But the causes which lead to an increase of State debt and to
so great an enlargement of municipal obligation are not so open
to public observation, do not elicit the sharp controversy and
discussion which always go so far to insure safety in the final
result, and the consequence is that many communities, before
they stop to consider, find themselves laboring under a burden
of debt, which if not absolutely discouraging is certainly
oppressive.

In reflecting on this subject you will observe at the very
outset that our form of Government gives extraordinary
opportunities for the use of public credit. We have first
the General Government, which borrows on the faith of the
Nation ; next the State Government, which borrows on the faith
of the State ; next the county, which borrows on the faith of



130 POLITICAL DISCUSSIONS.

the county ; next the city or town, which borrows on the faith
of the municipality. When this whole series of credits, four
in number, are used as they often are, nay, used almost
everywhere, the quadruplicate burden falls heavily on the
shoulders of the people. The four taxes operate at last on
the same man, and each piece of property in some way con
tributes its share towards satisfying the demand. I do not
think there is any other nation in which the power to incur
debt has been so extended as with us ; in which the same com
munities may be made to assume public obligations in so many
relations and each one operating for the time in a somewhat
independent sphere, the tendency of each is to enlarge, regard
less of the dimensions and demands of the others. When the
city is pledging its credit it seems to forget that a heavy debt is
already upon the county of which it forms an integral part;
the county freely incurs debt without apparently remembering
that every estate in it is already encumbered by a direct tax to
pay the interest on a debt of the State ; and the State too often
makes lavish use of its credit without pausing to reflect that
every one of its citizens is already burdened by the tax which
he is paying to liquidate the debt of the Nation. When in
the end, Nation and State and county and city have each and
all imposed their burdens, the citizen finds that while the tax is
increased fourfold the property to meet it has not experienced
a similar development and growth. Our power in this country
to cumulate our burdens may certainly be regarded as peculiar
to ourselves. I am aware that the large cities of Europe have
debts of their own ; so have the separate cantons of Switzer
land ; so have the departments of France for limited and speci
fied purposes ; so have the minor German states ; but still it is
true that our county, city, town and township facility for con
tracting debt is practically unknown among the nations of
Europe. Our marvelous capacity in this regard is the one
achievement of our Republican civilization of which I think we
have the least occasion to be proud.

There are in the United States sixteen cities having each a
population exceeding one hundred thousand (100,000), and an
aggregate population of four and a half millions (4,500,000).
Each is a city with special advantages which cannot be taken



MUNICIPAL DEBT IN THE UNITED STATES. 131

from it ; each in the language of the clay has a large future ;
each has abundant wealth and still larger prospective resources.
They include when taken collectively, the trade of Atlantic and
Pacific, of Gulf and Lake coasts, besides all the great interior
rivers of the continent and the converging traffic of thousands
of miles of railway. Surely one would think that each might
bide its time and patiently await its well-assured prosperity
without being compelled to borrow largely, in some cases almost
recklessly, of the future. And yet taking these sixteen cities
together we find their municipal debts amount to three hundred
and fifty millions of dollars ($350,000,000), being eighty dollars
per capita for their entire population, and presenting in the
aggregate an amount which prior to our war experience would
have been considered a large burden for the Nation. It would
be a gross injustice, however, to leave the inference that the
average debt of these cities is over twenty millions of dollars,
for indeed a single city, the commercial metropolis of the nation,
presents a debt of nearly one-third of the entire amount, while
several of the cities on the list have debts of comparatively
insignificant proportions.

The class of cities next in size to those referred to, those
having each a population exceeding fifty thousand (50,000)
and less than one hundred thousand (100,000) are twelve in
number having an aggregate population of about seven hun
dred and fifty thousand (750,000). Their total debt does not
exceed thirty millions of dollars ($30,000,000), which gives
about forty dollars per capita for the whole list.

