To-day have a letter from Admiral Lee respecting the
exportation of French tobacco from Richmond. This is an arrangement of Mr.
Seward to which I have always objected, but to which the President was
persuaded to yield his assent some months ago. The subject has lingered until
now. Admiral Lee says the French naval vessels and transports are at the Roads
and about to proceed up the James River, and inquires if he shall keep an
account of their export.
I took the dispatch to the Cabinet-meeting to ascertain from
Mr. Seward what his arrangements were, but he was not present. When the little
business on hand was disposed of, I introduced the subject to the President,
who told me he had seen the dispatch to me and also one to Mr. Stanton from
General Butler. He saw them both at the telegraph office, and after he got home
he had sent for Fred Seward and Mr. Stanton. They appear neither of them to
think the subject of much consequence, but after Stanton had returned to the
War Department and read Butler's dispatch, he sent the President word that Mr.
Seward ought to give the subject attention. The President had therefore told
Fred Seward to telegraph his father, who is in New York, to return.
It is curious, that the President who saw Adl Lee’s dispatch
to me should have consulted the Secretary of War and Assistant Secretary of
State without advising me, or consulting me on the subject. He was annoyed, I
saw, when I introduced the topic. The reason for all this I well understood. He
knew full well my opposition to this whole proceeding, which I had fought off
two or three times, until he finally gave in to Seward. When, therefore, some
of the difficulties which I had suggested began to arise, the President
preferred not to see me. It will not surprise me if this is but the beginning
of the trouble we shall experience.
At the Cabinet-meeting, Chase, after presenting his weekly
exhibit, showing our national debt to be over sixteen hundred millions, said he
should have to request the Navy Department and also that of the Interior to
make no farther calls on the Treasury for coin. I told him he must provide for
foreign bills which stood different from any others, and if he had paid the
Interior or any other Department than the State and Navy, which had foreign
bills, and possibly the War Department some foreign purchases, I thought it not
right; that I had experienced great difficulty in making California payments,
but had met them, because I supposed all domestic bills were treated alike.
Chase did not meet the point squarely, but talked on other
subjects, and answered some questions of the President's about the daily custom
receipts, and explained the operations of his gold dollar certificates, etc. I
brought him back to the Navy matter by asking him how our paymasters and agents
were to draw abroad, — by what standard of value. He said the legal-tender
standard. “What is that standard,” I inquired, “in Nassau, in Rio, in China, or
London?”
He made me no other answer than that he was anxious to
reduce the price of gold, and that something must be done to effect it. Talked
of taxing bank circulation and driving it out of existence. I told him that
might be a step in the right direction, perhaps, provided he did not increase
his paper issues, but that if he issued irredeemable Treasury paper instead to
an unlimited amount, there would be no relief; that by reducing the amount of
paper and making it payable in specie on demand he would bring his legal
tenders and gold nearer to equality. The President remarked that something must
be done towards taxing the bank paper; said he did not fully comprehend the financial
questions in all their bearings; made some sensible inquiries of Mr. Chase
concerning his issues, which were bought for custom-house purposes.
Mr. Usher made some inquiries and suggestions about bringing
down the price of gold and compelling banks and others to disgorge that were
worthy an old Whig of thirty years gone by. His ideas were crude, absurd, and
ridiculous. He evidently has never given the subject attention.
Mr. Grimes and Mr. Hale had a round in the Senate yesterday.
The former had the best of the debate, but still did not do himself, the
Department, and the service full justice.
SOURCE: Gideon Welles, Diary of Gideon Welles,
Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 —
December 31, 1866, p. 9-11
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