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$Unique_ID{USH00225}
$Pretitle{15}
$Title{Our Country:  Volume 7
Chapter CXLVI}
$Subtitle{}
$Author{Lossing, Benson J., LL.D.}
$Affiliation{}
$Subject{gold
president
bill
silver
congress
treasury
government
states
senate
house}
$Volume{Vol. 7}
$Date{1905}
$Log{}
Book:        Our Country:  Volume 7
Author:      Lossing, Benson J., LL.D.
Volume:      Vol. 7
Date:        1905

Chapter CXLVI

President Cleveland's Second Term - The Silver Question - Exports of Gold -
The Panic - Drain on the Treasury - Extra Session of Congress - State of
Parties - President's Message - Repeal of Silver Purchasa Bill - Bering Sea
Arbitration - Regular Session President's Tariff Message - The Wilson Bill -
The Senate Amendments - Bill Becomes Law - Veto of Bland's Bill for Coining
the Seigniorage - Repeal of the Force Bill - State of the Treasury - Issue of
Bonds - Aid from the Banks - Second Bond Issue - Income Tax Declared
Unconstitutional - Third Bond Issue - Contract with the Morgan Syndicate of
Bankers - Fourth Bond Issue - Strikes in Coal Mines - Pullman City and Chicago
- Dispatch of Federal Troops - Triumph of Republicans in State Elections -
Cuba and Hawaii - The Venezuela Question - Disquieting Message on that Subject
- The Venezuela Commission - Action of the Senate - The Coming Presidential
Election - Free Silver Agitation - The Republican, Democratic and People's
Party Conventions - Bryan and McKinley Election.

     The inauguration of President Cleveland and Vice-President Stevenson took
place with the usual ceremonies, on the 4th of March, but amid a storm of wind
and snow that spoiled the effect of the procession that marched to the Capitol
to listen to the customary Inaugural Address.  The new President in this, his
first official utterance, called attention to the question of currency.  He
promised that none of the powers with which the Executive is invested will be
withheld when necessary to maintain National credit or avert financial
disaster.  He described the result of the election that had raised him to the
Presidential chair as the verdict of the voters, which condemned protection
for protection's sake, and everything which savored of paternalism.  He
denounced bounties and subsidies to aid all ill-advised or languishing
enterprises, reckless pension expenditures which overlap the bounds of
grateful recognition of patriotic services and waste of the people's money by
their chosen servants.  He repeated his statement that public expenditures
should be limited by public necessity, measured by the rules of strict
economy, and that one mode of the misappropriation of public funds would be
avoided by carrying out civil service reform.  He described the existence of
immense aggregations of kindred enterprises for the purpose of limiting
production or fixing prices - that is, trusts and syndicates - as conspiracies
against the interests of the people, from which the general government should
relieve the people.  In conclusion lie reminded his hearers that the
Democratic party came into power pledged in the most positive terms to the
accomplishment of tariff reform, and a more equitable system of Federal
taxation.

     In such terms the President repeated and officially adopted the
principles on which he had been elected.  Of one subject which had arisen
since that date no mention was made.  This subject was the question of the
annexation of the Sandwich Islands.  At the close of the last year an
insurrection broke out in Hawaii, the Queen Liliuokalani was deposed, a
provisional government of Europeans formed under the protection of marines
landed from ships of war belonging to the United States and a delegation sent
to Washington to solicit annexation to the United States.  President Harrison
and his cabinet viewed the demand with favor, and he sent to Congress a treaty
to carry out this measure.  It was not acted upon by the Senate, and
therefore. the very important decision as to how far and in what direction it
is politic or prudent to extend the territory of the United States was left to
incoming administrations.

     In the Inaugural address there had been no expression of any intention on
the part of the President to call an extra session of Congress, although he
and his cabinet as well as the majority of the business world were alarmed at
the condition of our national finances, as it was by no means certain that
either the Senate or the House would repeal the Sherman Silver Purchase Act.
The Monetary Conference held at Brussels, in 1893, to which President Harrison
had despatched Mr. Andrews of Brown University, had come to no conclusion in
our Western States, a large proportion of the people regarded the
demonetization law of 1873 as a huge injustice to the debtor and agricultural
classes, and clamored for free coinage of silver, at the ratio of 15 to 1 or
16 to 1.  Meanwhile the Sherman Act was in full operation and the United
States Treasury was purchasing four and a half million ounces of silver each
month and paying for these purchases by treasury notes, redeemable in coin.
By the word coin the world of trade and finance understood gold coin, as the
treasury had always redeemed its issues in that metal, which alone is of use
in international exchanges. Doubts had already been expressed as to whether
the Treasury would be able to continue this policy, and when, in the month
after the new President's accession large exports of gold took place, doubt
gave place to alarm, and the alarm soon assumed the appearance of a panic.
With this distorted condition of the money market came a loss of business
confidence, and a sharp collapse in credit, and in the month of May an
appalling list of business failures and depressions in all sections of the
country.  In spite of all the efforts of the Government to keep gold in the
treasury with which to meet its obligations, gold continued to flow from
America to Europe.  Within a month after Cleveland's inauguration, Mr.
Carlisle, the Secretary of the Treasury, suspended the issue of gold
certificates as required by law when the greenback redemption fund fell below
the hundred-million-dollar mark, and on April 23, it was announced, in order
to allay fears that had appeared in some financial centers, that coin
certificates issued under the Sherman Act of 1890 were to be redeemed in
silver.  But in spite of this declaration the month of May was marked by
disaster in all financial quarters.  Undoubtedly the uncertainty respecting
the tariff policy of the new administration added to the commercial
depression, for commerce, which soon learns to adapt itself to any permanent
condition, abhors uncertainties.  The disasters of May were continued in June,
for banks were afraid to help their customers and depositors were afraid to
trust the banks, and it became evident that public confidence would not be
restored, except by Government action.  Such action was resolved when the news
was received that the British Government had suspended the free coinage of
silver at thele Indian mints, and the market-price of silver became still
further depressed.  Mr. Cleveland then summoned Congress to meet on August
seventh in extra session, and urgently requested the immediate repeal of the
silver purchase act.  In his proclamation convening the two houses of
Congress, President Cleveland said that the distrust and apprehension
pervading all business centers was largely the result of a financial policy
embodied in various laws, which needed repeal, in order that the people might
be relieved by legislation from the present impending danger and distress.''

