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[529]

Chapter XXX

  • The financial lesson of the Civil War
  • -- approaching bankruptcy of the government near the close of the War -- the legal -- tender notes an injury to the public credit -- a vicious clause in the Constitution -- no prejudice in the army against officers not educated at West Point -- the need of a law Reforming the relations between the President and the commander of the army -- devotion to the chosen leader in times of public peril.


another great lesson taught by our Civil War, perhaps even more important than any other, is the financial lesson. An established government which has a place to maintain among the commercial nations of the world must maintain its credit. It must purchase its supplies and munitions of war and pay its troops in money. In a great and prolonged war it is not possible for the people to contribute all the means required at the time. The amount of taxation would be greater than any people could bear. Hence the government must borrow the necessary money. This cannot be done without national credit. If credit declines, rates of interest and discount on securities increase until the national debt reaches its limit and no more money can be borrowed. In short, the nation becomes bankrupt. This was the condition of the United States before the close of the late Civil War. With a million of men on the muster-and pay-rolls, including several great armies of veteran troops in the field, [530] while the Confederate army was reduced to a very small fraction of that number, the Union cause was on the very verge of failure, because the government could no longer raise money to pay its troops, purchase supplies, or make any further use of its magnificent armies. This astounding fact was confided to the generals of the army in the winter of 1864-5 by the Secretary of War, who then said the rebellion must be suppressed in the coming spring campaign, or tile effort abandoned, because the resources of the treasury were exhausted. In corroboration of my recollection on this subject, I now find the following in a private letter written by me at that time:

Washington, February 3, 1865.
There is much excitement here over the peace rumors, and it would seem there must be good foundation for it. The President has actually gone to Fort Monroe to meet the rebel commissioners. I do not, however, indulge much faith in the result of these negotiations. We will probably have to beat Lee's army before we can have peace. There is much commotion among politicians, and there will be a storm of some kind on the political sea if peace is made now. On the other hand, if the war continues long, the treasury will most likely become bankrupt. It has got far behind already. There is no money to pay the army, and no one can tell where it is to come from. I have succeeded in getting enough to pay my troops, which was obtained by special arrangement with the treasury, and as a special reward for their distinguished services. No other troops in the country have been paid for five months, and there is no money to pay them.


The reasons for this deplorable condition of the United States treasury are understood by all financiers. Yet a very large proportion of the voting population do not appear to understand it, or do not know the fact. People engaged in an effort to throw off their dependency or political connection, and establish their own independence, or a country defending itself against a powerful adversary, may be compelled to resort to forced loans, in the absence [531] of national credit, to carry on the war. But in a great country with unlimited resources, like the United States, resort to forced loans would seem to be entirely unnecessary. However this may be, and whatever may be the necessity in any case, a forced loan, without interest, is simple robbery to the extent of unpaid interest, even if the principal is paid. And a robber cannot expect to have much credit left after his character becomes known to the world.

The issue of legal-tender notes during the Civil War was of this character. The country received a deadly blow to its financial credit when that policy was adopted. Nations or peoples cannot, any more than individuals, violate the established rules of honest dealing without suffering the just penalty. If money is needed beyond current revenues, there is no other honest way to get it but by borrowing it at such rate of interest and upon such security as can be agreed upon. Besides, to leave any room for doubt or cavil about the conditions of a loan, or about the standard of money in which principal and interest are to be paid, necessarily arouses suspicion of bad faith, and hence destroys or seriously injures national credit. It is now perfectly well known to all who have taken the pains to study the subject that this false and practically dishonest policy, however innocently it may have been conceived, cost the United States many hundreds of millions of dollars, and cane very near bringing disaster upon the Union cause. One of the most astounding spectacles ever presented in the history of the world was that presented by this country. It went into the war practically free from debt, and came out of it with a debt which seemed very large, to be sure, and was in fact nearly twice as large as it ought to have been, yet so small in comparison with the country's resources that it could be paid off in a few years. It went into the war practically without an army, and came out of the war [532] with its military strength not even yet fully developed. It had more than a million of men, nearly all veterans, in the ranks, and could have raised a million more, if necessary, without seriously interfering with the industries of the country. Yet in four short years a false financial policy destroyed the national credit, brought its treasury to bankruptcy, and thus reduced a great people to a condition in which they could no longer make any use of their enormous military strength! This lesson ought to be taught in every school-house in the United States, until every child is made to understand that there is no such thing in the world as paper money; that the only real money in the world is standard gold and silver; that paper can be used in the place of money only when it represents the real gold or silver in which it can at any time be redeemed; that even gold and silver can be used together as standard money only under their real intrinsic values as recognized by all the world; that any attempt to force either gold or silver into unlimited circulation, under any arbitrary ratio different from their real ratio, is not honest; and that dishonesty is the worst of all financial policies, as well as the most unworthy of a civilized people.

