Georgia a second time, because of her doubtful status at the time of her first ratification.
294. By the summer of 1868 Arkansas, South Carolina, North Carolina, Georgia, Alabama, Louisiana and Florida, Six Southern States Restored to Union. having satisfied the requirements of the Reconstruction acts, were entitled to representation in Congress. But Georgia did not choose her senators until after the adjournment of Congress, and, inasmuch as the state excluded the negro members of the legislature in September, Congress on reassembling returned the state to military rule until its submission. Alabama was restored in spite of the fact that her white voters had remained away from the polls in sufficient numbers to prevent a majority of all the voters registered from having ratified the constitution of the state, as the Reconstruction acts had required. The nominating conventions and the campaign of 1868 gave interesting evidence of the trend of political and economic events. Party lines, which had broken down in the North when all united in saving the Union, were once more reasserting themselves. President Johnson, who had been elected by the Union Republican party, had found his most effective support among the Democrats. The Republicans turned to General Grant, a Democrat before the outbreak of the war. His popularity with the Republicans was due not only to his military distinction, but also to his calm judgment in the trying period of the struggle between the president and Congress. He was seriously considered by the Democrats until he broke with Johnson in the Stanton episode.
295. The Republican nominating convention met on the 20th of May 1868, a few days after the failure of the National Republican Convention; Grant Nominated for the Presidency. impeachment proceedings, and it chose Grant as the candidate for the presidency. The platform supported the Congressional Reconstruction measures. Upon the vital question whether universal negro suffrage should be placed beyond the power of states to repeal it by a new constitutional amendment, the platform declared: “The guarantee by Congress of equal suffrage to all loyal men at the South was demanded by every consideration of public safety, of gratitude and of justice, and must be maintained; while the question of suffrage in all the loyal states properly belongs to the people of those states.” Nowhere in the North was the negro an important element in the population, but the North had shown an unwillingness to apply to itself the doctrines of negro rights which had been imposed upon the South. Between 1865 and 1868 Connecticut, Wisconsin, Minnesota, Kansas, Ohio and Michigan had refused to give the negro the right to vote within their own bounds, and this plank was evidence of the unwillingness of the party to make a direct issue of universal negro suffrage. Although the platform failed to indicate the future proposals of the Republican leaders on the negro question, on the topics of finance and currency it clearly showed that the party was controlled by economic interests which were to exercise increasing influence upon it. It pronounced in favour of payment of the public debt, not only according to the letter but the spirit of the laws under which it was contracted. The significance of this lay in its challenge to the Democratic agitation on the currency question.
296. It was this question which gave the tone to the proceedings of the Democracy at their convention in July 1868. The situation can best be presented by a brief review of the financial history just preceding the convention. Together with the discussion over political Reconstruction in the South, Congress and the administration had been obliged to deal with the reconstruction of debt, taxation and currency in the nation at the close of four years of expensive war. At its maximum point the debt had risen to $2,758,000,000, of a complicated variety of forms, and of the total less than one-half was funded. The problems of funding, readjustment of taxation, and resumption of specie payments proved to be so complicated with the industrial growth of the nation that they led to issues destined to exert a long continued influence.
297. The various war tariffs, passed primarily for the sake of increased revenue, had been shaped for protection under the Finance; the Tariff; Internal Revenue. influence of the manufacturing interests, and they had been framed also with reference to the need of compensating the heavy internal taxes which were imposed upon the manufacturers. When the war ended public sentiment demanded relief from these heavy burdens, and especially from the irksome internal taxes. The rapidly growing grain-raising districts of the Middle West exhibited a lively discontent with the protective tariff, but this did not prevent the passage in 1867 of the Wool and Woollens Act, which discriminated in favour of the woollen manufacturers and raised the ad valorem duty on wool. In spite of several large reductions of internal revenue, the national debt was being extinguished with a rapidity that only a prosperous and growing nation could have endured.
298. The currency question, however, furnished the economic issue which was most debated in the period of Reconstruction. The Currency Question; “Greenbacks.” One set of interests aimed at rapidly reducing the volume of the currency by retiring the legal tender notes, or “greenbacks,” issued during the war, on the ground that they had been provided only as a war measure, that the country needed a contraction of this currency, and that specie payments would be hastened by the withdrawal of the greenbacks. The secretary of the treasury, Hugh McCulloch, pressed this policy to the foreground, and desired authority to issue bonds to retire these notes. Another set of interests demanded the retention of the greenbacks, supporting their views by arguments varying according to the degree of radicalism of the speakers. The more moderate, like Senator John Sherman, of Ohio, who reflected the views of parts of the West, argued that the recuperation of the nation and the rapid increase of business would absorb the existing currency, while gold would cease to go abroad. Thus, by the increasing credit of the government, specie payment would be automatically resumed, and the holders of currency certificates would convert them into coin obligations at a lower interest rate. Others wished to use the greenbacks to pay the principal of such of the bonds as did not explicitly specify coin as the medium of payment; the most extreme, so far from contracting the currency by retiring the greenbacks, wished to increase this form of money, while diminishing the circulation of the notes of the national banks. The discussion tended to produce a sectional issue with the West against the East, and a social issue with bondholders and the creditor class in general arrayed against the less well-to-do. Congress agreed with Secretary McCulloch, and in the Funding Act of 1866 not only provided for converting short-time securities into long-term bonds, but also for retiring ten million dollars of greenbacks in six months and thereafter not more than four millions monthly. But the agricultural depression of 1866 produced a reaction. Loud demands were made that bonds should be paid in greenbacks instead of coin, that United States securities should be taxed, and the national bank notes suppressed. In 1868, on the eve of the presidential campaign, Congress, alarmed by the extent of these popular demands, suspended the process of contraction by decisive majorities in both houses, after forty million dollars in greenbacks had been retired by the secretary of the treasury.
299. Ohio was the storm centre of the agitation. The “Ohio idea” that greenbacks should become the accepted The “Ohio Idea.” currency of the country was championed by George H. Pendleton, of that state, and his friends now brought him forward for the Democratic nomination for president on this issue. In the national convention of that party they succeeded in incorporating into the platform their demands that there should be one currency for the government and the people, the bondholder and the producer, and that where the obligations of the government did not expressly provide for payment in coin, they should be paid in lawful money (i.e. greenbacks) of the United States.
300. But another wing of the Democratic party desired to
