principal Canadian products were allowed to enter this country duty free.* On January 18, 1865, however, Congress passed a resolution giving notice that this treaty would be terminated on March 17, 1866, and on that date the fisheries were again regulated under the terms of the treaty of 1818.+

In 1873, therefore, legislation was enacted giving the fishery articles of the Treaty of Washington full effect and on July 7, 1873, acting Secretary of State J. C. Bancroft Davis suggested to the British minister at Washington, Sir Edward Thornton, the names of several foreign diplomatic representatives at Washington any one of whom would be acceptable to the United States as the third member of the commission. He omitted the names of those ministers who "by reason of the peculiar

*For the early history of the dispute see Henderson, American Diplomatic Questions, pp. 451510; Foster, American Diplomacy, pp. 337-339; Blaine, vol. ii., pp. 615-623; Schuyler, American Diplomacy, pp. 404-416; Moore, American Diplomacy, pp. 87-94; Freeman Snow, Treaties and Topics in American Diplomacy, pp. 427-446; F. E. Haynes, The Reciprocity Treaty with Canada of 1854, in Publications of the American Economic Association, vol. vii., No. 6; J. L. Laughlin and H. P. Willis, Reciprocity, pp. 30-54, 473 (The Baker & Taylor Company); Cushing, The Treaty of Washington, pp. 226-236; Charles B. Elliott, The United States and the Northeastern Fisheries, pp. 15-75, 103-129.

The President signed the bill January 18. See Statutes-at-Large, vol. xiii., p. 566. For the debates in Congress see Congressional Globe, 38th Congress, 1st session, part iii., pp. 2333–38, 2364– 71, 2452-56, 2476-84, 2502-09, and 2d session part i., pp. 204–213, 226–234. See also Laughlin and Willis, Reciprocity, pp. 54-65.

These articles are printed in full in the Proceedings of the Halifax Commission of 1877, vol. i.

political connection of their governments with Great Britain would probably esteem themselves disqualified for the position," and also those "who have not the necessary familiarity with the English language.' Being absent from Washington Thornton did no receive this message till July 11, but not until August 19 did the British government make any counter proposals and then suggested a person whom Secretary Fish regarded as especially disqualified - Maurice Delfosse, the Belgian representative at Washington. "The disqualification did not convey a personal reflection on that gentleman, but was based upon the relations of his government to the government of Great Britain."* This was because of the relationship of the reigning family of Belgium to that of Great Britain. Furthermore, Belgium owed her origin to the armed interposition of Great Britain and the bonds of friendship were necessarily strong. Secretary Fish therefore informed Thornton that the selection of Delfosse was impossible, whereupon Thornton notified Fish that the Canadian government strongly objected to the "appointment of any of the foreign ministers residing at Washington."+

While this excluded Delfosse, Secretary Fish felt that the British government was resorting to devices for delay, and on September 6, 1873, rebuked this interposition of the Cana

* Blaine, vol. ii., p. 625; also Elliott, Northeastern Fisheries, pp. 81, 83, 84.

Elliott, Northeastern Fisheries, p. 82.

dian government saying that "the reference to the people of the Dominion of Canada seems to imply a practical transfer to that Province of the right of nomination which the treaty gives to her Majesty." On September 24 Thornton proposed that the ministers of the two countries at The Hague nominate "some Dutch gentleman," but Secretary Fish replied that this was contrary to the treaty. After much correspondence Thornton on October 24 advised Fish that the British government considered that the three months allowed by the treaty for the selection of a third commissioner had expired and on December 2 under instruction from Lord Granville, insisted that Great Britain and the United State write the Austrian government

requesting that the Austrian ambassador at London may be authorized to proceed with the nomination of the third Commissioner."* The Austrian ambassador then nominated Minister Delfosse, Fish having withdrawn his personal objections.†

The Commission met at Halifax, Nova Scotia, early in June, 1877. Ensign H. Kellogg represented the United States, Sir Alexander T. Galt represented Great Britain and Mr. Delfosse was the third Commissioner. Francis C. Fort was the agent of the British government and Dwight Foster of the United States. After presentation of both sides of the case by counsel, Delfosse, having the deciding

* Blaine, vol. ii., pp. 626-629.

Henderson, Diplomatic Questions, pp. 513516; Snow, Treaties and Topics, pp. 446-449.

vote, on November 23, 1877, cast it in favor of Great Britain. Blaine says: "The result of the negotiation, therefore, was that for twelve years' use of the inshore British Colonial fisheries, which were ours absolutely by the treaty of 1783, we paid to the British government the award of $5,500,000 and remitted duties of $350,000 per annum (for the period of twelve years $4,200,000), besides building up into a profitable and prosperous industry, the shore-fishing of Prince Edward's Island, which before the Reciprocity Treaty was not even deemed worthy of computation.