     When the two houses met, the division of parties was as follows: in the
House of Representatives Democrats, 219, Republicans, 127, Populists, 10, and
in the Senate, Democrats 44, Republicans, 38, Populists 3, and three
vacancies.  On August 8, the President's message was sent to Congress, and in
it he again expressed his belief that the alarming business situation, the
general financial fear and distrust and the universal depreciation of
securities were chargeable to the statute passed July 14, 1890, which he
described as a truce after a long struggle between the adherents of free
silver coinage and those tending to more conservative views." By this law it
was provided that the Secretary of the Treasury should buy 4,500,000 ounces of
silver monthly, issuing in payment for such purchase, treasury notes
redeemable in gold or silver, at the discretion of the Secretary, but as the
act declared that the policy of this country was to maintain the two metals on
a parity at the present legal rates, it was manifestly impossible for the
Secretary to refuse to pay the notes in gold, for thus lie would establish a
discrimination in favor of gold.  Thus between May 1, 1892 and July 15, 1893,
notes for payment of silver bullion had been issued to the amount of
fifty-four millions of dollars, while forty-nine millions of dollars in gold
had been paid in redemption of such notes.  Hence depletion of the treasury
was easy.  The net amount of gold in the treasury at the beginning of the year
was over one hundred arid twenty-one millions, but by April 1, it had fallen
to one hundred and six millions, and was soon reduced below the
hundred-million limit, which the unwritten law of the department held to be a
reserve, exclusively for the redemption of United States notes.

     "Unless," the President continued, "government bonds are to be constantly
issued and sold to replenish our exhausted gold, only to be again exhausted,
it is apparent that the operation of the silver purchase law now in force
leads to the direction of the entire substitution of notes for gold in the
treasury, and this must be followed by the payment of all government
obligations in depreciated silver, and the government must fail in its policy
to maintain the two metals on a parity with each other." The people of this
country he pointed out, are entitled to a sound and stable currency and to
money recognized as such 011 every exchange and every market of the world.
The matter was above the plane of party politics, and concerned every business
and calling, and the wage-earner especially will be the first injured by a
depreciated currency.  The financial condition of the country, as evidenced by
the universal depression of values and business ought at once to be considered
by Congress, leaving the tariff question for attention in the near future.  I
earnestly recommend,'' he continued, the prompt repeal of the provisions of
the Act of July 14, 1890, and other legislative action which may put beyond
doubt the intention and ability of the government to fulfill its pecuniary
obligations in money universally recognized by all civilized countries."

     A bill was at once introduced into the House of Representatives by Mr.
Wilson, chairman of the Committee of Ways and Means, and was passed unamended,
August 28, by a vote of 239 yeas to 109 nays, after the defeat of the proposal
to substitute the Bland coinage law.  In the Senate considerable delay took
place.  The bill was referred to the Committee on Finance, and reported back
with an amendment in favor of bimetallism. Various compromises were proposed
and declared by the President, but on October 30, the Senate passed the bill
so amended by 43 yeas to 29 nays, the votes being, for repeal 20 Democrats, 23
Republicans against repeal, 19 Democrats, 9 Republicans, and 4 Populists.
Finally on November 1, the amended bill was passed by the House of
Representatives, and received the President's signature, and Congress
adjourned till the first regular session, which began December 4th.

     For the fixity of purpose and stubborn determination with which the
President compelled his own reluctant followers in Congress to carry out his
will, in the repeal of the silver coinage law, over the most extreme
Republicans, gave him unstinted credit.  For it must be remembered that he had
this credit from foes, and some of the bitterest of foes among his own
household.  His nomination at Chicago had been bitterly opposed by an
important section of the Democratic party, which showed its hostility during
the election and continued to oppose him when he had been elected.

     The panic, which compelled the summoning of the extra session, commenced
with the return of the Democrats to power.  Prices of all securities dropped,
and the panic became general on the failure of the National Cordage Company,
in May.  The closing of the mints of India to the free coinage of silver
caused a big decline in silver bullion, and stock went down with a rush; mines
in the West were closed, and in that section and in the South, bank after bank
gave way under the strain.  Some relief was afforded by the issue of
clearing-house certificates at the important financial centers, except
Chicago.  The issue of such certificates in New York began on June 29, and the
total put out during the summer was $38,280,000.  The issue in Boston, was
$11,450,000, and in Philadelphia, $6,000,000.  In July a remarkable dearth of
currency occurred.  Early in August bank and treasury notes commanded a
premium as high as 4 per cent in New York.  By the middle of August the worst
was over, and the premium 011 currency ceased the first week in September.
The banks began to call in the clearing-house certificates, but the last of
the big issue in New York was not redeemed until November 1.  The number of
banks forced to suspend up to September 21 was 549, of which 151 were National
banks.  During the summer three large railroad corporations were forced into
the hands of receivers - the Erie, the Northern Pacific and the Union Pacific.

     The decision of the Court of Arbitration, respecting the seal fisheries
in the Bering Sea was given on August 15.  The Court, which met in Paris, in
April, consisted of Justice J. M. Harlan and Senator Morgan, representatives
of the United States; Lord Hannen and Sir John S. D. Thompson, of Great
Britain; Baron de Courcel nominated by France, who was elected President of
the Court Marquis Venosta, nominated by Italy, and Judge Graen by Sweden and
Norway.  On points of international law, the court was in favor of Great
Britain, dismissing our claims for exclusive jurisdiction in Bering Sea and
for a right to protect the seals, but prescribed the total prohibition of
sealing at all times within sixty mile of the Pribyloff Islands, and
established a close time from May 1 to July 31, on the high seas over a wide
district of the North Pacific.

     The first regular session of the Fifty-third Congress began on December
4, 1893, and continued until August 28, 1894.

     In his message, the President, after referring to the settlement of the
Bering Sea dispute and the repeal of the Silver Bullion Bill, expressed his
conviction that no further action should be taken until financial and
commercial conditions became more settled and the effects of the new law were
fully apparent.  He referred to the growing deficit in the Post-office
Department, which was estimated at $8,000,000 for the current year, and
disapproved of the further extension of free postal delivery.  In summarizing
the report of the Secretary of the Treasury, he stated that more than
$108,000,000 of gold had been exported during the year, and that the estimated
deficiency in the treasury for the year was $28,000,000.  In view of this, he
suggested caution in further appropriations for the new navy.  He announced
that 33,690 pensioners had been dropped from the rolls. The message strongly
indorsed the work of the Civil Service Commission.  It closed with the words:
After a hard struggle, tariff reform is directly before us.  After full
discussion our countrymen have spoken in favor of this reform, and if public
officers are really servants of the people, our failure to give relief would
be sheer recreancy.'' While adhering to the principle of taxation for revenue
only, yet the President added, in the conditions that have grown up, justice
and fairness call for discriminating care in the distribution of such duties
and taxation as are demanded.  Any reduction therefore should be of charges on
the necessaries of life, and on raw materials necessary for our manufactures.
A measure on the lines suggested had been prepared, and in order to provide
against a temporary deficiency which might exist while the new tariff was
going into operation, a small tax on certain classes of income was included in
the plan of the bill."

