Yale University Library

39002001917021

^>^piz^ ^y^z^^zf^

SPEECHES

ON

COMMERCIAL, FINANCIAL AND OTHER
SUBJECTS.

BY

ELIJAH WAKD.

<&.

NEW YORK:
Coprriffht, IS77, by
G. W. Carleton & Co., Publishers.
LONDON : S. LOW & CO.
MDCCCLXXVII.

CbG9.300

CONTENTS.

PAOE
A Ship-Canal, connecting the Atlantic and Pacific Oceans : its Value to the
Commerce of the United States and other Nations. House of Repre
sentatives, February 15, 1859  11
A Just Bankrupt Law : its Present Necessity, and Importance as a Perma
nent Act. House of Representatives, June 3, 1862  34
A Just Bankrupt Law : its Present Necessity, and Importance as a Perma
nent Act. House of Representatives, June 3, 1864  54
Our Commercial Relations with the British North American Provinces.
House of Representatives, May 18, 1864  59
Our Commercial Relations with the British North American Provinces.
House of Representatives, May 26, 1864  88
The Tariff and the True Principles of Taxation. House of Representatives,
June 2, 1864  100
The Treaty with the Hawaiian IslandB : its Relations to our National Com
merce,, House of Representatives, March 4, 1876  112
Our Commercial Relations with Canada. House of Representatives, May
18, 1876  124
Our Commercial Relations with Canada and the Extension of Markets for
our Productions. House of Representatives, February 1, 1877  157
The Financial Condition of the Nation. House of Representatives, January
15, 1863  183
The Financial Problem : how shall it be solved ? House of Representatives,
January 29, 1876  205
The Distribution of the Geneva Award. House of Representatives, May 23,
1876  226

Vlll CONTENTS. PAGE
Nationality of the Democratic Party. House of Representatives, March 81,
1858  236
The True Policy of the Government as to the Conduct of the War, with a
View to the Preservation of the Union. House of Representatives,
January 9, 1865  256
The Best Policy toward the Southern States. Letter to the New York
World, September 6, 1875  273
The Shipping Act relating to Merchant Seamen. House of Representatives,
Junel, 1876  277
A Coinage Department at the Assay Office in New York : its Utility to Com
merce, and Importance on Grounds of Local and National Justice and
Economy. House of Representatives, February 1, 1877  285
The Questions of the Times. At a Meeting Ratifying the Nomination of the
Hon. Elijah Ward for Election to the Forty-fifth Congress. November
4, 1876  293
A Free Canal Policy : the best Guarantee for the Preservation and Increase
of our Inland Commerce. . _., „.. . ._  „...  302

PREFACE.

The speeches selected from those of the Hon. Elijah "Ward,
and presented in this volume, are laid before the public because
they refer chiefly to measures of immediate and practical
moment in the national commerce and finances, but yet remaining
unaccomplished. Much labor has been spent with a candid and
impartial spirit in acquiring the information they contain, and
it would be difficult of access, and thus of comparatively little
use, unless collected and concentrated. The subjects will con
tinue to demand more and more the attention of American
statesmen, until they are finally settled. They include the much
needed ship-canal to connect the Atlantic and Pacific Oceans, an
extension of our commerce, especially of the markets for our
manufactures and agricultural productions, through an American
or continental system of trade with Canada, Mexico, Cuba, and
other countries, revenue reform and the restoration of our mer
cantile marine on the ocean, the necessity of a just, uniform, and
permanent bankrupt law, the importance of conferring the right
of coinage on the Assay Office in New York, a free canal policy
in the State of New York as essential to the preservation of her
inland commerce and valuable to the nation, a safe and gradual
return to a sound currency, redeemable in coin, and the renewal
of concord and prosperity in the Southern States.
On the whole, the speeches refer more or less directly to com
merce at home and abroad as the best means of stimulating pro
duction and increasing the employment and comfort of the people
throughout the Union. For many years these material interests
have been conspicuously neglected in the national Legislature,
and it was the object of Mr. Ward to present those views which
he believed to be true in regard to them without yielding to the
prevalent prejudices or snpineness of the times.

X PREFACE.
More than any other single sentiment pervading the speeches,
is confidence in the belief that " all legitimate interests are har
monious." Mr. Ward holds that the Monroe doctrine, however
gratifying to an honorable national pride, is little more than a
barren ideality, unless, in an enlightened self-interest, we asso
ciate with it a performance of its obligations, including a friendly
care for the commercial prosperity of the States we have so far
taken under our protection, by extending the exchanges of in
dustry with our neighbors on the north and south, thus promoting
such a system of intercourse and of benefits reciprocally given
and received as will tend to prevent those wars and chronic
apprehensions which in the Old World cause the constant main
tenance of large standing armies, with frequent loss of life on a
scale of stupendous magnitude, and at all times the infliction of
heavy burdens upon the people.

SPEECHES OP THE
HON. ELIJAH WARD.

SHIP-CANAL CONNECTING THE ATLANTIC
AND PACIFIC OCEANS:

VALUE TO THE COMMERCE OF THE UNITED STATES
AND OTHER NATIONS.

House op Representatives, February 15, 1859.

At the present time no one public work, of so much value
to the commerce of the world as the union of the Atlantic and
Pacific Oceans by a ship-canal through some part of the Isthmus
of Darien, remains uncompleted. Nearly twenty years have now
elapsed since Mr. Ward directed the thoughts of Congress to it.
Within that period several additional surveys have been made.
The important international enterprise continually receives in an
increased degree the attention of scientific and practical states
men in all parts of the world, and time demonstrates more and
more clearly the accuracy and importance of the facts and
opinions expressed in the following speech :
Mr. Chairman : Having the honor to represent in this
honorable body a constituency vitally interested in the
progress of commerce, an element which has enabled our
country to attain a high rank among the nations of the
world, and to which we must be chiefly indebted in the
future for its further growth and increased power, I feel
a deep interest in all subjects which seem likely to aid in
the development of our commercial greatness, and in
maintaining the supremacy we are rapidly acquiring.

12 SHIP-CANAL.
Our vast extent of territory, its fertility, mineral and
other resources, the energy of the people, and the great
amount of capital employed, are powerful levers in
advancing the prosperity of the country ; but the history
of the past demonstrates that no one element has had so
great an influence in the extension of commerce, and
contributed so largely to our national wealth, as increased
facilities for annihilating space and time by means of
railroads and canal communications. The utility and
importance of these modes of transportation have been
fully tested. Eailroads with cars propelled by steam
are of comparatively recent origin, having been first used
not more than twenty-seven years ago. Within that
period England has expended £300,000,000 sterling, and
the United States $1,070,000,000, in constructing _ rail
roads. Canals attracted the attention of the ancients.
The best authenticated accounts of ancient Egypt repre
sent "that country as intersected by canals conveying
the waters of the Nile to the more distant parts of the
country, partly for the purposes of irrigation and partly
for navigation. The efforts made by the old Egyptian
monarchs and by the Ptolemies to construct a canal
between the Red Sea and the Nile are well known, and
evince the high sense which they entertained of the im
portance of this species of communication." This work
was intended for a ship-canal to connect the Red Sea
with the Mediterranean. The same locality is now
attracting public attention, and the route has been ex
amined and surveyed and found to present no difficulty
that cannot be removed. The French projectors of the
Suez Canal contemplate its reopening, or the construction
of a parallel line connecting the two seas, which, if car
ried into effect, would be of great benefit to commerce.
Canals have been constructed in Italy, France, Holland,
Denmark, Sweden, England, and other countries ; but it
was reserved for the State of New York to excel them
all in connecting the waters of the Hudson with Lake
Erie, by means of the Erie Canal.
My associations with mercantile men, and residence in
the commercial metropolis, have long since induced me to
examine with the greatest attention projects that pro-.

SHIP-CANAL. 13
posed to develop intercommunication. The construction
of canals in the several States, of lines of railroads lead
ing to all parts of the country, the introduction of our
steam marmeand the many lines of clipper and other
sailing ships, induce me to believe that much more may
be done beneficially in this direction. Boston, New York,
Philadelphia, Baltimore, Charleston, and the other sea-coast
cities and towns, as well as those in the interior, attest
the benefits of railroads and canals, interlinking and
binding the Union by ligaments of a common interest
too strong to be severed. Appreciating the advantages
to the country that result from the home and foreign
trade, it becomes important to facilitate that trade m
every proper manner.
^With a view to increase commercial intercourse, by
diminishing the travelling distance from the Atlantic to
the Pacific ports, the subject of a ship-canal is assum
ing an importance commensurate with its merits. No
project of higher moment or greater magnitude has been
presented to the country.
" When in 1513 Yasco Nunez first beheld, from the heights of
Darien, the shores of the Pacific, its near proximity to the Atlan
tic couid not fail to render evident the importance of a water
communication between the two oceans. Long and vainly did
the Spaniards seek for a natural channel, which might facilitate
their passage to the Indies, and when forced to abandon all hope
in its existence, they continually directed their attention to the
best means of opening an artificial way. The great utility of
such an undertaking became still more evident towards the latter
part of the eighteenth century, which witnessed the rising im
portance of Hindostan, of China, and of the islands of the Indian
Ocean, as well as the discovery of Australia and the numerous
islands of the Pacific. The length of time required, and the
danger incurred, in doubling the two tempestuous capes, by
which alone the passage could be effected, served continually to
keep attention fixed on the inestimable advantages which would
accrue from an interoceanic communication. Various points of
Central America were therefore surveyed, and plans were pro
posed for executing this most desirable enterprise ; but the diffi
culties to be overcome appeared almost insurmountable, and
most of the projects have been tacitly abandoned.
" But within the last few years, the acquisition of California
by the United States, and the commercial activity which resulted

14 SHIP-CANAL.
from the working of the gold fields, so immediately followed by
a' similar discovery of the precious metal in Australia, and the con
sequent rapid development of trade with that continent, the ex
tension of commercial enterprise throughout the whole of the
Pacific and the Indian Oceans— all concur in rendering the real
ization of this project indispensable." *
If a passage through the isthmus were made, thou
sands of ships and vessels of all classes with their cargoes
would pass through it from and to every clime ; it would
save thousands of miles in sailing distance, weeks and
months of time, and the difficulties and dangers of the
Capes of Good Hope and the Horn be avoided. It woul4
open to our merchants new fields for enterprise and rich
.markets for their wares and the various productions of
the country.
It has been carefully estimated that fourteen thousand
miles between New York and San Francisco, and ten
thousand miles to China, India, Japan, and the Sandwich
islands, British Australia, the Dutch, English, and French
East Indies, New Zealand, the Russian American posses
sions, the coasts of Central America on the Pacific, Chili
and Peru, or nearly in this ratio, may be saved on
every outward voyage our ships make, and the same dis
tance on the return. The attainment of such great results
would give an extraordinary impulse to the commerce of
the United States and other nations.
From the time of the discovery of this continent;, a
short passage to the East has been constantly desired — >
a region Columbus was seeking for when he discovered
the New World. The commercial history of the past,
shows that whatever country has hitherto controlled the,
trade of the East has invariably held, for the time being,
the greatest commercial power in the world. In ancient
times, Carthage and Alexandria controlled the trade of
the land of spices and frankincense. Venice owed her
splendor and commercial rule to the same cause. At a,
later day, when the discovery of the passage by the Cape
of Good Hope had been made by the Portuguese, they
held the key to the East. The trade with India in silks',
* F. M. Kelley, Esq., of, IJew York, before the Institute of Civil Engineers,
London, 1855.

*

SHIP-CANAL. 15
fine cottons, linens, spices, and myrrh, gave to Portugal
such a supremacy in Europe, that her rival, Spain, fitted
out the expedition which bore the discoverer of this con
tinent to our shores. It did not result in the discovery.
of the passage so ardently desired, and there was almost
as much disappointment felt that a way to India was not
found, as there was joy at the discovery of America.
When the Dutch, half a century or more later (Pres-
cott and Helps), secured a portion of the Indian trade,
they, too, reaped the benefits and shared in the immense
gains. Subsequently England disputed with Portugal
and Holland for this trade ; fierce and bloody wars were
waged ; and history now records the unrivalled extent of
English commerce, which has vastly contributed to her
power. During the last few years we have been disput
ing with her for this trade, and we have in part succeeded ;
but if we desire further gains in this respect, we must
place ourselves in a central geographical position by mak
ing a passage through the isthmus.
Nations have made great sacrifices to secure the benefits
of this commerce. The most recent illustrations may be
found in the late Russian war, which, stripped of its pre
tended objects and the varied- phases of diplomacy, may
be regarded as a struggle for the control in the Indies
and the trade of that country ; for, by possessing Con
stantinople, Russia would have had a transit by the pen
insula to the Persian Gulf and the Red Sea, and thence,
by channels of communication now open, into the Indian
Ocean. It appears to me that no one, familiar with the subject
and the sources of commercial strength and power, can
justly doubt the importance and utility of an inter-oceanic
communication, by means of a ship-canal. The main
point to be determined is, whether it is feasible ; has any
route been discovered that science, skill, and energy can
overcome, within such a cost as to make its prosecution
and completion practicable ? While the subject has occu
pied attention for several generations, more recent elabo
rate explorations and surveys indicate only five or six
routes as at all practicable. In this, connection, engineer
ing problems are not so difficult of solution as to obtain

16 SHIP-CANAL.
the capital required in the experiments and accomplish
ment. The routes to which public attention has been
drawn are the Tehuantepec, Honduras, Nicaragua, Pan
ama, San Miguel, Chipo, and the Atrato.
In examining the several routes, my attention has been ;
particularly attracted to the Atrato for its practicability;
and more especially, because it can be constructed with
out locks, and at much less cost, for a canal of the same
size, than at any other point. These routes I propose
briefly to examine.
The Tehuantepec route commences on the Bay of Vera
Cruz, in longitude 21° from Washington, and, crossing
the dividing ranges of the water-sheds of the continent,
extends to the Puebla of Tehuantepec, on the Pacific.
The distance is one hundred and eighty-six miles, and the
summit level at the pass of Nisi Correjor is eight hun
dred and fifty-five feet above the level of the sea. The
topographical features of the country are a great general
slope from the sea, on either side, to the summit, which is
nearer to the Pacific than to the Atlantic.
No water exists at a sufficient elevation to operate a
canal with locks, even if locks were not objectionable,.
as they are, where they can be dispensed with ; and to
make an open cut from sea to sea would cost, nearly as
I have been able to learn, over a thousand millions of
dollars. The data upon which my conclusions are founded were
collected by the Government engineers. This line, al
though favorable for a railroad — a point which I do not
question — still is not, in my judgment, adapted for a ship-
canal. Since accurate surveys were made, its practica
bility, I believe, has not been urged.
The Honduras line lies eastward of the Balize, and
runs in nearly a southerly direction across the isthmus
known as Baya Honda, from Puerto Cabello to Fonseca.
The length of the route is one hundred and sixty miles,
and the summit level is two thousand six hundred and
eighty-one feet above the sea. Notwithstanding the riv
ers Humuya and Goascoran interlock, and their head-wa
ters pass one another, still the supply of water is insuffi
cient, and the great height of the summit would require

SHIP-CANAL. 17
at least one hundred and sixty locks of great magnitude,
and very costly. I therefore consider this line out of the
question for canalization ; for a railroad it is practicable.
The Nicaragua route has been very much discussed, and
in point of desirability for a water communication be
tween the oceans is undoubtedly next best to the Atrato,
but is much inferior to it, for the reasons which I will
hereafter present. At this place an elevation of one hun
dred and twenty-two feet has to be overcome, and, ac
cording to the most approved plans, at least thirty locks
would be necessary. Water here is abundant on the
summit, and at the Atlantic terminus there is a good
harbor ; but on the Pacific a harbor must be constructed
at Breto, or in that vicinity, in order to make the commu
nication complete.
If ' the use of locks was not greatly disadvantageous,
the Nicaragua line would claim our warmest support ;
but the difficulty and danger of elevating great ships to
the height of one hundred and twenty-two feet, and then
lowering them again every time a passage is to be made
from one ocean to another, must be apparent. Locks
offer serious objection to such navigation; each lock of a
canal is nearly similar to a dry dock, and thirty would
have to be passed each way ; in addition there is the diffi
culty and uncertainty attending the use of locks, arising
from tbe failure of the gates that enclose them, which, in
this case, would number one hundred and twenty, if the
locks were single lifts, -which are most desirable. The
cost of keeping such' mechanical structures in repair
would be great. The risk and injury to vessels from
striking against them are to be regarded, and the proba
bility of occasional delay in them, when out of repair, is
to be taken into consideration.
At Nicaragua, the cost of constructing a work equal
in width and depth would be more than at the Atrato.
I am aware that plans have been made, the estimated
cost of which would be less than is contemplated at the
Atrato ; but these plans propose a canal of much less
depth and width, and insufficient to do the trade required.
I am confident, from the estimates that have been made
—and I speak f ronl a knowledge of the case — that the

18 SHIP-CANAL.
same sized canal, even with locks, which would mate
rially reduce its working capacity, cannot be built at
Nicaragua for the same price as at the Atrato.
Upon the Panama route a railroad is now in successful
operation. It is undoubtedly one of the most desirable
lines, if not the best route, for a railroad _ crossing the
Isthmus ; it is but forty-seven and a half miles long, and
good harbors exist at either end. But for the purposes
of a canal, its disadvantages may be summed up in a few
words. The canal must be forty-two miles long ; ships !
must be lifted two hundred and fifty-seven feet. At this
elevation there is not sufficient water to feed the canal,
and water must be collected in reservoirs in the moun
tains, and brought sixty-one, miles through a trench of
more than one hundred and fifty feet deep. Even then,
thirty-six locks would be required. If an open cut be
attempted, the quantity of material to be removed would
be equal to over three times what is necessary at the
Atrato, and a lock on the Pacific would be indispensable. '
Various explorations have been made at San Miguel
under the directions of the engineers of the Government
of the United States, Great Britain, Spain, and Holland ;
but no line at all proper for a ship-canal has yet been
discovered. The Chipo route has only been surveyed on the At
lantic coast; and the range of mountains (Cordilleras)
seems to render it not available for the purpose of a ship-
canal at this point.
The proposed route for the Atrato Canal is through an
open cut from the sea to the waters of a navigable river,
having sufficient depth to float the largest man-of-war
and merchant ships; and no locks or other impediments
are required. The route to which I refer lies in the Re*
public of New Granada, in the province of Choco, and
may be found between the seventh and eighth degrees
of north latitude, and the seventy -seventh and seventy- 'i
eighth degrees of west longitude from Greenwich. It
begins at a good harbor at the mouth of the Atrato River,
in the Bay of Candilaria, and thence ascends the Atrato
River to one of its affluents.
In the early part of the present century, the venerable

SHIP-CANAL. 19
and remarkably far-sighted Baron Alexander Von Hum
boldt, in his "Essais Politique," in describing the various
routes that probably existed for forming interoceanic na
vigation, designated the line of the valley of the Atrato
River as worthy of particular consideration. Humboldt
came to this conclusion at that early period, from having
• personally examined this and the other proposed routes :
and in his various writings, he urges the merits of this
particular line. The transits at Honduras and Tehuan
tepec, the canoe navigation at the Lake Nicaragua, and
the mule path at Panama, however, for many years drew
off the attention of commercial men and capitalists from
the Atrato.
In 1850, General T. De Mosquera, ex-President of the
country, in a work entitled " Physical and Political Geog
raphy of New Granada," drew attention again to the val
ley of the Atrato, and a citizen of the State of New York
(Mr. Frederick M. Kelley), perceiving the vast benefits
to be derived to his own city, the country, and the world,
from any good route across the Isthmus, but more par
ticularly from any that could be made available for pur
poses of canalization, learning the views of Humboldt,
and alk that Mosquera could inform him relative to this
locality, determined, in 1853, as a mere matter of public
utility, and without any immediate hope of personal adr
vantage, with scarcely the remotest prospect of self-ag
grandizement, to fit out an expedition at his own expense,
and have surveys made, to see if the impressions of the
illustrious men I have named were founded in fact or
otherwise. The first surveys were made up the river Atrato and
Over the dividing isthmus, and down the river San Juan,
upon the line of a small canoe-canal, more properly a ditch,
that the priests of the mission of San Puebla had caused
the natives to dig, many years ago, and through which
canoes laden with the gold and merchandise of the sur
rounding countries passed, at times, at high water, from
one ocean to the other. This line did not present such
favorable features as were anticipated; but, nothing
daunted, three other expeditions, making four in all up
to that period^ were fitted out with praiseworthy zeal,

20 SHIP.CANAL.
by the same individual. They, however, all merely
added to our geographical knowledge of this highly in
teresting portion of our continent.
The fourth expedition, at nearly the close of the third
year of the researches, gave some slight promise of suc
cess, having learned from the traditions of the natives
that low ground existed near the seventy-seventh paral
lel ; but, owing to circumstances they could not control,
they were compelled to return without making any very
important discoveries. The data they furnished, how
ever, were the key to future success.
Another expedition was started and intrusted to an
explorer, with directions to search in the vicinity of the
locality before indicated as practicable. ' The dense
growth of underbrush, and the gigantic forests that cover
the entire face of the country, made the work of explo
ration tedious and difficult : but after an absence of sev
eral months the party returned with the tidings that a
route had been discovered and surveyed, by which a
canal could be made to connect the waters of the Atlan
tic and Pacific Oceans without locks, and at such a cost
as to be commercially available. No speculations, how*
ever, were gone into ; sober, serious reflection seemed to
indicate that, before any public demonstration was made,
the surveys should be verified by a Government corps.
Years had been occupied, and a large amount of money
expended by a private individual to solve this great probr
lem. The surveys being completed, Mr. Kelley pro
ceeded to Europe with the result. I ask to submit, in
his own language, his reception abroad. He says :
" I went to England, and submitted my plans and reports to
the Eoyal Geographical Society of London, and to the British
Institution of Civil Engineers. I invited the searching criticism
of those most competent to judge in the mother country. I went
to France, and knowing how deep an interest the Emperor Napo
leon had taken in the promotion of similar enterprises, and how
profound a knowledge he had displayed of the general subject, ;
at a time when correct views were confined to a very limited
circle, I laid my plans and surveys before his Imperial Majesty,
and invited to their consideration/in the most public manner, the
highest science in the service of the Government and people of

ship-canal: 21
France. I went to Berlin, and frankly explained to that illus
trious sage, the pioneer of all scientific knowledge of Central
America, the general views which I entertained, and the nature
of the evidence by which they had been confirmed. In those
three enlightened countries I was not treated as a stranger.
There was a grandeur in the design of which I was the bearer, a
dignity in the mission with which I was charged, that won for
me courtesies which, on mere personal grounds, no stranger, go
ing to Europe for the first time, could have anticipated or claimed.
From the Emperor of the French, from Lord Clarendon, from
Sir Roderick Murchison, from Baron Humboldt, from Bear-Ad
miral Beechy, from Robert Stephenson, Admiral Fitzroy, and
the members generally of the Royal Society and Institute, 1
received great kindness ; and, what was of more importance, they
applied to my plans and reports, in a catholic and courteous spirit,
but with the rigid exactness due to science and their own high
reputations, those tests suggested and fortified by tKeir great ex
perience. A friendless and unknown American citizen was
treated by these men as though he was a brother, not because he
was eminent in science, but because they recognized in him the
zeal, the prophetic hope and self-devotion which are ever the hand
maids of science." *
The important results thus far attained were brought
to the attention of the Thirty-Fourth Congress at its
second session. Appreciating the efforts made, and the
great results to flow from interoceanic communication, an
appropriation was made by the Government of the Uni
ted States for a verification of the surveys to which I
have alluded. Congress authorized the Secretaries of
War and the Navy, under direction of the President, to
detail officers for the survey and have the verification
made. The Navy Department selected Lieutenant Cra-
. ven, and the War Department detailed Lieutenant Mich-
ler, of the topographical engineers. These officers, upon
their return, proceeded to prepare their reports ; and the
result of the expedition will probably be laid before
Congress at the present session. While I am not able to
give the detail of the survey, I am sufficiently informed
to state that their reports will confirm the physical facts
as represented, including harbors, rivers, rock and earth
excavation, and the general character and quantity of
material to be removed to form the canal, upon which
* Kelley's Pamphlet on the Atrato Ship-Canal.

22 SHIP-CANAL.
the former estimate of the cost of this work was based.1
This estimate of cost had been computed by several ex
perienced engineers in this country.
By the proceedings of the Institution of Engineers of
London for 1858, 1 find that body— perhaps as competent
as any in the world to judge — indorses the estimate made
by our own engineers. I have also seen the written ex
pressions of many able and intelligent American engi
neers on the subject; letters from distinguished engineers
— Robert Stephenson, George Rennie, and other English
and French engineers of eminence — verifying the estimates
made for the work in this country. In April and May,
1856, the Royal Geographical Society, at Mr. Kelley's
request, discussed this question at great length, and took
very decided ground in favor of the work being done.
The President, who was Minister to England while Mr.
Kelley was abroad, did all in his power to advance this
great measure, and suggested the application to the Uni
ted States for verification. The French Emperor also
appointed a commission to examine the plans and surveys,
and they reported favorably to him, and he, I learn, ex
pressed a willingness to unite with England and the
United States in building the canal. The plans were
submitted to Baron Humboldt, and his approval was
obtained. Mr. Chairman, having drawn the attention of this
honorable body to the subject of ship-canals, briefly re
ferred to the various projects, and given a rapid sketch
of the Atrato, I will now refer to the benefit which the
commerce of this country and other nations would derive
through such a channel of communication from the Atlantic
to the Pacific Ocean. I have already alluded to the great
saving in travelling distance, and refer to the Appendix
for the detail. The first influence felt would be from the
supply of a colony of workmen, consuming the bread-
stuffs, manufactures, tobacco, and other products of the
United States, during the construction of the work.
I find, by official statistics, that the total tonnage owned
by the United States, that would use this canal, if con
structed, is 1,857,485 tons. The cargoes are valued at
$100,294,687, and the ships at $92,874,250; making a

SHIP-CANAL. 23
total amount of value afloat, belonging to the United
States, of $193,168,937. This includes the whale fishery,
but not the precious metals from California. Taking the
diminution of time as a basis, the benefit by the gain in
sailing distance from one part of the world to the other
by the Atrato Canal, estimating the saving of insurance,
interest on money, wages of men,ireight, wear and tear,
it appears that the sum of $35,995,930 would be annually
saved to the United States alone, as follows :
Table showing the saving in money to the trade of the United
States that would result from the use of the Atrato Canal, ac
cording to the official statistics for the year 1857.
Insurance on vessels and cargoes saved  $3,863,378
Interest saved on cargoes  3,008,840
Saving of wear and tear of ships, 5 per cent. 4,643,712
Saving of freight-money (by time)  11,250,000
Saving of wages, provisions, crew, etc  13,230,000
Total yearly saving to the United States. . $35,995,930
Should the United States assume to pay the whole in
terest on the work, during its progress and completion,
the amount thus saved to the commerce of the country in
one year exceeds, by $8,500,000, the entire sum that would
be required to be paid in twelve years, or seventeen times
the average annual payment. If England and France
unite, it is over forty times the annual sum that would
be required.
We find the tonnage of England, that would pass this
canal is 1,029,295 tons^ the value of tonnage and trade
is $190,649,750. The saving to England, upon the fore
going basis, would be $9,950,348, as follows:
Table showing the yearly saving in money to the trade of England,
as ascertained by the official returns for ,1856, if the trade went
through the Atrato Canal, instead of round the Capes.
Insurance on vessels and cargoes  $1,906,495
Interest on cargoes  1,858,826
Saving of wear and tear of ships  2,573,237
Saving of wages, provisions, finding, etc  3,611,790
Total  $9,950,348

24 SHIP-CANAL.
The tonnage of France that would pass through the
Atrato route is 162,735 tons; the tonnage and trade is
valued at $67,210,609 ; the saving to France would be
as follows :
Table showing the saving in money to the trade of France that
would result from the use of the Atrato Canal, according to
the official statistics for the year 1857.
Insurance on vessels and cargoes  $753,000
Interest saved on cargoes  452,084
Saving of wear and tear of ships  325,470
Saving of freight-money, estimated by. time. . 276,949
Saving of wages, provisions, and outfit of ships. 376,427
Total yearly saving to France  $2,183,930
Of countries other than those named— the tonnage that
would use this communication is 16,802,000 tons; the
saving would be about $1,400,000.
The aggregate value of the foregoing tonnage and
trade is $467,831,296; and the total saving would be
$49,530,208 annually.
These statements are predicated upon the present state
of commerce. The average increase for the last ten years
was about one hundred and ten per cent., and it is fair to
assume that the trade will increase one hundred per cent.
in the next ten years, in which case it is estimated the
saving to the world would be'$99,060,416.
Having presented the trade in an aggregate form, it is
perhaps proper to say that there, are many specific in
terests that would be greatly benefited. It is believed
that the whaling- fleet, for example, could go into the
fishing grounds, and return with as much oil and bone as
they do now, in two-thirds of the time they now spend,
and the coasting vessels of New England and the north- .
east could find employment in the Pacific, during "the sea
sons they are now idle, by procuring guano, etc.
Notwithstanding the vast benefits that would be secured
to commerce, it might be urged that the Government, in
addition, should have some direct benefit. In answer to
this, in rendering the aid required, Congress could pro
vide that all national vessels and munitions of war should
pass free of charge for a certain period.

SHIP-CANAL. 25
In transporting heavy merchandise (which is about
ninety one-hundred ths of all the trade) across the Isthmus,
the canal can only be resorted to on account of economy ;
railroad communication being too costly, besides the diffi
culty in unloading and loading. The charge for trans
porting a ship and cargo of one thousand tons by the
canal would not probably equal the twenty-fifth part of
what the cargo would cost by railroad.
If, instead of constructing a canal, it were determined
to build railroads across the Isthmus, it would be found
that there is not only a want of room to build them upon,
but that it would require twenty roads, each of them
equal in capacity to the Panama road, to be capable of
doing the business of the canal ; these twenty roads, if
built, would cost at least double as much as the canal, and
could not be kept in order for many times as much as
would be required for the canal.
Independently of the risk and expense of loading and
unloading, the cost of transportation by railroad in that
country is nearly forty-five times as much as it would be
by canal ; or, in other words, the canal can do the entire
freighting trade of the world in this direction, pay an
interest on the cost and the interest sunk during construc
tion, and maintain and operate itself for $8,140,000 per
annum. To do the business by railroad that the canal
could do at this cost, at the prices now paid to the rail
road, would amount to $360,000,000.
I would next invite your attention, and that of this
honorable body, to another branch of the subject; which
is, the physical advantages of this route as compared with
all others for communication between the oceans.
When it shall have been determined that any road,
railroad, or canal, is necessary in any direction, our next
duty is to decide which will be most useful, and in con
nection with the expense to be incurred, involving and
evolving one question with the other, to settle its final
place. Many situations are only suited for wagon roads,
and these are ample and sufficient for the wants of the
Government and the country they accommodate. Other
places, again, require more rapid communication, and a
greater amount of tonnage is expected to pass over them.

26 SHIP-CANAL.
Here it is proper to employ the facilities afforded by
modern science, and construct railroads or canals. If
swiftness of movement, as in the case of passengers and
mails, be desirable, then railroads should be preferred.
If the commodities to be moved are heavy, and water-
carriage can be employed, more particularly where a part
of the journey is performed in ships from the necessities
of the case, it is advisable to make a canal, more es
pecially if the goods can be carried, ship and all, through
without handling, so as to avoid the process of loading
or unloading. If goods could be conveyed to our inland
cities in the same ships that cross the ocean, with their
cargoes on board, no one would desire to unload them
into a canal-boat, or on to a railroad. These considera
tions become elements in the process of reasoning' by
which we should decide what method is best adapted to
carry on our enormous and constantly-increasing business
between the two great oceans of the world. If equal
advantages exist for loading and unloading, and water is
abundantly deep, no commercial man would prefer* to
have his goods unloaded from his ship fifty miles from
the entrepot, and brought by wagon or railroad to his
warehouse, when his ship could as well come to the wharf
at his door. The same rule would govern in crossing the
Isthmus. The estimated cost of this project is $73,687,141. (See
Appendix.) It is evident that a work of this magnitude
can only be completed by the aid of the Government, as
a means for postal facilities, and for the transportation
of military and naval stores. It is estimated that it will
require at least nine years to complete it. To raise the
requisite means, it is proposed that the United States
should guarantee to pay interest at the rate of five per
cent, upon the amount expended in the process of the
work, from year to year, for the period of twelve years.
The amounts in each, annually, would be as follows :
First year  $150,000
Second year  400,000
Third year.  800,000
Fourth year.  1,250,000
Fifth year  1,700,000

SHIP-CANAL. 27
Sixth year  $2,150,000
. Seventh year  2,600,000
Eighth year  3,150,000
Ninth year  3,750,000
Tenth year  3,750,000
Eleventh year  3,750,000
Twelfth year  3,750,000
Total interest money  $27,200,000
The above is based upon the supposition that this Gov
ernment is the sole promoter. In case England and
France joined, it would be for one-third the amount.
The interest being guaranteed by the United States, or in
conjunction with England and France, it is believed that
those engaged in the construction of the canal would be
able to obtain the money necessary for their object upon
the most favorable terms.
The estimated cost of this great work, I am prepared
to admit, is a large sum ; but this estimate is founded
upon the actual cost of doing the same kind of work, in
the same kind of a country, and is based upon the amount
of cubic yards of rock and earth to be excavated, and
dredging to be done, and is no theoretical hypothesis of
something yet never undertaken.
The cost of this canal, Mr. Chairman, is predicated on
a depth of thirty feet at low water, and a width of one
hundred feet. It is maintained that this is ample and
sufficient to pass the largest vessel afloat. There is
scarcely a harbor that admits vessels drawing over thirty
feet of water; the great commercial marts of this conti
nent, Europe and Asia, do not allow vessels of this draft
to enter, or at least do not allow those drawing more to
pass over their bars, hence ships are not built of more
draft than this when loaded ; but as the harbors of the
world mostly used do permit vessels of twenty-eight or
twenty-nine feet draft to enter, it is deemed best to make
the canal, at low water, as deep as the deepest harbors.
In width, it is proposed that it shall be, as I before said,
one hundred feet ; this will pass abreast two of the large-
sized merchantmen, with their yards clewed back, but
not two of the largest steamers, because of the width of

28 SHIP-CANAL.
their guards and wheel-houses ; these steamers must pass
by signals, singly in each direction, through the rock cut.
Up the Atrato River, vessels of any size, and three or four
together, can pass one another, so that there would be little
or no detention from any of larger size, as the wide part ex
tends for more than half the distance from ocean to ocean.
" No attempt whatever has been made to under-estimate
the cost, or to keep from the public the information upon
which the calculations are based. If, however, it is not
in all respects correctly estimated, a percentage of five or
ten per cent, of error in the calculation would not alter
our position. This canal would be a sound and proper
investment for the country to make, at $75,000,000, in the
manner proposed ; and, if necessary, at twice that amount.
i In furtherance of the work, the Government of New
Granada has not only given all proper facilities to the
private and Government engineers that conducted the ex
plorations ; but it has, by a formal concession, under prop
er restrictions, given the right to construct, maintain, and
operate the canal forever, accompanying this grant with
various desirable privileges extended to those that may
undertake the work. The State of New York has also
granted a special charter, under which a company may
be organized to build the canal.
j Mr. Chairman, I have merely presented some prominent
points bearing on this interesting subject. It is too vast
to be discussed in all its details under the rule of this
House. I present it to this honorable body as worthy of
its most serious consideration.
The gentleman (Mr. Kelley) whose name is identified
with this great work has quietly and unobtrusively, at a
large individual expense, been endeavoring to solve the
great problem of the age. He has brought this project
to a position that invites the attention of not only our
own country, but the whole world. I feel the deepest in
terest in this subject, in consequence of the great benefit,
as I have shown, that is to flow to trade. The extension
of commerce is not only important to national wealth,
power, and prosperity, but is also the great lever which ¦
conquers and. maintains peace and tends to bind the na
tions of the earth in perpetual amity.

SHIP-CANAL.

29

APPENDIX.

Table of the saving in distance from New Yorh to the following
places by the Isthmus of Panama over the Cape routes.

From New York to—

Calcutta . . .
Canton 
Shanghae' .
Valparaiso .
Callao 
Guayaquil.
Panama. ..
San Bias. . .
Mazatlan . . ,

San Diego. . . .
San Francisco

p. .
O ft
.2 a
§§go

MUes.
17,500
19,50020,000

Q

.3

MUes.
23,00021,500
22,000 12,900
13,500
14,30016,00017,80018,000
18,500
19,000

13,400 10,600
10,400 4,800 3,500
2,800
2,0003,800
4,0004,5005,000

Miles. 4,100 8,900
9,600

9,600
10,90011,600 8,100
10,00011,500 14,000
14,000
14,000
14,00014,000

30

SHIP-CANAL.

Table showing the trade of the United States that would pass
through the Atrato Canal, if now finished, taken from the offi
cial returns of the year 1857.*

Countries traded with.

Russian North American possessions
Dutch East Indies 
British Australia and New Zealand.
British East Indies 
French East Indies  * 
Half of Mexico 
Half of New Granada 
Central America 
Chili.. 
Peru 
Ecuador 
Sandwich Islands 
China 
Other ports in Asia and Pacific
Whale fisheries 
California to east United.Statesf.. .
Value of cargoes 
Value of ships 
Total value of ships and cargoes . . .

Exports and im
ports.

$126,537 904,550
4,728,083
11,744,151 98,432
9,601,063 5,375,354 425,p81
6,645,634 716.679 48^979
1,151,849
12,752,062 80,143
10,796,090 35,000,000

$100,294,687 92,874.250

$193,168,937

Tonnage.

5,735
16,58952,105
177,121 3,665
34,673
131,708 36,59963,749
193,131 1,979
33,876
123,578 4,549
116,730 861,698

1,857,485
at $50 per ton.

$92,874^250

* Congressional Reports on Commerce and Navigation, f Exclusive of gold dust.
Whale ships and coasting vessels have been estimated gener
ally throughout this appendix at $40 per ton. The United States
and. European commerce round the Capes is conducted in first
class ships, which often cost $80 per ton ; $50 have therefore
been taken as the fair average value in the construction of this
table, which does not include coasting trade.

Table showing the trade of England: that would pass through the
Atrato Canal, if now finished, taken from the official returns
for the year 1856.

Countries traded with.

Exports and im
ports.

Tonnage.

Half of Mexico 

$2,775,137 1,244,8172,437,605
15,486,110 20,473,520 360,015
( 7,077,390
\ 3,821,410
( 4,364,070
78,246,095 520,560
2,378,105

11 833

Half of Central America 

5,615
10188

Half of New Granada 

Chili 

118 311

244 319

• 1 820

T a ' (¦ Outward only 40 days
Singapore.) saved by canal.

68,530
16,00316,500
522,426 1950

11 800

Value of trade 
$139,184,834 51,464,750
1,029,295
at $50 per ton.
$190,649,584
$51,464,750
Table showing the tirade of France that would pass through the
Atrato Canal, if now finished, taken from the official returns
for the year 1857.
Countries traded with.
Exports and im
ports.
Tonnage.
Chili 
$10,000,000 13,160,000
• 2,790,000
1,090,000 440,000 100,000
2,073,859
( 2,180,000
I 4,440,0002,000,0001,000,000
19,800,000
25,688
35,096
Half of Mexico 
10,004
Half of New Granada 
2,389
],651
1,000
8,997
2,028
20,400 4,119
Dutch East Indies J 0utward 0Bly-
1,463
50,000
$59,073,859 8,136,750
162,735
at $50 per ton.
$67,210,609
$8,136,750
31
32 SHIP-CANAL.
Table showing the total tonnage that would pass yearly through
the Atrato Canal, if now finished, from official returns..
United States  1,857,485 tons.
England  .1,029,295 "
France  162,735 "
Other countries  44,555 "
Total  3,094,070 tons'.
Table showing the general results of the preceding tables.
Tonnage and trade of United States  $193,168,937
" " England  190,649,584
" " France  67,210,609
" « other countries  16,802,000
Total trade affected by the canal  $467,831,130
Table showing the saving to the trade of the world by using the
Atrato Canal.
United States  $35,995,930
England  9,950,348
France  2,183,930
Other countries  1,400^000
Total  $49,530,208 »
Exports of Great Britain increased one hundred and seven per
cent, in ten years. Exports of France increased one hundred and
thirty per cent, in ten years. Exports of the United States in
creased ninety-three per cent, in ten years. The average increase
is one hundred and ten per cent, in ten years. If the trade in
crease one hundred per cent, in the next ten years, the saving to
the world will then be $99,060,416 per annum.
A summary of the estimated cost of the canal and appurtenances.
Works at the mouth of the Atrato  $550,800
Excavations under water in Truando  3,280,000
" at confluence of open cut, etc . . 20,000
Excavation between confluence, as above,
and Pacific (excepting tunnel), calling all
the quantities rock, and estimating that
the grubbing and clearing would be thus
included  39,941,997
Tunnel $2, heading $10  12,701,920
Harbor at Kelley's Inlet  1,150,000

SHIP-CANAL.

33

Lighthouse  $35,000
Piers  55,000
Depots on Pacific  50,000
" on line, and Hospitals  35,000
Depot at Junction  15,000
Executive Department  120,000
Engineer Department  375,000
Medical Department  80,000
• Pay Department  90,000
Commissary Department  120,000
Quartermaster's Department  135,000
Dredging machinery  350,000
Hoisting and pumping engines and machinery 875,000
$58,949,717
Add 25 per cent, contingencies  14,737,424
Total  $73,687,141

The following table will show the money to be spent year by
year, and the interest on each year's expenditure, as long as paid
by the Governments, and the amount of interest-money to be
paid each year :

Spend.

Pay interest at 5 per cent.

..$3,000,000

$150,000 for 12 years $1,800,000

2d " ..

. . 5,000,000

.250,000 for 11 '

' 2,750,000

3d " ..

.. 8,000,000

400,000 for 10 <

' 4,000,000

4th " ...

. . 9,000,000

:450,000for 9 '

' 4,050,000

5th " ...

.. 9,000,000

450,000 for 8 '

< 3,600,000

6th " ...

. . 9,000,000

450,000 for 7 '

< 3,150,000

7th " ...

.. 9,000,000

450,000 for 6 '

' 2,700,000

8th "

. . 11,000,000

550,000 for 5 <

< 2,750,000

9th "

, 12,000,000

600,000 for 4 '

' 2,400,000

Total cost.

.$75,000,000

. . $27,200,000

Note. — I take pleasure in acknowledging my obligation to F.
M. Kelley, Esq., for valuable information, and the statistics con
tained in my remarks and the appendix.
3

A JUST BANKKUPT LAW:
ITS PEESENT NECESSITY AND IMPORTANCE AS A
PERMANENT ACT.

House of Representatives, June 3, 1862.

When this speech was delivered, events arising from the war
had caused an almost unprecedented number of mercantile fail
ures. They had befallen the sufferers suddenly, unexpectedly,
and from causes entirely beyond their control. Hence, measures
of relief were due to them. Mr. Ward showed that, reasoning
from the .ordinary principles of human nature and the experience
of commercial countries, a bankrupt law, duly guarding against
fraud, but releasing the honest debtor, is for the interest of the
creditor himself, and should be a part of every just and well-con-
Bidered code.
Mr. 'Chairman : The recent action of this honorable
body, in postponing until the third Monday of December
next all consideration of the bill reported by the Special
Committee " to establish a uniform system of bankruptcy
throughout the United States," is viewed with much sur
prise and regret by a large class of our citizens who are
bowed down by pecuniary obligations, from which there
can be no relief except through the provisions of such a
law. Supposing that adequate measures to relieve honest
but insolvent debtors, and to afford creditors increased
facilities for collecting their just debts, would be reported
at the proper season, early during the present session of
Congress, I purposed, making some remarks when the bill
sh/»uld be discussed, but as the House has, I think, incon
siderately and without a full knowledge of the subject
summarily disposed of it for a time, I deem it my duty to
my constituents, and to the country itself, to bring for
ward the chief points of the question to a fair and just con- '
sideration of the representatives of the people. Such an act

A JUST BANKRUPT LAW. 35
I regard as of vast public moment," and one that should not
be delayed, even in a crisis like the present, unparalleled
in the history of nations, when treason is seeking to over
throw the government. While crushing out this most
•unnatural rebellion, we should not be unmindful of im
portant measures, which, in addition to conferring present
benefits upon the people, will also contribute to the future
welfare of the country upon the return of peace.
A more deep interest is felt upon this subject in our
commercial cities than in other sections of the Union.
The benefits of a well-regulated bankrupt law would be
confined to no locality, but affect all parts of the country.
The objections to such an act are chiefly made by those
who, from the nature of their pursuits, are least conver
sant with the operations of commerce, and who will be
the least concerned in the proposed change. It would be
conducive, I think, to the common weal if, on this point,
something were yielded to the mature judgment of the
people in those places which are chiefly concerned in this
subject — to the commercial classes, who, by their energy,
do so much to give life and vitality to industry and pro*
duction throughout every State. Some concessions should
be made by each for the common good. If trade and
commerce are fettered, a corresponding injury is felt in
the agricultural and manufacturing districts. Every por
tion of the country looks to New York and other com
mercial cities for capital and business facilities. Stagna
tion or paralysis, to whatever extent they prevail in the
great emporia, injure the national' system of trade to its
most remote extremities.
The enactment of a just bankrupt law, impartially and
by proper rules regulating the relations and interests of
debtor and creditor, has demanded the attention of Con
gress ever since the organization of our Government. I
deem the attention of the House is now especially due to
the subject in consequence of the' effects produced by the
present rebellion, the ruin of many honorable and loyal
men, who, by their commercial and manufacturing pursuits,
promoted in better times the prosperity and employment
of labor in the North, contributing, at the same time, no
little to supply the necessities and comforts of life to the

36 A JUST BANKRUPT LAW.
South, thus tending to unite the two sections of our
country by the firm bond of frequent intercourse and
material interests, now for a time suddenly snapped
asunder to the infinite injury of the States composing
this Union, and of the world itself. The rebellion which
we are struggling to repress has its .victims not only on
the battle-field, but also in the ranks of commerce. The
abundant crops of the North, and the foreign demand
for our breadstuffs, have preserved many of our citizens
from the experience of these disasters — perhaps from a
knowledge of their existence. In other cases, the manu
facture of fire-arms, clothing, and other articles necessary
for the welfare of the army, or progress of the war, has
occasioned a local and limited prosperity ; but the pressure
caused by cutting off the Southern trade increased the
mercantile failures so greatly that in the aggregate last
year they exceeded by 2,041, or more than 40 per cent.,
the number of those who became insolvent in the great
crisis of 1857. A careful estimate of these failures shows
that they amounted to 6,993 in 1861, while in 1857 they
were only 4,932. In this calculation those only are in
cluded whose separate liabilities amount to at least $5,000.
Were it possible to enumerate the smaller debtors, who
have failed from the same causes, the aggregate would be
enormously increased. We cannot restore their lost wealth
to men who have been overwhelmed by calamities which
they did not merit, and of which they could not foresee
the origin or consequences, but it is at once our duty and
our wisest policy to enable those who are thus embarrassed
and are willing to surrender all they possess on earth for
the benefit of their creditors, to labor again with renewed
hopes on behalf of themselves and their families, thus
also contributing to the enlargement and reinvigoration
of that commerce and those varied industrial callings on
which the collection of the large revenue imperatively
required for national purposes now so greatly depends.
Mr. Chairman, there are many friends of the Union
in the Southern States who have lost their property
through their loyalty to the Constitution, and whose
losses we should endeavor to alleviate. Whenever peace
is restored, the solvent merchant of the South will no

A JUST BANKRUPT LAW. 37
doubt pay his obligations, but we need such a law as
shall interpose between the debtor and the creditor in the
South as well as in the North, so as to counteract the
tendency of popular and neighborly feeling to do injus
tice, and favor home creditors instead of those residing
at a distance, or in other States, by facilitating preferen
tial or fraudulent assignments, the system now unfortu
nately prevailing. In this way creditors will receive
their just proportion of whatever assets may remain.
The same laws which tend to create general dividends,
and to make men honest, will operate in each section of
the Union upon the same human nature, and tend to pro
duce the same results. The South is already deeply im
poverished, and as long as she remains so, the interests
'of our merchants must suffer with her. On the return
of peace, the restoration of prosperity to all parts of the
Union will be no less conducive to Northern than to
Southern interests. A humane and permanent bankrupt
law, enacted by the General Government, will save mil
lions of dollars to the Northern creditors, and prevent
endless delay and litigation.
In 1841 an extra session of Congress was called,
chiefly for the purpose of adopting some measures of
relief for the embarrassed condition of the country, and
especially for the relief of debtors. In my judgment,
this class of our fellow-citizens never deserved our atten
tion so much as at the present time. Comparatively few
of the recent insolvencies have resulted from headlong
speculations like those which culminated in 1837. Many
debtors yet remain weighed down by the cares and diffi
culties caused by the financial embarrassments of 1857,
when, in eight weeks alone, after a long-continued expan
sion of loans and the circulating medium, the banks of
the city of New York called in twenty-one millions of
bank debt, and the other one thousand three hundred and
fifty banks of the United States adopted the same policy.
The revulsion was not confined to this country or this con
tinent, but swept over the world, and was, perhaps, felt
with more severity by other nations than our own.
No foresight on the part of many who were then sub
stantial and prosperous men of business could have

38 A JUST BANKRUPT LAW.
provided against the complicated disasters of that year.
Prudent men, engaged in their ordinary pursuits, were
struck down without any sufficient warning, and many
who had reason, to believe themselves rich, and beyond the
reach of the casualties of fortune, suddenly became bank-~
rupts. But while the number of those who were reduced
to insolvency is greater than in 1857, it is equally certain
that the sources of their difficulties were unanticipated
alike by the Government and merchants of this country.
So far as commercial causes alone were concerned the
prospects of a successful and stable business were seldom
more flattering than theirs were a year and a half ago.
The causes of recent insolvencies are for the most part
entirely political, and the unhappy men who have thus
been ruined should no more be punished for these misfor
tunes than for any of the numerous accidents to which
mankind is liable.
The present indebtedness of the Southern to the North
ern States is carefully estimated to be about $300,000,00®,
of which $159,000,000 are due to the city of New York,
$24,100,000 to Philadelphia, $19,000,000 to Baltimore,
and $7,600,000 to Boston. By the losses thus incurred
many men of honor and integrity, whose means of meet
ing all their pecuniary engagements were as little doubted
by themselves as by all who knew them, are undergoing
the slow torture of mercantile failure, hopeless and life
long if they are not relieved by the Government of their
country. In not a few cases the amount of their debts
is many times less than that due to them by their former
customers in the Southern States. Last year, in the city
of New York, nine hundred and thirteen mercantile
houses became insolvent, whose, separate liabilities were
in no case under $50,000, and in several instances amounted
to some millions. Out of two hundred and sixty-six lead
ing dry-goods houses, reported as good when the rebellion
began, only sixteen remain, and their condition is preca
rious. These firms cannot well be spared from our com
mercial circles at this present crisis. The common rules
of humanity require our sympathy in their behalf, and no
less do justice and a regard for the interests of the repub
lic require that, after a strict examination of the affairs of

A JUST BANKRUPT LAW. 39
each insolvent, if he uprightly and honorably surrender
his property for the benefit of his creditors, he shall be
permitted to begin the world anew.
Sir, it is a striking fact, and little to our credit, that
while in most respects the United States adopt a system
more lenient to the debtor than that existing in any other
nation, they should not have adopted such measures for
exacting j ustice to creditors, and affording relief to honest
and unfortunate debtors, as England, France, and most
other commercial countries have long ago adopted and
found, by longifried experience, to be at once expedient
and humane. The just protection of the weak and un
fortunate-is eminently characteristic of our institutions
and of the customs and wishes of our people ; and yet
no wise "and equitable law exists by which each bankrupt
may be compelled to distribute his assets fairly and im
partially among his creditors, and may then be free to
devote his energy and ability to future acquisitions. Our
States have, for the most part, long ago abolished impris
onment for debt, but we yet continue to treat misfortune
as if it were a crime, and leave debtors as prisoners at
large. They may indeed use their personal labor to earn
a livelihood, but the reward of successful industry arises
far more from savings and the accumulation of capital
than from labor alone ; and from these opportunities they
are debarred. The hand of the law cuts them to the
quick through one of the most honorable and sacred in
stincts of our nature, by disabling them from making any
provision for their families. The insolvent debtor can
make no saving for the support of himself, his wife, and
children when he is disabled from earning the means of
subsistence, either by sickness, or by those natural infirm
ities of advanced age, to which, sooner or later, we must
all succumb. All savings are prohibited, and nearly all
hope for the rest of his life is destroyed. Many thou
sands of the most deserving of our fellow-citizens are in
this condition. Many, alike from the liberal enjoyment
of riches and from moderate competence, have thus been
reduced to poverty and want. If their sufferings affected
themselves alone, or arose from their own imprudence and
recklessness, they would be less worthy of our sympathy,

40 A JUST BANKRUPT LAW.
but they blight whole families and arise in many cases
from causes which no ordinary wisdom could have fore
seen, yet less could have controlled. Insolvency among
mercantile men is one of those calamities of which it may
well be said " Let him who thinketh he standeth take
heed lest he falleth." The various casualties arising from
commercial changes, the dishonesty of employees, losses
by fire or on the ocean, or through civil war, make daily
additions to the number of failures. It is estimated that;
throughout our great commercial cities in ordinary times
five per cent, of the persons engaged in business fail every
year. Ninety-five per cent, of our chief business men be
come insolvent at least once in their life-times; and most
of those who ultimately succeed have at some time passed
through the same ordeal and been dependent upon the
leniency or indulgence of their creditors. In many — per
haps in most — cases the honest debtor is met by his
creditors in the spirit of justice. Creditors who adopt
this line of action will surely not complain of a law mak
ing the course they pursue obligatory upon other creditors,
thus preventing fraudulent and preferential assignments
and much expensive litigation and delay.
Those who conscientiously oppose such a law as will
tend to render justice to both parties by exacting from
the debtor all he possesses, to be divided equally among
his creditors, guarding, by stringent and effective laws,
against fraud, and restore him again to active life, are, I
think, influenced rather by habit and custom than by due
consideration. A bankrupt law, properly regulated, is a
necessary element of every well-adjusted commercial
system. Commerce has always been and always will be
attended with many hazards. In an early period of
human history, before credit became an element generally
recognized in commercial transactions, and when the
artificial wants of the people were few and unimportant,
the risks attending the exchange of commodities were
chiefly those connected with carriage from place to place,
including dangers from the elements and from the inva
sions and robberies incident to an unsettled condition of
society. Trade was chiefly limited to payments in hand.
The code of laws was founded upon principles less hu-

A JUST BANKRUPT LAW. 41
mane and exalted than those we now recognize as of the
Highest Wisdom. The unfortunate debtor was regarded
as a criminal who could only discharge his obligations to
a wronged and indignant community by a protracted or
life-long confinement in prison, or by becoming a slave
for a term of years or for life. It may have been that
the losses which then occurred were often caused either
by collusion with others or by some violation of common
honesty. In our time we have ceased to hold the com
mon carrier responsible for those calamities or injuries
which are caused by the act of God or of the public
enemy, but the debtor is not the less held to his obliga
tions, although the losses which have overwhelmed him
are caused by war or rebellion, or by those natural causes
in which man had no direct or immediate agency.
In early history, the annals of all maritime and trading
nations are red with the blood with which the laws as to
debtors have been written. There was a period in Roman
history when the body of the debtor was divided among
his creditors ; and in our century and time he has been
placed -in close confinement, with no means of subsistence
except such as were afforded by the charity of friends, as
if thus he would be enabled to discharge his debts to his
creditors. The heart sickens, in this age of better hu
manity, at the recital of those disasters which in former
times overtook the poor delinquent and those who, under
Providence, were naturally depending upon him for sus
tenance and support.
The history of Great Britain affords us many instruc
tive suggestions on this subject. Occupying only a nar
row territory, her commerce, more vast than was ever at
tained by any other^country, is supported by a system of
credit. The most close investigation of economic science
and a careful practical application of sound principles are
necessary to maintain the prosperity, it might almost be
said even the existence of her people. Her credit system,
like our own, is liable to many reverses, which the records
of her courts of bankruptcy, stringent vas they are, show
to be unavoidable. The peculiar hazards necessarily
attendant upon widely-diversified commercial operations
early induced her statesmen to turn their attention to

42 A JUST BANKRUPT LAW.
some method of rapidly and certainly distributing the
remaining assets of insolvent debtors. Accordingly,
about the year 1543 (35 Henry VIII.), more than three
centuries ago, Parliament enacted the first bankrupt law
in that kingdom. It is worthy of notice that early legis
lation upon this subject arose from^ a regard to the
interests of creditors only. It was intended chiefly to
guard against the frauds which, even then, and under the
former system of severe punishment, were supposed to
account . for a large proportion of the failures. It had
become a common occurrence for delinquent debtors to
flee from the kingdom in order to avoid the imprisonment
consequent upon failure, taking with them whatever
valuables they could carry; and the first enactments of
bankruptcy were for the purpose of preventing these,
summary and inconvenient methods of payment. Severity,
towards debtors had been found to defeat its own pur
poses. From time to time these laws had been modified
for the benefit of debtors. From the first enactment
of a bankrupt law in England, they have been regarded
as necessary parts of every well-adjusted commercial code.
The broad principle is fully recognized that whoever
shall, in good faith, surrender all his property for the
equal benefit of his creditors, shall be discharged from
his debts. The law of that country now provides both '
for voluntary and compulsory bankruptcy, and the
interest of both parties, so far as they can be protected by
statutory provisions.
For many reasons, a bankrupt law is more necessary
in the United States than in any other country. Al
though we rank high among the chief maritime and com
mercial nations, transacting a vast trade between the
different States of our own Union, and a widely-extended
commerce throughout the world, our business is done
with comparatively limited capital, and is, therefore, at
tended with more than ordinary hazard. A common
spirit of enterprize arises from the general intelligence of
our people, the character of our institutions, and the
unlimited resources of our vast territory. But here
nearly all business men unavoidably encounter greater
perils than in European nations. The financial revulsions

A JUST BANKRUPT LAW. 43
which occur in all commercial countries are here pecu
liarly severe. Our business men depend; to a great
extent, upon the facilities and paper money furnished by
the banks. Great fluctuations continually occur in the
amount of the currency, loans, and discounts obtained
from these institutions. Upon this subject the panic of
1837 is suggestive. In January, 1834, bank loans and
discounts amounted to $324,119,499, but in the corre
sponding date in 1837 they reached the amount of $525,-
115,702, having increased more than 60 per cent, in three
years. The extraordinary expansion in the circulation and
loans, stimulated by the removal of the public deposits
from the United States Bank to the State banks in Octo
ber, 1833, led to a great increase in importations, which
rose up from $108,118,311, in 1833, to $189,980,035 in
1836, and largely affected the sale of public and other
lands. The receipts from the public lands in 1833 were
$3,967,682, and in 1836 $24,877,179. The over-trading
and speculation thus engendered were brought to a close
in 1837, by the "specie circular," and the panic of that
year ensued, resulting in the suspension of specie pay
ments by the banks and in a general bankruptcy.
Instead of a natural increase in the loans and discounts
of the banks, in accordance with the increase of popula
tion and the exchangeable products of the country, a
decrease continued until 1843, when they were only
$254,544,937, or less than half of the amount six years
before. Not until 1854, a period of seventeen years, did
they again attain the same amount as in 1837. They
then had gradually increased to $684,456,887 by January
1, 1857, but in the year following were suddenly dimin
ished by more than $100,000,000. The circulation in
current bank notes fluctuated in the same manner. From
$94,839,570, about January 1, 1834, it increased to $149,-
185,890 in 1837, decreased to $58,563,608 before 1843,
then gradually increased to $214,778,822 at the begin
ning of 1857, but during that year was suddenly dimin
ished by about $60,000,000, or nearly one-thii# its
amount, being only $155,208,344 on January 1, 1858.
The financial revulsion of 1857, the effects of which

44 A JUST BANKRUPT LAW.
are yet in existence, arose from causes in some respects
different from those of 1837. Until 1857 commerce and
bank facilities had seemingly kept pace with the popula
tion and resources of the country. The origin of these
reverses may chiefly, I think, be traced to the increased
diversion of capital from its legitimate purpose to rail
road enterprises and Western land speculations. ' Prior to
1858, about 24,290 miles of railways were constructed at
a cost of not less than $1,000,000,000. An impetus was
thus given to land operations along the lines of many
new routes of travel. From 1854 to 1856, inclusively,
the proceeds from land sales amounted to $20,404,691.
No less than 26,691,670 acres were -' appropriated to
bounty land warrants and 18,372,550 acres more were
granted by the 34th Congress to railroads.
These figures, taken from the financial report of the
Secretary of the Treasury, furnish an unerring index to
some of our commercial revulsions. The system should
be familiar to us all. For many consecutive years there
is a gradual increase in the circulating medium and in the
accommodations of the banks. When the. crisis ap
proaches money is said to be abundant. Those who re
ceive loans from the banks are enabled to extend their
own credit and give credit in return to the numerous tra
ders, manufacturers, and adventurers who, in this country,
are never at a loss for opportunities of speculations or
public improvements. Notes of hand, mortgages, stocks,
and even real estate itself, being then readily convertible
into money, become, to a considerable extent, a medium of
exchange, and swell the volume of the currency. The
system pervades every class of society. Hope and inex
perience ever suggest .that the new prosperity will be
permanent and progressive. Each epoch presents new
features. The lessons of past teachings are held to be
inapplicable to the present time, and are unconsidered,
or where they are remembered, the days of adversity are
confidently believed to be remote. Personal property of
nearly all kinds is bought and sold on an extended, system
of dledit. Stocks are negotiated which when the time of
pressure arrives are swept away by earlier liens. The.
amount of railroad stocks and securities alone, which

A JUST BANKRUPT LAW. 45
ceased to have any cash or negotiable value in 1857-58,
is believed to have been not less than $500,000,000. Real
estate is often bought and deemed the most secure invest
ment, a quarter or half the purchase money being paid
down, and a bond and mortgage given for the bal
ance. The mortgage is foreclosed during the revulsion,
at a sale where there is little competition or none at all,
and the mortgagor is held for the remaining balance of
the debt. In many cases the rent of costly edifices in
large cities is diminished at least one-half of its previous
amount. Public works are suspended. Manufactories
are stopped, wholly or in part ; and the grain itself, which
would have been exchanged for other products, remains
in the granaries of the farmer or unthrashed upon the
prairies, for need of the requisite money or mutual confi
dence to bring it to market.
Suddenly, and without any warning intelligible to the
. public, a financial collapse occurs. Men whose credit
was unimpeachable, and whose pecuniary responsibility
was as little doubted by themselves as by others, become
unable to sell their property or negotiate new loans, while
they are required to pay the debts they have already
contracted. Their "means have been invested." Tens
of thousands become insolvent who have abundant prop
erty to pay the whole of their debts, if it could be sold
at the average price of the few preceding years ; but the
relative value of money and of property has been changed.
Frequently creditors are willing, under such circumstances,
to release the debtor and assist him with credit in re
newed exertions, but their good intentions are frustrated
by others who insist on the full letter of the law which
gives. them their pound of flesh, and continues the useless
bondage of the debtor. He is free to go where he chooses,
but he can accumulate no saving, either for the benefit of
his family, for his own use in sickness or old age, or as a
small capital by which he might be enabled to pay the
debts conscientiously contracted in more prosperous times,
with full belief in his ability to pay them. He is like
those who are said to have been sentenced laboriously to
draw water, pouring it into empty vessels whence it es
capes as quickly as it enters. This is the penalty our

46 A JUST BANKRUPT LAW.
laws inflict on undeserved pecuniary misfortune. No
sooner is a frugal debtor known to lay aside a small
surplus from his earnings, than he is stripped by the
creditor. Hence artifices are adopted. Recourse is often
had to indirect ownership, sometimes involving actual
perjury without offending against legal enactments, but
destroying self-respect and inflicting the penalties of con
scious guilt upon the perpetrator, who often drifts on
Gradually through much suffering, to greater and greater
emoralization. His family is reared and its character
formed amid a cloud of adverse circumstances. If we
cannot make men honest, we can lessen the temptations
which often lead them to do wrong.
Let us see who is benefited by the laws which inflict
so much misery upon debtors, even when they are honest;
and upon their no less innocent families. The percent
age of debts paid out of insolvent estates is larger where
bankruptcy laws exist. The experience of England is
conclusive on this point, for the chief object of the bank
rupt law of that country, found by the experience of sev
eral centuries to be attained, is to render the estate of the
bankrupt available in liquidation of his liabilities before
it can be concealed by fraud or dissipated by bad man
agement, or other means. As the morals and philosophy
of trade advanced, it was found that humanity to the
debtor did not diminish the payment of debts, but had
the contrary effect ; and then the present creditable sys
tem found a place in the statute books of England. The
creditors at once receive the proceeds of the bankrupt's
estate, and he is wholly released from his liabilities.
Business men of the widest commercial knowledge
concur in the belief that such a law would produce good' ,
results in our own country. The belief has a broad
foundation in human nature itself. The first intentions.
of men are less selfish than their second thoughts. The
trader who has recently become insolvent is both able'
and willing to do more for his creditors than he is either
able or willing to do after long protracted despair and in
solvency. Those who, for commercial purposes, have
made this subject their special study affirm that,* when
ever a moderate compromise has been offered immediately

A JUST BANKRUPT LAW. 47
after failure, and been repelled, in hopes of obtaining a
better settlement, the creditors, in ninety cases out of a
hundred, would afterwards be glad if they could com
promise the debt at a smaller percentage, but usually
fail to realize anything — the debt becoming a total loss.
An attempt to settle with their creditors is usually one
of the first efforts on the part of those who become insol
vent. If the debtor fails in this through want of con
currence among his creditors, and the claims against him
are pressed, he foresees long years of thraldom and em
barrassment, and his next impulse is to secure provision
for himself and family. In his despair of meeting with
justice, he often has recourse to many subterfuges, few of
which ever reach the public ear; but the common course is
to make a preferential assignment, permitted by law, thus
placing his assets in the hands of one or more friends,
from whom he hopes to obtain employment or assistance
in business, or perhaps support and money from the
actual proceeds. The remainder of those to whom he is
indebted remain unsatisfied, and he bids them defiance.
Creditors, on the other hand, fearing assignments of this
kind, often submit to compromises which they know to be
unjust. A proper bankrupt law prohibiting these assign
ments would diminish, if it did not destroy, such dangers,
and thus befriend the creditor. In many cases through
these assignments, or by other means, the debtor is tempt
ed to keep all he can until some such terms as he thinks
favorable can be effected. From this time he leads a
surreptitious and demoralizing life. Perhaps one credi
tor alone objects to the offers made. The debtor is de
termined not to pay one unless he can pay all. It is
necessary his family should be maintained. Time passes,
and his assets are diminished. Often the creditor, fear
ing preferential assignments, hesitates to use legal meas
ures. The only dividend that can now be offered seems
paltry. The debtor, finding that neither the world nor
the world's law befriend him, and believing that the
bondage of debt will be perpetual, not unfrequently sets
aside the common restraints of prudence and morality,
and becomes an incubus, an injury to society, instead of
devoting his intellect and energies to its benefit. If of a

48 A JUST BANKRUPT LAW.
nature too scrupulous and honorable to yield readily to
temptation, his sufferings are severe and constant. He
endeavors to provide for those dependent upon him, but
their respect for him is diminished by his own loss of
conscious independence, and the change experienced in
the social position of them all, arising from the ne
cessity of proper retrenchment. This he and they can
meet, but society always attaches a certain degree of
odium to the insolvent, who in his turn is humiliated, and
often so far depressed that he resorts to dissipation as
the means of finding a temporary forgetfulness. He feels
weak and degraded in the eyes of that little domestic
circle of his wife and children, of those whom he is bound
by every honorable and sacred instinct of our nature to
maintain and defend at all legitimate hazards, by the
daily labor of his life, receiving in return, as his natural
right, the cherished equivalent of their affection and re
spect. He can bestow upon them nothing more than a
temporary subsistence, taking care at best that he never •
has at his command more than the savings of a limited
number of days. , The law has done all it can to make
honesty no longer the best policy for him, and the only /
hope he has of worldly prosperity, of competence, or
of maintaining his family depends upon the successful
practice of dishonorable concealments.
It is urged by many persons that the bankrupt act of
1841 was unpopular, and led to the overthrow of the
party that was chiefly instrumental in its passage. I
regard such an objection as unworthy of statesmen of
wide and liberal views, who comprehend a true and'
enlarged commercial policy. The passage of that act was
preceded by an extraordinary financial panic, resulting in
general insolvency, the causes of which I have briefly
traced already. There was no relief for these bankrupts.
except through the passage of such a law. It was urged
upon exaggerated grounds, as to the number of the insol
vents and the amount of their indebtedness, and formed
a part of the series of financial measures of the party S
then in power. Under a great pressure it was passed.£!i
It was objectionable in some respects ; in these particuV
lars it could have been afterwards amended; but in its

A JUST BANKRUPT LAW. 49
main features it would have operated beneficially. As
soon as the voluntary applicants, who were 33,739 in
number, with an aggregate indebtedness of $440,934,-
615.01, were relieved, or in the process of relief, the law
was repealed — just when, through the involuntary clause,
it would have become serviceable to the creditor, con
tributed largely to prevent future panic, and exercised a
wholesome influence upon trade and commerce, The error
was not in the passage of the act of 1841, but in its too
early repeal, before it had received a fair trial.
Another prominent argument against affording relief
to the unfortunate but honest debtor who has become the
victim of casualties which, perhaps, as in the case of our
present war, the statesmen and Government of our
country were unable to prevent or foresee, is founded
upon the fact that the assets of those who became bank
rupt, under the law of 1841, yielded only a small per
centage to their creditors. Merely a moment's reflection
would be sufficient to make it plain to any man that the
losses then brought within the reach of statistical
research were the accumulated losses of many previous
years, created under the operation of laws like those now
existing, when, as now, there was no general law of bank
ruptcy. No such enormous aggregate of hopeless debt
could have been accumulated under a permanent bank
rupt law. In almost every case the creditor would have
compelled an equitable distribution of the estate of the
insolvent, before it was dissipated through delay ; or the
debtor would have availed himself of the prospects
opened to every honest man by just enactments, before
his assets had been so fully consumed or squandered.
These losses were incurred under a legal system per
mitting preferential assignments, and thus encouraging
unjust concealments. Under a proper system the cred
itor would not be restrained by threats from enforcing his
claims, but would compel bankruptcy and obtain a divi
dend before the estate could be concealed by fraud or
spent in the maintenance of the despairing and entram-
melled debtor.
It should also be borne in mind that a large portion of
the liabilities of bankrupts in 1841 was created in the
4

50 A JUST BANKRUPT LAW.
purchase of unimproved property, partly paid for in
cash, and the remainder secured by bond and mortgage.
After the panic, the mortgagor failing to meet the prin
cipal, the real estate was sold, and bought in by the
mortgagee, at, in many cases, less than the amount of the
mortgage; thus securing his cash payment, and finally
the whole property. The bankrupt act did not disturb
prior liens. Again, the assets were put up at auction by
the general assignee, in many cases, without an investiga
tion as to their value, and were bought up by some
friend of the bankrupt who had more accurate informa
tion as to them.
Sir, reckless speculators will continue to encounter
risks, whatever may be the statutes, but the history of
the world assures us that the most flagrant speculations
have occurred where insolvent debtors were treated as
criminals. We are yet without experience to guide us as
to the comparative percentage paid under the present
system, and the amount that would be paid under a just,
stringent, and permanent law of bankruptcy ; but it is
worthy of note, that while under the insolvent laws of
England, which release the body but do not discharge
the debt, few dividends are made, a dividend is almost
always made under the bankrupt laws which encourage
integrity, by permitting the debtor to have brighter pros
pects for the future, by releasing him alike from prison'
and the debt — giving him no hope of prosperity but
through perfect honesty, yet allowing him through this
course of conduct, a relief, complete and permanent. Such i
laws present all possible motives for honesty, and power*';
ful incentives to abstain from fraud. >
Sir, it seems to be a just view of the case, in accordance
with the opinions usually entertained by business men,
that the parties to commercial transactions, where credit
is given, are, to a certain extent, adventurers in common.
For fraud or dishonesty, the guilty should be punished —
but in sales on credit, the risk is borne by each party,
although not in equal proportions. The vendor enquires
closely as to the pecuniary means of the purchaser, his
habits of' life, his knowledge of business, and his adapta
tion to its pursuits. He balculates the chances of hia-

A JUST BANKRUPT LAW. 51
customer's success, by inquiries as to the competition he
will experience, his practice of selling on time or on
credit, and by information from all possible sources. In
this case he may be regarded as an insurer of his own
debts, and generally charges his debtor a higher price
upon credit than for cash. Hence in those cases where
misfortune and not his own crime has overwhelmed the
debtor, he should, upon surrender of his effects, meet with
an honorable discharge.
Various systems of insolvency regulating the relations
of debtor and creditor prevail in different States. Special
enactments for this purpose are necessary in every com
mercial community. In some cases his present assets are
distributed, and he obtains no release from the debt — his
future acquisitions being deemed also the property of his
creditors. In others the person of the debtor is discharged,
and. he is free to acquire property in future, if a specified
proportion of his creditors vote in his favor. In yet other
cases he is discharged if his assets pay a certain percentage
of his debts, and the consent of his creditors is not essen
tial to his release.
Insolvent laws, of which any debtor whether imprisoned
or not may have the benefit, exist in California, Michigan,
Ohio, Indiana, Louisiana, Missouri, Connecticut, New
York, Massachusetts, and Rhode Island. Those persons
who. are imprisoned on civil process are alone entitled to
relief in Delaware, Maryland, Tennessee, North Carolina,
South Carolina, Georgia, Alabama, Mississippi, Illinois,
and New Jersey. In Maine, New Hampshire, Kentucky,
and Virginia, the relief is confined to debtors charged in
execution. In California, Michigan, and Massachusetts statutes
provide for the discharge of the insolvent from the debt
itself if his assets are assigned and distributed among
his creditors, while in many other States his person only
is excepted. In the State of New York the insolvent
laws enable the debtor, with the consent of " two-thirds in
value" of his creditors, and on the due surrender and
disclosure of his property, to be discharged from all his
debts contracted within the State, with certain exceptions.
For commercial purposes the different States are a unit,

52 A JUST BANKRUPT LAW.
At present their laws do not extend beyond the limits of
the separate States, and the persons subject to their
separate jurisdiction. In this varied legislation of the
different States we find a valid reason for comprehensive -¦
enactments. A law which will embrace the whole Union
in its provisions has now become indispensable. Nothing
less can relieve our insolvent citizens from the heavy
pecuniary obligations which oppress their energies, blight
their future, and deprive the country of the benefit of
their services and industry.
It is estimated that the aggregate number of failures
during the last five years, considering only those cases in
each of which the debts amount to $5,000 or more, and
leaving out the numerous class of insolvents who owe
less, is nearly twenty-five thousand, and the amount of
indebtedness in them is nearly seven hundred and fifty
millions. The liabilities last year alone were nearly as
large as in the preceding three years.
Many of these liabilities have been discharged by vol- .
untary compromise, but this condition of our commercial..
affairs clearly requires the intervention of Congress, and
this honorable body will fail in the discharge of an im
portant duty if it does not perform its share in affording
proper relief.
Upon this subject some differences of opinion exist be
tween the commercial and agricultural interests — the
former urging a bankrupt law, and the latter inclining to
oppose it. I see no good ground for opposition. Both
parties would, I think, be satisfied with such an act as in
its voluntary provision should apply to all persons, but
in its compulsory clauses only refer to those who are
merchants using the trade of merchandise, all retailers of
merchandise, bankers, factors, brokers, underwriters or
insurers. The agricultural interests would not be in
juriously affected by such an Act. It seems to me that
we can meet upon this subject in a spirit of harmony,1
and, without the imaginary rivalry of different interests,
adopt some suitable measure that will do justice to that
class of our citizens in whose behalf I now appeal to this
honorable body.
Society itself has at all times an interest in the subsfr

A JUST BANKRUPT LAW. 53
quent life and exertions of the bankrupt. The hope or
expectation of future acquisition, by conducing to the in
dustry, honesty, and morality of the unfortunate debtor,
contributes to the welfare of the community. A due
regard for the public good demands that the future acqui
sitions of the debtor who has faithfully surrendered all
he owned for the benefit of his creditors, should be placed
under his own control, and fully justifies prudent and
careful enactments for that purpose.

