- Historic Sites
The Dread Federal Surplus
April 1989 | Volume 40, Issue 3
But the greatest available resource to the big spenders of 1889-91 was human. It consisted of nearly two million Union veterans who were actual and potential recipients of government pensions. There was no automatic GI Bill of Rights for the boys in blue, but pensions were awarded both by class and on a case-by-case basis to those disabled in the service, and to their dependents, widows, and orphans.
At first the stream was thin; in 1866 some 127,000 pension claimants had received a total of about $15.5 million. But passing years swelled the power of the veterans’ organization—the Grand Army of the Republic (G.A.R.)—and also the number and variety of claims. Petitions were made on behalf of soldiers who had injured themselves while drunk or to avoid hazardous duty, or who had suffered accidents while “intending to enlist,” or had contracted postwar illnesses that they laid to wartime stress. If the Pension Bureau rejected a veteran’s definition of a service-connected disability, he could ask his congressman for a “private bill” for relief, and hundreds of these might slide through in a single legislative day.
The winning candidate in 1888 was Benjamin Harrison, grandson of “Old Tippecanoe,” who had served as a brigadier general with Indiana troops under Sherman. During the campaign he told G.A.R. audiences, Republican to a man: “When you lifted your hands and swore to protect and defend the Constitution and the flag you didn’t even know what your pay was to be… . My countrymen, it is no time now to use an apothecary’s scale to weigh the rewards of the men who saved the country.”
As incoming President, Harrison was true to the spirit of this address. He named as his commissioner of pensions James “Corporal” Tanner, a veteran who had lost both legs at Second Bull Run and who was a major lobbyist for the G.A.R. “I tell you frankly,” said Tanner, “that I am for ‘the old flag and an appropriation’ for every old comrade who needs it.” In a thunderous demand for a four-dollar-a-month minimum, he contributed the slogan of the hour: “No man ought to be down on the pension roll … for less than the miserable pittance of one dollar per week, though I may wring from the hearts of some [who may oppose the spending] the prayer, ‘God help the surplus!’”
The Dependent Pension Act assisted jobless veterans and gave widows eight dollars a month, with two dollars for each child.
Tanner’s tenure lasted less than a year, but he worked diligently at increasing pension expenditures, and Congress supported the good work with a new law, the Dependent Pension Act, which assisted jobless veterans and gave widows eight dollars a month, with two dollars for each child. Thanks to such exertions there were almost a million pensioners on the rolls by 1893. Pension expenditures for that year were $165 million, and they have never thereafter fallen below $100 million.
Thus, by a combination of pork, projectiles, and pensions, the 51st Congress managed to get rid of a large portion of the surplus. When some reproachful economizers chided it as the first “Billion Dollar Congress,” the Republican Speaker of the House, Thomas B. Reed, cheerfully replied that we were now a billion-dollar country. The unloved surplus shrank to less than $2.5 million by 1893. Then came a crushing depression and six straight years of red ink, more familiar to modern eyes. The century ended with a war-swollen 1899 deficit of nearly $90 million.
The surplus problem of the 1880s was not actually the first of its kind to beset the nation. During Andrew Jackson’s administrations (1829-37), excess revenues poured into the Treasury, largely from the sale of public lands. By later standards the scale was small—some $13 to $20 million annually—but the arguments over cutting the influx by reducing federal land prices were just as convoluted and outraged as any ever heard in Washington.
In the end the problem was solved by distributing the surplus revenue to the states. That policy had scarcely taken effect when the crash of 1837 made the question moot. There were surplus years during the 1920s, too, that ended spectacularly in 1929. Financial collapse seems to be the ultimate regulator of an overfull Treasury.
Professor Harold Lasswell once defined politics as a matter of “who gets what, when and where.” The politics of surplus are not all that different from the politics of deficit—though there is little doubt that the present Congress would probably be happy to trade places with the 51st. As the old saw goes, “I’ve been rich and I’ve been poor, and believe me, rich is better.”