     A bill of which the main features were thus outlined was accordingly
proposed by Mr. Wilson, of West Virginia, Chairman of the Committee of Ways
and Means.  It had been in preparation during the special session and was made
public before the reassembling of Congress.  The features of the bill, as
described in the accompanying statement of Chairman Wilson, were: (1) The
adoption, wherever practicable, of ad valorem instead of specific duties; (2)
the freeing from taxes of those great materials of industry that lie at the
basis of protection.' In addition to an extensive increase in the free list,
the schedules showed reductions in rates, as compared with the McKinley bill,
on all but a small number of items.  The notable additions to the free list
included iron ore, lumber and wool.  Raw sugar was left free, but the rate on
refined was reduced from one-half to one-quarter cent per pound, and the
bounty was repealed one-eighth per annum until extinguished.  Various
amendments were made in the administrative provisions of the tariff law.

     It was estimated that the reduction of revenue effected would be about
$50,000,000, and the committee set about the preparation of an internal
revenue bill to make good that deficiency.  While under consideration in
committee, many changes were made in the Tariff bill the most important
related to sugar, the duty being taken off of refined and the repeal of the
bounty being made immediate instead of gradual.  A clause was also inserted
repealing the reciprocity clause of the McKinley law.  The chief feature of
the internal revenue bill was the provision for an income tax.  The bill
provided also for a stamp duty on playing cards, and increased thele tax on
spirits to one dollar a gallon.  A tax of two per cent was imposed on all
incomes in excess of $4,000, and in case of corporations the same tax was
levied on all interest on bonds, and on all dividends, and surplus income
above dividends, except premiums returned to policyholders by mutual life
insurance companies, interest to depositors in savings banks and dividends of
building and loan associations.  The income tax proposal immediately called
forth lively opposition.  On February I the Internal Revenue bill was made a
part of the Wilson measure, and the latter as amended was adopted by the House
by a vote of 204 to 140.  The majority was composed of 194 Democrats and 10
Populists, and the minority of 125 Republicans and 15 Democrats.

     A scene of great excitement took place while the voting was in progress.
Democrat after Democrat who had been counted on to vote against, now when it
came to the final issue, recorded their votes for it, and when the decisive
numbers were announced, Mr. Wilson was raised aloft on the shoulders of his
supporters and borne in triumph, and amid enthusiastic cheers, from the House
of Representatives.

     The Wilson Bill, that thus passed the House on February 1, was sent to
the Senate on the following day, and was immediately referred to the Committee
Of Finance, which turned it over for consideration to a sub-committee.  The
sub-committee reported it with very few changes to the full Committee on
Finance, but that body submitted it to a thorough revision and made many
important alterations.  In this discussion the most prominent part was taken
by Senator Gorman, of Maryland, a Democratic leader and hence the bill as
passed is commonly described as the Wilson-Gorman Bill. The most important
amendments were the imposition of duties on sugar, iron ore and coal.  The
Senators from Louisiana especially demanded a duty on sugar for the purpose of
protecting the sugar planters of that State, and most of the other Senators
expressed their dissatisfaction with the schedules affecting the industry of
their constituents.  At a Democratic caucus, Senator Hill, of New York,
declared the bill to have been purposely framed to produce all insufficient
revenue, and thus make necessary an income tax, a tax which had never been
imposed except in times of war or to defray war expenses, and which was
forbidden by the Federal Constitution. The Committee reported the bill on
March 20, with the addition of 634 amendments; it was again referred back and
again reported on May 8th with the clauses admitting free raw material struck
out except in the cases of wool and lumber, and with a clause granting a large
bonus to sugar.  In this form the Wilson-Gorman Bill passed the Senate by 39
votes to 34 and was returned to the House of Representatives on July 3.

     The House of July 7 refused to concur in the amendments sent down by the
Senate, and a conference of the two houses took place.  In the conference
committee irreconcilable differences of opinion were manifested the crucial
point in the controversy being the sugar duties.  The Senate demanded instead
of a bounty on sugar a general duty of forty per cent ad valorem with an
additional duty on refined sugar, and a further additional duty on sugar from
a country paying an export duty.  Such a clause it was said, would not only
protect the native planters in our sugar States, but would enormously benefit
the large sugar refining company which had almost a monopoly of the business.
From the beginning of the discussion on the sugar schedules report had been
current that the American Sugar Refining Company had had agents at the Capitol
busy in influencing legislation by a lavish use of money among the Senators,
and so persistent were the accusations of bribery that the Senate in May
appointed an investigating committee, which reported that no bribery was
proved, but that two senators had been speculating in the stock of the company
during the debates in the Senate.  Finally the House conference members
refused to accept the proposed arrangement as too favorable to the sugar
company.  On July 19, Mr. Wilson reported to the House that the conference
could not agree, and took the unusual step of reading a private letter
addressed to him, on July 2, by President Cleveland, in which the President
stated that the Senate Bill was far short of what was demanded by the
Democratic party, that Congress ought not to be driven away from Democratic
principle by the fear, quite likely exaggerated, that in carrying out this
principle we may indirectly and inordinately encourage a combination of sugar
refinery interests, and that a failure to pass the House Bill would be party
perfidy and party dishonor.'' Such a letter thus communicated only hardened
the hearts of the opposing Senators, who declared it impugned their motives,
and the Senate refused to consent to any material change in its amendments.  A
deadlock resulted, the time being spent in idle talk, till the House yielded,
and in a caucus held August 13, decided to concur with the Senate.  The voting
on the passing of the bill was, in the Senate 39 (37 Democrats, 2 Populists)
against 34 (31 Republicans, 1 Democrat, 2 Populists, the solitary Democrat
being Hill of New York), and in the House, 182 (174 Democrats, 8 Populists)
against 106 (93 Republicans and 13 Democrats).

     The bill then amended and revised became law August 27, without the
President's signature.  He had previously vetoed in March, Mr. Bland's bill
for coining the seigniorage (that is, the difference between the cost and the
coinage value of the silver bullion in the Treasury, purchased under the
Sherman Act), but he naturally shrank from vetoing a bill brought in by his
own party at his own suggestion, and, therefore, allowed it to become law by
expiration of time, as provided for in the Constitution.  Thus after an
existence of three years and eleven months the McKinley Tariff Act was
superseded.