A JUST BANKRUPT LAW.
ITS PRESENT NECESSITY AND IMPORTANCE AS A
PERMANENT ACT.

House of Representatives, June 3, 1864.

Although the necessity of a bankrupt law was sufficiently ob
vious, its passage was so vigorously opposed that it was not secured
without persevering support. At the close of the debates at this
time, a few minutes were yielded to Mr. Ward. Having already
presented the subject almost exhaustively, little remained to be
done except to review the remarks of his opponents and recapitu
late the arguments he had advanced, and which remained unan
swered. Mb. Speaker : I am indebted to the courtesy of the
gentleman from Ohio for the oppprtunity of making a few
remarks. I feel very reluctant, having of late been so
frequently before the House, to occupy its time now, nor
would I do so if this were not a subject vitally affecting
commercial and manufacturing interests of the city which
I have the honor in part to represent. The large cities will
be much more affected than the agricultural districts by
the passage of a bill of this character ; but a just and ,
reasonable settlement of the questions involved must be
beneficial to all parties of the community, and I hope this
Congress will have the honor of passing a bill that will
relieve a large number of well-disposed but insolvent^
debtors from a bondage so nearly akin to slavery.
I have already, during the last session of Congress, adfl
dressed the House at length on this topic. The member^]
of this honorable body do not often look into the details
of statistics on a subject of this kind, and I feel it my
duty, not only to this House, but to my constituents, to
present briefly some of the main facts to be considered in
this connection. .

A
A JUST BANKRUPT LAW. 55
A large number of those who will be relieved by the
passage of this act became bankrupt from causes origin
ating in the present war ; from causes which they could
not foresee and over which they could not possibly exert
any control. ******
It has been urged as an objection to the passage of
this bill that it will release debtors in the Southern
States. A little reflection will lead us to the conclusion
that as the principles of human nature are nearly the
same everywhere, Northern creditors will, on the restora
tion of peace, receive a larger percentage of their claims
against debtors resident in the South, under the mingled
operations both of the voluntary and compulsory clauses
of this national bill, than if the laws regulating the rela
tions of debtor and creditor are left subject to a system
of preferential assignments, or whatever other policy may
be the choice of State or local governments.
******
The city of New York, from its commercial character
and the extent of its business, is always, in every mone
tary crisis, the largest sufferer. No accurate statement
of the insolvencies of last year has come under my notice,
but the amount of their liabilities is computed to be about
$50,000,000. I think it will be readily perceived by the
House that this enormous aggregate of indebtedness can
never be relieved except by means of a general law in
cluding the various States. In the absence of such an
act the energies of a large portion of the people are
crushed. There are probably twenty or thirty thousand
individuals in this country who are now unable to extri
cate themselves from the evils of insolvency. If they
could be discharged by a full and fair surrender of their
assets they would again become useful menjbers of the
commercial community.
I trust that the House will pass this bill. The subject
has been fully discussed before Congress and in the
country at different periods, and such a measure as is
now proposed has, with scarcely any exception, been uni
versally approved by the leading organs of public opinion
throughout all parts of the United States. •

56 A JUST BANKRUPT LAW.
During the last Congress no less than from thirty to
forty thousand persons petitioned for the passage of a
\ bankrupt law. I am satisfied that its enactment will'
benefit creditors as well as debtors ; for the very moment
that the avenue to escape is opened, men in failing cir
cumstances will extricate themselves from their embar- !
rassments by surrendering their property for the benefit
of their creditors, and thus the creditor, instead of being
paid as at present a small percentage of his debt, or fre
quently none at all, will receive a much larger dividend,
as the necessary and direct tendency of the proposed law
is to cut off the system of preferential assignments yet
permitted by law, but prejudicial to the interest of cred^
itors in general, and frequently adopted by debtors be
cause no other means of escape are open to them.
It has been urged as an objection to a general and
permanent law of bankruptcy that under the experimental
and temporary law of 1841 only a small percentage of
dividends was paid to the creditors. To arrive at a just
conclusion on this point it is necessary to remember that
for a long period before the passage of that law, including
the disastrous year of widespread insolvency, 1836-37,
no national remedy existed for the relief of debtors. In
the meantime, for the purpose of maintaining their, fam
ilies, insolvents, having no legal means of restoration to
an honorable position, were naturally but too frequently I
induced or driven to resort to indirect methods of con
cealing some portions of their property which had thus
become gradually exhausted, so that when the law was
passed there were few assets. A permanent law tends to
produce a contrary result, and to prevent the waste of
assets, both by its compulsory clauses and by opening out
avenues of future and hopeful employment to every
debtor who;(|passes through the ordeal with an unblem
ished reputation.
I regard it as a stigma on the age and country that, af
ter we have abolished imprisonment for debt, and done so
much towards enlarging the privileges and rights of debt
ors, we should not have a bankrupt law.
It is often said that if a man in failing circumstances
will give up his property, his creditors, will release him,;

A JUST BANKRUPT LAW. 57
but practically it is well known that there is seldom a
case in which there is not some creditor who will insist on
having his pound of flesh. If nine-tenths of a man's
" creditors are willing to release him on the surrender of
his property, the other one-tenth should be compelled to
acquiesce and not force the debtor to pay them a hundred
cents on the dollar, to the injury of the more liberal credi
tors, and at the risk of forcing the debtor to the adoption
t>f a preferential assignment, or some other arrangement
equally.-injurious to the general interests of his just
creditors. Every member of this House is, or should be, familiar
with those principles of legislation which are to be con
sidered in reference to a bankrupt law, an enactment de
manded alike on the grounds of expediency, humanity,
and justice. The United States alone, among all com
mercial nations, refuse this measure of relief to the hon
est but unfortunate debtor, and at the same time permit
¦ in its stead a system of preferential assignments, unjust
to the- creditor and demoralizing to the public. I advo
cate no new and untried theory. Legislation which has
existed for several centuries in England, France, and the
other leading nations of Europe, where it has been found
by experience to attain the object for which it was enact
ed, compelling the just treatment of creditors, and
affording relief to honest and unfortunate debtors, is
worthy of our most earnest and respectful considera
tion. It is far more needed in this country, where
monetary fluctuations are frequent, unforeseen, and vio
lent, than in the Old World, where the changes of
trade are less common and embarrassing. It is in es
pecial accordance with the spirit of our institutions
and of our people, who desire the protection of the
weak, and that none shall be hopelessly oppressed. In
all other respects our laws are lenient to the debtor. But
let no one regard this side of the subject alone.
The interests of the creditor are also to be considered.
It is proposed to render the estate of the debtor available
in payment bf his debts before it has been dissipated by
bad management or delay, or concealed by fraudulent
contrivances. The creditor, as soon as due investigation,

58 A JUST BANKRUPT LAW.
just to all parties concerned, can be had, is to receive his
share of the bankrupt's estate ; and if there has been no
profligacy, no culpable carelessness, nor any attempt at
fraud on the part of the debtor, he is set free once more
to resume his accustomed labors for the benefit of his
family and society. This course, while it is more profit
able to the creditor and more humane to the debtor than
the customs already prevailing, tends also to create and
maintain a higher standard of mercantile integrity and
honor — a possession of inestimable value to the nation.
The number of debtors who became insolvent in the
Northern States in 1861, the first year of the war, was
nearly six thousand, more than double the number of
the same class in each of several previous years. These
people were the victims of casualties which neither they
nor the statesmen and Government of our country were
able to foresee. At other times the sudden contraction
of paper money and banking facilities, after a long peri
od of expansion and easy credit, has produced unmeri
ted calamities like those by which merchants and others
dependent upon the Southern trade were overwhelmed in
that truly calamitous year. It is our duty to provide for
these people a ready and legitimate method, of extrication
from their difficulties. They have been left— the victims of
the war — wounded and disabled on the field of commerce.
I am satisfied that no law which it is in the power of
Congress to pass will be more acceptable to the people,
or more beneficial to the countiy, than the one now under
consideration. I therefore hope it will be promptly pass
ed. I now move the previous question.

OUR COMMERCIAL RELATIONS
WITH
THE BRITISH NORTH AMERICAN PROYINCES.

House of Representatives, May 18, 1864.

The treaty for promoting commerce with the British North
American Provinces caused an enormous and profitable addi
tion to our trade with them ; but a subsequent increase of duties
by Canada, and other injurious enactments on her part, stimulated
by her need of larger revenue, created much dissatisfaction in
the United States. Under these circumstances the Legislature of
the State of New York passed concurrent resolutions, saying
that "free commercial intercourse between the two countries,
developing the natural, geographical, and other advantages of
each for the good of all, is conducive to the present interest of
each, and the only proper basis of our intercourse for all time
to come." The resolutions were referred by the Committee on
Commerce to Mr. Ward, and he sought to give practical effect to
their principles both by speeches and reports.
Mr. Speaker: Among the many subjects of import
ance requiring our attention, none, except those immedi-
diately relating to the deplorable events transpiring in
our own country, so justly occupy our time as our re
lations to the young and rising nation inhabiting the
territory contiguous to our own on the north. If Mex
ico, our neighbor on the south, ready, perhaps, to form
an alliance with the insurgent States, is to be ruled by a
power hostile to us and our institutions, does it not form
a proper portion of our public policy to cultivate the
most friendly relations with the British Colonies ? Mex
ico has, it is true, been called a republic. She has
striven after the realization of popular government, but
has been too weak to attain it. The result has been
anarchy, followed by her falling an easy prey to Euro-

60 OUR COMMERCIAL RELATIONS WITH CANADA.
pean invaders, insignificant in number compared with her
own forces. In the British Provinces the principle of
government by the people through their representatives
is more fully acknowledged than in any country of mag
nitude except our own. Already they contain a popula
tion more numerous than all the free inhabitants of the
United States in 1790, several years after the Revolu
tionary war had terminated in peace. Their territory is
capable of maintaining in affluence a population much
larger than ours now is. Our commerce with the single
province of Canada alone has, for the last five years,
been larger than with any other country, excepting Engv
land, France, and Cuba. Can there be any doubt that it
is more reasonable to attempt by negotiation the removal
of any objectionable features which may have arisen
in connection with the existing treaty, than to disturb.
the industry and investments of the large portion of our
citizens now directly or indirectly engaged in this trade \
Besides the limited provisions as to reciprocal trade and
navigation, the treaty settled many difficulties which had
long occupied the attention of our statesmen. The free
use of the St. John River was considered important to the
eastern lumber trade. But the most pressing and urgent
motive undoubtedly arose from the value of the fisheries
near the maritime Provinces, and the imminent probabili
ty of hostilities with Great Britain unless some method
could be devised by which the fishermen of the United
States might pursue their calling on those coasts. A
large number of our fellow-citizens are engaged in these
fisheries. Their lifetime is one of difficulty and peril.
From the energy and character formed by a continual
struggle with the rough elements in the northern seas
spring the multitude of those who, through their uncon
querable perseverance and hardihood, enrich us by pro
moting our foreign commerce, and carry our nation's flag
into the ports of every sea. A practical acquiescence had
to some extent been given to our limited participation in
the fisheries. The Provincial coast abounds in deep bays
and inlets, very extensive, and forming an important por
tion of the fishing grounds. It was claimed by Great
Britain that as she had jurisdiction within three miles of

OUR COMMERCIAL RELATIONS WITH CANADA. 61
the coast, the old-time limit of cannon shot, the distance
should be measured, not along the shore, but from cer
tain specified and prominent headlands. This was for a
long time an essential point in the controversy.
By the Convention of 1818, between Great Britain and
the United States in relation to the fisheries, we re
nounced forever any liberty theretofore enjoyed or
claimed by American citizens to take, dry, or cure fish
on or within three marine miles from any of the coasts,
bays, creeks, or harbors of British North America, but
stipulated that they should have forever, in common with
the subjects of Great Britain, the liberty to take fish of
every kind on certain parts of the coast of Newfound
land, around the Magdalen Islands, and on the coast of
Labrador. Complaints having been made by the several Colonies
that the British Government did not enforce the pro
vision of the convention, but permitted Americans to
encroach upon the fishing grounds thus renounced, a case
was prepared in 1841 by the Legislature of Nova Scotia,
to be submitted to the imperial crown officers; and the
Advocate-General and Attorney-General of England
gave it as their deliberate opinion that " by the terms of
the convention, American citizens are excluded from any
right of fishing within three miles from the coast of
British America, and that the prescribed distance of
three miles is to be measured from the headlands or ex
treme points of land, next the sea, of the coast, or of
the entrance of bays or indents of the coast, and conse
quently that no right exists on the part of American
citizens to enter the bays of Nova Scotia, there to take
fish, although the fishing, being within the bay, may be
at a greater distance than three miles from the shore of
the bay ; as we are of opinion that the term ' headland '
is used in the treaty to express that part of the land we
have before mentioned, including the interiors of the
bays and the indents of the coast."
The Colonial authorities maintained this view of the
case, and it was confirmed by Mr. Webster, then Secre
tary of State, who, after quoting the first article of the
convention, used the following terms :

62. OUR COMMERCIAL RELATIONS WITH CANADA.
" It would appear that by a strict and rigid construction of this
article, fishing vessels of the United States are precluded from
entering into the bays or harbors of the British Provinces, ex
cept for the purposes of shelter, repairing damages, and. obtain
ing wood and water. A bay, as is usually understood, is an arm
or recess of the sea, entering from the ocean between capes or
headlands ; and the term is applied equally to small and large
tracts of water thus situated. It is common to speak of Hud:
son's Bay, or the Bay of Biscay, although they are very large
tracts of water.
" The British authorities insist that England has a right to draw
aline from headland to headland, and to capture all American fish
ermen who may follow their pursuits inside of that line. It was
undoubtedly an oversight in the Convention of 1818, to make so
large a concession to England, since the United States had
usually considered that those vast inlets or recesses of the ocean
ought to be open to American fishermen, as freely as , the. sea
itself, to within three marine miles of the shore."

It would be difficult to devise a system more likely to
embroil the citizens and subjects of the respective coun
tries. From the nature of the occupation itself, and the.
natural character of those who are engaged in it, frequent
infringements of such rules would arise. The precise
distance of three miles could seldom be readily ascer
tained. Through the interests of men and the ardor of
the chase, very different estimates would be made. A
settlement of the questions regarding the fisheries in such
a way as to give peace and security to the people on both
sides was exceedingly desirable. The British authorities,
at the instigation of the Colonies, insisted upon the
strict construction of the convention, which . had long
been inoperative or partially enforced. Applications for
the navigation of the St. Lawrence, previously granted by
courtesy, were withheld. A large number of armed ve&
sels were sent by Great Britain to the Colonial stations;
An excited state of public feeling prevailed. Mr. Web*''
ster gave official information that an American fishing
vessel had already been taken by the British naval force
on the Provincial coast. Its crew were carried as pris
oners into a British port. An expedition from other
American vessels had hastily been armed and organized,
and had forcibly retaken the captured vessel. It was

OUR COMMERCIAL RELATIONS WITH CANADA. 68
deemed prudent by the statesmen of each nation to
arrest the progress of events which might, almost at any
time, have precipitated the two countries into war, and
if possible, to prevent their recurrence in the future.
There was, as the present Secretary of State then said,
" only one way that Congress could act, and that was by
reciprocal legislation with the British Parliament or the
British Colonies." By the treaty the impending dangers
were wisely and honorably averted. The fish cured by
the Colonists was admitted free of duty into our mar
kets, and we acquired for our fishermen " in addition to
the liberty secured to them by the above-mentioned Con
vention of October 20, 1818, of taking, curing, and dry
ing fish on certain coasts of the British North American
Colonies therein defined, the liberty, in common with the
subjects of her Britannic Majesty, to take fish of every
kind., except shell-fish, on the sea-coasts and shores,
and in the bays, harbors, and creeks of Canada, New
Brunswick, Nova Scotia, Prince Edward's Island and of
the several islands thereunto adjacent, without being
restricted to any distance from the shore, with permis
sion to land upon the coasts and shores of those colonies
, and the islands thereof, and also upon the Magdalen
Islands, for the purpose of drying their nets and curing
their fish; provided that in so doing they do not inter
fere with the rights of private property, or with British
fishermen, in the peaceable use of any. part of the said
coast in their occupancy for the same purpose."
Bills of reciprocity had from time to time been pre- .
viously reported to the House, but none were adopted.
After the repeal of preferential duties favoring Colonial
produce in the home markets of Great Britain, measures
for its free admission into the United States were more
strenuously urged on behalf of the Colonies. The name
and intention of Reciprocity, and the hope of approach
to a system which could not fail to be mutually beneficial,
were hailed with delight by many of the best and wisest
of the nation. The plan was earnestly advocated on
behalf of those great principles which, overlooking sec:
tional boundaries, seek to allow free and practical scope
to the natural alliance of material interests with the most

64 OUR COMMERCIAL RELATIONS WITH CANADA.
noble and benevolent designs of public or international
policy. The British and Colonial authorities refused to nego
tiate on the subject of the fisheries or the navigation of
the St. Lawrence apart from the subject of our commer
cial relations with the Colonies, and they were all included
in the Treaty of 1854.
Our commercial relations with Canada and the other
British possessions in North America have been viewed
¦from so many local points — the trade of one city or dis
trict has so often been considered as fairly illustrating
the character of the whole commerce between us and our
neighbors on the north — statistics have frequently been
so partially examined vrith a desire to vindicate some
foregone conclusion rather than to discover and deduce
the truth — isolated facts have been reiterated without
due regard to others of no less importance— that few
enter upon consideration of this question without having
formed unjust or acrimonious opinions in relation to it.
I do not believe that calm argument, and candid, patient
investigation are inconsistent with those just conclusions
on all international subjects which are essential to the
greatest prosperity of the public; or that it is more
patriotic for us who have been sent here to assist in
forming laws for the government of this people, to be
rigorous and special advocates of some preconceived
opinions or local interest than to be unbiased judges
desirous of promoting the interests of the nation at large. ::
¦ I would be influenced by no hasty opinion, still less by .
any inveterate prejudice, considering details, but only con
sidering them in connection with the broader views relat
ing to the aggregate, by no means singling out especially
for attack such a condition of international trade as may'
be presented at some one minor point of entry, but in
cluding as far as practicable the whole commerce of the
United States with the countries whose territory extends
far beyond our own on the north-east shore, and follows
inland the projection of Maine, the Great Lakes of the
interior, the wilds of our extreme north-western Terri
tories, and the Rocky Mountains; and is as near to the
gold-bearing States on the Pacific as to New England and

OUR COMMERCIAL RELATIONS WITH CANADA. 65
the Atlantic, presenting a frontier coterminous with our
own for at least four or five thousand miles, from Maine
to Oregon.
A wide spread impression as to the operation of the
treaty has been created by imperfect or mistaken repre
sentations. The injury wrought by them is not confined
within these walls. The people look to us, if not for
guidance, at least for the results of careful thought and
eliberate investigation.
It is essentially the nature of our trade with the Prov
inces that our exports from certain Western ports should
be very large and their imports comparatively insignifi
cant, while the produce from these regions and Canada is
poured into easterly places of entry, whence "scarcely any
exportation of the same articles takes place. Hence, on
one side, the amounts of our sales, which are supposed to
be beneficial, are regarded too exclusively, and on the other
our purchases are chiefly considered, and these are sup
posed to be injurious to our interests, in accordance with
a popular but erroneous theory, applying to great inter
national questions between ourselves and foreigners such
principles as are evidently false in individual transactions
between man and man. We must consider the interests of
the whole country, studying the facts presented by the
whole case. We shall then, I think, be led to the conclusion
expressed by the concurrent resolution of the State of
New York, that " free commercial intercourse between the
United States and the British North American Provinces
and Possessions, developing the natural, geographical, and
other advantages of each for the good of all, is conducive
to the present interest of each, and is the only proper
basis of our intercourse for all time to come." Let us
approach the subject of our relations to the people of
these countries with a desire to comprehend it accurately
and fully as it is, and a conviction that errors made in the
spirit of liberality and friendship are less likely to be in
jurious than the perverse misunderstandings and recrimi
nations which, with their natural results of hatred, war,
devastation, and bloodshed, have hitherto contributed the
largest portion to human history.
There is, I think, a general belief that the balance of
5

66 OUR COMMERCIAL RELATIONS WITH CANADA.
trade, as it is called, is against us in our intercourse with
these Colonies, but the statistics recently furnished by the
Secretary of the Treasury show that during the period^
which has elapsed since the treaty went into effect, and
computing up to as late a date as our authentic records
will permit, our exports to the provinces have been
$171,628,779, while our imports have been only $144,183,-
096, showing that we have sold to them more by $26,445,- .»
683 than we have bought from them.
It appears on the same authority that while the amount
of our exports to Canada alone, since 1855, has been
$134,614,376, we have imported thence articles to the
value of $133,147,600, leaving a balance in our favor of
$1,466,776. * The exports of 1863 include $3,502,180 of •
gold coin. If there were no balance on the other, side,
this fact would be unimportant. The articles brought to
the United States from Canada are never articles of
luxury, but of the plainest and most absolute utility, for
the most part necessary to the maintenance of human life.
Hence they are intrinsically more valuable than the pre
cious metals, and usually may be readily exchanged in
the markets of the world either for specie or any. other
commodity. The isolated fact of this exportation, due to
the peculiar condition of our currency, was eagerly seized
and used to make an unfavorable impression upon the
public mind. As the statistics of the Canadian Govern
ment credit us with some such amount as I have named, ;
it was inferred at once that our exports to that Province
alone are annually $10,000,000 in gold or its equivalent-
It needed only a little breath, a few words, ready self-
deception, bold assertion, with sufficient confidence in the •
credulity of the public, to expand a statement, itself im
perfect and erroneous, into a bubble of these vast propor
tions. Upon this airy foundation were erected batteries
of invective against the treaty, as if by some means we
had been robbed of our just rights by the Canadians;'.
and a vivid picture was drawn of the canals which they
had widened and the railroads they had constructed
through their forests, with the unjust proceeds of the
robbery. In view of our temporary need of many arti
cles in the present national crisis — for instance, to supply

OUR COMMERCIAL RELATIONS WITH CANADA. 67
our cavalry with horses and the grain most suitable for
their maintenance — I should not deem it inconsistent with
sound political economy to purchase them with the metal
so abundantly supplied by our inexhaustible mines.
Nearly the whole trade between the two countries is car
ried on by means of gold and silver or their equivalent in
bills of exchange, or paper money redeemable in specie.
For these reasons the exportation of three millions and a
half of dollars in specie is not much to be regretted, but the
persistent habit of regarding one side only is deeply to
be deplored. It led to oversight of the fact that during
the year in question we imported through Champlain
alone nearly five millions of dollars in coins of the pre
cious metals.
The balance of trade represents in the main the amount
of gold and silver or their equivalents sent from one coun
try to another ; and between us and the Provinces, since
the treaty went into operation, that balance has been more
than twenty-six millions of dollars. Under the influence
of an animus unfavorable to fair discussion the error
loomed up into gigantic proportions, and it was stated
and sent forth to the nation that no other country presents
so unfavorable a balance-sheet with us. This method of
reasoning is little adapted to promote the interests of our
people or to increase their political intelligence, and more
than likely to diminish the respect and good-will enter
tained towards us by' the people of other countries.
I may well be excused from further reference to the
errors with which the subject has been invested. It
is better to examine the results and character of the trade
itself, considering how far reciprocity and mutual benefit
do or do not exist in our relations with the Provinces,
than to follow to their end the delusive arguments of
those who are opposed to the principle itself.
I have the satisfaction of knowing that this is no party
question!, and that many gentlemen on the other side of
the House unite with me in efforts to establish or extend
such a liberal policy towards the Provinces as shall
mutually benefit both of us, knitting us together by the
bonds which are of all the most powerful, those of mutual
interest, well judged, in necessary conformity to higher

68 OUR COMMERCIAL RELATIONS WITH CANADA.

principles. I am less desirous of an union of the govern
ments than for an union of the people. I do not wish to
admit into our family of States any who are not imbued
with the spirit of our institutions, and do not appreciate
as we do the benefits resulting from them, or the principles
on which they are established. Prudent men of business
are not accustomed in buying and selling to limit their
transactions to those who hold the same political or
religious opinions as themselves. There is no need for
the habitant of Lower Canada to quarrel with the staple
article of his food because it is made from wheat grown v
in Iowa, Wisconsin, or Illinois, or for the workman in the
factories of New England to ask, for conscience' sake or
for the sake of his country, whether the white loaf or
biscuit ornamenting his table is the product of the
golden grain which once waved on the fields of Upper
ianada. The facts carefully collected by the Provincial govern
ments fully concur with our own in proving that an
immense amount of benefits has accrued to the people of
both countries by the increase of their respective freedom
through the yet limited removal of artificial obstacles to
their intercourse. Upon the plainest principles of com
merce, the individual transactions constituting the vast
aggregate of this trade since 1855, and amounting to .
more than fifty millions of dollars in 1863 alone, must
year after year have been sufficiently profitable to re
munerate those who produced the substantial materials
of the exchanges and. those who were engaged in the
traffic, who, in their turn, could not have continued their
business if they had not found in the people at large
customers or consumers who were benefited by the pur
chases they made.
The treaty was dated June 5, 1854, and its salutary
effects were partially experienced during that year. Our
exports to the Provinces during the seven preceding years
have been multiplied nearly three-fold in the seven years
which have elapsed since the treaty, having been $69,686,-
107 in the former, and $171,628,779 in the latter period;
while our imports from the same regions have increased *
more than four-fold— having been $34,815,885 in the

OUR COMMERCIAL RELATIONS WITH CANADA. 69
former period, against $145,183,096 in the seven years
since the treaty went fully into effect.
Taking a general view of the subject commercially
considered — showing the results in the aggregate with
out entering into special and partial details — it does not
appear that the system as a whole is one of mere favor
to our northern neighbors or of injury to ourselves.
It is to be expected that of the raw or unmanufactured
products of the field, the forest, and the sea, computed
altogether, the Provinces will sell more to us than we can
sell to them. This naturally arises from the maritime
position of the Eastern Provinces, and because the Prov
inces stand in much the same relation to the United
States as that occupied by the new Western States to the
older settlements in the East. We receive from them the
products free under the treaty to a greater extent than
similar articles are exported to them in return, but may
reasonably expect to make up the deficiencies by selling
more manufactures and commodities of tropical, Asiatic,
or other foreign origin, either the products of our own
labor or brought from over the seas, chiefly in American
vessels, and purchased to a considerable extent with the
manufactures or productions of this country ; thus em
ploying and enriching our manufacturers, merchants and
commercial marine. We find, in accordance with this
view, that from these sources we have exported to the
Provinces an amount which, added to that of the raw
material sold by us to them, is sufficient to make up the
balance of $26,445,683, during the period in considera
tion, more than we have bought from them — a sum which
has been paid in specie or its equivalent.
The value of the foreign merchandise (exclusive of
articles passed through the United States in bond) ex
ported by us to the Provinces during the seven years im
mediately following the ratification of the treaty, was
$31,366,236 — purchased chiefly with productions of the
United States, and which yielded employment to the
farmer and manufacturer, shipper and sailor, as well as
profit to the merchant. The amount of our exports of
manufactures and other articles of United States origin,
not included in the treaty, is officially stated to have been

70 OUR COMMERCIAL RELATIONS WITH CANADA.
$47^269,139, during the first six years after it went into
effect. When investigating this question it is necessary to re
member the peculiar relations of the Provinces to each
other, and to the mother country. Although owing in
common a political allegiance to one sovereign, each of the
colonies is, in fact, an empire within an empire, having a
legislature of its own. Each of them has a separate tariff,
and charges the same duties upon the products of the others, ;
and of Great Britain, as upon those of foreign countries.
Their union is political, but not commercial; and the
treaty received the sanction, not only of the British
Government, but of the colonial legislatures of Canadai;
New Brunswick, Nova Scotia, Prince Edward's Island^
and Newfoundland. So far as I have been informed, the
results of the treaty with those colonies, which for the
sake of distinction, may be termed the "Maritime
Provinces," have been satisfactory, although as to them,
it should be regarded as neither complete nor final in itself,
but as only one link in a chain of events, permitting the
people of both countries to perceive more clearly the
benefits of mutual intercourse, and to start with increased
probabilities of success towards a system of unfettered,
absolute and complete reciprocity, so that each may enjoy
fully the natural advantages of friendly neighborhood, to
the people, territory, and possessions of the other.
Of all the Provinces, Canada is much the most im
portant. In 1860, the inhabitants of them all numbered
3,253,000. Of these, more than 2,500,000 constituted
the population of Canada, and less than 700,000 that of
the others. This Province, projecting from the northern
extremity of Maine, southerly to Detroit, and thence
northerly as far as any considerable settlements are to be
found near our frontier, occupies a position whence the
best route for passengers and freight to the ocean, and by
that common highway to other parts of the world, for
the whole year is through the territory of the United
States. For nearly half the year, when owing to a
rigorous climate the river St. Lawrence is impassable, the
only practicable means of intercourse for Canada with''
Other nations are through this country. Different routes

OUR COMMERCIAL RELATIONS WITH CANADA. 71
of communication may be opened through the Maritime
Provinces, but none of them can permanently be so
beneficial as the lines of travel leading to the great
natural centres of the commerce and shipping of this
continent — the Northern American cities on the Atlantic.
Nor are those facilities unimportant to the United States,
which would create a free right of way, unquestioned,
and unencumbered by forms, across the large peninsula
of Upper Canada, separating several of the North-western
and grain-producing States, together with a vast area of
fertile territory yet unoccupied, from the commercial and
manufacturing regions in the East. Canada also extends
up the St. Lawrence on both sides for several hundreds
of miles of the ocean. Hence, mutual rights of transit
are exceedingly advantageous to both countries, and our
commercial relations with this Province are worthy of
special consideration.
General dissatisfaction with the treaty exists along the
whole of our northern frontier near Canada, and the
moral and political effects, which it was hoped would
result from it, have been destroyed — the effect of the
Canadian tariffs enacted since 1855 having been to de
crease very materially the amount of manufactures and
goods of foreign origin sold by the people of this country
to those of the Provinces. This alone constitutes a
sufficient reason for a revision of our mutual commercial
relations, so that our manufacturers may not only receive
from the regions on the North of us, a considerable portion
of their necessary supplies of timber, breadstuffs, and
animal food, but may also enjoy a less restricted, and if.
practicable, an entirely free market for the products of
their labor.
During the last five years the manufactures of the
United States, exported to Canada, have in the aggregate
decreased from $4,185,516 in 1858-9, to $1,510,802 in
1862-3, and although the fluctuations in our own currency,
and the scarcity of labor arising from the war, have
tended to produce this result, there can be no doubt that
the chief cause of this important change is to be found
in the increased tariffs of Canada, by which the duties on
many articles, such as are manufactured in the United

72 OUR COMMERCIAL RELATIONS WITH CANADA.
States, have been gradually increased since the time when
the treaty was made, when those chiefly levied on such
imports into Canada were 12| per cent., but have since
been changed, and are now at rates varying from 10 to
20, 25, and 30 per cent. In some instances, such as cigars
and spirituous liquors, a higher rate is levied.
The effect of these duties is to permit the importation
of British and French manufactures of the finer qualities
into Canada as heretofore, but to stimulate the home
production of goods of the coarser and more substantial
qualities, such as those of the United States chiefly are.
Canada cannot, even under a high tariff, compete with
the nations of the Old World in the most costly and
delicate manufactures, but with the same amount of pro-,,
tection can, and does to a considerable extent, exclude
those of the United States — a nation less advanced in
this branch of industrial production. There is scarcely
any manufacture of this country which has not, or will
not be transplanted to Canada, and stimulated, under the
present protective duties of twenty per cent. The only
exceptions are those requiring a more extensive market
than the comparatively narrow territory and scanty popu
lation of the Province can afford. Indeed, it has been
deliberately calculated by some Canadian statesmen that
they will persevere in a protective system against the
manufactures of the United. States until the time arrives
when they shall not only be capable of supplying their
own market, but will prefer free access to this country
for the sale of their goods, to a continuation of the pro
tective duty in Canada. The result of a free interchange .
would no doubt be to encourage in both parts of the con
tinent those manufactures for which each is especially
adapted — thus benefiting the people of the two countries
by supplying their necessities with less expenditure of
useless labor.
It is just to add that the tariff of duties levied by
Canada, during the period in question, has been much
lower than those charged by us upon her manufactures,
and that while our exports of these articles amount to
many millions, it is very doubtful if the actual manufac
tures of Canada bought by us reached in the aggregate to

OUR COMMERCIAL RELATIONS WITH CANADA. 73
more than a few hundred thousand dollars, throughout the
whole of the last five years, during which the diminution
has arisen, although in that time the Canadians alone
bought from us manufactures to the value of $15,343,004.
The whole amount of our import from Canada, subject
to duty, for the eight years which have elapsed since the
treaty, is only $3,595,350, including not only Canadian
manufactures, but also goods from all other parts of the
world. Of these, one class alone — iron and its manufac
tures — amounted in value to about $1,500,000 — not pro
duced in Canada — a fact, which others of a similar
character gives good ground for believing, that if the
articles really and exclusively made in the Province were
selected, it would be seen they are no more than those
minute matters which are scarcely cognizable in legisla
tion or national statistics.
Adding $33,071,475, the value of foreign merchandise,
exported by us to Canada, during the same eight years to
the domestic manufactures also thus sold, the aggregate
value of these classes of our exports to Canada cannot be
less than $60,514,479, against $3,595,350— the amount
in like manner bought by us from that Province.
In addition to the existing and increased impediments
to the importation of our manufactures into Canada, one
of the obstacles to a fair reciprocity consists in the method
enacted by Canadian tariffs, since the treaty, of levying
duties on articles according to their value at the place
where last purchased, not according to their value in
Canada, or by specific duties, thus practically creating a
discrimination against the merchants and carriers of the
United States. The intention was explicitly avowed, and
the results are already known by our experience.
Under the operation of natural laws the trade of
Canada in many important articles will flow to and
through the Atlantic cities, such as New York and Bos
ton. Under the present system of Canadian legislation
our exports of foreign goods to Canada have decreased
from $5,501,125 in 1859 to $1,560,397 in 1862, and
$1,468,113 in 1863. They attained a yet higher value
previous to 1859, when they amounted to $8,769,580, but
for purposes of fair comparison I avoid the years of great

74 OUR COMMERCIAL RELATIONS WITH CANADA.
expenditure and undue speculation. In 1863 this portion
of our trade was only one- half of the average it reached
in each of the five years preceding the treaty ; was less
by 25 per cent, than in 1849, and since which time our
total exports of all kinds to Canada have increased five-,
fold, or from $4,234,724 to $19,898,718.
That the deficiency in our exports of foreign goods to
Canada has not arisen from decreased consumption, but
from legislative enactments by duties practically discrimi
nating against the Atlantic cities, is made yet more
evident, by the official records of the Province, whence it
appears that the value of merchandise imported into
Canada, and passed through the United States under
bond, was, in 1860, $3,041,877 ; in 1861, $5,688,952 ; and
in 1862, $5,50S,427. A circumstance which has justly
created much dissatisfaction in the provinces is that the
governor of Canada, by a departmental order, might dis
criminate in favor of particular routes through the
United States — a singular violation of the comity or
hospitality of the United States in extending unusual
facilities not required by any treaty for the transfer of
goods on the Grand Trunk railroad, via Portland into
Canada. The chief articles of commerce between the two coun
tries are grain and flour. Of wheat and flour we have
exported to Canada between the years 1856 and 1863,
inclusive of both years, a quantity amounting in value to
$30,643,772, and imported to the value of $49,940,127;
the imports exceeding the exports by $19,296,355. Of
wheat alone from this Province our imports have been
20,956,322 bushels, and our exports to it 22,933,763
bushels. Of oats and other grain our imports have been
$15,230,364 in value, making an aggregate of $65,170,-
491. The value of the same products from the other
Provinces was $1,990,787, while our exports were $29,?
422,918, so that upon the whole we have sold the people
of the Provinces more of cereals and their products by
$360,474 than we have bought from them, our exports .
having been $67,521,752, and our imports, $67,161,278. '
Of flour and bread stuffs alone, from 1856 to 1861, our
exports to all the Provinces exceeded our imports from

OUR COMMERCIAL RELATIONS WITH CANADA. 75
them by $6,184,224. From the nature and geographical
position of our territory we have been, and, under a free
system, shall continue to be the forwarders and merchants
between the people of the different Provinces.
The question on both sides as regards wheat and flour
is not one of revenue or consumption, but rather of .com
merce and transportation. If our whple crop of bread-
stuffs were sold to Canada, and sent as it would be, unless
sold to the United States, to a foreign market, via the St.
Lawrence, the market value of the Canadian crop would.
neither be enhanced nor diminished; nor would our
farmers be affected if the Canadian surplus 'were sent
through the Erie canal or over our railroads and the
Hudson river, except that in both cases the local demands
would be increased by the amount required for the use of
that part of the population which would be employed in
transacting the increased business.
Many beneficial results are produced in the course of
these exchanges. A large amount of Canadian wheat is
mixed and ground with western wheat by our millers,
with results profitable to themselves and their customers.
New England consumes much of the best wheat and flour
of Canada West ; and I am not one of those who are desirous
of protecting the manufactures of New England by taxing
their bread as well as their fuel. According to the census
of 1861 Canada East contains 1,111,566 inhabitants, pro
ducing only 2,563,114, and consuming, it is estimated,
nearly three millions of bushels of wheat. From habit
and other causes these people prefer the spring wheat of
Wisconsin and Illinois. The corn produced in great
abundance and at small cost in the rich warm valleys of
the Wabash and Illinois is consumed to a considerable
extent in the Provinces, especially in the manufacture of
alcohol, and we in our turn import and use a large
quantity of barley and oats — grains grown in great per
fection by the people of the Provinces.
The products of the forest are the next in value among
our importations from the Provinces, having amounted
during the last eight years to '$23,537,203, of which $19,-
894,930 were from Canada, and $3,642,273 from the other
Provinces — an annual average of $2,942,150, while our

76 OUR COMMERCIAL RELATIONS WITH CANADA.
sales of the same class to them have been comparatively
small. No inconsiderable share of this timber has re
placed old rail-fences on our farms, or enclosed, new land,
or built the house of the pioneer on the prairies. With
the progress of our settlements our own supply of this
necessaiy article has been seriously diminished, and its
sources have gradually become more remote and inacces-,
sible. Unlike the crops of the farmer, which may be '
produced year after year, a second crop of pine-timber is
never expected from the same land. Protection may seem
to have some force in favor of those manufactures which
we are led to believe will ultimately be sold cheaper if
we grant a temporary monopoly to their producers, but
the more the manufacture of lumber is increased the fur.
ther we shall have to go for it, and the higher will be the
price of an article of which there is necessarily only a
limited supply. In the freedom and expansion of this
trade the Government relinquished a small amount of
revenue, but the traffic of our northern lakes and canals
was greatly increased, employing profitably a large num
ber of our citizens. The carrier and consumer, together
with the manufacturers of New York and New England,
partake of these benefits. Timber, a necessary article of
consumption in building, and especially the material used
for this purpose by people of moderate means, is also
essential in the construction of ships — an important:*
branch of national industry and element of greatness,
compelled to face the eager competition of the whole ¦
world— and the supply of timber suitable for ship-build
ing has been so much reduced in the United States that
memorials have been presented to this House, asking that
its exportation may be prohibited. We sell timber exten
sively to the British Colonies and other countries, so that
the exports the last two years have been nearly seven
millions. Our importation from the Provinces of the
raw materials, used to a considerable extent in these
manufactures, is annually $2,942,150, and our exports of
the manufactures themselves in the last two years have
been more than ten millions.
The class of importations next in value is that of ani
mals and their products. These during ' the last eight

OUR COMMERCIAL RELATIONS WITH CANADA. 77
years have amounted to $11,813,332 from Canada alone.
With the other Provinces this trade is of nominal value.
We export large quantities of pork, beef, lard, butter,
&c, to Canada, making in all an aggregate of exports in
this class of $12,057,510 — rather more than our imports
— the nature of the trade being that we chiefly import
animals themselves and sell their products.
The remaining miscellaneous articles are for the most
part of no large amount separately, but consist of such
materials as should be supplied to our people and manu
facturers at as low a price as possible. Among the most
important of those not yet named is coal — an essential
element of household life and comfort, and the chief pro
ducer of the great labor-saving power of steam. The
exports from Ohio and Pennsylvania to Upper Canada
are nearly of the same value as our importations from
the lower Provinces. In Canada West the coal of these
States has superseded that brought from Liverpool and
the lower Provinces; and, at Montreal, th* anthracite
of the easterly portions of Pennsylvania also competes
with the coal brought from Liverpool and Nova Scotia.
These minerals are not found in the geological formations
of Upper Canada, and as the forests disappear, and wood
becomes too valuable to be used as fuel, that part of the
Provinces will ultimately depend exclusively upon the
United States for the most economical supply of this
necessary article. Anthracite coal, although found
abundantly on the eastern slope of the Alleghanies, is
found nowhere in the Colonies, and will always, in the
natural course of events, be imported by them, while for
many purposes of fuel, in the eastern States, economy dic
tates the use of the coal of Nova Scotia. Bituminous
coal, of the kind most commonly used in the manufacture
of gas, is not found in our territory east of the Alleghany
mountains, within an available distance of our chief At
lantic cities. It would be needless to say that a trade of
this kind is mutually beneficial. Under a system of free
trade in coal the people of each country are _ supplied
more cheaply than they otherwise could be with neces
sary light and fuel; and both save throughout large re-

78 OUR COMMERCIAL RELATIONS WITH CANADA. '
gions the expense and labor of carrying a heavy and
bulky article for several hundreds of miles.
Nearly all the various commodities received free of
duty by each country from the other under the provi-.
sions of the Treaty, are the simplest and plainest necessa
ries for the support of human life. I am opposed to any
permanent legislation that would prevent the free impor
tation of them, to every system that under any specious
name, hiding an. error or pretence, signifies dearer food
and increased taxation on the raw materials used in the.
manufactures — to any system, whether called protective
or not, which means diminished commerce by expelling
colonial produce from our canals and railroads to increase
the employment of British shipping through British sea
ports at the expense of our own.
As regards the objection sometimes urged, that if by
reciprocal legislation we admit certain raw materials free
of duty from the Provinces, it becomes necessary to admit
them by siiailar reciprocal legislation from several other
countries, I answer that like enactments would in all
such cases prove highly advantageous to the United
States, and that the law might safely and beneficially be
extended so as to admit also on the same terms of mutu
ally free import and export the same articles from every
nation in the world. Our supplies might be little in
creased by such arrangements, but our markets would be'-
immensely extended.
There is much in British policy which should serve as
a warning to us — much to be condemned— much serving
to teach us what we should always shun as examples;
but we cannot imitate a better or more honorable prece
dent than the removal of taxes from human food, from'
the daily bread and nutriment of men, women, and chil
dren, whether rich or poor. When the markets of Great
Britain were in effect thrown open to the grain and pro
visions from the United States and the world, the old
exclusive policy was reversed and one of the greatest tri
umphs of popular liberty, of progress towards the well-
being of mankind was achieved. It is common to quote
with admiration the sentiments of Greek and Roman ora
tors,, who, sometimes indeed, conquered the narrow limits

OUR COMMERCIAL RELATIONS WITH CANADA. 79
of their creed and ceased to treat the masses with con
tempt, but I hold in higher esteem and deem more conso
nant with justice, humanity, and the religion by which
we profess to regulate our actions — those words of a
modern statesman, Sir Robert Peel, who when renouncing
the office of Prime Minister of England and severing all
his old party ties, said : " I shall leave a name execrated,
I know, by every monopolist, who, professing honorable
opinions, would maintain protection for his own individ
ual benefit ; but it may be I shall leave a name sometimes
remembered with expressions of good-will, in the abodes
of those whose lot it is to earn their daily bread by the
sweat of their brow; when they shall recruit their ex
hausted energies with abundant and untaxed food, the
sweeter because no longer leavened by a sense of injus
tice." These words it seems to me, contain in substance
an essential portion of the principles by which we should
be actuated in the imposition of all taxes — leaving free
as water, light and air those articles which are absolutely
necessary for the sustenance of human life. Nor can I
regard this principle as less applicable to the people of
the United States than -to those of the British Provinces ;
. and it may reasonably be hoped that in a fair conference
between parties, each of whom has so much to gain by
commerce with the other, and so much to lose by exclu
sive legislation, existing difficulties may be removed and
the interests of both may be regarded and weighed in a
just balance.
As regards the navigation of the St. Lawrence, I am
not so much, disposed as some others have been to find
fault with the Treaty, because we have made less use of
this river than was expected. They would have had an
argument more in accordance with their usual method of
reasoning, if the Canadian carriers had diverted more and
more traffic from our own railroads, canals, and rivers, from
our own ports on the lakes or the sea-coast. Looking
forward with certainty to the time when the artificial
barriers separating mankind on this continent shall be
overthrown, and a system of free commercial intercourse
exist throughout the whole of it, we should guard against
the useless expenditure of human labor in constructing

80 OUR COMMERCIAL RELATIONS WITH CANADA.
canals and docks or erecting cities in places where it will
not be remunerative. As the cheapest and best routes
are those which must ultimately prevail, the sooner com
petition is fairly open the better for the people — the
greater will be the benefits received by the greatest num-
.ber, without any injustice to any. We cannot in the end
prevent this consummation if we would, and we ought to.
have no desire to prevent it if we could. The city of
New York, occupying a central position between the Ah
leghany mountains on the Western and the Blue Moun
tains on the Eastern side, is pre-eminently the emporium
of commerce on this continent. It is the market or ex
change for chartering vessels. So true is this that ship-
brokers are engaged there when the St. Lawrence is 'open,
in chartering vessels to go thence to Quebec for the pur
pose of carrying cargoes to European ports, thereby
adding the cost of a long and circuitous route to their
expenses, instead of making a direct voyage across the
Atlantic from New York. Freights are usually cheaper
from Canada West via. New York than the St. Law
rence, provided there are no governmental restrictions on
either route. The great increase in our trade with Can
ada, and the diminution of the exports and imports by
that river immediately after the Treaty, proves this broad
fact. It was fully admitted by the Canadian Minister in
the establishment of discriminating and countervailing
duties which, although injurious, were not sufficient to
control fully the natural laws by which this commerce is
regulated. The river at Quebec and Montreal is open
only for about half the year, and yet docks, warehouses,
hired attendants and other necessary appliances of trade
must be maintained for the whole year. The navigation,
when open, is full of perils. Narrow straits, heavy, fogs,
strong currents, and dangerous ice, sometimes sunk be
neath the water and unseen, beset the adventurous mar
iner. . Eight steamships belonging to the line subsidized
by the Canadian Government, with many passengers, have
been lost since 1857, while the old Cunard line, estab
lished almost with the beginning of steam navigation; on
the ocean, lost only one vessel and no passengers in the
whole period of its existence. That solitary loss was on

OUR COMMERCIAL RELATIONS WITH CANADA. 81
the coasts of the Provinces and caused by the dense fogs
and unexpected currents. The rates of freight*on flour
from Quebec to Liverpool are usually higher than they
are from Buffalo on Lake Erie to Liverpool by way of
New York. The same laws of trade determine the
cheapest route as to more bulky articles. The rate of
freight from that city to Europe is usually only one-half
of the rate from Quebec. New York being the great
port for the entry or arrival of merchandise or passen
gers, vessels coming to it receive remunerative rates on
inbound cargoes, while going from Europe to Quebec
they usually proceed in ballast, and hence are compelled
to charge such a price for freight to the Eastward alone,
as will yield them a profit both on the inward and out
ward passage.
Beyond the merely statistical views presented by the
subject, the relative position of the two countries forces
itself upon our attention. They form together by far the
larger portion of the vast North American continent —
extending from one great ocean to the other. The neigh
boring British Possessions reach down beyond the centre
of the region on this side of the Rocky Mountains, and
separate the wide and rich domain of the North-west
from those of the East, while on the North-east of the
Provinces our territory projects far between them and the
great Atlantic highway of the world — thus pointing out
clearly how advantageous, almost how necessary, mutual
rights of way and free commercial union are to the people
of each country through the territory of the other, unless
we mutually condemn ourselves to a perpetual system of
useless and wasted labor by carzying round the long pro
jections made by the territories of each. We have in
common the great lakes. A s their country rests upon the
Arctic seas, ours is washed by the warm waters of the
Gulf of Mexico. Between us we have so great a variety
of soil and climate as to be capable of yielding almost
every production necessary or conductive to the comfort
and happiness of civilized man. There is no reason why
the- commercial relations of the States and Provinces can
not be mutually as beneficial as those of the different
States are to each other. The wages of labor, which, it

82 OUR COMMERCIAL RELATIONS WITH CANADA.
is held by some, debar us from unrestricted commercial
intercourse with other countries, lest .we reduce the
remuneration of our own people to the European or
Asiatic standard, are on ordinary occasions nearly equal
on both sides of the frontier. The impediments to free
communication ¦ exist only through laws made by man,
and which we and those with whom we have to negotiate
can make or unmake as we choose. Why then by Gov-
ermental action seek to force the capital, labor, and traffic
of the two countries into barren and wasteful channels,
instead of mutually protecting home industry by per
mitting it to attain its most profitable results ? Difficul
ties which now appear to be insuperable may vanish
before united effort and by the conference of intelligent
commissioners on both side's.
Revenge and retaliation are sentiments by which the
mind and policy of a true statesman can never be gov
erned. It was well said by De Tocqueville, who had not
before him the illustration of his subject, furnished to us
by the condition of our own country at this day : " The
first notion which presents itself to a party, as well as to
an individual, when it has acquired a consciousness of its
own strength, is that of violence ; the notion of persuasion
arises at a later period, and is derived from experience."
Let us, at least, try what can be done through reason
a,nd negotiation, before we resort to a rupture of the ex
isting ties, and undo the work already accomplished in
the right direction, after much effort.
I trust there are few who deem it the part of wisdom
or sound policy, or consistent with due regard to the
character of the nation represented by us here to attach
any weight to whatever ebullitions of temporary ill-will
may have arisen from individuals in the Provinces or
Great Britain. These manifestations, having their sources
in ignorance or unworthy motives, may safely be left
to the class of minds in which they originated. Let us
avoid degrading this House to that ignoble level, but in
conformity with our own dignity and honor aspire to be
the leaders in such a wise and enlightened policy, as, in
stead of irritating the people of the Colonies and induc
ing them to mistake a pitiful hatred to this country for

OUR COMMERCIAL RELATIONS WITH CANADA. 83
patriotism towards their own, shall aid and assist liberal
statesmen on either side of our Northern boundary or of
the Atlantic ocean in their efforts to develop those
mutual interests constituting a great international law,
and which are the more clearly seen to be harmonious and
identical, the more closely they are examined.
By adopting the principle of commercial retaliation or
exclusion we can injure the people of the Provinces, but
in hostilities of this kind, as well as in actual warfare,
although one party often suffers more than the other, yet
both are injured. It may be that, even although we
adopt an isolating policy, the people of the Provinces
will be too wise to exclude our products from their mark
ets on the present terms of equality and freedom. Can
ada at least admitted them without duty before the treaty
— a liberal policy, dictated on her part by the soundest
financial considerations, for while her people were bene
fited by cheaper prices on some commodities, it drew
trade to her canals, seaports, and shipping. Even this
has been turned into an argument against our practising
the same system towards her. It was rather an example
of a just and comprehensive idea of self-interest for our
imitation, by no longer refusing our forwarders permis
sion to carry her products to the ocean on our canals and
railroads, for remunerative and satisfactoiy prices. The
course pursued by Canada before the treaty is probably
a fair indication of the course she would adopt if it were
unconditionally annulled, and we should show ourselves
determined to maintain an exclusive position.
Until 1847 the produce of the colonies was admitted
under special privileges into the markets of Great Bri
tain, but when these were removed the authority of that
country over the financial affairs of the colonies was also
relaxed. At that time the Canadian duties on American
manufactures were seven and a half per cent, more than
on similar articles made in Great Britain, but one of the
first uses made by the colonies of their increased power
was to equalize taxation on the manufactures of both
countries by an uniform tariff of seven and a half per
cent, on all.
As colonies of Great Britain the Provinces may easily

84 OUR COMMERCIAL RELATIONS WITH CANADA.
return to preferential duties iu favor of the nation with
which they are politically connected. If they did not
establish between themselves and the mother country a
system of imports, exports, and transit, entirely free, like
that prevailing between the different States of this Union,
they might have recourse to direct taxation, and adopt so
low a rate of duties on the products of all the nations of
the world, that it would be almost impossible to enforce
the tariff of the United States along the vast frontier of
the North. Already the project of unlimited free trade
.finds its advocates in Canada, and leading organs of pub
lic opinion, while admitting the benefits of reciprocity to
them, and affirming their readiness to do all that consist
ently with their own honor can*be done by them to main
tain the most friendly commercial relations with us, sig
nificantly intimate that a different course, perhaps in the
end not less beneficial, is open to them.
There is little room for doubt that if we rashly and
persistently pursue a hostile and exclusive course, most
of this trade now in our possession will be divided be
tween the colonies themselves and Great Britain. The
Provinces will be compelled to execute their old project
of an inter-colonial railroad from Halifax and St. .John,
and perhaps other ports, to the interior of their country,
thus completing the only remaining link in their present
vast system of internal communication, and giving them
uninterrupted access from Lake St. Clair and Lake Huron
to the ocean, through their own territory, at all periods
of the year. Their people, by commercially uniting the
Provinces together, may soon accomplish the development
of a system of home industry which will make them in
dependent of our manufactures, and competitors with us
in every neutral market. They may become their own
shippers and traders for all commodities of foreign origin.
Although we may banish them and their produce and
merchandise from our routes of communication with the
Atlantic, it is not likely we shall divert the traffic in
American produce via the St. Lawrence by any legisla
tion we can adopt. We cannot legislate for the Canadi
ans. We can cut them off from the use of our railroads
and canals, but may fail in persuading them to adopt le-

OUR COMMERCIAL RELATIONS WITH CANADA. 85
gislation of the same suicidal character. It is to be ex
pected that they will keep their channels for freight open
to our produce. We cannot compel them to grant us a
monopoly of this kind ; but if we should exclude them
from our thoroughfares, their carrying system will reap
the benefit of doing business for both countries — we
transacting a part of it for one only — and we shall pre
sent to the world the instructive but undignified spectacle
of men who, instead of cherishing this branch of our
industry and directing it to the full fruition of its natural
advantages, sever it from the trunk, even while it is sup
porting us.
Let those whose duty it is to watch over and promote
the permanent and substantial interests of the country be
led away by no narrow view, no temporary and transient
feeling, but consider and reflect upon the calm and sober
judgment formed in times of less excitement, by them
selves, the statesmen who have gone before them, and the
nation at large. " There has not," said Henry Clay, often
called the author of the American system, " been a moment
since the adoption of the present Constitution, when the
United States have not been willing to apply to the trade
between them and the British colonies principles of fair
reciprocity and equal competition." As it was with him
so also was it with Adams, Webster, Van Buren, Marcy,
Douglas, and all those of every party who have left
among us an enduring fame as statesmen.
The appointment of Commissioners on both sides to
consult carefully as to the course most conducive to our
mutual benefit appears to be less liable to objection and
to combine more advantages than any other plan. On
our side there are varied interests to be consulted — those
of the Eastern, Central and Western States, whether
they more especially consist in the promotion of manu
factures, agriculture, or commerce — or in the united and
harmonious progress of all these pursuits. On the side
of the Colonies are separate legislatures or governments
of several provinces, where different views will be taken
on many points of detail- — perhaps of economical prin
ciples. The whole will require so much consideration
that I should despair of complete success unless it should

86 OUR COMMERCIAL RELATIONS WITH CANADA,
receive full and undivided attention. It will be the duty
of such commissioners to ascertain how far we may re
move the obstacles which since the date of the Treaty
have through the legislation of Canada impeded the trade
of our great commercial cities, impaired our manufactur
ing interests, and tended to diminish the amount of in
land navigation and transit trade which would otherwise
have accrued to the States bordering on the British
Provinces. We are too apt to think the interests of the nation can
only be advanced at the expense of injury to another. In
reality and under a true system of reciprocity each of us
would receive the benefits of natural advantages enjoyed
by the other, which in its turn is benefited, not by with^ .
holding participation, but by inviting it. This principle
is as true and should be as universally admitted as those
of mechanical improvements or labor-saving machinery.
Hence, the words of the resolutions passed by the Legis*
lature of the State of New York express clearly and
definitely the principle by which we should be guided,
saying "that free commercial intercourse between the
United States and the British North American Provinces '
and Possessions, developing the natural, geographical,
and other advantages of each, for the good of all, is con
ducive to the present interest of each, and is the only
proper basis of our intercourse for all time to come." It
has been well illustrated by a French writer in the fable
of the blind man and the lame, who between them pos
sessed all that was necessary for both. One guided the
Other, who in his turn was carried, and each receiving
important benefits disdained too close inquiry as to which
of the two rendered the most valuable service.
We are considering the commercial relations of one-
eighth of the habitable surface of the world. Of this
vast region, the United States and the people of the
Colonies, subject to a beneficent Providence, control the
present condition and shape the future history. It has
been given to us, in the maturity of human civilization,
as a new parchment on which we may inscribe whatever
characters we choose; and the opportunity will never
return again in all the plentitude of the present time.

OUR COMMERCIAL RELATIONS WITH CANADA. 87
With nations, as with individuals, those habits and ten
dencies are easily formed in youth, which are afterwards
developed and control the career through long years or
centuries of the future. We may differ from the people
of the Provinces, in opinion as to the best form of gov
ernment, but other nations can judge better for themselves
than we can for them as to their own method of legisla
tion. A prohibitory or exclusive system would be no
less unnatural and injurious as to every commercial, po
litical, and moral result than if we separated New York
from Massachusetts, and both of these from Ohio, Illinois,
or Iowa. Let us then regulate our intercourse, not by
mutual fear or destruction, but by creating or rather by
developing reciprocal benefits in accordance with the
manifest designs of Him who made the world, and who
should never be mentioned except upon occasions worthy
of Him. Such a system is doubly beneficial :
" It droppeth as the gentle dew from Heaven
Upon the place beneath ; it is twice blessed —
It blesseth him that gives and him that takes."
Under its influence, assisted by a wise application of the
reason with which man is endowed, old animosities will
be forgotten, and in days to come the people of both
countries seeing plainly that the social body of mankind
i — like the material body of the individual — is provided
by nature with a healing power, will find additional
reasons to reverence Him by whom the universe itself
was framed.

OUR COMMERCIAL RELATIONS

THE BRITISH NORTH AMERICAN PROVINCES.

House op Representatives, May 26, 1864.