Taking the next class of cities, having each a population
exceeding twenty thousand (20,000) and less than fifty thou
sand (50,000), I find there are in all some fifty-three (53) in the
United States with a total population of something over a million
and a half. Their total debt cannot be less, I think, than sev
enty-five millions of dollars ($75,000,000), or fifty dollars per
capita.

Interested as I have been in making these investigations, I
included one more class within the scope of my inquiries, and
took the cities and towns throughout the United States, having
populations between ten and twenty thousand each, a list
which I found to include in all one hundred and five cities and



132 POLITICAL DISCUSSIONS.

towns, whose aggregate population amounts to nearly fourteen
hundred thousand (1,400,000), and whose aggregate debt is
something over thirty-five millions ($35,000,000), or about
twenty-two dollars per capita for the whole.

Adding these four classes together, it presents a table of the
cities and towns of the United States having over ten thousand
(10,000) inhabitants each of which there are in all one hun
dred and eighty-six (186) with an aggregate population ex
ceeding seven millions (7,000,000), and total municipal debt of
about four hundred and ninety millions (8490,000,000).

The towns having less than ten thousand inhabitants each, I
have not been able to classify with the approximate accuracy of
those I have given, but I feel well assured that the aggregate
of their debts would reach eighty millions of dollars ($80,000,-
000), making the total municipal debt of the country about
five hundred and seventy millions ($570,000,000).

Added to these municipal debts proper, we find the county;
debts of the entire country amounting to about one hundred
and eighty millions ($180,000,000), and the State debts to
about three hundred and ninety millions ($390,000,000),
making a grand aggregate of eleven hundred and forty millions
(81,140,000,000) of public debt of States, counties, cities, and
towns.

This sum-total is nearly three hundred millions of dollars
greater than that given in the census of 1870. The addition,
however, has not been made within the four succeeding years,
but a part is due, I think, to incomplete returns made to the
census officials. I have been at some pains, by original investi
gation and inquiry, to ascertain the aggregates of State, county,
and municipal indebtedness ; and while I do not assume to give
details, or vouch for absolute accuracy, I think the totals I have
given may well be taken as approximately correct statements.
The difficulty in attaining perfect exactness results from the
imperfect manner in which statistics are gathered in the several
States. I have found, indeed, very few States where the officers
are authorized by law to keep a record of public debt, except
the direct obligations of the State. In Massachusetts, where
great attention is paid to accuracy of statistics, I have been
enabled to obtain precise information, and the total amount



MUNICIPAL DEBT IX THE UNITED STATES. 133

of State, county, and municipal debts, shows a grand total of
ninety-seven and a half millions (197,500,000), subject to a
sinking-fund deduction of eleven millions ($11,000,000)
leaving eighty-six and a half millions (186,500,000) as the
net debt of that State. A very large burden it would seem ;
and yet such is the wealth of Massachusetts that the entire
debt does not constitute more than four per cent of its valua
tion, and probably not over two and a half per cent of its
actual wealth.

The State debts in many instances, both in the former and
the latter times, have been contracted without due caution,
and as a natural consequence the money realized from borrowing
has been oftentimes expended with an extravagance which
would hardly be tolerated in the disbursement of moneys raised
by current taxation. I do not desire to make my remark so
sweeping as to include those States where loans have always
been negotiated with care, and the receipts expended with econ
omy. But I venture the assertion, based on careful scrutiny
of the facts, that, taking the aggregate of State debts as they
stand to-day, there has not been realized on the average fifty
cents of permanent value for each dollar raised and expended.
In some cases the improvidence has led to even worse results
than this ; and I think, taking the country as a whole, there is
no form of public debt in which so much has been given and
so little received as in the direct obligations of the States. I
am glad, however, to be able to congratulate the citizens of this
rich and prosperous Commonwealth, that their debt is very
small, and is rapidly decreasing, and that in consequence there
of an inexpensive government and light taxation are their com
forting prospects for the future. What is true of your State, is
no less true of your sister States of this great section. The
seven States of the North-West, with an aggregate popula
tion of more than eleven millions (11,000,000), and property
worth over eight thousand millions of dollars (18,000,000,000)
have a combined State debt of less than twenty-five millions
($25,000,000). If these Commonwealths had exercised as pru
dent a care against county and municipal debt, they would
present to-day the most flattering balance-sheet, I venture to
say, of any civilized communities on the face of the globe.



