Evening journal., 1912-04-25
NEW NEWS OF YESTERDAY
The Outsider Who PerSuad-
ed Grant to Stretch the Law
By Holland

Wniie Shdtiihs III 1000 Win the late
Frederick d. Tappan. whose services
at the time of the money panic of 1898
as leading member of the New york
Clearing House Association. were Of
inestimable value 10 the nation, he
narrated to me hitherto unreported
anecdote associated with the great
panic of twenty years earlier, which
has passed into history as the Jay
Cooke panic.
President Grant was then at his
summer cottage at Long Branch
said Mr. Tappan. He was asked 10
come to New York and meet com
mittee of leading bankers who we're
anxious to have him issue an order TO
the Secretary of the Treasury to re-
issue the greenbacks or legal tenders
which had been retired and nominal-
ly cancelled.
"To make clear exactly what the
question involved really was | will
explain to you briefly the situation.
The Treasury Department had issued
from 1862 until about 1863 about four
hundred and forty millions of legal
tenders, which are commonly called
greenbacks. It gradually became the
opinion of the leading bankers of the
country and of many members of Gin
gress, that the issue of greenbacks
should stop and that that Secretary
Of the Treasury should begin TO retir9
them. These greenbacks were simply
promise TO pay. They we're, in fact.
if not in name, an irredeemable paper
currency At the time of the Jay Cooke
panic. about forty millions of these
greenbacks had been retired and can
celed But the bankers of the United
States were so frightened because OF
the widespread panic, and the need OF
money was so desperate that il was
decided to urge President Grant to in
struct the Secretary of the Treasury
to reissue these forty millions OF
! greenbacks.
when President Grant met the
| New York bankers at the Fifth Ave-
nue. Hotel he found a majority of
them in an almost frantic state OF
mind They told him that unless the
Government did something to help
the situation, the banks would be COM
PEELED to suspend payments and there
would be great runs upon the savings
banks One or two bankers however,
objected They said that if the can
! celed greenbacks we're reissued that
act would open the fioodgates and the
demand would come from the people
for enlarged issues Of greenbacks. I
might say. incidentally. that this pre-
diction was justified. An imitation bill
was passed by Congress a little later
authorizing the issue Of large amounts
of greenbacks. II would have become
law if Grant had not vetoed it. II
led, however to the formation of the
! Greenback parry
'Reverdy johnson. man now for
gotten, but in his day one of the ablest
of the statesmen of the United States.
Senator from Maryland, United States
Minister at the Court of St James, and
enc Of the leading lawyers Of the
| American bar. was at the Fifth Avenue
Hotel that morning. Grant had a very
high regard for Reverdy Johnson, al
though he was Democrat
Grant Was on his way from the
room in which the conference was
held to his own room I'm the hotel
when he Unexpectedly met Reverdy
Johnson. He took Johnson by the arm
and the two men paced up and down
The corridor. Grant asked Johnson
whether. in his opinion. Il would be
lawful for the President to order the
ressuing of the greenbacks
In reply Johnson said-and ] had t.
from his own lips
Mr. President. | have looked into
that matter Il Is my opinion as a
lawyer that the authority does not ex-
list for you TO order the reissuine Of
the greenbacks: but 7 want to say to
you that In times Of very great emerg-
ency 1t is necessary for a President
some times to stretch or overlook the
law There is such an emergency az
present. If YOU order the reissulng Of
the greenbacks, you will use the power
OF the Government to prevent great
disaster, and am sure that the judg-
ment of Congress and Of the country
will support you. You are not COM
manded by the law not to do It, al
explicit authority TO do it. My earnest
advice to you is TO do it,
The President believed that John
son, in giving this advice, was not in.
fluenced by any personal considera-
tions similar to those which had
moved the bankers to urge him to take
the same step After thinking a mo-
ment over what had just been said
TO him. tho President told Johnson.
that he was convinced-that he would
write the order instructing the Secre-
tary Of the Treasury to reissue the
/ greenbacks.
so you see. It was not the bankers
at all. but an outsider, who persuaded
the President to take this step And
II was Grants experience at that time
that led to his study Of the green
hack subject, which made it possible
for him some months later to write
his veto of the imitation bill. one Of
the noteworthv achievements of his
administration.
Copyright. 1912. by e J. Edwards.
All rights reserved
Tomorrow Mr.. Edwards will tell Of
"The Secretary Of State That Grant
Found in the Archives