The House having proceeded in the regular order of business
to the consideration of a joint resolution, authorizing the Presi
dent to give the requisite notice for terminating the treaty made
with Great Britain on behalf of the British Provinces in North
America, and to appoint commissioners to negotiate a new treaty
with the British Government, based upon the true principles of
reciprocity, and several members having discussed the subject,
Mr. Ward summed up the debate.
Mr. Speaker : In the consideration which I have given
to this question I have regarded it from no sectional or
partisan point of view, but have studied it in its inter
national aspects, and thus I shall continue to present it.
I know there are objectionable features in the working
of the treaty, but with very few exceptions the points
raised in opposition to it were presented in the report of
the Committee on Commerce, and also in my remarks
when opening this discussion. I named impartially the
merits and the defects, the advantages and evils existing
in the present arrangements. Nothing was suppressed,
nothing was exaggerated, and I endeavored to judge the'
subject with the utmost possible justice and impartiality.
I confide in the honor and character of this House to
treat this great international question as to our northern
neighbors in the same candid and honest spirit of good
will and truth with which we rightfully wish them to re
gard us and our affairs. I trust this House will rise
above mere local considerations. It must rise above

OUR COMMERCIAL RELATIONS WITH CANADA. 89
prejudice. I have no fear of Great Britain. I have con
sidered this question as one affecting many of the most
important interests of this nation. Thus I trust this
House also will consider it, uninfluenced by any fear or
intimidation of Great Britain. I cannot regard with com
placency the frequent assertions made by several honorable
members as to our national reputation. There is no
need to vindicate it. It should be, like the character of
Caesar's wife, above suspicion, and I am impatient when I
hear it unnecessarily asserted or called into question.
I propose to review as briefly as I can the chief re
marks made during this debate in opposition to the treaty,
or rather to any equitable and mutually beneficial and
satisfactory arrangement of our commercial relations
with the provinces.
The gentleman from Ohio [Mr. Spalding] referred to
the treaty of 1817 — a treaty entirely irrelevant to the
present subject. We have the power on a notice of six
months to terminate that treaty ; but there is no necessary
connection between the two. If the resolution of the
Committee on Commerce be adopted, questions regarding
the armaments of both nations on the lakes may, I think,
without impropriety be discussed, and very probably would
be discussed by the proper authorities on both sides.
It has been attempted to influence the action of this
House by the introduction of letters from different in
dividuals. I have not endeavored to acquire any support
for my views from this source, although I have received
many letters from various gentlemen of eminent ability
and character. I may, however, be permitted to give
portions of letters from Hon. Edward Everett, who was
Secretary of State during a considerable part of the ne
gotiations leading to the treaty. When acknowledging
the receipt of a copy of the report of the Committee on
Commerce in 1862, he said:
" It seems quite evident that the Provincial Government has
violated the spirit of the treaty in various ways. I trust, however,
that there will be no countenance given to the threat of abrogat
ing it, a measure never admissible but in a case of the greatest
provocation from the other party. Having the interests of Canada
West enlisted in favor of a just policy under the treaty, and I

90 OUR COMMERCIAL RELATIONS WITH CANADA.
presume also the sympathies of the Imperial Government in the
same direction, there will be no difficulty, I imagine, in persuad
ing the provincial Parliament that there is nothing to be gained
by a war of tariffs."
In a subsequent letter he said :
" In saying that 1 hoped the abrogation of the treaty would
not be thought of, I meant its abrogation before the ,time ap
pointed by the instrument itself. When that time arrives, if it
shall appear that the colonial legislation is in contravention of
the spirit and policy of the convention, security must be taken
for a change in that legislation, or the convention be given up,
which I trust will not be the case.
" I have reason to think we shall have the Imperial Govern
ment with us in a fair and honest execution of the convention."
I will, in passing, make one remark in regard to the
Constitution, so far as this question is concerned. The
gentlemen from Vermont (Mr. Morrill) occupied a col
umn and a half of his speech in attempting to show that
no treaty can deprive us of our right to legislate in re
gard to revenue measures. All I have to say is, that this
treaty did not deprive this honorable body of any portion
of our rights in this respect. The treaty was inoperative
until an act was passed by this House on the 5th day of
August, 1854, for the purpose of carrying it into effect.
The House may by its own sanction and by a solemn act
give effect to such a treaty.
I shall, without any further general remarks, confine
myself mainly to the consideration of the chief points
which have been most frequently urged in favor of ab
ruptly terminating our commercial arrangements with
the Provinces.
The main assertions on which the member from Maine
(Mr. Pike) relied as regards the statistics or business as
pects of the case are, that our trade to the Provinces has
created a balance against us. In one form or another this
assertion has frequently been made. The question he
has raised is one of easy solution, and needs nothing more
than a brief examination of the statement of .the Secre
tary of the Treasury, compiled from the duly authenti
cated official records. The treaty went partially into

OUR COMMERCIAL RELATIONS WITH CANADA. 91
operation in 1854, extensive transactions having that year
been made, based upon the expectation that drawbacks
would be, as I am told they ultimately were, allowed.
That was the year of the treaty — neither before nor after.
Its transactions were mixed. Therefore its trade should
be excluded from the statistics of commerce in the peri
ods before and after the treaty. No full and fair infer
ence can be drawn from that year, as it belongs to neither
epoch. In 1853, the year before the treaty, our imports
from the Provinces were $7,550,718 and our exports were
$13,140,642, leaving a balance in our favor of less than
$6,000,000; and the change was so great that in 1855,
the year after the treaty took effect, our exports increased
to $27,806,020, being more than double those of 1853.
As these imports in 1855 were $15,136,734, the balance
in our favor the year after the treaty was more than
$12,600,000, a larger amount than we either sold to or
bought from them, with one exception, in any year before
the treaty. Yet it is at least implied by the member from
Maine that when we made the treaty there was annually
a balance in our favor, paid to us in gold, of about six
teen million dollars ; a sum larger by about three millions
than the amount we ever sold to them in any year what
ever before the year when the treaty was made.
I deeply deplore the misrepresentations which are cur
rent oh this subject. Do they proceed from a conscious
and wilful desire to mislead us on a subject of so great
importance? I hope not. I am not willing to think
they do. Few national injuries are more pernicious than
the perversion of facts in the national councils, thus mis
leading and betraying the people by poisoning one of the
fountains whence they derive their information. There
may be some — I trust they are not many — in this House
who do not see that however popular this kind of betrayal
may be for a time, it not only inflicts an injury upon our
pecuniary interests and our honor, but, creating and cher
ishing a habitual sense of national injury and wrong,
leads us in the end to such results as we are now experi
encing in the deadly struggle between the different sec
tions Of this Union. I attribute no unworthy motives to
any one, but whoever will examine the official records of

92 OUR COMMERCIAL RELATIONS WITH CANADA.
our own Government will find that my statements are
accurate. It was said by the honorable member — he repeated the
remark several times — that the balance of our trade with
the Provinces is against us. The statement appears
slightly modified in his remarks as printed in the Globe,
but is substantially retained there. Did he mean during
the last year of which we have official information ? It
was then nearly two millions in our favor. Did he mean
during the whole time since the treaty went into operation?
In that time it was more than twenty-six millions in our
favor. There is nothing vague about this. There is no
mystery in the figures. There is no need of passion or
declamation. The solution is as easy as that of any
school-boy sum in arithmetic or of any ordinary settle
ment of accounts between individuals. I find my data on
the sixth page of the letter from the Secretary of the
Treasury in answer to the resolution of this House on the
17th day of last December, asking for information as to
the operations of this treaty. We asked him for infor
mation, and it is furnished to us. Shall we ignore it, and-
substitute for it such conclusions as our several fancies
may suggest? We may in this way point a paragraph
or lend some illusory brilliancy to a speech; but that is' ;
not statesmanship. It does not accord with our duty to
the nation. The balance of gold on which so much stress
has been laid was not paid by us to the Provinces, but by
them to us. It amounted to $26,445,692. This is the
state of affairs as to which the honorable member says he
" wpuld if necessary use force to put an end to an alliance
so injurious."
The subject has been treated as if there were no dif
ference between paying money for foreign gewgaws or
costly luxuries, and for such articles as are daily and
hourly necessary to the support of our Army and Navy, (
and for that yet larger army — the industrial army — the
laboring population, on whom the existence of the Army >
and Navy and of all classes of society must depend.
With exceptions too trivial to be worthy of notice, au
our importations free under the treaty are the plainest
necessaries of life. It is an outrage upon ^he best. and

OUR COMMERCIAL RELATIONS WITH CANADA. 93
wisest principles of modern political science to tax them.
They are an essential part of all that enables us to pay
taxes, and support either Army or Navy — of all that
makes us strong or prosperous either in war or peace.
There is another consideration to be regarded in con
nection with this balance of trade in relation to these
colonies — a reason why this trade is not identical in prin
ciple with many other transactions, but is an exceptional
case. I will illustrate the point by a familiar and prac
tical example. It is readily understood that if a mer
chant or dealer goes over to Canada, and there buys
certain articles — say, for instance, a thousand barrels of
flour or five thousand bushels of wheat — he does an act
which, so far as it goes, creates a balance against the
United States, to be paid in gold or its equivalent. But
if he sends the flour or wheat over American railroads or
canals to Boston or New York, and thence has it re-
shipped to England, France, Cuba, or elsewhere, he, by
his series of actions, gives freight and profit to our inland
carriers and Atlantic shippers, employs a large number
of our people in various occupations, and brings home at
last the original outlay, increased by the additional sum
invested for freight, storage, commissions, and labor of
various kinds, together with additional profit for himself,
all in the same precious metal or its equivalent. Gentle
men who reason as the honorable member has argued,
forget that this nation has commercial dealings ; and that
in such a case as I have described, it is quite as just to
complain of the balance of trade being against us as it
would be for a merchant who has extensive transactions
in all parts of the world to complain of the farmer or
manufacturer from whom he buys more than he sells to
him. He buys from one man for the purpose of selling
to another.
While the honorable member takes a narrow and lim
ited view of our commercial relations with the Provinces,
he has gone a long way back in his statements as to the
colonial policy of Great Britain. He quoted certain
laws enacted by the Government of that country a hun
dred and fifty years ago, ordaining that none of the
colonial trade should be carried in any but British vessels.

94 OUR COMMERCIAL RELATIONS WITH CANADA.
Since the time to which he referred five generations of
men, with their inventions, their experience, and their
changes, have lived and died. The folly of those laws
was long ago demonstrated. They were tried, found
wanting, and have been repealed. Even the colonial
tariffs discriminated in favor of British and colonial
produce and manufactures until 1843, when these dis
criminations were abolished. The colonies now make
their own tariffs and tax British manufactures at high
rates, to encourage production in their own territory.
For several years — for all the years, so far as I know —
since the treaty the trade of Canada with the United
States was greater not only than with Great Britain, but
than with all other countries but our own added together.
I wish to accept facts as I find them. Should I do
otherwise I should be unworthy of a place in this House,
and false in my duty to my country. Coming down as
closely as I can to the present time and to the special
point named by the honorable member, I find on refer
ence to our own reports on commerce and navigation, that
during the last five years the entries and clearances of
tonnage employed in carrying on the trade between the
United States and the British North American Prov
inces have been about fifty per cent, in favor of this coun
try. They were 20,763,512 of United States tonnage,
and 13,844,919 of foreign tonnage.
A very large increase in our exports to the Provinces', '
both of our own manufactures and agricultural produce
and of goods of foreign origin, did result from the treaty;
as was reasonably expected. Our domestic exports in
creased from $7,404,087 in 1853, to $15,806,642 in 1855,
and $22,714,697 in 1856, having doubled and trebled in
periods of one and two years respectively. Our exports
of goods of foreign origin were $5,736,555 in 1853, being
larger in that year than they had ever been before. In
1855, the year next after the treaty, they were $11,999,-
378, having doubled in full accordance with the natural
tendency of the treaty. My statements rest on the official
authority of our own Government. They cannot be refu
ted. No attempt has been made to meet them. No no
tice was taken of them by the honorable member, or by

OUR COMMERCIAL RELATIONS WITH CANADA. 95
any gentleman who has spoken in opposition to the reso
lutions of the Committee on Commerce.
A few more words as to this balance of trade. Before
the treaty Canada admitted the cereals and many other
products free of duty. Consequently we sold to her, al
though we refused to buy from her. The result was that
a large amount of these articles went abroad through the
St. Lawrence, to the injury of our merchants, canals, rail
roads, seaports, ocean shipping, and of all classes of our
population. The year after the treaty, the trade by the
St. Lawrence decreased to the amount of $15,203,600, and
so soon as the routes and markets of the United States
were opened the whole was transferred to our carriers,
for in the same time the trade to the United States in
creased $15,856,624, or from $24,971,096 to $10,827,720.
In this way a change was made in the " balance of trade,"
and that change was beneficial.
Much has been said in this connection about the Ala
bama and the Florida. I fully concur with those who
have condemned the outrages perpetrated by these vessels.
The honorable member spoke at some length of the south
erly port of Nassau. I am unable to discover in his
remarks upon this subject any adequate reason for our
injuring ourselves by curtailing or destroying a profitable
trade with the colonies in North America, still less why we
should not endeavor to make it more profitable than it is,
and to place it on a just and equitable basis. He dis
cussed at one time two subjects which have no proper
or logical connection with each other. All such inquiries
as I have been able to make, and a careful study of a
considerable portion of the organs of provincial opinion,
from day to day, since the beginning of the war, have led
me to the result that although, as must be the case in
every country where freedom of thought and utterance
prevail, where men think and speak for themselves, some
will be right and some will be wrong (and the various
minds of individual colonists have arrived at very differ
ent conclusions as to the present war, some taking the
side of the South, some friendly to the North and ap
proving of the course of the Administration, and some
equally friendly, but believing that a different policy

96 OUR COMMERCIAL RELATIONS WITH CANADA.
would have been more conducive to our interest), the
flagrant expressions adverse to us, and which sometimes
obtain wide circulation, are the words only of individuals
or cliques, and not of the vast majority or masses of the
people of these provinces on whom it is proposed as re
taliation to inflict commercial injuries which will equally
injure our own people, before we have made any effort
to remove those obstacles which some years after; the,
treaty took effect have prevented each nation from reap
ing the full benefits which would naturally' have accrued
from it. I have already, in my previous remarks, * ex-,
plained the operation of the increased tariffs of Canada,
especially of the tariff of 1859. These enactments,* '
which substituted artificial restrictions for free and nai
ural laws, should not be mistaken for the principles or
results to which they are in direct contradiction. I am
desirous of remedying the evils thus created.
It is argued that the treaty has deprived us of rev
enue. During the last year the imports and exports
between the United States and Canada of articles free
under the treaty were nearly equal. If we levy duties
on their productions, they may do the same on ours. ,
This principle is a two-edged sword. Or they may-
admit our products free of duty, as they did before
the treaty, and thus be the carriers of a considerable
portion of our produce as well as of their : own;
When a revenue was paid to our Government on Ca
nadian productions, the provincial railroads and means
of communication were imperfect and its population
was comparatively scanty. By renewing the duties, we,
shall drive away the trade and render our people! less '
able to pay taxes. The utmost amount of revenue«the,
Government can derive from duties on colohiaL pro
ductions is inconsiderable compared with the- loss; of
commerce we shall sustain, and the consequent loss of '
employment to the laborer and profit to the merchant
or capitalist. ',, ;,
Under a- reciprocal system, instead of attempting to ;
make money by restriction and. injuries, each will partake
of those .natural advantages which have appropriately '};,
and eloquently been termed " the gratuities of nature.''''.?

OUR COMMERCIAL RELATIONS WITH CANADA. 97
Otherwise, if a restrictive policy is mutually adopted, we
destroy the trade of such ports as Oswego and Portland,
and two or three men will be employed to do the work of
one, as in the case of compelling the Canadians to carry
sugar from Cuba to Toronto, round by way of the St.
Lawrence instead of carrying it ourselves for adequate
remuneration to the benefit of our people, through New
York, Boston, or Portland ; or in the case of coal, com
pelling the people of each country to carry this essential
element of success from remote mines, hundreds of miles
from the places where it is used. It is as necessary to
the comfort and maintenance of the poor as to the accu
mulations and luxuries of the rich. It saves labor, ena
bling one man, through the creation and application of
steam, to do the work of twenty. Thus it creates wealth
and power, diffusing its beneficent results through every
department of society on each side. It is a just illustra
tion of the whole subject. Let us place no fetters upon
these beneficial exchanges, nor compel the people of either
country to a perpetual system of labor in vain, wasting
in circuitous routes the labor and capital which might be
profitably expended. The waste of labor is a waste of
human beings and of life.
As to smuggling, which it is said exists to a great ex
tent on our frontier, I ask if it is likely to be diminished
by the increased duties created by our own recent tariffs,
or by entering upon a system of commercial hostilities
with the whole population of the Provinces and stimu
lating all their sympathies in favor of the smuggler.
Neither we nor they are alone in the world, or can carry;
out in all respects our own wishes and desires. England
and France, with a most expensive and numerous coast
guard, were never able to prevent smuggling except by
mutual liberality. Still less can we prevent it from
countries which are so near to us that a merchant may
have one-half of his store in the United States and the
other in the Provinces. Already two free ports exist in
Canada. All goods from the United States, from France,
Germany, England, and all other parts of the world, are
admitted free of any duty into these ports, which are not,
as might be inferred from their names, mere cities. One
7

98 OUR COMMERCIAL RELATIONS WITH CANADA.
of them in the Northeast extends, at the mouth of the St.
Lawrence, over a sea-coast twelve or fifteen hundred miles
in extent. The other "free port" is in the Northwest,
and, under the name of Sault Ste. Marie, includes prac
tically a coast on Lake Huron and Superior and their
islands of more than one thousand miles in extent. Do
those who oppose the appointment of commissioners and
our whole system of reciprocity think it is wise to reject
all approach to any unity of legislation between us and
the Provinces, and impel them to an extension of any.
thing like this system of free ports, which already ex<
tends over some twenty-five hundred miles of coast, until
it prevails over the remainder of the Provinces ? It is a
case where each Government can assist the other or in
jure it.
Various memorials from different parts of the United
States have been presented to Congress and referred to
the Committee on Commerce. They proceed from persons
having distinct interests, and living, some of them on the
western and some of them on the eastern extremity of
our frontier. Although they all unite in requesting mod
ifications of the treaty, not one of them is in favor of its
unconditional abrogation. There is no exception. The
State of Maine, in March last, through its Legislature,
passed resolutions decisively in favor of the appointment
of commissioners to negotiate a more extended and im
partial system of commercial relations with the provin
ces ; and in my opinion scarcely any State in the Union
has a stronger interest in a liberal settlement of this
question. After mature deliberation, the Committee on Commerce
believes that the appointment of commissioners on. both
sides to consult together as to the course most conducive
to our mutual interest, combines more advantages than
smy other plan. The treaty was made between the
United States and Great Britain, but as regards the man
agement of financial affairs the colonies are independent
of Great Britain. More than this, the British North
American colonies of Canada, New Brunswick, Nova
S,cotia, Prince Edward's Island, and Newfoundland are
commercially distinct, and independent of each other.

OUR COMMERCIAL RELATIONS WITH CANADA. 99
each placing the other provinces, and the United States,
Great Britain, France, and other countries upon a footing
of equality as regards importations. The subject in
volves on our side an adjustment of the interests of the
eastern, central, and western States — an earnest and full
consideration of the course best adapted to promote
manufactures, agriculture, and commerce, and the removal
of such restrictions as exist, by means of the legislation
of Canada, inconsistent with the general expectations
when the treaty was made. No other plan can bring the
parties whose interests are involved so closely and directly
into communication with each other, and its importance
demands the full and undivided attention of able and
comprehensive statesmen.
I will say in addition, that the terms of the resolution
do not seem to be fully understood. The resolution con
templates that the notice shall be given at the prop'eu
time, unless in the interim a convention shall have mefc
and agreed upon a treaty based upon the true principles
of reciprocity, and that whenever Great Britain shall in
dicate a willingness to enter into negotiations for that
purpose,, the President is authorized to appoint, commis
sioners to ascertain on what terms such treaty can be
made.

THE TARIFF, AND
THE TRUE PRINCIPLES OF TAXATION.

House os1 Representatives, June 2, 1864.

When this speech was made wild and inconsiderate ideas regard
ing the tariff had reached their climax in Congress. Inordinate
indiscriminations, abrupt and unstable taxation, were the practice
of the times. Mr. Ward advocated such a tariff upon the fewest
articles as would yield the largest revenue with the least injury
to the people. Since his speech was delivered many changes
have been made in accordance with these views, but much yet
remains to be done. The revenue reformer of to-day will recognize
in it an enunciation of the best principles of taxation.
Mr. Chairman: The importance of proper tax and
tariff bills is evident. The present financial condition of
the country invites our earnest attention, and every effort
should be made to maintain the public credit. A funda
mental error was long ago committed in enacting the sys:
tern of legal tender ; and the earnest convictions of many
who knew better than to depart from truth and reality
have been changed into faint scruples, and then entirely
overcome. The spectral doctrine that we can make money
by printing it has superseded the dissolving views of specie
payments; and the effect of all the redundancy of paper
is that $100 in gold will buy national securities to the
amount of $190. This is the deliberate estimate placed .:
upon our system, our credit, our honor, and the policy we
are pursuing by the capitalists of our own country and of
the world.
I speak of things as they are. The national debt is
increasing, and will continue to increase. We can judge 't
of the future in no better way than by the experience of

THE TARIFF AND TAXATION. 101
the past ; and if the Secretary of the Treasury has hither
to,, when the prevailing temper of the people has natur
ally been more sanguine and enthusiastic than it will be
hereafter, found himself unable to place any larger pro
portion of the public debt in the shape of permanent
loans, it is impossible to avoid the darkest forebodings
as to the future. Every day the war continues we grow
poorer and poorer ; the most vigorous and energetic por
tion of our people, those who are best capable of pro
ductive labor, are transferred from the fields of ordinary
industry to the work of mutual destruction, and their
number is diminished to an extent which already has
fearful results upon the actual income of the nation.
We must treat the public debt as something to be
actually paid. We must treble our revenue by a well-
considered system of taxation, pressing as lightly as pos
sible upon the working and producing classes, and we
must cease to inflate the currency by fictitious values.
There is no subject of more essential and permanent im
portance to the people than this collective indebtedness.
One dollar raised by taxation is, as has been said by the
Secretary of the Treasury, of more real value to the
country than two made as money is now supposed to be
made, and the tariff should be so arranged as to yield
the largest possible revenue to the country with the least
possible incovenience to the people.
When the war is over, and the enthusiasm and passion
it has created and kept alive have subsided, the monu
ment of debt will remain. It cannot be obliterated by
brave words and patriotic apostrophes. The public credi
tor will demand that the mortgage he holds upon the
bones and sinews of the producing population shall be
satisfied to the last fraction. Our legislation, therefore,
should tend to no inflation of prices. We should make
our money go as far as we can, by no means creating arti
ficial values and incurring liabilities to be paid when the
currency will be measured by a different standard.
For my own part, I do not believe it is now possible
to end this war without having incurred a debt of at
least $4,000,000,000. Our expenses are increasing with
the rise of prices and the increased necessity of more

102 THE TARIFF AND TAXATION.
vigorous exertions. Under the policy we have adopted,
HO spirit of reunion with us at present exists in the
Southern Confederacy. Some of its people — many of
them — desire peace ; but as was remarked by the honor
able member from Maryland, on the other side of the
House, who knows them well, it is not peaee and union,
but peace and disunion. They desire peace, but only with
victory and triumph for themselves and defeat of our
forces. Under these circumstances, it is impossible to
foresee how long the war will continue or what will be
its ultimate cost in money or in men ; but, in my judg
ment, the debt we shall incur cannot be less than $4,000,-
000,000, and may be far more.
I take it for granted that, under the policy of the Ad
ministration, we are engaged in a war of subjugation, and
I assume, for the purpose of this argument, that the party
at present in power wall realize its wishes, will conquer
and forcibly revolutionize, by external force, the whole
political, social, and industrial system of the South, in
direct opposition to the opinions, or, if we choose so to
call them, the prejudices, most cherished by them — form
ing their habits and the basis of their thoughts and
sentiments. Let us calculate the cost of retaining the fruits of the
victories we have yet to gain. We may be sure that we
cannot compel a population numbering eight millions,
and equaling ourselves in courage, determination, and all
the essential elements of military character and power,
to submit to the absolute control of our Government un
less we have a standing army of at least three hundred
thousand men. At sea we shall need a force quite as
powerful as at present. Our civil list will be increased
by the large number of officials necessary to collect the
additional revenue required for the support of the Army
and Navy. I endeavor to estimate, on the most moder
ate basis, the amount of our expenditure when such a
peace as is sought by the majority of this House shall be
attained. We shall need annually, at least, for —
The War Department  $300,000,000
The Navy Department  100,000,000
Interest on public debt, of say $3,000,000,000. . 180,000,000

THE TARIFF AND TAXATION. 103
Civil list, collection of revenue, foreign inter
course, and miscellaneous  40,000,000
Interior, pensions, Indians, &c  25,000,000
Total  $645,000,000
If the South should willingly return to the Union, we
shall, at least, need an army of a hundred thousand men.
Taking this estimate and reducing the cost of the War
Department by two-thirds, there will yet remain the
necessity for a revenue of $450,000,000 to be paid by
taxation and duties.
As England is the only country on the globe which is
cursed with so large a national debt as we shall incur
before the war is ended, comparisons are often made with
her as to ability to pay the principal and endure the in
terest. What are the facts? The real and personal
property of the British Isles is stated to be $32,000,000,
000. The value of the property, both real and personal,
in the States of the Union which are supposed to adhere
to the national Government is about $11,000,000,000, and
that of the other States is little more than $9,000,000,000.
By this it appears that Great Britain has, reckoning value
in ready money, three times as much property as the4
United States ; and therefore has, in this respect, three
times as much ability to pay her debt. Ultimately, as our
country is developed and our population augmented, the
relative position will be changed, but the disparity in our
present resources is even greater than this. The wealth of
Great Britain is largely in manufactures and commerce,
easily convertible into cash, and paying large revenue
upon the investment. That of the United States is prin
cipally in land and in agriculture, which is not easily
convertible into money, and which pays but a small per
cent, upon the investment. Great Britain has immense
colonies in all parts of the world, whose wealth and pro
ductive industry, through the medium of her commerce
and manufactures, contribute to her prosperity. If peace
should now be made, it would be three times more diffi
cult for the United States to pay their debt than for
Great Britain, whose statesmen and peoplej in conse-

104 THE TARIFF AND TAXATION.
quence of the vast magnitude of the obligation, never
expect to discharge its principal.
Now, sir, let lis look at the interest of the respective
debts. That of England is from three to three and a
half, that of the United States from five tc seven per
cent. The interest of our debt, estimating it at even
$3,000,000,000, will be $180,000,000, while the interest
on the British debt is $140,00,0,000 ; in other words,
$180,000,000 interest money will have to be collected off
our $11,000,000,000 of property, while England only
collects $140,000,000 from her $32,000,000,000 of prop-
orty. The burden of our interest will therefore be three
times as great as that of Great Britain, whose debt in
this comparison with ours appears light. For genera
tions to come the laboring men of the United States
must labor for several hours more per day. They must
stint themselves and their families in necessary comforts,
not to speak of accustomed and almost necessary luxu
ries, in order to repair the results of this deplorable war.
I have mentioned these facts because it has been too
common upon the floor of this House to exaggerate the
manufacturing, agricultural, and commercial resources of
the country, so far as regards their ability to bear taxa
tion with the present population, after the vast destruc
tion which the war has produced among the most valu
able classes of our producers. I know the ultimate mag
nitude of our resources, but no true and wise friend of
his country can speak of our appalling debt as if it were
an affair of trifling moment, and. could be discharged as
readily as it has been and yet continues to be created. I
believe there is a disposition on the part of the people to
sustain the Government in this war, and to bear the just
burdens which result from this source. It is of vital
moment that this rebellion should be put down, and that
the problem of . self-government should he successfully;
solved. The revolt is an attempt on the part of the
few to create a revolution against the wishes of the
many. Jf we admit the right of secession, there is an
end to the Government; and if we cannot put down
the rebellion, this Republic will cease to occupy its
proper position among the nations of the world.

THE TARIFF AND TAXATION. 105
I believe, Mr. Chairman, that the city of New York is
willing to agree to any just tariff to meet the exigencies
of the country. But all the communications that I have
received on the subject are to the effect that the tariff
should be for revenue and not prohibitory. In the tax
bill I noticed some peculiar features in the imposition of
taxes where taxation was injudicious. It passed from one
extreme to another ; from a disposition to tax lightly, it
rushed to inordinate and indiscriminating taxation. The
same course also has been pursued in reference to this
tariff bill.
I pass now to the consideration of the joint resolution
in reference to the tariff which passed Congress some
time since. I suppose that scarcely ever has such a spec
tacle been exhibited in any legislative body so free and. so
well disposed as this. The joint resolution raised the
tariff fifty per cent, upon all articles, without regard to
what effects it might produce, whom it might injure, or
what it might prohibit. Some articles would bear the in
creased taxation and others would not ; yet this was a
tariff to continue only for sixty days, and included goods
in bonded warehouse and on shipboard. What is the
effect of it upon goods on hand? There are large firms
which, upon the first intimation that congressional action
was expected, probably took from the custom-house mer
chandise of the value of millions and millions of dollars.
They at once put up the price of these goods at rates cor
responding to this new tariff of fifty per cent., although
they x paid no portion of the increase; while others, of
smaller pecuniary means, being unable to remove their
property from the warehouses upon such a brief notice,
were compelled to pay the additional duty. Goods on
shipboard were also subject to this increase. There is no
equality or justice in such hasty action.
I object on behalf of the great interests I represent to
this kind of abrupt, unstable, and temporary legislation.
It creates a feeling of danger and insecurity exceedingly
prejudicial to the public welfare. Impose a tariff fair
and just, exact taxes which are liberal, and my constitu
ents will submit to them cheerfully ; but what I ask for
them is that they shall not be subjected to fluctuations

106 THE TARIFF AND TAXATION.
in legislation which shall break up and destroy their.
trade. My statements may be illustrated by reference to our
action on the subject of taxing liquors on hand, a subject
which is very familiar to this House. A tax of forty
cents was imposed upon whisky on hand, and in con
formity with the general tenor of these measures my pro*
posal in this House to exempt foreign liquors which were
in bonded warehouses or on shipboard in transitu to this
country was defeated. The bill passed the House, went
to the Senate, passed that body in an amended form, came
back, and was returned to the Senate again. The Senate
finally receded from their amendments to which we had
disagreed, thus striking off the tax on domestic whisky
on hand, but leaving it to operate upon imported liquors.
Thus our importing merchants were compelled to pay a
duty or tax of forty cents per gallon on foreign liquors
on hand.
I think few enactments can be more likely to alienate
important interests from the support of the constituted
authorities than this system of taxation. No Govern
ment can afford to destroy or weaken the friendship of
those who support it, and. who intend to support it'
honestly, fairly, justly, and liberally. The measures to
which I have referred were no sooner passed than a dis
contented feeling was created. And now to-day that tax
of forty cents on foreign liquors on hand is charged to
the importers of New York, while there is none on liquors
of domestic manufacture. I opposed and voted against
the imposition of any tax on stock on hand. I believe it
would have been far better for the Government if the
House had, when the revenue bill was reported, promptly
passed the bill putting a liberal tax on liquor thereafter
manufactured, but leaving stock on hand untouched. We
should have realized a larger revenue, for we should not
have lost two months, during which the bill was pending
between the two Houses, in the collection of additional
taxes. I have seldom thought proper to quote in this House
from articles published in the newspapers. I will, how
ever, read an extract from an article published in one of

THE TARIFF AND TAXATION. 107
the most sound, impartial, reliable journals in this coun
try, entirely in conformity with my own views. In
speaking of this tariff resolution it says :
"The suddenness and absoluteness of this sixty days' tariff
savors more of the edict of some absolute monarch than the acts
of representatives of a free people. Not the least consideration
is shown for the convenience of traders, although they are the
?arties to whom the Government has to look for its chief support.
'he contracts of importers are totally disregarded : and they are
treated as though they had no other business than to pay the
levies of arbitrary enactments. Such conduct tends to convulse
and paralyze legitimate business ; it goes on the supposition that
merchants have no interests that ought to be respected by the
Government, aud that they are bound to submit to every whim
and caprice of an arbitrary power without warning or redress.
There is no Government in Christendom that, in these days,
would be found guilty of siidi discourtesy and injustice toward
foreign traders and the large class of domestic merchants whose
interests are interwoven with foreign commerce. Such legisla
tion is producing the most serious alarm among commercial men,
and wearing their affections from a Government which they have
proudly esteemed as the truest protector of commerce, because
the truest representative of the people, in whom all the interests
of commerce are invested."
It will be seen that there is a great deal of truth and
force in the article. Now, all I ask of the House is to so
adjust the tariff duties as to do justice to my region as
well as to others. I am willing you should tax liberally,
but to whatever extent you prohibit or prevent the im
portation of foreign goods to that extent you diminish
the power of the foreigner to purchase the products of
this country. We injure ourselves when we injure the
foreign labor. I am willing that the tariff shall be
largely increased on many articles ; but I ask that you
shall not tax articles on hand, and that you shall not by
these sudden and violent changes affect the great in
terests of the country disastrously.
I trust before this session closes the House will correct
much of its present legislation. If you do that, you will
appeal powerfully to the support of the people of my sec
tion. The interests affected are too great to be treated
hastily with immature or hostile consideration. Let us

108 THE TARIFF AND TAXATION:
not make rash experiments where so much of the welfare
of our country is at stake. We passed a measure called
the gold bill because honorable members alleged this
would put down the price of gold ; but it ought to have
been evident to every member of this House that the sale
of $11,000,000 would not reduce the relative value of the
precious metal. The steady increase in price is caused
by the inflation of the currency, and until that is
diminished the price cannot be permanently reduced
The nominal value of specie did not go down upon the
passage of the gold bill, but continued to go up, and it
is, I believe, to-day at a premium of over ninety per cent.
The House took alarm, and sought by legislation to do
that which no nation in the world has ever accomplished,
to reduce the price of gold by legislation. But as the
value of gold in comparison to paper money continued to
increase steadily, a sort of panic was created, in the House,
and the cry was, " Tariff ! tariff ! tariff ! " " Tax ! tax !
tax ! " This was done indiscriminately. I ask the House
to deliberate upon these questions, affecting, as they do
all the interests of the country. I trust that we shall not
permit ourselves to commit injustice because gold may
have gone up or down. Calm and deliberate legislation
is absolutely needed in an emergency like this ; I ask that
we shall not legislate hastily or intemperately on any
subject. But, as men comprehending the great issue be-'
fore the country, and the great stake involved in ' the
gigantic war on our hands, we should consider measures
carefully in all their aspects, and endeavor to raise as
large a revenue as possible with the least injustice to
any interest.
I have no doubt that by a judicious system of internal
revenue, and by duties on imports, we shall be able to
raise in time a sufficient revenue to meet the exigencies of
the country. But we shall certainly gain nothing by
such a course of legislation as we have pursued for the
last sixty days. Every member who will reflect one moment
on the subject must see that it is far better for us to be
deliberative rather than hasty, and to examine and weigh
well every measure, and see what are to be its results and
effects. In appealing to the House in behalf of the city

THE TARIFF AND TAXATION. 109
of New York, I appeal to them in behalf of a city equal
in population to one or two of the smaller States of the
Union, and in behalf of a community that has a large and
vital interest in everything affecting the preservation of
the Union. That city has done everything in its power
to aid the Government, and will continue to do it what
ever may be said to the contrary.
Now, Mr. Chairman, with regard to this question of
taxation and tariff, there are many features in the mod
ern policy of England, enacted there by the earnest ad
vocacy and efforts of the middle and laboring classes,
which, I think, we might advantageously adopt. My
colleague, (Mr. Stebbins,) whose absence I regret, said,
in substance, during his remarks on the tax bill, that he
was in favor of our surrounding ourselves as with a
Chinese wall, isolating ourselves from all foreign commu
nication and commerce, and making ourselves, as it were,
a self-sustaining machine. " Prohibit," said he, " the
exportation of every dollar of gold and silver, of every
bushel of grain and every pound of beef and pork, or
adopt the policy of a prohibitory tariff.'' He would
" hold no intercourse with foreign nations until the war
was over; none whatever." In my judgment, we need
all the support we can derive from every source, and
none of the accustomed supplies should be cut off. We
should derive all the strength we can from profitable
commerce as well as agricultural and manufacturing in
dustry. Perhaps this thought also was suggested to the
mind of my colleague, for almost in the next breath he
told us that we should derive $100,000,000 from such an
increase of the duties on imports as would not be
prohibitory. It would be a very unwise policy for us to
isolate ourselves now from the rest of the world. We
are in a position when we cannot well afford to lose the
sympathies of the people of foreign nations, especially
when so great an effort is now being made on the part
of the Confederate States to secure them. We should
not needlessly and unprofitably alienate from ourselves
the laboring and producing population of other coun
tries. What I understand we desire to attain in the adoption

110 THE TARIFF AND TAXATION.
of a new tariff system in this country is to secure the
most revenue in the best way, and that it should be
derived as far as practicable more especially from articles'
of luxury ; and while my friend (Mr. Morrill) feels*
great hostility to the British Government, there are still
certain features in the policy of that Government which
I presume he will admit we may follow to advantage so
far as they are beneficial to the masses of the people.
Now, in Great Britain, the receipts in 1862 from custom®
were $120,000,000, and of that amount ninety per cent.
was obtained from five or six articles, namely : coffee,
tea, sugar, spirituous liquors, and tobacco, as will appear-
in the following statement :
The revenue of the United Kingdom, in 1862 was about
$355,000,000, and was derived as follows:
Customs  $120,000,0005
Excise  90,000,000
Stamps  , 45,000,000
Lands and assessed taxes  15,000,000
Property tax.  55,000,000
Post-Office.  19,000,00*
Other receipts  12,000,000'
Total  $355,000,001 ';:S
Of the receipts from customs,, ninety per eent. are ob
tained from six articles, namely,, coffee,, spirits, sugar,,
tea, tobacco, and wines, as will appear from the following.
statement :
Coffee, duty 6 cents per pound  $ 2,000,000
Spirits,, duty $2 50 per gallon  13,000,000
Sugar, duty 3 cents per pound'.  33,000,000
Tea^ duty 35 cents per pound  28,000,000
Tobacco, duty 75 cents per pound  28,000,000
Wines-, duty 50 cents per gallon  5,000,000 "
Six articles  $109,000 000
All other articles  11,000,000
Total  ,  $120,000,000-
The* authentic^ accounts; show some remarkable facts.

THE TARIFF AND TAXATION. HI
Of the whole revenue of $355,000,000, spirits contribute
$63,000,000, or 17£ per cent. ; beer contributes $30,000.
000, or 8^ per cent. ; tea and coffee contribute $30,000!
000, or 8| per cent.; tobacco contributes $28,000,000, or
8 per cent. ; sugar contributes $33,000,000, or 9 per cent.
wine contributes $5,000,000, or 1J per cent. ;. stamps con
tribute $45,000,000, or 12J per cent. ; income and prop
erty contribute $55,000,000, or 15£ per cent. ; land tax
contributes $6,000,000, or 1^ per cent. ; excise, besides
spirits, contributes $10,000,000, or 2| per cent. ; post
office contributes $18,000,000, or 5 per cent. ; assessed
taxes contribute $9,000,000, or 2£ per cent. ; sundries
contribute $23,000,000, or 6| per cent.
The whole amount of revenue in Great Britain is double
the amount of circulation, thus disposing of an alleged
necessity for a great expansion of currency in order to
collect high taxes.
One of the objects of a tariff bill, as of every descrip
tion of tax bill, is to realize as large an amount as can be
raised on articles of luxury, to simplify the whole sys
tem, to diminish the expense of collection, prevent smug
gling or illegal trade, and subject the public to as little
vexation and inconvenience, as few unnecessary burdens
as possible, to relieve the masses of the people as far as
possible from any increased price in the necessary articles
of living ; but we, on the contrary, as will be noticed by
this bill now before us, propose to put a tariff upon almost
©very article that is imported.
I hope this House will endeavor, in the course they may
pursue in regard to this and every other measure affecting
the revenue, to adopt such a policy as will enable me to
support the bilL At the proper time I shall move some
amendments to the different sections of the bill, and I
hope it may be so amended as to obviate the objections
whieh now present themselves to my mind.

THE
TREATY WITH THE HAWAIIAN ISLANDS:
ITS RELATIONS TO OUR NATIONAL COMMERCE.

House of Representatives, March 4, 1876.

Through a singular combination of circumstances a commercial
treaty with the Hawaiian Islands had been advised by a large
majority in the Senate. Mr. Ward advocated its approval and
the appropriate legislation in the House, as it would to some ex
tent open a market for our manufacturers and furnish freight
for our shipping. Eegarding the completion of a canal through
the Isthmus of Darien, as a question only of time, and as China
and Japan are among our chief fields for commercial and manu
facturing enterprise, he believed it to be important that we should
have friendly naval stations in the Pacific Ocean, but he sup
ported the treaty most earnestly on the ground that it would
direct attention to our incomparably more important relations
with Canada, Mexico, and Cuba, and might serve as a precedent
for an extension of them.
Mr. Speaker : I have observed with much pleasure
that the convention for the extension of the trade of the
United States with the Hawaiian Islands was advised
in the Senate by the triumphant majority of fifty- one
against twelve votes, and has been sent to this House for
its approval and the appropriate legislation. Under the
policy which has now for many years controlled the le-1
gislation of this country, the industry of the people has
been unduly diverted to manufacturing pursuits. "Over
production and a want of employment have followed.;
For the present the home demand can scarcely be in
creased, and it has become incumbent on Congress to do
whatever is fairly in its power to open or extend markets
abroad. This is one of the direct results which will be
accomplished by the proposed treaty, and hence it should

TREATY WITH HAWAIIAN ISLANDS. 113
be supported by the representatives of the people with
out distinction of party.
The treaty also provides for the admission of certain
articles, and, notably, unrefined sugar, into the United
States, free of duties. It cannot be expected that com
mercial privileges, such as we shall obtain if the treaty
should be fully confirmed, can be accorded to us
without some equivalent. At the same time it is clear
to me that the advantages given to the people of the
Hawaiian Islands by the proposed arrangement are also
advantages to ourselves. By the stimulus given to in
dustry in the islands an increased demand not only for
our manufactures, but also for our agricultural produc
tions, most of which are essentially different from those of
the tropics, will be created, and the mutually beneficial
exchange will be effected by our own sailors and ships,
thus giving another impetus to our national progress.
The discussions which have engaged so large a share of
public attention, as to the opposing doctrines of free trade
and "protection," are now of diminished importance.
The taxation needed for the expenses of government and
interest on the national debt is already so burdensome that
argument as to the expediency of levying further taxes on
the many for the benefit of the few should, by common
consent, be postponed. Bevenue, with the least possible
injury to the people, is the proper object of the tariff.
So long as our observation of the prices we are com
pelled to pay on the articles we use or consume is con
fined to our own country only, we lose sight of their inju
rious effect. When we compare prices in our own country
with those of the world at large, we ascertain our condi
tion with tolerable precision. The competition to which
our shipping is subjected on the ocean, in trade with other
countries, affords a strong illustration of this rule. Be
fore 1860, seventy-five or eighty per cent, of our foreign
commerce was in American vessels. The proportions are
now almost literally reversed, over seventy-two per cent.
being carried in the vessels of other countries. Of our
whole foreign carrying trade little more than one-fourth
is under our own flag. The earnings of the trade were
recently estimated by the Secretary of the Treasury to be
8

114 TREATY WITH HAWAIIAN ISLANDS.
more than a hundred million of dollars yearly. In 1872,
the amount paid to foreign steamships for freight and
passage money was $134,742,441. When weconsider that
such sums are paid annually, and that our ship-owners,
sailors, and others formerly enjoyed the pre-eminence and
chief profits in a trade now so nearly monopolized by for
eigners, it is plain that a liberal and comprehensive change
is needed in legislation. Upon similar principles, judici
ously applied, a strong stimulus could be given to the ex
ports of many manufactures, and the additional labor
employed in their production would increase the demand
for agricultural products and the home consumption of
those manufactures to which the condition' of our country
is specially adapted.
The theory of protecting and encouraging industry by
high duties, levied, in the main, upon the industrious, has
long been tried, while no legislative efforts have been
made to attain the same object by the judicious applica-.
tion of the lowest taxation consistent with the needful rev
enue. While our tariff levies duties on nearly twenty-five '
hundred different and distinctly enumerated articles or
classes of articles, the whole British tariff includes only
fourteen ; all others are supplied to her consumers free of
duty. Although we cannot yet attain the same simplicity,
it would be wise to take steps in that direction. Whenever
a revision of our tariff takes place, as it must at no distant
day, whatever diminution of revenue may be caused by
the Hawaiian treaty will be unimportant in comparison
with the benefits derived by the country at large.
While some diminution of our revenue on certain arti
cles may be expected to follow the removal of duties as
required by the treaty, I have yet to learn that taxation
is the chief purpose of government, which is instituted
and maintained for the benefit of our citizens. The money
which might be taken by the custom-house officials from
the pockets of our citizens will be spent in other articles,
many of them yielding revenue to the Government, or be
re-invested in industrial pursuits, productive of the pros-"
perity and wealth which are the surest sources of national:
income, and enable the people to pay necessary taxes
without repining.

TREATY WITH HAWAIIAN ISLANDS. 115
The advantages of the treaty are in some degree local.
They will accrue primarily and for the present chiefly to
the benefit of our fellow-citizens on the Pacific coast. But
that is a narrow, unwise, and destructive statesmanship
which would, on such grounds, lead those who live in
other parts of the Union to regard the treaty with in
difference or, yet worse, endeavor to prevent its provi
sions from becoming part of the laws of the Union. One
of the cardinal principles of our legislation should always
be no less to promote the legitimate interests of each part
of our country than to protect it from attack by foreign
foes, and I know of no more probable source of future
danger than neglect of this obvious duty. The welfare
of the whole Union is intimately connected and bound
up with that of every State. If one member suffers, all
in fact suffer with it, and apart even from all ties of
sentiment and their very important results, each has a
material profit from the prosperity of the others.
The manufactured, agricultural, and mineral produc
tions to be admitted under the treaty free of duty into
the Hawaiian Islands will, to a very considerable extent,
be brought from the Atlantic coast and all other parts
of the Union. Yet even this view of the subject is not
that which is most important to the nation at large.
Placed as our continent is, midway between the leading
commercial nations on the European side of the Atlantic
and those oriental realms whose trade has always en
riched those who have obtained it, and is now one of the
chief objects of solicitude and competition among the
different states of Europe, it is to what has been usually
termed " the East," but is to us the West — the region on
the other great continent fronting our Pacific coast — and
to South America that we must look for the natural
openings for our manufacturing ingenuity and enter
prise. The purchase of a preponderating interest in the Suez
Canal has justly been regarded as a masterpiece of states
manship and far-seeing policy on the part of Great Bri
tain. Its object is to maintain for that country its
supremacy in oriental trade. I regard the treaty with
the Hawaiian Islands as scarcely less important to our

116 TREATY WITH HAWAIIAN ISLANDS.
people than the control of the Suez Canal is to Brit
ish subjects. China and Japan are among the chief
fields for our commercial 'and manufacturing enterprise,
and it is of the utmost importance that we should possess
adequate naval stations in the Pacific Ocean.
It is also our duty to legislate with due regard to the
more remote future. Vast as the difficulties attending
the opening of a ship-canal between the Atlantic and
Pacific Oceans undoubtedly are, the resources of modern
science make the whole question one simply of cost, and
the benefits which would demonstrably result from it to
the commerce of the world, and especially to that of the
United States, prove that the necessary expenditures
would be amply remunerative.
By the completion of this great work remote' nations
would, for all practical purposes, be brought nearer the
commercial centres of the world by thousands of miles,
and the trade of the globe would receive a stronger
stimulus than has ever before been given to it. The Sue?
Canal itself could never compete successfully with such
a work, not only for the exchanges of this continent,
through part of which it would pass, but for those of
many other nations ; the passage by the Mediterranean
and Bed Seas being too uncertain to be used extensively
by sailing vessels whenever means of communication
through the American isthmus are established.
Becent surveys, carefully made by officers of the United
States, show that a ship-canal through the American
isthmus is practicable, and its completion is only a ques
tion of time. When that period arrives, enormous and
unprecedented changes will take place in the commerce
of the world, and our maritime interests will acquire an
importance incalculably exceeding any they have ever
yet attained. Although the benefits will affect mankind
at large, they must accrue to the people of this country
far more extensively than to those of any other. It is in
this view of a certain and, historically speaking, not dis
tant future that the real value becomes apparent of such
safe and convenient harbors on the track of our commerce
in the Pacific as the Hawaiian Islands afford. Hence,
the proposed treaty is of far greater concern to us than

TREATY WITH HAWAIIAN ISLANDS. 117
in the mere exchange of the commodities specified by it.
His Hawaiian Majesty stipulates that during the continu
ance of the treaty he will not lease or alienate any port,
harbor, or other territory in his dominions to any other
power or government. By its adoption the interests of
the United States are, as far as is at present practicable,
established in the islands.
For these reasons I regard the Hawaiian Islands,
although no part of this continent, yet as commercially,
politically, and in fact as part of its appurtenances, and
to be properly included in the application of the Monroe
doctrine, prohibiting the intervention of European pow
ers in them. Of this it was well said by President
Johnson in his message of December 5, 1865, that it has,
as law, been " sanctioned by time, and by its good results
has approved itself to both continents." We all remem
ber how Mr. Seward, soon after the civil war had ceased,
asserted this doctrine, and urged the evacuation of Mexico
by the French in language addressed to our minister in
France, and not the less significant because it was duly
courteous. " We shall," he said, " be gratified when the
Emperor shall, either through the channel of your es
teemed correspondence or otherwise, give definite infor
mation of the time when French military operations may
be expected to cease in Mexico." We all know the aus
picious events which followed as the practical result of
this national assertion. In my judgment the proposed
treaty with the Hawaiian Islands has a similar tendency.
If we refuse, it is certain that they will form at least
commercial alliances with Great Britain and her colonies,
and such an opportunity as now presents itself will be
lost to us forever. In a naval and military point of view,
many of our highest authorities have repeatedly warned
us not to permit the islands to pass into the hands of any
foreign power.
It appears to me that however just and proper and
gratifying to an honorable national pride the Monroe doc
trine in itself may be, it is imperfect and little more than
a barren ideality, unless, in an enlightened self-interest,
we associate it with a friendly care for the commercial
and material prosperity of the states we have so far taken

118 TREATY WITH HAWAIIAN ISLANDS.
under our protection. If we prohibit the interference of
European nations with ;the states of this continent, shall
we stop at that point and cultivate no further increase of
friendly relations with them ? I for one have the strong
est possible faith in the manifest destiny of our people,
and that a series of united states will exist from the cold
regions of the north, so far as they can be inhabited by
civilized man, down to the southern verge of the Amer
ican continent, and include the islands adjacent to it.
We, with our rapidly increasing 40,000,000 of people,
shall, be, so to speak, the key-stone of the arch — no bar
rier in the way of intercourse, but doing all we can to
facilitate it, we ourselves necessarily partaking, at least
to as high a degree as any others, in the prosperity which
would thus be inaugurated and established.
The progress of this manifest destiny, however much it
may have been delayed by events which none can lament
more deeply than I do, is now perhaps the most impor
tant of all the problems in our future. How shall it be
consummated ? Manifestly, it would not be creditable to
us, and it should be abhorrent to our desires, to work it
out by means of the > cruelties, barbarities, and piratic
robberies of war. Nor should it be done by the ever
corrupt and corrupting influences of purchase, by taking
money from the pockets of our already overburdened
people to bribe others to enter into the Union and partake
with us o,f what, if we are true to ourselves and posterity,
are its inestimable privileges. Let us, by the force of
those necessities which compel men to seek interchange
able supplies, exchange the products of their industry,
attract the neighboring states to ourselves and each
other, reversing the policy of oppressors, which has ever
been to divide mankind and keep them separate, that they
might the more easily conquer and command them. In
this way the consummation of our manifest destiny will
be solved in accordance with the principles of the highest
civilization. It is more than doubtful if in any other
manner it can ever be accomplished at all.
The policy I have described could not fail to command
the admiration and good-will of liberal and enlightened
statesmen throughout the world. I commend to your at-

TREATY WITH HAWAIIAN ISLANDS. 119
tention the wise and noble thoughts of John Bright, ex
pressed in the British Parliament, on the development of
the Monroe doctrine in a civilized and unobjectionable
form, throughout the whole length and breadth of the
American continent and the adjacent islands. In reply
to Sir Edward Bulwer Ly tton, Mr. Bright said :
There cannot be a meaner motive than this that I am speaking
of in forming a judgment on this question, that it is " better for
us " (meaning the people of Great Britain) that the American
continent should be as the continent of Europe is, severed into many
states and subject to all the contentions and disasters which have
accompanied the history of the states of Europe.
•• I should say that, if a man had a great heart within him, he
would rather look forward to the day when from that point of
land which is habitable nearest to the pole to the shores of the
great gulf, the whole of that vast continent might become one
great federation of states, that, without a great army and without
a great navy, not mixing itself up with the entanglements of Eu
ropean politics, without a custom-house inside through the whole
length and breadth of its territory, but with freedom everywhere,
equality everywhere, law everywhere, peace everywhere, would
afford at least some hope that man is not forsaken of heaven, and
that the future of our race might be better than the past.
Without pursuing the comparison in detail, it is un
questionable that if our commerce with the Hawaiian
Islands is worthy of special attention, that with the Do
minion of Canada is almost incalculably more so ; and
the argument loses nothing of its force, either commer
cially or politically, when we consider the limited area of
the islands and the vast territory of the Dominion to be
inhabited by people who are sprung like ourselves from
the foremost nations of the Old World, and whose num
bers will be computed by the hundreds of .millions.
Our commercial relations with the southern countries
of this continent have long been unsatisfactory. By ex
tending our exchanges with them we should acquire the
chief benefits of actual ownership without its disadvanta
ges. Additional capital would be attracted to Mexico
and Central America. Labor in those countries would
meet with more remunerative and regular employment.
Thus an antidote would be provided to restless insubordi
nation and want of steady industry. Personal intercourse

120 TREATY WITH HAWAIIAN ISLANDS.
among the inhabitants of the different portions of the
continent would be incalculably promoted. The attrition
would destroy mutual prejudices. Migration would take
place to and fro between distant regions. As the indus
try of the inhabitants of every part would be more amply
remunerated, they would be enabled to buy more largely
from each other. We being the most advanced manufac
turers on this continent, the chief share of increase in the
sale of manufactured articles would accrue to us ; but all
would be benefited. The prices of articles of tropical
origin to the people of the United States and Canada
would be diminished. Thus the cost of living and of
production would be reduced ; industry throughout the
continent would be encouraged by the extension of our
markets, and would be enabled better to compete abroad
with other countries. No other course, so readily adopt
ed, would tend so much to diffuse the ideas and industrial
habits of the northern and most advanced nations of the
world. Commerce with Cuba has long been in a very unsatis
factory condition. Our importations from her in 1874
amounted to the large sum of $86,272,466, while our ex
ports of domestic origin to her were only $19,597,981 ;
the balance of $66,674,485 — except less than two mil
lions of foreign goods exported from this country — was
necessarily paid in gold or its equivalent in bills of ex
change on other countries. No point in our foreign rela
tions is more worthy of attention than this. The vast
sum thus paid yearly to Cuba would soon enable us to
resume specie payments if we could pay it in the products
of our industry in other forms. It is believed that much
might be done in this direction by an honorable treaty
with Spain, tending not only to the commercial benefit of
all parties concerned, but to terminate the unfortunate re
lations between her and Cuba by harmonizing their
mutual interests.
This belief derives additional strength from the state
ment made some years ago on official authority, that in the
project of a treaty drawn up by the Spanish minister at
Washington, arrangements were suggested for an exten
sive reciprocity of trade between the United States and

TREATY WITH HAWAIIAN ISLANDS. . 121
Cuba as a satisfactory solution of difficulties existing at
that time.
The people and government of Mexico, and those of
Canada, are undoubtedly desirous of wider commercial
intercourse with us. Our trade with those countries, if
relieved from unnatural obstacles, would certainly attain
gigantic proportions at no distant day. We should not
covet their territory, but desire their trade and the harmo
nious development of our various resources, leaving us
free from the responsibilities and burden of managing their
affairs; and least of all should we, by money wrung from
the earnings of our already overtaxed citizens, endeavor
to annex foreign territory, or any part of it, and give
others a share in governing us. The certainty of an eco
nomical, free, and pure government should be the attrac
tion on which we rely. Admission into the Union should
be regarded as a privilege, not as a matter of bargain and
sale. The trade we might soon have with Mexico is of incal
culable importance. She is capable of supplying our
rapidly increasing population with tropical productions
for centuries to come. Last year our imports of the
products of the sugar cane from Cuba alone amounted to
$75,728,448, while those from all other countries were only
$17,120,755. Yet the supply of these necessary articles
from Cuba is liable to be cut off almost at any time by
the emancipation of the slaves through whose labor it is
produced. The same immediate results which followed
emancipation in the other West Indian islands must be
expected in Cuba. It is therefore advisable that, with
wise foresight, we should provide other sources of supply.
Mexico alone can furnish them, and she can do so abun
dantly. Her population already amounts to 9,000,000,
being six times as large as that of Cuba, which is 1,500,-
000; a fair index to the probable consumption of our
products by the people of the two countries under similar
conditions of trade. Hitherto her industrial development
has been materially crippled by the absence of cheap
transportation for her products from the rich lands of the
interior. Bailroads are now removing this obstacle, and
their construction affords the best opportunity that will

122 . TREATY WITH HAWAIIAN ISLANDS.
' ever arise for us to open a mutually beneficial exchange
of the products of the industry of our people for many
articles now of prime necessity, and which we cannot, ad
vantageously raise in our own country, but are abundantly
produced in Mexico.
Under a good commercial treaty or customs union with'
Mexico, many years would not elapse before her territory
would be intersected with a network of railways carry
ing prosperity into every part, the amount of our produce
tions taken in exchange for hers would far exceed the
enormous sum now paid annually to Cuba, and the diffi
culties arising from the Zona Libre or Free Belt, on our
frontier would immediately be settled; while the'mofe
remote political results which would arise from the in
creased intercourse of the people of both countries,
through the development of their natural commercial
union, must be obvious to all thinking men.
It should also be remembered that by the adoption of
an American commercial system we should not only su
persede the demand upon us for the specie or bills of
exchange now paid for tropical productions, but become
also the intermediate carriers and factors for the trade
which would be indefinitely extended between our neigh
bors in Canada on the north, and those in Mexico on the
south. The Canadians, by their recent proposals for a
treaty of trade with the United States, and the Mexicans^
through the liberal concessions their government has
made, providing for a railroad nearly seven hundred
miles in length, from the city of Leon to connect with ¦
the international railroad of Texas, and thus with the
railway system of the United States, prove their appre
ciation of the benefits to be derived from enlarged com
mercial intercourse with our citizens, who, we may be
sure, will not transact business if it is not to their profit.
Such a treaty with Spain as would insure free admis
sion into Cuba for our flour, other provisions, and various
articles of manufacture, would be worth more than the
fee-simple of the island itself to the farmers and manu
facturers and merchants of the United States ; and the '
commerce created by a similar arrangement with Mexico
would benefit the manufacturers of New England and

TREATY WITH HAWAIIAN ISLANDS. 123
Pennsylvannia far more than the conquest or purchase of
half the Mexican territory.
By these means each country that became a party to
the arrangement would be brought face to face with the
actual interests naturally arising from its condition;
prejudices founded on erroneous opinions would be de
stroyed. Whatever political relations would really be
mutually advantageous would follow as the natural re
sults of friendly and beneficial intercourse. The people
of the United States would be enabled by practical ex
perience to decide how far peace and perfectly reciprocal
commerce with adjacent countries are preferable to ad
mitting dissimilar nations to a share of power in govern
ing us, and to the ancient European system of establish
ing jurisdiction over them. The adoption of these
principles would be the initiation of a favorable revo
lution in our commerce. The change in our foreign
relations, and the benefits arising from it, would in every
part of our country give an impetus to the industry and
spirit of enterprise which abound among us, and develop
them to the utmost ; we should no longer see the great
prizes of trade with the countries adjacent to us fall into
the hands of others, while the character of our people
and our unequalled agricultural, mining, manufacturing,
and commercial facilities give us the means of grasping
and retaining them.
The commercial relations of the different countries of
this continent being founded not only on the present con
dition of their people, but on their unalterable positions
and variations of climate, unlike those topics which are
temporarily brought forward for purposes of faction or
excitement, and are dropped forever when a vote has
been taken on them, will constantly recur, in various
shapes, as sources of debate, irritation, and, perhaps, of
embroilment, until they are brought upon the natural level
of perfect freedom.
Begarding the proposed treaty with the Hawaiian
Islands as the precursor of more extended and beneficial
measures, I trust it will receive the sanction of the House.

COMMEBCIAL EELATIONS WITH CANADA.

House of Representatives, May 18, 1876.