The laws of finance, like the laws of military strategy, were never invented by anybody, any more than the law of gravitation or the law of electrical attraction and repulsion. They have all been learned by the experience and study of mankind since the dawn of civilization. All alike are parts of the great laws of nature. They should be carefully and diligently studied and taught in all the schools, until the rising generation understand that all the affairs of mankind are governed by the uniform laws established by the great Creator and Ruler of the universe; and that self-appointed ‘leaders of the people’ who would entice them to follow their own inventions cannot save them from the penalties which naturally [533] follow the violation of any of the laws of the universe. In short, education,—wisely directed education,—both in science and in morals, is the one indispensable foundation of good popular government. The relative importance to be attached to the many branches of popular education demands the careful consideration of all educators, and still more the purity of the doctrines taught in all the schools. There is good reason to believe that this last duty has been much neglected, especially in respect to financial theories.

In this connection, it is worthy of serious consideration whether one of the teachings of a corrupt age has not found its way into that almost sacred writing, the Constitution of the United States. What right has Congress, or any other department of government, or any government on earth, to ‘regulate the value’ of money, any more than that of wheat or corn? Is not the real value of money, like that of everything else, regulated by the general law of supply and demand throughout the world? Ought not the value of money, and what shall constitute money, be left, without governmental interference, to be determined by the common consent of mankind? Must not commercial intercourse among all the countries of the world necessarily regulate all this, in spite of the decrees of government? Ought not the function of government in this regard to be limited to the coining of money and stamping on its face its real value—that is, in effect, the amount of gold or silver it actually contains? In short, is not the attempt of government to make a certain weight of one thing equal to a certain weight of another thing a plain violation of a natural law, and hence necessarily vicious? Is not all our serious monetary controversy in this country the result of vicious teaching to be found in our own Constitution, inherited from a corrupt age, when the fiat of a prince was thought sufficient to make a coin worth more than it was in fact? Where did [534] so many of the people of the United States learn the heretical doctrine of fiat money? Is it not taught in the Constitution of the United States? It so seems to me, and hence it seems to me that the people should at once strike at the very root of the evil, and eradicate from their fundamental law the theory that the value of anything can be regulated by arbitrary fiat, in violation of natural law. Let the people restore to themselves their inalienable right to liberty of trade, so that they can deal with each other in gold, or in silver, or in cotton, or in corn, as they please, and pay in what they have agreed to pay in, without impertinent interference from legislators or anybody else. Then, and only then, can the monetary system of this country be placed on a sound foundation, and all the gold and silver of our mines, as well as all other products of human industry, and the people who produce or own them, become truly free.

Another important lesson taught by our experience since the Civil War, no less than at the commencement of that period, is that prompt and vigorous action, in accordance with established military methods, whenever military force must be employed, necessarily presupposes such knowledge of the laws on the part of department and army commanders as will justify the President in intrusting them with discretionary authority to act without specific orders in each case. Such emergencies as that of 1894, for example, give striking proof of the necessity for the higher education to fit men for high command in the army. It is not mainly a question of military education. Early deficiencies in that respect may soon be overcome by the constant practice afforded by active service. The indispensable necessity is for education in general, and especially in those things which army officers are not habitually required to know, but which are of vital importance to those who must, in great emergencies, be intrusted with great responsibilities and [535] with discretionary authority. That very emergency of 1894 gave examples of officers, not educated at West Point nor at any other military school, distinguished for gallant and efficient military service in the field, who proved to be perfectly familiar with the principles of constitutional and military law which ought to govern the action of troops under circumstances like those of 1894; while others, distinguished as commanders in the field, seemed strangely ignorant of both constitutional and military laws. It is also worthy of remark that such necessary legal education did not appear to be universal among the West Point graduates at that time. Some men who are not graduates of West Point are much better qualified for high command than some who are.

