WHAT THE REPUBLICAN PARTY HAS DONE TO ESTABLISH A SOUND FINANCIAL SYSTEM.

The gold standard law, passed by a Republican Congress and signed by a Republican President on March 14, 1900, is one of the most important political acts since the Proclamation of Emancipation. The decree that struck the shackles from four million slaves was a military measure aimed at the destruction of the Southern Confederacy. The law that riveted our finances to the gold basis was a measure of peace and preservation, ending distrust of the nation's ability to meet its obligations, and giving stability to our home industries and our vast and rapidly expanding Commerce. Each sprang from a strong moral impulse to put an end to wrong and menace, and each was followed by results of such transcendent importance to the country as to mark an ep ́ ch in our national history.

Months before the assembling of the St. Louis Convention in 1896, many thoughtful Republicans felt that the time had come for the party to speak out strongly on the money question and to make a decided stand against the free silver heresy that had swept the West and South from their moorings and which threatened to engulf the East. Their influence prevailed over timid counsels, and the platform adopted contained a declaration for the gold standard that put the matter beyond doubt or question. It said: "The Republican party is unreservedly for sound money. It caused the enactment of the law providing for the resumption of specie payments in 1879; since then every dollar has been as good as gold.

"We are unalterably opposed to every measure calculated to debase our currency or impair the credit of our country. We are, therefore, opposed to the free coinage of silver except by international agreement with the leading commercial nations of the world, which we pledge ourselves to promote, and until such agreement can be obtained the existing gold standard must be preserved. All our silver and paper currency must be maintained at parity with gold, and we favor all measures designed to maintain inviolably the obligations of the United States and all our money, whether coin or paper, at the present standard, the standard of the most enlightened nations of the earth.”

The effect of this declaration on the country was profound.

Conservative Democrats, representing the best thought and intelligence of that party, and despairing of its early return to sound principles, began to support the Republican ticket. When the Democratic Convention a few weeks later went to extremes with its free silver platform, the desertion of the Gold Democrats, as they became popularly known, swelled to such a tide as to assure McKinley's election and remove anxiety over those so-called silver Republicans in the Northwest and the Rocky Mountain States, who supported the Democratic ticket.

The Indianapolis Convention. Two months after the election, that is, in January, 1897, a notable convention was held at Indianapolis. This was not a political convention, but one of business men representing every important chamber of commerce, board of trade, or other commercial organizations within the United States. Three hundred and fifty delegates attended, all animated by the same purpose of considering how the existing monetary system could be made safe and strong and adapted to the necessities of a great and growing country, and how public sentiment could be best concentrated upon that improvement. These delegates resolved that the gold standard ought to be maintained; that the United States notes and Treasury notes ought to be retired, yet so gradually as not to injuriously contract the currency, and that a banking system ought to be established that should furnish facilities of credit to every part of the country, a safe and elastic currency, and secure such a distribution of the loanable capital as would equalize interest rates. It was also resolved that an executive committee should be created with power to represent the convention in these and other related matters and to organize a commission of business men to report upon the whole subject if Congress should fail to act upon the monetary question. The chairman selected for the executive committee was Mr. Hugh H. Hanna, a manufacturer of Indianapolis, a man peculiarly fitted by temperament, training, and experience for this important and delicate work. The committee found President-elect McKinley sympathetic and responsive, and in his inaugural address he thus referred to the subject:

"The country is suffering from industrial disturbances from which speedy relief must be had. Our financial system needs some revision; our money is all good now, but its value must not be further threatened. It should all be put upon an enduring basis, not subject to easy attack, nor its stability to doubt or dispute. Our currency should continue under the supervision of the Government. The several forms of our paper money offer, in my judg ment, a constant embarrassment to the Government, and imperil a safe balance in the Treasury. Therefore I believe it necessary

to devise a system which, without diminishing the circulating medium or offering a premium for its contraction, will present a remedy for those derangements which, temporary in their nature, might well in the years of our prosperity have been displaced by wiser provisions. With adequate revenue secured, but not until then, we can enter upon such changes in our fiscal laws as will, while securing safety and volume to our money, no longer impose upon the Government the necessity of maintaining so large a gold reserve, with its attendant and inevitable temptations to speculation. Most of our financial laws are the outgrowth of experience and trial, and should not be amended without investigation and demonstration of the wisdom of the proposed changes. We must be both 'sure we are right' and 'make haste slowly.' If, therefore, Congress in its wisdom shall deem it expedient to create a commission to take under early consideration the revision of our coinage, banking, and currency laws, and give them that exhaustive, careful, and dispassionate examination that their importance demands, I shall cordially concur in such action. If such power is vested in the President, it is my purpose to appoint a commission of prominent, well-informed citizens of different parties, who will command public confidence both on account of their ability and special fitness for the work. Business enterprise and public training may thus be combined, and the patriotic zeal of the friends of the country be so directed that such a report will be made as to receive the support of all parties, and our finances cease to be the subject of mere partisan contention. The experiment is, at all events, worth a trial, and, in my opinion, it can but prove beneficial to the entire country."