     At this session of Congress, another bill repealing the Federal election
laws became law.  It had passed the House at the special session by a vote of
202, chiefly Democrats, against a solid Republican vote of 102, and passed the
Senate, February 7, by 39 Democratic and Populist votes against 28 Republican
votes.  The Federal Election Bill, commonly known to Democrats as the "Force
Bill," was denounced in the Democratic platform of 1892 as an outrage upon the
electoral rights of the people in the several States, which the party was
pledged to resist.  Thus three of the demands made in that platform, the
repeal of the Sherman Bill, the repeal of the McKinley tariff and the repeal
of the "Force Bill," were satisfied.  In connection with the Wilson-Gorman
Tariff Bill, the reciprocity clauses of the McKinley Act were repealed.

     The President, in his veto of the Bland Bill for coining the seigniorage,
denounced the measure as dangerous, adding, that it was time to strengthen and
not deplete the gold reserve, and advising that the Treasury be given more
power to issue bonds to protect the reserve." In truth the condition of the
Treasury was going from bad to worse.  On January 13 Secretary Carlisle
submitted to the Finance Committee of the Senate a statement showing that the
excess of expenditures over receipts to that date had reached $3,000,000, and
that at the same rate the deficit for the year would be $78,000,000, or nearly
three times what he had estimated in his annual report.  The gold reserve had
shrunk to $74,000,000, and he asserted that the ordinary expenses of the
Government would soon have to be paid out of that fund.  Unless something was
done by Congress to authorize the issue of low rate bonds, the Secretary
announced that he would put forth high-rate bonds under the power granted by
the Resumption Act of 1875.

     Nothing, however, as we have seen, was done by Congress, and on January
17, a bond issue of $50,000,000 was announced.  Considerable dissatisfaction
with the terms of the proposed issue was expressed by financiers, but on the
last day allowed for bids, the New York bankers, after several consultations
with Mr. Carlisle, decided to sustain him, and subscribed for some
$45,000,000.  The subscription ended on February 1, the total bids being about
$58,000,000.

     The gold reserve meanwhile had run down to $65,000,000, but the proceeds
of the bonds raised it above the $100,000,000 mark.  There were heavy
exportations of gold during May and June, and on June 22, the reserve was less
than $62,000,000.  The New York banks now came to the aid of the Government,
and voluntarily supplied from their own vaults the export demand.  On June 25,
President Cleveland made a public denial of the rumors that the payment of
matured obligations gas being postponed by the Administration, and declared
that there was no cause for apprehension. Toward the end of July, the taking
of whiskey out of bond, in anticipation of the increase of the tax, measurably
increased the revenue.  The gold reserve sank to $54,000,000, but, the demand
for export dying out, it had increased by the end of October to $62,000,000.
But this was far below the sum fixed for the so-called gold reserve, and
another bond issue of $50,000,000 was resolved on in November, and the gold
reserve was thus raised to $112,000,000.  In his annual report the Secretary
of the Treasury, with the approval of the President, set forth a scheme of
currency reform, involving a reorganization of the National banking system. A
bill embodying this plan was introduced in the House early in December, and,
with some changes, was approved by the Democratic caucus.  The House, however,
refused to accept the proposal of the Committee on Rules by which the bill was
to be pressed to passage, and the measure thus received its death blow.

     Still the drain on the Treasury gold continued at an alarming rate, and
on January 28, 1894, the reserve was reduced to $52,463,173 - the lowest point
reached since resumption in 1879.  On that day, the President sent a special
message to Congress containing a second project as to the currency.  His
recommendations included the issue of a fifty-year three per cent. bond,
payable in gold, the proceeds to be used in maintaining the Treasury's gold
reserve and in redeeming legal-tender and Treasury notes; the cancellation of
all notes so redeemed permission to National banks to circulate notes up to
the par value of bonds deposited, such notes to be of denominations greater
than $10; the limitation of silver certificates to denominations less than
$10, and the requirement that import duties be payable only in gold.  The
President intimated that a failure to legislate would be followed by another
bond issue.  A bill containing his recommendations was rejected by the House
on February 7 - 135 to 162.  In the debate the Republicans affirmed that the
difficulties of the Treasury were chiefly due to the inadequate revenue
produced by the Wilson-Gorman Act.  The hope of the Government in its tariff
measures, had been that the Income Tax that had been so fiercely denounced
even by Democratic leaders, would produce revenue enough to compensate for the
diminished returns under the new reduced tariff.

     But this hope was frustrated by the decision of the Supreme Court, that
the Income Tax Bill was, as had been argued in the previous debates in the
Senate by Senator Hill of New York, unconstitutional.  Before, however, this
decision had been handed down by the Supreme Court and on thele rejection of
the bill recommended by the President for the issuing of fifty-year three
percent bonds, another bond issue became necessary, the Treasury having then
in its vaults only $41,000,000 in gold in fact, on the day, February 7, when
the bill was rejected, the suspension of gold payments at the Sub-treasury of
New York was within forty-eight hours of realization.  The Treasury was thus
at the mercy of the bankers, and as every moment was of importance in
providing for the due maintenance of our financial honor, the President, in
another message, on February 8, announced that a contract had been made with
the banking houses of Belmont and Morgan, for the purchase of 3,500,000 ounces
of gold, to be paid for in thirty-year four percent coin bonds, on terms which
made the price of the bonds about 104 1/2, and the amount $62,317,500.  In
addition to this, the contract gave the bankers who formed the syndicate the
option of any other bonds that might be issued till October 1st.  This
contract subjected the Administration to violent criticism from Republicans
and silver men. When the syndicate put the four per cents on the market the
loan was eagerly taken up in both New York and London, and the market
quotation for the bonds rose as high as 118.  This occasioned further bitter
attacks on the Administration, for having accepted so low a figure as 104 1/2.
But, it must be remembered that the syndicate was contracting not merely for
the delivery of so much specie, but for the importation of it from abroad,
without drawing upon the reserve or hoards of gold in this country.  Under the
contract, the gold in the Treasury increased steadily until, with the last
payment for bonds under the contract it stood at $107,000,000.  Still, in a
short time the reserve had again fallen below the limit, and the syndicate had
to fulfill its contract to sustain the Treasury by depositing gold during the
months of August and September.  But not even these successive issues of bonds
were able to place the currency of the nation on a sound basis, and in
January, 1895, after the President's message on the Venezuela question, a call
was issued for bids for $100,000,000 in gold for four per cent. bonds, and the
total amount of gold received was about $111,000,000, some of the gold in
payment of the bonds being withdrawn from the Treasury.  Yet, even after the
final payments on this issue of bonds had been made, the reserve in the
Treasury was as low, in July, as $90,000,000.  The banks, however, began now
to supply the Government with gold, and enabled it to tide things over till
the annual movement of crops put an end to the export of gold.  This action
was entirely successful in allaying the apprehension of the public and in
obviating the necessity for another bond issue.