Much has been said about a supposed prejudice in the army against officers who have not enjoyed the advantages of education at the military academy. I aver, emphatically, that I have never seen any evidence of any such feeling, and I do not believe it has ever existed to any appreciable extent. On the contrary, the general feeling has been that of just and generous consideration for officers who were at first laboring under that disadvantage. Some of the most popular men in the army have been among those appointed from civil life or from the volunteers. General Alfred H. Terry was a fair example of this. He was a ripe scholar, a thorough lawyer, a very laborious student of the art and science of war,— more so than most West Point graduates,—and so modest that he hesitated to accept the appointment of brigadier-general in the regular army, although it had been given for so distinguished a service as the capture of Fort Fisher, on the ground that older officers who had devoted their whole lives to the military service were better entitled to it.

The general feeling in the army has no special reference to West Point. It is a feeling, and a very strong [536] one, in favor of education, of qualification in all respects for the service which may be required, of that dignified self-respect and becoming modesty which prevent an officer from desiring a position for which he is not fully qualified, and, above all, that manly delicacy which makes it impossible for an officer to seek a position which ought to be left to seek him. As well might a maiden ask a man to marry her, or get some one else to do it for her, as a soldier to seek in the same way a position on the staff of a general or of the President.

This is especially true in respect to the position of the ‘commanding general,’ or general-in-chief, of the army. The President being, by the Constitution, commanderin-chief of the army and navy, no law of Congress, even with his own consent, could relieve him from that responsibility. There is no law, and there could not constitutionally be any law passed, establishing any such office as that of commanding general of the army, and defining the duties and authority attached to it. Such a law would be a clear encroachment upon the constitutional prerogatives of the President. The only constitutional relation in which the so-called ‘commanding general,’ or ‘general-in-chief,’ of the army can occupy is that usually called ‘chief of the staff’—the chief military adviser and executive officer of the commander-in-chief. He cannot exercise any command whatever independently of the President, and the latter must of necessity define and limit his duties. No other authority can possibly do it. In this regard the President's power and discretion are limited only by his constitutional obligation to exercise the chief command himself. He can give his generalin-chief as much authority as he pleases consistently with that obligation. Hence it is entirely in the discretion of the President to define and fix the relations which should exist between the general and the Secretary of War—a very difficult thing to do, no doubt,—at least one which [537] seems never to have been satisfactorily done by any President. The Secretary and the general appear to have been left to arrange that as best they could, or to leave it unarranged. However this may be, the relations of the general to the President are, or ought to be, of the most confidential character, no less so than those of any member of the cabinet. And the necessity of that confidential relation is far more important than in the case of any cabinet officer, for the reason that it is brought into prominence in times of great emergency, when questions of peace and war are involved, and when the President is required to act upon momentous military questions about which he cannot, in general, have much knowledge, and hence must trust to the ability, judgment, discretion, and scientific military knowledge of the general-in-chief. In such cases the general becomes, as it were, the ‘keeper of the President's conscience’ in respect to the most momentous questions he can ever have to decide.

It is necessarily extremely embarrassing to the President to be compelled to place or retain in that close, confidential, and important relation to himself an officer in whom he has not entire confidence in all respects; or else, as the only alternative, by selecting another, to cast a reflection upon the senior in rank, whose soldierly character and services may have entitled him to the highest distinction. The situation is no less embarrassing, under the existing law and custom, to the officer who may at any time happen to be the senior in commission. He may be compelled to submit to the humiliation of being superseded by some junior in rank, or else to occupy a confidential position of great importance in the absence of that confidence which is necessary to make such a position even tolerable to himself or to the army, which must inevitably be deprived of his legitimate influence for good if he does not enjoy the confidence of the President and the Secretary of War. There can be no relief [538] from this dilemma, so embarrassing to both the President and the general, except by appropriate legislation.