134: POLITICAL DISCUSSIONS.

In regard to the aggregate municipal debt of the country, it is
not of course to be inferred that it could all have been wisely
avoided. Credit, prudently used and safely guarded, is one of
the great engines of modern civilization and advancement, and
with municipal governments its use at times seems imperatively
demanded. In many cases the public health has required that
debt be contracted for supplies of pure water and for systems
of drainage and sewerage, and occasionally for other forms of
public improvement essential to the growth of the community.
But in the main, I think our cities have been too ready to draw
on the future, too ready to pledge the " lives and fortunes " of
posterity to the payment of a debt which the generation in
curring it is unable to discharge. Expensive municipal build
ings, loan of credit to outside enterprises, not needed and often
visionary, have led in some large cities to a growth of debt for
which there is no corresponding return of pecuniary profit, and
no adequate advantage in any form. These debts have in many
cases been contracted carelessly and without due reflection.
The old adage that what is " everybody s business is nobody s
business " is nowhere more applicable than in the general ad
ministration of municipal affairs in our large cities. It is so
easy to obtain Legislative authority to contract debts ; it is
so easy to sell a good city bond to the capitalist who highly
prizes such forms of security; it is so easy to incur a debt to be
taken care of by those who come after us, instead of levying a
severe tax to be paid by ourselves ; in short, it is so easy and
alas so natural to have a smooth, pleasant time to-day, thinking
little of the ills that may overtake us on the morrow. This ready,
convenient, lazy method of shifting the burdens of to-day, has
tended to precipitate on many of our most favored and promis
ing cities a load of taxation, which hampers business, oppresses
property, hinders accessions of population, and thus retards the
very growth which the debt was contracted to stimulate.

Another evil results from the growth of municipal debt
which I think has not been sufficiently observed. I mean the
facility which such debts give to the capitalist for a safe and
profitable investment of his surplus thus saving him from
the trouble, and depriving the community of the advantage, of
his embarking in active business. Take for instance a promi-



MUNICIPAL DEBT IN THE UNITED STATES. 135

nent.and wealthy city and I do not refer to any particular
one and this you will find to be its history and experience at
one or more periods of its prosperous career,, Its banks and
other places of deposit are full to overflowing of money owned
by its leading capitalists, waiting for an opportunity to invest.
They are carefully examining into different branches of manu
facture, into improvement of real estate by blocks of fine stores,
into the outlook for a new railroad, into a project for a new
line of steam-packets all or any one of which would greatly
contribute to the development and growth of the city in ques
tion. At the moment these capitalists are about to invest their
money in some one of these channels of gain to themselves, and
profit to the community, another set of gentlemen having great
influence with the municipal officers, commit the city to some
new scheme of improvement. From three to five millions of
first-class seven per cent bonds are placed on the market and
our capitalists suddenly conclude that nothing presenting so
little risk and so clean a margin of profit can be found in manu
factures, or blocks of stores, or railway shares, or steam naviga
tion companies, and they accordingly invest their odd millions
in city bonds, and devote themselves thenceforth to the enno
bling occupation of cutting coupons.

Though the foregoing purports to be a single case, it illus
trates a practical truth worthy to be remembered, viz. : that too
much of the surplus capital has been invited into bonds of this
kind, and is thereby removed from active participation in the
business projects of the country. These projects are thus left
too largely to the control of men who have great enterprise,
but who are hampered for lack of capital and are constantly
encountering the evils of a too widely extended credit. It may
be an extravagant assertion, and yet I had almost said, that if
the hundreds of millions of capital that have been hidden away
in the municipal bonds of the country had been, by the absence
of such opportunities for investment, forced into business enter
prises, the country would be so much the richer that a great
number of the objects for which the municipal debts were con
tracted could have been accomplished by the mere process of
taxation on the vastly superior amount of property that would
have been thus created.