     This statement of the various issues of bonds, during Cleveland's
administration, has been here given without regard to the time between the
separate issues, in order to present a consecutive view of the financial
condition with which the Government had to deal.  And it is especially
necessary to remember these successive attempts of President Cleveland to
maintain the gold reserve when we come to the presidential campaign of 1896.
The opponents of the Government argued that the whole trouble lay in the
Wilson tariff, which did not provide reserve sufficient to carry on the
Government, while the latter asserted that no part of the money acquired by
these bond issues was expended in defraying current expenses, but that the
whole was entirely devoted to preserving the National honor in assuring the
parity of silver and gold in all our National obligations.

     The year 1894 may be described as a year of misfortune.  Forest fires
raged in Minnesota and Wisconsin, devastating forty square miles of territory,
with great loss of life and great destruction of property.  In the coal mining
States, 126,000 men went out on strike destructive riots took place at
Cleveland, Ohio, requiring the calling out of the militia; in Colorado, the
silver miners struck, and order was only restored when troops appeared; in the
town created by and named after Pullman, the originator of the Pullman car
system, a reduction of wages caused a strike, and the Railway Union, an
extensive organization of railroad employees, in sympathy with their
fellow-workmen at Pullman, ordered a blockade of all roads using Pullman cars.
On June 26, traffic was suspended, scenes of violence and acts of incendiarism
were recorded at various places, and on July 8, the President of the United
States had to dispatch United States troops to Chicago, without having been
requested by the Governor of Illinois so to do, an action justified by the
fact that the strikers were interfering with the transport of the mails, but
deeply resented by the Populist party.  All these strikes, the depression of
business and the general discontent was attributed by the partisans of free
silver coinage to the closing of the mints to silver.  The result was that the
November election was a Republican victory; in New York, the Republican
candidate for Governor defeated Senator Hill by 150,000 votes; Mr. Wilson, the
author of the tariff bill, lost his seat in West Virginia; and Colorado,
Kansas, Pennsylvania, Ohio, Nebraska, and a dozen other States were swept by
the Republicans.  Apart from the discussions of currency questions, the third
session of the Fifty-third Congress was uneventful.  The recognition of the
Hawaiian republic was announced, but the administration refrained from any
change in its policy respecting those Pacific Islands, while it had preserved
a strict neutrality in the affairs of Cuba, only insisting on Spain issuing to
its officers peremptory and positive orders not to interfere with legitimate
American commerce.

     In the first session of the Fifty-fourth Congress the result of the
November elections of the previous year was seen.  The Senate consisted of
Republicans 44, Democrats 39, Independents 6; the House consisted of
Republicans 248, Democrats 104, Independents 7.  In his message the President
discussed at length the currency question, declaring that the only remedy for
the troubles under which the country was suffering was the retirement of the
greenback and treasury notes of 1890; he reiterated the necessity of observing
strict neutrality between Spain and the insurgents in Cuba, and added that
Great Britain had been called on for an answer to the question whether she
would or would not submit her long-pending dispute about territorial limits
with Venezuela to arbitration, and that an answer was soon expected.  Little
attention was excited by this clause in his message till on December 17, a
special message was sent to Congress, respecting Venezuela, together with the
correspondence that had passed between the British Government and Mr. Olney,
who had been transferred to the office of Secretary of State, on the death of
Mr. Gresham.  Both the message and the correspondence were of an unusual and
disquieting character.  In the absence of any settlement of the disputed
territorial questions between Great Britain and Venezuela, the President
declared that the United States must determine for its own justification the
true divisional line, and must therefore appoint a commission to investigate
the facts.  He concluded with the threatening words: When such report is made
and accepted, it will, in my opinion, be the duty of the United States to
resist by every means in its power, as a wilful aggression upon its rights and
interests, the appropriation by Great Britain of any lands or the exercise of
governmental jurisdiction over any territory which, after investigation, we
have determined of right to belong to Venezuela.  In making these
recommendations I am fully alive to the responsibility incurred, and keenly
realize all the consequences that may follow."

     This expression of President Cleveland of the extended views entertained
by him respecting the so-called Monroe doctrine created great surprise and
excitement, and deeply affected the stock markets of London, the Continent and
New York, thus increasing the difficulty of keeping gold in the treasury, and
necessitating another special message to allay the growing apprehension of the
people.  Two bills were, in consequence, introduced into the House of
Representatives, but both were dropped in consequence of the amendments made
by the Senate and the insertion of a clause providing for the free coinage of
silver.

     The bellicose message of the President regarding the Venezuela boundary,
and its extended interpretation of the Monroe doctrine, were regarded by many
as a stroke of personal policy, designed to regain for Grover Cleveland some
of the popularity that he had lost by his conduct in respect to Hawaii.
During the first year of his term he had sent, as a special commissioner to
the islands, Mr. James P. Blount, who reported that the monarchy was
overthrown by a conspiracy devised under assurances from the United States
Minister, Mr. Stevens, that he would recognize any government the
revolutionary party might form, and that this recognition was given before the
Provisional Government had demonstrated its ability to maintain its existence.
Based on these reports was the recommendation made by Secretary Gresham to the
President, that the treaty of annexation left over from President Harrison's
administration be not submitted to the Senate," and on December 18, 1893, the
President sent a message to Congress reviewing the whole matter, and promising
his co-operation in any plan "consistent with American honor, integrity, and
morality." On the same day, Mr. Willis, who had succeeded Mr. Blount as
Minister to Hawaii, demanded that the Provisional Government at Honolulu turn
over its power to the deposed Queen Liliuokalani.  The demand was refused by
Mr. Dole, the Hawaiian Prime Minister, who declined to recognize the right of
the United States to interfere in the domestic affairs of Hawaii.  Finally, in
June, 1894, a convention was held under the auspices of the Provisional
Government, and a constitution adopted, which was proclaimed to be in force on
July 4, with Sanford B. Dole as President.  Formal recognition of the Republic
of Hawaii was given by President Cleveland on August 7, In an official letter
to President Dole.

