The Republican Party/Chapter V

Chapter V

Constructive Legislation

The achievement of "Liberty and Union," the preservation of the Federal Union and the abolition of slavery would in themselves and alone have been a noteworthy performance, sufficient to entitle the first Republican government to everlasting renown, But such was by no means the full measure of its public services. Partly because of and partly in spite of the tremendous burdens and duties of the Civil War it engaged in a number of works of constructive statesmanship of the highest importance. It realized that with its accession to power and with the disposition of the two great issues of the war a new era was dawning upon the United States, second in importance only to that which was ushered in by the adoption of the Constitution; and that to meet this era and to take advantage of its conditions and opportunities new laws, new methods and new systems of administration were necessary. To the task of supplying these the Republican party through its official representatives at Washington committed itself.

One of the foremost of these needs was that of a reformed tariff system. Years before under the lead of Henry Clay the Whigs had adopted a tariff scheme on imports which afforded a certain degree of protection to American labor and encouragement to American industry. The Democrats on their return to power had abolished that and had substituted a revenue tariff void of those characteristics with the result that in 1857 the country suffered a disastrous business depression. To correct these conditions the Republicans of the House of Representatives in 1860 adopted a bill framed by Justin S. Morrill of Vermont restoring some of the features of the former Whig tariff. This was rejected by the Democratic majority in the Senate. The next year it was put forward again and finally on March 2, 1861 became law. Later it had to be materially altered to meet the fiscal exigencies of the war. Its essential principle, however, remained unchanged for many years and its effect was to cause a rapid development and immense enlargement of American Industry. Great new industries were created to supply the American people with home-made articles of indispensable use for which they had formerly been dependent upon other lands. The American standard of wages and the American standard of living among wage-earners were placed and kept far higher than in any other country. American industrialists were protected against unfair competition of the poorly-paid labor of Europe, a fact which soon induced multitudes of European working-men to migrate to the United States in quest of better wages and better conditions of labor and of life. In this way the Republican government at once supplied the revenue needed for paying the extraordinary expenses of the war and enormously stimulated and expanded the profitable industries of the nation.

Another need was that of an improved banking and currency system. Hitherto, because of Democratic hostility to a national bank, state and local banks had flourished and had issued their notes as currency. Some of these were of course sound and trustworthy institutions. Others were of the speculative and "fly-by-night" order. If such a bank failed its notes were worthless. The result was that bank notes as currency were worth not their face value but a varying sum, determined by the standing of the bank of issue and the distance from it at which the notes were offered. Commercial journals printed daily or weekly lists of the banks and the current value of their notes. The traveler setting out with a pocketful of bills worth a hundred cents on the dollar found their negotiable value diminishing as he proceeded on his journey until perhaps in some distant state they were at a discount of twenty-five or fifty per cent or a notice of failure left him completely stranded.

The Republican party determined to reform all this, partly because the exigencies of the war required it and partly because it was obvious that "wild cat" banking, as it was aptly called, was not only discreditable but also potentially disastrous to the commercial and business interests of the nation. Accordingly there was devised and enacted a scheme for the organization of a system of national banks, chartered and supervised by the Federal government, the notes of which, used as currency, would be guaranteed by government bonds purchased by the banks and deposited by them with the Federal government as security. The act of February Z5, 1863, with some subsequent amendments, was the beginning of the national bank system which has ever since prevailed and of which the London Times, not always a friendly critic of things American, said that "the genius of man has never invented a·better system of finance." The creation of the national bank system was of great service to the government during the war inasmuch as it assured a certain market for the government bonds which were then issued. The national banks which were organized had to buy them as security for their notes. But in addition to that it rendered the people the inestimable service of providing them with a convenient banknote currency of stable and uniform value. It was not necessary to examine a bill to see what bank had issued it and then to look up its current value in the market reports. A dollar bill of any national bank was worth a hundred cents at any time and at any place. The bank that issued it might fail but the note would still be good for its face value.

The National Bank act became law in 1863. In 1864 there were 508 such banks; in 1865, 1,513; in 1875, 2,088; in 1885, 2,714; in 1895, 3,712; in 1905, 5,757; and in 1915, 7,560.