Proposed Currency Convention.-At the special session of 1897 President McKinley sent to Congress a message recommending the creation of a non-partisan currency commission. The resolution passed the House promptly, but a free silver majority in the Senate smothered it in committee, and the session ended without final action. So long as the Senate was controlled by its free silver majority currency legislation was impossible. But the Indianapolis committee, encouraged by President McKinley, continued its campaign of education for the gold standard, and was ably supported by the sound money press, irrespective of political affiliations. Shortly before the close of the Fifty-fifth Congress, and when it was seen that the next Senate would be a sound-money body, a caucus of House Republicans was called to consider the question of appointing a special committee of members who had been re-elected to the next Congress, to sit during the recess and prepare a plan of monetary revision to be submitted to the Fifty-sixth Congress the following December. A resolution by Mr. Henderson, of lowa,

to create a committee of eleven members, was adopted with practical unanimity, and a week later the caucus chairman, Mr. Grosvenor, of Ohio, announced its membership. The committee was well chosen geographically and typical in public ability and character. Mr. Henderson was named for chairman, and the other members were Messrs. Dalzell, of Pennsylvania; Payne, of New York; Overstreet, of Indiana; Curtis, of Kansas; Lovering, of Massachusetts; Morris, of Minnesota; Hawley, of Texas; Loud, of California; Babcock, of Wisconsin, and Kerr, of Ohio.

Preparing the Gold Standard Bills. Equally important was the action of the Senate Finance Committee, which received permission to sit during the summer for the known purpose of framing a bill upon the monetary question. The House committee was the first to meet, and its members assembled at Atlantic City on April 17, 1899. Three daily sessions, participated in by all the members, resulted in the preparation of a bill making the gold dollar the standard unit of value, with United States notes, Treasury notes, and all interest-bearing obligations payable in gold. The fiscal and revenue branches of the Treasury were to be separated by the creation of a division of issue and redemption, and a gold reserve amounting to 25 per cent of the outstanding United States notes and Treasury notes was to be established and maintained. The Secretary of the Treasury was to be authorized to sell 3 per cent gold bonds to restore the reserve whenever it should fall below $100,000,000; he was to maintain at all times the parity of every dollar issued or coined by the Government, and, if necessary to do this, he might "at his discretion" exchange gold for any other form of money. Small banks with a capital of $25,000 each were authorized and national bank circulation was expanded to the par value of the Government bonds deposited for security. The tax on circulation was shifted to the capital, surplus, and undivided profits of the banks, and further coinage of silver dollars was prohibited, except from the existing stock of bullion purchased under the act of 1890.

Three months after this informal committee of the new House adjourned the Republican members of the Senate Finance Committee met at Narragansett Pier and drew up a bill simpler than the House bill, but embracing fewer of its popular provisions. The Finance Committee bill "continued" the gold dollar as the standard unit of value, and required the redemption of United States notes and Treasury notes in gold. It established a definite gold reserve of $150,000,000, and directed the Secretary of the Treas ury to sell 3 per cent gold bonds to maintain it. Authority was given to the Secretary to refund the outstanding bonds into 2 per cent gold bonds; bank note circulation based upon them was to be

taxed one-half of 1 per cent only, and the banks, as in the House bill, were authorized to issue notes to the par value of the bonds deposited. The Secretary of the Treasury was directed also to retire Treasury notes as fast as silver dollars were coined from silver in the Treasury. After the bill was reported to the Senate amendments were added to establish small banks and for international bimetallism when it could be secured "by concurrent action of the leading commercial nations of the world."

The Perfected Legislation.—The two measures passed their respective Houses by substantial majorities. The essential features of the bill that came out of conference were those of the Senate bill, although the House conferees secured two modifications of it-first, that it should be the "duty" of the Secretary of the Treasury to maintain parity, and secondly, that United States notes and Treasury notes, when redeemed in gold, should not be used to meet the deficiencies of current revenue. The last amendment was of special value, because it compelled the Secretary of the Treasury to borrow money to cover deficits, and thereby avoided the dangerous inflation of the currency that occurred from 1893 to 1896, from the excess of paper money paid out by the Government and put in circulation in excess of the amount received into the Treasury.

The country had anticipated the action of Congress, but none had been so optimistic as to foresee the tremendous impulse that the single act established the gold standard would give to our foreign and domestic trade. It is true that the Republican triumph of 1896 alone had created a feeling of confidence throughout the country such as had not been experienced since the defeat of the party in 1892. But the Democratic policies from 1893 to 1897 had been so destructive to business, and so potent in creating suspicion and distrust, that even a Republican victory could not wholly restore the favorable conditions that had existed under the Administration of President Harrison. It was reserved to the Dingley tariff law and the gold standard law to work this change, and it came speedily. The ink of the President's signature to the gold standard bill was scarcely dry before its result was seen. Millions of capital that for years had lain idle in bank and in safe deposit vaults came from their hiding places and sought the channels of commerce, now happily freed from the rocks and shoals of financial uncertainty. Prudent men, who had used in their business only enough of their capital to protect the industries already established, began to project new enterprises and to enlarge their plants. Soon the hum of industry was heard in every city and hamlet of the land. Idle men disappeared, everybody who wanted work could get it, and in a little while the demand for labor outran the supply. This was followed by rising wages in many lines