136 POLITICAL DISCUSSIONS.

It is also a matter for serious consideration whether these
large municipal loans have not had a prejudicial effect on the
price of money, tending continually to create stringency in
the money market and raise the rate of interest to the borrower
and the business man. There is a loud outcry in all quarters
against the high rates charged for money, and yet if States and
great cities will flood the markets with their obligations at
seven per cent and oftentimes at a higher rate of interest, how
can any borrower on mere individual credit expect or hope to
negotiate loans at the old-fashioned six per cent rate, which
in so many sections of the country was formerly the rule. It
will inevitably happen that the individual citizen will pay from
one to four per cent higher for money than the prosperous city ;
and if the city absorbs the great surplus of capital by its tempt
ing rates and perfect security, the individual is necessarily sub
jected to the squeezing process when he wants money on his
own note, and he is then made to feel the double burden of
paying increased taxes to support the city loan, the negotiation
of which had already increased his burdens by raising the rate
of interest on the money he was compelled to borrow in the
prosecution of his private business.

If then we have not exercised sufficient care and circum
spection in regard to incurring State, county and municipal
debt in the past, what is the remedy ? I answer, first arid fore
most, an awakened, active, well-balanced public judgment,
which will suggest and enforce a wise caution and conserva
tive course on this subject. I have no patent remedy to
propose, and yet I venture to suggest that the Legislatures
of many States have altogether too large a power to create
debt without referring the subject to the people for their pri
mary consideration. Perhaps I may entertain a pre-judgment
on this particular phase of the question in favor of the stringent
provision in the Constitution of my own State, where the
Legislature has no power to incur a dollar s debt except for
war purposes, under the pressure of actual danger, and where
an amendment to the Constitution proposed by two-thirds of
the Legislature and then submitted to a vote of the people, is
a prerequisite for pledging the credit of the State for any other
purpose whatever.



MUNICIPAL DEBT IN THE UNITED STATES. 137

It might also be a wise and salutary provision to define in State
Constitutions the precise ends for which municipal credit should
be used, limiting those uses to proper and restricted objects,
and forbidding in any event the creation of a debt beyond a
specified percentage of the official valuation of the city or town.
At the same time a judicious safeguard should be provided
against the overlapping of county debts, so that while the town
is guarding its credit with care it shall not be involved in the
embarrassment caused by an extravagant extension of the credit
of the county.

Finally, as a governing principle, it would be well to apply
to all State, county and municipal debts, the wise precaution
contained in that famous rule laid down by Mr. Jefferson as
the basis of all sound National credit. I quote the words of
the great philosophic statesman, as equally applicable to all
possible forms of public obligation, and as affording a basis
at once secure for the creditor and advantageous for the
debtor :

" Never borrow a dollar without laying a tax at the same instant, for
paying the interest annually, and the principal within a given term ; and
consider that tax as pledged to the creditors on the public faith. On such
a pledge as this, sacredly observed, a government may always command
on a reasonable interest, all the lendable money of its citizens ; whilst the
necessity of an equivalent tax is a salutary warning to them and their con-,
stituents against oppression, bankruptcy, aiid its inevitable consequence, *
revolution."



138 POLITICAL DISCUSSIONS.



THE DEMOCRATIC PARTY AND THE CONSTITU
TIONAL AMENDMENTS.



[A speech delivered by Mr. Elaine at a Republican meeting in Mechanics
Hall, Worcester, Massachusetts, Oct. 28, 1874.]

FELLOW-CITIZENS, In every political campaign it is impor
tant to ascertain the dividing line between parties, to find out
precisely what separates them, to determine whether the issue
that separates them is worth fighting over. Is there any ques
tion at issue between the two parties to-day of sufficient moment
to interest you as intelligent American citizens any question
of sufficient magnitude to decide your vote ?

