MAGAZINE OF AMERICAN HISTORY

No. 3

VOL. XXV

MARCH, 1891

Eva

GENERAL FRANCIS E. SPINNER THE FINANCIER

VERY well-ordered government labors to throw about its financial department salutary checks as evidences of its faithfulness. In this respect the government of the United States has simply followed the example of the older nationalities, and it hardly need be added that if any new governments are to arise, having in view the welfare of their constituents, they cannot be too prompt in formulating like action.

In 1789 the Treasury Department of the United States received its organization, and the same year witnessed the appointment of its first comptroller. Soon, however, by reason of the rapid advance of the nation in material prosperity, together with the war with England in 1812, when the financial condition of the country was much disturbed, it was felt there was full need for further assistance in its monetary affairs, and another comptroller was added, entering in 1817 actively upon his duties. The subsequent increase in population, extension of commerce, and the appearance of those numerous forces which so largely contribute to the development of a nation called for a third, and still later a fourth, until now the accounting department of the United States may be said to consist of no less than four comptrollers, seven auditors, and one register, to whom with the treasurer the moneys of the nation are intrusted.

The relations existing between the several comptrollers, auditors, and registers of the government have been well understood; but what were the relations which the comptroller sustained to the secretary of the treasury for many years was a subject for wide differences of opinion. Although the comptroller was defined in the statute by which he was appointed as an independent officer, he was limited in his action to the performance of only such duties as were warranted by law. In the year 1823 AttorneyGeneral Wirt gave it as his official opinion that the decisions of the comptroller could not be questioned even by the President. His language was: "My opinion is that the settlement made of the accounts of the individual by the accounting officer appointed by law is final and conclusive so far as the executive department of the government is concerned." This

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opinion received many adverse criticisms, nor did the points at issue receive a final settlement till congress in 1868 affirmed that the position taken by Attorney-General Wirt was valid, and therefore for the future to be binding till such time as its decision should be rescinded. Accompanying this action, however, was the proviso that no comptroller was to be so independent as to decline the reopening of a decision at the request of the secretary.

Never did the nation require more wisdom, integrity, and faithfulness in the administration of its finances than in the recent civil struggle; nor was it ever called upon to devise more liberal means or face more serious embarrassments. Passing from the handling of a few million dollars anterior to the war, to the disbursing of thousands of millions before the struggle ended, was no insignificant transition. On the accession of Mr. Lincoln to the Presidency, the finances of the nation were literally in chaos. Some seven months before, the secretary of the treasury attempted to borrow moneys for the running expenses of the government, but unhappily the confidence of the people was so unsettled as to the possibilities of the future, that out of ten millions of dollars asked. for only a fraction over seven millions was offered. The result was that the secretary was forced to tide over the period previous to his resignation by selling treasury notes, payable a year from date, from six to twelve per cent. discount. In fact, at the close of the administration of President Buchanan, the public credit had become sadly depressed. In December, 1860, when the national debt was less than sixty-five millions, proposals were solicited by the secretary for a loan to meet obligations falling due the following month for five million dollars, at such a rate of interest as might be agreed upon by lender and receiver. This request was met by the offer of less than two millions at the enormous rate of twelve per cent.; while four hundred and sixty-five thousand dollars were rejected, because for its use from fifteen to thirty-six per cent. was demanded, leaving the remaining three millions to be finally accepted at the prescribed rate of twelve per cent. Under such auspices the nation was gradually drifting into the vortex of war, and quite blind likewise to the experiences so soon to be encountered; the expedients employed later to meet the exigencies of the nation constitute the common property of history.

At the close of the session of the thirty-sixth congress, in March, 1861, Mr. Chase, who had just assumed the duties of secretary of the treasury, extended an invitation to General Spinner to take the office of treasurer of the United States, a position increasingly responsible from the peculiarly disturbed condition of the nation, intensified by the possibilities toward

which events were then rapidly drifting. At first General Spinner hesitated to assume the proffered offer, but after consulting with his more immediate friends he decided to accept. Accordingly on the 21st of March, 1861, he was confirmed and immediately entered upon the discharge of his onerous duties.

What this position then involved never can be known till the numerous conflicting forces and factions arising from rapid increase of taxation, marked advances in the cost of living, internal intrigues, the greed and selfishness of men, the oft repetition of violence, the frequent negotiations for new loans, an impaired commerce, the almost open hostility of other

nationalities, together with those numerous uncertainties which are ever born of alternate victories and defeats, and which so surely affect the temper of a people, receive wise and judicial consideration. In reality the treasury was not only empty, but the credit of the government was far lower than that of any other great nation. For some years the annual expenditures had exceeded the revenues, and shifts were resorted to in order to make good deficiencies, which though affording temporary relief, in reality, however, merely increased the recurring embarrassments. Eight states, also, had adopted ordinances absolving themselves from further connection with the Union, three others were simply biding a favorable moment, while the loyalty of some of the border states was exceedingly questionable. What added to the darkness of the hour was the impossi

bility of obtaining loans beyond the sea, more especially since the foreign press was almost a unit in its antagonism with the government, and in multiple ways endeavored to weaken its influence. How General Spinner met these difficulties, and assisted in bringing the nation through one of the most exciting and perilous crises in its history, should be known to every lover of our common country as well as to pupils in political science.

Governmental legislation in relation to finance at this period was beset with numerous conflicting difficulties. Schemes contemplating relief from financial pressure were frequently proposed by congress, and discussed with no little vehemence and seriousness. New conditions and complications were constantly demanding new movements, and extraordinary expenses were requiring untried efforts. Each new loan was supposed to be the last, but as events determined otherwise the succeeding loan was beset with troubles which required the devising of some new plan to satisfy the lender and provide for its final payment. The part which Mr. Chase took at this crisis in the finances of the government should endear him forever to every patriotic heart. But his coadjutor General Spinner was none the less active and efficient. Though Secretary Chase has long been regarded as the father of the "greenbacks," their appearance as national currency was more the product of his advisors, of whom General Spinner was chief, than the result of his own individual act. He not only aided in their conception, but framed them, followed up the details of their execution, and in due time placed them at the disposal of the general government. Especially was this true of the postal currency. A blank card in the centre of which a three, five cent, or more postage stamp was pasted by the hand, and on General Spinner's own desk, constituted the issue of this currency, till the engraver's skill could be sought and the printing-press utilized for its production.

The national banking system, also, and the laws thrown about its establishment were the outcome of what General Spinner conceived to be the duty of the hour as well as the requirements of the situation. Not that he was the friend of inflation and desirous of a double currency standard —this latter, in his judgment, was as illogical as a double standard for the measurement of lengths-but banks with a perfectly secured circulation made current throughout the Union were a necessity, and this a wise bank act would properly subserve. He believed national struggles should be met by national issues, based on the nation's honor and the nation's wealth.

General Spinner's devotion to the many interests now on hand in behalf of the government was exceedingly marked. Through all the years