Forty-Six Years in the Army by John McAllister Schofield (best ebook reader under 100 .TXT) 📕

the world must maintain its credit. It must purchase its supplies and munitions of war and pay its troops in money. In a great and prolonged war it is not possible for the people to contribute all the means required at the time. The amount of taxation would be greater than any people could bear. Hence the government must borrow the necessary money. This cannot be done without national credit. If credit declines, rates of interest and discount on securities increase until the national debt reaches its limit and no more money can be borrowed. In short, the nation becomes bankrupt. This was the condition of the United States before the close of the late Civil War. With a million of men on the muster- and pay-rolls, including several great armies of veteran troops in the field, while the Confederate army was reduced to a very small fraction of that number, the Union cause was on the very verge of failure, because the government could no longer raise money to pay its troops, purchase supplies, or make any further use of its magnificent armies. This astounding fact was confided to the generals of the army in the winter of 1864-5 by the Secretary of War, who then said the rebellion must be suppressed in the coming spring campaign, or the effort abandoned, because the resources of the treasury were exhausted. In corroboration of my recollection of this subject, I now find the following in a private letter written by me at that time:

"Washington, February 3, 1865. "There is much excitement here over the peace rumors, and it would seem there must be good foundation for it. The President has actually gone to Fort Monroe to meet the rebel commissioners. I do not, however, indulge much faith in the result of these negotiations. We will probably have to beat Lee's army before we can have peace. There is much commotion among politicians, and there will be a storm of some kind on the political sea if peace is made now. On the other hand, if the war continues long, the treasury will most likely become bankrupt. It has got far behind already. There is no money to pay the army, and no one can tell where it is to come from. I have succeeded in getting enough to pay my troops, which was obtained by special arrangement with the treasury, and as a special reward for their distinguished services. No other troops in the country have been paid for five months, and there is no money to pay them."

The reasons for the deplorable condition of the United States treasury are understood by all financiers. Yet a very large proportion of the voting population do not appear to understand it, or do not know the fact. People engaged in an effort to throw off their dependency or political connection, and establish their own independence, or a country defending itself against a powerful adversary, may be compelled to resort to forced loans, in the absence of national credit, to carry on the war. But in a great country with unlimited resources, like the United States, resort to forced loans would seem to be entirely unnecessary. However this may be, and whatever may be the necessity in any case, a forced loan, without interest, is simple robbery to the extent of unpaid interest, even if the principal is paid. And a robber cannot expect to have much credit left after his character becomes known to the world.

THE FINANCIAL LESSON OF THE CIVIL WAR

The issue of legal-tender notes during the Civil War was of this character. The country received a deadly blow to its financial credit when that policy was adopted. Nations or peoples cannot, any more than individuals, violate the established rules of honest dealing without suffering the just penalty. If money is needed beyond current revenues, there is no other honest way to get it but by borrowing it at such rate of interest and upon such security as can be agreed upon. Besides, to leave any room for doubt or cavil about the conditions of a loan, or about the standard of money in which principal and interest are to be paid, necessarily arouses suspicion of bad faith, and hence destroys or seriously injures national credit. It is now perfectly well known to all who have taken the pains to study the subject that this false and practically dishonest policy, however innocently it may have been conceived, cost the United States many hundreds of millions of dollars, and came very near bringing disaster upon the Union cause. One of the most astounding spectacles ever presented in the history of the world was that presented by this country. It went into the war practically free from debt, and come out of it with a debt which seemed very large, to be sure, and was in fact nearly twice as large as it ought to have been, yet so small in comparison with the country's resources that it could be paid off in a few years. It went into the war practically without an army, and came out of the war with its military strength not even yet fully developed. It had more than a million of men, nearly all veterans, in the ranks, and could have raised a million more, if necessary, without seriously interfering with the industries of the country. Yet in four short years a false financial policy destroyed the national credit, brought its treasury to bankruptcy, and thus reduced a great people to a condition in which they could no longer make any use of their enormous military strength! This lesson ought to be taught in every school-house in the United States, until every child is made to understand that there is no such thing in the world as paper money; that the only real money in the world is standard gold and silver; that paper can be used in the place of money only when it represents the real gold or silver in which it can at any time be redeemed; that even gold and silver can be used together as standard money only under the real intrinsic values as recognized by all the world; that any attempt to force either gold or silver into unlimited circulation, under any arbitrary ratio different from their real ratio, is not honest; and that dishonesty is the worst of all financial policies, as well as the most unworthy of a civilized people.