     But this was not the only quarter in which President Cleveland's policy
created dissatisfaction.  The insurrection raging in the Island of Cuba
appeared to our citizens as the struggle of liberty-loving colonists against
the tyranny of the mother-country, Spain, and many appeals were made to the
President to acknowledge the Cubans as belligerents.  The Senate passed a
resolution by 64 votes to 6, declaring that "the United States should accord
belligerent rights to the Cuban Government," and that the President should
offer his friendly offices to the Spanish Government for the recognition of
the independence of Cuba.  But no steps in this direction were taken by the
Government, which, in spite of all clamor and all reports of Spanish outrages
on American citizens and ships, adhered to its international duty of strict
neutrality.  In both the Hawaiian and Cuban questions, President Cleveland
deserved high praise for his consistency and firmness in observing the
obligations of international law, but in the popular view his conduct was
considered to lack courage, and not to support American principles," to the
extent required by true patriots. To show that he did not lack courage, and
that he was a good American, to reinstate himself with many of his own party,
and to divert attention from the state of the treasury were, perhaps, Mr.
Cleveland's motives in his Venezuela message.  It at once aroused what is
called a "jingo" feeling in the country, and for a few days the President rose
in favor.  But he was not allowed to enjoy for long the monopoly of patriotic
sentiments, the Senate and the House of Representatives surprised both the
President and his Secretary, Mr. Olney, in the force of their declarations,
and at once appropriated $100,000 for the expenses of the Commission
recommended in the message.  The following were appointed members of the
Commission on January 1, 1896: David J. Brewer, Associate Justice of the
Supreme Court of the United States Richard H. Alvey, Chief-Justice of the
Court of Appeals of the District of Columbia; Andrew D. White, Frederic R.
Coudert and Daniel C. Gilman.  The commission organized with Justice Brewer as
chairman, and pursued its work diligently during the greater part of the year.

     But over all these transactions hung the cloud of the coming Presidential
election, and this, it was universally recognized, would turn not on a strong
foreign policy, but on questions of finance and tariff. And of these two
domestic questions it soon became apparent that the former would be the real
battle-ground of the contending parties, and the issue was sharply drawn on
the free coinage of silver.  The issue was no new one. As far back as 1884,
Secretary McCulloch, in a report to President Arthur, said:

     "I have been forced to the conclusion that unless both the coinage of
silver dollars and the issue of silver certificates are suspended, there is
danger that silver, and not gold, may become our metallic standard. This
danger may not be imminent, but it is of so serious a character that there
ought not to be delay in providing against it.  Not only would the national
credit be seriously impaired if the government should be under the necessity
of using silver dollars or certificates in payment of gold obligations, but
business of all kinds would be greatly disturbed; not only so, but gold would
at once cease to be circulating medium and severe contraction would be the
result." And since then, as for years before, political economists, financiers
and statesmen had struggled with the difficulties of the situation.  As has
been already mentioned the silver purchase clause in the act of 1890 was
repealed in the Fifty-third Congress, and this had embittered the advocates of
free silver coinage still more.  Such advocates were to be found in both of
the great political parties, but in neither did they form the majority.
Taking a local view, we may say that the Eastern States were for Sound Money,"
that is, opposed to free silver, while in the West and South there was
division in the ranks. This division had been apparent in the Fifty-second
Congress, when Mr. Bland, the originator of the Silver Coinage Act of 1878,
reported a bill for the free coinage of silver, and time had indeed not closed
the breach on this important monetary question.  The Populist party, which in
its programme in 1892 had demanded public ownership of all means of
transportation, direct issue of currency by the government, and the
suppression of trusts, syndicates and all monopolies, was in favor of silver
or at least of bimetallism.  In March, 1895, the Bimetallist League issued an
address for the formation of a new party to advocate the unrestricted coinage
of gold and silver on a parity.  In May a convention held at Salt Lake City
came out for silver, and in June, a bimetallic conference at Memphis demanded
unlimited silver coinage.  In the same city, in May, Mr. Carlisle, Secretary
of the Treasury, had addressed a sound money convention, in behalf of the
parity of all American money, and some months afterwards had declared his
opinion that the government ought to retire all the greenbacks and get out of
the banking business.  In December, I 895, the President's message echoed his
opinion and recommended the retirement of greenbacks and treasury notes by
long-term bonds at low interest, but it is difficult to convince the ordinary
citizen that such an issue, when the interest has to be paid from taxation
that is directly felt by all tax-payers is a better way to put our finances on
a sound basis than the continued issue of greenbacks.  Then much was made of
the "crime of 1873," meaning thereby the act of that year demonetizing silver,
concerning which so high an authority as Jay Cooke wrote: The act has worked
infinite harm and damage to all the debtor classes, which are as fifty to one
in this country, compelling all who rely upon the products of their industry
to discharge their indebtedness, to pay such debts contracted when silver and
gold were both equal standards of value at a time now when gold alone is
recognized as the unit of value, and the basis of all value among the
civilized nations of the world."

     On the other side, the sound money advocates alleged the fact that the
whole commerce of the world is transacted on a gold basis, that the interest
on our debt, specifically payable in coin, has always been understood by us
and by foreign holders as being payable in gold, and that the honor of the
country compelled us to live up to this understanding, unless we should
confess ourselves bankrupt, ready to repudiate our obligations.

     The first of the nominating conventions to be held was that of the
Republican party, at St. Louis, June 16.  The platform adopted for the coming
campaign renewed the party's allegiance to the doctrine of protection as the
foundation of prosperity, demanded a renewal of reciprocity arrangements with
American States, protection for all our products and discriminating duties for
the purpose of building up our mercantile service.  The next clause created a
break in the convention.  It opposed the free coinage of silver, except by
international agreement with the leading commercial nations of the world, and
declared that until such agreement was effected the gold standard must be
preserved.  Twenty-one delegates left the hall when this was announced, among
them being four Senators and two Representatives; the seceders were Hartmann
(Montana), Cannon, Senator, Allen, Kearns, (Utah), Pettigrew, Senator, (South
Dakota), Cleveland, Strother, (Nebraska), six delegates from Idaho, including
Senator Dubois, and eight, including Senator Teller, from Colorado.  It had
been long before seen that William McKinley, of Ohio, would be the choice of
the convention, and on the first ballot he received 661 votes, the next
greatest number being given for T. B. Reed, of Maine, 84, while the votes cast
for Governor Morton, of New York (58), for Senator Quay, of Pennsylvania (61),
for Allison, of Iowa (35), were merely complimentary expressions of local
feeling.  In replying to the delegation that reported his nomination to Mr.
McKinley, he stated, Protection and reciprocity, twin measures of true
American policy, should again command the encouragement of the government.  A
policy compelling the government to borrow money in time of peace must be
reversed.  The money of the United States, whether paper, silver or gold, must
be as good as the best in the world, and must be at par in every commercial
center of the globe." The nomination for Vice-President was given to Garret A.
Hobart, of New Jersey.

