The Cleveland Era [43]
Silver Coinage Act so as to avoid a displacement of the gold standard. On February 3, 1886, Chairman Bland of the House committee on coinage reported a resolution reciting statements made in that address, and calling upon the Secretary of the Treasury for a detailed account of his administration of the Silver Coinage Act. Secretary Manning's reply was a long and weighty argument against continuing the coinage of silver. He contended that there was no hope of maintaining a fixed ratio between gold and silver except by international concert of action, but "the step is one which no European nation... will consent to take while the direct or indirect substitution of European silver for United States gold seems a possibility." While strong as to what not to do, his reply, like most of the state papers of this period, was weak as to what to do and how to do it. The outlook of the Secretary of the Treasury was so narrow that he was led to remark that "a delusion has spread that the Government has authority to fix the amount of the people's currency, and the power, and the duty." The Government certainly has the power and the duty of providing adequate currency supply through a sound banking system. The instinct of the people on that point was sounder than the view of their rulers.
Secretary Manning's plea had so little effect that the House promptly voted to suspend the rules in order to make a free coinage bill the special order of business until it was disposed of. But the influence of the Administration was strong enough to defeat the bill when it came to a vote. Though for a time, the legislative advance of the silver movement was successfully resisted, the Treasury Department was left in a difficult situation, and the expedients to which it resorted to guard the gold supply added to the troubles of the people in the matter of obtaining currency. The quick way of getting gold from the Treasury was to present legal tender notes for redemption. To keep this process in check, legal tender notes were impounded as they came in, and silver certificates were substituted in disbursements. But under the law of 1878, silver certificates could not be issued in denominations of less than ten dollars. A scarcity of small notes resulted, which oppressed retail trade until, in August, 1886, Congress authorized the issue of silver certificates in one and two and five dollar bills.
A more difficult problem was presented by the Treasury surplus which, by old regulations savoring more of barbarism than of civilized polity, had to be kept idle in the Treasury vaults. The only apparent means by which the Secretary of the Treasury could return his surplus funds to the channels of trade was by redeeming government bonds; but as these were the basis of bank note issues, the effect of any such action was to produce a sharp contraction in this class of currency. Between 1882 and 1889, national bank notes declined in amount from $356,060,348 to $199,779,011. In the same period, the issue of silver certificates increased from $63,204,780 to $276,619,715, and the total amount of currency of all sorts nominally increased from $1,188,752,363 to $1,405,018,000; but of this, $375,947,715 was in gold coin which was being hoarded, and national bank notes were almost equally scarce since they were virtually government bonds in a liquid form.
As the inefficiency of the monetary system came home to the people in practical experience, it seemed as if they were being plagued and inconvenienced in every possible way. The conditions were just such as would spread disaffection among the farmers, and their discontent sought an outlet. The growth of political agitation in the agricultural class, accompanied by a thorough- going disapproval of existing party leadership, gave rise to numerous new party movements. Delegates from the Agricultural Wheel, the Corn-Planters, the Anti-Monopolists, Farmers' Alliance, and Grangers, attended a convention in February, 1887, and joined the Knights of Labor and the Greenbackers to form the United Labor party. In the country,
Secretary Manning's plea had so little effect that the House promptly voted to suspend the rules in order to make a free coinage bill the special order of business until it was disposed of. But the influence of the Administration was strong enough to defeat the bill when it came to a vote. Though for a time, the legislative advance of the silver movement was successfully resisted, the Treasury Department was left in a difficult situation, and the expedients to which it resorted to guard the gold supply added to the troubles of the people in the matter of obtaining currency. The quick way of getting gold from the Treasury was to present legal tender notes for redemption. To keep this process in check, legal tender notes were impounded as they came in, and silver certificates were substituted in disbursements. But under the law of 1878, silver certificates could not be issued in denominations of less than ten dollars. A scarcity of small notes resulted, which oppressed retail trade until, in August, 1886, Congress authorized the issue of silver certificates in one and two and five dollar bills.
A more difficult problem was presented by the Treasury surplus which, by old regulations savoring more of barbarism than of civilized polity, had to be kept idle in the Treasury vaults. The only apparent means by which the Secretary of the Treasury could return his surplus funds to the channels of trade was by redeeming government bonds; but as these were the basis of bank note issues, the effect of any such action was to produce a sharp contraction in this class of currency. Between 1882 and 1889, national bank notes declined in amount from $356,060,348 to $199,779,011. In the same period, the issue of silver certificates increased from $63,204,780 to $276,619,715, and the total amount of currency of all sorts nominally increased from $1,188,752,363 to $1,405,018,000; but of this, $375,947,715 was in gold coin which was being hoarded, and national bank notes were almost equally scarce since they were virtually government bonds in a liquid form.
As the inefficiency of the monetary system came home to the people in practical experience, it seemed as if they were being plagued and inconvenienced in every possible way. The conditions were just such as would spread disaffection among the farmers, and their discontent sought an outlet. The growth of political agitation in the agricultural class, accompanied by a thorough- going disapproval of existing party leadership, gave rise to numerous new party movements. Delegates from the Agricultural Wheel, the Corn-Planters, the Anti-Monopolists, Farmers' Alliance, and Grangers, attended a convention in February, 1887, and joined the Knights of Labor and the Greenbackers to form the United Labor party. In the country,