The laws of finance, like the laws of military strategy, were never invented by anybody, any more than the law of gravitation or the law of electrical attraction and repulsion. They have all been learned by the experience and study of mankind since the dawn of civilization. All alike are parts of the great laws of nature. They should be carefully and diligently studied and taught in all the schools, until the rising generation understand that all the affairs of mankind are governed by the uniform laws established by the great Creator and Ruler of the universe; and that self-appointed "leaders of the people" who would entice them to follow their own inventions cannot save them from the penalties which naturally follow the violation of any of the laws of the universe. In short, education,—wisely directed education,—both in science and in morals, is the one indispensable foundation of good popular government. The relative importance to be attached to the many branches of popular education demands the careful consideration of all educators, and still more the purity of the doctrines taught in all the schools. There is good reason for believe that this last duty has been much neglected, especially in respect to financial theories.

A VICIOUS CLAUSE IN THE CONSTITUTION

In this connection, it is worthy of serious consideration whether one of the teachings of a corrupt age has not found its way into that almost sacred writing, the Constitution of the United States. What right has Congress, or any other department of government, or any government on earth, to "regulate the value" of money, any more than that of wheat or corn? Is not the real value of money, like that of everything else, regulated by the general law of supply and demand throughout the world? Ought not the value of money, and what shall constitute money, be left, without governmental interference, to be determined by the common consent of mankind? Must not commercial intercourse among all the countries of the world necessarily regulate all this, in spite of the decrees of government? Ought not the function of government in this regard to be limited to the coining of money and stamping on its face its real value—that is, in effect, the amount of gold or silver it actually contains? In short, is not the attempt of government to make a certain weight of one thing equal to a certain weight of another thing a plain violation of a natural law, and hence necessarily vicious? Is not all our serious monetary controversy in this country the result of vicious teaching to be found in our own Constitution, inherited from a corrupt age, when the fiat of a prince was thought sufficient to make a coin worth more than it was in fact? Where did so many of the people of the United States learn the heretical doctrine of fiat money? Is it not taught in the Constitution of the United States? It so seems to me, and hence it seems to me that the people should at once strike at the very root of the evil, and eradicate from their fundamental law the theory that the value of anything can be regulated by arbitrary fiat, in violation of natural law. Let the people restore to themselves their inalienable right to liberty of trade, so that they can deal with each other in gold, or in silver, or in cotton, or in corn, as they please, and pay in what they have agreed to pay in, without impertinent interference from legislators or anybody else. Then, and only then, can the monetary system of this country be placed on a sound foundation, and all the gold or silver of our mines, as well as all the other products of human industry, and the people who produce or own them, become truly free.

Another important lesson taught by our experience since the Civil War, no less than at the commencement of that period, is that prompt and vigorous action, in accordance with established military methods, whenever military force must be employed, necessarily presupposes such knowledge of the laws on the part of department and army commanders as will justify the President in intrusting them with discretionary authority to act without specific orders in each case. Such emergencies as that of 1894, for example, give striking proof of the necessity for the higher education to fit men for high command in the army. It is not mainly a question of military education. Early deficiencies in that respect may soon be overcome by the constant practice afforded by active service. The indispensable necessity is for education in general, and especially in those things which army officers are not habitually required to know, but which are of vital importance to those who must, in great emergencies, by intrusted with great responsibilities and with discretionary authority. That very emergency of 1894 gave examples of officers, not educated at West Point nor at any other military school, distinguished for gallant and efficient military service in the field, who proved to be perfectly familiar with the principles of constitutional and military law which ought to govern the action of troops under circumstances like those of 1894; while others, distinguished as commanders in the field, seemed strangely ignorant of both constitutional and military laws. It is also worthy of remark that such necessary legal education did not appear to be universal among the West Point graduates at that time. Some men who are not graduates of West Point are much better qualified for high command than some who are.