At this time much embarrassment and distress prevailed in
the commercial and manufacturing cities of the United States.
Under this pressure unprecedentedly large quantities of our manu
factures had been exported to Canada, and her value as a market
was clearly demonstrated, but our importations of wheat had,
under the existing duties, become merely nominal. The tariff
of Canada was exceedingly liberal, while ours was oppressive. ' ;
The result is, that we sell large amounts of many articles to
Canada, to be carried over railroads and canals, and exported by her
ships, while we divert her exports from ourselves. The highest '
mercantile and official authorities in, Canada had expressed a de
sire for a fair extension of commercial relations with us, and its
advantages were fully appreciated in all the northern States. In
this speech the extent of Canada, the character of her people, and
her natural connections with the United States, are presented as
briefly as the subject permits, and discussed with reference to the
principle of political economy, the facts of the newest statistics,
and many demands of public policy. Recognizing these facts,
Mr. Ward introduced a joint resolution for the appointment of
commissioners by the President to ascertain the best terms on
which a treaty of commerce could be negotiated.
Mr. Speaker : At the present time, when capital
seeks investment, interest is reduced beyond all precedent
in this country, wages are lowered, Immigration decreases,
the value of our exports is diminished, and hundreds of
thousands of our people are in search of work by which
they may earn a livelihood, it is the duty of wise states
men and sound patriots to do the utmost in their power
to promote the return of prosperity by such measures as
will best extend the sales of our productions, and promote
our carrying trade and commerce. Hitherto, intent upon |
the development of our unparalelled resources, and hav- ¦ *
ing a sparse population, we have paid too little attention
to our external trade and the encouragement of foreign

COMMERCIAL RELATIONS WITH CANADA. 125
markets for our products, especially for those of our man
ufactories, the number of which we have stimulated to an
extent far greater than is commensurate with the demands
of our own population.
There is no more obvious remedy for this state of af
fairs at present, nor any more sure and stable foundation
of our prosperity in all time to come, than the extension
of our commercial relations with the adjacent countries
on this continent; — on the north with Canada, and on the
south with Mexico.
Yet we seldom appreciate at their great and practical
value the importance of the vast regions north of the
United States on this continent. Stretching from the
Atlantic to the Pacific ocean, they contain an area of
three millions and a half of square miles ; more than is
owned by the United States, exclusive of our newly ac
quired territory in the far northwest, and not much less
than the whole of Europe with its family of nations. No
small proportion of these Territories consists of barren and
inhospitable regions in the extreme north ; but, as a recom
pense, the arid plains extending through Texas, and thence
northward beyond the limits of the United States, are
comparatively insignificant as they enter the British pos
sessions, where the Bocky Mountains, being less elevated,
and having a narrower base, afford an easier passage to
the clouds from the Pacific Ocean, bearing ample rain
with its fertilizing influences into the interior of the con
tinent. By the same cause the climate is tempered.
The isothermal line of 60° for summer rises on the
northwestern plains as high as the sixty-first parallel, its
average position in Europe ; and a favorable comparison
may also be traced for winter and the other seasons of
the year. Spring opens almost simultaneously for a dis
tance of about twelve hundred miles on the vast plains
reaching northerly from St. Paul. Along the valleys of
the Bed, Assinaboine, Saskatchewan, and Mackenzie
Bivers, for more than seven hundred miles north of the
limit of the United States, wheat has been grown, yield
ing most abundant returns, thus indicating a soil and
climate well suited for the crops ordinarily produced in
the cooler parts of the temperate zone. Barley, the

126 COMMERCIAL RELATIONS WITH CANADA.
grasses, and many root crops grow twelve hundred miles
north of the same boundary.
These facts are significant proofs of the immense
capabilities of the agricultural areas in the interior of the
continent north of the forty-ninth parallel. Westward
from these regions — yet scarcely inhabited, but of incal
culable value in the future — are countries of yet milder
climate on the Pacific coast, whose relations to California
are already important. To the eastward are the rapidly
increasing settlements, enjoying the rich lands and plea
sant climate of Manitoba, on the Bed Biver of the North,
a stream capable of steamboat navigation for four hun
dred miles.
It is asserted by those who add personal knowledge of
the subject to scientific investigation, that the habitable
but undeveloped area of the British possessions westerly
from Lake Superior and Hudson's Bay comprises suffi
cient territory to make twenty-five States equal in size to
Illinois. Bold as this assertion is, it meets with confir
mation in the isothermal charts of Blodgett, the testimony
of Bichardson, Simpson, Mackenzie, the maps published
by the government of Canada, and recent explorations.
North of a line drawn from the northern limit of Lake
Superior to the coast at the southern limit of Labrador
exists a vast region, possessing in its best parts a climate
barely endurable, and reaching into the Arctic regions.
This country, even more cold, desolate, and barren on the
Atlantic coast than in the interior latitudes, becoming
early known to travellers, has too often given character in
public estimation to the whole north.
Another line, drawn from the northern limit of Minne
sota to that at Maine, would include nearly all the
inhabited portion of Canada, a country extending opposite
the Territory of Dakota and States of Minnesota, Wis
consin, Michigan, Ohio, Pennsylvania, New York, Ver
mont, New Hampshire, and Maine, and possessing a
climate identical with that of our Northern States.
The "maritime provinces " on the Atlantic coast include
New Brunswick, Nova Scotia, Prince Edward Island, and
Newfoundland. Geographically they may be regarded
as a northeasterly prolongation of the New England

COMMERCIAL RELATIONS WITH CANADA. 127
system. Unitedly they include an area of at least eighty-
six thousand square miles, and are capable of supporting
a larger population than that at present existing in the
United States or Great Britain. They are equal in ex
tent to the united territory of Holland, Greece, Belgium,
Portugal, and Switzerland.
The natural interests of New Brunswick and the ad
jacent State of Maine are inseparably connected. New
Brunswick has an area of twenty-two millions of acres
and a sea-coast four hundred miles in extent, and abound
ing in harbors. It had at the census of 1871 a population
of nearly three hundred thousand, being nearly equal to
that of Nebraska, Nevada, Oregon, and Colorado. The
chief occupations of its inhabitants are connected with
ship-building, the fisheries, and the timber trade. Judging
from authentic surveys and records, it is scarcely possible
to speak too highly of its climate, soil, and capabilities.
Few countries are so well watered and wooded. On its
unreclaimed surface are large stocks of timber; beneath
are. coal-fields. The rivers, lakes, and sea-coast abound
with fish.
Nova Scotia, a long peninsula, united to the American
continent by an isthmus only fifteen miles wide, is two
hundred and eighty miles in length. The numerous
indentations on its coast form harbors unsurpassed in any
part of the world. Including Cape Breton, it has an area
of twelve millions of acres. Wheat and the usual cereals
and fruits of the Northern States flourish in many parts
of it. Its population in 1871 was declared by the census
to be nearly four hundred thousand. Besides possessing
productive fisheries and agricultural resources, it is rich
in mineral wealth, having beneath its surface coal, iron,
manganese, gypsum, and gold.
The province of Prince Edward Island is separated
from New Brunswick and Nova Scotia by straits only
nine miles in width. It is crescent-shaped, one hundred
and thirty miles in length, and at its broadest part is
thirty-four miles wide. It is a level region, of a more
moderate temperature than that of Lower Canada, and
well adapted to agricultural purposes.
The island of Newfoundland has a sea-coast of one

128 COMMERCIAL RELATIONS WITH CANADA.
thousand miles in extent. It has. an area of over twenty-
three millions of acres, of which only a small portion is
cultivated. Its spring is late, its summer short, but the
frost of winter is less severe than in many parts of our
own northern States and Territories. It is only sixteen
hundred and sixty-five miles distant from Ireland. It
possesses a large trade with various countries, including
Spain, Portugal, Italy, the West Indies, and the Brazils.
The chief wealth of Newfoundland and of the Labra
dor coast is to be found in their extensive and inexhaus
tible fisheries, in which the other provinces also partake.
The future products of these, when properly developed
by human ingenuity and industry, defy calculation. The
Gulf Stream is met hear the shores of Newfoundland by
a current from the polar basin, vast deposits are formed
by the meeting of the opposing waters, the great sub
marine islands known as " The Banks " are formed, and
the rich pastures created in Ireland by the warm and/
humid influences of the Gulf Stream are compensatedby
the "rich sea-pastures of Newfoundland." The fishes of
warm or tropical waters, inferior in quality and scarcely
capable of preservation, cannot form an article of com
merce like those produced in inexhaustible quantities in
these cold and shallow seas. The abundance of these
marine resources is unequalled in any other portion of the
globe, except where similar conditions exist in the North
era Pacific ocean.
The provinces of Ontario and Quebec, known as Canada
before the union with the Dominion, include an area of more
than one hundred and eighty-five millions of acres, inde-;
pendently of the northwestern regions yet scarcely open
for settlement. Their territory is three times as large as
that of Great Britain and Ireland, and more than three
times that of Prussia. It intervenes between the great
northwest and the maritime provinces, and consists chiefly
of a vast projection into the territory of the United
States, although it possesses a coast of nearly one thou
sand miles on the river and gulf of the Saint Lawrence,
where fisheries of cod, herring, mackerel, and salmon are
carried on successfully. Valuable fisheries exist also in
its lakes. It is rich in metallic ore and in the resources

COMMERCIAL RELATIONS WITH CANADA. 129
of its forests. Large portions of it are peculiarly favor
able to the growth of wheat, barley, and the other cereals
of the North.
Within thirty-five years, or less than the life-time of
nearly all who are now hearing me, the population of
Ontario and Quebec has increased about five-fold, or from
five hundred and eighty-two thousand to about three
millions. The population of the Dominion of Canada and the
other possessions now exceeds four millions, being more
than that of Arkansas, California, Delaware, Florida,
Kansas, Louisiana, Maine, Minnesota, Nebraska, Nevada,
and New Hampshire, added together, at the last census.
Many of their inhabitants are of French extraction, and
a few German settlements exist ; but two-thirds of the
people of the provinces owe their origin either to the
United States or to the British islands, whose language
we speak, and who " people the world with men industri
ous and free." The identity of language in contiguous
countries is a fair exponent of the tendency to amalga
mation. It generally implies great similarity, if not
identity, of religion, laws, and habits, the essential ele
ments of thorough fusion.
Apart from the artificial regulations by customs duties,.
the exchanges of the products of labor between the peo
ple of the United States and their neighbors on the north
would be as intimate and, in proportion to the popula
tion, at least as various and comprehensive, as those of
the States of our Union with each other. In fact the
commercial relations of our northern, northwestern, and
eastern States with the Dominion of Canada, if left
simply and without obstruction to the practical test of
benefits or profits given and received by the people of
both countries, would be more close and intimate than
those between most parts of the Union. The great lakes,
which for some thousands of miles politically separate
us, are themselves among the cheapest and most useful
means of intercommunication for the northwestern and
eastern States, and with the majestic river through which
their waters flow, have long furnished, by aid of short
canals, one of the most important channels of trade and

130 COMMERCIAL RELATIONS WITH CANADA. ,
travel, from the interior to the ocean, and thence to the
;chief markets of the world.
Nearly three-fourths of the people of the Dominion in
habit a territory in latitudes south of our boundaries in ¦
Maine and Minnesota. Across this region, and especi
ally the peninsula between Lakes Huron and Michigan,
is the direct line of communication between the States of
Maine, New Hampshire, Massachusetts, Bhode Island,
Connecticut, and New York on the one side, and Michi
gan, Wisconsin, Minnesota, and all our Territories west
of them on the other.
Great as the value of transit through Canada is to our
people, similar freedom through our territory is perhaps
even more important to the Canadians. Excepting the
maritime provinces, the whole of the British North
American possessions, until they approach the Pacific
Ocean, is dependent upon the railroads, canals, rivers, and
other means of communication in the United States for
the shortest routes to the ocean. Fortunately, what is in
this respect almost the necessity of the Canadians is one
from which must result the employment of our people
and profit to our forwarders on such a scale that it will
confer conspicuous national benefit upon us if we do not
prevent the natural interests of the people from attaining
due and harmonious development. More than that, the
great natural, permanent system of exchanges is between
the North and South ; their productions being necessa
rily distinct, and modern civilization having rendered
them practically necessaries of life to the people of each
region. fiegarding the subject from a broad and national point
of view, it is instructive to see how great and varied are
the advantages that would result to all parts of our
country from free intercourse with the neighboring
nations. The northern and southern parts of our conti
nent possess special and distinct advantages for pro
ducing commodities with which each can purchase those .¦
of other sections. The Northern States, for instance,
need fear no competition with Mexico or Cuba in
manufactures or agriculture. These countries would
purchase, in increased quantities, our manufactures,

COMMERCIAL RELATIONS WITH CANADA. 131
cereals, meats, and fish, while we in return should con
sume more of their sugar, coffee, fruits, and other tropi
cal productions. The agricultural productions of Cana
da are almost identical with those of the Northern States,
but would be exchanged for our own manufactures, and
for the products of warmer climates, in part those of our
Southern States, and in part of regions yet farther south,
whose products would thus be brought through our ter
ritory, and afford employment and profit to our people,
with advantages to all the countries which would be par
ties to the arrangement. Our agriculture, manufactures,
and carrying trade would alike be benefited, and the
natural operation of the laws of trade would necessarily
confer corresponding benefits on those for whom our
work would be done and with whom our exchanges
would be made.
The trade between the northern and southern parts of
this continent must attain enormous proportions. It is
very desirable for our people that it should as soon as
possible be developed to the utmost. Its natural course
will be through the central or intermediate States, creat
ing in them commercial interests of a magnitude which
it is almost impossible now to calculate. The mutual
benefits thus given and received would be perpetually
diffused, and circulate in every vein and artery of com
merce and manufactures throughout the Union, and be
accompanied with the gratifying knowledge that they
were derived from the prosperity of our neighbors in
other countries.
As the .naturally interdependent commercial relations
of the United States and Canada arise from geographical
and climatic causes which are permanent and unchange
able, and the cost of labor and the interest on capital in
both countries are, reckoning from a series of years,
nearly alike, they have from the beginning of our history
attracted the attention of our leading statesmen without
distinction of party.
During the Presidency of General Jackson, Mr. Van
Buren, when writing in 1829 to Mr. McLane, then our
Minister at the Court of St. James, referring especially
to the North American Colonies, said :

132 COMMERCIAL RELATIONS WITH CANADA.
The policy of the United States in relation to their commer
cial intercourse with other nations, is founded on principles of
perfect equality and reciprocity. By the adoption of these prin
ciples they have endeavored to relieve themselves from the dis
cussions, discontents, and embarrassments inseparable from the
imposition of burdensome discriminations. These principles were
avowed while they were yet struggling for their independence^
are recorded in their first treaty, and have been adhered to with
the most scrupulous fidelity.
The exceptional character of our natural commercial
relations with Canada has also been duly observed by
some of the most eminent advocates of what is termed
" protective " policy. One of the chief arguments in its
favor is that against admitting the products of " pauper
labor " to compete with those of our own citizens. It
has no force in reference, to a contiguous country, from
which people can pass to the United States in a few
moments or at most a few hours. The other argument
of the same class of theorists is derived from the impor
tance of a " home market." But a " home market " is
the market nearest home, and this is furnished by the re
spective countries to each other at every point of their
coterminous territory.
Mr. Clay, who was called* the father of the " protec
tive " system, duly appreciated these facts, and from his
standpoint added valuable testimony to the uniformity .
of opinion among American statesmen in his time, and
his conviction as to the policy by which he desired our
country to be guided.
The Government of the United States —
He said —
has always been anxious that the trade between them and the-
British colonies should be placed on a liberal and equitable"
basis. There has not been a moment since the adoption of the
present Constitution when they have not been willing to apply-
to it principles of fain reciprocity and equal competition.
As time has passed and the country on both sides of
the frontier has become more closely inhabited, farms,
villages, and cities taking the place of the primeval wil-

COMMERCIAL RELATIONS WITH CANADA. 133
derness, the value of the intercourse of the people has
immensely increased. When Mr. Clay and Mr. Van
Buren deemed it important the population of Canada
was insignificant. It is now larger than that of all the
six New England States added together.
The interests involved and the benefits each country
can confer upon itself by due emancipation of its indus
try are so many and obvious that they will continually
demand discussion until they are fully settled on the
basis of perfect freedom, and our trade with Canada is as
unrestricted as that of our different States among them
selves. It is our duty to regard these questions practi
cally, avoiding alike on one side the inconsiderate haste
which might result from political sentimentality, and on
the other the influence of the absurd and pernicious
dogma which, carried to its logical results, would put an
end to all trade, individual as well as national, that
whatever is profitable to others must be injurious to our
selves. The modern increase of facilities of communication
by canals, railroads, bridges,, steamboats, telegraphs, and
the press, assisting the transfer of merchandise, the travel
of passengers, and the free interchange of thoughts be
tween the United States and the Dominion, add to the
policy enunciated by Mr. Clay and Mr. Van Buren, a
value we cannot estimate too highly. The commercial
spirit and resolute enterprise of the Canadians are shown
no less by the attractions they have presented to immi
gration, and the consequent increase of their population,
than by the fact that with a population small in compar
ison with that of many nations in the Old World they
already rank as the fourth power on the globe in the
extent of their merchant shipping, taking precedence in
its extent and quality of all countries except Great
Britain, the United States, and Germany.
The aggregate of the foreign trade of Canada in 1872-
73 and 1873-74 was about two hundred and seventeen
millions, each year, being considerably more than one-
sixth of all the imports and domestic and foreign exports
of the United States. The aggregate of our foreign trade
in 1875 was $1,219,434,544. H it had been as large as

134 COMMERCIAL RELATIONS WITH CANADA.
that of Canada in proportion to the population of the two
countries, it would have exceeded $2,400,000,000.
Notwithstanding the adverse laws in both countries,
preventing a free exchange of the products of the indus
try of their people, thus depriving Canada of her natural
prosperity, injuring the business of many of our States,
and most seriously impeding the progress of those parts
of our country which are near the Canadian frontier, our
exports of articles, the growth, produce, and manufacture
of the United States to Canada, according to the report
of the Treasury Department, amounted in 1873-74 to no
less than $42,505,914, being more than twenty times as
large as those to China, whence we draw so large a pro
portion of our imports, and larger than our exports of a
similar character to any country in the world excepting
only Great Britain, Germany, and France. Our exports
to Canada of goods of foreign origin in the same year
amounted to $4,589,343, and the total trade with her to
at least the vast sum of $85,253,168.
Taking the official statistics of Canada as the test of
our exports to the Dominion, the value of our exports
was much larger, those entered for consumption there
having amounted to $54,279,749, and our imports to
$35,061,117 — the aggregate trade having been $90,524,-
000. In 1874-75 the aggregate of our domestic exports to
Canada, as shown in the Beport on Commerce and Navi
gation, including the additions on page 416, was $49,906,-
285, and the trade between the two countries amounted
altogether to $86,256,925.
An examination of our exports to Canada shows that
her value as an outlet for our manufactures has long been
much underrated. This has, no doubt, arisen in part
from the fact that we compute the amount of our ex
ports from our own custom-house statistics. These are
the best sources we have of information as to our im
ports, on which accuracy is exacted because they are
subject to duty ; but there is no such urgency as to our
exports. They pass from our side of the lines without
much attention from our officers. Modern political econ
omists and statisticians have observed the operation of

COMMERCIAL RELATIONS WITH CANADA. 135
the same rule in various countries, and regard it as an
established axiom that "the amount of export is always
less exactly registered than the amount of import, because
with the former duty is but rarely levied." This rule ap
plies with peculiar force to the ordinary data furnished
by the official reports of the commerce and navigation of
the United States so far as they refer to Canada.
In 1874 the Chief of the Bureau of Statistics asked the
attention of the National Legislature to this subject, and
in 1875 he repeated his request. He found it imprac
ticable, if not impossible, to obtain full returns of mer
chandise exported to the Provinces of Ontario and Quebec.
Our custom-house returns on the Canadian border are
necessarily defective, in part for want of legislation re
quiring persons exporting merchandise by railway-cars or
other land-vehicles, which have long been used in the
transportation of merchandise across the Canadian bor
ders, to file full manifests of such merchandise with the
collector of the customs as is required in the case of all
exports to foreign countries in vessels. It has been found
on close investigation into the facts that in both countries
the accounts of imports from each into the other are the
more accurate, because " the customs-officers of both are
constantly on the alert to see that no dutiable merchan
dise crosses the border without paying its prescribed im
post." Upon the basis thus irrefutably laid down, it is found
that the value of articles of domestic production exported
from the United States to Canada in 1874 was $11,424,-
566, and in 1875 no less than $15,660,281, in addition to
the amounts shown by our own official records. This
enormous amount of over $27,000,000 consisted chiefly of
the products of the manufacturing industry of our peo
ple, and I desire to direct to it the special attention of
those who fancy that an extension of reciprocal trade
with Canada would be injurious to the manufacturing
population of the United States.
One of the most efficient and beneficial means of pro
tecting our manufactures would be to encourage the
demand for them in Canada. Including the amounts
given in the statement of the quantities and values of our

136 COMMERCIAL RELATIONS WITH CANADA.
domestic exports in the official records of the Bureau of
Statistics, and the additions corrected from the reports
furnished by the Canadian commissioners of customs, our
exports last year, of our own production, to the Dominion,
included books and stationery to the value of $794,846
cotton manufactures, besides raw cotton, $1,591,844
musical instruments, $639,027 ; leather and its manufac
tures, $789,428 ; tobacco and its manufactures, $1,673
366; refined sugar and molasses, $1,988,733; manufac
tures of iron and steel, $6,833,649, besides other manu
factures to the value of many millions. Our imports
during the same year from all parts of the Dominion of
her staple productions of wheat and flour amounted only
in value to $363,317.
If we can export our manufactures in such large quan
tities to Canada when impeded by her present tariff, it
cannot be disputed that we should increase our sales of
them if they were admitted at lower rates of duty, and
yet more if they were admitted free of all duty what
ever. The treaty of 1854 provided for a reciprocal trade be
tween the United States and the British North American
possessions in certain articles, consisting mainly of the
unmanufactured productions of the farm, forest, mines,
and fisheries. It was for several years mutually satisfac
tory, but under the pressure of debt and the need of
increased revenue the Canadians raised the duties on
manufactured goods to such an extent as to destroy its
natural effects in promoting many branches of the industry
of our people.
The Legislature of the State of New York passed con
current resolutions complaining of the tariff thus exacted
by Canada, and demanding a revision of the treaty, but
expressing approval of the principle of reciprocity and a
desire for an extension of its application. It was seen
that unrestricted trade between the United States and
Canada must be mutually beneficial for the same reasons
as make it desirable between New York and Pennsylva
nia, or any of the other States in the Union.
The resolutions of the State of New York asserted that
" free commercial intercourse between the United States

COMMERCIAL RELATIONS WITH CANADA. 137
and the British North American possessions, developing
the natural, geographical, and other advantages of each
for the good of all, is conducive to the present interests
of each, and is the cnly proper basis of our intercourse
for all time to come ; " and, in pursuance of the request
of the State of New York, that its senators and repre
sentatives in Congress should take such steps as would
regulate the commerce and navigation between the two
countries in such manner as to render the same recipro
cally beneficial and satisfactory, I moved in the House of
Bepresentatives that the President of the United States
should be authorized and required to give notice to the
British government that the treaty of commerce then ex
isting, as to the British North American Colonies, would
be terminated at the earliest date legally permitted, but
that the President should be authorized to appoint three
commissioners for the revision of said treaty, and to con
fer with other commissioners duly authorized therefor,
whenever it should appear to be the wish of the govern
ment of Great Britain to negotiate a new treaty between
the governments and the people of both countries, based
upon the true principles of reciprocity, and for the re
moval of existing difficulties.
The preamble declared that inequality and injustice
existed in our present intercourse with Canada, subver
sive of the true intent of the treaty, owing to the
legislation of Canada, after the treaty had been adop
ted, and that it was desirable that friendly relations
should be entertained between the United States and
the British North American provinces, and that com
mercial intercourse should be hereafter carried on be
tween them upon principles reciprocally beneficial and
satisfactory to both parties.
A motion to lay the preamble and resolution on the
table was rejected by a vote of 76 to 73. Thus the
House refused to terminate the treaty unconditionally.
A notice simply to abrogate the treaty was voted
down, and the preamble which asserted that commer
cial intercourse between the United States and the
British North American provinces should be hereafter
carried on between them upon principles reciprocally

138 COMMERCIAL RELATIONS WITH CANADA.
beneficial and satisfactory, was adopted; and the reso*
lution would also have been carried if a few members
who, together with their constituents, were conspicuously
in favor of and especially interested in the utmost
possible freedom of exchanges between the two coun
tries, had not been induced to believe that they would
obtain better terms by postponement to the next ses-'
sion of Congress. But the postponement was only
adopted by a majority of five out of one hundred and
fifty-nine votes.
Just before the time for reconsideration arrived the
war feeling had attained increased intensity, and the
exigencies and temper of the occasion threw all com
mercial, considerations temporarily aside.
Since that time the Canadian tariff has undergone
great and liberal changes. Very many of the articles
on which we charge duties almost prohibitory are ad
mitted free of all duties into Canada, and her old
tariff of twenty-five or thirty per cent, has been re
duced to a general rate of seventeen and a half on
manufactures, often much less, and can no longer be a
subject for complaint for injustice on our part while
we charge forty or sixty per cent. We now approach
the whole subject under new and favorable auspices.
As the exports of Canada consist chiefly of raw
productions of the farm and forest, for which we ex
port little for actual consumption in Canada, the ad
mission of these articles free of duty by each country •
into the territory of the other is not the most just or
desirable form of reciprocity. To place our trade with
the Dominion on a satisfactory basis, manufactures
also should be admitted free of duty from each country
into the other. But to effect this it is necessary that
no higher duty should be levied in one country than
in the other on iron, silk, wool, and the other materials
of manufactures. Without this the country admitting
them at low duties, or without any, would manifestly
be able to undersell the other if it continued such duty
as it might deem necessary for its revenue or prudent for
the protection of its labor against the competition of
countries under different social and monetary conditions.. ,

COMMERCIAL RELATIONS WITH CANADA. 139
The best arrangement of reciprocal trade between the
two countries must include more or less the manufac
tured as well as the raw productions of each, thus giving
mutual encouragement to various and differing industries
on both sides of the line, and permitting labor in each to
adjust itself to the most advantageous employments.
The United States have never yet made decisive efforts
to secure the benefits thus within their grasp.
If such a system of reciprocal exchanges could be
extended to manufactured productions, both countries
would assuredly profit. The first effect might seem detri
mental to special interests in both, but a natural equi
librium would soon establish itself, producing conditions
under which capital and labor would be applied to the
best advantage. It would be found what each country
can produce better and more cheaply for the other than
the latter can for itself, and under such circumstances
each would obviously be the gainer by mutual exchanges.
It is the nature of trade that it will not long be con
tinued unless all the parties gain by it. Both as pro
ducers and consumers the people of each country would
profit by such an economical adjustment of affairs.
As many manufactures in both countries are made of
materials imported from various parts of the world, it
would manifestly be impossible to establish a completely
free system of commercial intercourse with Canada, except
under duties not only corresponding but also equitably
divided on the productions of other countries. This is
the chief obstacle to any fair, mutually advantageous,
and complete arrangement of reciprocity between us.
If, for instance, wearing apparel, of which we formerly
sold large quantities to the Canadians, were included in
a list of free exchanges between us and them, without
any more fundamental and comprehensive change, Canada,
by admitting free of duty wool, or, if she chose, cloth and
the other articles used in making apparel, could undersell
us so far as to drive us out of our own markets. The
principle thus illustrated is applicable to almost all other
manufactures. The materials for manufactures of wood,
wool, and iron, are already brought into Canada either
free of all imports or under nominal duties for the pur-

140 COMMERCIAL RELATIONS WITH CANADA.
pose of encouraging cheap production. There is nothing
to prevent their being admitted wholly free. Under
these circumstances the Canadian manufacturers^ would
have an unjust advantage over those of our own country
even in our own markets. On our side we might reverse
all this by a lower tariff or a system of bounties. But if
the materials of manufacture were admitted on the same
terms into the United States and the Dominion, and an
equitable distribution made of the revenues, the manu
factures of each might safely and profitably be admitted
into the other. In fact, with our larger capital and more
advanced manufactories we should have an advantage in
the competition which would also inure to the benefit of
the Canadian people.
Manufactures are not the only form of industry which
is worthy of consideration. The interests of our mer
chants and forwarders, as well as the people of Canada,
are seriously injured by the present obstacles to their
intercourse. There is a great difference between a bonded
system and a system of perfect freedom, as to exports or
imports. The annoyances, vexations, and delays necessa
rily attached to any bonded system are often sufficient
in this day of easy communication to turn away business
from its natural and best centre. It is also to be remem
bered that hitherto the Government of the United States
has not thought it expedient to refund the duties on the
re-exportation of foreign merchandise in less quantities
than the original package, thus creating an obstacle,
often amounting to prohibition, to the jobbing and retail
ing of goods.
That the mere adoption of the same rates of duties in
the United States and. Canada on articles imported from
other countries would not be politic, is evident on the
ground that customs-revenue is chiefly collected in a few
ports, although ultimately paid by the consumers, often
in very remote parts of the country.
All these difficulties might be solved by adopting the
principles embodied in the Zollverein or Prussian con
federacy of the German States, Math such modifications
as may be found expedient between ourselves and the
Canadians. By this course both can obtain all the com-

COMMERCIAL RELATIONS WITH CANADA. 141
mercial advantages of union without political entangle
ment, leaving each country free to practice in its own
self-government such rules as it believes to be most in
accordance with the genius of its people, and best adapted
to promote its own interests.
Previous to the adoption of the Zollverein, it had been
the misfortune of Germany to be divided into a large
number of independent states — most of them of petty
dimensions and small population — -every one having dis
tinct custom-houses, tariff and revenue laws, often differ
ing very widely from those of the neighbors surrounding
it. Sometimes one part of a state was separated from its
other parts, and was as a commercial island encompassed
by states having different laws. The condition was such
as would have existed in New York or any other of our
States, if each of the different counties had been commer
cially divided from the rest, and the inhabitants of one
county could not, without paying heavy imposts, pass
into another with a horse, ox, or load of grain, the pro
duct of their own farms, or take imported goods into any
of the counties adjoining their own, and the difficulty
continually increased on passing through additional
counties. Thus the inland trade of Germany was sub
jected to all the restrictions that are usually laid on the
intercourse between distant and independent states.
The principle of the Zollverein or customs union is that
there shall be entire and unrestricted freedom of imports,
exports, and transit among all the states which are its
members! The same duties are collected on the outside
frontier of the states thus united. Within that line all
trade is as untrammelled as within our present Union. An
equitable distribution of the revenue thus obtained is
made among all the states of the confederation.
The Zollverein is comprehensively defined to be the as
sociation of a number of states for the establishment of
a common customs law and customs line with regard to
foreign countries, and for the suppression of both in the
intercourse of the States within the border line. There
would be no impediment by discriminating- duties on the
importations for Toronto if made via New York or Bos
ton. H the merchants of Chicago found it to their in-

142 COMMERCIAL RELATIONS WITH CANADA.
terest to purchase at Montreal, they could do so ; and
buyers from the new province of Manitoba might buy
and sell at St. Paul, Du Luth, St. Louis, or New Orleans,
as freely as at Halifax or any other city in the Dominion;
The merchants of British Columbia would buy and sell
in the markets of San Francisco as freely and with as
little hinderance as in those of their own country. All
means of transit would be entirely open to the people of
both countries, and those most conducive to the public
welfare would take the trade. Internal revenue laws
could, so far as necessary, be made in conformity with the
principles of the Union. There could be fair and com
plete competition everywhere within the confederation,
and full scope could be given to the development of natu
ral advantages wherever they would bring profit to the
merchant and save needless labor of the people, or yield
remunerative employment to them.
The German Zollverein began in 1818, considerably
more than half a century ago. Its progress is a sufficient
proof of the excellence of the principles it embodies and
of the mode by which they are carried into effect. The
enlightened state of Prussia was the originator and leader
in the movement, by forming a commercial union with a
few minor states ; the whole population thus included
being at first only nineteen millions. The experience of
the benefits thus created is so satisfactory, that the best.'
publicists of Europe believe that Prussia thus conferred '
upon the German people advantages scarcely inferior to
those she initiated by the diffusion of education and in
telligence. It not only promoted the industry and pros
perity of the allied states more than any other measure
or sets of measures that their governments could have de
vised, but it was found that the increase of wealth and
population thus arising created an additional demand for ,
foreign products.
Whatever opposition there is to unembarrassed inter
course with Canada proceeds mainly from a fear lest it
might revolutionize our tariff or injure our revenue. It
is well to remind the alarmists who raise this outcry that ;
such results are no necessary consequence of an American
Zollverein. So far as the Zollverein of Germany is a

COMMERCIAL RELATIONS WITH CANADA. 143
precedent, such apprehensions are entirely groundless.
As Prussia was the largest and most populous country
when the Zollverein was begun, her tariff was adopted ;
and owing to increased prosperity and the consequently
increased consumption of tax-paying articles, the revenue
of Prussia rose about thirty per cent, in the four years
next following the amalgamation of the North German
and South German States into one grand union on the
1st of January, 1834.
In 1865 the benefits of the German Zollverein had be
come so well proved and appreciated, that instead of the
three original states or duchies it included fourteen, with
a population of nearly thirty-six millions.
The solidity and cohesive power of the Zollverein were
decisively tested in the war which began between Prussia
and Austria in 1866. The governments of the North
German States included in the union sided with Austria,
and it was feared that a dissolution of the Zollverein
would ensue ; but, says one of the historians of the time,
the extraordinary spectacle was presented that while " its
component parts were waging open war with each other,
its custom-house authorities remained in their functions
in the general name and received and divided the revenue
moneys in the general name, a spectacle which surprised
nobody in Germany, but caused general astonishment
abroad as something quite incomprehensible. German
nationality, and the inner conserving power which ani
mates 'the Zollverein received hereby the most glorious
confirmation." After the war of 1866, the German States to the south
of the river Main, having preserved their independence,
were not under any obligation to renew the Zollverein,
but preferred to continue members of it. In 1867 a new
Zollverein treaty was concluded between the states of the
North German Confederation and the North German
States, the scope of which extended to the whole of Ger
many except Austria. Even with Austria a liberal and
comprehensive treaty was effected in 1868, mutually re
ducing duties on both sides and abolishing all transit
duties and nearly all those on exports.

144 COMMERCIAL RELATIONS WITH CANADA.
A traveller who has crossed the outer line is freed from the
vexations of the douanier in every part of Germany, and may
proceed without interruption from Belgium to the frontier of
Russia, and from Tyrol to the Baltic, a distance of seven hundred
or eight hundred miles, including a population of seventy mil
lions. Until the Canadians are ready for annexation to the
United States by their own appreciation of republican
institutions, no solution of the commercial questions at
issue between us and them can be complete except by
means of a customs union. I, for one, am not desirous of
incorporating in our political union four millions of peo
ple who desire a form of government essentially distinct
from our own. But it by no means follows that we and
they should not mutually develop in harmony our mate
rial interests, and regard them and the character of our
respective populations as a basis on which such future
political arrangements may be made as time may prove
to be wise. The quality of grain or lumber and the de
sirability of selling or purchasing manufactures are ut
terly independent of the political preferences of the
producers or consumers, and on neither side can natural
prosperity be promoted by chronic commercial jealousy.
It is evident that the policy I advocate would tend to
lessen the hostility of differently instituted governments,
while it would not interfere with the political institu
tions of any, and that a strong bias toward the most
friendly relations on other points must naturally arise
upon the basis of mutual pecuniary interests and intimate
social intercourse.
Meeting upon their own ground the theorists who re
gard " a balance of trade in our favor " as the chief test
of the benefits of commercial exchanges with any single ,
country, I find that, according to the reports of the Sec- ,
retary of the Treasury, there appears to have been during
the thirteen years when a treaty for the reciprocal ex
change of grain, lumber, and many other natural produc
tions existed, a balance in our favor amounting to some
$83,000,000, and that ever since the termination of the
treaty until 1874, when the pressure on our affairs tended
to force sales at low prices, there has been a balance

COMMERCIAL RELATIONS WITH CANADA. 145
against the United States in the trade with the Dominion.
So much for the present exclusive policy in comparison
with the more liberal but incomplete system under the
treaty, judging them from the ordinary stand-point of
many protectionists.
Since the termination of the treaty the proportion of
the trade of Canada with this country in comparison with
the whole foreign trade has been reduced from fifty -five
to thirty-five per cent, until the necessities of our people
compelled them to part with the products of their labor
at reduced prices.
The tariff of Canada is moderate as compared with
our own ; yet, in connection with our taxation of many
materials, it is enough to have caused some important
branches of manufacture, notably those of wood-screws
and musical instruments, to be lately transferred by our
own citizens to the other side of the northern frontier,
where they are not only established for the supply of the
people of the Dominion, but, if we persist in our present
course, will undoubtedly at no distant date compete on.
terms favorable to the Canadians in neutral markets with
the products of our own labor on a very extensive scale
and in many various manufactures.
While it is desirable to encourage as far as we are able
the sales of our manufactures to Canada, it is always to
be remembered that the trade between that country and
the United States is to a considerable extent one of tran
sit or carrying to other countries, and thus what is called
"a balance" against us, which is really an advantage,
may exist, because it may merely represent what we have
bought from one country to sell at a profit to others. If
our merchants buy the bulky productions of Canada to
the extent of many millions and carry them through our
own country to our sea-ports, they give employment to
our laborers, create a demand for the products of our far
mers, and cause the expenditure and employment of vast
sums of money among our traders and capitalists, while
the articles thus carried and exported stand to our credit
and profitably swell the balance in our favor in other
countries, being at least as valuable in our exchanges
with the rest of the world as if they were gold or silver.
10

146 COMMERCIAL RELATIONS WITH CANADA.
The Canadians, understanding the natural operation of
the simple laws of business and carrying it into their,
affairs of state, have, with an enlightened self-interest,
attempted to diminish what might by more short-sighted
economists be called " the balance in their favor," by ad
mitting our wheat, flour, corn, oats, barley, pease, and
many other productions entirely free of all duty. They
would like the exchange to be much more — as some of
Our doctrinaires would call it — " against them." The
more of our wheat, corn, and flour they buy, or, in other
words, " the larger the balance against them," the more
their shipping and canals, and with them their merchants
and the rest of their population, prosper. We take the
other course, and by way of fancied " protection " levy a
duty of twenty cents a bushel on their wheat, fifteen
cents on their barley, ten cents on their oats, twenty per
cent, on their flour, and from ten to twenty per cent, on
their pease.
Under the treaty, the quantities of grain exchanged
between the two countries were almost exactly equal. In
1874 our exports of grain and breadstuffs to the Domin
ion, exclusive of barley, for which we pay Canada a bet
ter price than she can find elsewhere, amounted to $16,-
477,674, while the imports of the corresponding articles
were $3,473,352, showing what is called " a balance in
•our favor" of $13,004,322; our exports of grain and
breadstuffs to Canada, as thus shown, being, in conse
quence of our duties on her products and her exemption
of ours, more than four times as large as our imports
from her. This " balance in our favor " shows that
we expel the trade in certain classes of products:
from our shipping, railroads, elevators, and ware
houses with incalculable injury to all classes of our
people, and force it into Canadian channels. This is more
fully shown by the official reports of Canada, where it-
appears that in the same year nearly twenty-one millions
of bushels of grain were certainly exported from that
country, being between six and seven millions of bushels
more than her imports.
Thus we see that the purchases of grain by Canada
are for re-exportation, either directly or for such con-

COMMERCIAL RELATIONS WITH CANADA. 1.47
sumption as leaves a corresponding surplus on her own
side for exportation. No bonded system regarding grain
from Canada can afford such facilities for profits by our
merchants, millers, carriers, and others as would arise
from free and untrammelled trade in it.
The enlargement of the Canadian canals, with a view
yet further to draw away from this country the transit of
its own productions, and trade in them, is at the present
moment going on, and that on a magnificent scale. In
1855, the year after the treaty went into operation, as
Soon as routes and markets of the United States were
opened freely to the grain, flour, and timber of Canada,
the trade by way of the St. Lawrence was $17,469,528,
or not much more than half its amount in the previous
year. The decrease was $15,203,600, and a correspond
ing amount was transferred to other carriers, for the
Canadian trade in the United States increased in the
same time $15,856,624, or from $24,971,096 to $40,827,-
720. In view of these facts, the urgency of removing
from those who are employed on our railroads, rivers,
and canals the restrictions imposed on them by duties
on Canadian grain, and placing them on an equal foot
ing with their foreign competitors, cannot be reasonably
disputed. If we bought from Canada every bushel of wheat that
she now exports to other countries, the demand in those
countries would remain the same. The difference would
chiefly be that after paying for it in the products of our
own labor, we should, send it or its equivalent to the
present consumers, and that we should do the business
and make the profits now made by the Canadians. If
there should be what some call "a balance against us"
with Canada, it would be more than made up through
the amounts placed to our credit by our sales to other
countries. Mainly, for those agricultural productions which are
not " perishable " and will bear transportation the markets
of the world at large regulate our own. The prices alike
of grain and dairy products are transmitted by cable and
eagerly examined by the dealers in them on this side of
the Atlantic. The free admission of these articles into

148 COMMERCIAL RELATIONS WITH CANADA,
this country will stimulate industry without reducing
general prices, not only through increasing the business
of our railroads, canals, rivers, and sea-ports, but by
furnishing them to consumers as nearly as possible to the
places where they are produced, and by passing them
through the hands of the fewest intermediate dealers.
There are also many agricultural products — notably
animals and fresh meats — which might profitably be ex
changed by Canada for our manufactures, thus furnishing
an increased and cheaper supply of provisions to our
people, who, under the system I advocate, would pay for
them in the products of their looms and workshops.
Even as to these articles many errors are current. It
appears from the tables published by the Bureau of
Statistics that last year our imports described as animals ¦
from the British American colonies amounted to $1,987,4:
231, and those of meats, butter, cheese, poultry, lard, etc.,
to $533,886 ; a total of $2,521,117. An outcry is raised
that our farmers are oppressed by these inundations of
provisions. But their amount is little more than equal to
our exports of meats alone to Canada. Their amount is
no less than $2,457,904. Of animals, meats, butter,,',
cheese, lard, and tallow only our exports to the, same
country were $4,398,060, or about two millions more than
our imports.
It would be improper to pass without examination our
trade with Canada in coal, an article which is one of the
essential elements of manufacturers, and in the North
becoming daily more and more one of the prime neces
saries of human life. It is found in abundance on the.
sea-coast of Canada, whence it is advantageously exported
to the New England States and New York. But it is not
found in the interior and well-settled parts of the
Dominion. They depend on our mines for a supply, and
obtain it, free of all duties, principally from Pennsylvania,
Virginia, and Ohio. Anthracite coal is extensively
imported into the maritime provinces. Altogether, re
garding the subject from a national point of view, onr
imports of coal last year from Canada amounted to
$697,6.73, and our exports to her were, as shown; by our
own returns alone, $2,034,527. The imports, taking a

COMMERCIAL RELATIONS WITH CANADA. 149
series of years, are nearly stationary; but our exports
•increase enormously, and in the last three years were
$7,272,964, not far from four times as large as in the
three years from 1863 to 1867. Under these circumstances
any imposition of duty on coal from the Dominion is
evidently unjust, favorable only to petty local interests
at the cost of important communities and contrary to
the spirit in which each part of the Union should regard
all the others.
Among our largest imports from Canada, timber is
probably on the whole the one most necessary to our citi
zens. It forms a part of every house in city or country.
It is directly or indirectly a part of almost every manu
facture, and the cost of the home of every workman in
the manufacturing parts of our country depends upon its
price. Considered with regard to the tariff and its " pro
tective" character, lumber is unlike any other article.
Our iron-ore being inexhaustible, the production of that
metal may be stimulated to any extent. The more there
is made of it the more can be made. The same is true
of manufactures of wool and cotton, or of those articles
themselves. Looms, sheep, and cotton plantations can be
almost indefinitely multiplied. But, for all intents and
purposes, a high price for lumber is not only a tax on
the people, but stimulates present production with the
absolute certainty of speedy, spendthrift exhaustion of
the supply. By duties on Canadian lumber we simply
exhaust our resources and pay for drawing what we need
from places remote or difficult of access when we might
get it easier elseMThere. It would be even more reasona
ble to dig holes and fill them up again than to indulge in
this delusive and extravagant legislation.
There has been a too common belief that by duties on
the productions of Canada we make her people pay our
taxes. Perhaps the fallacy yet lingers in some minds.
The fact that we have destroyed our importations of
wheat and flour from Canada, and that she now sends
her surplus together with much of our own to other mar
kets, may convince of their error some of those who have
imagined she must depend upon us for the sales of her
productions. It was argued when the treaty was repealed

150 COMMERCIAL RELATIONS WITH CANADA.
and a duty was imposed on Canadian timber, that we
should buy it as cheaply as ever. Instead of this con
summation, it has been found that our importations be
came nearly threefold as large as before, and that the
prices in Canada doubled, showing clearly that we pay
the duty and injure every branch of industry in which
northern timber is a material.
The well-known fact is that we are rapidly exhausting
our supplies of timber in the Northern States. The de
mand for it increases at the rate of twenty-five per cent.
a year, and even those who are interested in high prices
and immediate sales of what is left of it, admit that in
twenty years building timber will be extremely scarce^
and that in many parts of the country, yet supplied in
part from their own soil, it will have entirely disappeared.
It is stated on good authority that more than sixty-three
thousand nine hundred establishments, employing nearly
four hundred thousand persons and using material to the
value of $310,000,000 a year, we're engaged in 1869 in
manufacturing articles entirely from wood, in addition to
more than seven millions four hundred thousand persons
partly employed on wood or using that material yearly
to the value of $554,000,000. In some instances, follow
ing the example of more experienced nations, premiums
are given to those who plant certain areas with forest
trees. Yet in the face of all these facts we, under the
name of " protection," betray the public interests into
the hands of a few monopolists, and condemn our people
to pay large rewards for the too rapid destruction of our
remaining forests. In considering these facts it is desir
able to remember that under a free system of exchanges
Canada would be paid for her lumber in the products of
our labor.
The value of an extension of trade with Canada is duly
appreciated by all thoughtful commercial men. The
National Board of Trade passed resolutions and peti
tioned Congress in its favor. The New York Chamber-
of Commerce regards it as " specially desirable, on polit
ical as well as economical grounds, that all unnecessary
hinderances should be removed from the commercial inter
course between the United States and the great Dominion

COMMERCIAL RELATIONS WITH CANADA. 151
which borders our northern border for so many thousands
of miles," and " strongly recommends the proper author
ities at Washington to enter into such treaty stipulations
whenever the Canadian authorities may be found ready to
meet them on a basis of perfect fairness and equity."
The boards of trade in Boston and Chicago, and many
other similar associations, have earnestly expressed the
same views. Various State legislatures, notably that of
New York, have passed resolutions to the same effect.
Proof that the importance of the interests involved is
fully appreciated, and of a willingness to negotiate,
abounds in Canada.
In 1873 the. Dominion Board of Trade presented a
memorial to Earl Dufferin, the governor-general of the
Dominion, expressing a " sincere and cordial desire " that
he would " be pleased to make such representations to the
imperial government as will procure the appointment of
a commission to meet and confer with a similar commis^
sion on the part of the Government of the United States^
(if such commission has been or shall be appointed,) for
the purpose of framing and negotiating such a treaty of
reciprocal trade as will be for the mutual advantage and
benefit of the trade and commerce of the Dominion of
Canada and the United States." The Canadian minister
of customs, the privy council, and the governor-general
fully concurred in these views, and the governor, in coun
cil, formally promised that " should the Government of
the United .States comply with the wishes expressed by
the National Board of Trade, the subject will receive
the fullest consideration of the government of Canada."
There is good reason for believing that no change has been
made in their views.
During the present year a leading member of the Do
minion Board of Trade, at its annual meeting, expressed
the general sentiment of those who were present by say
ing, "We are anxious to deal fairly and liberally with
our neighbors, and on condition that they meet us in a
liberal spirit." A resolution was passed, declaring " That
this board is of opinion that it is very desirable that a
treaty of reciprocity in trade with the United States, on
a comprehensive, liberal; and fair basis, should be oh-

152 COMMERCIAL RELATIONS WITH CANADA
tained; and is also of opinion that the initiatory steps
thereto ought to come from the Government of the Unir
ted States, seeing that it was by their action that the old
treaty was abrogated." Thus there is ample proof that
commissioners would be promptly appointed to meet and
confer with our own.
While we have now in Canada a most valuable and in
creasing market for our manufactures, it is quite certain
that its continuance depends on the duties levied by the
Canadian tariff. A large proportion of the manufactures
we export so extensively to the Dominion, conspicuously
those of iron, copper, brass, lead, cotton, etc., are admitted
free of duty or at almost nominal rates of five or ten per
cent., and those charged at higher rates than seventeen and
a half per cent, are few in number and insignificant in
quantity. The Canadians have it in their power, and it
could be no just cause of complaint by us, to adopt our
own scale of duties. The effect of such a step could not
fail to inflict serious injury on our manufacturers, many
of whose products would soon be excluded from the Ca
nadian markets, which it is for our interest to open yet
more widely.
The importance of our present and future commercial
relations with the Hawaiian Islands has been ably dis
cussed. I have not under-estimated nor will I now depre
ciate it. But it shrinks into seeming insignificance in
comparison with the value of the trade between the peo
ple of the United States and Canada. In the same year
when our exports of cereal productions to the Islands
amounted to the value of about $45,000, those to the Do
minion were of the value of over fourteen millions, our
exports of cotton and its manufactures to the Islands were
about $16,000, and of iron and steel, including wooden
ware, were nearly $20,000, while those of the same classes
to Canada were over one million one hundred thousand
and over six millions, respectively, exclusive of wooden-'
ware. The exports I have specified to Canada are exclu
sively of our own production, the aggregate of which to
Canada was about ninety times as large as that of all our
exports to the Hawaiian Islands during the same time.
Without pursuing the comparison further it is absolutely

COMMERCIAL RELATIONS WITH CANADA. 153
unquestionable that, if our commerce with the Hawaiian
Islands is worthy of special attention, that with the Do
minion of Canada is almost immeasurably more so ; and
the comparison loses nothing of its force either commer
cially, politically, or in a military point of view, if we
consider the limited area of the Islands and the vast ter
ritory of the Dominion coterminous with our own, to be
inhabited by people sprung from ourselves, or, like our
selves, from the foremost nations of the Old World and
whose number will be computed by hundreds of millions.
While the moderate rates of duty exacted by the
Canadian tariff enable us to make large exports of man
ufactures, they also permit goods from other countries to
be imported on the same terms. Silks, broadcloth, plate,
watches, jewelry, etc., are charged with a duty of only
seventeen and a half per cent. The boundary between the
two countries not only extends across the continent, but
the shore-line is increased for thousands of miles by in
numerable bays, affording great facilities for defrauding
the revenue. At other places a smuggler can go in the
day or night from one side of the frontier to the other
laden with jewelry, laces, or other expensive goods liter
ally as easily and with as much security as a traveller
can pass from one farm to another or through the un
broken forest. It is stated that stores, kept by enterpris
ing merchants, are built on the imaginary or mathemati
cal line separating the two countries, and that goods
bought in each are sold freely to all customers ; the mer
chandise itself changing places from the shelves on one
side to those on the other at those hours and opportuni
ties when it is impossible for a custom-house officer, how
ever vigilant, to watch what may be done inside the
building. No wonder then that the Secretary of the
Treasury should have found " the difficulty attending a
proper surveillance of our northern frontier " of ^ suffi
cient importance as to direct special attention to it in his
last report as being "under existing circumstances very
great, if not in some respects insurmountable." To
guard these lines with moderate security an enormous
increase of the revenue service would even now be ab
solutely indispensable. In the four collection districts of

154 COMMERCIAL RELATIONS WITH CANADA.
Vermont, Champlain, Oswegatchie, and Cape Vincent,
having a frontier line of more than three hundred miles.
after deducting for a few officers" employed in permanent
service at the principal ports and minor stations, " there
remain," says the Secretary of the Treasury, " but four
teen as a preventive force, or less than one man for every
twenty-one miles of frontier."
As the frontier regions become more populous and
goods brought from one country to the other meet with
readier sales, these difficulties will be incalculably in
creased, and it will be absolutely impossible to prevent
immense quantities of valuable goods from being illicitly
brought across the line without payment of any duty.
In addition to these suggestive facts it is to be remem
bered that some of the most liberal and advanced states
men in Great Britain, not content with the present anom
alous relations of the mother-country and the colonies,
entertain the project of a Zollverein or customs-union/
between them. The people of these countries have as
undoubted rights to free trade with each other as the
citizens of our different States now enjoy among them
selves. But, if the difficulties attending our present tariff are
now " in some respects insurmountable," what would
they become if the same freedom of trade as exists
between the States of the Union were also a matter of
fact between the different parts of the British Empire ?
There is no complete remedy but such a customs-union
as I have suggested between the United States and the,
Dominion, In proposing the appointment of commissioners to con?
fer with other commissioners duly authorized by tbe
government of Great Britain, or whenever it shall appear
to be the wish of that government to appoint such com
missioners, to investigate and ascertain on what basis a
treaty of reciprocal trade for the mutual benefit of the,
people of the United States and the Dominion of Canada
can be negotiated, and to report the results of their
investigation to the President of the United States, there
is no bias toward any special form of reciprocity. They
may or may not approve of such a customs-union as

COMMERCIAL RELATIONS WITH CANADA. 155
under existing circumstances seems to me the best and
only perfect solution of the embarrassments attending the
present commercial relations of the two countries, as it
would effect a great saving in the revenue service, abolish
.smuggling, give complete freedom of transit to the people
on both sides, and by a continuous and harmonious de
velopment of their resources encourage social intercourse
and prepare the way for whatever other institutions their
intelligence and mutual good- will might hereafter suggest
and approve. But between such an arrangement and the
present condition of trade there are many intermediate
steps. It ought not to be difficult to agree upon the basis
of a common tariff on all articles, such as silks, laces,
brandies, wines, jewelry, etc., the importation of which is
taxed only for revenue, and in regard to which no irrecon
cilable differences of politico-economical theory arise, or
to determine the terms of equitable division of the.
revenue collected from them in common. If this only
were done, the most extensive smuggling from which the
revenue of the United States suffers would be stopped,
and our own public Treasury would be the gainer by
many millions. Some at least of the manufactures and.
raw products of each country could be admitted to free
exchange with those of the other.
Beyond these considerations, or rather as their basis,
are the plain and well-known facts that the prosperity of
our people and our strength as a nation depend upon
their unrestricted exchanges of the products of their labor
more than upon any other material cause, and that the
relative positions of the United States and the Dominion
render similar commercial relations no less valuable to
our citizens and the Canadians; that if permitted tg
develop themselves harmoniously, according to the unre
stricted, wishes of the people, the mutual interests of the
' two countries are even more important than those of
many of our own States, and that whatever would directly
benefit so large a number of them must be profitable to
them all and should be desired by all.
Whatever arrangements may be made might properly
include various regulations necessary for the freedom and
convenience of our commercial and social neighborhood

156 COMMERCIAL RELATIONS WITH CANADA.
and intercourse, such as a uniform system of extradition,
light-houses, copyrights, postage, patents, telegraphs,
Weights, measures, and coinage.
The principles I' am desirous of seeing brought into
active use are simply those expressed nearly a century
ago by Girard, Franklin, Deane, and Lee in a treaty of
commerce between France and the United States, in
which they, on the part of this country, agreed to avoid
" all those burdensome prejudices which are usually
sources of debate, embarrassment, and discontent," and.
to take as the " basis of their agreement the most perfect
equality and reciprocity," " founding the advantage of
commerce solely upon reciprocal utility and the just rules
of free intercourse." Thus all petty, acrimonious debates
as to whether one party would make more or less than
the other would cease. All would be merged in con
siderations of plain and palpable benefit as far as it is
between States and individuals in the Union.
It is undeniable that the Government and people of
Canada are desirous of meeting in a friendly and liberal
Spirit whatever efforts we may make toward extending
our trade with them. Thus apparently the means of
benefiting a large and suffering portion of our population
are open to us by giving them employment through an
extended market for their productions. How much this
is needed may be estimated from the statement of the
Secretary of the Treasury in his annual report, that our
domestic exports to all countries decreased in value $70,-
149,321 last year. By opening trade with Canada, we
should also furnish our people with a more abundant
supply of the necessaries of life and some of the mate
rials for manufactures. The purpose of the resolutions
now under consideration is simply to ascertain, after full
and careful investigation by intelligent, citizens of the
United States, how far and through what measures we
can best bring into actual practice the opportunities
which are placed within our reach by the circumstances
of the times and by immutable nature, or rather by Pro
vidence itself.

COMMEBCIAL BELATIONS WITH CANADA,
AND THE
EXTENSION OF MARKETS FOR OUR PRODUCTIONS.

House of Representatives, February 1, 1877.

The demands of the electoral count and appropriation bills
upon the time and attention of the House in the second session of
the Forty-fourth Congress probably prevented the appointment of
commissioners on behalf of the United States to confer with com
missioners on behalf of Canada, to ascertain on what terms a
mutually beneficial treaty of commerce between the two countries
could be arranged. The suggestions made by Mr. Ward in his
speech during the previous session had been warmly approved by
the National Board of Trade, the Dominion Board of Trade, and
many leading commercial bodies in the United States. The
House permitted him to present his closing arguments, in which
the natural commercial relations of the United States and Canada
are demonstrated, the modern policy of Great Britain toward
her colonies is stated, the most recent statistics are comprehen
sively presented, the benefits of mutual international profit are
recognized and illustrated, and "that short-sighted view — the
most pernicious and perhaps the most common of all political
errors — that the gain of one man or nation must be the loss of
another," is refuted.
Mr. Speaker : To those who regard our commercial
relations with Canada comprehensively and in a national
spirit, without undue bias from minor matters of merely
local or special interest, it is sufficient for me to point
out the respective geographical positions of the United
States and the Dominion, and the extent of the latter
country. A straight line drawn from the northern boun
dary of Maine, near the headwaters of the St. John's
Biver, to Detroit, would pass entirely through Canadian
territory. We are enabled more clearly to estimate the
extent of this line, which is small in comparison with our

158 COMMERCIAL RELATIONS WITH CANADA.
northern frontier, when we see, as we may on reference to
any map of this continent, that if continued for the same
length onward from Detroit into the United States, it
would reach a considerable distance southerly from the
place where the Arkansas Biver flows into the Missis
sippi, and that if extended directly south from Detroit it
would reach nearly to Tallahassee or the Gulf of Mexico.
Begarded from another point of view, it may be seen
that the part of the Canadian territory south of a line
drawn from the northern boundaries of Maine and Minne
sota would exceed in breadth the States of Ohio, Indiana,
Illinois, and Iowa, and would be equal in area not only
to those States, but in addition to large portions of Ne
braska, Missouri, Kentucky, Kansas, and Arkansas. A
country of these vast dimensions, and under alien com
mercial laws, exists between all the New England States,
New York Pennsylvania, and Ohio, on one side, and
Michigan, Wisconsin, Minnesota, and all the regions west
of them on the other. An equal area extended southerly
would, with the exception of a few miles, separate by a
broad barrier all our territory north and east of any point
on the northern shore of the Gulf of Mexico from all
those parts of the Union which are northwest of it. What
commercial advantages would not each State lose if
Georgia, the Carolinas, Virginia, and Pennsylvania were
thus widely separated from Mississippi, Missouri, and all
that part of the United States west of them, and deprived
of full and free commercial intercourse with the inter
vening region ? The country thus separating these various
States, if commercially isolated as far as Canada now is,
would not only cease to be so vast a source of permanent
and honorable profit to the other parts of the Union, but
would itself, by its isolation, suffer in a greater propor
tion than the others. Such is the mutual injury con
tinually inflicted on the people of both countries by the
obstacles to the free exchange of the products of industry
in the United States and Canada. The evil results would
be more conspicuous than those of the imaginary condi
tion I have endeavored to describe if the benefits of un
trammelled commercial intercourse had ever been enjoyed.
If to that part of Canada which alone I have brought

COMMERCIAL RELATIONS WITH CANADA. 159
under consideration we add the important maritime prov
inces of New Brunswick and Nova Scotia, and Manitoba,
and the immense territory of the northwest interior and
on the Pacific coast, the loss mutually sustained is seen to
be yet more vast and to be continually increasing.
Many considerations demonstrate the importance of
mutually free imports, exports, and transit throughout
the United States and Canada. Not only does our
warmer climate enable us to produce many articles not
easily or profitably grown in Canada, yet necessary for
the comfort of her people and for which she can give us
valuable exchanges needed in the daily life of our citi
zens and as material for the manufactures we export, but
our rivers, railroads, and canals are the only direct means
she has of communicating with southern regions, while
unfettered transit through her territory and the perpetu
ally free navigation of the St. Lawrence are conspicuous
wants of the Western and Eastern States. The people
of Canada sprung from the same nations of Western Eu
rope as those whence we derive our origin, have all the
charteristics of a commercial, enterprising, and progres
sive nation, however its manifestations may have been
retarded by isolation from the remainder of the conti
nent, and, favored by the resources of a new and broad
territory, their products and exports are of greater value
than those of a population of equal number, but of any
other race in the world. Already, though with inhabi
tants numbering less than one-twentieth part of those of
Bussia, Canada, yet a colony or possession of Great Brit
ain, occupies the fourth if not the third rank among the
nations of the world in the magnitude of her commercial
marine. In the general education of the people, modern
Canada is unsurpassed. Separated as they are by the
Atlantic and Pacific Oceans from the nations of the Old
World, and enjoying the yet slightly developed advanta
ges of their country, their rates of the wages of labor
are on the whole not widely different from our own.
From the greater part of the Canadian settlements, and
at an average cost not far if at all exceeding that of the
wages of an artisan for a single day, a man may come to
the United States where he can earn such wages as are

160 COMMERCIAL RELATIONS WITH CANADA;
paid here and enjoy the advantages of republican insti
tutions. In addition to these considerations, Canada is
on the whole a forest and farming country, ready not
only to sell us many of the bulky articles we need for
common use or for exportation, but also to receive in re
turn those manufactures of which under the policy we
have adopted we have a large surplus, and for which we
have not yet found sufficient markets.
It has followed as a matter of course, from the relative
positions of the United States and Canada, and the dis
tance of both from Europe and Asia with their dense
populations, that their commercial relations have engaged>|
the attention of the most sagacious statesmen and mer-: ']">
chants of our country from the beginning of its history
to the present time ; and the advocates of the most liberal
and intimate system of exchanges with the Canadians
have been confined to no party, but have included in their
number protectionists as well as free-traders. The ad
vantages which, under a system of just and fair recipro-o. i
city, our own citizens and the people of the Dominion tl
would mutually give and receive are at least, in propor-.
tion to their respective populations, as valuable as those
which any States or groups of States confer upon each
other by the unlimited freedom of trade between them,
and these benefits are among the greatest derived from
the Union, and are the strongest bond for its preservation
and perpetuity. The barriers to intercourse between our
citizens and the Canadians are wholly artificial, the results
of human law, and can easily be removed by mutual
agreement and appropriate legislation.
During the last twelve months the chief mercantile
bodies throughout the Northern States have passed reso
lutions earnestly in favor of the motion now before this
House for the appointment of commissioners by the
United States and on the part of Canada, through Great ,
Britain, to inquire and ascertain by. mutual investigation
and conference how far it is practicable to extend our
commerce with the Dominion.
In the States upon our northern frontier the advan
tages of an extension of our trade with Canada are, with
perhaps a few local exceptions, highly appreciated'hy all

COMMERCIAL RELATIONS WITH CANADA. 161
thinking commercial men. A more complete system of
the exchange of the products of labor between the two
countries is warmly desired by the people of New Eng
land at large — a sufficient proof that it would not injure
our manufactures, but would inure to their benefit. The
close contiguity of New England on her northern and
eastern boundaries to Canada gives her people ample op
portunities for judging accurately as to the practical
effect of reciprocal trade ; and the intelligence and habits
of shrewd and careful calculation prevalent in New Eng
land give assurance that her chief men of business are
reliable authorities on this subject. Their views, as pre
sented by one of the leading members of the Boston Board
of Trade, and in substance applicable to nearly all the
Northern States, are unequivocally that New England is
greatly interested in the question of reciprocity. Her
/people depend largely for their success and subsistence
upon being able to manufacture as cheaply as they can.
They think, and none can contradict them, that the prime
necessities of life, fuel and food, should be supplied to
their laboring-men at the lowest practicable cost.
The citizens of New England, knowing that between
them and the Canadians there are no barriers except
those of an artificial nature, regard their neighbors in the
provinces as their natural or legitimate customers. The
representatives of the Boston Board of Trade assert
that the people of Massachusetts are deeply impressed,
as many others are in all parts of our country, with the
fact that difficulties and depreciation are besetting every
branch of industry. These formidable disasters are not
confined to their great cities, but even in the small man
ufacturing towns also are found people seeking for work,
and the general cry is, " It is our trade relations that are
wrong and unsound ; what have you to suggest to lift us
out of this slough of despond ? " The most obvious
remedy for all this distress is to increase the sales of
manufactures to our neighbors and the supply of raw
materials from them.
The chief commercial associations in the city and State
of New York substantially and emphatically concur in
the views presented by the Board of Trade. The people
11

162 COMMERCIAL RELATIONS WITH CANADA.
of that State, like those of every other commercial and
manufacturing part of the Union, suffer by the exclu
sion of Canadian products from our markets and the re
strictions upon the exportation of our manufactured arti
cles of foreign origin to Canada. Through duties on
Canadian grain, we cut off an enormous trade which
would naturally, and with mutual benefit to the people
of both countries, pass through our territory, paying
freight to owners of our railroads and canals and giving
work and wages to vast multitudes- of men now in. need,
and adding to the profits of our shippers and merchants,
besides, through increased employment, enlarging the de
mand for the agricultural and other products of the re
gions through which they pass. What in these respects
is true of the city and State of New York is also true of
Philadelphia and Baltimore and the States of Pennsyl
vania and Maryland. The latter, more remote from
Canada, have not so clearly perceived the advantages of
being enabled, with fewer or diminished impediments, to
sell to her the products of their workshops or their im
ports from Europe and the regions of the tropics. Bail
roads, now giving such easy access from Baltimore and
Philadelphia to the interior of the continent, have placed
within their reach new advantages as regards trade with
Canada which they do not yet adequately appreciate, but
are already of much importance, and will continue to in
crease for centuries to come.
It is not surprising that the merchants and manufa&
turers of New England estimate at its real value an ex
tension of trade with Canada, a country not only conti
guous to their own for many hundreds of miles, but for
a considerable distance intervening between their territory
and the ocean, and so near to them that a man may stand
with one foot on each side of the dividing line. Yet as
Canada is no mere eastern province, but extends across
the continent from the Atlantic to the Pacific Ocean, and
the best and most fertile parts of the Dominion are in
the interior, her trade is no more important to New Eng
land than to any other part of the Union. While sugar
or coffee, if sent by the Saint Lawrence route and
through Quebec and Montreal to Toronto, must be carried

COMMERCIAL RELATIONS WITH CANADA. 163
more than three times as far as if sent via New York,
and at an enormously increased expense, the same causes
operate constantly and must ever continue to do so with
regard to Baltimore, Philadelphia, New Orleans, and all
other southern ports in connection with Western Ontario,
Manitoba, and other inland regions of the British posses
sions. 'If such a continental system as I desire to see
should be established, no cities would feel its stimulating
influences in greater force than St. Louis and Chicago.
The latter perhaps would be its heart and centre.
I have endeavored to present the facts in the most
simple form. As the resolutions I offer in regard to
them have been approved by the various local commercial
bodies of the United States to which they have been
presented, from Chicago and Milwaukee to Boston, with
out partisan considerations, and, as far as I know, without
any dissentient voice, so also were they unanimously re
commended at the last meeting of the National Board of
Trade, an association which attracts to its councils leading
merchants and manufacturers from all parts of the Union.
It includes alike among its members free-traders and
protectionists. Several of the latter took special pains
to state in explicit terms and the strongest language that
they were " protectionists from the soles of their feet to
the crowns of their heads," but they all without an ex
ception advocated the unequivocal and entire adoption of
the resolutions now before the House in favor of recipro
city with Canada. The opportunities of gaining immense
business advantages for the people of both countries are
too open and manifest to be successfully or candidly
denied by any one who in a patriotic and national spirit
has made any fair examination of the subject. It is
entirely a matter of business, partly in those details with
which merchants are most conversant, and extending also
into those more extensive principles and arrangements
which are based on the broadest and most comprehensive
considerations of statesmanship. The resolutions simply
provide that a few sensible, practical men, the best we
can select on our side, shall meet others of the same
character appointed on behalf of Canada, and ascertain
how far the mutual interests of the people of both coun-

164 COMMERCIAL RELATIONS WITH CANADA.
tries can be advanced. It is certain that if we are true
to ourselves we can furnish citizens who will prove the
equals of the representatives of the Canadians in knowl
edge, skill, and sagacity, and will report to our people
whatever good can be derived from circumstances so
favorable. Their suggestions will be submitted to Con
gress and the country, and will be of no avail unless they
obtain the approval of the national legislature and the
enactment of appropriate laws. The issue is not, as some
seem to think it must be, which side can take the most
shrewd advantage of the other, but how far the natural
and gratuitous bounties offered by Providence to the
people of both countries can be best developed for their
permanent and mutual benefit. The resolutions go no
farther than this. They do not aim at carrying into
effect any special theory. The commissioners intended
to be appointed would enter upon their inquiries and
consultations without any undue bias and with the whole
field of investigation and conference open to them.
There are no commercial barriers between the two peoples
except those which are created by man, and can be re
moved by mutual agreement and legislation.
The question is, in brief, whether with a coterminous
country, inhabited by people almost identical with our
selves in education, language, origin, and character, and
where wages, controlled by the necessary demand for
labor in a new country with vast undeveloped resources,
.do not differ much from those given and received in the
United States, we cannot profitably enlarge the exchanges
of our products. The arguments of those who oppose
the resolutions are and must be founded on local and
petty interests. Carried to their logical conclusions, they .
would prove that it would be better for us if an open sea
existed on the north of the United States instead of a
fertile country with a population scarcely surpassed in
intelligence, enterprise, and. industry by any on the face
of the globe.
During the last session of Congress, a treaty for the
reciprocal extension of trade between the United States
and the, Hawaiian Islands was approved by Congress,
and it has now become part of the laws of the land.