     The scenes in the Democratic National Convention, at Chicago, July 11,
were much more sensational than those at St. Louis.  It was evident that a
large proportion of delegates were in favor of free silver, in spite of all
the efforts of the Gold Democrats of the Eastern States.  The platform
relegated the tariff question to the background, and in its opening clauses
denounced the so-called crime of 1873 and demanded the free and unlimited
coinage of gold and silver at the present legal ratio of 16 to 1, without
waiting for aid or consent of any other nation." The adoption of the platform
was moved by William Jennings Bryan, of Nebraska.  He had been returned to
Congress in 1890, and had been a member of the Committee of Ways and Means,
and held that position in the Fifty-first and Fifty-second Congress.  He was
defeated, however, in 1894, and devoted his whole time to the advocacy of free
silver.  In his speech he declared that the money question is the paramount
issue of the hour," that the interests of the farmer as well as of other
citizens required protection from the inroads of organized wealth, that,
instead of the government going out of the banking business the banks must go
out of the government business, and that when we have restored the money of
the Constitution all other reforms will be possible.  His speech was delivered
with great fervor in a popular style of eloquence, and ended with words that
became the battle cry of the Silverites: "Having behind us the producing
masses of this nation and the world; having behind us the commercial
interests, and the laboring interests, and all the toiling masses, we shall
answer their demands for a gold standard by saying to them: "You shall not
press down upon the brow of labor this crown of thorns.  You shall not crucify
mankind upon a cross of gold."

     The effect of the speech was decisive.  At the first ballot the old
champion of silver, Mr. Bland was in the lead, but in the final and fifth
ballot, Mr. Bryan received more than the 572 votes necessary for a choice.
Strangely enough, a Gold Democrat, Arthur Sewall of Maine, was put on the
ticket for Vice-President.  One hundred and sixty-two delegates refrained from
voting.  Mr. Bryan's nomination was indorsed by the People's Party Convention,
meeting at St. Louis, July 25, but the nomination for Vice-President was
given to William T. S. Watson, of Georgia, in place of Mr. Sewall.

     The important secession of Democratic delegates from the Chicago
convention, and the dissatisfaction of a powerful element of the party with
the platform there adopted, led to the summoning of a Sound Money Democratic
Convention, at Indianapolis, in September, which was attended by delegates
from all the States except Idaho, Nevada, Utah and Wyoming.  It denounced the
Chicago platform as undemocratic, and condemned its financial doctrines as
well as the tariff proposals of the Republicans.  It favored tariff for
revenue only, the single gold standard, a bank currency under governmental
supervision arbitration for the settlement of international disputes and the
maintenance intact of the independence and authority of the Supreme Court.  It
also strongly indorsed the Cleveland Administration. With practical unanimity
it nominated Senator John M Palmer, of Illinois, for President, and General S.
B. Buckner, of Kentucky, for Vice-President.

     The currency campaign was highly exciting and was remarkable for the
unwearied efforts of Mr. Bryan on behalf of his party.  He made a tour of the
country in all directions and addressed with his usual brilliancy numerous
audiences.  Mr. McKinley remained quietly at his house at Canton, Ohio, where
he received numerous delegations, to whom he returned terse and forcible
replies.  The election took place November 3, and the popular vote was,
McKinley, 7,104,779; Bryan, 6,502,923 Palmer, 133,148, while the electoral
vote gave McKinley, 271, Bryan, 176.

     On December 7, the Fifty-fourth Congress met for its second session. In
the House, the Republicans numbered 248, the Democrats 104, Populists 7, and
in the Senate, Republicans 45, Democrats 38, Populists and Silverites 7, and
to bodies thus hostile to his administration, President Cleveland addressed
his last message in which, after announcing the settlement of the Venezuela
boundary question, he stated that negotiations for a treaty of general
arbitration for all differences between the United States and Great Britain
were far advanced.

     From the commencement of our history as a nation, this country has so
constantly lent the weight of its influence and example to the substitution of
reason for force in the adjustment of disputes among nations that
international arbitration may be said to be a prominent feature in its policy,
and on two occasions we opened the door for arbitration treaties with all the
nations of the world.  In April, 1890, the Sherman concurrent resolution was
passed by both Houses of Congress for this express purpose, and in October of
the same year, when Mr.  Blaine was Secretary of State, there was sent by our
State Department, the Pan-American form of treaty, with an invitation to all
civilized nations to join us in such a treaty. The Sherman resolution
declared, That the President is hereby requested to invite from time to time,
as fit occasions may arise, negotiations with any government with which the
United States has or may have diplomatic relations, to the end that any
differences or disputes arising between the two governments which cannot be
adjusted by diplomatic agency may be referred to arbitration, and be peaceably
adjusted by such means." On June 16, 1893, the British House of Commons
adopted the following resolution.

     "This house has learnt with satisfaction that both Houses of the United
States Congress have, by resolution, requested the President to invite, etc."
(here the words of the Sherman resolution are quoted) and that this House
cordially sympathizing with the purpose in view, expresses the hope that Her
Majesty's Government will lend their ready cooperation to the Government of
the United States upon the basis of the foregoing resolutions." In accordance
with these expressed opinions of our own Congress and the British Parliament,
a treaty was drawn up, and signed on January 11, 1897 by Secretary Olney and
Sir Julian Pauncefote, Ambassador for Great Britain, and at once transmitted
to the Senate.  Its chief provisions were as follows: The parties agree to
arbitrate all questions in difference which fail of adjustment by diplomacy.
All pecuniary claims which in the aggregate do not exceed 100,000 pounds, and
do not involve the determination of territorial claims, shall be dealt with by
an arbitration tribunal.  Each party shall nominate one arbitrator, who shall
be a jurist of repute, and these two shall select an umpire.  In default of
this the umpire shall be appointed by agreement between the members of the
Supreme Court of the United States and the members of the Judicial Committee
of the Privy Council of Great Britain.  In case they fail to agree, the umpire
shall be selected by the King of Norway and Sweden.  Controversies involving
the determination of territorial claims are to be determined by a tribunal
composed of jurists of both countries.