The award created astonishment in the United States and on March 11, 1878, Mr. Blaine in the Senate requested the papers in the case and President Hayes transmitted them to Congress.

After being debated in

the Committee on Foreign Relations a report was submitted to the Senate on May 28 by Hannibal Hamlin, the chairman, which recommended that the award be paid by the President "if, after correspondence with the Government of Great Britain, he shall, without further communication with Congress, deem that such payment shall be demanded by the honor and good faith of the Nation." A

* Vol. ii., p. 632; Henderson, pp. 517-519; Schuyler, American Diplomacy, pp. 416-417. The full proceedings of the commission are given in House Ex. Doc. No. 89, 45th Congress, 2d session. Senate Ex. Doc. No. 44, 45th Congress, 2d session. For Blaine's speech see Ridpath's Blaine, pp. 282-288.

During the past few years the country had been preparing for the resumption of specie payments as authorized under the act of Congress of 1875 and the subsequent enactments. The resumption necessitated the hoarding of gold, for the Secretary of the Treasury, John Sherman, estimated that the smallest reserve of gold that was safe would be 40 per cent. of the notes outstanding, and on this basis $138,000,000 in coin was. necessary.

This was a difficult task at best and was rendered doubly so by the attitude of Congress. In 1877 it was estimated that the total stock of gold in the United States, outside the treasury, was less than $100,000,000 and of this sum the national banks held only $22,658,820.§ But the country was losing more gold by export

Elliott, Northeastern Fisheries, p. 86 et seq. McPherson, Handbook of Politics, 1878, p. 213. Elliott, p. 88.

Blaine, vol. ii., pp. 615-637; Snow, Treaties and Topics, pp. 449-451.

Recollections, vol. ii., p. 631; Annual Report of the Secretary of the Treasury, December 2, 1878.

§ Report of Comptroller Knox, 1877, p. 163; Noyes, American Finance, pp. 23-26.

than it was producing and the treasury was compelled from time to time to sustain the money market by releasing some of the gold it was accumulating for resumption purposes.

**

Secretary Sherman, upon assuming office, displayed much firmness in his pursuit of the resumption goal. He gradually sold $95,500,000 of bonds and took enough from the surplus revenues so that on January 1, 1879, the treasury contained $133,508,804.50 of coin over and above all matured liabilities. Before he had succeeded in doing this, however, Congress had made several attempts to repeal the law of 1875. The times were propitious for the opposition to break down the policy of the administration. The Republicans had only a small majority in the Senate and this could not be trusted. Trade was stagnant and prices falling; business failures. were numerous; and in 1878 "the record of insolvencies far exceeded even that of the panic year of 1873."+ The people moreover were discouraged by four years of hard times and the opponents of resumption had no trouble in being heard.

On November 23, 1877, the House began the attack by passing a bill by a vote of 133 to 120 which practically repealed the Resumption Act, but this was subsequently radically amended in the Senate and then laid on the

*See his report of December 2, 1878 and his Recollections, vol. ii., pp. 686-695. See also Bolles, Financial History, vol. iii., pp. 293-299; Horace White, Money and Banking, p. 196 et seq.; Upton, Money in Politics, pp. 146-154.

Noyes, American Finance, pp. 34-35.

.

table by the House.* The free silver issue was now vigorously pushed. Congressman R. P. Bland, of Missouri, on July 25, 1876, had introduced a bill in the House providing for a free and unlimited coinage of gold and silver at the ratio of 16 to 1.† The House passed the bill after various amendments November 5, 1877, by a vote of 164 to 34. The Senate, however, defeated this bill in its original form and a compromise was offered by Senator Allison. The bill was finally passed February 15, 1878, by a vote of 48 to 21 in the Senate and February 21 in the House by a vote of 203 to 72, being known as the BlandAllison Act. It provided that there should be "coined at the several mints of the United States silver dollars of the weight of four hundred and twelve and one-half grains troy of standard silver as provided in the Act of January 18, 1837, *** which coins together with all silver dollars heretofore coined by the United States of like weight and fineness, shall be a legal tender, at their nominal value, for all debts and dues, public and private, except where otherwise expressly stipulated in the contract." This law also provided that "the Secretary of the Treasury is authorized and directed to purchase from time to time, silver bullion, at the market price thereof, not less than two mil

* McPherson, Handbook of Politics, 1878, p. 143 et seq.; Hepburn, The Contest for Sound Money, pp. 233, 235, 237-238.

† Congressional Globe, p. 5186, 44th Congress, 1st session.