The most important military reform now required in this country is a law authorizing the President, ‘by and with the advice and consent of the Senate,’ to appoint, not a commander of the army, but a ‘general-in-chief,’ or ‘chief of staff,’ to aid him (the commander-in-chief) in the discharge of his military duties. The President ought to have the power to retire such officer at any time, with due regard for his rank and services, and to appoint another in the same manner. The title ‘commanding general of the arm’ is inappropriate and misleading. There never has been any such office in this country, except that created especially for General Grant in 1864. The old title of ‘general-in-chief,’ given to the officer at the head of the army before the Civil War, is the appropriate title in this country. That officer is, in fact, the chief general, but does not command the army.

If it be considered the best policy to reserve the two highest military grades,—those of general and lieutenant-general,—to be conferred only by special act of Congress for distinguished services, appropriate distinction may be given to the officer at the head of the army at any time by the title of general-in-chief, with such additional compensation as is necessary to defray his living expenses in Washington. Neither the rank nor the pay of an officer in a subordinate position can possibly be regarded as appropriate to one in a higher grade of duty. Every grade of public service should have an officer of appropriate rank and compensation, certainly the highest in any department even more than any other. The government of this country has not been duly regardful even of its own dignity and self-respect, in denying to its chief military officer appropriate rank, and in requiring him to expend all the savings of a lifetime to maintain his official position for a few years at the seat of government. [539]

Not by any means the least benefit to be expected from a law authorizing each President to select his chief general, would be the education thus given to officers of the army in respect to the relation in which they stand to the commander-in-chief, and in respect to the reasonable limits of military ambition in a republic where the President is and must be commander-in-chief, whether he is a man of military education and experience or not.

So strongly were these views impressed upon my mind by my studies of the subject, made at the request of General Grant and General Sherman many years ago, that when I became the senior officer of the Army I refrained scrupulously from suggesting to the President or the Secretary of War or anybody else that I had any expectation of being assigned to the command, or regarded myself as having any claim to it. It seemed to me solely a question for the President himself to decide whether or not he wanted me as his chief military adviser and assistant, and it would have been impossible for me to consent that anybody should try to influence his decision in my favor.

The duties of patriotic citizenship in time of war have not always been duly appreciated, even by those most zealous in their loyalty to the government. I would not detract one iota from the honor and fame of the wise, brave, and patriotic statesmen who upheld the hands of the great Lincoln in his struggle against the avowed foes of the Union, and his still harder struggle with professed patriots who wielded national influence only for evil, though under the guise of friends of the Union. But if many thousands of those zealous and ‘truly loyal Union men,’ many of whom I knew, could have managed in some way to get into the ranks and get killed in battle the first year, I firmly believe the Union would have been restored much sooner than it was.

When the people have chosen their chief to lead them [540] through the fierce storms of civil war, he alone must guide the ship, or else all must perish. After the storm has burst upon them it is too late to select another pilot. Then partizan opposition, impairing the popular strength and confidence of the leader and embarrassing his military operations or public policy, becomes treason, and a far more dangerous treason than any which the open sympathizers with the public enemy could possibly commit. Those powerful leaders of public opinion who hounded Lincoln on to measures which his far greater wisdom and his supreme sense of responsibility told him were unwise, deserved to be hanged, or at least to be imprisoned until the war was over. That some of them died in shame and disgrace upon the failure of their own selfish schemes for personal or political aggrandizement, was only a mild measure of righteous retribution.

In the calm atmosphere of these later years I still think that the course of the young soldier who had not learned any of the arts or of the ambitions of partizan leaders, but whose only motto was ‘the President's policy is my policy; his orders my rule of action,’ was much more in accord with the plain duty of every citizen of the republic. I can find in my mind or heart only contempt for that theory of patriotic duty which sends one citizen to the front, freely to give his life, without question, to enforce the orders of the chosen leader of the nation, and permits another to stay at home and bend all his efforts toward forcing the substitution of his own egotistical views upon the country, in lieu of those which the great leader has decided to be most wise.

Let the names of the great war governors, and of the statesmen in Congress and cabinet who gave all of their strength to the support of the measures of Lincoln, stand by the side of the foremost commanders of armies on the roll of national honor. Let the others be covered by the mantle of charity, and quietly pass into oblivion.

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