COMMERCIAL RELATIONS WITH CANADA. 165
Although its advantages were in some degree local and
accrued primarily and chiefly to the benefit of the Pacific
States, the welfare of each State is so essentially an in
tegral part of ¦ that of the whole Union, the material gain
derived by the people at large from the prosperity of
each State is so great and manifest, that I gave the treaty
my warmest support. It provided for a not unimportant
extension of the demand for our manufactures.
Several military and political considerations also
prompted me to advocate the measure. Their weight
was duly appreciated by many of an opposite political
party, who hold what are called protectionist doctrines,
but perceived that they did not apply to the case then
under discussion. It should be gratifying to every good
and thoughtful citizen that, so far as a few small and re
mote islands in the Pacific Ocean are concerned, the in
terests of our suffering people were not neglected, and
that such legislation was adopted as is likely to create an
increased demand for the productions of their agricultu
ral and manufacturing labor, and, in the far-distant future
may confer naval and military advantages on the United
States. From every possible point of view our relations with
the Hawaiian Islands shrink into absolute insignificance
when compared with those between the United States
and the Dominion of Canada. Every military, naval,
and commercial reason for which it is desirable that we
should cultivate intercourse with the far-off islands of
the Pacific applies in a different form, but with incalcu
lably increased force, to our connections with our next-
door neighbors on the north. The Hawaiian Islands are
distant some three thousand miles from that part of our
country which is nearest to them. Canada is so near to
us that for many thousands of miles her territory is
separated from our own only by an imaginary or mathe
matical line, and a man may stand at his ease in each
country simultaneously. This contiguity extends, not in
a straight line, but with indentations nearly doubling its
length, from one side of the American continent to the
other at the broadest part of our broad land. Where our
countries do not thus touch each other they are separated

166 COMMERCIAL RELATIONS WITH CANADA.
only by lakes and rivers, which in some respects furnish
increased facilities for intercommunication. At various
points railroads cross the boundary, thus binding the
people together, if not with links of steel, with bands of
iron. It would have been unwise to overlook the benefits
which will accrue to us from the treaty with islands " in
the ends of the earth ; " but who can say how much
greater folly and injustice we commit toward our own
citizens by an illiberal and exclusive policy toward the
millions whose homes are close. to our own?
It was argued, and I do not disparage the force of the
reasoning, that if we did not enter into a friendly com
mercial treaty with the Hawaiian Islands they would
pass into the hands of some foreign power, and thus our
influence would be weakened, and, in case of war, expe
ditions against us might be fitted out from the Islands.
Canada is under the sovereignty of that nation which,
by means of her vast naval power, might, if war arose,
be our most formidable antagonist. The population of
the Dominion, already greater than that of this country
at the time of the Bevolution, will not only, as the settle
ment of the vast northwest increases, be as large as that
of this country now is, but be computed by the hundreds
of millions, and be far more nearly equal to our own in
the future than is now usually supposed. It should be
unnecessary to dwell longer on this part of the subject.
Begarded simply as a matter of military policy, the -;
friendship of Canada is not only more important to us
than that of the Hawaiian Islands, but of any other
power whatever on either side of the Atlantic.
From the same causes which render our relations with
Canada more important than those with the Hawaiian
Islands in a military point of view — her contiguity to the
United States, the extent of her territory, and the char
acter of her population — the almost incomparably great
er value of her trade to us in the future is also demon
strated. The comparison of the trade of the two coun
tries with us at present admits of an approximately'
exact arithmetical proof. In the last calendar year of
which at the present time we have any authentic com
mercial record, our exports to the Hawaiian Islands

COMMERCIAL RELATIONS WITH CANADA. 167
amounted to $783,561, while those to the British North
American Colonies during the fiscal year corresponding
most nearly with that period were nearly fifty times as
large, having been at least $38,296,531. Our exports to
Canada included grain and flour to the amount of nearly
twelve millions of dollars ; of animals and their products
the amount was $4,398,060 ; of raw cotton, $556,340 ;
of coal, over two millions, and of timber, $541,151. Our
manufactures exported to Canada included cotton goods
to the value of $673,031 — nearly as much as all our ex
ports to the Hawaiian Islands added together ; glass
ware, $416,708; manufactures of iron and steel, $3,377,-
913; and of wood, $1,376,611. These are all our own
manufactures, exclusive of commodities of foreign ori
gin. Altogether the value of our own manufactures ex
ported to the Dominion, exclusive of coin and bullion, in
the fiscal year 1875, was, as shown by our own reports,
$10,197,580. Doubtless the actual amount was much
larger, the accounts of exports being, probably in all
countries, less accurately kept than those of imports. In
the fiscal year of 1876 the aggregate of the imports of
all kinds to the Dominion from this country was no less
than $44,093,073, of which more than half were admit
ted free of all duty whatever, and the remainder at
duties which, compared with those we exact on similar
productions from Canada, appear insignificant. They far
exceed those imported into Canada from Great Britain,
or any other country, and yet the duties collected on im
ports from Great Britain exceed those collected on
imports from the United States by nearly one-half.
In specifying the amounts of several of our produc
tions and manufactures exported to Canada, I have ad
hered to our own accounts, but as may be seen on refer
ence to the report of the Chief of the Bureau of Statis
tics on commerce and navigation for 1875, and the report
on the finances for 1876, it is almost if not quite impos
sible to obtain full and accurate statements of our ex
ports to Canada from our own authorities. The chief
defect is that railroad cars and other land vehicles pass
ing into adjacent territory are not required to file lists or
manifests of lading similar to those required from ves-

168 COMMERCIAL RELATIONS WITH CANADA.
sels clearing for foreign countries. Hence our own re
turns inadequately and grossly misrepresent the real
value of our exports to Canada. As duties on many of
these articles are collected in Canada, accounts of them
are more strictly kept in that country, although even
there, owing to smuggling and undervaluations, they
doubtless fall short of the real amounts. It is shown by
the official statements of the Commissioner of Customs
of the Dominion, that the value of articles produced in
this country and exported to Canada, but omitted in the
returns of our custom-house officers, was, in 1874, $11,-
424,566; in 1875, $15,596,524; and in 1876, $10,507,563.
Most of these exports consisted of manufactures of cot
ton," wool, iron, copper, etc. How far our own reports,
considered by themselves, are likely to mislead, may be
inferred from the fact that to the amount of our exports
of cotton manufactures in the year 1875, which was
$673,031, according to the returns I have already quoted,
should be added $918,813— making a total of $l,"o91,844;
and to $3,377,913, the value of our manufactures of iron
and steel exported to Canada, as shown by our own re
ports, should be added no less than $3,455,736, altogether >
$6,833,649 in this branch of manufactures alone. Similar
proportions may be observed as to other exports, but it is
needless to multiply details. It would be useless to argue
further with those" who do not see that such a market
for our manufactures should receive attention and en
couragement from every true friend of the people.
Surely it is needless to urge that, if the Hawaiian
treaty was worthy of approval by a triumphant majority,
better opportunities of extending our commerce and
beneficent influence nearer home and on an enormously
larger scale should not be neglected. I regard it as an
auspicious omen that so large and influential a portion of
the party in power, visiting in imagination the genial
climes of the Hawaiian Islands, should have overcome the
theories and prejudices through which more important
subjects are mistily regarded, and, so to speak, have picked
up a shell " on the shore of the great ocean truth." Be-
membering some of the advances made in physical sci
ence since the great philosopher so modestly described.

COMMERCIAL RELATIONS WITH CANADA. 169
his own merits and discoveries, I regard the Hawaiian
treaty as a precedent fraught with great advantages to
the agricultural, manufacturing, and commercial interests
of all parts of our country. I trust it will be the means
of directing public attention to practical and easy, be
cause mutually beneficial, methods of adjusting affairs
with our neighbors, both North and South. As far as
an extension of our trade with them can be carried into
effect it cannot fail to be profitable to all parties to the
arrangement. Our policy should be not to tax our own
citizens to pay others for entering into our Union and
enjoying its advantages, nor to incorporate with ourselves
alien countries whose people are not in harmony with the
spirit and requirements of our institutions, but simply to
extend our commercial relations with them. We should
thus acquire the chief benefits of actual ownership with
out its disadvantages. It is a necessary counterpart of
the Monroe doctrine, prohibiting the interference of the
Old World in the internal affairs of this continent, that
we should study to promote the interests of the other
American* States and extend the exchange of the respec
tive products of their labor and our own.
How vast the beneficial commerce between the United
States and the Dominion might by this time have become
if, instead of merely abrogating the former treaty, we had .
endeavored to improve it, or substitute for it one of more
perfect reciprocity, we can now only conjecture. Practi- ,
cally for the time we threw aside its lessons. By others
they were hee\led and yielded abundant fruit. During
the visit of Bichard Cobden to this country in 1860 his
attention was pointedly directed to the treaty then in
operation between us and the Canadians. Whatever
objections he entertained to such measures were fully
removed by M. Chevalier, who represented the interests
of France. The result was the memorable arrangement
between England and France, which was speedily followed
by similar treaties between other countries, and not less
than fifty or sixty in number. It is the custom with a
certain class of theorists to represent that in the negotia
tions between England and France the former was the
victor and the latter a dupe. In fact both countries

170 COMMERCIAL RELATIONS WITH CANADA. , '
gained enormous advantages. Thence a friendship arose
between the two nations which is1 warmer and probably
more durable than has ever existed at any other period
of their history. Among the causes which have con
tributed to the marvellous recuperation of France and the
welfare of her people none has been more powerful than
her commercial treaty with England, her largest and
most profitable customer, with whom her trade is nearly
twice as large as with any other country, and more than
four times as large as with the United States.
The exports of France to Great Britain and Ireland in
1858 amounted to about thirteen millions of pounds ster
ling, and in 1875 to nearly forty-seven millions. The ex
ports from. Great Britain and Ireland to France increased
during the same time in a smaller ratio, or from nine mil-
lions to twenty-seven millions. Tried by the protectionist
theory of what is sometimes called " the balance of trade,"
France has enormously the advantage, but only so far as^
her customers in Great Britain and Ireland are enabled
to buy cheaper from her than they can buy elsewhere.
The late Emperor Napoleon fell in a manner likely to
drag down with him any cause that he had espoused, and
M. Thiers, the chief statesman who succeeded him, was .
at least as decidedly against the treaty as the emperor had-
been in its favor. But the truth of its benefits had
grown plain and palpable, the interests it served were too
numerous and powerful to be subverted, and M. Thiers
was reluctantly compelled to yield to them.
Notwithstanding the obstacles we have so long inter-
posed,our trade with Canada in 1875 amounted to over $78,-.
000,000. According to the most reliable statistics, taking
the imports into each country from the other as they are
shown by the records of its own custom-houses, the trade
between the two countries in 1874 and 1875 averaged
more than $90,000,000 in each year. Our exports to
Canada alone have for many years been four or five times
as large as to Bussia, and much larger than those to any
other country in the world, except only Great Britain,
France and Germany. In the opinion of many who are
best qualified to judge on the subject, this vast aggregate
of our exchanges with Canada, each representing a trans-

COMMERCIAL RELATIONS WITH CANADA. 171
action mutually beneficial to some of the people of both
countries, would soon be doubled if the existing restric
tions of the custom-houses on both sides of the frontier
could be removed. Is this prospect, or are the facts as we
now find them, to be thrust aside as if of no moment in
the present depressed condition of our trade and manu
factures? Year after year the plight of our laboring
men throughout the country, and especially in the regions
dependent upon manufactures and commerce, has grown
worse and worse. Year by year since 1872 the attractions
presented to the laborers of Europe have sensibly dimin
ished, until, in the last fiscal year, the immigrants to our
shores were less by nearly three hundred thousand than
they were four years ago, the actual reduction within that
time having been from 437,750 to 169,986. These new
comers go, it is to be supposed, to friends who are ready
to receive them chiefly in those parts of the country least
affected by the prevalent distress.
We are all familiar with the accounts of unparalleled
and increasing destitution among our own working popula
tion. Let not repetition dull our minds so that We can
not see, nor steel our hearts so that we cannot feel the
force of facts so often told and so well authenticated. In
some of our largest cities the present is the third winter
when two-thirds of the unskilled laborers have been una
ble to find employment. Multitudes of temperate, indus
trious, and well trained mechanics, and of young women
with honorable independence of character and sensitive
. about receiving charity in any form or shape, have lost all
hope, and in the depth of destitution and despair are beg
ging to be saved from lingering death through hunger by
being sent to places intended for the reception of vagrants
and criminals.
During the seventeen years through which the party
yet remaining in power has held the reins of Government,
there has been a conspicuous and complete neglect of all
the chief means for restoring prosperity to our people.
The return to specie payments has chiefly, except when it
has been prevented by legislation, been ief t to the slow
progress of natural laws of finance. Nothing, if we ex
cept the reduction of wages and the increased destitution

an

172 COMMERCIAL RELATIONS WITH CANADA.
of our laborers, has been done to promote ship-building
and give us again our former commercial eminence and
prestige on the ocean. Except in the minute and peculiar
instance of the Hawaiian Islands, nothing has been done
to extend the markets for the production of our fields
and manufactories. In view of the present widespread
misery we who are placed here to frame laws for the ben
efit of the people shall be worthy of the most severe con
demnation if we neglect to give our best attention to such
enactments as will yield food and work to the suffering
masses. Among the most obvious of these measures is
such an extension of our trade with Canada as will yield
us a larger amount of grain and other necessaries of life,
increase the use of our leading thoroughfares in the
North, and enlarge the outlets already existing in the
Dominion for our manufactures. We see that the oppor
tunity is open to us in the relative geographical positions
of the two countries, and that even under the present
restrictions the exchange of the products of labor between
them is enormous. We have also reliable assurances in
the settled, firm and stable character of the Canadian
government and people, and their frequently expressed
desire to ascertain by mutual conference with us how far
our commercial relations can be emancipated and ex
tended. This desire has been repeatedly shown in the
newspapers of Canada, the resolutions passed by her
boards of trade, and the authentic and official statements '
of her government itself.
The Dominion Board of Trade at every one of its
meetings has expressed an earnest and intelligent desire
for an extension of trade with us, and in every instance
has coupled the expression of the desire with that of a
belief that the first official proposal for it should come
from the Government of the United States, offers made
by Canada having been regarded with so little attention
on this side of the frontier. A leading representative of
Canada, at the meeting of our own National Board of
Trade in New York last summer, reiterated these views,
and no doubt uttered the general sentiment of his coun
trymen when he confidently assured his hearers that if
Congress should adopt the resolutions now before this

COMMERCIAL RELATIONS WITH CANADA. 173
House for the appointment of commissioners, the Cana
dian Government would " likewise appoint a commission,
and we should for the first time since the abrogation of
the old treaty have business men to sit down together,
talk the matter over fairly and squarely as a practical
question, deal with all its difficulties, and, if possible,
bring about a treaty which will be mutually satisfactory
to both countries." The Canadian minister of customs,
the privy council, and present governor-general have at dif
ferent times fully concurred in these views, the governor-
. general himself in council having formally promised
" that should the Government of the United State's com
ply with the wishes expressed by the National Board of
Trade, the subject will receive the fullest consideration,
of the Government of Canada."
At the time of the abrogation of the old treaty there
was much just reason for complaint of the illiberality
and unfairness of the Canadian tariff on many of the
productions of the United States ; but all that has now
been reversed. We impose on all kinds of Canadian
grain and flour a duty so heavy as to be nearly prohibi
tory, with the single exceptions of barley and some peas,
for the production of which the soil and climate of Can
ada and the habits of her farmers, or all these causes
combined, are especially favorable. Nearly all the arti
cles admitted into Canada free of duty under the old
treaty are now admitted there free of duty, while on our
side they are heavily taxed. Although Canada is an in
tegral part of the British Empire, all the manufactures
of the United States are admitted there upon the same
terms as those of any other colony and of Great Britain
herself. The old colonial restrictions have passed away,
and become obliterated by the advancing power of a
more enlightened policy.
The views I advocate have sometimes been met by the ob
jection that, whatever might be the mutual interests of the
United States and Canada, Great Britain would not per
mit them to be harmoniously developed. I think there
is no reason to apprehend any real difficulty on this, score.
If the interests of Canada are stifled and oppressed, let
us be certain that we are not the wrong-doers, and that

174 COMMERCIAL RELATIONS WITH CANADA. ' V
the blame is put on the right shoulders. A brief review .
of the history of the colonies throws much light on our
policy in regard to them. For the last half-century they
have made steady and accelerated progress toward greater
freedom and independence. The measures adopted by
Great Britain have undoubtedly encouraged the move
ment. Soon after the first American colonists from Great
Britain had surmounted the difficulties and hardships. of >
the earliest settlements, in the regions which are now the
United States, and had begun to accumulate wealth, the (
exclusive system was applied so far that few articles
could be exported from the colonies to any other country
without being first laid upon the shores of Great Britain.
Next, the colonists were compelled to buy solely from
British merchants, and their importations could only be
made in British ships, " it being the usage of other nations
to keep the plantation trade exclusively to themselves,"
Even the excellent Lord Chatham, distinguished as a
friend of the colonies, was so far imbued with the com
mon heresies, of his time as not to hesitate in declaring
that " the British colonies in North America had no right »
to manufacture even a nail for a horseshoe ;" and Lord
Sheffield only expressed the general opinion of his day
when he affirmed that "the only use of the colonies and ,
the West India Islands is the monopoly of their consump
tion and the carriage of their products." On all these;
points increased enlightenment has effected a quiet revo
lution. The monopoly of the colonial trade was found to
be as unprofitable to the oppressor as to the oppressed,
and confirmed progress has been made in those views of
public policy which are inextricably blended with mag
nanimity and liberality.
A few years ago the Government of Canada, through
its financial minister, emphatically declared the right of.
the people of that country to decide for themselves, in
all respects, the mode and extent to which taxation shall
be imposed on them. The British Government was warned
that serious evils and future complications would result
from any opposition to the rights thus asserted; and the
Canadian Government congratulated itself that the Brit-

COMMERCIAL RELATIONS WITH CANADA. 175
ish ministry of that day " have been obliged to admit
that we were in the right, and that any assumed interfer
ence with our rights and privileges is not for one moment
to be entertained." Thus the practical rights of self-
government, only obtained by the United States through
revolution, were quietly conceded. The most striking
point in this illustration of the reversal of the ancient
relations of Great Britain and her colonies is not merely
that so great a concession was made to the colonies, but
that the point in dispute was an order in council disallow
ing a bill inflicting certain disabilities on the shipping of
the United States. t
The people of Great Britain have discovered that their
own capitalists and laborers were injured by forcing the
trade of the colonies in artificial directions and with
drawing it from the natural and really beneficial pursuits
in which it would have been employed. The revolution
ary war in the United States strengthened these impres
sions. It was found that the independence of the United
States, and their consequent prosperity, contributed ma
terially to the well-being of Great Britain, whose tax
payers were relieved from the expense and trouble of
governing distant and extensive regions, while the benefits
of intercourse with them not only remained but were
augmented. The belief has become more and more prev
alent in the mother-country that the means by which she
can most securely and profitably derive the elements of
real prosperity from her colonies is by permitting them
to direct their industry into those channels which their
natural position and advantages indicate as the most re
munerative. On the one hand concessions were made to the colonists
by permitting them to resort to the markets of the world
and tax British manufactures ; on the other, the British
people were gradually emancipated from the oppressive
taxation which gave the colonies special privileges in
Great Britain itself. The latter was at first especially
conspicuous as to the indispensable articles of grain, flour,
and lumber.
The military and naval defense of the colonies remains
as the only substantial relic of the ancient policy. The

176 COMMERCIAL RELATIONS WITH CANADA.
consideration given for it is withdrawn. It remains as a
tax on the people of Great Britain without affording
them any adequate compensation, and the declaration of '
their leading statesmen of all parties, the actions of their
government, and the tendencies of public opinion clearly
indicate the early termination of this anomalous and in
consistent condition. The time is approaching when, as
the most zealous defenders of the old colonial system have
admitted would be the case, it will be found that "it is
all of a piece, and must either stand or fall together."
So evidently correct are the frequent assertions of Can
ada that her Government, acting for her legislature and
people, must, whatever may be the deference they owe to
the imperial authorities, decide for themselves as to all
matters connected with the tariff, and so completely has
the principle thus announced been carried out in legisla
tion, that Great Britain, in reply, is throwing the naval
and military defense of the Canadians upon themselves^
A former governor-general of Canada substantially
declared in the Imperial Parliament that if Canada should^
ask for independence the request would readily be grant
ed. If we look among those British statesmen now living,
and who for many years have been leaders in the actual
and progressive career of their country, and whose influ
ence was never more completely manifested than in the
recent change in her European and Asiatic policy, we find
in their public speeches the most creditable and liberal
expressions regarding the commerce of the United States
with Canada, and the relations of Great Britain with the
latter. The profitable and humanizing effects of the com
mercial treaty with Great Britain and France point out
significantly and decisively how valuable a judicious com
mercial treaty between the United States and Canada
would be, not simply in increasing sales, but in promoting
the advancement of the soundest doctrines of civilization
and international good- will.
I know of no expressions of modern statesmanship bet
ter worthy of being borne in mind by every American
citizen, and regarded as axiomatic in our conduct toward
our sister-States and Canada, than those terms of glow
ing eloquence in which Hon. John Bright depicted his

COMMERCIAL RELATIONS WITH CANADA. 177
hopes that the day would come when the whole of this
vast continent might become one great federation of
States, and, free from military control, without a custom
house inside through the whole length and breadth of its
territory, but with freedom everywhere,- equality every
where, law everywhere, peace everywhere, would afford
at least some hope that man is not forsaken of heaven,
and that the future of our race might be better than the
past. The Bight Honorable W. E. Gladstone, when premier,
speaking in a debate in the House of Commons, lamented
that it had been the fate of the transatlantic possessions
of European nations that in every instance when they
had reached maturity separation had been carried out by
war or bloodshed, leaving behind them feelings of pain,
hatred, or shame. He declared the true policy toward
Canada to be that, if separation should arrive it may come
in a friendly, and not a hostile form, but in true accord
with the best spirit of the age.
It seems to me that we do not in our statesmanship
adequately recognize and appreciate the relations actually
existing between Great Britain and her North American
possessions or adapt our policy to the facts as they are.
One of the main errors of Great Britain in her treatment
of those colonies from which our Union was formed was
the discouragement of their industry, except so far as it
was subsidiary to her own. Perhaps no part of her con
duct toward us was more unjust or injurious, or contri
buted more powerfully to the causes of the Bevolution.
I fear that the recollection of it, rankling in our memo
ries, has sometimes led us to such legislation in commer
cial affairs as we have been satisfied to think, must be
beneficial to ourselves, because it is inconvenient or pre
judicial to others. This is one of the most prevalent and
pernicious sophistries by which mankind has ever been
deluded and afflicted. Let us look to ourselves and take
heed lest in our day, in the plentitude of our power, and
at a more enlightened period of the world's history, we
in our commercial treatment of weaker neighboring States
fall into the same kind of error as that which Great Bri
tain practiced toward us, but has utterly discarded in
12

178 COMMERCIAL RELATIONS WITH CANADA.
her modern treatment of her colonies. Canada, it is true,
is not our possession, but as compared with the United
States she is practically in her infancy. In refusing even
to consider by what means our trade with her can be in
creased with mutual benefit to the people of both coun
tries, we follow the evil example set us in a more aggra
vated form by Great Britain in the early days of our
own history.
Sanguine and vivid expectations have been entertained
by some who laid claim to profound knowledge and
statesmanlike views, but who have lived to see the error
of their hopes, that by a rigorous and exclusive policy
Canada would speedily be compelled to implore annexa
tion to the Union. The time, it has long ago been
publicly said, before she would thus be brought on her
knees was so short that it should be counted by months;
and not by years ; but experience has only made more
evident what was from the beginning sufficiently obvious,
that the Canadians, being of the same human nature with
ourselves, actuated by similar sentiments and passions,
are repelled by repulsion while they might be attracted
by a friendly and liberal policy, which through a natural
and interminable series of profitable transactions would
bring people already homogeneous more and more into
communication with each other.
It cannot be said that there is any real want of friendly
feeling in the United States toward the Canadians.
Many of them migrate to this country, and are soon
scarcely distinguishable from our native-born citizens,;;
not a few of whom have taken up their abodes in the
Dominion and become prosperous and prominent. If
Canada should be oppressed, and to gain her liberty and
rights be driven to arms as we were at the time of the
Bevolution, our sympathy from one end of the Union to
the other would not merely be sentimental, but would
evince itself by practical demonstrations at every point
of our frontier. Happily for all the parties concerned,'
the prospect of any such contingency has long passed,
and the appropriate way of testifying our good-will is
not by self-immolation in the loss of life and material
wealth, but by the sacrifice of an old prejudice and an

COMMERCIAL RELATIONS WITH CANADA. 179
out-worn theory and the adoption of such commercial
measures as will promote our interests' as well as those of
our neighbors.
I have said that Canada has wisely pursued -a more
liberal course toward the United States than we have
towards her. She admits our manufactures on equal
terms with those of Great Britain, and at very moderate
rates of duty. The chief products of our agriculture
are admitted free of all duty whatever. At the same
time this liberality redounds to her benefit. She is study
ing her own interest. By charging no duties on our
flour, wheat, corn, and other grain she obtains a large
surplus for exportation and encourages transportation and
the profitable employment of her people from one end of
her railroads and canals to the other. She finds her own
profit in all this. The prices of wheat, flour, corn, cheese,
and cut meats are telegraphed to this side of the Atlantic
and regulate our own. They are posted up and pro
claimed in our leading marts of trade. Even in fresh
meats a vast trade with Europe is rapidly progressing.
Immense quantities are weekly exported from the United
States and Canada, and in a few years Great Britain will
be at least as dependent on this continent for her supplies
of fresh beef and other meats as she now is for bread-
stuffs. As the prices in foreign markets mainly determine
those here and in Canada, it is suicidal to many of our
mercantile, manufacturing, and carrying interests, and
beneficial to no other interests whatever to charge duties
on the importation into this country of the farming pro
ducts I have named, and the list could be very widely
extended. Our exportation to Canada of all these articles
is enormously greater than hers to us, and it is created
mainly by those exportations to Europe which we impede
by our laws while Canada gives facilities for them. For
instance, in 1875 our imports of wheat from Canada
under our tariff amounted, according to our official
statistics, to only $296,588, while our exports to her were
of the value of $6,070,167 in gold. A certain class of
theorists may think they detect in this a very favorable
balance of trade. In reality it represents how much of
our wheat was exported to Europe by Canadian routes.

180 COMMERCIAL RELATIONS WITH CANADA.
The enlargements now in progress on the Canadian canals
will force public attention to these facts. . We ought to
be prepared to meet them in advance. When our ports
were open to the free admission of Canadian wheat our
forwarders and merchants and their employes reaped the
profits. There was also a local benefit to our millers and
many communities. Thus, when I speak of a liberal
policy I do no not mean that of self-destruction or sacrifice
of our own interests, but one in which the benefits of
mutual profit are recognized, a belief with which the
issues of individual and national well-being are most
intimately connected, and that short-sighted, view — the
most pernicious and perhaps the most common of all
political errors — that the gain of one man or nation must
be the loss of another, is discarded.
Besides the additions to our direct exports and the
increase in the sales of our manufactures both to Canada
and, through a better supply of raw materials, to other
countries, which might be secured by means of a fair
treaty of commerce with Canada, other points demand
our consideration. Year after year the Canadians have
continued their liberal treatment of our trade and manu
factures in the hope that the whole system of commerce
might be remodelled between us with due regard to the
interests of both countries, but incited by our large expor
tations the protectionist theories grow yearly stronger and '
stronger in Canada, and if her people should adopt a
, system of what are sometimes called " reciprocal duties,"
charging on our productions the same duties as we levy
on hers, the result would be ruinous and almost prohibi
tory on our exports to her. If, on the other hand, the
Dominion should, renew, as is sometimes suggested, a
closer connection with Great Britain, the trade between
those two countries might become as free and untram
melled as it is between all the States of our own Union.
In this event it would manifestly be impossible to check
smuggling on an enormous scale from the Dominion into
the United States. The difficulties already attending
a proper surveillance of our northern frontier were lately
described by the Secretary of the Treasury as being in
some respects insurmountable. In the contingency to

COMMERCIAL RELATIONS WITH CANADA. 181
which I have alluded an addition of several thousands
of men to our revenue service, with the accompanying
expense, would not suffice to prevent a vast illicit trade,
with demoralizing effects on our people and incalculable
injury to our revenue.
I look forward to that time in the not distant future
when a truly fraternal comity shall prevail throughout
this continent from that habitable part of it which is near
est the arctic regions to the tropics, and from the Atlantic
to the Pacific Ocean ; and when this sentiment shall find
its natural expression, not in lawless and desolating fili
bustering expeditions, or hostile inroads of any kind, but
be manifested and continually increased by those peace
ful exchanges of the products of human industry which
yield profitable employment and make homes happy.
Nature herself, in the varieties of climate and resources,
has provided for this plan by permanent and beneficial
laws against which we make our temporary and destruc
tive statutes. From such a continental and truly Ameri
can system, we who occupy a central position between
the North and South should not only satisfy our needs,
but by being the merchants and carriers for our neighbors
on both sides derive larger profits than any of them.
Because in population and power we are the foremost
nation of the continent, it becomes our duty to ourselves
and to others to take the lead in giving practical develop
ment to the bounties which Providence has placed within
our reach. The first step toward its attainment is by
ascertaining definitely through inquiries made by efficient
and reliable commissioners how far we can extend our
commercial relations with Canada, whose people and gov
ernment invite us not less by their stable, intelligent, and
progressive character than by the assurances they have
already more or less formally given us. Of all affairs
of foreign policy this opportunity of cheapening the ma
terials of our manufactures and extending our markets is
the most important. Next to integrity in our Govern
ment and the preservation of our liberties, no subject
more deeply concerns the interests of the people. My
motion is simply for the appointment of a commission of

182 COMMERCIAL RELATIONS WITH CANADA.
inquiry. It is, so far as I know, unanimously approved
by the leading commercial and business men of the coun
try without distinction of party, and should meet with
the same just consideration from both parties in this
House.

THE
FINANCIAL CONDITION OF THE NATION.

House of Representatives, January 15, 1863.

At the time when this speech was delivered, the crude and
pernicious errors through which the national debt and taxation
enormously increased were advanced and defended by the high
est official authorities. It was maintained that paper money had
not depreciated, but that gold had advanced in value. On be
half of the producing and mercantile interests, Mr. Ward pro
tested earnestly against this and similar sophisms, and thoroughly
analyzed the financial system adopted by the then Secretary of
the Treasury, testing it by abstract principles and the experience
of our own country and other nations.
Mr. Chairman : The condition of our financial affairs
and the regulation of the circulating medium are re
garded with much anxiety by the people of this coun
try, from motives of their own personal interest, and yet
more from patriotic devotion to the cause of unity in our
great struggle for national existence. Civilized society
itself relies upon the instrument of trade and commerce,
termed money, for the regulation of all economical affairs
connected with the creation and equitable distribution
of wealth. 11 the monetary system be deranged our
varied national resources, in common with those of indi
viduals, become subject to innumerable disasters, against
which no human foresight can guard. The losses of the
last year have enabled us to appreciate this truth more
fully. We have, I trust, learned something within that
time. For myself, I am free to confess that although my
record upon this question remains to-day exactly as I
would. have it, I am among those who have been learning
from that inexorable teacher, experience.

184 FINANCIAL CONDITION OE THE NATION.
I have been and yet am desirous of supporting the
Government of my country in a vigorous prosecution of
the war. If on any subject the North does not present
an unbroken front, in perfect unity of feeling, the fault
does not rest with myself. My vote has aided in furnish
ing for the defence of the Union, not only all needful
supplies of that which faithfully represents the products
of the industry of our country — money, the sinews of
war — but in placing at the disposal of the legally ap
pointed officers of the Government that which is yet
more precious, the invaluable lives of the men who con
stitute the brave armies of the Union. I could not con
trol the expenditure of the money, or prevent the sacri
fice of the men ; nor was my vote, given against the issue
of "legal tender," sufficient to prevent the practice of an
unsound system of finance. I hoped that another course,
more conducive to the interests of the nation, would have
been pursued ; but I did not, nor do I now, question the
purity of motives in those gentlemen who sustained the
views I deemed it my duty to oppose. I believe the issue
of this paper money was an unfortunate measure ; and
now that we have from practical experience a thorough,.;
knowledge of the influence it exerts, there should be only,
one opinion as to the expediency of continuing to aug
ment the volume of such a currency. It is for us not to
aggravate the evil, but, so far as is possible, to devise
measures for its removal, that a gradual and perfect cure
may be effected.
When it was decided to adopt the principle of " legal
tender," there was no doubt that the majorities of both
Houses who voted for it did so because they considered
it the least objectionable of the measures under consider
ation. Here, permit me to say that I know of no greater
trial for a statesman or a legislator than this — to be com
pelled to choose between two measures when his judg
ment condemns them both ; when his only course is that
laid down in the common maxim of life, to choose the
least of any number of evils. The whole question is full
of difficulties arising out of the mutations of commerce
as well as the exigencies of nations; Numerous theories
and suggestions have been presented by prominent cifci-

FINANCIAL CONDITION OF THE NATION. 185
zens in various parts of the country ; but all experience
has demonstrated the impossibility of securing lasting
prosperity for any country which persistently adheres to
the use of a legalized but irredeemable paper currency.
I have heard with the utmost pain and regret, some of
the opinions expressed by gentlemen who hold high
official positions, and who, by long careers of life spent
iD the legislative service of their country, have honorably
won for themselves no small share of confidence from this
House and from the people. In the great epoch of this
age, I have turned with anxious expectation to the official
report of the statesman who, by the desire of the Pres
ident of the United States and of a large portion of our
fellow-citizens, has been chosen to discharge the grave
and arduous duties of the Secretary of the Treasury, and
to the speeches delivered in this House by the Chairman
of the Committee of Ways and Means. Differing, as I
do, from the Secretary of the Treasury on that cardinal
question of our day, the strict application of free local
self-government alike to northern and southern States, so
far as it is compatible with the maintenance of the
Union, I hoped to have seen him mindful of the distinc
tion between promptitude and procrastination, paying
and promising to pay real money, and that paper fiction
which, in the phraseology of the day, is called " legal
tender ; " firm and steadfast in his allegiance to those
principles of financial economy yet held by the great
party of which he was formerly a member, and which
commanded his respect and approval through long years
of calm reflection, when he was unbiased by the disturb
ing influence of that one dark enigma now absorbing so
large a share of public attention, and causing the expen
diture of so much of our national substance, and the
sacrifice of so many lives. I should have been deeply
gratified if I had been able, by the support of the Gov
ernment, to win from my political opponents the reputa
tion I deserve, of being swayed by no partisan motives,
and solely by a desire for the welfare of the Bepublic.
In the report of the Secretary, I find that while to
some extent apparently opposing the further increase of
the currency through the issue of more notes by the

186 FINANCIAL CONDITION OF THE NATION.
United States, he denies that the remarkable appreciation
in the value of gold — or rather, to speak accurately, the
decrease in the value of fictitious money as compared
with money itself, is wholly, or even for the greater part,
owing to the large volume of paper promises to pay. He
doubts if " the aggregate currency of the. country, con
sisting of United States notes and notes of corporations,
is at this moment greatly in excess of legitimate demands
for its employment," or if " any actual excess is due to
the issues of United States notes already in circulation."
In attempting to vindicate his position, he assumes that
the amount of coin, estimated by him to have been $210-
000,000, circulating and in the banks on the 1st day of
November, 1861, had been practically demonetized and
withdrawn from use as currency, or as a basis for currency,
and it is therefore excluded from his estimate ; when, in
fact, with exceptions trivial in comparison with the whole
amount of specie, it was never used as currency, and the
banks, while they have suspended metallic payments, yet,
as is asserted by the Secretary himself, retain an increased
amount of gold and silver for purposes of their own
security, and as a basis for their present circulation and
a future resumption of those specie payments they were
induced to suspend by the anticipation of the policy then
foreshadowed and afterwards adopted, in the issue of
Treasury notes not redeemable in coin. At the same
time, the bank circulation in the loyal States, partly in
consequence of the suspension of specie payments, has
increased about thirty per cent., or from $130,000,000 in.
1861, to $167,000,000 in 1862. Assuming, then, the
Secretary to be correct, and taking gold only at a premium
of thirty per cent. — considerably less than its average
price for several months — the purchasing power of the
hard money at that time was $373,000,000, or $63,000,000
more than in 1861, if, for the sake of argument, I concede
more than the truth requires, and assume that the paper
has not become depreciated. This specie, the only true
money of the country, has not been annihilated, become
dead capital or " demonetized," as is said in the report,
by one of those novel and mysterious expressions which
are often coined and used for the occasion, in preference

FINANCIAL CONDITION OF THE NATION. 187
to our own plain Saxon words, when complexity and
confusion, not simplicity and clearness, are the desired
objects. The amount of precious metals in the United
States has not even been diminished, but increased, during
the year in question.
In the same short space of twelve months the cir
culation of the notes of the United States, includ
ing credits to disbursing officers and to the Treas
urer of the United States, was swollen from $15,140,-
000 in 1861, to the enormous sum of $210,104,000,
being over $80,000,000 more than the whole amount of
the notes of corporate banks throughout the loyal States
in 1861.
From these facts it follows that the aggregate circula
tion of the loyal States, which at the first date, 1861, was
$355,140,000, was not, as stated by the Secretary, only
$377,104,000 in 1862, but nearly $650,104,000. The
increase in the currency of the loyal States in one year
alone has been nearly equal to the whole amount of paper
money in the country at any former period in our exist
ence, when we included in our estimates the whole of
the United States from Maine to Texas.
Starting with his erroneous position that the only true
money of the country is no longer any money at all —
using this as a foundation for subsequent arguments, and
assuming that the increase of the National circulation,
estimated in " legal tendeT," is only $22,000,000 instead
of $355,104,000, the Secretary easily adds other links to
the chain of his delusions. If the $22,000,000 were really
the only increase in the currency of the loyal States
during the year in question, his assertion that it was
" legitimately demanded by the changed condition of the
country in the year between the two dates " might be
permitted to pass unnoticed. He speaks of the in
sufficiency of the bank circulation to support the great
activity in business resulting from enormous military and
naval preparations, and is apparently ignorant of the vast
amount of trade formerly enjoyed, with the Southern
States — but now lost to us — and of the power of the
banks themselves, by means of bills of exchange, drafts,
checks, and certificates of deposit, to transact any amount

188 FINANCIAL CONDITION OF THE NATION.
of business that the necessities of the nation even yet
require. New York is the great business centre of the
Union. Nearly all our domestic and foreign exchanges
meet in that commercial emporium or metropolis. In
that city alone banking facilities exist for the transaction
of business amounting to $20,000,000 daily, or about ten
times the estimated daily expenses of the Government
when engaged in the present war.
It was not difficult to pass on, from the belief that the
currency of the country had undergone so slight an in
crease, to the assertion that no undue inflation in currency
or prices now exists. Outside of official circles, and by
every man who is unbiased by political prejudices, or the
vain desire to prop an inherently vicious system of finance,
the existence of this inflation is universally well known
and admitted. It is known, not only to our financiers
and merchants, but is painfully felt in the home of the
laborer, and made palpable by practical facts and figures
to every one who purchases the common articles necessary
for daily food and clothing; and the evil is daily becoming
more hurtful and notorious. The report of the Secretary
tends to create confusion by comparing the prices of
wheat, pork, and corn on the 1st day of November, 1861,
with those on the corresponding day in 1862. It is true
that while the prices of many staple articles of food and
clothing bought by the northern farmer and laborer have
been doubled, and in many cases more than doubled, the
chief agricultural products of the North have been so
injuriously affected that even their nominal value has
been little changed. Pork, for instance, one of the great
Avestern staples of trade, sold for less on the 1st of May
last year, and now sells for less in depreciated paper
money than it ever brought in gold during the ten
preceding years. On the 1st day of May, 1862, the
market price of prime pork in New York was $12.62^, or
about fifteen per cent, less than $14.50, the lowest price
it ever reached on any corresponding day since 1850.
The Secretary ignores the effects, so injurious to the
vast farming interest, produced by the large quantities
of the cereals already forwarded, to market, by the
abundant crops of Europe, and the enforced idleness of

FINANCIAL CONDI HON OF THE NATION. 189
those numerous industrial and commercial classes of
Europe who are the chief foreign consumers of our pro
visions, who depend upon a supply of cotton from this
country, and by its withdrawal are rendered unable to
purchase as much as they require of our breadstuffs and
surplus agricultural productions. The farmer finds that
while the prices of that which he has to sell have seem
ingly but little changed, he is compelled to pay increased
prices for nearly all that he buys.
The Secretary says nothing of those disturbances in
the valley of the Mississippi, which have not only injured
our market in the Southern States, but also in those
parts of the world to which western produce finds the
cheapest access through that great highway or artery of
the interior. He labors to prove that gold has increased
in value, and that his paper money has not depreciated.
In truth, the condition of the commercial system is indi
cated almost as infallibly by gold as the temperature of
the atmosphere is shown by the mercury in the thermom
eter. Not an article sold in this country, but capable of
being carried abroad, can for many days together con
tinue to be sold for legal tender paper without an infla
tion of price at least equal to the difference between the
price of gold and its fictitious substitute. Take grain
and pork, the articles named by the Secretary, as familiar
instances. Can it be supposed for a moment that if
their price in paper money is their real value, our Cana
dian neighbors, or our own shrewd fellow-citizens, who
are always awake to such an opportunity, would not at
once buy up these articles, take them into the provinces,
where gold is at par and American silver at a discount
of four or five per cent., bringing back hard money with
them, and selling it for paper currency at a premium of
more than forty per cent. ?
The commercial value of all exchangeable commodities
is their price in the markets of the world. Our country
men — and they are not the only competitors in this race
Raided by the rapid missions of the newspaper and
telegraph, keep well informed in these prices, and unless
they can sell for legal tender at an enhanced rate,_ will
send their property to foreign countries and obtain in

190 FINANCIAL CONDITION OF THE NATION.
exchange for it either the precious metals with which
they can buy paper money at its diminished valuation, or
such merchandise as will yield a yet larger profit.
The rule is of wide application. It is true as regards
almost every article produced in the United States. It,
influences manufactures themselves, and the materials
from which they are made.
So much for articles of domestic origin. I shall not
be asked to prove that articles of foreign origin cannot
be bought with legal tender, as a medium of exchange, at
par. or that foreigners require gold or its substantial
equivalent from us in all our dealings. Dividend-paying
stocks and securities, and nearly all other forms of per
sonal property, have risen in nominal value to a greater
extent than gold ; and the general inflation has already
seriously affected the price of real estate itself, which
many cautious men are beginning to purchase as a secure.
investment, safe amid that general ruin which they see
is necessarily approaching, if the administration now in
power persists in its desolating policy.
I pass over the third argument of the Secretary, in his
attempts to prove that the currency is not redundant,
with an expression of regret and humiliation that so
feeble a device, or error should have found its way into so
grave and important a document as the report issued
from the Treasury of this nation at this important crisis
of our history. It is not only unreasonable, but it is an
undignified trifling with the subject, to name the tempo
rary premium on gold, at the most feverish stage of a
panic which lasted only for a few days, in comparison
with the lowest premium it bore during the subsequent
revulsion, to prove that no great redundancy of currency
exists. The last quotation shows that gold is now at a
premium of forty-eight and one-half per cent. His
financial system had, at the time of which he speaks,
brought gold from par to a premium of at least thirty
per cent. ; and the general rule, not the ephemeral change,
supplied the true philosophy and moral of the occasion.
In monetary affairs, as in physical nature, we measure
events by the progress of the tide— not by the little
changes of the rising and receding ripples ; andthepriee

FINANCIAL CONDITION OF. THE NATION. 191
of gold, stationary for some months at thirty or thirty-
two per cent., and now risen by gradual degrees to forty-
eight and one-half per cent., furnishes the correct index.
My reason for stating these facts, which are or should be
familiar to us all, is, that they are contradicted by the
highest financial authority in the country.
The circulation of the banks in the loyal States was
expanded during the year intervening between the first
days of November, in 1861 and 1862, from $130,000,000
to $167,000,000 ; and the volume of deposits, practically
answering many of the purposes of circulation, increased
from $264,000,000 to $344,000,000. A corresponding
stimulus was naturally given to loans. This increase
took plaee, as the Secretary justly observes, chiefly
within the last seven months of that year — the period
during which the enactment of laws creating legal tender
came most fully into operation.
All, or nearly all, this expansion of credit, with its
enormous increase of nominal values, has been produced
by the pernicious, system of legal tender. These notes,
being less valuable than specie, would have produced a
run upon the banks against which they could not have
maintained themselves. They must continue a suspen
sion of specie payments in order to avoid ruin, and by
the national legislation were thus practically absolved
from the great balance-wheel or principle of their system,
the obligation to perform their contracts and keep their
promises to pay. As a natural consequence they fol
lowed the example of the Government, and issued an in
creased amount of paper money. Conjointly with these
causes and the increase of nominal value requiring more
"money " to transact the same amount of business, arose,
necessarily, an increase in the amount of loans and de
posits. It was foreseen by all men of common intelli
gence as to financial affairs, that the whole chain of these
events must be produced by the financial policy of the
Treasury. I have shown that we already experience a portion of
those pernicious effects which the universal experience of
mankind has proved must follow from the enactment of
laws compelling men to receive pieces of paper as money

192 FINANCIAL CONDITION OF THE NATION.
without providing for their redemption in specie, and
that prices of all kinds are inflated. The merchant and
contractor, in making sales or agreements, charge profit
not only on the actual value of the articles they furnish,
but on the value in paper money. The Government, at
the present time, pays for all its uses a premium of at
least forty or fifty per cent, above its actual value, equiv
alent, in effect, to a corresponding depreciation in our
national securities.
The dealer who, a few months ago, sold his goods at
a fair profit on time, finds himself when he is paid unable
to replace his stock. From the uncertainty attending
the future, business is thrown, more and more into the
hands of the few who are able to buy and sell for cash.
The country is suffering from the demoralizing effects of
financial doubt and uncertainty, already so great that
ordinary mercantile investments are losing their legiti
mate character of efforts to supply the demands of the
people, and are becoming guesses or chances like those
in a lottery — dependent upon the unknown and secret
will of the officers and advisers of the Government, and
the influence they exert in the price of that which is given
and received as the standard of value. The relation be
tween debtor and creditor on all previously existing pe
cuniary contracts has been arbitrarily changed. Each
merchant, jobber, and retailer, charging a percentage on
the increased price of the article which passes through
his hands, the continued and progressive accumulation of
prices, presses with peculiar hardship and severity upon
the laboring man, whose wages, in times like these, are
the last of all things to rise. The clerk who has agreed
to work for a salary, and has arranged his expenses in
accordance with his means, finds himself unexpectedly,
and from no fault of his own, unable to meet his daily
expenses. The family of him who has spared from his
income a small sum for life insurance, finds the result of
his hard earnings reduced by these deplorable laws, upon
the death of the father, more than one-third, nearly one-
half of the just amount. By the practice of constant econ
omy, parent of many virtues, numerous day-laborers and
other persons have deposited in savings-banks a sum

FINANCIAL CONDITION OF THE NATION. 193
estimated as amounting to at least two hundred and fifty
million dollars in the. Free States. The depreciation in
these frugal savings of the most industrious classes is
already more than one hundred millions of dollars. It
contrasts strangely with the sums realized by fraudulent
contractors, and with the enormous fortunes made by the
speculators who know beforehand the intentions of the
Administration. The motive for industry and economy
is thus impaired among one of the most deserving classes
of the people by abusing their confidence and destroying
their sense of security. The state fares ill, indeed, when
favorites thus flourish ; when the industrious are deprived
of their earnings by the Government which should pro
tect them, and the idle and rapacious are enriched from
the spoils of the better part of the community.
The soldier and sailor of the regular Army and Navy,
together with those who, in the hour of our peril, have
nobly come forward to give their lives, if need be, to the
service of their country, thus lose nearly half of their
pay, by the act of that Administration whose commands
they loyally obey, however repugnant the ruling policy
may be to their convictions regarding the welfare and
true honor of the nation. Where men enlisted under a
stipulation that their pay should be thirteen dollars, they
receive considerable less than eight dollars in actual
value. Pensions for the maimed and wounded are re
duced in the same proportion. He who dies upon the
field, and leaves behind him a widow and orphan chil
dren depending upon the bounty of his country, whose
gratitude he so well merits, and in whom he had confided
with the proud love of his heart, knows that the cold
charity of a pension thus unjustly diminished is all that
will be doled out to them ; but he knows not what will
be end of these curtailments now already so far ad
vanced. I leave the legal questions arising as to the obligations
of contracts and the consistency or conflicts of recent en
actments with the Constitution of our country, to be de
cided in those courts of law where, I trust, the zeal and
blindness of party strife and politics may never enter.
My purpose in this place at present is to discuss the
13

194 FINANCIAL CONDITION OF THE NATION.
tendency and effect of laws — not their constitution
ality. The results I have named follow naturally from the
principle of what is called "legal tender," in pursuance of
laws as unchangeable as those of arithmetic or gravitation.
We may make whatever laws we choose, and flatter our
selves and the people that Nature herself will yield to the
warmth of our desires and the force of our enactments ;
but real value, like truth itself, which in reality it is, will
irrepressibly assert its power. The story related of the
Saxon king, Canute, who, being told by his courtiers that
the waves themselves would obey him, placed his chair
near and in front of the rising tide, and called his syco
phants around him, has been frequently applied to other,
monarchs and other flatterers. It is no less true of those
who, from motives of personal ambition, or in the vain
pursuit of an imaginary public good, endeavor to delude
the people into a vain hope that we can successfully con
tend against the laws of trade and finance. Historical
precedents in proof of this assertion are numerous. The
volume of the currency of the rebellious government at
Bichmond has increased so rapidly that gold is said to
command, at least, a premium of one hundred and fifty
per cent. ; and the contractors for the supplies of the
rebel army have agreed among themselves to make no
contract with that Government for more than one week
in advance.
The paper money of France, known as assignats, during
the great expansion of the currency was made a legal
tender, and the French Government of that day punished
with death those who refused to take the paper at its
nominal value. The result was a deplorable disturbance
in every kind of exchange. There was not, there never
can be, any practical law . determining prices between
buyer and seller ; and all who made new bargains eva
sively refused to take the depreciated money in payment,
unless they received double or treble prices, according to
the degree of depreciation. Nearly all creditors were
ruined, because they were obliged to accept a value
merely nominal. Yet this form of legal tender was se
cured by real estate — or rather was fundable in land —

FINANCIAL CONDITION OF THE NATION. 195
but, being wanted more as currency than for investment,
became depreciated, and the Government, to supply the
loss sustained by the deficiency, frequently increased the
issue, until it became worthless.
It is instructive to observe how the issue of assignats
was enlarged to suit the appetite of the times. From one-
half of its nominal value it became worth one-sixth, and,
the fiction rapidly tumbling down the abyss, I find it re
corded that silver became worth one hundred and fifty
times its denomination in paper before the assignats were
regarded as absolutely worthless. At last, by common
consent, the people returned to a metallic currency.
Examples of this kind have not been wanting in our
own country. Already we find each dollar of the Gov
ernment money is worth less than sixty cents in hard cash.
Thomas Jefferson, when writing from Paris in 1786 toM.
de Crevecceur, records the worth of one hard dollar both
in continental and Virginia money, in 1779 and 1780.
He reminds us that in January, 1777, seven dollars and
twenty-two cents of continental money were worth no
more than one dollar of silver, and that in fifteen months
it needed no less than forty dollars to procure the same
silver dollar. In January, 1779, one hard dollar was
worth eight dollars of Virginia money ; and in December,
1780, it needed seventy-five dollars of the same paper cur
rency to purchase one substantial or real dollar.
The State of Connecticut, by an act passed October 4,
1780, regulating the " redemption of obligations," showed
the fluctuations of the paper issue of that time, between
1777 and 1780, by the following scale :
Sept. 1, 1777  $100 paper money passed for $100 specie.
Oct. 1,1777  109 " " 100
Nov. 1,1777  121 " " 100
Dec. 1,1777  133 " " 100
Dec. 1,1779  2,597 " " 100
Jan. 1,1780  2,932 " " 100
Feb. 1,1780  3,333 " " 100
March 1,1780  3,732 " " 100
March 18, 1780.... 4,000 " " 100
It is unnecessary to follow this portion of the subject
farther.

196 FINANCIAL CONDITION OF THE NATION.
In some form or other the juggling legerdemain of de
basing the currency of the country has been a favorite
remedy with short-sighted statesmen of every nation,
ancient or modern, when unable to meet its engagements
promptly. The Bomans, at the end of the first Punic war,
raised two ounces of copper to the same denomination as
•they previously expressed by their legal standard of twelve
ounces, thus enabling that republic to pay its great debts
with one-sixth of the real amount. So much embarrassed
and burdened with debt were the masses of the citizens,
that the change was popular. It is the first step that is
dangerous. As with our first issue of paper money, it led
to a second and a third. During the next Punic war the
same coin was reduced from two ounces to one, and after
ward to half an ounce, being only twenty -fourth part of
its original value, or little more than four cents on the
dollar, estimated in the money of the United States. . In
the reigns of Henry VIII. and Edward the VI. in England,
and in Scotland also during the minority of James VI., a
fraudulent adulteration of the national coin was practised.
The Secretary of the Treasury recommends the reduc
tion of the value of the five-dollar gold piece to that of
the British sovereign, or about $4.84, the usual price of
that coin in New York. This carried into our other
national coins would lower the permanent value of the
currency by rather more than three per cent, and is to
that extent an injury to the public creditor, and an arbi
trary and unjust invasion upon the transactions of pri
vate or personal business. But this is insignificant in
comparison with the - depreciation which has already in
flicted a lasting stigma upon the public honor, under the
name or guise of paper dollars or legal tender, now al
ready at a discount of forty -seven per cent. I prefer a
frank and open depreciation to an evasive system which
"keeps the promise to the ear, and breaks it to the
sense." It is in vain to affirm that gold has risen, but that
paper money has not fallen. The man who is in a sink
ing boat might as well say that the water is rising, and
that his boat is stationary. Let him, if he is not out of
sight of land, not yet engulfed above his eyes, look at

FINANCIAL CONDITION OF THE NATION. 197
the shore while he can, and see whether the water is
flooding its banks. The markets of the world, where
we sell our products and buy many articles in return,
are the true landmarks as to the value of our currency ;
and they are and must be, as I have already shown, faith
fully indicated by the rise and fall of the precious
metals. I am opposed to all these schemes for pretended pay
ment. One law practically prevails with regard to na
tional bonds when they amount to millions, and another
as to indigent creditors. Our honor is implicated in the
faithful performance of all our contracts; but if any
distinction must be made, it is far more deeply concerned
in paying to the utmost fraction the wages of the soldier,
who has won them on the field by his sweat and blood,
the peril of his life and limb, than by paying the richer
creditor in coin, and depriving our faithful defenders of
nearly one-half of their well-deserved earnings.
If,' by our enactments, we have made less than sixty
cents of hard money already pass for one dollar, on what
principle are we debarred from going farther in the same
direction ? There are men who cannot perceive the im
portance of truth and integrity until they themselves
individually feel substantial retribution for their offences,
and the results of their rash and headlong policy are
fully accomplished. The prudent capitalists who are
already, to a very considerable extent, seeking other in
vestments in preference to national stocks, ask — and let
those who initiated this policy answer this question if
they can — why, if we have already reduced our debt
from one hundred to less than sixty cents on the dollar
in hard money, we may not reduce it to fifty cents, or
any other amount that we choose ; and why, if we thus
treat the poor, who are many, and for the time being are
uninfluential and forgotten, we may not in process of time
pay the fewer and richer creditors in a legal tender yet
more debased or depreciated. The confidence of the
people in the Government itself decreases', and the facili
ties for negotiating loans are diminished. I prefer an
avowed confession of the financial weakness of the
Treasury to a course like this, pernicious in itself and

198 FINANCIAL CONDITION OF THE NATION.
already made palpably plain to every public creditor and
to every man throughout the country who pays the com
mon expenses of maintaining himself, and is not blinded
by the bigotry of party spirit.
I have heard, and with pain, the honorable member
who occupies the position of chairman of the Committee
of Ways and Means express in this House views still
more at variance than those of the Secretary of the
Treasury with the principles of sound finance and states
manship. He advocates the adoption of a circulation of
paper money amounting to $600,000,000 ; and in face of
the inflation of prices, which he recognizes, says that this
amount is required by the business of the country.
On the 1st day of January, 1857, the circulation of all
the hanks of the United States, including those now in
rebellion, was $214,778,822, a larger amount than it ever
before attained. But the expansion of the currency,
followed by the commercial crisis and numerous failures of
that year, gave us a circulation only a little more than
the third of the paper now proposed. As the expansion
of 1857 was followed by the commercial disasters of the
same year, so also the increase of paper money in 1837,
when, on the 1st day of January, it was $149,185,890, or
about $50,000,000 more than $94,389,570, its amount on
January 1, 1834, was followed by the widespread and
well-remembered disasters of 1837.
I have named these sums thus minutely because we
are now accustomed to talk so thoughtlessly of more
enormous amounts than were ever before in the same
length of time spent by any nation, that we are apt to
forget the real magnitude of the questions we discuss.
The addition to the national debt of Great Britain by
the Crimean war is 'stated to have been $200,000,000 ;
and the whole amount expended by the same country in
vain efforts to retain the United States as colonies was
less than $675,000,000, while at the present time the
aggregate we are required to raise for the appropriations
of the next eighteen months is $1,646,634,315. But the
chief lesson taught by the disasters of 1837 and 1857 is
the inseparable connection between all violent and sudden
expansions of the circulating medium with feverish,

FINANCIAL CONDITION OF THE NATION. 199
eager, and undue speculation, succeeded by an invariable
debility and collapse of the commercial system. This is
historically true ; and no unusual knowledge of human
nature is needed to trace the relation of cause and effect
between the two events. Debtors are easily emancipated
from their engagements. Owners of real and personal
property are alike, for a time, elated by the nominally
extravagant prices they obtain. No two epochs can be
precisely alike, and thus the lessons of the past are
spurned in the passion of the present moment. AH
hasten to make new investments, and the bubble grows
larger. Nearly all admit the approach of the impending
storm, but fancy themselves too wise or too dexterous to
be involved in the ruin which they see must soon overtake
the community.
The policy supported by the honorable member has set
the ball in motion. He now proposes to " protect the
people " from what he terms " their own eager specula
tions," by increasing the size and accelerating the speed of
the avalanche he has started ; and he complacently de
clares, to use his own words, that when " their unregula
ted enterprise," which has been deprived of its natural
and salutary checks by the system of legal tender, " has
brought them to general bankruptcy," he " shall have the
satisfaction of knowing that he attempted to prevent it."
The " handwriting on the wall," foretelling the ruinous
condition to which the financial policy of the Administra
tion is bringing us, is everywhere visible, and he who
runs may read it.
I will not do so much injustice to the intelligence of
those gentlemen whose counsels have ruled in the affairs
of the nation as to intimate that their own judgment, apart
from extraneous political causes, approved of the course
they have pursued. Considered as questions of revenue
and finance alone, they must long ago have regretted, as
they will ever in the future deplore, their long-continued
procrastination, their timid delay in measures of taxation
and finance, resulting at last in a determination to rush
through Congress, with hot and desperate haste, the en
actment of fictitious currency upon a plea of the immedi
ate and pressing necessity which the accumulated evils

200 FINANCIAL CONDITION OF THE NATION.
of long-continued errors have created. They hoped, by
," making money abundant," and depreciating its value, to
make men invest in national stocks. The notes of an in
dividual are in good esteem when he is chary of his credit
and uses it seldom ; when he issues them in unlimited
number, people become suspicious. In the same way the
immense issues of paper money, injuring the credit of the
Government, have tended to prevent capitalists, who are
proverbially timid, from purchasing Government securi
ties. The same rules apply to individuals and nations
alike ; and yet the gentlemen to whom I refer would
spurn in their personal affairs the plan they have forced
upon the country, of enlarging purchases and thus driv
ing creditors into a compromise. There is no real dis
tinction between the two cases.
If those who are now in power had applied to the
affairs of state the sound principles of common sense
they know to be correct in private life, the nation would
have been safe ; but, bewildered by the magnitude of the
subject, and intoxicated by the possession of new-born
power, they rushed into financial schemes at which the
the world wonders. Who does not knOw that when the
debts of an individual are overdue, and he refuses to pay
them except by giving his notes, and persists indefinitely
upon this method of transacting business, his creditors
take whatever they can get in ready pay, rather than his
bonds at long date ? Yet, considering the boundless re
sources of the nation, and the large sums accumulated by
favorites of the Government, the public may be surprised
to learn that the plan should have failed so signally as
was stated by my honorable colleague who addressed the
House on Monday. He told us that —
" The Secretary has paid out nearly $250,000,000 legal tender
notes, being all that he was authorized to issue ; and notwith
standing he has had authority for the last ten months to sell
$500,000,000 of five-twenty-six per cent, bonds at the market
price, he has only disposed of about $25,000,000 and has still au
thority to sell $475,000,000 at the market price, and take his pay
for them in legal tender notes."
We have arrived at this stage of embarrassment. Money
has been made as " abundant " as the advocates of the

FINANCIAL CONDITION OF THE NATION. 201
scheme asked, but men are daily buying real estate and
personal property of nearly all kinds in preference to na
tional securities at the proposed rate of interest. Many
of those who have already invested in national stocks,
are anxious to sell them and prefer holding other property.
Nearly all kinds of bond and share securities have risen
in price, following the course of gold, with the ominous
and prominent exception of Treasury paper and Govern
ment stocks, which are sold lower for " legal tender " than
when gold was at a premium of one hundred and thirty
or one hundred and thirty-two per cent. Yet those whose
errors have brought this trouble upon us hold the poisoned
chalice to our lips, and ask the nation to drink its con
tents to the dregs.
The Administration, having in its control the vast re
sources of the property and credit of the United States,
possessed ample power to maintain public confidence and
raise all needful sums, if, instead of authorizing the first
issue of Treasury notes, it had boldly entered the money
market, and adopted prompt measures of taxation, which,
however odious, would have been cheerfully borne in the
hope of vindicating the great principle of self-government
by the people. Unfortunately there has been a grave
and important departure from this financial course, in
volving a loss of unity of opinion as to the best means of
terminating honorably the present fratricidal war between
the two sections of our country. In avoiding taxation
until it could not be deferred longer, and in producing
that hopeful excitement which is always caused by a large
increase of the currency, they avoided much that would
have brought calm reflection to the public mind. Nearly
a year ago I introduced a motion in favor of providing
Congress and the country with more frequent statements
of the receipts and disbursements of the Government,
hoping thus early, to arouse the nation to a sense of its
impending danger ; but the resolution yet slumbers in the
Treasury without response. The effects of those who
were interested in the expenditure of the public money
were not counterbalanced by the exertions of those from
whom the public taxation must be collected. Fuel was
thus added to the flame of popular excitement, producing

202 FINANCIAL CONDITION OF THE NATION.
results favorable to the opinions of those who were de
sirous of interfering with the local institutions of the
South, and were unwilling to trust the great and difficult
problem of the races to the gradual and ameliorating in
fluences of time, by which Providence works out its benefi
cent changes without injury to mankind. In vain did the
President, in his first message, tender advice in the words
he has lately reiterated :
" Suppose you go to war, you cannot fight always ; and when,
after much loss on both sides, and no gain on either, you cease
fighting, the identical old questions, as to terms of intercourse, are
again upon you."
The party by which he was chiefly supported raised
new and unnecessary questions, making the war entirely
one for tbe triumph of conquest and of arms, or — as some
have even gone so far in this House as to assert — of ex
termination. We reap a plentiful harvest of debt, deso
lation, and death from the seed they have sown. I do
not envy them the temporary popularity and fading
laurels thus won by the sufferings of our country. The
history of these financiers will be like that of John Law,
the celebrated banker, who once wielded the chief power
in France. Says M. Thiers :
" His fate was that which may be supposed to have overtaken
the first adventurous boatman who rowed from Lake Erie to On
tario. Broad and smooth was the river on which he embarked ;
rapid and pleasant was his progress ; and who was to stay him
in his career? Alas, for him! The cataract was nigh. He saw,
when it was too late, that the tide which wafted him so joyously
along was the tide of destruction ; and when he endeavored to
retrace his way, he found that the current was too strong for his
weak efforts to stem, and that he drew nearer every instant to the
tremendous falls. Down he went over the sharp rocks, and the
waters with him. He was dashed to pieces with his bark ; but the
waters, maddened and turned to foam by the rough descent, only
boiled and bubbled for a time, and then flowed on again as
smoothly as ever."
While my chief object at present is to enter my earnest
remonstrance agamst an increase of legal tender paper,

FINANCIAL CONDITION OF THE NATION. 203
and ask attention to the importance and necessity of ar
resting the inflation which is now going on so rapidly, it
would be unjust to refrain from reference to the measures
of relief which are demanded by the exigencies of the
country. My earnest desire is and always has been, to furnish
the Government with every resource and power necessary
to the repression of the rebellion. From my solicitude
for the re-establishment of the Bepublic, I desire to avert
any increase of such paper money as is now in use, know
ing how injuriously it affects public confidence, enlarges
expenditures by raising prices, lulls the public mind into
a sense of false security, and lessens the vigilance which
prevents fraud.
It seems to me that the country requires rather less
than more of the circulating medium ; and. yet the attempt
to enforce a speedy reduction either by immediate re
sumption of specie payments, or by legislative enactments
for the restriction of bank credit, would produce serious
disasters. Taxation of the banks will, I believe, tend to
throw upon the market the State stocks and mortgages
held by them as a basis for circulation — pressing hard
upon the credit of States and individuals, leading to the
withdrawal of banking capital, and curtailing the usual
accommodations to manufacturing and commercial inter
ests throughout the country.
Gentlemen for whom I entertain much respect are de
sirous of substituting the legal tender of the United States
for the bank notes of the States individually, and think
they have found a cure for our financial troubles. The
whole paper circulation of the loyal States, as computed
by my honorable colleague, is $166,600,000 — a trifle in
comparison with $1,646,634,315.15, the amount we are
called upon to raise for the next eighteen months. We
are asked to derange our commercial and industrial sys
tems throughout the whole country and submit our State
institutions to a central authority, and yet the burden will
remain, practically, almost undiminished. The whole
circulation of the loyal States is only about one-tenth of
$1,646,634,315.15, the minimum amount now computed
to be necessary for the maintenance of our credit and our

204 FINANCIAL CONDITION OF THE NATION.
Army and Navy for the next year and a half. I regret
the rejection of advice heretofore tendered to the Gov
ernment, to issue small notes bearing interest, so as to
prevent their becoming current money. Interest has been
saved, but at the cost, of increased outlay and disaster.
These notes, made payable in long loans, would not have
had much influence on prices. More reliance should have
been placed, and might yet be placed, upon the sale of
public stocks at seven and three-tenths, or, at least, a
higher rate than six per cent., in eveiy favorable state of
the money market. It is a problem difficult of solution
whether it will be better for the Government to raise
money temporarily by establishing a system of deposits
in New York, by selling seven and three-tenths bonds on
short time, or by what other means, except those of legal
tenders, which we have already tried and found ruinous.
In my opinion, Government might yet by these plans
steadily absorb much of the available capital of the coun
try, without the sacrifices involved in a continuation of
the legal tender issues ; but the case is full of the utmost
danger to the nation. It presents the most solemn re
sponsibilities for the Secretary of the Treasury, and I
should yet rejoice to see a commission appointed to inquire,
with his co-operation, into the best method of arranging
our financial affairs. It would be a part of the duty of
such commissioners to call before them, without any dif
ference of party, the most wise and distinguished bankers,
and commercial men of extended experience, thus avoid
ing the odium and partialities which it is difficult to
separate from private conferences.

THE FINANCIAL PROBLEM.
HOW SHALL IT BE SOLVED?

House of Representatives, January 29, 1876.

At the date of this speech the fallacy of a belief in the reality
of prosperity produced by the war and an inflation of the cur
rency had been demonstrated by practical tests, but the shrink
age of values and the pressure of ill-considered taxation had
produced general embarrassment or distress for which a new ex
pansion of " legal tender " was hailed by many as a panacea.
To give useful warnings against this error the monetary ex
perience of the United States and other nations, so far as it bears
upon the subject is recapitulated, and a method is propounded
for returning to specie payments by steps so gradual that Congress
would have no excuse for again interfering, confidence would re
turn and prosperity prevail.
Mr. Speaker : The present embarrassment of our finan
cial and commercial interests demands serious and pro
found attention. Its effects are felt by the people of all
pursuits in every part of the Union, and, without distinc
tion of party, they imperatively require the application
of the best attainable remedy. Capital lies idle in the
vaults of the banks, and has been offered at lower rates
of interest than at any other period in the history of this
continent. The number of business failures in the year
just closed was seventy-seven hundred and forty, larger
than in any previous year. In 1874 the number exceed
ed that in 1873, and so on, with one exception, when it
was stationary, the failures have gone on increasing every
year since 1862. Multitudes of men and women, to an
extent hitherto unparalleled, are presenting that " sad
dest sight on earth " of being able and anxious to work,
but unable to find the work to do.

