Speech at Toledo

September 19, 1878


My friends and fellow citizens:  The three States of Michigan, Indiana, and Ohio, it is safe to assume, are each numerously represented in the audience before me.  These States are fortunate in their history, in their geography, in their soil, in their climate, and in their people.  They are part, and a very important part, of the old Northwestern Territory—that beautiful region northwest of the River Ohio, which was given to the United States by the State of Virginia in 1787, and organically devoted to freedom and freemen forever.  And now you have assembled today to show what the productions of your farms, your shops and your minds have to exhibit.  Naturally, one addressing an audience assembled for such a purpose is mainly turned to the material interests of this important part of the United States; and during the very few minutes that it is proper for me to detain you, I propose to call your attention only briefly to the subject of your material interests.  Geographically the future fortunes of these three States are alike and equally great.  They are all in a temperate zone, have a good working climate at all seasons of the year; men can work standing under and in the sun that shines on their land without injury, and in the Winter they can work again.  We are midway between the great East and the great West; and as we are midway between New York and Chicago, and San Francisco between London and China, it is across this continent that the commerce of the world must travel.  We are fortunate in our soil.  Every great valuable crop of the temperate zone can be successfully cultivated here.  Hay, corn, wheat, cattle—all the great interests of agriculture in this zone—can here be successfully cultivated.  The wealth of the mines we have also; coal in abundance sufficient to supply the whole land, and iron and copper.  I say, my friends, that in material wealth we have all the essential elements.  And yet, and yet—it is in your thoughts—I can almost read it in your faces—that for five years past there has been stagnation in business, and the depression still seems to exist.  Now, the few plain words that I desire to say on this subject are first, a word or two as to the cause.


What Makes Hard Times


One simple, acknowledged fact or opinion, and known to most men, is that the war was the cause of it.  Now, my friends, that is the cause of that extraordinary and remarkable event which happened in 1873.  There is no mystery in it; it was bound to be sooner or later; you could not escape it.  This war made the hard times, as war always does.  Why, what is war?  We know about it now.  When that war began we were threatened with its results.  I remember a brilliant writer in Cincinnati, where I resided in 1800, who said: “Why, this country can’t go to war. The people of Cincinnati live on the business in the South.  Let us go to war, and in six months the grass will grow in your byways and streets.”  Did it?  Why, my friends, the war had not been prosecuted ninety days until every man saw what a mistake that was, and that every street was busier than before we had war.  A million of men in the South were taken from the ranks of industry, and instead of making property they became the destroyers and consumers of property.  So ti was in the North—but where it made a difference from what expected was this:  every man who had wheat or corn, or coal or labor, found that when war came he had a better customer than even before; a customer that wanted all he had got, and wanted it immediately; a customer who would not haggle about the price.  That customer he had in the person of the united States.  Business, instead of being depressed, began to revive.  Property which had laid on the shelves of the merchants for a long time increased in value day by day.  The result of it, then, was that we made money fast; we made it easily.  We could afford to borrow at high rates of interest, because our investments were sure to be profitable.  Over-trading and fast living were the results of the war; I need not enlarge on it.  Finally the war ended; men formerly in the ranks returned to their homes, and the material needs of the Government began to decrease.  You lost your best customer, the United States.  It didn’t want to buy, it wanted to sell.  Now every wise man knew we should have a day of settlement.  Flush times of war are to be followed by hard times like these we have lately known, and there is the cause.  Now, my friends, it is sufficient to say that it is written in the laws of political economy that wars are followed by hard times and panics.  The only mystery in the whole thing is that the hard times did not come before they did.


Better times Ahead.

Now we have got the cause; what is the effect?  The moment we began to have hard times we began to retrench; every man to cut his expenses down and to curtail his expenditures.  Each man in a little while began to find himself a little better off than he was.  It may be a long time—one year, two years, five years; but when it does get to the end, and the majority get their expenses less than their receipts, then we are all better off.  The Government of the United States is the people of the United States.  When you are all extravagant, the Government will be extravagant.  When you are all getting to watch yourselves, to watch each particular point, you set your offices to watching more particularly.  When the war ended we had a debt of $2,400,000,000 on our shoulders, upon which we were paying 7 3/10 percent interest.  Our taxes were raised to nearly $500,000,000 in a time of profound peace.  Our currency was worth 60 or 70 cents on the dollar.  In our foreign trade the balance was against us nearly $100,000,000 a year; and now how are we?  The debt is reduced nearly a third!  How many a wise man shook his head at the close of the war and said, “The people can never pay that debt.”  Why, we have got a third of it paid off already.  The interest that you paid—that is reduced from $140,000,000 to $95,000,000.  We no longer pay 7 3/10 percent interest.  We can get all the money we want at 4 percent.  What does that mean for you and me?  Those who borrow money know that when the Government pays 7 percent it will cost them 12 and 15 percent, and when the Government pays 6 and 4 per cent the rate of interest will go down for us; and so, as the credit of the Government grows better, your credit and mine grows better.  We are down to 4 percent on interest; and now as to the currency.  It was a currency worth 60 cents on the dollar on one day, but did not stick at that price.  You never could tell on Monday what it would be on Saturday.  Who lose by a fickle standard of value?  Always the laborer and producer.  Why?  Simply because the middleman  being a businessman, understands that the standard of value is likely to go up or go down to his disadvantage.  Therefore, when he sells he does it having reference to the fact that standard of value may change, and consequently he charges enough to make himself safe—and the consumer bears the loss.  That is a fickle standard of value.


Signs of Coming Prosperity


Now, my friends, how do you see it today?  The currency has been going up, up, until it is 99 1/2; it is unchangeable as Lake Erie.  It does not go down at all.  It is steady.  It is no longer a yardstick that is one foot in March, three feet in May and six feet in July; it is three feet all the time.  Now, my friends, that is the currency.  As to our balance of trade—before the panic that balance of trade was against us $100,000,000 a year; that is to say, we bought abroad that much more than we sold abroad.  How is it today?  We are selling more produce than ever before in our history; more corn, more wheat.  We have even gone so far as to take watches made in Elgin, Ill., and made in New England, and carry them right over to the foot of the Alps, where the people have been making watches for 300 years, and all the watches to those people.  Now, my friends, as I said before we are selling $207,000,000 a year abroad more than we are buying abroad.  How does that operate?  As every man who sells more than he buys is getting rich, so it is with the United States.  You each of you are getting out of the panic; we are all getting out of the panic, and nothing but our own unwisdom will get us into it again.



The Need of the Hour


What do we want?  We want confidence.  Do not encourage your Legislature or your Congress to legislate too much.  It was a favorite maxim with Jefferson that the world was governed too much.  Too much legislation on financial subjects is the bane of our times.  My friends, let us all hold up our hands in favor of letting well enough alone, and standing firmly by our present Constitutional currency.  That destroys no man.


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