     In the Senate, after a debate in which great hostility was displayed by
Senators of both parties, the treaty was referred to the Committee on Foreign
Affairs, who returned it January 30, with sundry amendments.  One of the
amendments provided that no question which affects the foreign or domestic
policy of either of the parties, or the relations of either with any other
State or Power by treaty or otherwise, shall be subject to arbitration under
the treaty, except by special agreement.  Another struck out all reference to
the selection of an umpire by King Oscar.  Another provided that if at any
time before the close of a hearing on any matter, except territorial claims,
either party declares that the decision of a disputed question, excluded
except by special agreement, is involved, the jurisdiction of the tribunal
shall cease.  The treaty was discussed at considerable length, but there
seemed to be a general desire to put off action till after the inauguration of
the new president.  Mr. McKinley (to anticipate matters and thus conclude the
incident) in his inaugural address, after reminding Congress that the treaty
was clearly the result of our initiative, added : I respectfully urge the
early action of the Senate thereon, not merely as a matter of policy, but as a
duty to mankind.  The importance and moral influence of the ratification of
such a treaty can hardly be overestimated in the cause of advancing
civilization.  It may well engage the best thought of the statesmen and people
of every country, and I cannot but consider it fortunate that it was reserved
to the United States to have the leadership in so grand a work." But in spite
of this strong recommendation by the Republican President of his Democratic
predecessor's work, the Senate rejected the proposed treaty by a large
majority.

     President William McKinley and Vice-President G. A. Hobart, were duly
inaugurated on March 4.  The weather was perfect, the ceremonies more than
ordinarily impressive, and larger crowds were present than had witnessed the
installation of any other president.  In his address, the President said that
the currency should be under the supervision of the Government, but that
changes could be made in our fiscal laws until an adequate revenue had been
secured.  He spoke in favor of a currency commission, promised early attention
to international bimetallism, and insisted on the necessity of more revenue
and the restoration of protective legislation, and the reciprocity principle
of the law of 1890.  He repeated the declaration of the party, of opposition
to all combinations of capital organized as trusts, called attention to the
state of our mercantile marine, and as action on these matters would not be
postponed, concluded by expressing his purpose to call together Congress in
extraordinary session on March 15, to consider especially the state of the
treasury.

     The President sent to the Senate his nominations for the members of his
Cabinet Secretary of State, John Sherman, Ohio; Secretary of the Treasury,
Lyman J. Gage, of Illinois; Secretary of War, Russell A. Alger, of Michigan;
Secretary of the Navy, John D. Long, of Massachusetts; Secretary of the
Interior, Cornelius N. Bliss, of New York Postmaster-General, James A. Gary,
of Maryland; Attorney-General, Joseph McKenna, of California; Secretary of
Agriculture, James Wilson, of Iowa, all of which were immediately approved.

     Of these officers, Russell A. Alger, Secretary of War, was born in
Michigan in 1835 and engaged in the lumber business.  During the Civil War he
served with the Michigan Cavalry, and was several times wounded.  He left the
service with the brevet rank of Major-General.  In 1884 he was elected
Governor of his native state by the largest majority ever given to a
Republican.  He held no office until named to the Secretaryship of War.

     John Davis Long, Secretary of the Navy, was born in 1838, and rose to an
eminent position at the bar in Boston.  In 1879, he was elected Governor of
Massachusetts, and reelected for two successive terms.  Subsequently he sat
for three successive terms in Congress, but was an unsuccessful candidate for
a seat in the Senate of the United States.

     Mr. Gage of New York, Secretary of the Treasury, was an eminent banker in
Chicago, was prominent in organizing the Columbian Exposition, and well known
for his views on sound money and banking reform.  The Secretary of the
Interior, Cornelius N. Bliss, a prominent merchant of New York, was long a
leader in local politics, but held no previous public office.  The
Postmaster-General, James A. Gary, of Maryland, had been a delegate to every
national political convention from 1872, but had been defeated in his
aspirations to Congress.  Mr. Joseph McKenna, of California, the
Attorney-General, an eminent lawyer, served four terms in Congress, and was
appointed a Judge of the United States Court of California in 1892.  He was a
political friend and associate of Mr. McKinley in Congress, and assisted him
in framing the McKinley Tariff bill.  Later in the year Mr. McKenna resigned
and was succeeded by John W. Griggs, Governor of New Jersey.  The Secretary
for Agriculture, James Wilson, a native of Scotland, sat for six years in the
Legislature of Iowa, and for three terms in the Congress of the United States.

     On March 6, the President called an extra session of Congress to meet
March 15, at which Thomas B. Reed was elected Speaker of the House of
Representatives by a vote of 200 to 114.  In his message to Congress, the
President stated that an extraordinary session was indispensable because of
the condition of the revenue.  The current expenses were greater than the
receipts, and had been so for three years.  Congress should promptly correct
this condition, and in raising the required revenue duties should be so levied
on foreign products as to preserve the home market, so far as possible, to our
own producers, to revive and increase manufactures, to encourage agriculture,
to increase our commerce, and to render to labor its adequate rewards.  The
enactment of such a measure, he concluded by saying, was the imperative demand
of the hour and ought to be passed before any other business was attended to.

     On the same day Mr. Dingley, of Maine, introduced a tariff bill, and on
March 19 a measure was reported from the Committee on Ways and Means. March 23
was set for the opening debate, and it was ordered that on March 31 the
measure was to be put on its passage.  In opening the discussion, Mr. Dingley
stated that in the four fiscal years beginning July I, 1893, the total
deficiency was nearly two hundred and four millions of dollars, and that this
deficiency arose from the falling off in receipts from duties on imports,
caused by the financial policy of the late administration.  To remedy this the
new tariff bill was introduced.  The chief opponent of the proposed
legislation was Mr. Wheeler of Alabama, but on March 31 the Dingley bill
passed the House by 205 votes against 122.  In the Senate the discussion was
protracted, and no fewer than 872 amendments were incorporated in the House
bill, the vote being 38 against 28.  The House non-concurred, and a conference
committee was appointed, which reported in favor of many of the Senate
amendments.  The report was agreed to and on July 24 the President approved
the bill.

     The Bering Sea Fishery question was raised again by Mr. Sherman, who in a
very undiplomatic dispatch accused Great Britain of trying to evade the
regulations of the Court of Arbitration respecting pelagic sealing, but the
British government declined to re-open the matter, and refused to take part in
a conference at which representatives of Japan and China were to be present.
Finally a conference of experts, at which representatives of the United
States, Canada and Great Britain were to take part, was arranged.

     The conference was long drawn out, subject to many adjournments and
delays, and terminated its meetings in February, 1899, with nothing
accomplished.  The seals were left wholly unprotected.  The United States
forbade pelagic sealing to its citizens, while England did not, and all the
profits of the rapidly perishing industry were being reaped by foreigners. The
Canadian sealing fleet of 1,899 included 26 vessels, that of 1900 numbered 33,
with a catch of more than 35,000 seals each year, and more than half of these
females.  The same conditions have prevailed ever since. The North American
Company has been increasing its efforts in order to obtain its full share
while the seals last, and in the Congressional session of 1901-2 it was
seriously proposed to kill off the entire Arctic herd at once and thus end the
whole question by putting an end to the seals.  This radical step, however,
has not been taken.