Had a long telegram at midnight from Cairo, respecting Rebel
movements in western Kentucky, — at Paducah, Columbus, Fort Pillow, etc.
Strange that an army of 6000 Rebels should be moving unmolested within our
lines. But for the gunboats, they would repossess themselves of the defenses,
yet General Halleck wants the magnanimity and justice to acknowledge or even
mention the service.
There is still much excitement and uneasy feeling on the
gold and currency question. Not a day but that I am spoken to on the subject.
It is unpleasant, because my views are wholly dissimilar from the policy of the
Treasury Department, and Chase is sensitive and tender — touchy, I may say — if
others do not agree with him and adopt his expedients. Mr. Chase is now in New
York. He has directed the payment of the May interest, anticipating that
throwing out so much gold will affect the market favorably. It will be likely
to have that effect for a few days but is no cure for the evil. The volume of
irredeemable paper must be reduced before there can be permanent relief. He
attributes to speculators the rise in gold! As well charge the manufacturers
with affecting the depth of water in the rivers, because they erect dams across
the tributaries! Yet one cannot reason with our great financier on the subject.
He will consider it a reflection on himself personally and claims he cannot get
along successfully if opposed.
I remarked to Senator Trumbull, whom I met when taking my
evening walk last Thursday, and was inquired of, that I could hardly answer or
discuss his inquiry in regard to the gold excitement, because in a conversation
which we had a year or two since, when one of the bills was pending, — the first, I believe, — I had said to him I
was a hard-money man and could indorse no standards but gold and silver as the
measure of value and regretted and distrusted the scheme of legal paper
tenders. Chase heard of that conversation and claims I was embarrassing the
Treasury.
This sensitiveness indicates what I fear and have said, viz.
Chase has no system on which he relies, but is seeking expedients which tumble
down more rapidly than he can construct them. He cannot stop what he and others
call “the rise of gold,” but which is really the depreciation of paper, by the
contrivances he is throwing out. The gold dollar, the customs certificates, the
interest-bearing Treasury notes, etc., etc., are all failures and harmful and
will prove so. The Secretary of the Treasury found a great and rich country
filled with enthusiasm in a noble cause and full of wealth, with which they
responded to his call, but their recourses and sacrifices were no
evidence of financial talent on the part of the Secretary who used them. The
Secretary is not always bold, and has not enforced taxation; he is not wise
beyond others, and has not maintained the true measure of value; he resorts to
expedients instead of abiding by fixed principles. By multiplying irredeemable
paper and general inflation, his “ten forty” five-per-cents may be taken, but
at what cost to the country! He is in New York and may negotiate a loan; but if
he does, it will be with the banks and, I presume, at six per cent. If so, the
banks will not be able to help the speculators, and they, being cramped, will
suffer, and perhaps fail. The fancy stocks will be likely to fall under this
operation, and the surplus money may seek government securities, but under the
inflation how expensive to the country!
SOURCE: Gideon Welles, Diary of Gideon Welles,
Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 —
December 31, 1866, p. 12-4
