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Download Download INDIANA MAGAZINE OF HISTORY Volume XLII June, 1946 No. 2 The Money Question in Indiana Politics 1865-1890” WILLIAM G. CARLETON Kansas, Nebraska, the Dakotas, and other trans-Mis- sissippian states experienced in the 1890’s an agrarian cru- sade of tremendous proportions. Indiana went through a similar period of agrarian radicalism in the 1870’s. In both cases demands for monetary inflation loomed large in the program of economic amelioration. It is the purpose of this article to trace one aspect of agrarian radicalism in Indiana -the history of the inflation movement in the state during the 1870’s and the 1880’s. This movement in Indiana never became as evangelical or as spectacular as the free-silver agitation of the 1890’s in the West and the South, but it was persistent and in many ways similar. And like the later and more colorful movement, it largely failed and was not able to check the relentless trend toward an industrial and a conservative economy. The legal tender outstanding in 1865 amounted to $433, 000,000, and $145 of it exchanged for $100 in gold. The contraction bill advocated in April, 1866, by Hugh McCul- loch was passed by both houses of Congress and became a. law. This act authorized thle retirement of $10,000,000 of the legal tender within six months and after that $4,000,000 a month. The issue thus presented was as yet little under- stood by the voters of Indiana, and the positions taken by the various members of the Indiana delegation in Congress were not clarifying. Senator Henry S. Lane, Republican, voted for contraction, while Senator Thomas A. Hendricks, Democrat, was significantly absent. Michael C. Kerr, Dem- ocrat, representative from the second district, voted for the *This article and the one which will follow in the next issue of the Magazine were prepared in a seminar in 1925-1926 in Indiana University under the direction of the Editor when Mr. Carleton was a senior. 108 Indiana Magazine of History measure. Kerr always leaned toward hard money. William E. Niblack, the Democratic representative from the first district, did not vote. The remainirrg memlxrs of the dele- gation were Republicans, and of these John H. Farquhar of the fourth district, Thomas N. Stillwell of the eleventh dis- trict, and Henry D. Washburn of the seventh district voted for contraction; Ralph Hill of the third district, George W. Julian of the fifth district, Joseph I-I. DefreEs of the tenth district, and Godlo~eS. Orth of the eighth voted against contraction ; while Eb,enezer Dumont of the sixth and Schuyler Colfax of the ninth did not vote.’ Julian was later counted as a hard-money man, but it must be remembered that many conservatives, including Juhn Sherman of Ohio, voted against the act of 1868, believing that the country was not yet readjr for contraction, and that McCulloch’s schemes were prema- ture. The large number of dodgers showed that sentiment in Indiana had not yet crystallized, and that it was not con- sidered politically safe to be on either side. Opinion as yet was unformulated. The three affirmative votes offset the three negative votes. In the midst of the depression of 1868, Congress by law ordered contraction to cease. The amount of outstanding legal tender had been reduced to $365,000,000. The bill put- ting an end to contraction passed the House on December 7, 1867, and every one of the ten Indiana representatives who votied cast his ballot in the affirmative. The three Demo- crats, Niblack, Kerr, and Holman, all of whom later be- came conservative on the money question, voted with the seven Republicans in favoi. of the bill. Speaker Colfax was in the chair and was the only Indiana member who did not vote. The bill passed thc Senate on January 15, 1868, and both Morton and Hendricks voted for it.’ Morton was avid in his support of tkie bill. Opinion in the Indiana delegation was thus unanimous, and sentiment in Indiana seems to have been overwhelmingly against contraction. Both parties in Indiana in 1868 wanted the greenbacks restored. McCulloch was an Indianan, and his home was at Fort Wayne. In the congressional election of 1866, he made sev- eral speeches in the state in favor of the moderate recon- struction policy of President Johnson, and he appears to 1 Congnessional Globe, 39 Cong., 1 Sess., 1854, 1614. 2 Ibid., 40 Cong., 2 Sess., 70, 537. Money Question in Indiana Politic.s, 1865-1 8!)0 10‘3 have wielded some influence in the Republican organization of the state.’ But after 1866, Oliver P. Morton opposed McCulloch on every important issue, becoming a leader of the radical reconstructionists in the Senate after his election to that body in 1867, and a spclcesrnan for the Western Re- publicans who favored cheap money. So savage did Morton become in opposition to sound money that Daniel M‘. Voorhees, who became the most conspicuous inflationist in the Demo- cratic party, was wont to use in his own speeches quotations irom Morton’s fulminations against hard money, and lonx after the Republican party in Indiana had abandoned cheap money, Voorhees delighted to taunt his adversaries with the vigorous inflation arguments uttered over and over again by the great Republican idol. Voorhees was especially fond of quoting from Morton’s speech in opposition to the Public Credit Act of 1869 in which the great Republican leader declared that “it would be foul injustice to the government and people of the United States, after we sold these bonds on an average of not more than 60 cents on the dollar, now to propose to make a new contract for the ben,efit of the bondholder^."^ It was Morton, not McCulloch, who expressed the aspirations of the Republicans of the state in the years immediately following the Civil War. The state platform of the Republicans in 1868 was €rankly radical on the money question. The platform de- clared that the large and rapid contraction of the currency, sanctioned by the votes of the Democratic party in both Houses of Congress, has had a most injurious effect upon the industry and business of the country; and it is the duty of Congress to provide by law for supplying the deficiency in legal tender notes, commonly called greenbacks, to the full extent required by the business wants of ihe country. In these words the platform approved the unanimous vote given by the Indiana cviigressional delegation to the bill ordering contraction to cease : We cordially approve the course of the Republican members of Congress in their active support of the bill prohibiting the further contraction of the currency, in which they faithfully represented the will of the 3Francis M. Trissal, Public Men of Indiana, A Political History from 1860 to 1890 (2 vols., Hammond, Indiana, 1922), I, 46. 4 Matilda Gresham, Life of Walter Quintin Gresham, 1832-18.9.5 (2 vols., Chicago, 1919), I, 430-431. 110 Indiana Mayaxine of Histo~y people of Indiana. Acd this convention expresses their unwavering confidence in the wisdom and patriotism of Oliver P. Morton, . and we send greeting to him . and assurance to him of our unqualified endorsement of his course. On the public debt question the platform said this: “The public debt made necessary by the rebellion should be hon- estly paid; and all the bonds issued therefor should be paid in legal tenders, commonly called greenbacks, except where, by their express terms, they provide otherwise.”’ The Democrats entered the campaign of 1868 with a radical financial platform. It declared that : The national bank system, organized in the interests of the bondholders, ought to be abolished, and the United States notes substituted in lieu of the national bank currency, thus saving to the people, in interest alone, more than eighteen million dollars annually, and until such system of banks shall be abolished, we demand that the shares of such banks in Indiana shall be subject to the same taxation, State and municipal, as other property of the State. The platform further declared on the same subject: That the bonds and other securities of the United States with every other description of property, should bear its equal proportion of taxation for State, county and municipal purposes, and to that end the bonds and other securities of the United States ought to be taxed by Congress for national purposes, in an amount substantially equal to the tax imposed on property in the several States for local purposes. The Democrats further asserted that they were in favor of “the payment of th8e Government bonds in Treasury notes, commonly called ‘greenbacks,’ (except where expressly made payable in gold by law,) at the earliest practicable point.”” The convention closed its platCorm labors with an eulogy of George 1% Pendleton of Ohio whose slogan “The same currency for the bondholder and the pl~ugh-holder’~had made him the leading inflationist candidate in the Democratic contest for the presidential nomination. The final platforni resolution declared Pendleton to be one “who has our entire 5 Indianapolis, Indiana, Journal, February 21, 1868 ; Indianapolis, Indiana, Daily Herald, February 21, 1868; William E. Henry, State Platfoms of the Two Dominunt Politioal Parties in Indiana, 1850-1900 (Indianapolis, Indiana, 1902), 34-35. The Indiana delegation to the Republican National Convention of 1868 supported Grant and Colfax, both sound-money men, but other considerations dominated the situa- tion and entered into the choice. 6 Indianapolis, Indiana, Journal, January 9, 1868 ; Indianapolis, In- diana, Daily Herald, January 9, 1868; Henry, State Platforms of the Two Dominant Parties, 32-34.
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