Find Out What Grant Was Drinking, and Get Some to Congress

That was quite an evening the other night in respect of U.S. Grant. The annual banquet at the Union League of the Grant Monument Association marked the 201st birthday of the 18th president and celebrated his recent posthumous promotion to six stars. That makes Grant — with George Washington and John J. “Black Jack” Pershing — one of three titans authorized to that rank.Grant’s record as president has much to teach today, as fears rise of default on our national debt if the borrowing ceiling isn’t lifted and as our fiat dollar’s gold value hovers near a record low. These are challenges that Grant and his generation knew all too well. During the Civil War the federal government had resorted to paying its bills with fiat greenbacks, flooding the economy with paper dollars that were not convertible in gold.This monetary crisis sparked a national debate over whether to honor America’s obligation to repay its debts in gold, or whether to default by repaying bonds in paper money. During the war, the national debt had risen to $2.8 billion from just $61 million pre-war. The debt stood at some 40 percent of the economy, an unprecedented level of borrowing for America, though a far cry from today’s level of 120 percent of our gross domestic product. As in today’s turmoil over the borrowing ceiling, the post-Civil War debt debate was intertwined with a monetary dilemma. How — or even whether — to redeem the greenbacks was an “intense and exasperated conflict” at the time, historian Eric Foner has noted. Even more heated was whether America would default on its debt. The Republican Congress was so concerned that it proposed amending the Constitution to prevent default.That’s why the 14th Amendment says the “validity of the public debt of the United States” shall “not be questioned.” The debates in Congress leading up to the amendment’s passage, legal sage Phanor Eder has noted, show that the 14th Amendment was designed “to insure that the principal and interest of the gold bonds should be paid according to their tenor in gold, and not in paper money currency.”The 14th was ratified in 1868, the same year that Grant was elected. The election that year, the first since the war ended, hinged in part on these monetary questions, Eder wrote. Repaying “the national bonds in gold” and “the resumption of specie payments on the greenbacks” were key “issues of the Presidential campaign,” he reckons. Grant’s victory promised the question “was settled for all time,” Eder wrote. Little wonder, then, that Grant in his inaugural address offered a ringing defense of honest money. “A great debt has been contracted in securing to us and our posterity the Union,” Grant said. He urged “the payment of this, principal and interest, as well as the return to a specie basis,” at the earliest possibility. “To protect the national honor every dollar of government indebtedness should be paid in gold,” he averred. In his second term, Grant and the GOP Congress enacted the Resumption Act, restoring the greenbacks’ gold convertibility.This opened two generations of prosperity, innovation, investment, and growth in America. It propelled America to the top of the world’s industrial powers while holding inflation down to an average of 0.1 percent a year, according to economist Michael Bordo. That cemented the GOP’s reputation as the party of honest money, one that endured until President Nixon closed the gold window and ushered in the age of fiat money.Which brings us back to Grant. Upon being told that the general drank too much, Lincoln is said to have asked what brand of whiskey Grant was drinking so he could send a barrel to the rest of his generals. Today Republicans are flummoxed over how to preserve the “national honor” amid the runaway debt and dollar debasement. It’s time to find out what libation Lincoln sent the generals, we say, and get some to the Congress.

Find Out What Grant Was Drinking, and Get Some to Congress

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