Ishing the market demand for gold by selling customs-house

certificates or foreign exchange, could better the govern-

ment's credit, and therefore such measures could have noth-

Ing more than a temporary effect upon the premium. What

was needed was, as Mr. Chase himself wrote, victories and

heavier taxes.

By this time, however, the secretary's temper had become

ruffled by defeat, and he was ready to try extreme meas-

ures. " The price of gold must and shall come down," he

wrote to Horace Greeley, June 16, "or I'll quit and let

somebody else try." 3 One resort was left: the government

had failed to control the gold market; it remained to try

abolishing the market altogether.

A bill with this purpose had been sent by Chase to the

Senate Committee on Finance and reported by Sherman

April 14.* This measure prohibited under heavy penalties

all contracts for the sale of gold for future delivery and also

i New York Times, money article, May 20, 1864.

2 Ibid., May 24. 3 WABDEN, op. cit., p. 603.

* Congressional Globe, 38th Cong., 1st Sess., p. 1618. Compare Fessenden's expla-

nations of the source of the bill, p. 1669.

forbade the sale of gold by a broker outside his own office. 1

Of course the bill, if it became law, would make dealing in

"futures" illegal, break up the gold room, and prevent sales

at the stock exchange.

It was with much misgiving that the Committee on

Finance brought the bill before the Senate and few advo-

cates were found who would say more than that they hoped

it might accomplish some good. Fessenden spoke for the

majority of his colleagues when he said:

Although we may not believe .... that a bill of this kind

will necessarily produce the effect .... it is. nevertheless a duty

in the present condition of things in this country to leave nothing

untried which offers even a reasonable ground of hope ; and it is

upon that supposition .... that the committee recommend the

measure .... a bill of this kind may produce an effect in two

ways; first by operating upon public opinion, and second by high

penalties .... it may .... have an effect to check in some,

perhaps not any inconsiderable, degree, the rampant and heartless

and wicked spirit which is actuating men with reference to this

subject. 2

If those who voted for the bill spoke doubtfully of it,

those who voted against it were more certain of their

ground. With one accord they declared that such legisla-

tion could not accomplish what the secretary expected. Mr.

Henderson, for example, reminded the Senate that the act

authorizing sales of gold had been " a total failure " and

added: "It is utterly futile for us, unless we can keep up

the character of the currency of the United States, to under-

take to interfere with the price of gold." '

Senator Collamer took similar ground : " Gold does not

fluctuate in price," he said, " . . . . because they gamble

i See text, ibid., p. 1640.

2/6td., p. 1640; compare similar remarks of Chandler, p. 1644; Hale, p. 1671;

Sherman, pp. 1640, 1646.

3 Ibid., p. 1670. Cf. remarks of Clark, p. 1643; Powell, p. 1671; Rcverdy Johnson,

p. 1645.

230 HISTORY OP THE GREENBACKS

in it ; but they gamble in it because it fluctuates But

the fluctuation is not in the gold; the fluctuation is in the

currency, and it is a fluctuation utterly beyond the control of

individuals." '

The true way to restore national credit, said Cowan, was

not to pass futile enactments against gold speculation, but to

prosecute the war vigorously and to raise large sums by

taxation. "If we do that," he concluded, "if in the first

place we satisfy the money lender that we are going to put

down the rebellion, and in the second place that we are

going to pay the expenses .... then the public credit at

once will appreciate and public securities will rise, or, if you

choose the other phrase, gold will apparently go down." 2

Perhaps the only senator who heartily approved of the

bill was Lane, of Kansas: "It is my opinion," he said, "and

the opinion of loyal and sagacious business men of the city of

New York, that the Confederate government is to day, and

has been since last December, through its foreign agents,

engaged in the effort to depreciate our currency by gam-

bling." His only objection was that Secretary Chase was

being credited with the authorship of the bill, when he

himself had introduced a very similar measure several

months before. 8

Though the bill was passed by the Senate April 16, 4 its

consideration in the House was delayed while Mr. Chase

was trying his other experiments in the gold market. When

they had all failed he wrote a note to Samuel Hooper urg-

ing that the bill be acted on. "Its passage," he said, "will

probably check the advance and give a little time for further

measures." 5 Accordingly the bill was taken up June 7, but

so closely was opinion divided that the speaker's casting

> Ibid., pp. 1666, 1667. 2 Ibid., p. 1641. * Ibid., p. 1669.

*The final vote was 23 to 17. Ibid., p. 1673.

5 Letter of Jane 2, WARDEN, op. cit., p. 599.

SPECIE VALUE OP THE PAPER CURRENCY 231

vote was required to secure consideration for the subject. 1

A week later the bill was passed after very little discussion

in the House by a vote of 76 yeas to 62 nays. 2 It received

the president's signature June 17. 3

Gold opened in June at 190 and rose at the prospect that

the gold bill would be passed. On the 14th, when the

House agreed to the bill, the price touched 197^. When

the law was put in operation on the 21st of June, the gold

room was closed, and at the stock exchange the precious

metals were dropped from the call list ; for it was now

unlawful for brokers to buy and sell gold outside of their

offices. Persons who needed gold to pay customs or to send

abroad were forced to go from one office to another inquir-

ing the price. 4 There being no organized market, there was

no regular quotation, and the prices demanded by different

brokers varied so widely that June 27 there was a difference

of 19 points between the lowest and highest selling rates

reported. Business was so greatly inconvenienced that a

meeting of bankers and merchants convened on the 22d and

appointed a committee to recommend necessary alterations

in the law. 5 Two days later the committee called upon Mr.

Chase in Washington to urge the repeal of the act. 8 At a loss

what to do, Chase had already authorized the assistant treas-

urer at New York and Mr. Jay Cooke to take such measures as

would arrest the rise of the premium. 7 But they could do

nothing, and the rise went on. Mr. Chase was very loath to

recommend the repeal of the bill, and yet he saw no other way

1 Congressional Globe, 38th Cong., 1st Sess., pp. 2793, 2794.

2 Forty-three members did not vote. Ibid., p. 2937. The Senate concurred in

the House amendments, which did not affect the substance of the bill, on the same

day.-P. 2930.

3 13 Statutes at Large, p. 132.

* New York Herald, editorial article, June 24, 1864.

' See account of the meeting in New York papers of June 23, 1864.

Extract from Chase's diary, WAEDEN, Life of Chase, p. 607.

? Letter to J. Cooke, June 21, WARDEN, p. 606.

232 HlSTOBT OP THE GREENBACKS

to remedy the situation. 1 Before this dilemma was settled he

sent his resignation to President Lincoln, June 29, and next

day it was accepted. The vacant position was offered to

Governor David Tod of Ohio. When he declined it, Senator

Fessenden was prevailed upon to assume its duties. 2

Meanwhile the gold bill had been repealed. Unanimous

consent to introduce a bill for this purpose was granted to

Senator Reverdy Johnson on the 22d of June. 8 July 1,

this bill was called up and passed with no debate except

Johnson's brief explanation :

The universal impression, so far as I have been able to collect