206 THE FINANCIAL PEOBLEM.
To understand the nature of the disease which is now
preying on the vitals of the country, we must refer to its
origin and trace its insidious progress, reviewing the fi
nancial history of the war impartially and in the light
now thrown upon it by the decisive lessons of the past.
The rebellion was precipitated on the country unex
pectedly to the party in power, who were slow and un
willing to comprehend its real magnitude. The repeated
prophecies of leading statesmen, that it would succumb
in a few weeks, are yet fresh in our memories, and will
never fail to arrest the attention of all students of our
history. As the nature of the impending dangers was
not understood, neither the military nor pecuniary meas
ures needed to meet them were promptly undertaken.
The antiquated and exploded financial theories of obso
lete European statesmen and of our own in former days
were again put into practice and once more proved to be
erroneous. Those who gave more far-seeing counsels
were fortunate if they escaped opprobrium. While the
North believed that the crisis would rapidly pass over,
the South mistakenly supposed the North would yield to
its demands. The battle of Bull Bun, when the capital
itself was endangered, in part dissolved the illusion on
both sides ; but the financial errors which had taken root
were destined to be worked out to their logical results,
which have now swept over the country and can only
slowly be overcome.
The policy of deluding by makeshift expedients, in
stead of following the standard of the real and perma
nent good of the public as fixed by immutable natural
laws, was too conducive to the personal and partisan in
terests of those in power to be readily abandoned. At
an extra session of Congress, in July, 1861, it was simply
indicated that, in view of the expected brief duration of
the war, the Government would make a loan of a hundred
and fifty millions in gold from the banks of New York,
Boston, and Philadelphia. Before the 17th of November,
in the same year, they had actually advanced one hun
dred and forty-six millions in this form, and their system
was so strong that after the last part of the loan had
been nearly or quite paid, the gold and silver in the

THE FINANCIAL PEOBLEM. 207
banks, which had at the beginning been less than fifty
millions, was forty-two millions. The specie for a long
time returned to the banks in the ordinary course of busi
ness. The Treasury continued to demand " thirty mil
lions a month," and insisted that this should be paid only
in coin. The banks yet had more than sufficient specie
for the transaction of their own business, but further
steps were taken to destroy the State banks.
The Government, which should have guarded the banks
carefully, so that they might have kept up the value of
the currency by a knowledge of their strength, scattered
the gold, and it could neither be lent over again in suffi
cient quantities or made available as a reserve for the
banks. Suspension followed on the 31st of December,
soon after the meeting of Congress . at its next regular
session. Even in the beginning of January, 1862, specie and
paper money remained of equal value. At that date due
sagacity and prudence would have prompted the instant
adoption of a system of adequate taxation and other well
considered and suitable measures of providing for the ex
penditures of the war. The Government, having by its,
own action forced the banks into suspension, authorized,
on the 25th of February, 1862, a large issue of " legal
tender," receivable " for all debts except duties on im
ports and interest on the public debt." In those notes
the distinction was, for the first time in history, made by
a government between specie and its own paper. Thus
the door was opened wide to the enormous over -issue of
paper money, which led to the inflation of prices, and but
for our natural wealth and strongly national spirit would
have been fatal to the Government and immediately dis
astrous to the business of the people. It was deemed
more creditable to create fictitious and exaggerated prices
.of labor and commodities and, an artificial appearance of
prosperity, than to enforce prompt taxation.
The Administration having created an unfailing de
mand for gold, and fanned the fire of speculation by the
terms of the original notes which were exchangeable for
United States 6 per cent, bonds, withdrew even this right
of redemption after July 1, 1863, and more anxious to

208 THE FINANCIAL PEOBLEM.
produce a seemingly low interest than to protect the peo
ple against an actual depreciation of the national securi
ties, which reached the low rate of thirty-five cents on
the dollar, made an inglorious and suicidal effort to raise
loans at 5 per cent. The continuance of the right to ex
change the " legal-tender notes " for 6 per cent, bonds
might have effectually prevented the currency from be
coming redundant, and it might have been continually
checked by investments in the bonds for the sake of
interest. The 6 per cent, bonds were sold at the rate of
$1,500,000 to $2,000,000 a day — amounts nearly equal to
the daily expenses of the Government. Of the loan at
the lower rate, little was taken except by bankers, who
used the bonds in the organization of national banks.
The funding was substantially arrested for several months.
Many times the sum of the interest sought to be saved
were lost in the enhanced rates of purchase for the Army
and Navy, and, under a needlessly inflated currency, a
war debt of over $2,800,000,000 was incurred, although
the value received, reckoned in gold, was probably not
more than forty cents on the dollar on all the expenditures
of the war.
The currency continued to be further inflated, without
any provision for converting it into interest-bearing bonds,
until, by the 30th of June, 1861, the natural fruits of the
mistaken policy became palpable to its advocates. The
currency and other temporary loans amounted to over
$1,125,877,034. The Administration having created a market for gold,
with a constant supply and demand, through paying
interest on bonds in gold and refusing to receive its own
notes in payment of duties on imports, the congressional
majority, by joint resolution, increased the previously ex
travagant duties to the amount of 50 per cent, on all ar
ticles indiscriminately for sixty-three days, ending with
the 30th of June, 1864. The necessary consequence was
that gold rose rapidly and enormously, or rather that the
currency correspondingly depreciated. Congress, alarm
ed and anxious to stem the tide it had thus set in motion,
passed a " gold bill," approved June 17, 1864, with the
vain hope of checking the depreciation of the currency

THE FINANCIAL PEOBLEM. 209
by prohibiting time contracts for the sale of gold. Vio
lations of the act were to be punished by fines and im
prisonment. The ill-advised step only added fuel to the
flame. Its result was a temporary closing of the gold-
room, leaving purchasers at the mercy of individual
dealers, and, next, a mania of speculation, during which
gold reached- its maximum of 285, the actual premium
having more than doubled within about two months.
The pernicious effects of these glaring violations of the
laws of common sense and political economy were so im
mediately obvious that both acts were short-lived, the
" gold bill " being repealed in fifteen days after its pas
sage. The protracted duration of the war, so widely at vari
ance from the early and rose-colored assurances of the
administration, added to the excessive issue of paper
money and its great depreciation, induced distrust and
discredit of the Union. Instead of wantonly diluting
the currency and wilfully diminishing its value, so as to
tempt purchasers of bonds, or, in the phraseology of the
day, to "float the debt" nominally at par, but really far
below it, a strong specie reserve should have been main
tained, and the paper dollar kept as nearly as possible at
its par value. This would have given confidence, and the
people or Government would have received a full or fair
equivalent for the money they are compelled to pay.
Throughout her recent great calamities France, in pur
suance of a policy well worthy of profound attention,
never permitted her currency to reach a discount of over
2| per cent., and yet one dollar of hard money would
have bought nearly three dollars of ours, and our bonds
were depreciated to a corresponding extent. No other
nation has ever, during war or any other great exigency,
made such distinctions, discrediting her own currency by
persistently recognizing and enacting its inferiority to the
precious metals.
It is little to the credit of the party which for the last
fifteen years has been intrusted with the management of
our financial affairs that, although France maintained
her paper' money practically at par during the misfor
tunes which ended in a loss of some of her best territory,
14

210 THE FINANCIAL PEOBLEM.
throughout a terrific civil war, and although she paid a
ransom of $1,000,000,000 and interest, our " legal-tender,"
or Government paper money, is yet at a discount, varying
from 12 to 13 per cent., and gold once reached a premium
of at least 185. The public debt of France is more than
twice as large as our own. Her area is more than one-
third less than that of the State of Texas alone and only
about one-twentieth part of that of the Union. Her
population, long nearly stationary, and recently dimin-
. ished, was, in 1872, little more than thirty-six millions,
while ours is now about forty-three millions, and is prob
ably increasing at the rate of nearly a million and a half
yearly. Judging from the past, our national wealth will
double in about eight years, a rate of prosperity three or
four times greater than that of France. Yet, with her
far inferior resources, and throughout the pressure of
almost unequalled misfortunes, the outstanding issues of
the Bank of France not redeemable in specie never ex
ceeded $640,000,000, and were lately $489,000,000,
against which it holds $300,000,000 in the precious
metals, but insists, as a preliminary to the resumption of
specie payments on the 1st of January, 1878, on a further
reduction to the amount of nearly a hundred millions of
the issues lent to the government.
Our basis of credit being, as we have seen, far superior
to that of France, the contrast between her financial man
agement and that of the administration of this country,
deeply condemns the latter. Acting without forethought,
and in one of those blunders which are sometimes said
truly to be worse than crimes, it borrowed and dissipated
the specie held by the banks, and paid away its own, in
stead of encouraging and keeping a reserve, which would
have made the currency nearly at a par with coin, and
thus have retained, at nearly .the same standard, the cur
rent value of its bonds and the articles needed in the war,
enormously diminishing the burdens of the people, who,
through the shameless waste of their credit, now pay, in
the common standard of the world, debts contracted un
der the fictitious valuations of an irredeemable currency,
which the administration, by its example and its laws,
taught the people and the world to distrust.

THE FINANCIAL PEOBLEM. 211
Our Government took no efficient or well-calculated
steps to keep up the value of our note circulation. But
this object was the first aim of France. Our administra
tion fed speculation, wilfully producing an artificial state
of things and an appearance of prosperity which deceived
many. The Secretary of the Treasury, with the hope of
reducing interest, caused an immense depreciation of the
currency and brought upon us the long train of disasters
from which we have not yet recovered. His was the
policy of selling notes at half or one-third of their face
for the sake of saving one per cent, in interest. France,
on the contrary, arrested speculation by advancing the
rate of interest through her bank and kept down prices,
thus encouraging exports and enabling her government
to buy at fail' prices. Her financial policy was the re
verse of ours and the result was more propitious. The
chief practical example she now gives as an appropriate
lesson for the condition in which we are placed is that,
by means of an enlightened and moderately liberal com
mercial policy for the benefit of the people at large, and
not the favoritism of the few, and by maintaining a large
reserve of specie in her bank, she circulates free of dis
count a nominally inconvertible paper currency to the
amount of over $500,000,000.
Although, owing to the unparalleled natural wealth of
our country, the results of defying- the positive laws of
political economy were long delayed, the time necessarily
came when the speculations thus set afloat were subjected
to the inevitable test of realizing money from them ; and
it was found they rested on no adequate foundation.
The Administration had transferred its financial agencies
to men who had been foremost in advocating its sophis
tries and strenuously striven to delude the people by
promulgating the doctrines that "a national debt is a
national blessing," and that "debt is wealth." The lead
ing and most trusted advisers and co-operators of the
Government in its financial affairs became the most con
spicuous speculators. The system significantly culminated
in the failure of the houses which had been most highly
favored and trusted by the Administration. A run for
deposits almost immediately followed. The sixty banks

212 THE FINANCIAL PEOBLEM.
of New York were liable for $200,000,000 to their depo
sitors. Speculation had become so rife because the cur
rency was far in excess of legitimate commercial demands
that, to meet the emergency, the banks had depended on
" call-loans." The bank loans throughout the United
States far exceeded those of any other date, and the ratio
of cash to deposits and circulation was then, as it had
been for the two previous years, less than at any other
time during the last forty years. In New York, within
little more than three weeks, the " legal-tender " reserve
was reduced from thirty -four millions to less than six
millions. The securities on which the " call-loans " had
been made became unsalable except at ruinous prices.
Prominent among the results of the stimulation of a
false currency was a mania for the construction of rail
roads, which averaged nearly six thousand miles for the
five years ended in the crisis, against an average of about
eleven hundred in the seven years ended with 1866. The
reaction was so disastrous that railroad bonds to the
amount of $567,028,639 were in default, and considerably
less than half of the railroad stocks in the whole country
paid dividends, entailing losses and ruin on multitudes of
innocent sufferers. These disasters, though more easily
computed than many others and larger in amount than
any other single class, are probably little more than fair
specimens of the widespread calamities. Many manufac
tures, notably those of iron, cotton, and wool, were sus
pended or put on short time. Laboring men and women
were thrown out of work to an extent previously un
known in the history of our country ; immigration, that
prolific source of our prosperity, decreased ; multitudes
returned to Europe to spread abroad in every land the
tidings of their disappointments and deter others from
embarking ; and the number of bankruptcies in 1873, as
also in 1874, exceeded that ever before known, except in
1861, the year when the memorable destruction of trade
and capital was caused by the war. From that time to
this the commercial confidence necessary to the employ
ment of labor has been impaired, and the poverty of the
masses and crime have increased beyond all former pre
cedent. In addition to other burdens, we sustained in

THE FINANCIAL PEOBLEM. 213
1871 and 1872 losses by fire in the cities of Chicago and
Boston amounting to $300,000,000, an amount of wealth
as irretrievably lost as if it had been swallowed in
chasms caused by earthquakes or thrown into the midst
of the ocean..
All the calamities we now endure would have been in
calculably more general and severe but for the prompt
action of the clearing-house through which, when the
crisis occurred, the stronger banks of New York unit
ed to sustain the weaker by combining their reserves
of legal-tender notes and issuing interest-bearing loan
certificates, which were made the media for the payment
of differences.
It is instructive to note that throughout the history of
our country commercial panics have universally followed
large expansions of the currency. By unsettling values
and stimulating wild and reckless speculations which, but
for a superfluity of the circulating medium, would never
be undertaken, they draw money away from sound in
vestments which would yield permanent profit to those
who make them with a view to enriching themselves by
rendering real services to the people at large. The
national industry has been misdirected, a course analogous
to waste of time and money misspent by an individual.
The violent and well-remembered panic of 1837 followed
an increase of $54,796,320— or from $94,389,570 to
$149,185,000 — in the circulation, within the brief period
of three years, while during the same period the loans
and discounts, which practically are for many purposes
a part of the currency, increased $198,996,261, or from
$326,119,441 on the 1st of January, 1834, to $525,115,702
on the corresponding day in 1837. Until seventeen years
afterwards the aggregates of the loans and discounts of
the banks never were so great as in 1837. In 1857, the
year of the next great panic, they had increased to
$684,456,887, and in the two preceding years the currency
had increased from $186,952,223 to $214,778,822. In
1860 the paper currency was $207,100,000, but in 1866,
under the republican regime, the outstanding circulation
had increased to $648,866,000, and on July 1, 1875, to

214 THE FINANCIAL PEOBLEM. f
$727,640,588, exclusive of over forty-one millions of frac
tional currency.
The notion of many of the advocates of expansion is
vaguely that it would be substantially a distribution of
money among the masses at large ; but it is in fact one
of the most seductive methods of depriving those who
depend on their labor and industry of their just reward,
placing colossal fortunes in the hands of a few, to whom
it gives a lion's share of the little the people individually
possess, taxing their labor and that of their descendants,
and thus endangering even the Bepublic and the liberties
of the people. This has been the uniform experience of
mankind, and it is aptly illustrated by the history of our
country in the last fifteen years, during which we have
had au irredeemable circulation, and when, while wealth
slipped more rapidly than ever into the hands of specu
lators, the number of bankruptcies exceeded those of any
former term, and poverty, distress, and crime have made
alarming progress unprecedented in the history of our
country. It may be freely admitted that, at first sight, the theory
that paper promises to pay are capital is not without
some show of plausibility. Currency is the symbol of
wealth, and the shadow is frequently mistaken for the
substance. It is, in fact, when inflated, nothing more
than so much " watered stock." The value is nominally
increased, but the actual property remains the same.
Sooner or later the fraud is exposed, but from time to
time this is again forgotten, and a new era of inflation
and delusion begins, to end in the same way as its
predecessors. The experiment has often been made, and
as often attended by the same bitter lessons. Yet, with
new men, the old errors are repeated. Happily for man
kind, nations are long-lived, seldom dying, and in some
degree the wisdom gained by one generation filters down
the course of time to its successors. As on some points
the laws of finance are as positive as those of physical
nature, the experience of other countries is instructive.
In 1797 the Bank of England began, under authority
of Parliament, to issue excessive amounts of notes, which
the London merchants agreed to receive at par. Even

THE FINANCIAL PEOBLEM. 215
this could not prevent their depreciation. Parliament
seconded the ineffectual efforts and in 1811 passed the
celebrated resolution that " the price of gold had advanced,
but the value of bank-notes was not depreciated" — a
complete counterpart to the declaration of one of our
own Secretaries of the Treasury, who claimed to be the
author of the legal-tender system, that gold had increased
in value but that his paper money had not depreciated.
In 1814 a British "gold-bill" was passed, enacting that
"the taking of gold coin at more than its value or bank
notes at less shall be deemed a misdemeanor." It was as
ineffectual as our own. The trade in the precious metals
was conducted as openly as ever and the depreciation of
the notes continued. No effort was made to enforce the
impotent law. The notes remained below par for nineteen
years. At last the celebrated "bullion-committee,"
appointed by Parliament to investigate the calamitous
condition of British financial affairs and their inconsistency
with the theories too generally believed, recognized the
actual depreciation and declared that this was the cause
of the general advance in prices. Its main conclusion
was that " the country ought to be brought back with as
much speed as is compatible with a wise caution to the
original principle of cash payments at the option of the
holders of bank-notes."
The highest officials of the time, the London bankers,
and the nation at large, with the exception of. a few
thinking men, long continued to re-assert that the large
volume of the currency had nothing to do with the rise
in prices ; that the bank-notes had lost nothing of their
value, and that no restriction of the circulation was
needed. It was not until eight years afte'rward that the
public had been instructed by the logic of events, and,
with few exceptions — which, however, . included the
directors of the Bank of England — the truth of the doc
trines held by the committee was universally admitted.
The following axioms were regarded as incontroverti-
bly established :
If gold is at a premium in paper, the paper is redundant and
depreciated, the premium measures the depreciation.

216 THE FINANCIAL PEOBLEM.
If the inferior currency be removed, the exchanges* will be
turned, the overflow will stop, and, if any vacuum is created,
gold will flow in to supply it.
A better and a worse currency cannot circulate together.
The worse will drive out the better.
The views of the committee have long continued to
be, in substance, the laws of finance in Great Britain ;
and for more than thirty years the use of bank-checks
and other modern means of facilitating payments has
been so great that there has been no material increase in
her paper currency, although during the same time her
commercial transactions have been multiplied fourfold.
The depreciation of the currency of France, under the
regency of Louis XV., has become proverbial. At its
origin it had its advocates, but although France prohib
ited the use of coin and decreed even the penalty of
death for those who refused to receive the paper at par,
it fell until the nominal equivalent of one hundred dollars
would buy only a single pound of butter. At last it be
came utterly worthless ; the people, by common consent,
returned to a specie currency ; and the author of the
scheme only escaped from the country at the peril of
his life.
Austria has been slower to learn, and her disasters
have been prolonged to a much more recent date. Sixty-
five years ago her currency was so far reduced in value
that she issued " redemption notes," in which it was to
be " redeemed " at the rate of three to one. This having
failed, she over and over again, under new names, such
as "Viennese legal-tender" and "anticipation notes,"
vainly sought to provide substitutes for a metallic stand'
ard. In 1873 she suffered from a panic bearing a close
resemblance to our own. After her war of 1866 large
issues of paper money were made, which led to a belief
in the abundance of capitals>and to speculations of all
kinds. The government itself gave aid by guaranteeing
dividends on various railroads. The market was glutted
'with an immense quantity of so-called securities, in
which it was for the time impracticable to distinguish
between the good and the bad, The inevitable crash
ensued. As in this country, the leading speculators were

THE FINANCIAL PEOBLEM. 217
the first to suspend. Their example was soon followed
by! a multitude of smaller operators. Even the strong
houses were shaken. The bourse was closed to prevent
violence among its more adventurous members, some of
whom committed suicide.
In the yet brief history of the United States and
Canada the same lesson has been no less imperatively
taught. I pass over the examples to be found in the
records of the individual States and colonies. Franklin
himself, early in the revolutionary war, warrnly approved
the issue of bills " on the faith of the continent." One
member of the Congress, who seems to have been alone
in his views, or in the courage needed to avow them,
urged taxation, but was bluffed by one of the almost
unanimous majority, who, in a spirit of which we have
conspicuous examples -in our own time, asked " if he was
to help to tax the people when they could go to the
printer's office and get a cart-load of money." The cur
rency decreased in value until monstrous sums were
needed to buy a cow or procure a frugal meal. It be
came exchangeable only at the rate of a thousand dollars
for one sound dollar. This, too, in spite of penal laws
to enforce the impracticable wishes of Congress. The
historian of the time says :
Wealth was accumulated by the dishonest multitudes of con
tractors and the many defrauders of that unhappy period, white
more deserving men felt that it had been plundered from their
own coffers for the aggrandizement of such people.
No thoughtful statesman ever overlooks the precedents
establishing the positive conclusion that wherever legisla
tors have attempted by penalties to compel the people to
take irredeemable paper at par with coin the laws of the
strongest alike with the weakest governments have sig
nally failed in enforcing their wishes.
Stripped of the sophistries with which it is frequently
surrounded, the necessity of a fixed standard of value in
all the commercial and monetary affairs of the nation is
so clear that he who runs may read it. Paper money
may be freely used ; checks or bills of exchange, aided
by the railroad, telegraph, and post-office, may transact

218 THE FINANCIAL PEOBLEM.
nearly all such business of the country as is on a large
scale, and tend to prevent any exorbitant rate of interest ;
but it is essential that all these means should simply rep
resent one universal and uniform standard. Without
this guard, they become uncontrollable and unsound — ex- ,
tortionate taskmasters instead of good and faithful ser
vants. In the minds of many men affairs of state are sur
rounded with a confusing mystery, as if the principles of
ordinary facts and common sense could not be applied to
them. Yet it is plain that trade in grain of any kind
would be placed under such enormous disadvantages as
to render it almost impossible if the bushel measure of
to-day might be larger or smaller to-morrow from causes
the farmer or merchant could not foresee and altogether
independent of their control. The dealers in textile fa
brics, and in land itself, would be in strange predicaments
if the yard and the foot were subject to great and frequent
variations, and might represent at one time little more
than a third of their measure at another. Yet the obsta
cle which has been thrown in the way of the trade and
prosperity of the country is almost exactly of the same
nature. The " legal-tender " dollar at one time was worth
little more than a third of the true dollar, and continually
changes from day to day, making trade uncertain and
values of all kinds doubtful. No man knows when he
rises what they may be that morning, or when he goes to
his place of business what they may be before the sun
sets. It is an established fact that the greatest possible
certainty of value is attainable only by enforcing the
standard of the" precious metals ; they become the prop
erty of whatever nation or individual will give most for
them. Their portability and the universal recognition of
their value throughout the world make them the natural
and least fluctuating medium of exchange, and arbitrary
legislation has been and seemingly always will be unsuc
cessful in discovering or enforcing any stable substitute
for them.
Gold, by the Constitution of the United States, is a legal
tender, and, as a necessary consequence, the standard of
value. That instrument gives no authority or power to

THE FINANCIAL PEOBLEM. 219
any department of the Government to issue legal-tender
paper, or a currency payable on demand. The only
ground upon which it was issued during the civil war
was that of seeming necessity, it being supposed that the
existence and supremacy of the Government were invol
ved. Without entering into the conflicting decisions of
the Supreme Court of the United States, it is sufficient to
know that they endorsed the issue of legal tender, but
only as a war necessity. It necessarily follows that it
could not otherwise be legally issued. Under a proper
construction of the Constitution this is impossible ; and
as democrats adhere to that instrument, they cannot for
a moment contend for such a proposition.
When the legal tender issued by the Government is
withdrawn, it must cease to issue more or any paper cur
rency whatever.
The right to control the financial affairs of the country
by increasing the circulating medium at his own will is
too dangerous a power to be lodged in the hands of the
Secretary of the Treasury. That high official is seldom
chosen for his adaptation to the special duties devolved
upon him. He may be one, who has attained political
rank, yet be profoundly ignorant of the simplest facts
and principles in modern science, and become a mere par
tisan intriguer. At another time the holder of that of
fice may be a man of sterling principles, sound doctrines,
and pure character ; but in the change of parties there
can be no certainty of this. We know the common weak
nesses of human nature, and should guard against them
by making the temptations to do wrong as few and slight
as possible. Hence the aim of all good citizens should be
to separate the Government from the business of banking.
It cannot remain in the hands of the Government without
creating such centralization and influences as are hostile
to the spirit and perpetuity of republican institutions.
Upon the withdrawal or redemption of the legal tender
and the resumption of specie payment, the issue of new
currency should be practically free to the banks to any
extent on the deposit of national bonds as security for the
circulation. Under these conditions there would be free
trade in money. The law of supply and demand would solve

220 THE FINANCIAL PEOBLEM.
the question of the currency, and the largest practicable
amount of benefit the banks can render would be attained,
while the circulation would be kept within moderate limits
and gradually attain the true and honest standard of the
world. As one of the ultimate results, the time may
come when their notes, amply secured by Government
bonds, in a proportion which will assuredly command
specie, may be accepted by the Government in payment
of its dues and re-issued for its current expenses.
I do not know any more striking instance of the for
getfulness of yet recent history and the superficial con
sideration, too often with the most deplorable results,
given to the affairs which concern us all, than the impres
sion on the minds of some candid men, and the loud and
reiterated assertions of others, that the democrats are
the party of inflation, and the republicans are the most
reliable supporters of a sound currency and a return to
specie payment. The traditional policy of the democrats
is that of a currency redeemable in hard money, and will
be so to the end. Individuals are to be found who on
other points agree with them, but believe in the pernicious
doctrine of an irredeemable currency. They are not the
party, and misrepresent its well-known and hitherto uni
versally admitted tenets. On the other hand, the repub
licans, from the beginning of their possession of power
to the present time, have uniformly practiced the fraud,
and attempted to justify it, until their efforts were no
longer availing. They took from the banks the power of
paying in specie, are responsible for the whole existing
system of paper money, and in the height of their delu
sions took from'it the redemption in national bonds which
would certainly have led the country safely to specie pay
ments many years ago.
Some, although holding general allegiance to the re
publican party, were so far patriotic and wise as to warn
it against the cause from which most of our financial
evils sprang, and have since wrung from it spasmodic
promises of reform which have been as often broken.
There are many conspicuous instances of this practical
deception. One of them was the first act of Congress
approved by President Grant after his inauguration. In

THE FINANCIAL PEOBLEM. 221
clear and terse words.it explicitly declared that "the
faith of the United States is solemnly pledged to the pay
ment in coin or its equivalent of the United States notes,"
and that Congress " pledges its faith to make provision
at the earliest practicable period for the redemption of
the United States notes in coin." The hopes thus given
were fallacious. The congressional majority arrested the
contraction begun by McCulloch when Secretary of the
Treasury, and were supported by the illegal inflation by
Boutwell and his successor. Six years ago, in 1870, the
premium on gold fell to 8^- per cent., and yet it was not
long ago 17|, and is now about 13. During the last six
years, under republican control, paper money has receded
farther from approaching to an equality with gold.
The people are vitally interested in a return to a specie
basis. The paper they now receive for services, daily
toil, and general business purposes is worth only eighty-
seven cents on the dollar,- through its depreciation to
that extent below gold value, which they pay for nearly
all the articles required for daily use. No sophistry can
long. continue to delude them, while a vigilant press pene
trates the remotest parts of the country, into a belief that
such depreciated and inconvertible paper money is the
best currency.
The expediency of a return to specie payments may now
be taken for granted. The present time is the most op
portune we have had since inflation began for making vigor
ous preparations for specie payments. The premium on
gold has been reduced by commercial causes, apart from
legislation, from 185| to 12 or 13 per cent., thus indicating
that the remaining steps to gold at a par rate with notes
can gradually be safely retraced by no extraordinary
amount of statesmanship, provided it is sincere and per
severing. Since the war began the circulating medium has
increased three times as fast as the population. In New
York the accumulation of money and the low rate at which
it may be had are unprecedented ; but a few borrowers
whom the capitalists will trust are to be found. Low as ,
the rate of interest throughout the world has long been,
money was, for several months, cheaper in New York than
in the great cosmopolitan market of London, the difficul-

222 THE FINANCIAL PEOBLEM.
ty of our capitalists having been to find profitable employ
ment for their currency at home. A similar state of
affairs prevails, though in a minor degree, at Chicago,
Cincinnati, and the other great financial centres of the
Union. Even the bill passed June 20, 1874, with the
intention of increasing the currency, has proved, as clearly
as the thermometer shows temperature, that more is not
needed, and that there is a redundancy above the wants
of the people. Under its operations, and after allowing
for the new circulation, there has been a net contraction
of the paper currency to the amount of over twenty mil
lions within a year. Banks are unable to employ their
money at fair profits. The legal-tender and other reserves
held by the banks of the country at this time are largely
in excess of the requirements of the law.
The abundance of money throughout the civilized
world affords peculiarly favorable opportunities for fund
ing or obtaining specie and foreign credits, which, to a
certain extent, are identical with each other. The futility
of expanding the currency was signally demonstrated by
the Secretary of the Treasury, during the panic of 1873^
who issued, without authority of law, $26,000,000 of notes,
in the vain hope of relieving the money market. These
notes did not enter at all into the general circulation, but
were hoarded by saving-banks and trust companies, as
were those which had been already withdrawn from the
banks of discount and deposit. Large exportations of
grain to Europe from this side of the Atlantic are expected.
Our imports have enormously shrunk. The people them
selves are more than usually free from debt ; and last, but
not least, is the encouraging fact that their minds have been
long and carefully prepared by an increasingly intelligent
press, never before so sound and well informed on finan
cial topics, to take more than superficial views and look
beyond the delusions of what is merely immediate and
temporary to that which, though slightly more remote, is
permanent and real. The Government, at present unable
to redeem its promises to pay, may never again have so
good an opportunity of beginning the process of exchang
ing its bonds at a lowr rate of interest, or the national
banks of laying up the reserves of specie, on which, in

THE FINANCIAL PEOBLEM. 223
their hands, under the wholesome law of free competition,
the restoration of prosperity depends.
On the other hand, if the policy of the expansionists
could be followed, the return to specie payments and the
successful funding of the debt, long ago due on demand,
but yet unpaid, will become more and more difficult,
until, as we have seen has repeatedly been the case in
other countries and our own, the control of legislation
will be lost, broken promises will be renewed only by
making more of them, and widespread disaster, misery,
repudiation, and national dishonor will ensue. We have
reached a point where any expansion of an irredeemable
currency means its indefinite increase, and are approach
ing that crisis against which the united wisdom of many
generations warns us, in the maxim that the descent to
destruction is easy, but the labor and work of retracing
our steps is difficult, if not impossible.
We have now arrived at the period when inflation no
longer inflates. In the body political and financial, as in
the human body, there is a point where the power of
stimulants ceases and can no longer prevent collapse. This
is the law of all serious panics and their results. There
is a great shrinkage in business, and no important revival
can be expected until a new financial system which will
deserve and receive public confidence is fairly begun. In
proportion as there is a cry for inflation, capital, prover
bially timid, seeks for safety, withdraws from enterprise,
and refuses to employ labor. Until the future policy of
the Government is permanently settled, there can be no
real renewal of the commercial and general prosperity of
the country.
The act of January 14, 1875, passed by the last repub
lican Congress under the previous question, cutting off
all debate, has done more than any other single measure
to produce expansionists. It has created alarm in busi
ness circles and given to inflation an importance it could
not otherwise have attained. The impression is that if
the act be rigidly enforced the contraction of the currency
will of necessity be so rapid as to produce again wide
spread disaster, and such undoubtedly would be the case
if resumption were really enforced at the date named for

224 THE FINANCIAL PEOBLEM.
it, January 1, 1879. While the majority of the House
is not responsible for this act or its consequences, it
should not be repealed unconditionally and without sub
stituting for it some better measure having for its object
the resumption of specie payments at the proper time.
A modification of the law, one more in accordance with
the true interest of the country, will be no doubt effected.
So long as the Government continues practically to insist
that its own notes are of an inferior value to the precious
metals, a most serious financial error is committed, and
a policy in opposition to the resumption act, and far-
reaching in its effect, is perpetuated. I express only the
general opinion of the most sagacious financiers when I
say that so long as this barrier remains specie payments
cannot be attained for many years.
I regard a moderate contraction of legal-tender as in
dispensable and vital to the resumption of specie pay
ments. It is the necessary guarantee to be given by the
national legislators to the people that they may confi
dently rely on the sure approach of a sound currency,
but so far as it is enforced it should be so gradual as not
to disturb too violently the various existing interests of
the production, commerce, and property of the country.
This should be done by funding legal-tender paper into
bonds at the lowest practicable rate of interest. This
simple process, fairly carried out, would probably turn
the foreign exchanges in favor of this country to such a
degree that we should not only retain the immense pro
duct of our own mines, but that there would be returned ~
to us a sufficient amount of the precious metals, now
driven away to other lands by excessive paper issues, to
enable us to resume specie payments. All this would be.
done by a process perfectly natural and in strict har
mony with the well-settled principles of trade and
finance. The time to resume will be when we are pre
pared to do so, and is not within the ken of legislators,
be they ever so wise, to fix it definitely by statute.
At the same time there should be some definite and
absolute provision for moderate but steady contraction.
Among the possibilities of the future is such a demand
for money as' would make it unprofitable for the banks

THE FINANCIAL PEOBLEM. 225
to convert the legal-tender they hold into bonds at the
lowest rate of interest. I would, therefore, suggest as a
means of gradual contraction, and with a view to render
ing more' certain the resumption of specie payments, that
if the Government should authorize the purchase and
cancellation of some moderate amount, say $1,000,000
per month, of the legal-tender notes, and authorize the
Secretary of the Treasury to sell 5 per cent, bonds — If
bonds at a lower rate of interest cannot be negotiated —
of the United States to provide funds for that object,
the first great step would be taken towards resumption,
without injury to the financial and business interests of
the country. Under the recommendations of Mr.
McCulloch, when Secretary of the Treasury, contraction
on a larger scale was begun, but Congress, fearful of the
effect, withdrew its assent. I propose that the rate and
method of contraction shall be so gradual that Congress
can have no excuse for again intervening. Bigid ad
herence to such a course would indicate a determination
to return to a sound foundation; the absence of the
inferior currency would be gradually supplied by the
superior ; the problem as to the method of resumption
would be solved, and the system work itself out by a
natural process, while individuals and the banks would
have ample time to prepare for a new condition of affairs.
Business being thus adjusted upon the new basis, confi
dence would return, and with it prosperity prevail.
The country is disposed to look to the democratic
party for a return to the economy and integrity in the
administration of public affairs and for the introduction
and adoption of measures well calculated to restore to
a safe and harmonious basis the financial, commercial,
and material interests of the nation. It yet remains to
be seen whether the leaders fully recognize the exigencies
of the occasion and realize the necessities and hopeful
expectations of the people.
15

DISTEIBUTION OF THE GENEVA AWABD.

House of Representatives, May 23, 1876.

A bill ignoring the legal rights of parties on whose behalf the
Government of the United States obtained the award by the
tribunal of arbitration at Geneva and collected the money from
Great Britain, or postponing its payment until certain invalid
and improperly preferred claims, rejected by the tribunal and
indefinite in amount, have been satisfied, having been reported from
the Judiciary Committee, a remonstrance was addressed to both
houses of Congress by several of the chief insurance companies,
and presented in the House of Representatives by Mr. Ward,
and at his request read by the Clerk. Mr. Ward then said :
Mr. Chairman : At the request of many of my con
stituents, who are deeply interested, and in accordance
with my own sense of right and duty, I present to the
House, as briefly and distinctly as I can, my views on the
important subject of the distribution of the funds awarded
by the tribunal of arbitration at Geneva. In my opinion
the length of the discussion regarding it is to be attributed
rather to the magnitude of the amount involved than to
any intrinsic difficulty in understanding or determining
the principles of law and justice so far as they are appli
cable to this case.
During the war various insurance companies and pri
vate claimants sent memorials to the Department of State,
setting forth their demands against Great Britain for
losses growing out of the destruction of vessels and their
cargoes by the cruisers of the insurgents, and requested
the interposition of the Government of the United States
in their behalf. The underwriters, confidently relying
on the ultimate protection of their rights by their country,
from time to time, as they paid for vessels and cargoes
destroyed by the cruisers, communicated to the State De
partment full, formal proofs of the facts and of the value

DISTEIBUTION OF THE GENEVA AWAED. 227
of the losses. The Department, through the Hon. William
H. Seward, then Secretary of State, punctiliously, as was
his duty, replied to each of the statements thus made, and
transmitted the claim " to the United States Minister at
London, with a view to such reparation as may be justly
due." Afterwards, when the war was over, the Government,
through the Department of State, issued an official notice,
dated September 22, 1865, calling upon "citizens of the
United States having claims against foreign governments,
not founded on contracts," to forward them to that De
partment, urgently asking compliance " without delay,"
and accompanied the notice with rules for the guidance
of applicants, directing the insertion in each claim of a
request "for the interposition of this Government with
the foreign government against which the claim is pre
sented." In accordance with the trust thus confided to our
Government by the sufferers, the claims were duly pre
sented to the Government of Great Britain and subse
quently to the tribunal at Geneva.
In pursuance of the same line of manifest duty, re
quiring every government to afford due protection to its
citizens or subjects, Mr. Fish, as Secretary of State, re
plied to letters enclosing claims of the class already
described, promised that his Department would " present
to the tribunal at Geneva, to be taken into account in
estimating the sum to be paid to the United States, all
claims growing out of the acts of the several vessels
which have given rise to the claims generally known as
the Alabama claims," and requested that they might be
presented in due time.
The claims were duly presented by our Government to
the tribunal at Geneva, in accordance with the treaty of
Washington. Throughout all the proceedings they were
uniformly treated as the' claims of private parties, who
on their part placed implicit, unquestioning trust and
confidence in the dne protection and good faith and in
tegrity of the Government. All doubt or question as to
their rights or the disposal of the funds is an after
thought, having no origin in the tribunal and contrary to
its intentions and conclusions.

228 DISTEIBUTION OF THE GENEVA AWAED.
In formally submitting its case to the tribunal, the
Government of the United States placed first in the gen
eral statement of the claims for which it asked repara
tion " the direct losses growing out of the destruction of
vessels and their cargoes by the insurgent cruisers." The
other injuries for which compensation was sought were —
The national expenditure in the pursuit of those
cruisers ;
The loss in the transfer of the American commercial
marine to the British flag ;
The enhanced payments of insurance ;
The prolongation of the war, and the addition of a
large sum to the cost of the war and the suppression of
the rebellion.
Great Britain objected to the presentation of the three
latter classes of claims, and refused to proceed with the
arbitration unless they were withdrawn. The United
States refused to withdraw them. A failure of the ar
bitration was imminent. At this crisis, the president of
the tribunal, on behalf of all the arbitrators, announced
that they, after the most careful perusal of all that had
been said on the part of the Government of the United
States in respect to these classes of claims, had " arrived
individually and collectively at the conclusion that these
claims do not constitute, upon the principles of interna
tional law applicable to such cases, good foundation for
an award of compensation or computation of damages
between nations, and should, upon such principles, be
wholly excluded from the consideration of the tribunal
in making its award." The United States authorized
their agent to state that they accepted this declaration as
determinative of the judgment of the arbitrators on the
important question of public law involved, and that
these classes of claims might be excluded from considera
tion in any award that might be made.
Subsequently, by protocol 27, dated August 29, 1872,
a majority of the tribunal decided to reject the claims for
expenditures incurred in pursuit of the cruisers, on the
ground that they were comprised in the cost of the war.
Thenceforth there remained only for consideration -by
the tribunal the claims for direct losses growing out of

DISTEIBUTION OF THE GENEVA AWAED. 229
the destruction of vessels and their cargoes by the insur
gent cruisers. The basis of the award was further and
distinctly narrowed down by the tribunal to the private
losses growing out of the destruction of vessels and their
cargoes by the acts of the Alabama, the Florida, and their
tenders, and the Shenandoah after she left the port of
Melbourne. In accordance with this decision the arbi
trators requested the Government of the United States to
furnish them with definite information as to the amount
of such losses, and, complying with the request, on the
19th of August, 1872, a schedule was presented in behalf
of our Government enumerating specifically the vessels
destroyed by the cruisers for whose acts Great Britain was
held to be liable, showing the value of each vessel so
destroyed and of her cargo, as proved by the claims filed
for it, including those of the insurance companies.
The judgment of the tribuual was that there had been
a violation of the obligations of neutrality on the part of
Great Britain ; that she was consequently " responsible
for the American ships which were destroyed by the ves
sels in question." In view of this decision, the only
remaining duty of the tribunal was either to ascertain and
award to the United States such a sum in gross as was
deemed sufficient to cover those private losses, as it was
empowered to do by the seventh article of the treaty, or
to remit the duty of auditing each claim for the losses to
a board of assessors, as provided in article 10. The
former was deemed the most satisfactory course. Its
adoption was requested on the part of this country, and
the gross sum of $15,500,000 was accordingly awarded to
the United States. The majority was four to one. The
award, of course, included alike such of the destroyed
vessels as were insured and those which were uninsured.
In determining what sum in gross should be awarded, the
tribunal considered the claims on the proofs submitted to
it, those of the insurance companies being the most con
spicuous among the claims thus submitted.
The United States have now received the money, have
admitted that it is not their own, and established a special
court for its distribution; but have closed its doors against
every insurance company which cannot show that its whole

230 DISTEIBUTION OF THE GENEVA AWAED.
business during the four years of the war, so far as the
war risks were concerned, was unprofitable.
At this point it becomes necessary to consider the
principles on which marine insurance is conducted among
commercial nations. It has always been regarded as a
proposition thoroughly established, that whatever is re
covered of the ship or cargo insured is the property of
the insurer who has paid the original owner the value of
it. It would be superfluous to spend time in proving
this undeniable proposition. Daniel Webster said of it :
There is no more universal maxim of law and justice through
out the civilized and commercial world than that an underwriter,
who has paid a loss on ship or merchandise to the owner, is enti
tled to whatever may be received from the property. His right
accrues by the very act of payment. And if the property or its
proceeds be afterwards recovered in whole or in part, whether
the recovery be from the sea, from captors, or from, the justice
of foreign states, such recovery is for the benefit of the under
writer. It was upon this principle that the claims of our people
to reparation for the British violations of the laws of
neutrals were advanced by our Government. On the
part of Great Britain, the justice of our case thus urged
was distinctly admitted in the words —
The American insurance companies who have paid the owners
as for a total loss are, in our opinion, entitled to be subrogated to
the rights of the latter, according to the well-known principle,
that an underwriter who has paid as for a total loss, acquires the
rights of the assured in respect of the subject-matter of insur
ance. The principle of marine insurance requiring that the
parties who have paid the owners in full for their losess
shall have whatever may be afterwards recovered is seen,
even on slight reflection, to be founded on morality and
justice. It resembles that involved where payment of a
note is guaranteed for a pecuniary consideration, and, the
maker refusing to pay, the note is paid by the guarantor,
but afterwards collected from the maker. Obviously the
guarantor, who has paid the owner in full, is entitled to
all that is recovered. Or, to take an illustration yet more

DISTEIBUTION OF THE GENEVA AWAED. 231
closely analogous to the case in point, a vessel fully in
sured does not arrive at the port when she is expected.
The parties who have agreed to pay for her in case of
loss honorably fulfill their engagement, and fully indem
nify the owners. Ultimately the vessel, having been de
tained by unforeseen causes, comes to port. To whom
does she belong ? Manifestly not to the original owners.
They have been paid, and in law and justice have trans
ferred their claim to those who paid them. The risk has
been run, but there has been no loss. Yet further from
all right would it be for any third party, even the
United States, to step in and, by the power of force, give
the vessel to other parties.
We are not approaching the subject of the disposal of
the amount paid to us as if the money were our own, to
be given as we choose. Two-thirds of it remain undis
tributed. It was awarded for specific purposes and for
no others, and the money was paid to the Government of
our country for parties whose claims were admitted to
be just, and who had confided them to the Government
as their best and truest trustee.
The bill reported by the majority of the Judiciary
Committee makes provision for three classes of claims.
It provides :
That the first class shall be for claims directly resulting from
damage done on the high seas by Confederate cruisers during the
late rebellion, including vessels and cargoes attacked on the high
seas, although destroyed within four miles of the shore, except as
provided for in section 11 of said chapter 459. The second class
shall be for claims for the payment of premiums for war risks,
whether paid to corporations, agents, or individuals, after the
sailing of any Confederate cruiser. The third class shall be for
claims for sums actually paid for insured property destroyed on
the high seas by such Confederate cruisers, except sums for which
judgments have been entered under section 12 of said chapter.
That judgments entered in the first class shall be paid before
judgments of the second class are paid ; and judgments of the se
cond class shall be paid before judgments of the third class are
paid. If the sum of money so unappropriated shall be insuffi
cient to pay the judgments of the first class, they shall be paid
according to the proportions which they severally bear to the
whole amount of such unappropriated sum. If such sum shall
be sufficient to pay the judgments of the first class, and not suffi-

232 DISTEIBUTION OF THE GENEVA AWAED.
cient to pay the judgments of the second class, the latter judg
ments shall be paid according to the proportion which they sev
erally bear to the residue of such unappropriated sum. If such
sum shall be sufficient to pay the judgments of the first and
second classes, and not sufficient to pay the judgments of the third
class, they shall be paid according to the proportions which they
severally bear to the residue of such unappropriated sum after
the payment of the judgments of the first and second classes.
The Geneva tribunal adjusted only the liability of
Great Britain for the admitted depredations committed
by the Florida, Alabama, and Shenandoah after leaving
Melbourne, and their tenders, the Tuscaloosa, Clarence,
Tacony, and the Archer, and excluded from consideration,
in the award of damages, the Georgia, Sumter, Nashville,
and other exculpated cruisers. In opposition to this de
cision, the bill allows to be presented claims resulting
from damage done on the high seas by all " Confederate
cruisers during the late rebellion," without the limitation
imposed by the arbitrators and in direct conflict with the
intent and decision of the chosen tribunal.
In equally bad faith is the provision allowing claims
for the payment of the premiums on war risks which were
distinctly ruled out by the tribunal. This ruling was re
cognized and accepted by the agent and counsel who re
presented our Government at Geneva; and to make yet
more glaring the enormity of the proposed bill, the claims
of the insurance companies, which seem to come clearly
within the award, are placed in the last class, without
possibility of payment after the wrongful demands, ex
cluded by the tribunal but placed by the bill in the first
and second classes, have been satisfied.
The majority of the Committee say, with an evident
desire to palliate the transparent injustice they suggest
inflicting on the insurance companies, that the first class
of claims for which provision is made in this bill will
not, they think, exceed $1,500,000, and the second class
$5,000,000, leaving $4,000,000 for the insurers. A sig
nificant commentary on these estimates is that the chair
man of the Judiciary Committee in the last House, who
urged the same interests as have priority in the report
made by the majority of the present committee, in answer

DISTEIBUTION OF THE GENEVA AWAED. 233
to a question by another honorable member, replied that
the bill then under consideration, and which is now a
law, would require only $3,000,000 to satisfy the claims
for which it provided. As matter of fact it has taken
between eight and nine millions. The probability is that
the first two claims for which provision is made in the
bill reported by the committee would swell in larger
proportions. It would be difficult to find in the whole history of
pernicious legislation a precedent more dangerous to
public and private integrity than the perversion of the
funds our country has obtained from Great Britain for
specific purposes, which were admitted to be just, to
other purposes for which they were not and never would
have been awarded. There is no doubt how the courts
would decide, and I regret that a knowledge that no court
in equity would reject the doctrine of subrogation as
applied to the insurance companies, should be assigned
as a reason why Congress ought to take the matter into
its own hands and make its own will the law. It is bad
enough that Congress should disregard settled principles
and rules as to the rights of property, but that such a
doctrine as this is avowed in open debate in this House
is deeply to be deplored. Having called to our aid in
settling the claims of our citizens against the British gov
ernment, men of the most profound legal knowledge and
the highest character among other leading nations of the
world, the attention of civilized mankind is directed
towards us. The reputation as well as the honor and
honesty of our country is at stake, and if we fail in our
duty, we shall be deemed now and through future his
tory to have added publicly and as a nation a portentous
illustration to the already long catalogue of the too prev
alent characteristics of the times.
While the facts I have presented are beyond doubt
or cavil, the considerations which should regulate our
decisions as to the Alabama claims are so unquestionable
as to be out of the region of debate. I repeat that the
Government of our country obtained the money through
the award of a great international court appointed by
the leading civilized nations, with the hope not only of

234 DISTEIBUTION OF THE GENEVA AWAED.

solving the difficulties which then existed, but of estab
lishing a precedent which would tend to promote human
progress by substituting just and honorable, arbitrament
for settlements through brute force and the horrors of
war. We are bound to respect the rulings of the court ;
and those whose good opinion is best worth deserving
will judge us by the disposal we make of the funds com
mitted to our charge.
Our Government obtained the award as damages for
destruction of the private property, and on proofs sup
plied by its owners. As the Government itself never
owned the property, it cannot possibly be the rightful
owner of the damages or have any right to confiscate
them. In presenting the claims before the court as grounds for
damages, the Government insisted upon their validity. If
it has now discovered that they were invalid and that it
was an error to present them, only one alternative re
mains. The plain and common rules of honesty and fair
dealing are as obligatory in arbitraments between nations
as between individuals ; and if, after recovery of dam
ages, the plaintiff nation ascertains or becomes convinced
that the recovery was founded on wrong or error, it is
bound in honor and good faith to return the sum improp
erly collected. While Great Britain would doubtless be
unwilling to receive again any part of the sum she has
paid to the Government of the United States under the
award, she cannot be expected to regard without interest
an alienation of the money and its application to objects
for which, by so high a tribunal, it has been decided that
she is not responsible.
The duty of the Government, apart from this alterna
tive, is plain and simple. Having received the money as
the value of private property, it is bailee or trustee for
the owners. Bepudiation of the trust or bailment by
any individual under the same circumstances would be
severely punished in a court of j ustice. The nation cannot
be sued, but it is therefore so much the more firmly bound
by higher considerations of right and policy to render no
less justice than the private trustee would be constrained
to do. All fair consideration of this subject leads to the

DISTEIBUTION OF THE GENEVA AWAED. 235
same conclusions. The only just claim on the part of
the Government is the one per cent, interest, the differ
ence between what it has paid and received. This is
fairly its right, and should be covered into the Treasury.
The Government ought freely and promptly to submit
all claims upon which the award was based to proper
audit before the distributing tribunal, where they can be
heard upon their merits and decided in accordance with
the principles of legal right. No other course will afford
substantial or valid protection to the national Treasury,
and any indirect or arbitrary procedure cannot fail to
disgrace our country in the estimation of the whole civi
lized world.

NATIONALITY OF THE DEMOCBATIC PAETY
AND ITS IMPOETANCE TO THE UNION.

House of Representatives, March 31, 1858.

At this time the bond of fraternity between the Northern and
Southern States had been weakened by agitating the question of
slavery in Kansas. Mr. Ward foresaw that the result might be a
forcible disturbance of the harmony of the Union. He believed
that no prophetic spirit was required to foretell the disastrous
consequences that might ensue, and hoped to avert them and dis
miss the discussion from the halls of Congress, by admitting Kan
sas as a State, when her people would have the usual power to
make such changes as they may think proper in their government,
subject to the Constitution of the United States.
Mr. Chairman: The subject of admitting Kansas as a
State under the Lecompton Constitution has been so fully
and ably discussed by the distinguished members of this
honorable body, that no new view can be presented of the
immediate points in issue. It has occupied the attention
of Congress until, I am sure, the whole country must be
wearied of the discussion. It is a matter of deep regret
that so large a portion of the time of this Congress has
been thus absorbed. The nation, has just passed through one
of those periodical financial revulsions which result from
inflated issues of bank paper, overtrading, and speculation,
leaving thousands in hopeless bankruptcy, all branches
of industry arrested, and commerce paralyzed ; and yet
nearly four months of the session are gone and. not one
effort has been made, one word of hope or consolation
uttered, or any measure of relief brought forward in
Congress that exhibits an interest, or sympathy even,
with those upon whom calamity has fallen so heavily.
A sectional and political excitement has been engendered,"

NATIONALITY OF THE DEMOCEATIC PAETY. 237
which, while it may not precipitate a dissolution of the
Union, weakens that bond of fraternal intercourse which
should always exist between different sections of our
common country, My position was early taken from a
deep conviction of duty to the nation and my party ; my
constituents have left me free to take such a course as my
judgment dictated ; and whether I meet with their appro
bation or not, I know they will accord to me an honesty
of intention and a rectitude of purpose. While my own
immediate constituents have confided in my judgment, I
have not been unmindful that the united democracy of
the city of New York, of which my district is a part, and
the local organizations, have cordially approved of the
action of their Bepresentatives who sustain the admission
of Kansas under the Lecompton Constitution ; that the
democratic press, the democratic members of the Legis
lature, and the leading men of their party present an un
broken front in support of the Administration, and ex
hibit a unity of action that has not been witnessed in our
State for many years upon any other prominent public
question. In addition to this concentration of public opinion, I
have not been insensible to other influences. The city of
New York is the largest commercial city in the Union.
In 1856-57, five-eighths of the total imports into the
United States were imported into that city ; one-third of
the exports, one-third of the domestic produce, and over
one-half of the foreign produce, were exported therefrom ;
and there were collected at the custom-house there within
the same time, forty-three and a half millions of dollars
upon dutiable imports ; its banking capital, exclusive of
that of private bankers, in 1857, amounted to sixty-five
and a half millions, and it also has many more invested in
other corporations, and in domestic manufacture and
trade. These, too, are but a part of the vast interests
that centre there. These sources of wealth, power, and
greatness cannot but suffer by the continued agitation of
this Kansas question, ending as it may in disturbing the
harmony of the Union, without resulting in any practical
good to the persons the slavery agitators desire to benefit.
It is not to be denied that we are a commercial people,

238 NATIONALITY OF THE DEMOCEATIC PAETY.
and that to commerce we are indebted for our advance
ment, growth, and prosperity as a nation. The majestic
vessels which carry our products to other climes, pene
trating every sea-port, bear with them civilization, and
instruct other nations that a power here exists that can
not be disregarded. The commercial prosperity of my ¦
city, the whole country, the onward progress of commerce,
and the agricultural and the other departments of indus
try, are involved in the public questions which from time
to time agitate the country. Impressed with the value
and importance of the Union to my constituents, I find
reasons, in addition to party considerations, for pursuing
the course best calculated to end the present agitation,
and once more restore amity and good feeling. No one
who has observed closely the events in Kansas for the
last few years can fail to trace to its proper source the
present excitement, and perceive the urgent necessity of
investing the people of that Territory with the rights of
sovereignty, so that they may exercise the functions of a
State government, and relieve Congress from further in
terference. No analogy can be drawn between the griev
ances of the American colonies prior to the Bevolution,
as attempted by my colleague [Mr. H ask in], and the al
leged complaints of a part of the people in Kansas. In
the former case, Great Britain persisted in controlling
local affairs ; and in the latter, Congress desires,- in the
most speedy way, to confer all power upon the citizens of
that Territory to manage their own affairs in their own
way, subject to the Constitution of the United States.
Mr. Chairman, from the course the debate has taken,
an apprehension would prevail with those not cognizant
of the facts that a foul and deep wrong was about to be
perpetrated upon the people of Kansas ; that the provi
sions of the Kansas-Nebraska act were to be violated, and
the platform adopted at the Cincinnati Convention relat
ing to the question of slavery ignored. To demonstrate
that this is mere clamor, it is proper that I should briefly
refer to a few antecedent events. The act referred to,
passed in 1854, has this provision :
" When admitted as a State, the said Territory or any portion
of the same, shall be received into the Union, with or without

NATIONALITY OF THE DEMOCEATIC PAETY. 239
slavery, as their constitution may prescribe at the time of their
admission ; it being the true iiltent and meaning of this act not
to legislate slavery into any State or Territory, nor to exclude it
therefrom, but to leave the people thereof perfectly free to form
and regulate their domestic institutions in their own way, sub
ject only to the Constitution of the United States."
The territorial government of Kansas was organized
under the act containing this section. The resolutions of
the Cincinnati Convention, relating to slavery and territo
rial organization, were as follows :
" And that we may more distinctly meet the issue on which a
sectional party, subsisting excl asively on slavery agitation, now
relies to test the fidelity of the people, North and South, to the
Constitution and the Union —
" 1. Resolved, That claiming fellowship with, and desiring the
co-operation of, all who regard the preservation of the Union un
der the Constitution as the paramount issue — and repudiating all
sectional parties and platforms concerning domestic slavery,
which seek to embroil the States, and incite to treason and armed
resistance to law in the Territories ; and whose avowed purposes,
if consummated, must end in civil war and disunion — the Amer
ican democracy recognize and adopt the principles contained in
the organic laws establishing the Territories of Kansas and Ne
braska as embodying the only sound and safe solution of the slav
ery question upon which the great national idea of the people of
this whole country can repose in its determined conservatism of
the Union — non-intebfeeence by Congbess with slaveet in
State and Teeeitoev, oe in the Disteict of Columbia.
" 2. That this was the basis of the compromises of 1850, con
firmed by both the democratic and whig parties in national con
ventions, ratified by the people in the election of 1852, and right
ly applied to the organization of Territories in 1854.
" 3. That by the uniform application of this democratic prin
ciple to the organization of Territories, and to the admission of
new States, with or without domestic slavery, as they may elect,
the equal rights of all the States will be preserved intact, the origi
nal compacts of the Constitution maintained inviolate, and the
perpetuity and expansion of this Union insured to its utmost ca
pacity of embracing, in peace and harmony, every future Ameri
can State that may be constituted or annexed with a republican
form of government.
" Resolved, That we recognize the rights of the people of all
the Territories, including Kansas and Nebraska, acting through
the legally and fairly expressed will of a majority of actual resi
dents, and whenever the number of their inhabitants justifies it, to

240 NATIONALITY OF THE DEMOCEATIC PAETY.
form a constitution, with or without domestic slavery, and be ad
mitted into the Union upon terms of perfect equally with the
,other States."
It will be observed that neither the act nor resolution
contemplated that the constitution of Kansas should be
submitted to the people. They intended, unquestionably,
that the people should have power to " regulate their
domestic institutions," but whether through a submission
or a convention was left undetermined. A sentiment and
feeling, however, grew up during the canvass that the
slavery clause should be submitted, and was acquiesced
in, which would have been a full compliance with the act
and the platform, leaving the constitution otherwise to
be formed in such manner as the people judged best. I
do not mention these facts as approbatory of non-submis
sion, for I should have preferred that the whole constir
tution had been voted upon. But whether that could or
could not have been done, it rested with the people and
the convention to decide. Such has been the uniform
practice, I believe, relating to the territorial action for
the admission of new States, except when controlled by
legislative action. I mention this because my colleague
[Mr. Haskin] has sought to create the impression that
the question of submission of the whole constitution en
tered into the last presidential campaign as a distinct
issue. Whatever individuals may have done, I assert
that it was not then made a part of the democratic
creed. In confirmation of this position I cite the follow
ing passage from the address of acting-Governor Stanton,
under date of April 17, 1857 :
" The government especially recognizes the territorial act which
provides for assembling a convention to form a constitution with
a view to making application to Congress for admission as a State
into the Union. That act is regarded as presenting the only test
of the qualification of voters for delegates to the convention, and
all preceding repugnant restrictions are thereby repealed. In this
light the act must be allowed to have provided for a full and fair
expression of the will of the people, through the delegates who
may be chosen to represent them in the constitutional convention.
I do not doubt, however, that, in order to avoid all pretext for re
sistance to the peaceful operation of this law, the convention itself

NATIONALITY OF THE DEMOCEATIC PAETY. 241
will, in some form, provide for submitting the great distracting
question regarding their social institution, which has so long
agitated the people of Kansas, to a fair vote of all the actual bona
fide residents of the Territory, with every possible security against
fraud and violence. If the constitution be thus framed, and the
Juestion of difference thus submitted to the decision- of the people,
believe that Kansas will be admitted by Congress without delay
as one of the sovereign States of the American Union, and the
territorial authorities will be immediately withdrawn."
This question of submission has recently arisen, and
has been seized upon since the commencement of this
Congress, and made the basis for assailing the President
of the United States for an honest and patriotic discharge
of his high duties. The President, in his instructions to
Governor Walker, neither intended nor expected that
any other question than that of slavery was to be sub
mitted. In his message transmitting the Lecompton Con
stitution to Congress, he says :
"No person thought of any other question. For my own part,
when I instructed Governor Walker, in general terms, in favor
of submitting the constitution to the people, I had no object in
view except the all-absorbing question of slavery. In what man
ner the people' of Kansas might regulate their other concerns
was not a subject which attracted my attention. In fact, the
general provisions of our recent State constitutions, after an ex
perience of eighty years, are so similar and so excellent that it
would be difficult to go far wrong at the present day in framing
a new coustitution.
" I then believed, and still believe, that, under the organic act,
the Kansas Convention were bound to submit this all-important
question of slavery to the people. It was never, however, my
opinion that, independently of this act, they would have been
bound to submit any portion of the constitution to a popular vote,
in order to give it validity. Had I entertained such an opinion,
this would have been in opposition to many precedents in our
history, commencing in the very best age of the Eepublic. It
would have been in opposition to the principle which pervades
our constitutions, and which is every day carried out into prac
tice, that the people have the right to delegate to representatives,
chosen by themselves, their sovereign power to frame constitu
tions, enact laws, and perform many other important acts, without
requiring that these should be subjected to their subsequent ap
probation. It would be a most inconvenient limitation of their
own power, imposed by the people upon themselves, to exclude
16

242 NATIONALITY OF THE DEMOCEATIC PAETY.
them from exercising their sovereignty in any lawful manner
they think proper. It is true that the people of Kansas might,
if they had pleased, have required the convention to submit the
constitution to a popular vote ; but this they have not done. The
only remedy, therefore, in this case, is that which exists in all
. other similar cases. If the delegates who framed the Kansas Con
stitution have in any manner violated the will' of their constitu
ents, the people always possess the power to change their constitu
tion or their laws, according to their own pleasure."
The alleged grievance of the republicans in Kansas,
arising out of the non-submission, is not of such a char
acter as would authorize us to reject the admission of
Kansas as a State under the Lecompton Constitution.
They had also an opportunity to vote for delegates to
form the constitution, when that instrument was sub
mitted with slavery or without slavery, and they refused
to exercise the right. But it is urged that they could
not vote for or against slavery without voting for the
constitution. Admitting this, I would ask, who are to
blame ? Surely those who abstained from exercising the
right of popular sovereignty when the delegates were
elected to the constitutional convention. Here is a wil
ful and repeated determination by them not to take part
in any proceeding which recognized the Territorial Leg
islature ; and this^omission, in my judgment, estops them
from any claim upon, or right to, our sympathies. Gov
ernor Walker, in referring to the selection of delegates,
distinctly warns them what would be the consequences
if they should not participate in the election. He says :
" The people of Kansas, then, are invited by the highest au
thority known to the Constitution to participate freely and fairly
in the election of delegates to frame a constitution and State gov
ernment. The law has performed its entire appropriate function
when it extends to the people the right of suffrage, but it cannot
compel the performance of that duty. Throughout our whole
Union, however, and wherever free government prevails, those
who abstain from the exercise of the right of suffrage authorize
those who do vote to act for them in the contingency, and the
absentees are as much bound under the law and constitution,
where there is no fraud or violence, by the act of the majority of
those who do vote, as if all had participated in the election.
Otherwise, as voting must be voluntary, self-government would

NATIONALITY OF THE DEMOCRATIC PAETY. 243
be impracticable, and monarchv or despotism would remain as the
only alternative."
This is the true doctrine, and I have never heard it
questioned. I firmly believe that, judging by the past
acts of the republicans of that Territory, if this constitu
tion be sent back the same obstinacy and difficulty will
exist. It was their deliberate intention that the constitu
tion should be presented here with slavery to keep up that
excitement, and to further aid and abet those who seek
to break down the democratic party, and this honorable
body will fail to assert its rights and protect its dignity
in permitting its attention longer to be occupied with this
subject and these local contentions.
The motives and acts of the republicans have been
such as cannot be recognized without overturning all
government, law, and order. The evidence is unques
tioned and overwhelming, that they have been in a state
of rebellion to the government since the meeting was con
vened on the 14th or 15th of August, 1855, which resulted
in the convention, held the 19th September of that year,
which framed the Topeka Constitution, to be put in
operation in subversion of the territorial government
established under the authority of Congress. The or
ganization under that instrument, tke assembly of its
Legislature, its acts, the presentation of that constitution
to Congress, the passage of the bill admitting Kansas a
State under it by the republican members of the House
of Bepresentatives, and its rejection by the Senate, the
creation of armed forces in Kansas to sustain this revolu
tionary movement, are now matters of history. These
occurrences demonstrate the position I assume, and which
is sustained by the President in his message, February 2,
1858 :
" This government [territorial] would long since have been sub
verted had it not been protected from their assaults by the troops
of the United -States. Such has been the condition of affairs since
,my inauguration. Ever since that period, a large portion of the
,, .people of Kansas have been in a state of rebellion against the
government, with a military leader at their head of a most tur
bulent and dangerous character. They have never acknowledged,

244 NATIONALITY OF THE DEMOCEATEC PAETY.
but have constantly renounced and defied, the government to
.vhich they owe allegiance, and have been all the time in a state
of resistance against its authority. They have all the time been
endeavoring to subvert it, and to establish a revolutionary govern
ment, under the so-called Topeka Constitution, in its stead. Even
at this very moment the Topeka Legislature is in session."
Again he says :
" The truth is, that, up till the present moment, the enemies of
the existing government still adhere to their Topeka revolutionary
constitution and government. The very first . paragraph of the
message of Governor Robinson, dated the 7th of December, to the
Topeka Legislature, now assembled at Lawrence, contains an open
defiance of the Constitution and laws of the United States. The
Governor says: 'The convention which framed the constitution
at Topeka originated with the people of Kansas Territory. They
have adopted and ratified the same twice by a direct vote, and.
also indirectly through two elections of State officers and mem
bers of the State Legislature; yet it has pleased the Administra
tion to regard the whole proceeding as revolutionary.'
" This Topeka government, adhered to with such treasonable
pertinacity, is a government in direct opposition to the existing
government prescribed and recognized by Congress. . It is a usur
pation of the same character as it would be for a portion of the
people of any State of the Union to undertake to establish a sepa
rate government, within its limits, for the purpose of redressing
any grievance, real or imaginary, of which they might complain,
against the legitimate State government. Such a principle, if
carried into execution, would destroy all lawful authority and
produce universal anarchy."
In these revolutionary acts may be discerned the object
of the republicans, and that is, to agitate until the To
peka Constitution is accepted. This cannot be done so
long as Congress recognizes the legitimacy of territorial
organization, and it would be subversive of the funda
mental principles of our Government. The question then
arises, does the Lecompton Constitution come to us in a
legal form ? The only mode in which a people of a Terri
tory can form their constitution, or alter it when a State,
is through the Legislature. This is the proper manner of
ascertaining the popular will. Applying this rule to
Kansas, we find that the Kansas-Nebraska act left the
" people of the Territory perfectly free to form and regu-

NATIONALITY OF THE DEMOCEATIC PAETY. 245
late their domestic institutions in their own way, subject
only to the Constitution of the United States." Acting
upon the power thus conferred, proceedings were had
authorizing the election of delegates to form a constitu
tion. Such election was held ; the convention assembled
at Lecompton, and adopted the constitution now presented
to us for our action. I have already disposed of the objec
tion that but a small part of the voters exercised their
right. The questions then arise, what can and should
Congress do in the premises, and what power does it
possess ?
The Constitution provides that new States may be ad
mitted by the Congress into this Union, and " the United
States shall guarantee to every State in this Union a
republican form of government." The Lecompton Con
stitution is legally framed, presented, and is republican
in form, and the Territory should be admitted at once as
a State under the power thus conferred. It has been
urged that even if a part of the people would not vote,
they should still be protected against their own wrongful
omission. I am free, to say, Mr. Chairman, that I should
feel reluctant to participate in any act that would inflict
a wrong upon the citizens of Kansas, and would not do
it knowingly. I would not vote for a measure that I
believed would fasten upon them a permanent constitu
tion that could not be altered or amended ; but, sir, I can
see no wrong in giving them a republican constitution,
and conferring upon Kansas the powers of a sovereign
State. I have examined the provisions of that constitu
tion, and find it is as democratic as that of other States.
The following liberal provision is in the bill of rights :
" All political power is inherent in the people, and all free
governments are founded on their authority, and instituted for
their benefit ; and therefore they have at all times an inalienable
and indefeasible right to alter, reform, or abolish their form of
government in such manner as they may think proper."
This is a full reservation of power by the people, ex
cept so far as its exercise is restricted by the constitution.
Taking the position I have, that an alteration of such an
instrument can only be effected by legislative action, ex-

