of the currency was opposed by a large number of people, who believed that the country needed more money, not less money. The opposition to retirement was strongest in the West, where the expanding conditions of business required larger and larger sums of money. Congress in 1868 yielded to the sentiment against contraction and ceased to retire the greenbacks. But inasmuch as the greenbacks were to remain in circulation, it became necessary to give them the same currency value as gold. So, Congress in 1875 passed the Redemption Act, which provided that after January, 1879, the secretary of the treasury should redeem greenbacks in gold, dollar for dollar, whenever they should be presented to the treasury for redemption. In order that this might be done the secretary sold bonds for gold and kept this gold in the treasury vaults as a special fund for redeeming the greenThe amount of gold thus set aside for redemption. purposes was $100,000,000. It was not expected that all the greenbacks would be presented for redemption. When redemption day arrived virtually no greenbacks were presented. The mere knowledge that the notes could be exchanged for gold satisfied the holders, and no exchange was demanded. In 1878, Congress provided that when a greenback was redeemed in specie "it should not be retired, cancelled, or destroyed, but should be re-issued and paid out again and kept in circulation." Thus the greenbacks were permanently established in our currency system on an equal footing with gold. They amounted in 1879 to about $346,000,000 and the amount has never been materially decreased. They remain part of our national debt that has never been paid.

Another important currency measure of Grant's administration was the demonetization of silver. This was accomplished in 1873 when Congress discontinued the free coinage of silver (p. 193) and established the gold dollar as the standard of value. At the time of its passage the law demonetizing silver inflicted no hardship upon the holders of the white metal, for the bullion in a silver dollar was worth about $1.02 in gold and it was more profitable to keep silver in its bullion form

than it was to coin it. But about the same time that silver was demonetized, Germany began to withdraw large quantities of silver from circulation and several other countries of Europe began to restrict the coinage of silver. Moreover, there was presently an enormous increase in the output of the silver-mines of Nevada. The result was that in the years following 1873 silver as compared to gold fell in value. By 1876 the silver in a dollar was worth only ninety cents. Those who held silver bullion now wanted the remonetization of silver; that is, they wanted free coinage at the old rate of sixteen to one, and they assailed the demonetization law as the "crime of 1873."

Several attempts were made in Congress during Grant's administration to lower the tariff rates, but very little was accomplished in that direction, the manufacturing interests being able to block any measure that provided for a substantial downward revision. In 1870, it is true, there was a slight reduction on pig-iron, but this was offset by an increase of duty on steel rails. There was, however, a substantial reduction in the internal taxes which had been so indiscriminately imposed (p. 410) on domestic articles during the war. In 1870 the income tax was reduced, and provision was made that it should speedily expire. This tax was always unpopu- Taxes lar, and it was flagrantly evaded. Yet during the eleven years of its existence it yielded nearly $350,000,000 of revenue. Upon the whole, the problems relating to taxation were by no means perplexing, for taxes after the Civil War were not burdensome and the national revenues were sufficient for the current expenses, for the annual interest charges, and for a wholesome reduction of the public debt.

THE AFTERMATH OF RECONSTRUCTION

Reduction

of

While Congress was dealing with currency matters, it was also giving a share of its attention to the affairs of the South, for the settlement of the Southern question was by no means Carpetcompleted when the last of the reconstruction (p. 433) acts Rule was passed. A pernicious and disturbing element in the

bag

The
Ku-Klux-
Klan

South consisted of the carpet-baggers (p. 428). These men, as a rule, were of such questionable character that they could not have been elected to a petty office in the Northern communities from which they came. In the South, however, by playing upon the prejudices of the negroes and taking advantage of their ignorance, they were able to secure the votes of the negroes and rise to the highest offices in the State. The purpose of the carpet-baggers was to make money out of politics, and in the States where carpet-bag government secured a foothold, there was the most shameful corruption. For instance, in South Carolina, where the carpet-baggers for a while held full sway, $200,000 was spent by the legislature for furniture and $150,000 for printing. Of course most of this money was what we would now call "graft." The most expensive wines, liquors, and cigars were ordered to be sent to the boarding-houses of the members, many of whom were ex-slaves. Upon one occasion the legislature of South Carolina appropriated $1,000 to reimburse the speaker of the house for a loss he had sustained by betting on a horse-race. The winner of the bet was the negro member who made the motion that the money be appropriated! In the conduct of the government the most shocking ignorance prevailed. In Alabama in one county the sheriff was a negro who could not read. In the legislatures the negroes were so ignorant that they could only watch their white leaders-carpet-baggersand vote aye or no as they were told.

As early as 1866 the native whites of the South began to protect themselves against the carpet-baggers and the negroes. They organized a secret society that was known as the KuKlux-Klan. The purpose of this organization was to prevent the negro from voting, and to compel him to work at reasonable wages and to lead a quiet, peaceable life. The society did everything it could to make the life of the carpet-bagger miserable. In order to terrify the negro the members of the Klan wore a white mask, a tall cardboard hat, and a gown that covered the whole body. When the Klan went on horseback the bodies of the horses were covered with white sheets,

The
Tweed

Ring

and the feet of the horses were muffled. On the paper containing the threats sent to the negroes were pictures of crossed swords, skulls, owls, bloody moons, and the like. But in carrying out its purposes, the Klan sometimes went further than merely to terrify the negro; in some cases acts of violence were committed. Indeed, the offenses of the Ku-KluxKlan became so great that in 1871 Congress took matters in hand and passed a series of Force Laws, the enforcement of which caused the society to be suppressed and many of its members to be arrested.

CORRUPTION IN HIGH PLACES

But bad government in the days of Grant's administration was not confined to the carpet-bag régimes in the South. In 1870 William M. Tweed and his gang were robbing the taxpayers of New York City as shamefully as the carpet-baggers were robbing the taxpayers of South Carolina. Tweed was the "boss" of Tammany Hall and the local leader of the Democratic party. He secured the control of the city government and plundered the city treasury on a scale unparalleled in the history of public theft. The favorite method of stealing was by raising the accounts of those who worked for the city or furnished it with supplies. For example, if a man had a bill against the city for $5000 he was asked to raise it to $55,000. When this was done, the one presenting the bill received $5000 while the remaining $50,000 were divided among the members of the Tweed Ring. In this manner a plasterer working on the court-house received $133,000 in two days! After the ring had carried on its corrupt practices for two or three years and had stolen a sum variously estimated at from $45,000,000 to $200,000,000, Tweed fell into the clutches of the law and was imprisoned, the man who did most to overthrow him being Samuel J. Tilden.

The corruption of the time was so wide-spread that charges of wrong-doing were brought against men high in government circles at Washington. In 1872 the fair name of Congress was smirched when scandals began to come to light in regard