I think there is, and I think it is a question of far greater
moment than the currency or the tariff, or anti-monopoly, or
railroad or bank questions. It is a question which goes to the
very root of all the political controversies of to-day ; it is a
question which lies at the foundation of American citizenship;
it is a question of maintaining inviolate the provisions of the
Federal Constitution.

The war has been over nearly ten years ! What are the
fruits of it ? What do you point to as the result of it ? You
have half a million of graves filled with heroic dead : you have
a larger number of heroic wounded still living. You have
spent an immense sum of money ; you have an immense vol
ume of debt ; you have heavy taxation. Are these to be called
the imperishable fruits of the war? Alas, not! They are the
sorrowful calamities of the war ! The dead will be forgotten,
the debt will be paid, taxes will be reduced, and the genera
tions to come will read of these things as painful traditions.
But the result of that war is imperishable imperishable
through the changes in the fundamental laws of your country.



DEMOCRATIC PARTY IN 1874. 139

I beg you all to remember that a change in the Constitution
of the United States is a matter of great moment. It is exceed
ingly difficult to accomplish. It was purposely made difficult
by the founders of the Government. Legislation goes by majori
ties : an Act of this year may be repealed the next but the
organic law cannot be changed so readily. Our fathers ordained
that it should require two-thirds of the Senate and two-thirds
of the House of Representatives of the United States to do even
so much as propose to the people to amend the Constitution.
And when proposed they made it a requirement that three-
fourths of all the States should assent before any change should
be ratified and become effective. In the progress of the civil
conflict it became a settled conviction in the minds of all patri
otic men, Republicans and Democrats alike, that if the war
was to end victoriously for the Union a blow must be struck at
slavery, first by the emancipation proclamation, then by an
amendment to the Constitution ; and the Thirteenth Amend
ment to the Constitution, perfected in 1864, made it impossible
in language originally applied to another country but appli
cable here that a slave could breathe the air of the United
States and live.

It was soon found that the mere fact of stripping the mana
cles of slavery from a man makes him only a freedman, not a
freeman. It was also very soon found that although the Thir
teenth Amendment referred primarily and only to the colored
man, yet there was a cognate question of citizenship, of equal
interest to the white man, and that if this Government was to
abide and be strong that question must be settled. For up to
that time, Mr. Chairman, there was nothing in the Constitution
of the United States, there was nothing in our laws, there was
nothing in the judicial decisions of the Government, that you
could put your hands on and say, this constitutes citizenship of
the United States. There was no standard nothing that dis
tinctively made you or me a citizen of the United States. In
the Constitution it was written that " the citizens of each State
shall enjoy the privileges and immunities of the citizens of the
several States ; " and the meaning of that ought to have been
so clear that the wayfaring man, though a fool, need not err
therein, and that the running man might read. It meant very



140 POLITICAL DISCUSSIONS.

plainly that if I, a citizen of Maine, chose to come and cast my
fortunes with the citizens of Massachusetts, I was entitled to
all the privileges and immunities that you enjoy as citizens of
Massachusetts, and, vice versa, if you chose to come to Maine
you should have the same rights that we enjoy there.

As between Maine and Massachusetts, and as between Mas
sachusetts and all the States westward to the Pacific, north
of a certain line of latitude, this was an effectual guaranty,
realized and not denied. But the moment you went south of
a certain line of latitude, whether you were a colored man or a
white man holding certain obnoxious opinions, your citizenship
was not worth the paper on which your name was inscribed on
the register of the hotel at which you were a guest. This was
not a mere sentiment it was not a fancied grievance. It was
an outrageous discrimination, leading to bad feeling and bad
blood and to grave wrong. Take an illustration in my own
State, largely engaged in commerce. A ship would sail from
Portland for Charleston, S.C., and among her crew there might
be two or three colored men. When that ship reached Charles
ton those colored men were placed in prison, detained there
while the ship was engaged in loading, and when the ship was