Laughlin, Bimetallism, pp. 181-183.

lion dollars worth per month, nor more than four million dollars worth per month and cause the same to be coined monthly, as fast as so purchased, into such dollars." President. Hayes vetoed the bill on February 28* but on the same day it was passed over his veto by both Houses (in the House by a vote of 196 to 73 and in the Senate by a vote of 46 to 19). It then became law and continued in force until 1890.†

To further embarrass and humiliate the treasury a resolution was introduced by Stanley Matthews on December 6, 1877, while the coinage bill was under discussion, declaring that all the bonds of the United States "issued or authorized to be issued " were payable in the silver dollars

Richardson, Messages and Papers, vol. vii., pp. 486-488; Globe, pp. 1418-19, 45th Congress, 2d session; Watson, American Coinage, pp. 151154.

Statutes-at-Large, vol. xx., p. 25; Dewey, Financial History, pp. 405-408; Bolles, Financial History, vol. iii., p. 390 et seq.; Noyes, American Finance, pp. 38, 41-42; Laughlin, Bimetallism, pp. 183-186; Hepburn, Contest for Sound Money, pp. 286-290, 563-565; Taussig, The Silver Situation, pp.1-17; Watson, American Coinage, pp. 146-150; Sherman, vol. ii., pp. 603-623; Dunbar, Currency, Finance and Banking Laws, pp. 246248; Upton, Money in Politics, pp. 212-219; Blaine, vol. ii., pp. 602-610; Crawford's Blaine, pp. 419-437. Substantially what this law of

66

1878 did was to make a token coin of the old standard silver dollar. It restored it, but it limited the amount which could be coined, and it went over to the principle of coining on government account."- Sherwood, Theory of Money, p. 167. See also J. F. Johnson, Money and Currency, pp. 347-353. For the votes taken at various times see McPherson, Handbook of Politics, 1878, pp. 127-135.

provided by the Bland Law.* "The extraordinary character of this resolution may be judged from the fact that it was proposed and passed in both Houses while the Coinage Act was still pending, and while, therefore, there was not in existence the coin which was duly declared a legal tender for settlement with public creditors."†

As the time for carrying the law into effect drew near the opponents became louder prophets of evil. They predicted that business would be utterly prostrated and that it would be impossible to meet the enormous demands for coin. The premium on gold, however, continually diminished, and paper money was at par on December 17, 1878.

Sherman, however, went steadily forward perfecting his plans but took the extra precaution to employ an increased clerical force to assist in paying out the coin. These clerks were not needed, for Sherman's readiness to pay had allayed all fears. At the closing hour the banks had more gold in their vaults than at the opening. Resumption had been effected without the slightest trouble and its salutary influence was immediately felt. Business now began to revive, and the tide of prosperity throughout the whole country continued to rise higher and

*Passed the Senate January 25, 1878 (43 to 22) and the House January 29 (189 to 79). Laughlin, Bimetallism, p. 201 et seq.; McPherson, Handbook of Politics, 1878, pp. 136-139; Burton's Sherman, pp. 267-269; Hepburn, Contest for Sound Money, p. 291.

Noyes, American Finance, p. 38. ‡ Ibid, p. 47.

higher.* Upon resumption

"the

measure of value in the United States became gold."÷

The prosperous condition of the country was further augmented by the blight which fell on European crops in 1879; England was hit particularly hard, practically every growing crop being ruined by frost; in France the wheat crop was ruined by snow, and Austria, Germany and Russia yielded the smallest wheat crops in years. On the other hand the crops in this country were huge, the wheat crop alone exceeding by 28,000,000 bushels that of any previous year. The crop of Indian corn was the largest recorded up to that time; coincident with these records also came the completion of the tide-water pipe-lines from the Pennsylvania oil-fields, and the partial failure of the cotton crop of India. Consequently the wheat shipments which in 1878 did not average beyond 2,000,000 bushels weekly, now averaged 1,000,000 bushels daily; the excorded for a single season; the export of cotton was the largest yet reports of oil rose nearly 2,000,000 barports of oil rose nearly 2,000,000 barrels over the highest previous record; and the shipments of cattle increased in such proportions as to force the

Bolles, Financial History, vol. iii., p. 301 et seq.; Dewey, Financial History, pp. 374-378; Noyes, American Finance, pp. 48-60; Sherman, vol. ii., pp. 623-672, 686-702; Burton's Sherman, pp. 257-279. See also President Hayes's annual message of December 1, 1879, Richardson, Messages and Papers, vol. vii., p. 558.

Taussig, The Silver Situation in the United States, p. 3 (G. P. Putnam's Sons).

Annual Reports of the Department of Agri. culture.