In his instructions to Motley he had sought to minimize the bearing upon our claims of the Queen's proclamation of May, 1861, but the proclamation still remained an ugly obstacle in his way, and he was conscious of the inconsistency of even a perfunctory assertion of our grievance while we ourselves might be upon the point of recognizing belligerent rights in a band of Cuban guerrillas who, as he afterwards wrote, "have no army, no courts, do not occupy a single town or hamlet, to say nothing of a seaport." To his mind, "Great Britain or France might just as well have recognized belligerency for the Black Hawk War," and trusting to the efficacy of delay, he deposited the proclamation in a safe place after signing it, and left it there awaiting further instructions which never came.

Rawlins died September 6; "Black Friday" came; Grant's mind was fully occupied with pressing questions; and in the multiplicity of other things Fish had his way. In his annual message of December 6, 1869, the President contented himself with disclaiming any disposition on the part of the United States "to interfere with the existing relations of Spain with her colonial possessions on this continent." But public feeling was strong for recognition of belligerency, and when Congress met there was a growing pressure for the passage of resolutions to that end. Fish was the

restraining influence at this time. Had it not been for him Grant would have doubtless aided those who called for recognition. Fish advised John Sherman, who had introduced the resolution in the Senate, "to prepare bills for the increase of the public debt, and to meet the increased appropriation which will be necessary for the army, navy, etc." As the time for a vote in the House approached, he impressed on Grant the necessity of sending in a message emphasizing the importance of refraining from recognition, and wrote a special message, which was sent to Congress on June 17, treating the whole subject comprehensively. Fish says in his diary that the President

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was induced with great hesitation and with much reluctance to sign it, and after it was sent in he told me that he feared he had made a mistake. It evoked a fierce debate, and much denunciation, but it evoked also much good sense in the speeches of those who sustained it; an expression of good sound international law, and of honesty of purpose, and it brought the gravity of the case to the consideration of Congress; and the Administration, after the severest debate on a question of foreign policy which has occurred for years, was triumphantly sustained."

Of impressive immediate effect was the clear declaration with regard to upholding the public credit. "A great debt has been contracted by us in securing

to us and our posterity the Union," said Grant. "The payment of this principal and interest, as well as the return to a specie basis as soon as it can be accomplished without material detriment to the debtor class or to the country at large, must be provided for. To protect the national honor every dollar of government indebtedness should be paid in gold, unless otherwise expressly stipulated in the contract. Let it be understood that no repudiator of one farthing of our public debt will be trusted in public place and it will go far toward strengthening a credit which ought to be the best in the world, and will ultimately enable us to replace the debt with bonds bearing less interest than we now pay. To this should be added a faithful collection of the revenue, a strict accountability to the treasury for every dollar collected, and the greatest practical retrenchment in expenditure in every department of government."

It required some courage for the President and the Republican Party to take this attitude, for there was a strong sentiment in the country in favor of the payment of five-twenty bonds in greenbacks and a large issue of greenbacks for that purpose. A considerable party had come into being in support of this proposal, and the feeling had been accentuated by the rapid contraction of United States notes following the Civil War, $140,000,000 out of $737,000,000 having been

withdrawn in the two years preceding 1868. Johnson, although he had at his elbow in Secretary McCulloch one of the soundest of financial ministers, had extraordinary ideas personally about the repudiation of interest on government bonds, which found expression in his last annual message; and the fact that, following the London panic of May, 1866, business had been in a bad way, with a decrease in the value of property and an increase in the face value of debts, was popularly attributed to the contraction of the currency. Yet there was no hesitancy on the part of the new Administration.

The Republicans in the platform upon which Grant was elected had denounced all forms of repudiation as a national crime and declared that the national honor required the payment of the public indebtedness "in the uttermost good faith to all creditors at home and abroad not only according to the letter but the spirit of the laws"; and the very first act of the Congress which came into existence on March 4, 1869, was a law "to strengthen the public credit," which, after passing both House and Senate overwhelmingly, was signed by Grant on March 18. The law solemnly pledged the faith of the United States to the payment, in gold or its equivalent, of the United States notes and all the United States bonds except in those cases where the law authorizing their issue

provided expressly for their payment in "other currency than gold and silver." By the words of the law the United States also solemnly pledged its faith "to make provision at the earliest practicable period for the redemption of the United States notes in coin."

The episode which has come down in history as the "Gold Conspiracy," with "Black Friday" as its demoralizing climax, throws light not only upon Grant's ingenuousness, but also on the fashions of the hour. At the time of Grant's accession to the Presidency the two spectacular figures in New York financial circles were Jay Gould and James Fisk, Jr., — "Jim" Fisk as he was popularly known. Gould was the shrewdest, most subtle and ruthless trader and manipulator in the Street a railroad wrecker after the manner of his day, with an extraordinary genius for getting money; slight in figure, reticent, keen of face, of a Semitic type. Fisk, his partner in many deals, was a speculator of another sort, big, coarse, florid in complexion, dress, and speech, a daring gambler for heavy stakes, a high liver, unscrupulous in his financial operations, immoral in his daily and nightly life.

These two, so strikingly contrasted in everything except their passion for speculation and financial power, had combined their diverse talents in 1868 to gain control of the Erie Railroad. They played with