Another fiscal measure of the Republican party, enacted at the same time with the National Bank act, was the Legal Tender act which put into circulation as legal tender for all save certain specified purposes notes of The United States treasury, familiarly known as "greenbacks." This measure was bitterly opposed by the Democrats and its validity was contested in the courts. After much litigation the Supreme Court of the United States in 1883 fully sustained its constitutionality and validity. In a decision in which all but one member of the court concurred it was held that Congress had full power to provide for the issuance of such notes in time of war or of peace and thus to make paper money legal tender. These "greenbacks" and the notes of thousands of national banks have now for a generation been the familiar and favorite circulating medium of the Nation. The treasury notes and bank notes are used indifferently and indiscriminately and both are recognized as always and everywhere worth their full face value in gold coin. They form, in honor of the Republican party, one of the greatest monuments to constructive statesmanship that the world has seen.

In the very foremost rank of beneficent legislation of the Civil War era must be placed the Homestead act. As soon as Republicans secured an influential footing in Congress they moved for legislation which would make it possible for actual settlers to acquire farms in the public domain at a merely nominal cost, and thus develop the agricultural resources of the then unoccupied western prairies and plains. Such a policy was opposed by the southern pro-slavery Democrats who did not wish the free states and territories thus to be improved and accordingly when, in 1860, the Republicans put the first homestead act through Congress President Buchanan vetoed it. But it was presently repassed and went into effect simultaneously with the Emancipation Proclamation, on January 1, 1863. Under this beneficent act any actual settler could acquire absolute title to a quarter section or 160 acres of public land by payment of a registry fee of ten dollars and by then for five years occupying and cultivating the land in question. Within twenty miles of a railroad in a state, or ten miles in a territory, only half that amount could be acquired because of the supposedly greater value of the land within such zones. A supplementary Timber Culture act provided that in regions lacking natural timber growth title to a tract of 160 acres could be acquired by planting ten acres of it in timber and keeping it in good condition for eight years, or a tract of eighty acres by planting and caring for five acres of timber.

It must be remembered that prior to the enactment of these measures public lands had largely been acquired in huge tracts by speculators who then resold to actual settlers at high prices. The Democrats in Congress persistently opposed homestead legislation, because of the attitude of the southern plantation owners. When the first homestead bill was put forward in 1859 every Republican voted for it and every Democrat against it. When it was brought up again in 1860 every Republican voted for it and every Democrat, with the exception of a few from northern states, against it and the Democratic President vetoed it. The Homestead law and its results in the settling and development of the West must be credited, therefore, exclusively to the Republican party. What its results have been may be partially estimated from the fact that in less than thirty years from the enactment of the measure there was thus taken up by settlers a total of 141,606,400 acres, or as much as the area of all the New England and Middle States and the State of Virginia united, these homesteads supporting a population of above six millions.

Nor must we overlook the act for Land Grants to Agricultural Colleges. As early as 1857 Justin S. Morrill introduced into Congress a bill for giving public lands for the founding of colleges of agriculture and the mechanical arts. This was passed by Congress in 1859 but was, like the Homestead bill, vetoed by the Democratic President. Mr. Morrill introduced it again in 1861 when there was a Republican President and it was passed, signed and became law in 1862. This great measure for the common weal gave to each state in the Union—east and west, north and south alike—30,000 acres of public land for each Senator and Representative that it had in Congress, the proceeds of the land to serve as a fund for creating colleges for instruction in agriculture and the mechanical and industrial arts. To states which had no public lands within their borders scrip was issued for lands located elsewhere. About seventy such institutions of practical learning have been established under that system, with a present attendance of probably more than 100,000 students; another incomparable monument to the constructive statesmanship of the Republican party.

Reference has hitherto been made to the Pacific railroads and the recommendations in party platforms that national aid be given to that necessary enterprise. Both parties made such recommendations but it was the Republican party that gave them practical effect. It was under Republican government, on July l, 1862, that the Pacific Railroad charters were actually issued, and it was under Republican government that bonds were issued to assist in the construction of the roads. The bonds issued aggregated $64,623,512 and they were practically all repaid to the government, with interest, between the years 1897 and 1899. The great steel highways which connect the Atlantic and Pacific coasts of the continent are thus another memorial of the national services of the Republican party.

To save the Nation from dissolution, to make it a nation of free men, to give it a stable and secure banking and currency system, to give millions of its people free homesteads, to conserve and enlarge its natural resources, to provide generously for the most useful education, to provide it with continent-spanning transportation facilities and to give it the industrial primacy of the world; these were the things for which the Republican party stood, and these were the things which it achieved in its first administration of the Res Publica, the Commonwealth.