246 NATIONALITY OF THE DEMOCEATIC PAETY.
•
cept in case of revolution, and believing, with the late
lamented Webster, the great expounder of constitutional
law, " that no single constitution has ever been gotten up
by mass meetings," that " there must be some mode of
ascertaining the public will, somehow and somewhere ;"
and, " if not, it is a government of the strongest and
most numerous," I can only recognize the right of the
people of Kansas to change their constitution in the
manner prescribed thereby. If Kansas be admitted under
the Lecompton Constitution, can it be altered ? and, if so,
when ? It provides for a change as follows :
"Sec. 14. After the year 1864, whenever the Legislature shall
ethink it necessary to amend, alter, or change this constitution,
they shall recommend to the electors at the next general election,
two-thirds of the members of each House concurring, to vote for
or against ealling a convention ; and if it shall appear that a
majority of all the citizens of the State have voted for a con
vention, the Legislature shall, at its next regular session, call
a convention," etc.
It seems to me that this section (and I give it as my
opinion only) takes effect infuturo,. and that, until 1864,
there is no restriction that can prevent a prior alteration.
I shall not occupy the attention of the committee in elu
cidating this point — it has already been ably done, and
especially by my friend the honorable member from Penn
sylvania [Mr. Phillips]. I presume it will not be dis
puted that, if Congress or a State Legislature pass a law
to take effect on and after such a day (named), or after
such a time, it cannot take effect or become operative
until the period designated has expired. The same rule
would apply to a constitutional provision. The Topeka
•Constitution has the following :
" Sec. 4. No convention for the formation of a new constitution
shall be called, and no amendment to the constitution shall be,-
by the General Assembly, made, before the year 1865, nor more
than once in five years thereafter."
This contained a restraint or restriction that would
become immediately operative.
The State of New York illustrates, in her action, the

NATIONALITY OF THE DEMOCEATIC PAEIY." 247
effect of both provisions. The constitution of that State,
of 1777, contained no provision for its amendment. The
Legislature, in 1821, passed a law submitting to the peo
ple the propriety of amending the constitution. They
responded in the affirmative. The convention which as
sembled, instead of amending the old one, framed a new
qonstitution, which was accepted. The one thus formed
contained a clause directing the mode of changing it. In
1846, contrary to the restriction, the people, through the
Legislature, called another convention, and formed the
existing constitution.
Mr. Chairman, no serious objections are urged, I be
lieve, against any other part of this constitution except
the slavery provision, or point raised except as to the pro
vision relating to an amendment. It may be said to have
been recognized in solemn form by the whole people of
that Territory ; for, after the constitution was framed, an
election was ordered and held under its provisions for the
election of State officers and the Legislature. In law,
this is an estoppel, and amounts to an assent.
Suppose, sir, that instrument could not be altered
before 1864 ; what injury would result thereby to the
party that desire it to be a free State ? None. It is con
ceded that there are now in Kansas but about one hun
dred and sixty slaves. With a supposed free-State ma
jority in the Territory, with climate and soil adverse to
the permanent existence of slavery, I do not believe that
Southern gentlemen would desire to take their slaves
there, so that the present number would not be greatly
increased before the people could amend their constitu
tion. The public welfare, the repose of the nation, and,
indeed, every consideration that can influence the patriot
and lover of his country, demand that this subject should,
be promptly dismissed from the halls of Congress. Kan
sas admitted, and her people will then adjust their own
internal affairs, peace be restored, a more natural and
healthy flow of immigration than that sent forward by
the emigrant aid societies will occur, and peaceful pur
suits be cultivated, instead of threatening warlike arma
ments, If Kansas be not admitted, the excitement now
pervading the country will be continued, the subject will

248 NATIONALITY OF THE DEMOCEATIC PAETY.
again be presented at the next session of Congress, im
peding all legislation, and perhaps at the following one ;
with each protraction the waves of angry and embittered
feeling rolling higher and higher. It does not require a
prophetic spirit to foretell the disastrous consequences
that may ensue.
Political history presents curious phases. It shows
the members of the opposition party to have opposed
all the leading measures of the democratic party in
times gone by, until public sentiment indicated their
adoption as part of the public policy of the country, and,
after being driven from point to point, they sought shel
ter under the slavery agitation, in which refuge they now
remain, pressing it on regardless of consequences to the
Union. In the last Congress they were the opponents of
non-intervention, or popular sovereignty, and in favor of
Congressional interference, and opposed to an enabling
act ; now we find them in favor of an enabling act and
in favor of popular sovereignty, and what the next phase
may be to-morrow may determine; it is not unlikely
that we may find them voting for the admission of a
slave State. They have the warmest sympathy for
" bleeding Kansas," and cry fraud ! fraud ! and charge
high crimes upon the democratic party ; but they have
none for the great city of New York, whose vested rights
were ruthlessly invaded by a republican Legislature, and
stripped of many of its chartered privileges, to give spoils
and patronage to their adherents. I have been taught to
believe that " charity begins at home."
Another singular spectacle is presented : we find sev
eral honorable members, who fought side by side with us
in the great political battle which resulted in the recog
nition of non-intervention in local affairs of Territories,
recently voting for the appointment of a special commit
tee to intervene in its worst form in the domestic affairs
of a Territory. Among the latter I find my colleague
[Mr. Haskin]. It was with feelings of regret and mor
tification that I heard him utter the following language :
" In arriving at the conclusion to vote against the admission of
Kansas under the Lecompton Constitution, I have been aided and

NATIONALITY OF THE DEMOCEATIC PAETY. 249
influenced by a desire to faithfully represent the constituency
which elected me, and to fulfil the pledges which I made them
upon accepting my nomination. To them I am responsible for
my course here ; and being honestly convinced that my opposi
tion to the admission of Kansas under the Lecompton Constitu
tion — repudiated and protested against, as it is, by at least three-
fourths of her people — meets with the approval of a large
majority of my constituents, whose wishes I am in honor bound
to obey, I shall vote against the admission of Kansas under the
Lecompton Constitution."
The honorable member represents the counties of
Westchester, Bockland, and Putnam. I was born on
the banks of the noble Hudson, in the county of West
chester; the traditions of the home of my family clus
tered around and have been identified with it for more
than a century ; my early life was spent in rambling
among the rocks, hills, and dales of that beautiful region,
until they became familiar as household words. It is
classic ground, hallowed by the footsteps of the Father
of his Country and his compeers ; the scene of some of
the most important events of the war of independence.
Revolutionary patriots now sleep the sleep of death be
neath its green sod ; and there rest, too, the remains of
Paulding (and his associates), the capturer of Andre,
whose last request to his medical attendant was, " Please
tell all those who ask after me that I die a true democratic
republican," and whose descendant my colleague so re
cently defended on this floor. Surrounded by such asso
ciations, the democracy of that section cannot, will not
falter in a crisis like this ; and I am justified in saying
that my colleague does not represent the wishes of the
constituents who honored him with his election. Public
meetings have been held in the several counties of the
district, condemning his course, and the democratic press
is unanimous against it. My colleague will bear in mind
that his predecessor, in 1854, voted against the Kansas-
Nebraska hill in opposition to the wishes of his constitu
ents. He boasted that he could be returned upon that
vote; not being nominated, he ran, in 1856, as an inde
pendent candidate, and received, so small a number of
votes that I did not find his name mentioned in the offi

250 NATIONALITY OF THE DEMOCEATIC PAETY.
cial canvass. Whether my colleague is to share the same
fate remains to be seen. While I desire that the honor
able member shall take all the credit he is entitled to
for his advocacy in times past of the principles of the na
tional democracy, I cannot perceive how it can justify
his present course. Others before him have been distin
guished for consistent political action, and yet, by a
single act, have blighted the good effect of all their ante
cedents, and destroyed their political future. Without
intending anything personal, but by way of illustration,
I would say that Arnold was esteemed a true and loyal
officer, and had done the State some service, until he
committed treason against his country. Will it be
urged that his treason was therefore justified ?
I have heard much during this debate of " reading
membei's out of the party." Sir, no formal pronuncia-
mento is required for that purpose. jThey are out by
the operation of their own act ; they are in the position
of the soldier who, in the hour of battle, deserts to the
enemy ; the penalty follows. It is idle to suppose that,
when gentlemen proclaim the result of their act will be
to break down the national party, and elevate a sectional
one with its attendant consequences, and are doing all
they can to attain that object, they can remain, when the
act is completed, in full communion with the party they
seek to destroy. Their proper place is with the opposi
tion, and time will soon place them in that association.
History is full of examples of conflicts between individ
uals and the party ; but each instance has resulted in a
signal failure of the assailant. The contest in such cases
is as unequal as that between a mere guerilla band and a
powerful and well-organized army. Men, as individuals,
are apt to exaggerate their power when directed against
organizations. In struggles with the democratic party,
men are but pigmies contending with giants. They may
be compared to the fly on the wheel; the fly is crushed,
and the wheel rolls on. Whenever a great issue, as in
the present case, arises, involving perhaps the very exist
ence of the Union, it is the duty of every man having
at heart the welfare of the nation to sustain the Admin
istration in its patriotic course, and more especially those

NATIONALITY OF THE DEMOCEATIC PAETY. 251
who hold their seats in this honorable body, and were
elected upon the same platform with the present distin
guished chief.
Sir, I entreat these anti-Lecompton democrats to pause
in the step they are about to take in the opposition.
You concede the great purpose and mission of the na
tional democratic party; you concede, it is the great
bulwark that alone can arrest the ascendency of section
alism; you concede that such a triumph may result in a
separation of the States, bringing in its train calamities
that may be conjectured but not foretold; and yet you
stand ready to strike the parricidal blow. Should this
measure be defeated by your votes, and the disaster flow
from' it which has been predicted, you cannot fail to be
regarded hereafter as the parricides of the Bepublic.
The Northern national democracy stands now, and will
continue to stand hereafter, by the principles established
by the Kansas-Nebraska act, and those enunciated at
Cincinnati. We insist that the Territories, as well as
States, have the sole right to determine their local and
municipal matters, and that each should be let alone to
manage them in their own way. This course must ulti
mately force the slavery agitation out of Congress, not
withstanding the embarrassment which has thus far
attended the application of the principle to Kansas.
The present difficulty has grown out of the premature
immigration forced upon the Territory by slavery agita
tors which went there not to cultivate the soil, but to
foster the excitement which has of late convulsed the
whole country, and of which all, I believe, are heartily
tired. This rule adopted will not produce like conse
quences again. There may be some struggle when a
constitution with slavery is presented, but I believe pub
lic sentiment will determine that it shall be no bar to
admission on that ground. Once firmly established and
acted upon in good faith, slavery will be left to the law
of climate and soil to control it. This law, which has
been silently working since the adoption of the Constitu
tion, has caused the abolition of slavery in six of the
original States, and either abolished or prohibited it in
nine of the new States since .admitted, and which has

252 NATIONALITY OF THE DEMOCEATIC PAETY.
now brought to us two, if not more, free States for ad
mission into the Union, thereby destroying the equilib
rium between the slave and free States, imposes, in my
judgment, a higher duty upon the national democracy of
the North than has hitherto existed, to see that the com
promises of the Constitution are maintained, and the
rights of the States secured. Its action in the past is a
guaranty for the future. All that the Southern States
demand is to be allowed to control their own affairs, and
equal rights with the other States. When a new State
seeks admission, and its people desire slavery, Congress
should not interpose objection, if the constitution be re
publican in form, but should at once admit it into the
Union. The national democracy are fully committed
upon this point, and will redeem the pledge.
My colleague [Mr. Haskin], in his remarks, uses the
following language :
" I honestly believe that, but for patronage, fast becoming the
bane of the Republic, not ten democratic members from the free
States would be found supporting the Lecompton Constitution as
it has been presented to us."
I hold that no member of this honorable body should
make even a vague charge of this grave character against
his associates, even from belief, unless founded upon some
fact. If the integrity and honor of any gentleman has
yielded to the seductions of patronage and power, it is
proper and due to the dignity of this honorable body that
it should be known, and the person or persons named.
I therefore call upon my colleague [Mr. Haskin] to give
this information, and the facts upon which his belief is
founded ; my respect for this honorable body forbids
that I should characterize this charge in such terms as it
deserves. I await his response : I can make great allow
ance for excitement incident to debate. The remarks of
my colleague, however, having been prepared in advance,
and read from a printed copy, indicate premeditation and
deliberation. While my colleague makes an assault on
the one side, the honorable member from Illinois [Mr. -
Morris], in saying that the " Northern men who vote for
the admission of Kansas under the Lecompton Constitu-

NATIONALITY OF THE DEMOCEATIC PAETY. 253
tion are going to their political graves " (I do not quote
the exact language, not having his remarks before me),
pays us a high compliment, for which, as one, I thank
him. It shows his conviction that we have been guided
by higher motives than selfish considerations.
Sir, I have heard it stated on this floor, and held in
terrorem over the Northern Lecompton members, that the
Kansas-Nebraska act republicanized the last Congress.
Without desiring to refer in detail, I desire to state a
fact not generally understood. The whole country has
been made aware long since of the division in the demo
cratic party of the State of New York from 1853 to 1856.
It is to be deplored, but nevertheless is true, that had the
Hard and Soft vote been united upon single candidates
in 1854, it would have secured eleven more members in
the last Congress — seven by a majority vote, and four by
a plurality — making a total of fifteen, and given to the
democratic party in Congress a decided majority. I may
also say that the twelve democratic members from that
State in the present Congress were returned upon the
principle contained in the Kansas-Nebraska act.
In times gone by, the parties in this country were
divided into the democratic and whig parties. Many
glorious battles were fought between them, and many
brilliant and gallant contests were had by the rival leaders
upon this floor upon the great questions which, from time
to time, have agitated the country. As participants in
these intellectual encounters, the names of Calhoun, Clay,
Webster, Benton, and a host of others, now occur to me.
In all the giant efforts of these statesmen — amid all the
heat, zeal, and bitterness of debate and party warfare —
there was one common bond between them, and that was
the love of the Union. The whig . party was national — -
it was glorious to battle with it — it was " a foe worthy of
our steel." In its triumphs, however much we might
differ from its policy, the country rested secure upon its
nationality. The great issues between them were decided
by the people in favor of the democratic party, and the
contentions ceased. The great leaders of the whig party,
Clay and Webster, having lived the period allotted to
man, and devoted their whole lives, from their manhood

254 NATIONALITY OF THE DEMOCEATIC PAETY.
to their graves, to the service of their country, full of
honors, passed away to the silent tomb, amid grieved
hearts, bearing to their eternal home the affection and
veneration of their fellow-countrymen. The whig party
ceased to exist, and the opposition party were without a
leading principle. The slavery agitation, which had for
a long time been seen but dimly in the distance, now
culminated in the republican party, and a bitter, sec
tional, and fanatical contest ensued. In this struggle the
national democratic party — lifting itself up to its giant
proportions, reinforced by a part of the national portion
of the whig party, several of whom, I am proud to say,
are now upon this floor cooperating with us, met the
enemy and triumphed. Though defeated, they were not
conquered ; and the war is yet waged.
No intelligent person can be so blind as not to see, in
the success of a Northern sectional party arrayed against
the constitutional rights of the South, that a counter-geo
graphical party must arise. When this occurs, is is easy
to foretell the consequences. I shall not dwell upon it.
In this crisis we can only look to the democratic party in
the future ; it occupies a broad, national platform, and
guards scrupulously the rights of all sections. I believe
in its invincibility and in its great destiny ; its national
ity will preserve it ; the people must see the consequen
ces of its defeat ; and I feel a deep conviction that when
the hour of trial comes, all classes will rally to its sup
port as the only means of preserving the Union, which
they are taught to love and cherish from early childhood.
I love my whole country ; it is with regret that I see
contrasts presented, attempting to show the greater pros
perity of one section or class over another. We are one
aggregated whole — what adds to one part strengthens
the other. Our power and greatness as a nation result
from combination, and from that alone must it increase
and be carried on in the fulfilment of its great future.
This protracted struggle is drawing to a close ; the
President of the United States has taken his position
firmly, and it is our grave and solemn duty to sustain
him. I have taken mine, whatever may be the individual
consequence, and can say, in the language of the lament-

NATIONALITY OF THE DEMOCEATIC PAETY. 255
ed President Jackson, when standing over the rocks of
the Bip Baps, looking upon the ocean, when friends were
deserting him by legions in consequence of his firm course
upon the public measures of his day : " Providence may
change my determination ; but man can no more do it
than he can remove these Bip Baps, which have resisted
the rolling ocean from the beginning of time."

THE TBUE POLICY OF THE GOVEBNMENT AS
TO THE CONDUCT OF THE WAE
WITH A
VIEW TO THE PRESERVATION OF THE UNION.

House of Representatives, January 9, 1865.

The House having under consideration a motion to reconsider
a vote by which it had rejected a joint resolution submitting to
the State Legislatures a proposition to alter the Constitution by
an amendment abolishing slavery, Mr. Ward opposed the pro
posal. He held, in the following speech, that if the right to in
corporate the amendment existed, it was injudicious to exercise
it at the moment when we should desire to bring back the seceded
States to loyalty and obedience. At the same time he opposed
the practical re-admission into the Union, with the right of hold
ing slaves as property, of any State where slavery had been swept
away by the onward march of our armies.
Mr. Speaker: It is not my intention to discuss at this
time and place the causes which have inaugurated the
terrible rebellion which has already cost the Bepublic
such a frightful waste of life and treasure. It is enough
for me to know that a death-blow has been aimed at the
heart of the American Union, to feel indignant at the
outrage and solicitous to avert it. It is enough for me
to know that a sacrilegious attempt has been made to
break up the wisest form of government that human
wisdom ever devised, to feel it my duty to join in the
effort to chastise the perpetrators of so great a crime. I
have not approved of all that has been done under the
sanction of the war power. I have deemed it proper to
protest, in the name of the loyal and law-abiding con
stituency I have the honor to represent on this floor,

THE PEESEEVATION OF THE UNION. 257
against certain acts of the Executive and Congress, which,
in my opinion, have been the means of prolonging this
sanguinary war ; but I am settled in the conviction that
secession is treason, and that as such it must be put down
at all hazards and at any cost. If secession succeed,
republican liberties are lost forever, and the Government,
failing to vindicate its power, would forfeit the consider
ation and respect of every civilized nation on earth. If
the heresy of secession were to be recognized as a canon
of our political faith, there would be an end to our Gov
ernment. Let Louisiana secede unhindered, and then,
when that act has been accomplished, what is to prevent
her from handing that State over to England, or any
other Power, commanding as she does the mouth of the
great Mississippi ? This she most assuredly has a right
to do if she has a right to secede, thus closing up the
"Father of Waters," and excluding all the States on its
borders from a market. The same principles would apply
to other States. Hence the duty of every American
patriot, whatever his station or condition, to uphold the
Government in its efforts to compel the seceded States to
respect the Constitution and the laws of the country.
Upon this conviction of duty I have ever acted since the
first insult to our flag was offered. The same abiding
sense of the responsibility which rests upon me as a Bep-
resentative of the people in Congress will, I trust, carry
me unflinchingly through whatever phase may yet remain
, undeveloped in the fearful drama which has been so long
in process of action. If the conduct of the war had not
been marked by some of the most startling usurpations
of power that ever made a free people tremble for their
liberties, my voice should never have been raised except
in the way of encouragement and sympathy.
Much wonder has frequently been expressed that in this
fearful crisis through which our bleeding country is now
passing, in the awful presence of the grand and sublime
uprising of the people of this nation, no master spirit has
yet risen in the midst of our assemblage capable to stay
the uplifted hand, and gifted with that peculiar sagacity
which employs the acquired light of yesterday in the se
lection- of a path for to-morrow. Whatever may be the
17

258 -THE PEESEEVATION OF THE "UNION.
cause, it cannot be denied that the present crisis has most
signally failed in the production of those towering intel
lectualities whose impress never fails to mark itself deeply
upon the mould of times, and which during all our former
trials as a nation have been wont to direct the destinies
of the Bepublic triumphantly through the fiery paths of
sedition and conspiracy. Hence the blunders and mis
managements which have characterized the conduct of
this war. The spirit which was wont to kindle the voices
of former statesmen as if with a coal from the altar is no
longer manifest in the places of power. Under these cir
cumstances, and in view of the obstacles which we may
yet have to contend with before the blessings of peace
can be restored to -our distracted country, it, behooves
every man in the position I have the honor to occupy,
however humble his pretensions or capacity, fearlessly to
present his views on the great questions now at issue, in
order that out of the very multitude of counsels some
good and practical result may be attained.
I have observed that the more entirely the objects which
stand in the way of the execution of any purpose are ig
nored, the more easy it becomes to lay down plans for the
perfect management of the affairs of the country, military,
and financial. Overlook the rivers and the mountains,
the distance and the atmospheric phenomena, the reluct
ance upon one side, and the resistance upon the other, and
to construct the most infallible programme for the sup
pression of the rebellion is one of the easiest of un
dertakings. To overlook the laws of trade, the limits of
the popular power, and the propensity of mankind to
prefer their own to any other interest, and to prescribe a
financial policy which shall carry the country safely
through the war and its consequences is a work not above .
the powers of the most ordinary capacity. Individuals
entirely able at a single effort or less to solve all the
problems of our condition are easily to be found. The
country is rather redundant of them than otherwise. They
cross us on all sides, in the newspapers and on the street
corners. But that which alike marks all 'their solutions
is the omission of more or less and sometimes of all the
real elements of the calculation. " On to Bichmond " is

THE PRESEEVATION OF THE UNION. 259
easily said. " Order a levy en masse, and advance all along
the line " is a suggestion so magnificent as to give an air
of pusillanimity to the inquiry whether its execution is
practicable. Issue legal-tender notes ad libitum, tax
without measure, and borrow without limit, are pieces of
advice which are all the more acceptable, perhaps, because
they who propose them refrain from disclosing that there
are points beyond which neither of these sources of reve
nue can be made available. For my own part, sir, I shall
not take upon myself the invidious task of attempting to
solve the perplexing problem of the war, nor yet of sug
gesting any panacea for the cure of existing evils. I
simply desire to offer a few remarks which are forced
upon me by the constantly -recurring deviations from the
avowed object for which this devastating war was origi
nally and authoritatively declared to be waged. I feel
that I am somewhat entitled to the indulgence of the
House when I venture to raise my voice as a warning to
those in power that the mass of the people no longer re
cognize them as their representatives in a glorious struggle ;
that they no longer consider the war as a war for the sal
vation of the country, but as having degenerated to a
strife about a collateral issue utterly foreign to the cause
which they entered so heartily to sustain.
Sir, when the rebellion first broke out I had the honor
of being a member-elect of this body, and from the day
that I took my seat on this floor I have never sought to
embarrass the Government in its efforts to bring back the
seceded States under the glorious flag of that Union which
had protected them all so long and so well.
In the extra session of 1861, the House of Bepresenta-
tives declared by a solemn act " that the war was not
waged upon our part in any spirit of oppression, nor for
any purpose of conquest or subjugation, nor for the pur
pose of overthrowing or interfering with the established
institutions of those States, but to defend and maintain
the supremacy of the Constitution, and to preserve the
Union with all the dignity, equality, and rights of _ the
several States unimpaired." Had the noble and patriotic
Sentiments enunciated in that resolution been made the
rule of action by both branches of the Government, the

260 THE PEESEEVATION OF THE UNION.
war would, I believe, before this time have been termi
nated ; for whatever may be said of the proud and in
domitable spirit with which the people of the South have
carried on the war, and of their attitude of haughty de
fiance, I am fully convinced that if the olive branch had
been tendered in that spirit of magnanimity which becomes
a dignified Government after it has vindicated its power,
the repentant rebels, at least the greatest portion of them,
seeing the folly of their ways, would long ere this have
returned to their allegiance.
This Government did not begin the war. The seceded
States, at the time the rebellion was inaugurated, had
nothing to complain of ; no overt act had been committed
by the Government ; there had been no interference with
any of their prerogatives ; none of their citizens had
been burdened by taxation ; all their rights and institu
tions were under the protection of the United States.
They have gone out from among us under the false pre
tense that they foresaw in the future that they should
lose their just political power and influence in the Union,
and acting upon this self-imposed delusion, they had
drawn the sword wantonly and wilfully upon the Govern
ment and loyal people of. the United States.
What I mean by the term olive-branch, sir, is the exhi
bition of a generous and conciliatory spirit, which I re
gret to say has not hitherto characterized our invitations,
to the people of the seceded States to come back and be
restored to the inestimable privileges of American citizens.
All our legislation on the subject, whether we look to
the Confiscation Bill, or to those other severe enactments
which have called forth so much bitter acrimony on this
floor, has been marked by a spirit of vindictiveness and
oppression utterly unworthy of a great and a Christian
nation. Even the proclamation of amnesty by President
Lincoln fails to hold out any hope of satisfactory re
sults, because its provisions are not in accordance with
the fundamental principle of self-government, that the
majority must rule.
There is in this plan for restoration so triumphantly
heralded by' the friends of the Administration an attempt,
at usurpation so offensive to the people that no mind

THE PEESEEVATION OF THE UNION. 261
regulated by the usual dictates of sanity, and guided by
the wisdom of the Constitution, could ever have elabor
ated. The proposition made by the sole authority of the
President to constitute one-tenth of the citizens of a
State the whole State is so preposterous that it can
scarcely be regarded as serious. Were such a proposition
to be acted upon, the Government would find itself placed
even in a more awkward position than it occupies now,
for it would have to maintain a standing army in each of
the States thus surreptitiously brought into the Union, in
order to protect the dominant minority from violent acts
on the part of that overwhelming majority which, by
this anomaly in legislation, would be totally disfran
chised. Sir, I am as strongly opposed as any of my compeers
on the other side of the House to the re-admission into
the Union, with the right of slave property, of any
State where slavery has been swept away by the onward
march of our armies. Whatever may be the object of
the war, the practical result is the same ; and that is, the
overthrow of slavery in all those portions of slavehold-
ing territory which our armies subjugate ; in these the
relation of master and slave ceases to exist. The masters
retreat as our forces advance, and carry with them a
portion of their slaves, but the greater part remain be
hind and take refuge within our lines; and the ques
tion is, what shall become of them, and what are our
duties in regard to them ? The American people have
behaved admirably since this war broke out. They
have shown an energy and elasticity of spirit, a power
of organization and combination, a readiness to make
sacrifices, a patriotic devotion worthy of the highest
praise. Let us not forget the claims of those unhappy
freedmen whom we have deprived of their masters— their
natural guardians and protectors.
The war is no longer waged for the purpose of restor
ing the Union of all the sovereign States that are and
ever were in our great national communion, with all the
purity and strength of our precious Constitution undim-
med and untarnished, but for the newly-avowed object
of subjugation, extermination, and emancipation, until

262 THE PEESEEVATION OF THE UNION.
every Southron shall be reducedrto the_most crouching
and abject submission — not to the Constitution, but per
sonally to those who hold the sword and the purse of
the country. Sir, I am not prepared to join in any such
crusade. I occupy the same platform to-day that I did
on the breaking out of the rebellion. I am in favor of
a vigorous prosecution of the war, by all constitutional
means, for the purpose of destroying the military power
, of the rebellion ; but I am not willing to prolong this
war a moment longer than is necessary to effect its legi-^
timate object. The consequences of a mistaken policy
are too serious to suffer me to be governed by the spirit
of faction on the one hand, or influenced by subserviency
to power on the other. We have now arrived at that
stage in the progress of the war when we should consid
er the question of offering to the people of the rebel
States such conciliatory terms as are constitutional, just,
and practicable, and most likely to lead to the re-estab
lishment of the national authority over the whole coun
try. The terms and conditions offered to the insurgents
in the President's proclamation of amnesty are only cal
culated to inflame their hatred of the North and impel
them to renewed resistance. They are flagran tly at vari
ance with the declarations voluntarily made to the people
of the loyal States and published to the world. I desire
to see such terms offered as a proud and already chast
ened people can accept without positive degradation to
themselves — terms which shall recognize the existence
of the States with constitutions and forms of adminis
trations — terms, in short, calculated to divide our ene
mies and draw the hearts of the repentant people of the
decaying confederacy toward our Government. When
these honorable terms are rejected, then I shall be willing
to leave events to the harsh and cruel necessities of the
justice which is vindicated by the sword.
But, sir, although the beneficent spirit which pervaded
Mr. Crittenden's resolution, to which I have referred, was
not allowed to exercise its healthy influence over the de
liberations of this body, its provisions were tacitly adopted
as a governing principle in the conduct of the war — so
much so, that when Generals Fremont, Hunter, and

THE PEESEEVATION OF THE UNION. 263
Phelps, issued their proclamations of emancipation, the
President revoked them all, declaring again and again
that he had no right under the Constitution to emanci
pate the slaves. Those who spoke in behalf of the Ex
ecutive, and in elucidation of his views, stated every
where — in the public streets, in conventions, and in the
Legislatures — that the President was determined that
the seceded States on re-entering the Union should be
protected in all their rights. Governor Stanley, who
travelled five thousand miles, it is supposed at the ex
press request of the President, that he might try to per
suade the people of North Carolina out of the rebellion,
stated in his speech of June 17, 1862, delivered at Wash
ington, North Carolina, that Mi". Lincoln was no aboli
tionist, that he was the best friend the South had, and
that all the Administration wanted was peace. Gover
nor Stanley spoke according to instructions, as many
others had done before him in every section of the. coun
try, which had the effect of producing a strong feeling
of reaction throughout the border States, and adding
thousands upon thousands to the recruiting lists.
These assurances, Mr. Speaker, concerning the alleged
objects of the war were of so broad and distinct a char
acter that no man of well regulated mind could avoid
confiding in them. For my own part, I relied as impli
citly upon these solemn pledges as the magistrates of
ancient Borne did on the sybiline books when danger
pressed the eternal city. I should frankly have despised
myself had I suffered a doubt to rise in my own mind as
to the integrity of purpose which governed the action of
the President. All that I paused to consider was, that
when he took his oath of office he swore to maintain the
Union and enforce the laws ; that had he attempted to
trifle with the sacred rights of the people, and allow a
Government to be broken up which he had sworn to
preserve, he would have acted contrary to the require
ments of the Constitution, and deserved to be impeached.
Upon these solemn convictions, I rallied all my feeble
strength to the support of the Government, the Constitu
tion, and the Union, looking upon secession as eternal
war, and recognizing, this great principle — that we are

264 THE PEESEEVATION OF THE UNION.
one people, that one we will remain, and one we will
die. I am welbaware, sir, that my course in sustaining the
war policy of the President has subjected me to consid
erable animadversion, and that my motives of action
have frequently, and sometimes wickedly, been miscon
strued by those who either could not understand the
emergencies of the occasion, or who preferred seeing
this great Bepublic split up into fragments rather than
yield one iota of their prejudices. But, sir, there is
one tribunal to which I appeal with feelings of pride
and confidence from the judgment of disunionists : it is
the tribunal of my conscience. The verdict which I find
recorded there will sustain me under all calumnies and
vituperations. When the day shall come for me to ren
der an account of my stewardship to my constituents, I
shall be able to show them that in denouncing treason
and in sustaining the Government in its efforts to put
down rebels in arms I have been true to myself, to my
country, and to the sternest requirements of the demo
cratic creed. How much the democratic party, acting
as a party, through its organization, may do to bring
back peace to the country, it is impossible to predict.
That will depend upon the steadiness with which it adheres
to what are admitted to be democratic principles. To
expect to return to sound practices in the Government,
through the medium of a party which, from any sugges
tions of expediency, however plausible, departs from its
principles, is, of all expectations, the most irrational.
Peace will return ; the war fury is a passion which
exhausts itself. But, however desirable peace may be,
we ought to be united in the determination that when
it comes it should bring with it the Union of the States
under the Federal Constitution. Those who fail to
recognize this national exigency are not imbued with the
true spirit of democracy ; they have read the signs of
the times to very little purpose. The democratic party
is essentially a party of progress, and those who aspire
to be its leaders ought, at least, to have sense enough to
know that we are in the midst of a great revolution, and
that revolution is progress.

THE PEESEEVATION OF THE UNION. 265
The only issue before the people at this time is the is
sue of union or disintegration. I admit that the country
needs peace, and I am anxious to secure it ; but I do not
want to get it by indirection. In my judgment, the only
feasible plan of restoration is a vigorous prosecution of
the war, or the proffer of conciliatory terms to those who
are willing to renew their allegiance to the Federal Gov
ernment. These are the only paths which lead to peace,
and I wish the people to understand the stern reality of
the fact It is a great mistake, sir, to suppose that po
litical truth and naked fact are meat too strong for their
digestion, and that the reality must be largely diluted
with romance in order to render it palatable to them. I
sincerely believe that the best way to deal with the peo
ple, in order to secure their support to a just cause, is to
place before them the true issue in the most distinct man
ner. I believe, furthermore, that good causes have failed
more frequently through the cowardice and double-deal
ing of professed politicians, under the presumption that
the people could only be made to do right by deceiving
them and playing upon their prejudices, than from all
other causes combined. In the hurry and spirit of the
hour men are a little too apt to think doubt and consid
eration evidences of disloyalty, and caution and patience
vices rather than virtues. This error has been made'
several times since the war began, and has resulted in
depression among the people, when the truth dispelled
the brilliant anticipations of enthusiastic hopes.
It would seem, to a superficial observer, that rapid ad
vances are being made in the overthrow of popular lib
erty, that the people are supine and indifferent on the
subject, that one essential requisite after another of a
popular government is being swept away into the mad
vortex of fanaticism and passion, until hardly the form
of our grand old fabric of constitutional liberty remains
as a mournful memento of the glorious past. To those,
however, who more critically analyze public events, it will
be seen that all grave questions outside of the restoration
of the Union have been merely postponed until the ter
mination of the war. The people have been taught_ to
revere the Constitution and the Union. The conviction

266 THE PEESEEVATION OF THE UNION.
of their judgment is that the structure of our Govern
ment is well adapted to develop the commercial, agricul
tural, and industrial resources of the country, and to pro
mote the general prosperity and happiness. The Consti
tution in its operation prior to the rebellion contained
every safeguard requisite for a prosperous career. The
history of every nation demonstrates that its citizens will
accept the form of government best calculated to give
protection to person and property and to promote the
general welfare. Trade, commerce, agriculture, and all
the industrial pursuits, thrive under a stable government
and languish and perish under the opposite one. Under
the Constitution the equilibrium is well preserved. The
passage of a law requires the co-operation of this honor
able body, the Senate, and the Executive. If we pass
an unconstitutional measure, the Senate operates as a
check; if both bodies pass such an act, the President
can veto it ; if all co-operate, the Supreme Court can in
terpose its decision and declare the act void. I know of
no nation in which the rights of the people are more
carefully and admirably guarded. In addition, this is
the only country in modern times that has thus far suc
cessfully demonstrated the capacity of the people for self-
government. This problem is now on trial. For these
reasons, when the rebellion began, the people, with great
unanimity, rallied to the support of the Government
' without respect to party ; such unanimity continued un
til the prosecution of the war was diverted from the
original object, the restoration of the Union, and a series
of measures were inaugurated, such as confiscation, abo
lition, emancipation, suspension of the writ of habeas
corpus in the loyal States, and others of a like charac
ter, which divided the North and united the South;
abolitionism abolished slavery in the District of Colum
bia; confiscation merely enabled property to be con
fiscated in such parts of the country as have been re
covered from the rebels ; the emancipation proclamation
has done nothing more, as yet, than the legitimate opera
tion of the war power would have achieved, that is, lib
erated slaves where the army has secured possession. It
is evident, in my judgment, that the whole policy of the

THE PEESEEVATION OF THE UNION. 267
Government has been, since the adoption of the Critten
den resolution by this honorable body, to postpone in
definitely the close of the war. Entertaining these views,
I deemed it my duty to oppose all these collateral issues,
such as arbitrary arrests, confiscation, suspension of the
writ of habeas corpus, and the freedom of the press in
loyal States, and emancipation, as having a tendency to
retard a successful issue to this most deplorable war.
Many honorable members of this House for whom I
have great respect, supposed that these measures, great
in themselves, and especially that of arbitrary arrests,
were paramount in the public mind, and would over
shadow all other questions. I concede the gravity of the
point involved, but still, great as that and the other
collateral issues are, the people regarded the life of the
nation and the problem of self-government as paramount,
and desired these issues first settled before permitting
others to engross their attention. The Union restored
or separation accomplished, these grave questions will
then become subjects of serious inquiry, and the culpable
parties be held responsible for the inroads made upon
personal rights and liberty.
In addition to the series of measures to which I have
referred, we are now called upon to sanction a joint
resolution to amend the Constitution so that all persons
shall be equal under the law, without regard to color,
and so that no person shall hereafter be held in bondage.
I might object to this amendment, sir, upon the ground
that to prohibit the establishment or continuance of
slavery as a legal relation would be virtually to admit
that it may exist as such legal relation, and that such an
admission in the Constitution would leave that instru
ment, in respect to human liberty, in a worse state than
it is at present. Upon this point, however, I do not
intend to enlarge; for, as I understand it, the fact of
servitude among a people will be little affected by any
provision which their constitution may or may not
embody. Sir, it would seem to me that the sum total of the
- wisdom of the ruling party is contained in the dogma
that the negro is exactly like the white man. To some

268 THE PEESEEVATION OF THE UNION.
it may seem that this is not very much, hardly enough to
constitute the foundation of a political system and an
administrative policy for a great nation and a numerous
people; but this is a matter of opinion. Some 'may
suppose that the basis of a political system ought-
observing the uses of sciences in general — to be laid upon
some fact, the existence of which is capable of demonstra
tion; but, sir, we, the people of the United States, are
trying great and sublime experiments in politics, and if
we can succeed in making something stand upon nothing,
will it not show that we are justly entitled to the reputa
tion for political sagacity and adroitness which we have
been considerably more ready to claim than the benighted
statesmen of Europe have been willing to accord ? So
far as I can see, Mr. Speaker, in any form of civilization
resembling our own, servitude will always exist; and
servitude rendered necessaiy by circumstances which the
servile party cannot control, is bondage. Bondage will
differ in form, as it is modified by the character of the
parties between whom it exists, and it will differ in in
tensity as it is affected more or iess by external conditions.
The relation of master and servant in the South is natural
to this extent : it is the relation into which the white and
black races, being brought together, naturally fell under
the influences of mutual necessities for personal security,
social tranquillity, and subsistence. The relation of
master and servant in Great Britain is affected by the
pressure of a costly Government, which draws from labor,
through capital, the means to defray its annual expenses.
Servitudes differ in degree and they differ in kind, but
the most important difference of the two — the one that
is at once the most significant and the least changeable —
is the difference in degree ; a man may be nominally free,
but if he* is a workman without capital, and lives in a
state of society of which it may be said " once a peasant,
always a peasant ; once a factory operative, always a
factory operative;" if the constant labor of his body
when in health is only just sufficient to provide him with
food and clothing, and if old age, or a few days of illness,
inevitably reduce him to pauperism or starvation, he has
little to boast of his freedom, and would find it hard to

THE PEESEEVATION OF THE UNION. 269
discover wherein it ministers to his elevation or his hap
piness. The freedom of a British working man consists in a
limited liberty to change his employer. He is descended
from ancestors who toiled, as he toils, all their days for
food, clothing, and shelter, and these scanty in quantity
and poor in quality. He begets a posterity to whom he
transmits his poverty and his hopelessness, and his whole
life, from his cradle to his grave, is one long, desperate
struggle against starvation and nakedness. This is
British liberty to a majority of the people of England.
This is what it has been for hundreds of years, with no
prospect of change but for the worse. Legislation has
teen tried abundantly, with a view to work improvements,
and with worse than no avail. England has always had
and now has her theorists who have labored to create
imaginary Utopias, but that vast war debt, which, like a
millstone, is grinding the people to powder, and pressing
them into the earth, is a thing that cannot be lifted by
constitutional clauses, or parliamentary expedients. That
legislator will do well, Mr. Speaker, who can devise an
amendment to the Constitution which shall relieve the
people of the United States, without regard to color,
from the pressure of a war debt larger in proportion to
their resources than that of Great Britain. The debt is
inevitable, it already exists, it is being increased with
giddy rapidity. There is nothing in our institutions to
prevent national indebtedness from producing the same
effects upon the people of the United States that it has
produced upon the people of Great Britain. Here is a
thing, sir, which may well enlist the wisdom of the wisest
statesmen of the country. If nature has made the negro
different in any respect from the white man, all the con
stitutional clauses in the world will do nothing toward "
obliterating that difference. If it has made the negro
like the white man, that likeness will, at the proper time,
assert itself without constitutional assistance. Nature
can neither be hindered nor accelerated by legislative
contrivances, and no more than the European can the
African be elevated to any valuable purpose by the will
of another.

270 THE PRESEEVATION OF THE UNION.
It was declared by me at the last session that for gen
erations to come the laboring men of the United States
would be required to work one or two hours in each day
more than at present, in order to pay off the debt con
tracted by this war. Now, sir, under all the advantages
afforded by a new country, and circumstances, in many
respects, favorable to an extraordinary degree, the aver
age laboring man of the United States has hitherto done
little more than live. Impose upon him the necessity of
two hours or of one hour additional labor per diem to
support himself and his family, and he is, call him by
what flattering title you may, a bondman. Against this
bondage, the most hopeless and inexorable of all servi
tudes, no constitutional amendments, however cunningly
devised, will afford security ; it will descend from father
to son, engraving, as it does in England, its characters,
revolting and indelible, deeper and deeper upon each suc
ceeding generation.
Mr. Speaker, if at a time when no causes of excitement
were disturbing the minds of the people, a despot had
arisen over us, to decree and enforce upon the operative
population of the United States two hours per day of ad
ditional labor for the remainder of their lives, what a cry
would have gone up from all parts of the land against an
act so tyrannical ! What protest would have been en
tered by such, if any there were, who were permitted to
discuss and condemn ! What exhortations there would
have been to combine for resistance, and what citations
of principles against a domination so heartless and de
structive ! What pictures, at once true and revolting,
would have been drawn of the degradation of the people,
broken in spirit and pressed to the dust by excessive toil
and intolerable exaction, and what fiery indignation would
have been felt and expressed against the unnatural mon
ster by whom the wrong was devised and executed ! The
result is not altered because we happen to reach it by a
process less direot. The evil will be the same, the wrong
the same, the same the suffering when the excitement has
passed away and the fact remains, and we see it in its
nakedness ; but then, if it is not so now, it will be too
late to permit the discovery to be of much avail.

THE PEESEEVATION OF THE UNION. 271
Without pursuing this point, I would say that slavery
has always been and is regarded as a domestic question.
The right to abolish it does and ought to rest with the
States in which it exists. Since the organization of the
Government the law of climate and soil has controlled
the subject, and has caused the abolition of slavery in six
of the original States, and either abolished or prohibited
it in all but nine of tne new States since admitted. This
Government is one of delegated powers, and those not
conferred are reserved to the States respectively or to the
people. In regard to slavery the Constitution is silent,
and therefore no power exists to amend it in the respect
indicated ; and in addition, in my judgment, that instru
ment contemplated that all the States should participate
in any amendment thereof. Sir, I do not stand here as
the apologist of slavery, but merely to insist that we have
no right to incorporate the proposed amendment, and that
even if the right exist it is a most injudicious time for the
exercise of the power when we should desire to bring back
the seceded States to loyalty and obedience. Our action
in this respect cannot fail to add fuel to the flame, widen
the breach already existing, further embitter the South,
and prolong the sanguinary contest. I do not regard this
question as having been decided by the late election.
The issue there involved was the victorious prosecution
of the war for the restoration of the Union. Entertain
ing these ideas, I cannot vote for the proposed amendment.
Such are some of my views, Mr. Speaker, on some of
the most important questions which agitate the public
mind at this moment. If the war be brought to a close
within a reasonable time, and a united country be the
result, this great Bepublic, with its immense resources,
will spring into new life, and under the blessed reign of
peace will ultimately shake off its burdens and repose
queen-like among the nations of the earth.
We must be prepared to make still greater sacrifices
than any that have gone before, if necessary, to save the
Union ; but the considerations to which I have adverted
admonish us, as I have observed already, not to prolong
the war a moment longer than is necessary to effect the
legitimate object. Let us be careful lest in seeking to

272 THE PEESEEVATION OF THE UNION.
obtain a fancied benefit for others we do not destroy our
selves. It has been justly said, sir, that to most men ex
perience is like the stern-lights of a ship, which illumine
only the track it has passed. It will be a sad thing for
the Bepublic if those who have it in their power to con
trol its destinies are recorded by history in such a category.
On the use to be made hereafter of the light of experi
ence depends our whole future destiny. It is to decide
whether we take the first fatal step of disintegration
which will lead us to the position of those petty States
whose weight in the world's council is represented by a
cipher, and whose little quarrels only provoke a smile, or
whether we remain a great people — homogeneous, united,
and powerful.

THE BEST POLICY TOWABD THE SOUTHEEN
STATES.

Letter to the New York World, Sept. 6, 1875.

In the summer of 1875 Mr. Ward, being desirous of promoting
the impartial and temperate discussion of sound political principles
as applied to the living issues of the times and or indicating such a
course as should be supported alike by just and thoughtful men
of both parties, addressed to the New York World a letter on the
" Principles and Policy of the Democratic Party." He advo
cated such reforms as would best secure integrity in public affairs,
a safe and gradual return to a redeemable currency, thorough re
vision and reform of the tariff, extension of our trade with Can
ada, Cuba, and Mexico, and the obliteration of the political " color
line" in the South, together with the maintenance of free gov-
'ernment and constitutional liberty. The latter subjects are
treated in the following extracts from his letter :
The rule that " honesty is the best policy " is, perhaps,
even more obviously true in its application to the treat
ment of the South than to affairs of the tariff and
finance. The manufacture of false reports of Southern out
rages has run its course, been detected and exposed, and
is no longer profitable to the seekers of Northern favor.
The misgovernment of our Southern fellow-citizens has
become so palpable that not a few of the Eepublicans
themselves see it is not so much the Southern people as
the party in power that needs reformation. One of their
chief leaders acknowledges that " it is not the disease but
the doctors that we ought to examine — it is not the ill
ness but the medicine that does the harm." The Admin
istration has steadfastly followed the course of those dis
reputable practitioners who administer drugs to drive a
patient into madness, and keep him in confinement under
18

274 BEST POLICY TOWAED THE SOUTH.
false certificates, knowing that their occupation and fees
will be at an end when his actual condition is known.
Considered only as a matter of self-interest, the pros
perity of the South is of incalculable importance to the
Northern people. One of the great causes of stagnation
in the Northern manufactories is the impoverished con
dition of the South. According to the census of the Uni
ted States, the production of the great staple of cotton,
so important for home use and in our foreign exchanges,
shrank from nearly five millions and a half of bales in
1860, to little over three millions in 1870. The produc
tion of tobacco decreased in far larger proportions.
These losses are not counterbalanced by any increase in
other articles. The production of the cereals decreased
forty-four per cent, and the value of live stock twenty-six
per cent. All this is in strong contrast to the prosperity
of the previous decade.
Part of the evil influence of the unscrupulous adven
turers who have been aided by the civil power of the ad
ministration and the army itself, and have united with the
managers of their party elsewhere to use the colored vote,
first to control and rob the South, next to aid in govern
ing and despoiling the people of the North, is clearly*
shown by an examination of the debts and liabilities in
curred in the Southern States since the close of the war.
At that time, the amount in Georgia and Texas was
merely nominal, but on January 1, 1872, as shown in
the Ku-Klux Beport of that year, it was over fifty mil
lions in the former and twenty millions in the latter
State. Since the war ended, up to January, 1870, the
debts and liabilities of the various Southern States grew
from eighty seven millions to three hundred and sixty-
two millions — a net increase of over two hundred and
seventy-five millions. This vast sum has mainly been
squandered or stolen, not fairly invested for the benefit of
the people to whom it belonged, and the true value of
whose property during the ten years between 1860 and
1870 was diminished to the amount of over two thousand
millions of dollars, as shown by the census of the United
States. The indignation of the Southern whites against the

BEST POLICY TOWAED THE SOUTH. 275
spoliation to which they were thus subjected, by the aid
pf the Administration and Congressional majority, was
further aroused by the federal office-holders, who, with
their adherents and the support of their party at Wash
ington, controlled elections, and tampered with the courts
and usurped their power. Legislatures were seized, need
less and obnoxious acts passed, and nothing was neglected
to foster and perpetuate enmity and strife between the
two races. A regard for the real interests of the colored
men, which could only be promoted by advancing his
sense of political justice, in. harmony with the interests of
the whites, was no part of the schemes. The old pro
verbial game of oppressors, to divide the people against
each other, so as to conquer and rob them all, was never
more recklessly pursued than in the two successful efforts
to set race against race, and the North and South against
each other. The beneficial restoration of concord and
the Union can only be effected by fair dealing and con
stitutional liberty.
Directly injurious as the impoverished and dishonestly
taxed condition of the South is to the Northern people,
its dangers are secondary in importance to the results
which must follow to the people of the whole Union if
the continuation of military interference and despotism,
such as have been conspicuously exemplified in Georgia,
Louisiana, and Arkansas, is permitted. All simply local
and domestic matters must, under the Constitution, be left
to the people of the States. At last, the practices of the
Bepublican party are echoed in the speeches of its leaders,
who attempt to justify the progress of centralization — a
system absolutely contrary to all free and especially to
all really republican government.
One of the first objects in the Democratic Southern
policy should be to destroy the political " color-line,"
which it has been the constant aim of those who had no
desire for the welfare either of the white or colored race
to intensify to the utmost. If it should be perpetuated,
and the colored people continue to be made the tools of
those who maintain corrupt government both at^ the
South and North, the ultimate result will be especially
disastrous to those who, in comparison with the rest of

276 BEST POLICY TOWABD THE SOUTH.
the population of the Union, are in a small minority.
Their practical welfare can best be promoted by such a
general prosperity of the South . as will give them a fair
day's wages for a fair day's work, and improve their
education and sound intelligence on public affairs, so that
by their own free and honest efforts they may earn the
respect of all men, and, judging for themselves on political
questions, may be independent of dictation by sordid and
selfish intriguers. When the Federal Government ceases
to interfere in the affairs of separate States, and is repre
sented in the South by office-holders whose character will
command respect and esteem, a complete and harmonious
settlement of the political questions in those States will
soon be attained. Attachment to the Union will be in
creased when an Administration fulfils the duty of making
union a blessing."

THE SHIPPING ACT— EELATING TO MEE-
CHANT SEAMEN.

House of Representatives, June 1, 1876.

Under the original statute relating to merchant seamen much
good had been effected for sailors and ship-owners ; but it was
novel legislation and many unforeseen abuses arose, chiefly from
want of needful responsibility on the part of the commissioners
entrusted with the chief duties prescribed. To remedy these de
fects Mr. Ward, on behalf of the Committee on Commerce, re
ported a series of amendments and made the following speech in
their support. The House adopted them by a large majority.
Mr. Speaker : The act known as the " Shipping Act of
1872," relating to merchant seamen, and being title 53 of
the Eevised Statutes, has, in many important respects,
fulfilled the intentions of its framers, but has been found
practically deficient in some of its provisions, and thus
the benefits expected from its operations have been ma
terially abridged and serious abuses have been called into
existence. It has been in operation from August, 1872,
to the present time, and there has been ample opportuni
ty to judge fairly of its merits and defects.
The well-known character of the sailor and his essen
tially peculiar mode of life have long ago led, in the
leading maritime nations, to the enactment of laws for
his protection, especially as to his shipment and discharge
from service. His occupation is pursued remotely from
society at large and under discipline necessarily strict
and to a great extent arbitrary. Beleased from his cus
tomary restraints, with his pay in his pocket and a stran
ger amongst strangers, he naturally becomes liable to
temptations and impositions ; and the opportunities thus
afforded attract a class of men who are to be found in

278 EELATING TO MEECHANT SEAMEN.
every seaport ready to take advantage of his circum
stances and make him their prey.
As the laws of other countries competing with us for
the great prizes of the shipping trade secured for their
seamen special advantages which our own did not enjoy,
our commerce suffered from the want of enactments duly
protecting our sailors, whose condition in our seaports
was one of great injustice to themselves and other citi
zens, and disgraceful to our country.
It Was the common habit of a large class of men who
infested the seaports to pander the grossest appetites of
the sailor, and taking advantage of his inexperience and
the exhilaration naturally produced by his being ashore,
and his freedom from restraint, to keep him in a state of
excitement and intoxication, so that he became powerless
ill their hands. He was liable not only to be cheated
and robbed of his wages to an extent that could not be
practised on any other class of men, but his labor was
often sold and his services were engaged for long voyages
when he was unconscious of the nature of the agreement
he was making. Sometimes, when he imagined he had
contracted for a short trip, he found himself in a vessel
bound for the East Indies or China. There were not a
few instances where mechanics and persons of various
other pursuits in the city or rural districts were drugged^
carried to the ship, and passed off as good sailors, their
captors pocketing their advance wages, they themselves
incapable of performing duties at sea arid the ships en
dangered by being insufficiently manned.
Extortion of the most flagrant kinds was practised.
Both sailors and ship-masters were victims. When men
were abundant a large proportion of the sailor's wage's
was taken from him for securing his shipment. The con
sequences of this infamous treatment and of his being fre
quently shipped while unconscious of what he was doing,
were that he worked grudgingly and under a sense of
injury on board ship, the captain found difficulty in man
aging him, and he frequently deserted at the first port-
where he landed, taking his chance of shipping again under
some different name. When there was a scarcity of sail
ors similar extortion was practised on the ship-owners,

RELATING TO MERCHANT SEAMEN. 279
but frequently there was a combination among the more
powerful parties to the bargains, the sailor himself being
the chief sufferer, not only from the condition to which
he was reduced, but because, from the nature of his voca
tion, he was only a transient stranger. It could only be
expected that in such a state of affairs between officers
and crew, separated by a wide expanse of waters and long
intervals of time from ordinary society and its laws, dis
cipline might often degenerate into tyranny and cruelty
on one side, and that, on the other, insubordination and
even mutiny might arise.
The Well-known existence of these evils long attracted
the attention" of philanthropic persons, whose exertions
led to the passage of the act now under consideration.
The preponderating weight of the most reliable informa
tion from the various ports shows that under its operation
the wrongs already described have been checked or de
stroyed, and the examples made of offenders have induced
a salutary fear of detection, exposure, and punishment.
There has been a marked improvement in the condition
of seamen, and the ship-owners, many of whom were at
first opposed to the act, have found benefit from some of
its provisions.
Although, for the most part, the opinion of those who
have made due investigation is, in the language of a report
adopted by the New York Ship-Owners' Association, after
being carefully prepared by a committee of six of its mem
bers, that the act is, on the whole, beneficial to the inter
ests of both sailors and ship-owners, if properly inter
preted and administered in accordance with what the com
mittee believe to have been the intention of its f ramers,
the conclusion is yet more generally admitted that the
law is not free from defects, but is capable of improve
ment. It is believed that, by judicious and much-needed
amendments, many, if not all, of the objections conscien
tiously entertained against the act will, in due time, be
removed. The provisions of the act are numerous, but its main
object is to provide an officer to see that no foul play
is practised on the seaman or his employer in the en
gagement or discharge of crews. The commissioner

280 EELATING TO MEECHANT SEAMEN.
appointed for these purposes is, in order to execute
them satisfactorily, invested with various powers which
might be safely intrusted to a thoroughly just and
firm man, but are. liable to many perversions. In view
of the crimes it was intended to prevent, the essential
rule of making him duly responsible was neglected. The
natural result has followed, that the shipping commis
sioners, being actually responsible to no one particu
larly, often perverted the powers intrusted to them,
have seldom made proper reports, and are virtually
and practically " a law unto themselves."
As New York is the chief shipping-port of the Uni
ted States, the merits and defects of the law and the
enormity of the abuses which exist under it are most
plainly visible there. In various degrees the same re
sults may be seen in other seaports.
The act directs that to provide means for the pay
ment of the commissioner and the execution of his
duties, specified fees shall be paid to him on the en
gagement and discharge of seamen ; that his compensa
tion shall not exceed $5,000 a year ; and that he shall
pay the surplus into the Treasury of the United States.
It does not appear that the commissioner at New
York has ever paid any of the fees into the Treasury,
although they have greatly exceeded the sum he was
authorized to retain, but has expended them in a man
ner directly in violation of the provisions of the act.
The first* five months of its operation ended Decem
ber 31, 1872. During that time the fees received
amounted to $22,112, but the expenditures of the com
missioner were $23,168.87, leaving an alleged balance
of $1,056.87 due to him. Thus he appropriated, for
such uses as he arbitrarily chose, the sum of $21,085.53
during the first few months of his tenure of office. In
1873 the amount of fees collected was $38,267.50, all of
which was expended or retained, and a claim made of the
further sum of $1,088.61, a3 due to him. In 1874 the
number of attaches to his office was diminished, but he
managed to expend the whole amount of fees, being
$56,169, and claimed as due to him the further sum of
$805.57. There is no satisfactory reason for this sudden

EELATING TO MEECHANT SEAMEN. 281
increase of nearly $20,000 in the alleged expenditures of
that year over the one next preceding it. In 1875 the
amount of fees received was $51,718.50, and, perhaps un
der a salutary fear of the direction of public attention, or
in pursuance of the rule of spending all the money that
came under his control, the expenditures reported by the
commissioners were $51,440.29, including the balance due
for the previous year.
An analysis of the expenditures of the commissioner
shows that to a most serious extent they were made for
his personal ends and in gross violation of the law. The
act provides that he may " engage a clerk or clerks to
assist him and to act as deputies at his own proper cost."
Eegardless of this direction he engaged six clerks, at a
salary of $1,300 each ; eleven agents and others, at sala
ries amounting to $10,660; a deputy, at $2,400; and
paid each of four of his own sons a salary of $2,500.
All these salaries were paid out of the fees, and in addi
tion to his own salary of $5,000, although, as has been al
ready shown, he was only authorized to engage any clerks
or deputy by paying the salary " at his own proper cost."
Among these glaring violations of the law, the appoint
ment by the commissioner of no less than four of his own
sons, at salaries of $2,500 each, is not the least conspicu
ous and flagrant. The salary is more than that paid to
his deputy, and it is obvious that fair and just decisions
could not be expected from him in any of the cases where
the appeal might be made to the commissioner in the in
terest of the seaman's or public rights against any of his
, sons thus favored and exorbitantly paid from the money
collected from the seaman. The committee are fully
satisfied that the duties of the shipping commissioner can
be discharged for much less than is claimed for that pur
pose. The amount fixed by the act is probably inade
quate, but, so long as it is thus limited, due compliance
should be made with the law.
The act requires the commissioner to rent, lease, or pro
cure, at his own cost, suitable premises for the transaction
of business. But he rented, as commissioner, from an as
sociation of which he was president, an office for the an
nual rent of $5,500, which he pays out of the fees coming

282 EELATING TO MEECHANT SEAMEN.
into his hands as commissioner, and not, as provided by
law, out of his own salary. The rent paid by him as
commissioner to the association of which he is president
is not far from ten times the actually fair rental of such
premises as are required, he paying $5,500, while rooms
more conveniently located for the performance of the du
ties with which he is charged could be had from $500 to
$700. At Philadelphia the rent paid for such an office
was $350. The office for which the exorbitant rent of
$5,500 is paid, for the use of the commissioner, is at a
very inconvenient distance from the custom-house. Thus
much vexation and loss has arisen, and in many instances
the delay has been so great that the departure of vessels
for a whole day has been postponed simply for the neces
sity that captains should visit the office and return to the
custom-house. It is regarded as a defect in the act that
there is no specific provision by which parties who are ag
grieved can present their cases on points requiring a strict
construction of the law. All cases at New i"orkin which
such construction was asked have been presented by the
commissioner himself ex parte.
In San Francisco, Boston, Philadelphia, and other sea
ports the same violation as exists at New York of the
provisions of the act, so far as regards the expenditure
of the fees which are paid to the commissioners, has pre
vailed. In Philadelphia numerous complaints have also
been made in other particulars, indicating the expediency
of a change in the appointing power. Applications have
been made for a total repeal of the act, as well as for
amendments to it. It is deemed more desirable to remedy
its defects than to destroy it.
The primary and essential reform most imperatively
demanded in the law is that the power of appointing the
shipping commissioners shall cease to be given to the
United States courts which have jurisdiction in maritime
cases, and, to take the most pleasant view of the matter,
whose judges, having selected their appointees from con
fidence in them, cannot be regarded as impartial judicial
authority in matters to which the appointees are parties.
It is obviously inexpedient to blend the judicial and
executive or appointing power. The office of the com-

EELATING TO MEECHANT SEAMEN. 283
missioner is created and held under the law of the United
States. Under these circumstances, the proposed bill
provides that the power of appointing the commissioners
shall be vested in the Secretary of the Treasury of the
United States, and that, under certain restrictions, he
shall regulate the amounts of their salaries, their modes
of conducting business, and the number and salaries of
the clerks and other persons in their employ. More than
enough has been brought before the Committee on Com
merce to prove the abuses existing under the present
irresponsible and arbitrary system. It is believed that
if these fundamental changes and such other amendments
as are herewith submitted are made, the law will be
justly and efficiently administered, and become deserv
edly popular among those whom it chiefly intended to
benefit. I will endeavor to present separately, and as briefly as
possible, the various reasons for the several amendments
now proposed.
Section 4501 : The change removing the appointing
power from the several circuit courts to the Secretary of
the Treasury is the, main reform proposed in this amend
ment. It is contrary to sound public policy to blend to
gether the creative and judicial functions. This may be
regarded as an axiom in legislation. The interests of
justice demand compliance with the rule. The courts,
however desirous of being impartial, can scarcely be fair
judges between strangers and those appointees whom
they have selected either from friendship or from confi
dence in their character. In fact, the greater the confi
dence of the courts the less impartial are they likely to
be. Experience in the various ports has amply confirmed
this view, and the amendment is almost universally
desired by the people who are most deeply interested
in the success of the title. They deem it essential that
this alteration should be made in order to insure them a
due measure of justice. Under the present law some
commissioners have discharged their duty with fidelity,
but in other instances their conduct has been arbitrary
and unjust to the sailors, and public interests and money
have been sacrificed to personal gain. The law as it now is

284 EELATING TO MEECHANT SEAMEN.
left them irresponsible and practically " laws unto them
selves." After reading and explaining the various amendments, Mr.
Ward continued :
The amendments are in the main very simple, although
it has taken some time to read and explain them. I am
expressing the unanimous sentiment of the Committee
on Commerce in saying that these amendments are cer
tainly needed. The only objection that I have heard
raised to this bill (except in the case of one or two
charitable bodies in New York City) comes from those
who hold places as commissioners. We have received
from different sections of the country many petitions
and letters of the most urgent character in favor of these
changes in the law.
I wish to say, for the Committee on Commerce and for
myself, that we have no other object in proposing these
changes than to remove the imperfections of the existing
law and render it more efficient. It is believed that
some central power is essential to give effect to the law.
It was but the other day that I was constrained to ask
this House to pass a law in order that the commissioners
may be checked in libelling vessels in direct conflict with
the act. They have acted in entire disregard of any
authority except themselves ; and their conduct has been
the means of making the law very odious and very
unpopular. If the House should now pass this bill, the
law may hereafter require further amendment before it
shall be fully perfected. When the occasion for such
amendments become manifest, they can be made. I now
move the previous question.

A COINAGE DEPARTMENT IN THE ASSAY
OFFICE IN NEW YOBK;

ITS UTILITY TO

COMMEECE AND IMPOETANCE ON GE6UNDS OF LOCAL
AND NATIONAL JUSTICE AND ECONOMY.

House of Representatives, February 1, 1877.

During the last thirty or forty years the Hon. Robert J. Wal
ker, Hon. Thomas Corwin, Hon. William H. Seward, and many
others, without distinction of section or party, have urged the ex
pediency of coinage in New York as the commercial metropolis
of the Union. On the 10th of October, 1854, an assay office, at
which bars of the precious metals are prepared and issued, was
established. The results are most decisive proofs of the tendency
to. bring gold and silver to New York rather than «to any other
place east of the Rocky Mountains. In 1876 for instance, the
value of the bars issued at New York was nearly nine millions,
and at Philadelphia and Boise added together less than two hun
dred thousand. At New York there is for payment of duties and
other purposes a greater need of specie than in any other city of
the Union. Hence Mr. Ward thought it expedient to lay before
Congress and the country an epitome of arguments and facts
proving the expediency of conferring the privilege of coinage
upon the Assay Office in New York.
Mr. Speaker : Having in the preceding session of Con
gress introduced a bill providing for coinage in New
York, and as the committee to whom it was referred
have omitted to report thereon, and the bill now under
consideration is the one through which appropriations
for coinage are made, I deem the present opportunity
suitable for calling the attention of the House to a sub
ject of much importance, not only to the city and State

286 A COINAGE DEPAETMENT IN NEW YOEK. ,
I have in part the honor of representing, but also to the
country at large.
The signs of the times unequivocally demonstrate that
inflation can no longer inflate, and that, by a natural re
action, a most favorable time to prepare for specie pay
ments is near at hand. Gold has lately been at a pre
mium of less than five per cent. Our exportations of it
are large ; our mines are producing vast quantities of the
precious metals ; and currency is yet abundant at low
rates of interest, although during the year ended on the
1st day of November, 1876, there had been a decrease of
nearly $25,000,000 in the amount of national bank notes.
Since the act of June 20, 1874, came into operation, the
outstanding amount of these notes has been reduced $32,-
300,000. Between January 14, 1875, and January 1,
1877, the reduction in the amount of legal- tender notes
was $15,900,000, and the amount of legal-tender notes
lately deposited in the Treasury to provide for further
withdrawals of bank-notes was $18,900,000. The three
items indicate a contraction amounting to $67,100,000 in
the circulation of the two classes of notes between June
20, 1874, and January 1, 1877. This is about nine per
cent, of the whole paper currency. The natural laws of
finance are asserting their power. Arbitrary and doubt
ful measures for the restoration of a sound currency re
deemable in the metallic standard of the world are no
longer necessary. It seems impossible that those to
whom the legislation of our country in monetary as
well as in other affairs is intrusted should not patrioti
cally take advantage of so golden an opportunity to con
fer incalculable benefits upon the people. My purpose at
present is simply to urge the adoption of one of the most
important means of aiding in the restoration of specie
payments by removing unnecessary, expensive, and un-..
just obstacles to their essential precursor, conversion of
the precious metals into the coin of our own country.
While I am desirous of applying the principles of jus
tice and good will in the fullest measure to all other parts
of our country, I deem it my duty to state what is strictly
due as regards coinage to the city I have in part the honor
of representing. In one year alone there were sent from

A COINAGE DEPAETMENT IN NEW YOEK. 287
the assay office in New York to Philadelphia for coinage
no less than $62,480,508 in gold and $2,663,046 in silver.
That certainly was an exceptional year, but during the
twenty-one years which have elapsed between the time
when the assay office in New York was organized, and
December, 1875, the amount of bullion thus transmitted
was no less than $172,221,463, at a cost of $182,281, a
waste of money and labor as complete as any ever typi
fied in modern proverbs or ancient mythology. As we
seem to approach nearer to specie payments the amount
of the bullion thus transmitted increases. In the three
years ended with 1875 it was two and a half times as
large as in the three preceding years. In these calcula
tions the amount of the silver purchased for coinage un
der the provisions of the law of 1873 and subsequent acts
now in operation is not included. Its amount, passing
from and through New York to the Mint at Philadelphia
during the last two years, may be computed at millions.
During the two years and a half ended on the 30th of last
December, the amount of gold and silver bullion trans
mitted from the assay office in New York to the Mint at
Philadelphia was no less than $22,487,803, and the char
ges of the transmission were $22,680.05. The amount
thus transmitted is no fair criterion of that which would
have been coined in New York if the needed facilities for
that purpose had existed there and the loss of time as
well as the cost of transportation had been avoided. The
means thus wasted would undoubtedly have been much
larger if for the last sixteen years the ordinary and natu
ral demand for specie had not been checked by legisla
tion. Yet under these circumstances the direct and need
less expense thus actually incurred for transportation of
bullion since the establishment of the assay office was over
$200,000. I do not believe there has ever existed under
our Government any more flagrant instance of the power
of habit and established patronage in resisting a most
just and needful conformity to the requirements , of the
times. For at least thirty or forty years the justice and expe
diency of converting bullion and the gold and silver cur
rency of other countries into our national coin at New

288 A COINAGE DEPAETMENT IN NEW YOEK.
York have been urged by leading statesmen, irrespective
of party or the locality of their residences. The Hon.
Bobert J. Walker, in four successive annual reports, with
arguments which it is impossible to controvert, earnestly
directed public attention to the subject, and the same re
commendations were made by the Hon. Thomas Corwin,
Hon. William H. Seward, and many others. The right
was not sought for New York or for the benefit of its
commerce only, but for the benefit of the whole Union.
No unjust or exclusive advantage was asked for that city,
but simply that the great centre of our foreign and home
trade should have equal facilities with other cities of less
commercial importance for coinage and recoinage.
Apart from the commercial emporium to which the
precious metals are first brought from the places of their
production on the other side of the continent, it is evi
dent that where the chief market of commerce is there
also the precious metals will centre, and it is no less clear
that in the same place there should be every opportunity
for increasing their value and bringing them into active
use. While this is true at all times it is especially so at
present, when the people are desirous of a safe and eco
nomical return to a currency at par with the commercial
standard of the world.
It may be argued that the impediments to coinage by
compelling the citizens of the centre of the exchanges of
the Union to carry their specie to and fro, for hundreds
of miles, are to some extent removed by modern facili
ties for rapid transit; but, whatever the cost thus in
curred for freightage may be, it is to that extent a tax,
primarily upon New York, but ultimately upon the
nation and an obstacle to its foreign and domestic trade.
In our commercial system, bullion and coin, the represent
atives of value and current circulation among all na
tions, pass and repass to and from New York as the
blood in the human system tends toward the heart and is
thence distributed again.
The risk, expense, and delay of sending the precious
metals from their natural emporium to be coined else
where, must, so long as they are continued, be hindran
ces to the production of the coins of the United States,

A COINAGE DEPAETMENT IN NEW YOEK. 289
and tend to keep the precious metals out of common use.
Millions of dollars are thus as utterly lost to the industry
and business of the country as if they were thrown into
the sea. Coinage of a metallic currency is prohibited at
the place where the Government collects its chief reve
nue in coin. Needless and artificial obstacles created by
law are kept in the way of an abundant supply of the
stable currency most needed for a return of general pros
perity. As gold and silver are articles of commerce,
they naturally gravitate from all quarters to the com
mercial centre of our country. They are brought there
not only from our own mines, but from Mexico, Peru,
Chili, Central America, Europe, and all other regions of
the world, as part of the exchanges. A large amount of
them is also brought, chiefly in the coins of other coun
tries, which it is desirable to convert into our own, by
hundreds of thousands of immigrants.
The imports and exports of New York in 1874, if com
pared with those of all other ports of the United States
added together, were almost exactly in the proportion of
seven to five, the precise value of them at New York
having been $750,127,354 and at all other ports in the
aggregate $573,977,352. This was no exception to the
rule. In 1875 the proportion of these imports and ex
ports received or shipped at New York was somewhat
larger. At that port alone they amounted to $713,341,-
549, while at all other ports in this country they were of
the value of $506,092,995.
The difference in the value of foreign imports alone is
yet more striking ; and as the Government depends on
them for that part of the revenue which is collected in
coin, the comparison is especially important and sugges
tive. In 1874 the imports at New York were almost
twice as large as their aggregate at all other ports in the
^Union. In New York they were $395,133,622 and all
other ports of the United States $200,727,626. In 1875
the proportions were nearly the same, having been $368,-
637,580 at New York, and $185,268,573 at all the other
ports added together.
The laws of the United States require that the duties
on imports must be paid in coin. A far larger propor-
19

290 A COINAGE DEPAETMENT IN NEW YOEK.
tion of these duties is collected at New York than at any
other port and than at all other ports added together.
For the ten years ended with 1875, the amount of duties
thus collected at New York has been more than twice as
targe as those at all other ports of the Union ; the aggre
gate at all the ports, including New York, added togeth
er, having been $1,800,650,297, while it was $1,239,615,-
311 at New York alone. As this city is also the chief
depot and market on the Atlantic coast for the precious
metals, it is most manifestly inexpedient and unjust, on
grounds of obvious principles of public policy and right,
to refuse to her the power of coinage.
As New York is the commercial so also is she the mo
netary centre of the Union. The capital employed in
banking in the State is more than twice as large as that of
*my other State except Massachusetts. The average ex
changes of the clearing house in the city every day on
the average of the last twenty-three years were over sixty-
one millions, and for the last ten years were nearly ninety-
four millions.
These enormous commercial and monetary transactions
do not redound to the benefit of the city of New York
alone. They only exhibit, in a conspicuous form, the busi
ness the people of the whole country finds it for their in
terest to transact at that port on more profitable terms
than elsewhere, and would have removed long ago if they
had not continually found this to be true. The whole is
a question of superior natural advantages, together with
the skill, enterprise, and industry, which have been used
in developing them for the common advantage of the peo
ple of the Union. Hence it follows that if New York be
refused equal facilities with other cities for coinage and
recoinage, the unjust disadvantages under which she is
compelled to labor are inflicted not upon her alone, but
upon all parts of the Union with which it has commercial
dealings. On the 10th of October, 1854, an assay office was
established in New York. From that time to June 30,
1876, gold and silver to the value of no less than $343,-
5^3,911 had been deposited there. Of this amount
$253,757,757 were prepared as bars of fine gold and silver

A COINAGE DEPAETMENT IN NEW YOEK. 291
by the melter and refiner. Leaving out of consideration
the three mints at San Francisco, Carson, and Denver,
which are to be judged by a different standard, as they
depend on the production of the precious metals in the
mountains between the great plains of the continent and
the Pacific Ocean, nearly all the bars manufactured at
the mints and assay offices of the United States in
1875-76 were manufactured in New York. In 1875, at
Philadelphia, they amounted to $318,786.66, in Charlotte
to $6,690.03, and 'in Bois6 to $7,779.48— altogether $443,-
256.17, or considerably less than a twentieth part of their
amount at the New York Assay Office, where it was nearly
ten millions ($9,925,727.28). In 1876 the disparity was
yet more striking ; the total value of the bars of gold
and silver made and issued at the mint of Philadelphia
and the assay offices of New York and Boise having been
$8,791,591, of which not far from nine millions ($8,602,-
991) were made and issued at New York, and less than
two hundred thousand ($188,599) at Philadelphia and
Boise" added together. More decisive proofs of the
natural tendencies to bring the precious metals to New
York, rather than to any other city east of the great
plains, can scarcely be imagined. Doubtless the propor
tion of gold and silver brought to New York would be
vastly increased if facilities existed there for their coin
age. If any manufacturing firm sent its goods hundreds
of miles for the sole purpose of receiving a stamp or
label which might as well be conferred at home, it would
be a fair way to ruin ; and the only reasons why the
pernicious system is permitted so long to exist are the
force of habit, the difficulty of reform, and the fact that
the loss is borne by many and in the end is paid out of
the pockets of the people at large.
This shameful maladministration of public affairs be
comes yet more apparent when it is known that the
desired change might, so far as the buildings are con
cerned, be made with little cost or none at all to the
national Treasury. The Director of the - Mint and the
Supervising Architect, after conferring together, unite in
the opinion that there is a necessity for the speedy erection
of a more suitable building for the purposes of the Assay

292 A COINAGE DEPAETMENT IN NEW YOEK.
Office in New York. They concur in saying that a less
central location than the one now obcupied would be
equally adapted for the proper transaction of the work
which is carried on in refining the precious metals, and
that the injury to surrounding property through the action
of the acid fumes resulting from the processes employed
is so detrimental that it should have weight with the
Government in its selection of a proper site for these
works. The iron- work of the building is so far injured
and weakened that, although efforts have been made to
render it as secure as possible, it is yet in a dangerous
condition. The Director of the Mint and the Supervising Architect
state positively that a new building, located in a less
central position, should be commenced at once, so con
structed as to be proof against burglars and fire, and that
the part of the building particularly devoted to the
reduction should be built of such materials as will suffer
no deterioration from the processes employed. They add
that on the completion of the new edifice the old building
and site will realize by sale a sum more than sufficient to
defray the expenses of the purchase of the new site and
erecting thereon a suitable structure.
In these statements I emphatically concur, and from
my own local information and knowledge I have no doubt
that the surplus thus accruing to the Government would
be amply sufficient not only to erect and complete an
assay office of durable materials and sufficiently capacious,
as the present building is not, for the processes now con
ducted in it, but also to provide the room and outfit
necessary for coinage. Thus, without charge to the
national Treasury, arrangements might be made for giving
the people of the country ample facilities for coinage at
that port where they would be incomparably more con
ducive to the national welfare than they can be at any
other place on this side of the continent. The change is
imperatively demanded on grounds of economy.

THE QUESTIONS OF THE TIMES.

At a Meeting Ratifying the Nomination of the Hon. Elijah Ward fob
Election to the Forty-Fifth Congress, November 4, 1876.

_ The following speech is a brief review of the national neces
sities of the times. In it Mr. Ward urged the pressing necessity
of integrity in practical politics, economy in public affairs, re
duction of taxation, a safe and gradual return to specie pay
ments, a revenue tariff to revive manufactures and replenish
the Treasury, the extension of markets for the products of our
industry, and the beneficial restoration of concord in the South
through fair dealing and constitutional liberty.
Fellow Citizens : At the present time it is of the
highest importance, that correct views and principles
should be placed before the people, thus contributing to
the progress of sound opinion.
The chief of all the changes demanding public atten
tion is integrity in. public affairs. An administration re
garding freedom - of government as the right of each
member to scramble for emoluments and honors for him
self and party, instead of rendering faithful service to
the country, has long held almost plenary possession of
power. This is the most prolific source of all the na
tional troubles. Beform in this respect is the course on
which the people most strenuously insist. Every other
question should be subordinated to this single one, which
has now long and loudly demanded settlement. The
great obstacle to the fulfillment of the patriotic purposes
of the people is the old plan of dividing those who mean
well. . If those who think alike will vote alike, their
cause is safe. Integrity and fair dealing are so intimate
ly blended with other sound principles in' practical poli
tics, that when this vantage-ground is gained there will

&&«'

294 THE QUESTIONS OF THE TIMES.
be less disagreement than may be commonly expected on
the other leading topics of the times.
The essential truth that " honesty is the best policy,"
has long been laid aside with many forgotten errors, and
its practical application is alike the great need of the
times and demand of the people. Through it only is the
way to economy, diminished taxation, and renewed confi
dence and prosperity. Without it there can be no reli
able reform, and the people will continue to be wronged
either by commending evil doctrines, or by intrigues rob
bing sound principles of their proper effect. Integrity
in those who make our laws and manage public affairs is
as needful to the well-being of the people as a firm foot
ing and a pure atmosphere are to the progress and life of
individuals. The remedy is in the hands of the people. They can
insist that merit — integrity and ability — not merely zeal
in political intrigues, shall be the qualification for all ap
pointment and elections to office and retention in them.
No laws or constitution, however admirable, can secure
the public interests if our citizens themselves become in
different or inactive in public affairs.
We have reached a period when the attention of the
nation is strenuously directed towards the reformation of
the abuses which have attained unprecedented propor
tions under the management of the Bepublicans. As
the people are now compelled to practice economy them
selves, they expect that those to whom the administra
tion of their Government is entrusted will conform to the
same standard. Becent investigations show that from
Washington and the District of Columbia to the furthest
of the wild Indian tribes, the management of the party
in power is permeated by extravagance and corruption.
Exposures are sometimes made, and leading Bepublicans
do not hesitate to admit that reforms in almost every
department of the Government are indispensable. Yet,
when particular party-doings are reached, the party
which is responsible for them first opposes those who
make the charges, and when they can be no longer re
sisted, screens the offenders from deserved punishment,
while it makes a merit of permitting any exposures of

THE QUESTIONS OE THE TIMES. 295
its own crimes. Credible assertions are made that the
United States are defrauded of at least one-fourth of their
rightful revenue, through the misconduct of the officials
intrusted with its collection. Incalculably greater in
jury is inflicted on the people by the preventible evils in
legislation and other forms.
Since the Bepublican party has been in power, it has
given to corporations and monopolies an area of the pub
lic land exceeding, by nearly forty thousand square miles,
that of the dimensions of no less than thirteen of the
most important States of the Union, including the exten
sive States of New York, Pennsylvania, Ohio, and Indi
ana. The extent to which other abuses have been carried
can never be known, unless there is a change in the per
sonnel of the Administration. Persevering investigation
has been made by a Democratic Congress during the last
session, but further inquiries are absolutely necessary,
not only to arrest the present wrongs, but as the best
means of discovering the proper measures for lasting re
form and improvement.
The masses of the people everywhere are anxious for a
return to the sound principles on which our Government
is founded. Enormous wrongs, it is universally admitted,
have been perpetrated under the Bepublican Administra
tion. The practical question at the approaching election
is, whether leaders of the party which has committed them
should be trusted and retained in positions of the highest
responsibility and confidence. To this there can be only
one reasonable answer. After we have repeatedly seen
those who are in power attempt to screen offenders and
thwart the efforts of Democrats to expose them until the
exposures became too rank and flagrant to be any longer
suppressed, further confidence is absolutely repugnant to
common sense, the principles of which are the same in
affairs of State and ordinary life.
Four years ago, in the national platform of the Be
publicans, their party pledged itself to the enactmentof
laws which would " make honesty, efficiency, and fidelity
the essential qualifications for office." But such expo
sures have throughout that period been made and will
probably continue to be made, as incalculably exceed

296 THE QUESTIONS OF THE TIMES.
those which at any previous time would have irretrieva
bly condemned any Administration or party. They
give us startling glimpses of the evils which leaven the
whole system. The Bepublican Congress not only
abandon the effort to reform, and in spite of frequent
pledges of economy, the . ordinary expenditures of the
Administration in 1874 far exceeded those of any year
since 1888. The same Congress voted for $40,000,000
of additional taxes, a sum which alone is two-thirds of
the whole cost of the Government of the United States,
in its last year of Democratic rule. In 1875, notwith
standing the urgent necessity of economy, the net ordi
nary expenditures were almost exactly the same as the
average of the five previous years. Under the present
Administration the number of employees in the civil ser
vice, has been needlessly almost doubled, having in
creased from fifty-four thousand in 1869, to one hundred
and two thousand in 1876.
Eleven years ago, and repeatedly since that time, the
Bepublican party proclaimed that a return to specie
payments was one of its cardinal principles, and yet we
are now further from it, and the, greenback is more
depreciated than it was six years ago. The party has
practically persevered in the fictions by which it im
periled the credit of the nation and impoverished the
people. Nothing has been done to promote commerce,
restore the American flag to its former proud position
on the ocean, revive manufactures, or relieve all classes,
and replenish the Treasury by means of a revenue tariff.
The prosperity of the city of New York depends in no
inconsiderable degree upon her shipping trade with for
eign countries. In this respect our interests have been
greatly neglected by the party in office. When it came
into power, nearly all our commercial transactions with
other nations were carried on through our own vessels.
The proportions are now reversed, and now only a small
fractional proportion of our foreign carrying trade is under
our own flag. Enormous sums are annually paid to foreign
ers for freight and passage money, which, under a judi
cious system of tariff, would accrue to the profits of our
own people. Upon the same principles, applied to other

THE QUESTIONS OF THE TIMES. 297
articles, much encouragement would be given to the
cheaper production of many manufactures we should be
enabled to export in greater quantities, thus giving in
creased employment to large numbers of our people, and
furnishing an enlarged market at home for the produc
tions of the field and workshop.
In striking contrast with the long-continued extrava
gance of those in power is the course pursued by the
Democratic party in the House of Bepresentatives last
session, when, for the only time in many years, it obtain
ed a majority. It was at first fettered by a rule estab
lished by the Bepublicans, that no law as to appropria
tions, upon an appropriation bill, should be repealed or
even modified, unless it had the assent of two-thirds of
the members. Wise efforts in favor of economy encoun
tered the bitter and persevering efforts of the Bepublican
Senate. Yet against all the obstacles placed in its way
the Democrats effected a reduction within a fraction of
$30,000,000 from the appropriations of the previous year
by the Bepublicans. This is an annual relief of over a
hundred thousand dollars from the burden of the tax
payers in each Congressional district throughout the
country, and nearly three millions and a half to the State
of New York. It is over fifty-five millions less than the
amount asked by the Administration, and yet ten millions
more than it would have been but for the opposition of
the Bepublican Senate. In the State of New York, un
der Democratic rule, taxation for the present year
has been reduced nearly eight millions of dollars, as com
pared with 1874, and the saving to the county of New
York alone is nearly four millions.
The oppression of the Southern people by the party in
power invites the most serious consideration at the pres
ent time. My views are those expressed by President
Grant when, before he was trammelled by partisan con
siderations and after careful inspection of the Southern
States, he expressed satisfaction that " the mass of the
Southern people accepted the situation of affairs in good
faith; " that the questions which formerly divided the sen
timents of the people of the two sections are regarded by
the South as forever settled by the highest tribunal; and

298 THE QUESTIONS OF THE TIMES.
that " immediately after the close of the rebellion there
was a very fine feeling manifested in the South, and that
we ought to take advantage of it as soon as possible."
Instead of taking this, the only right course and the only
course in accordance with the interests of the people of
the North, the national Government has been wrongfully
represented in the South by corrupt men.
The most serious results must follow to the people of
the whole Union, if, under an usurped power, the con
tinuation of military interference and despotism such as
have been conspicuously exemplified in South Carolina
and Louisiana, and now existing, should be permitted.
The beneficial restoration of concord and the Union can
only be effected by fair dealing and constitutional liberty.
If we consider the importance of the welfare of the
Southern States with a view simply to our own interests,
we cannot fail to see how greatly the prosperity of our
merchants and lawyers depend upon theirs. Their exports
for the last five years were almost twice as large as all
the interest on the national debt during the same time,
and were, at least, equal in amount to three-fourths of the
exports of the North. Thus we see at a glance how deep
ly we are concerned in the welfare both as furnishing
means for paying the national debt, and as a market on
which the profits of our merchants and the employment
of our people so greatly depend.
However great the financial blunders through which
the national debt is now far larger than it ought to have
been, the money advanced was paid in good faith, based
on the promises of the nation, and its honor and credit
require that both interest and principal shall be paid in
coin. The people, without regard to party, united with
great promptitude and bravery in the preservation of the
Union, and submitted to the most exorbitant taxation and
exactions without a murmur. When the war was over,
it was generally expected that heavy taxation would
cease ; but, instead of this, the burdens have continued,
and seven hundred millions of direct and indirect taxes,
besides the needlessly extravagant and profligate cost of
collecting them, have been taken from the people, although
that payment could well have been deferred until the

THE QUESTIONS OF THE TIMES. 299
financial condition of the country would better have
enabled our citizens to meet it. The determination of the
people to pay the debt, the known magnitude of our
resources, and the rapidity of their development, are such,
that after the resumption of specie payment its gradual
reduction may be anticipated.
The approach to specie payments should be by such pru
dent measures as will leave no cause for reaction, and inter
fere as little as possible with the relations of debtors and
creditors, giving individuals ample time to prepare for a
new condition of affairs. The Bepublican party, while
professing to be in favor of a return to a sound currency,
has constantly evaded it in practice. In the Forty-third
Congress it repealed the delusive pledges it had previously
made, by announcing that, in four years, specie payments
should be renewed, but up to the present time has accom
panied the resolution by no act to render it effective.
On every point the Administration and leaders of the
Bepublican party have amply proved that however
specious their promises may be, no confidence can be
placed in them, and at the last Congressional election the
people, by an overwhelming vote and by a common im
pulse throughout the Union, recorded an emphatic verdict
of condemnation. It is only to the Democratic party that
we can look with expectation of reform. We need a
restoration of cordial harmony between the North and the
South, and conciliation of the races. Can we have any
hope of these benefits from the party which has fostered
discord and relies upon it for a continuation of these
things which it most desires ? Are we to expect a purer
government from the party which, for the benefit of its
own members, has doubled the number of its office-holders
at a time when the work to be done was diminished ?
After the stupendous financial blunders now acknowledged
by leading Bepublicans, and which probably doubled the
cost of the war, are we to look to the same party for
extrication from difficulties into which it has plunged us ?
Can we expect from it sincere investigation into its own
wrong-doings, or fair treatment of charges against its
own members from exposure of which guilt it would
suffer ? It would be unreasonable to trust for such a re-

300 THE QUESTIONS OF THE TIMES.
duction of taxation, for such revenue reform, and extension
of markets as are needed, for the products of our industry
to the party which has already, by its anti-commercial
policy, brought embarrassment and ruin upon so large a
portion of the mercantile and laboring population. Un
der these considerations, it is clear that the mission of the
Bepublicans has ended, and that a new party should take
possession of the reins of power, and revive those inter
ests which are so important to the people at large.
No matter how well meaning the Presidential candidate
of the Bepublicans may be, it would be impossible for
him to be an effective supporter of reform and entrench
ment. He would, from the moment of his election, be
surrounded by those who, with their adherents, including
over a hundred thousand office-holders, constitute the
present Bepublican party and profit by the taxes wrung
from the hard earnings of the people. They would be
the power behind his office, and he would become a tool in
their hands. On the contrary, a Democratic President,
with a Democratic Cabinet, fresh from the people, and
representing their principles and wishes, would, from the
absolute necessity of their position, be compelled to en
force measures of economy and integrity, and reform the
abuses against which they protest, which have been created
by the Bepublicans, and for which they are responsible.
It is not only the success of the Democratic candidate
for the Presidency that is important to the people. It is
essential to the restoration of national prosperity that
the Democratic party should retain its preponderance in
the House of Bepresentatives. My record as a member
of that House for the four terms during which you have
honored me with your confidence, is open to you all, and
well known to nearly all who are before me. I have al
ways regarded it as of the first importance that Congress
should steadily indicate a rigid determination to restore
the currency to a sound basis at the earliest term consist
ent with the business interests of the country ; that the
paper dollar may be convertible into coin at the option
of the owner, and be as valuable as a dollar in gold. By
adherence to this course, business would gradually adapt
itself to the new basis without injury to the business

THE QUESTIONS OF THE TIMES. 30]
interests of the country. Confidence would return, and,
with it, prosperity would prevail. My vote has always
been in favor of such measures as will promote harmony
in the Southern States, and make the Union, with its
attendant benefits, a union more and more fully in spirit
and in substance. I have endeavored to promote such a
reform and simplification of the tariff as will restore our
tonnage, stimulate manufactures, and extend our com
merce, while it will at once increase the revenue and
lighten the burden of taxation. I have especially labored
for the establishment of such an extension of our com
mercial relations with adjacent countries as could not fail
to be mutually beneficial to all parties interested in them.
My views on these and other subjects are already familiar
to many who are now present, and if again returned to
Congress, you shall find me in the future, as I have been
in the past, an earnest and consistent supporter of your
interests, and of those principles and measures which
conduce most to the welfare of our country.

A FEEE CANAL POLICY:
THE BEST GUAEANTEE FOE THE PEESEEVATION AND
INCEEASE OF OUE INLAND COMMEECE.
At a meeting of the members of the Chamber of Commerce,
New York Produce Exchange, Ship-owners' Association, and
Citizens' Association, held in the city of New York, March 9,
1870. Mr. Chairman : I do not intend to enter into the de
tails of the great subject before us, but briefly to indicate
my concurrence with those who wish to carry to success
ful completion the early policy of the founders of the
Erie Canal, and thus aid in further developing the numer
ous agricultural, manufacturing, and commercial interests
of our country.
I need not remind the audience before me that the
existence of the metropolitan city where we live is owing
to its superb position at the mouth of the Hudson Biver,
its admirable harbor, and to the extension of navigation
to the Great Lakes. Bailroads — those marvellous crea
tions of less than half a century — cover our country with
a network, and lead from the Northwest to many cities
on the Atlantic Coast; but, of all the sisterhood of
United States, New York alone possesses a good water
route from the lakes and the great granary of the interior
to the ocean. With proper care of it and its connections,
this public work will render benefits to our race greater
than those of the far-famed Canal of Suez, for it will
bind to the Atlantic coast and to this city, which, though
already great, is yet in its infancy, the vast and now
sparsely inhabited Northwest, where, within the life-time
of some who now live, many additional millions of the
most energetic and industrious of the human race will
dwell, and, aided by all the labor-saving appliances of
present and future inventions, pour forth their invaluable

A FEEE CANAL POLICY. 303
productions to swell, beyond all our minds can now be
lieve or imagine, the volume of their trade with New
York, and of that commerce with the Western nations
of Europe and other countries, of which this city is
marked out by nature as the proper depot.
During my recent travels in the Old World, the former
and present sites of its commerce naturally drew my at
tention, and brought vividly before me the causes of their
rise and fall. I found everywhere that, although rail
roads are preferred as the means of carrying passengers,
and transact an enormous and increasing business in
freight, the canals and natural water-courses compete suc
cessfully with them in the carrying of heavy and bulky
articles, such as form almost exclusively the mass of the
^exports from the West to the Atlantic.
In the investigations I made in 1858 as to the proposed
ship-canal between the Atlantic and Pacific Oceans, I
found it was calculated by competent engineers that the
cost of the transportation of a ship and cargo of one
thousand tons by such a canal would probably be less
than one-twenty-fifth part of the cost of transporting the
cargo by rail. The same ratio will not hold good as to
transit by canal and by rail between New York and the
Lakes, but, during those months when water communica
tion is annually open, the experience of our State and
other parts of the world' demonstrates that it furnishes
the cheapest mode of transmitting all the commodities
which are of great weight and bulk in proportion to
their value, and for which swiftness of movement, at
additional expense, is not desired.
I have found, with much regret, that while the popula
tion of the United States is steadily increasing at the
rate of about three and one-half per cent, yearly, and
the chief productions of the Western grain-growing
States are increasing in a grater ratio, the condition of
our canals and the tolls demanded on articles passing
through it have been and are such that the trade of New
York in wheat and breadstuffs, the chief staple _ of
Northern exports, is stationary. It is also an alarming
fact, and one that should be known to every voter in the
State of New York, for it rests on the authority of the

304 A FEEE CANAL POLICY.
State Engineer himself, that although the productions
naturally seeking transit through the canal have long con
tinued to increase, that important public work itself has
been so unjustifiably neglected that its capacity to carry
has actually been diminished. In the estimate I have
made as to the Western productions brought to this city,
I include all that is brought by rail.
Viewing the subject superficially, it may seem that a
rivalry injurious to the railroads of our State might be
created by an enlarged canal ; but it is not difficult to
appreciate the essential harmony of the interest of the
two systems, when we reflect on the amount of Western
productions already going and likely in increased quanti
ties to go elsewhere, but which, through the attraction of
cheaper and quicker transportation on the canal, would
be brought by lake vessels to the chief termini of our
largest roads. During six months of every year the
railroads would have a monopoly in carrying heavy and
bulky articles, as they would have throughout the whole
year, in the additional passengers and light goods brought
to them by the certain advance in the general prosperity.
A brief consideration of the physical features of the
country whence our inland commerce is derived, and on
which also our imports chiefly depend, will enable us to
appreciate the subject in its true relations. The great
mountain ranges of the North American continent are in
two chains, one being far to the West, and known as the
Bocky Mountains, and running parallel to the Pacific
from near the Arctic Ocean to the Isthmus, and the other
known as the Appalachian or Alleghany Mountains in
the East, and running parallel to the Atlantic coast.
The latter range reaches from Georgia to the Catskill
Mountains, where, through an opening made when the
mountains were formed, and increased by attrition, the
Hudson flows, and affords to commerce the facilities
which, in connection with our almost unrivalled harbor,
and the low level of the land of this State between that
river and Lakes Ontario and Erie, gave to New York its
trade and commerce.
The political and commercial importance of the region
thus described has been duly estimated by the thought-

A FEEE CANAL POLICY. 30S
ful men of this continent ever since its formation was
understood. The attention of Washington was given to
the subject as soon as he attained majority, and, with
a view to developing its advantages by opening an ade
quate water-course, he followed the Mohawk until he
reached the summit separating the streams which flow
into Lake Ontario and the St. Lawrence from those flow
ing into the Hudson, and, with the foresight of a true
statesman, declared that through the depression he thus
examined would be the chief thoroughfare of the com
merce of the interior with the Atlantic coast and the
. nations on the other side of the ocean.
On the eastern side of the river the mountains resume
their course, and, under various names, continue to the
northern extremity of Gaspe, preventing the St. Law
rence from flowing southward, and driving the waters
from the Great Lakes so far to the north, that exit and
entrance for vessels by way of Montreal and Quebec are
impossible for half the year.
The vast plain comprised between the two great moun
tain ranges has an average breadth of more than one
thousand four hundred miles, and arithmetical calcula
tions fail to give us an adequate idea of its area from the
Gulf of Mexico on the south to its extremity on the
north. Bivers of large size flow into the Arctic Ocean,
but there the severity of the climate is such as to pre
vent the formation of ports accessible to shipping, and
thus these rivers may be dismissed from consideration as
channels of commerce, except so far as they will contrib
ute to the trade which will concentrate on Lake Supe
rior. The remainder of the natural system of commer
cial arteries is of wonderful simplicity, and consists of
only two great rivers — the Mississippi and the St. Law
rence. The Mississippi is navigable for nearly two thousand
miles from the Gulf of Mexico, and, but for the injury
done to grain and other perishable articles by passing
through a climate so hot as that of New Orleans, this
river would be used for freightage to a much greater
extent. Its course leads away from Europe, but toward
the tropical countries of the West Indies and South
20

306 A FEEE CANAL POLICY.
America. The necessities implied by these facts have
been so fully appreciated by the people of the Missis
sippi Valley, that they have already connected its vast
inland navigation with the Great Lakes by four lines of
canal and numerous railroads, so as to obtain an outlet
for their products by Atlantic ports instead of by their
own river.
Thus the great course of the inland trade of this con
tinent is to and fro between the East and the West.
Before the Erie Canal was opened, the difficulties of car
riage between these two portions of the Union were so
great as almost to constitute an embargo ; but no sooner
was this public work in operation than the cost of trans
portation from Buffalo to Albany was reduced from one
hundred dollars to ten, and afterwards to three dollars a
ton. Until the canal was made, the productions of the
West were of little commercial value ; there, were few
inducements for the emigrant to settle on the new shores
of Lakes Erie and Michigan, while the country beyond
them was a yet more unbroken wilderness. The open
ing of the canal had an electrical effect not only in oiir
own country, but also in stimulating the immigration of
the laboring population of Europe; and the develop
ment of the West was accompanied by a corresponding
increase of business in the city and State of New York
and New England.
In the meantime the people on the northern side of
our frontier were not forgetful of whatever advantages
belong to the St. Lawrence, and, by a series of canals
and lakes, they enabled vessels to pass around the rapids
of that river and into Lake Ontario from the ocean,
and also made another ship canal from Lake Erie into
Ontario. So long as we adopted a wise commercial policy, and
also enlarged our canal from the Hudson to the lakes in
due proportion to the increase of Western and Canadian
trade, the route by the way of New York easily main
tained its supremacy, and our port, open at all seasons,
was secure as the great distributing market of grain and
breadstuffs to the South, to New England, and to
Europe. Now, not only are we remaining stationary

A FEEE CANAL POLICY. 30 7
but the exports of our products by our foreign neighbors
are greatly increasing. The Northwest of our country
and of British America is likely soon to enlarge im
mensely its production of wheat to an extent far beyond
the quantity required for consumption in the United
States and Canada. The densely populated countries
of Western Europe will be the chief market for this
surplus. Thus it becomes important that, while we know that'
our port occupies a central position, and by its trade
with Northern and Southern regions, is the chief rendez
vous of this continent for shipping from all parts of the
world, we should not be guilty of the folly of ignoring
the fact that the St. Lawrence leads almost in a direct
line from the great grain-growing regions of the West to
those nations of Europe whose people are and will be the
chief consumers of the grain exported from the United
States, and that the British and other foreign vessels
used to take cargoes from our other seaports, or Mon
treal to Europe, will be likely to bring back return
freight, thus doubly injuring our trade.
By a liberal and progressive policy as to the canal, we
shall not only arrest the departure of trade from us, but
greatly increase its volume by restoring the traffic in
many important articles which had been diverted to some
extent to other channels, sometimes, of late, charging less
for transit.
Nature herself seems to have intended to aid man in
connecting Lake Michigan with the Mississippi Biver.
So nearly do the Fox and Wisconsin Bivers meet, that
on the map they seem to be the same river. Already,
by the aid of a few short canals and locks, steamboats of
light draught pass, during the period of high water,
from " the Family of Lakes to the Father of Waters."
Iowa, Minnesota, and Wisconsin are eagerly looking for
ward to the enlargement of this channel. Beliable en
gineers who have investigated the subject give assurances
that, by connecting various rivers, communication by
water can, at very moderate cost, be continued into the
interior of the continent for hundreds of miles beyond the
Mississippi.

308 A FEEE CANAL POLICY.
The first link in this vast and unequalled series of
water channels is the canal leading westward from
Albany ; and that its enlargement at the earliest possible
time is one of the most desirable events for the nation at
large, and especially for our own city and State, cannot
be doubted by any who examine the subject with candid
and unbiased minds. The question arises — -by whom
shall it be done?
It is yet in our power to make such reductions in the
cost of transportation to New York as will secure this
trade to us, by enlarging the canal so as to permit the
passage of large boats, then introducing the use of steam
,as a propelling power, and adopting, to the fullest extent,
that rule which is the best policy toward ourselves and is
due from us to every other State of the Union, and from
.every State of the Union to us — -the freest possible tran
sit of passengers and trade through our territory. We
.should as soon as possible reduce the tolls on our public
works to the minimum cost of their current expenses,
allowing a moderate amount annually for interest on the
sum expended and to discharge the principal.
A measure has been introduced into Congress asking
for aid to complete a canal from Buffalo and Oswego to
tide-water, capable of floating vessels of six hundred tons
burthen. Apart from the difficulties, delays, and doubts
which beset the passage of such a measure at the present
time, when the public mind is looking forward to national
retrenchment, the plan is liable to most serious objections.
It is desirable that we should keep the canal entirely
under our own control and ^unfettered by conditions.
At the time of the last census the population of the State
of New York outnumbered that of at least a dozen other
States. In accumulated capital the disproportion is yet
more conspicuous. Ours is pre-eminently the commer
cial State, and is not only amply able itself to do the
work, but is especially interested in maintaining the great
thoroughfare for trade from the West.
Looking at the authentic statistics of the Erie Canal,
apart from the lateral branches, we find that the returns or
income from it some years ago exceeded the aggregate ex
penditure for its original cost, the interest, maintenance,

A FEEE OANAL POLICY. 309
repairs, and all other items^-and are precisely $140,430,-
953.40, while the tolls derived from it have been over $87,-
000,000, and the interest on them exceeds $94,000,000 ;
the total income being $181,828,603.83, or more than $41,-
000,000 over all its other expenditures from the beginning
to 1867, while since that time, a large addition has been
annually made to this surplus.
Taking a more extensive but no less truthful view of
the case, the mind glances at the farms, manufactories;
villages, and cities it has created along and near its line,
and the additions it has made to commerce, wealth, and
population at its terminus. I speak far within the boun
daries of accuracy when I say that in its indirect results
to the people of this State the canal has been beneficial
to an extent greater by very many times than all the
direct revenues or profit drawn from it. We are to esti
mate this part of the subject by the increase of individ
ual wealth throughout the community, the rise in real'
estate, both in city property and in farms, and by the-
multiplication and prosperity of our people. It would
not be difficult to show that by opening out the West to
settlement, the canal contributed more than any otheu?
single cause to the preponderance of the power of the
North. The fifteenth of last month is memorable for the cele
bration of the beginning of work on an undertaking of
stupendous importance to mankind, not only in itself, buU
as a forerunner of many others yet to be accomplished.
I allude to the railroad known as the Northern Pacific,
by which St. Paul and the Mississippi will be connected!1
with Lake Superior, and a new line of rail, running con
tinuously through the most fertile belt of the Western
half of this continent, will be established from the great
est of all our inland seas to the Pacific. It has for us a
special significance and interest.
Partly through difficulty of access, and partly through
the machinations of that " Last Great Monopoly " — the
Hudson's Bay Company — the public has only recently
known that West and Northwest from Lake Superior is*
a vast area of fertile land, much of it equal in fertility
to that of Illinois, while it surpasses that far-fame^

310 A FEEE CANAL POLICY.
State by many times in extent. Acre for acre, a portion
of it, equal in size to more than five such States, will
probably not be inferior to Illinois in the value of its
productions. It includes not only much of our territory,
but also the rich wheat plains of the Bed Biver of the
North, and those of the yet greater Valley of the Sas
katchewan, well named the Mississippi of the North,
which are ready to pour millions of tons of grain into
the cars of the railroad, as soon as its passenger trains
afford an opportunity for the industrial army of settlers
to make war upon the yet primeval wilderness. The
soil, like that of Minnesota, can be brought under culti
vation with remarkable ease, and is so peculiarly adapted
to the growth of wheat, that, probably in a few years,
the portion of the United States and the British Posses
sions, that will seek shipment for its grain on Lake Supe
rior, will be the great wheat granary for us and the
people of Western Europe. The prospect thus opened is
stimulating the Canadians to a completion and vast
enlargement of their rival works, and affords valid
reasons why we should strenuously prepare to receive a
trade which it is in our power to secure, but which, if
once lost, we may never be able to regain.
That part of Lake Superior to which the products of
this vast area will soon be brought by the Northern
Pacific and other railroads is, by water — the cheapest
of all methods of transportation — almost as near the
western part of our State at the terminus of the canal at
Buffalo, as it is to Chicago. From Duluth, the depot of •
the road on Lake Superior, the cost of carrying freight
by water to Buffalo, or Oswego, will not be more than
one-third of the cost by rail. This brings the subject
closely home to us of New York.
At various other points along the lower lakes are rail
roads, carrying grain to other Atlantic ports. This
State alone has the advantage of cheap water carriage
from the lakes to the ocean, and this city is the only
place on the Atlantic to which trade can thus be
brought. _ A large increase of trade will also take place '
from Chicago and Milwaukee, and the regions tributary
to them; but this part of the subject is more generally

A FEEE CANAL POLICY. 311
understood than that I have endeavored As briefly as pos
sible to describe.
For many years this State has ceased to meet its obvi
ous interests and necessities with its former foresight and
vigor. I rejoice that under the influence of many leading
men of both political parties there is reason for hoping a
wiser policy may be adopted, in view of the fact that,
while the receipts of grain and flour at the upper lake
ports and Montreal have enormously increased during the
last ten years, those of our own city have diminished.
They were less in 1867 than in 1860, and less by more
than nineteen millions of bushels in the last two years
than they were in 1861 and 1862.
The amount of tonnage of the trade we are permitting
to leave us, or are driving away by the joint influence of
high tolls and a shallow or neglected canal, was no less
than 6,442,225 tons in 1868. The tonnage of all the
American and foreign vessels entered and cleared in this
city, to and from foreign ports, in the same year, was
5,109,722. In making the comparison, the figures as to
the canal represent the actual number of tons of freight,
while those of the foreign trade denote, not the cargoes,
, but the size of the vessels.
It is shown in an official document, recently prepared
by Mr. Nimmo, Chief of the Tonnage Division of the
Treasury Department, that the total tonnage of all the
vessels entered last year at New York, Boston, Philadel
phia, Baltimore, New Orleans, and San Francisco, the six
principal ports in the United States, was, in the year just
ended, only 5,224,578, being, by much more than a mil
lion tons, less than the actual amount of the commodities
carried on the Erie Canal in the same year and exclu
sively by the vessels of our own country.
I am credibly informed that if the canal should be
enlarged so as to pass vessels of 600 tons, and permit the
substitution of the illimitable power of iron and steam
for that of the comparatively weak muscles of horses,:
freight might, exclusive of tolls, be carried at a living
profit over the canal and Hudson from the lakes to New
York for considerably less than half a cent a ton for each
mile, and that the total cost of bringing a ton of grain

312 A FEEE CANAL POLICY.

from -Chicago to New York need not exceed $3.75.
Thus we should give the grain producers of our country
unprecedented facilities for successful competition in for
eign markets. The benefits created would extend to
purchaser and consumer everywhere. There can be no
doubt that by attracting trade through a judicious and
liberal system of low tolls, the revenue directly derived
by the State Treasury itself from the canal would be faf
greater than if we continue the absurd and unbusiness*
like policy of gradually driving trade away by eXorbt ,
tant charges. By the better policy now proposed the
commodities brought to our city would be incalculably
increased. Their transshipment and the profit in buying
and selling them would appertain to our forwarders and
merchants, and give employment to many thousands' of
our people. Where the productions were sold, othef
articles would be bought in exchange ; and there is no
branch of industry that would not be benefited.
I rejoice to know that the interests of our city are
those of the Union at large, and that, in finding or mak
ing a way to develop the natural advantages of our po
sition, we not only benefit ourselves and the North*
west, but, by increasing profitable shipments of our pro
ductions to other countries, enable our people more
easily to pay interest on the large and increasing amount
of our national and other securities held in Europe.
The canal is, both locally and in a cosmopolitan sense^
an important division of that yet more comprehensive sub
ject, the commercial intercourse which is materially the
main-spring of modern triumphs over the forces of nature,
of the advancement of civilization, and the increase of
human welfare. In a familiar photograph of the travel
ling and carrying system of his time, Shakespeare pleas
antly suggests how recent is the progress of our race on
these points. We remember how the company of eight
or ten persons assembled at Gad's Hill and travelled to
gether for protection against common danger, and how, of
the two strictly professional carriers, one had, on his soli
tary horse, " a gammon of bacon and two razes of ginger,"
and the other " had turkeys in his panniers." Having
thirty miles to travel, the members of the cavalcade rose

A FEEE CANAL POLICY. 313
at two in the morning that they might perform the jour
ney before night. In those days not only was there no
railway and no canal, but even good wagon roads had no
existence. When estimating what the future will be, we
properly compare the past with the present, as it is not
only in Great Britain and throughout Europe, but in this
country, a wilderness in Shakespeare's time. Instead of a
couple of carriers owning two horses, laden with one
piece of bacon, two " razes " of ginger, and half a dozen
turkeys, the modern substitutes in the United States
alone have a capital measured by thousands of millions
of dollars, and their traffic is estimated to be worth ten
thousand millions of dollars annually.
Such facts as these indicate the tendencies of an era
that has yet by no means arrived at its climax. Equally
instructive is the lesson taught by the various great
nations of ., antiquity, such as Egypt, Assyria, Greece and
Eome, which arrived at a high degree of civilization, but
fell, mainly because they transferred to the oppression
and plunder of other nations the energy which would
have insured their prosperity if it had been applied to the
development of their own productiveness. The United
States, to a greater extent than any other country, either
of ancient or modern times, possess alike the unprecedented
appliances of modern science to the production of all
that is desirable for the material welfare of man, and
unlimited natural resources ; and no limits can be
assigned to our progress, if to a sound and decisive
policy on subjects directly financial, commercial, and
educational, we add due attention to the material advan
tages obviously within our reach.

THE END.

INDEX.

Agricultural productions, how prices in are
chiefly regulated, 148, 189 ; trade with
Canada in, 93 ; large exports from United
States to Canada, 146, 148.
Alabama claims, the fund awarded should
be distributed in good faith, 227.
Amnesty bill, at variance with self-gov
ernment, 261, 262.
Annexation, true policy of the United
States as to, 169.
Arbitrament, international, a substitute
for brute force and the horrors of war,
234.
Armaments on the Great Lakes, 89.
Arrests, sometimes arbitrary during the
war, 267.
Assay office in New York, should have
right of coinage, 285 ; amount sent by it
to Philadelphia for coinage, 287; work
done by, 291 ; could be fitted for coinage
at small cost, 291.
Atrato ship-canal, its great importance to
the commerce of the United States and
other nations, 11, 132 ; early surveys for,
13 ; saving in time and distance, 14, 29.
Austria, financial experiments of, "Vien
nese tender," 216.
Balance of trade with Canada, 67, 69, 93 ;
" balance of trade " illustrated, 93, 95,
146, 147 ; with Canada for several years
after repeal of treaty was against the
United States, 145 ; old theory of balance
of trade exploded, 179.
Banks, how forced to suspend in 1861, 206,
207.
Banking, on resumption of specie payments
should be free, 21 9.
Bankruptcies unprecedented in number,
214.
Bankrupt law, its importance as a perma
nent act, 34, 54 ; should be uniform, 34 ;
encourages integrity, 37 ; is in accordance
with American institutions, 39 ; properly
regulated, is a necessary part of every
commercial system, 40 ; specially needed
in the United States, 42 ; is no untried
theory, 57 ; benefits creditors, 47 ; former
laws in the United States, 49; found
beneficial in England, France, etc., 39.
Boston Board of Trade, recommends nego
tiations for free trade with Canada, 151.
Bright, Hon. John, on legitimate develop
ment of the Monroe doctrine, 119 ; his
wishes and hopes as to the future of
America, 176.

British Islands, value of their real and
personal property, 103; levy duties on
few articles 110, 114.
British North American Provinces, our
commercial relations with, 59; impor
tance of trade with, 60, 68; territorial
extent of, 64, 65 ; balance of trade with,
67 ; relations of the provinces to each
other and their separate tariffs in 1864,
70 ; population of each province, 127, 128 ;
free exchange with, would benefit both
countries, 72, 81 ; statistics of trade
with, 74.
Bull Run, battle of, dissolved many delu
sions, 206.
Canada, population of, its number and
character, 129 ; trade with tropical coun
tries, 131 ; extent of her commercial ma
rine, 133, 159 ; means of communication,
129 ; obstacles to trade with, 138 ; govern
ment and people anxious to negotiate
in a friendly spirit, 121,156, 172; extent
of, compared with that of our own states,
158 ; commercial isolation of, injurious,
158; rate of wages in, 159; chiefly a forest
and farming country, 160; contrasted with
the Hawaiian Islands, 164 ; importance as
a military power, 168 ; trade with, in
1874 and 1875, 170; a just treaty with,
would promote the best principles of in
ternational good-will, 176; the sound
policy towards her people, 177, 178 ; as a
province in 1864, 70 ; now charges same
duties on manufactures from all coun
tries, 83 ; trade with the United States
greater than with all other countries
added together, 94 ; extent, area, .and cli
mate, 125 ; extent of North-western
Canada, 125, 126 ;
Canadian Government promises fullest con
sideration to proposals for closer com
mercial relations with the United States,
173 ; tariff now admits free of duty near
ly all so admitted under the former
treaty, 173 ; general moderation of pres
ent tariff, 138.
Canals, ancient and modern, 12 ; magni
tude of the Brie Canal (see Erie Canal),
12 ; projected across the Isthmus of Da-
rien (see Darien), 14, 303 ; canals and nat
ural water-courses, their value for car
riage of heavy freight, 303.
Carrying interests of the United States re
quire mutually free transit with Canada.
140.

316

INDEX.

Centralization contrary to truly republican
government 275.
Central America, extension of trade with.
119.
Central States, their interest in trade be
tween Canada and Mexico, 131.
Chase, Hon. Salmon P., reply to when Sec
retary of the Treasury, 185, 186, 188, 199.
Chamber of Commerce of New York de
sires removal of hindrances to trade with
Canada, 150.
Chicago, her board of^trade desires nego-
tjons for closer business relations with
Canada, 151 ; her interest in trade with
Canada and Mexico, 163.
China, small amount- of our exports to, 134.
Chipo route across the isthmus, 18.
Cincinnati Convention, resolutions as to
slavery, 239.
Circulation, monetary, alarming increase
of, 199 ; of the banks, 198 ; disastrous re
sults of sudden expansion of, 198.
Circulating medium, changes in, 44.
Clay, Henry, on reciprocal trade with Can
ada, 132.
Coal, free exchanges of with Canada would
save both countries the cost of carrying
for hundred of miles,. 78, 97 ; labor-sav
ing and should be free of duty, 97 ; mu
tual exchanges with Canada, 148.
Cobden Richard, his initiation of a treaty
/ with France, 169.
Coinage in New York, demanded by jus-
* tice and economy, 285, 292 ; would aid in
restoring specie payments, 286, 288 ;
v urged by leading statesmen from various
' states, 288 ; reasons why delayed, 291.
Colonial privileges in Great Britain an
nulled, 83, 89 ; rights compromised, 94 ;
"restrictions passed away, 173.
Color-line, political, must be destroyed,
275.
Commercial union and mutual rights of
transit important to the United States
and Canada, 140 ; isolation, one party
may suffer more than another, but both
are injured, 83; intercourse, beneficial
political results of, 120 ; relations, natu
ral, in the main immutable, 123.
Commerce through the Union gives life to
industry in every state, 35 ; its hazards,
40 ; as a source of strength in war and
peace, 114; views of early American
statesmen as to, 156 ; has long been ne
glected by our legislators, 296.
Commissioners to negotiate a commercial
treaty with Canada, 137 ; appointment of
recommended, 59, 86, 98, 99; recom
mended by the Legislature of New York,
136, 151 ; and by chief commercial bodies
throughout the United States and Cana
da, 151, 154, 160, 173.
Commission of bankers and merchants, to
devise a financial plan during the war, re
commended, 204-
Conduct of the war,, true policy of the
government as to, 256.
Connecticut money, how it became worth
less, 195.
Contraction of currency indispensable, 224 ;

should be so gradual as not to provoke
reaction, 224, 225.
Continental or American system of trade,
130 ; our duty to lead, the way is open, .
182 ; continental money, its decline, 195.
Convention of 1818 with Great Britain, 61 ;
opinions of Daniel Webster on, 62.
Cotton manufactures, sales to Canada, 136,
167.
Corn laws, British, their -repeal a triumph
of public liberty, 79.
Cuba, extension of trade with desirable,
120, 130 ; present unsatisfactory condi
tion of trade with, 120 ; former arrange
ments for extended trade, 120 ; wishes of
her people for freer intercourse with the
' United States, 121.
Darien, canal across isthmus of, 16 ; sur
veys by different governments, 18; in
terest taken by different nations; 20, 22 ;
canal across would aid in maintaining*.
supremacy of the United States, 23 ;
tables showing savings to the United
States, 23 ; showing how soon the cost
would be repaid, 23, 27 ; cosmopolitan as
to its results, and should be international
in character, 32; cost repaid by France
and England, 23, 24 ; value to New Eng
land and coasting vessels,, 30 ; how gov
ernment should aid, 26.
Debtors, ancient treatment of, 41 ; if up
right should be permitted to begin the
world anew, 39, 51 ; how demoralized by
oppressive laws, 47.
Debasement of the currency, a favorite
resort of short-sighted statesmen, 196.
Democrats, their traditional policy is for
sound money, 220.
Destitution prevalent and disregarded,
171.
De Tocqueville, the first notion is that of
violence, that of persuasion is derived
from experience, 82.
Divide and conquer, the favorite game of
oppressors, 275.
Dominion, Governor-General and other
official authorities promise the fullest
consideration to proposals for commer
cial treaty with the United States, 151 ;
Board of Trade is anxious to deal liber
ally etc., 151; but thinks extension of
trade should be first proposed by the
United States, 172.
Embarrassments of Trade in 1876, 124.
England, commercial treaty with France,
its origin and beneficial results, 16.9, 170 ;
Bank of England, its financial experi
ence, 214, 215.
Erie Canal, its importance to New York
and the nation, 12, 303 ; injurious and un
justifiable neglect of, 304 ; it reduced cost
of freight marvelously, 306 ; its enlarge
ment desirable. 308, 311 ; expenditures,
income, and results of, 309 ; a cause of
preponderance of northern power, 309 -t a
free canal policy essential, 302, 312.
Error, the great financial, of the govern
ment, 208.

INDEX.

317

Everett, Hon. Edward, nothing is to be
gained by a war of tariffs, 89.
Exchange of products of industry, 118.
Exports to Canada, increase under former
treaty, 68, 92 ; from the United States,
larger than to any other country, except
Great Britain, Germany, and France,
134 ; are much underrated, 134 ; in 1876,
167; amounts of are insufficiently re
ported, 167.
Experience teaches successive generations,
etc., 214, 272.
Extension and freedom of trade over the
American Continent, 120.
Failures, number in various years, 38, 52,
55, 58, 205 ; liability to, 40.
Favoritism, needless increase of employees,
.296.
Financial condition of the nation, 183;
problem— how shall it be solved? 205;
history of the United States since the war
began, 205, 206 ; errors from mistaken
views of the war, 206 ; policy of delusion
of the people adopted, 206.
Finance, its lawB as sure as those of arith
metic or gravitation, 194, 214 ; estab
lished axioms of, 215, 216 ; experience of
the United States and Canada, 217.
Fire, losses by, in Boston and Chicago,
213.
Fisheries, value of Canadian to New Eng
land and the nation, 60; their extent,
61 ; prospect of war as to, 62.
Flattery of the people injures a just cause,
265.
Food and fuel should be supplied at lowest
practicable cost and not taxed, 161.
France, her occupation of Mexico, 117;
her commercial treaty with England, its
origin and beneficial results, 169, 170 ;
recent financial course sketched and re
commended, 209, 210 ; her course the re
verse of ours, 211; wise policy of the
Bank of France, 210 ; former deprecia
tion of currency in France, 216.
Free ports in Canada in 1864, 98 ; canal
policy, the best guarantee for the pre
servation and increase of our inland
commerce (see Erie Canal), 302.
French assignats, how they were refused
in making new bargains, 194 ; became
worthless, 195.
Frontier, northern, its commercial in
terests, 64.
Geneva award, distribution of, 226 ; claims
of insurance companies as to award, 226,
227 ; confidence officially invited and in
terposition promised, 227; decisions of
the tribunal, 229 ; receipt of money by
the United States, 230 ; judiciary commit
tee advises improperly, 231 ; perversion
of funds a dangerous precedent, 233;
duty of the government, 235.
Gladstone, Hon.W. E., on the fate of trans
atlantic possessions, 177.
Gold bill, its bad effects and quick repeal,
108- repealed in fifteen days after its
passage, 209 ; the rise of gold illustrated,
197 ; gold the standard of value, 218.

Grant, President, pledges himself and Con
gress to specie payments, 221.
Grain trade with Canada one of ro-exporta-
tion, 146 ; how prices are controlled, 146.
Great Lakes, as means of . communication,
129.
Great Britain, her bankrupt laws, 41 ; pro
gress in liberty, 78; modern colonial
policy of, 173 ; former oppressive policy,
174 ; views of the Alabama claims, 228 ;
on the rights of underwriters, 230. '
Hawaiian Islands, treaty with, 112 ; impor
tant as harbors and naval stations, 116;
should not pass into the hands of any
foreign power, 117 ; treaty with, a pre
cursor of more extended measures, 123,
169.
Healing power of the political and social
body, 87.
Home markets, value of, 132.
Honduras, route across the isthmus, 16.
Hudson river, its scenery and association^,
249.
Humboldt, Baron, on the inter-oceanic
canal, 19.
Immigration, serious diminution of, 171.
Imports from Canada, 66 ; increase under
former treaty, 68; the simplest neces
saries of life, 92.
India, great value of trade with, 14.
Industrial army, on it the existence of the
army and navy and all classes of society
depends, 93.
Independence, Canadian, assertion of, 174 ;
of the United States, its effect on Great
Britain, 175 ; colonial, 98.
Inflation, injurious results of, 18S; example
of the Government followed by the banks,
191 ; painfully felt in the home of the labor-
or, 192 ; increased enormously the national
debt, 192 ; may benefit .the speculator,
but despoils the masses, 193 ; continued
until its fruits were palpable, 208 ; in
duces speculation and panics, 213 ; creates
delusive hopes, 214 ; futility of, 222 ; no
longer inflates, 223v
Insolvency, unexpected and political causes
of, 45; average among business men, 40;
laws in various states, 51.
International law, the greatest is that of
the mutual interest of mankind, 82.
Interest, unprecedentedly low rate of, 222.
Iron and steel manufactures, large sales of
to Canada, 136, 167.
Jefferson, Thomas, on hard money, 195.
Kansas, her admission as a state, 236, 238 ;
organization as a territory, 239.
Kelley, Frederick M., on canal across the
Isthmus, 19.
Labor, often in vain through obstructive
laws, 97 ; how to relieve present condition
of, 124.
Labrador, resources and climate, 128.
Land grants, ^enormous extent of, under
Bepublican administration, 295.

318

INDEX.

Lecompton Constitution, 244; confirmed
power to change form of government,
245.
Legal tender, an nnsound system of
finance, 1 84 ; absurdities of its advocates
exposed, 189 ; depreciated national securi
ties, and forced the government to pay
high prices, 192, 199 ; arbitrarily changed
relations of debtor and creditor, 192 ;
lessened the vigilance which prevents
frauds, 203 ; when and why initiated, 207 ;
unprecedented distinction made between
it and . specie by government, 207 ;
strange and fatal error as to, 208; un
stable, 218 ; when withdrawn, no more
must be issued, 219.
Lincoln, President, in his first message
tendered sound advice, 202 ; why his
proclamation of amnesty was unsatisfac
tory, 260 ; assurances given through Gov
ernor Stanley, 263 ; Lincoln desired peace,
263. '
Loans and discount, fluctuations in, 43.
Local self-government and the constitution,
275.
Making money abundant, fallacy of, 199.
Manitoba, its climate and resources, 126,
159. ¦ '
Manifest destiny, how to be consummated,
118.
Manufactures, sales of, to Canada, 134, 135,
167 ; might be largely increased, 136 ;
few imported from Canada, 73.
Markets, needed extension of, for our pro
ductions, 156.
Marine insurance, some settled principles
of, 230, 231.
Maritime provinces, population in 1874, 70 ;
their extent and resources, etc., 125.
Maryland, interested in Canadian trade,
162, 167.
Material interests, long neglected by the
Government 171.
Mexico, French occupation of, 117 ; exten
sion of trade with, 119, 125 ; population
and trade of, 121; 122 ; value of a com
mercial treaty with, 122, 130 ; railroads
in, 121, 122 ; our relations with, 59.
Military despotism in the South must in
jure the whole Union, 298.
Mint, the director of, on coinage in New
York, 292.
Monroe doctrine, implies duties as well as
rights, 169 ; has approved itself to both
continents, 117 ; a barren ideality unless
associated with friendly care for other
American states, 118; creates obliga
tions, 118.
Municipal matters, local right to deter
mine, 251.
National Board of Trade, petitioned Con
gress in favor of trade with Canada, 150,
163.
National debt, needlessly increased, 208 ;
injuries, few greater than the persistent
assertion of delusive statements, 92.
Nationality of the Democratic party, 236,
254.

Nature, the gratuities of, 96.
Neglect of commerce by the party in:
power, 161.
New Brunswick, its area and population,
127, 159.
New England, views as to trade with
Canada, 161, 162; benefit to be gained
by a commercial treaty with Mexico, 122.
Newfoundland, area, climate, trade, etc.,
128.
New York, resolutions of State on trade
with Canada. 36, 59, 136 ; the commer
cial centre of the Union, 186, 289 ; the
chief commercial city, 237 ; change in
constitution of the State, 247 ; necessity
of coinage in, 287 ; shipping commission
of, 281 ; assay office in, 285 ; imports
and exports of same, 289 ; natural depot
of the precious metals, 291 ; and the
national shipping trade, 296 ; the mone
tary centre of the Union, 290 ; natural
causes of its greatness, 302, 304 ; trade
with the West must be maintained by a
free canal policy, 302.
North and South, permanent system of ex
changes between, 130.
North-west, its climate, extent, and re
sources, 125, 310.
Nova Scotia, its area, population, etc., 127,
159.
Ontario and Quebec, formerly known as
Canada, 128 ; area and resources, 128.
Panama route from ocean to ocean, 18.
Paper money, the spectral doctrine of, 100 ;
injurious effect on the national debt, 101 ;
dollar should have been kept as near par
as possible, 209.
Parliament, British, passed a gold bill
in 1814, 215 ; investigated financial prin
ciples, 216.
Parties, comparison of the Democratic and
Republican, 297 ; integrity in public af
fairs the leading question, 293.
Peel, Sir Robert, on severing his party ties,
79.
Pennsylvania, interested in extension pf .
trade with Mexico and Cuba, 123 ; her
interests as to Canada, 162, 163.
Policy, the best, to the South, 273, 275, 298.
Preferential duties in favor of colonies, re
pealed by Great Britain, 63.
Preservation of the Union essential, 256.
Principles and policy of the Democratic
party, 273.
Prince Edward's Island, area and climate.
127.
Prosperity, cannot be secure with legalized
but irredeemable currency, 196.
Protection to home industry, by permitting
it to obtain its best results, 82; in
Canada, 72, 83 ; so called sometimes in
jurious and pernicious, 146.
Protectionists, earnestly advocate recipro
city with Canada, 163.
Prussia, the commercial policy it success
fully pursued, 140.
Public money, influence of those interested
in its expenditures, 201.

INDEX.

319

Questions of the times in 1876, 293, 801.
Railroads, their value and history, 12 ;
mania for construction of, 212 ; interest
of those in the State of New York, 304.
Reaction, financial, and consequent dis
tress, 212.
Real estate, how affected in panics, 50.
Rebellion, must be subdued, 35 ; has its
victims in the ranks of commerce, 36;
was unexpected and misunderstood, 205 ;
false prophecies as to, 205.
Receipts and disbursements of the govern
ment, motion for frequent statements
of, 201.
Reciprocity with British North American
Provinces, 59 ; naturally beneficial ef
fect of, 66 ; complication of, with the
fishery question, 64 ; to be regarded na
tionally, not locally, 64 ; as to the fish
eries, 63 ; operations of, 66 ; character of
imports from Canada, 66, 78 ; increase
of trade under the treaty, 68; opinions
of American statesmen in favor of, 85 ;
illustrated^ 86, 87 ; discussed in Congress,
138.
Reduction of taxation by the Democrats,
297.
Reformation necessary in the government,
273,
Republican party — its broken pledges, 295.
Resolutions of the State of New York on
trade with Canada, 59, 65 86, 136.
Retaliation alone, never the policy of a
true statesman, 82.
Revulsion, commercial, in 1837 and 1 857, 37.
San Miguel, route from ocean to ocean, 18.
Secession must be put down at any cost,
257 ; implies perpetual disintegration,
114, 267.
Sectional excitement, full of danger, 237,
254.
Self-government on trial in the war, 267.
Ship-canal between Atlantic and Pacific
oceans, 116.
Shipping oi the United States, how reduced,
114; act relating to merchant seamen,
277 ; its objects and results, 277 ; needed
reform of abuses, 277, 281 ; commission
ers should be appointed by central power,
283.
Simplification of tariff, 110.
> Slavery in Kansas, unnatural and tempo
rary, 247 ; prohibited by the laws of soil
and climate, 251 ; swept away throughout
the Union as the armies progress, 261.
Smuggling, how regarded and prevented,
98 ; how to diminish, 1 55 ; from Canada,
181.
t South, best policy towards, 273 ; impor
tance of its prosperity, 274 ; increase in
its debts, 274; should be treated justly
and constitutionally, 275.
Southern States, indebtedness at beginning
of the war, 38 ; indebtedness in January,
1870, 274 ; impoverishment in ten years,
274 ; people misrepresented in Congress,
298.
Spain, arrangements for extensive trade

between the United States and Cuba,
120 ; value of a treaty for tradu with
Cuba, 122.
Specie payments, should be approached
gradually, so as to avoid reaction, 299.
Speculation disastrously stimulated by ex
pansion of the currency, 199.
Standard of value, necessity of, 217 ; fluc
tuations pernicious, 217.
Stanley, Governor, officially asserted the
administration wanted only peace, 263.
Statistics, Bureau of, showing returns of
our exports to Canada, 135.
St. Lawrence River, impassable nearly half
the year, 70 ; as a route for shipping, 95 ;
circuitous route for tropical productions,
P7; its value to the United States, 79,
80, 95, 97, 147, 163, 305, 307.
St. Louis, a commercial centre under a con
tinental system of trade, 163.
Tariff, former, in Canada, 71 ; injurious in
fluence on importations from the United
States, 71 ; compared with tariff of Uni
ted States, 72 ; a praotical discrimination
against our Atlantic cities, 74 ; colonial
tariff made by the colonists themselves,
94 ; former increase in Canadian, 96 ;
tariff of the United States, 100 - should
yield the largest revenue with the least
inconvenience to the people, 101, 103;
proper objects of, 111; the sixty day
tariff, 105 ;' tariff of Great Britain, 110 ;
effects of United States tariff illustrated,
114 ; our own laws drive trade from us,
146, 162 ; Canadian, some effects of, 145,
180 ; many of its duties on our manufac
tures nearly nominal, 152 ; moderate
duties on silk, etc., 153.
Taxation, if injudicious, impoverishes the
people and diminishes revenue, 96 ; the
principles of, 100, 101, 110; arbitrary,
107 ; further taxation for the benefit of
few should be discontinued, 113 ; cannot
be shifted to other people, 149 ; national,
of the banks, impolitic, 203 ; injuriously
deferred during the war, 201 ; prompt
taxatior evaded and specious flattery
substituted, 207 ; pressure on the labor
ing classes, 270, 298.
Tehuantepec, route for a ship-canal, 16.
Thiers, M., on the fate of false financiering,
202.
Timber, should be admitted free of duty,
76 ; our exports of it, 76 ; oppressive
duties cause spendthrift exhaustion of
the supply, 149 ; rapid destruction of our
forests, 150 ; importance of abundant
supply, 150.
Topeka, constitution framed at, 244
Transit, main natural lines in North Amer
ica, 305 ; by water, can be extended far
inland, 307 ; what it was in the olden
time, 322.
Treaty, commercial, with Hawaiian Islands,
112 ; the advantages it confers yield also
advantages to ourselves, 113 ; may reduce
revenue on certain articles, but tend to
promote it on others, 114; less important
than treaty with Canada,. 119.

320

INDEX.

United States, interest in canal between
Atlantic and Pacific oceans, 16, 23;
should seek commercial rather than
political annexations, 169; commeroial
relations with British North American
provinoes, 59 ; naturally more intimate
than those of most of the States with
each other, 129; our exports to Canada
ninety times as large as to the Hawaiian
Islands, 152 ; small exports to China, 134 ;
interest in a continental system of trade,
140 ; expected to lead the way, 182 ; the
great financial error of the Government,
208; financial history since the war be-
' gan, 205, 206; treaty with Hawaiian
Islands, ll2; local self-government and
the constitution, 275 ; should discharge
duties implied in Monroe doctrine, 169 ;
the Union essential, 256 ; ratio of increase
in population, 303 ; no limits can be as
signed to their progress, 313.
Value, commercial, is mainly the price in
the markets of the world, 189.
Van 'Buren, Martin, on commercial policy
of the United States, 132.
Virginian paper money, its decline and fall,
195.

Wages and salaries, how reduced by legal
tenders, 192.
War, magnitude of the late war in the Uni
ted States, 102 ; its effect on the laboring
population, 104; the stupendous errors
as to its duration, etc., 206 ; magna
nimity sometimes the truest wisdom, 260 ;
proper objects of the war, 261 ; passion
for war soon exhausts itself, 264.
Washington, he foresaw and foretold the
greatness of New York, 305.
Webster, Daniel, on fiBhing rights of the
United States, 62; on the rights of
underwriters, 230.
Wheat and-fiour trade, with Canada, one
rather of transportation than consump
tion, 74 ; how far north wheat may be
grown, 126 ; onr trade in, with Canada,
179.
Whig party, was a worthy foe, 253.
Zollverein, or German customs-union, 140 ;
origin and history of, 141, 142 ; principles
and progress of, 141, 143, 154 ; modified
form applicable to trade "between United
States and Canada, 144; suggested be
tween Great Britain and Canada, 154.

YALE UNIVERSITY

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