Litchfield enquirer., 1874-04-30
The Imitation BIH Vetoed.
70 t.e Ssaate ofths Unatsd states.

The Imitation BIII Vetoed.
 z6 the Senate ofi ths Uaited States:
 Herewith return the senate bill, num- Der 6l7, entitled ssAn act to fix the amount of United States uotea and the circulation of national banks and for oth- erpurposes, without my approval In dolng so l must express my regret at not be1ng able to give my assent to a measure which has received the sanction of mai of1ty of the legislators chosen by the peo- Die to make laws for the guidance, and l have studiously sought to find sufficient arguments justify such assent, but un- successfully. Practically it is question whether the measure under discussion would give an additional dollar to the lrredeemable paper currency of the coun- try or not, and whether by requiring three-fourths of the reserves to be retain cd by the banks and prohibiting interest to be received on that balance, 1t might not prove contraction. But the fact cannot be concealed the theoretically the blll increases the paper circulation one hundred millions of dollars, less only the amount of reserves retained from circula- ton by the provisions of the second sec ton. The measure has been supported on the theory that it would give increased ejaculation. It is fail inference there fore that, if in practice the measure should fail to create the abundance of circulation expected of it, the friends of the measure, particularly those ont of congress. would ciamor of such imitation as would give the expected relief. The theory. in my belief, E departure from the true principles of finance. national interest, national obliga- tlons to creditors, congressional promises, party pledges on the part of both politi- cal parties, and of the personal views and promises made by me in every annual message sent to congress and in each in- augural address.
 REAssERTIoN OF PRINCIPLES.
 In my annual message to congress in December, 1869, the following passages appear: "Among the evils growing out of the rebellion and not yet referred to, is that of an irredeemable currency. It is an evil which I hope will receive your most earnest attention. It is duty, and one of the highest duties of the govern ment, to secure to the citizens medium of exchange of fixed unvarying value. This
 
 substitute for it can be devised. It should be commenced now and reached at the earliest practicable moment consis- tent with far regard to tie interest of the debtor class. Immediate resumption, if practicable, would not be desired. It would compel the debtor class to pay, be- yond their contracts, the premium in gold at date. Their purchase would bring bankruptcy and ruin to thousands. Fluct- nations, however, in the paper value of the measure of all values, gold is 6etri- mental to the interest of trade. It makes the man of business an involuntary gam bier, for in all sales where future pay ment is to be made both parties speculate as to what will be the value of the cur rency to be paid and received I earnest ly recommend to you, then, such legisla- tion as will insure a gradual return to specie payments and put an immediate stop to huctuation in the value of cur rency" I still adhere to the views then expressed.
 k AS early as December 4, 1865. the house of representatives passed resolution by a vote of IA yeas to 6 nays, concurring in the views of the secretary of the treas ury ill relation to the necessity of a con- traction of the currency, with a view to as early resumption of specie payments as the business interests of the country will permit, and pledging cooperative action to this as speedily as possible The first act passed by the forty-first congress on the 18th day of March, 1869, was as fol- lows: An act to strengthen the public credit of the United States. Be it enact ed, etc., That in order to remove any doubt as to the purpose of the govern ment to discharge all its obligations to the public creditors and to settle conflicting questions and interpretations of the law. byyirtue of which such obligations have been contracted, it is hereby provided and declared, that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the obliga- tions of the United States and of all the interest bearing obligations, except in cases where the law authorizing the issue of any such obligation has expressly pro- that the same may be paid in lawful money or in other currency than gold and silver: but none of said interest bearing obliga- tio1s, not already due, shall be redeemed or paid before maturity unless at such times as the United States notes shall be convertable into coin at the option of the holder, or unless at such time the bonds of the United States, bearing lower rate of interest than bonds to be redeemed can be sold at par in coin; and the United States also solemnly pledges it's faith to make provision at the earliest practicable period for the redemption of United States notes in coin" This act still remains as 8 continuing pledge of the faith of the Unit ed states to make provision at the earliest practicable moment for the redemption of the United States notes in coin.
 THE MAINTENANCE OF THE RESERVE.
 A declaration contained in the act of June 20, 1864, created an obligation that the total amount of United States notes issued or to be issued should never ex- ceed $4O0, ,OO0, ,O00 The amount in actual circulation was actually reduced to S356,- OOO, 900, at which point congress passed the act of February 4, 1868, suspending the further reduction of the currency. The $44, ,OOO, 900 have ever been regarded as reserve to be used only in case of an emergency, such as has occurred on sev- eral occasions and must occur from any cause. Revenues suddenly fall below ex- penditures, and such reserve is neces- sary because. the fractional currency, amounting to $5O, ,0OO, 600, is redeemable in legal tenders on call. It may be said that such a return of fractional currency for redemption is impossible, but let steps be taken for return to specie ba- sis and it will be found that silver will take the place of fractional currency as rapidly as it can be supplied.
 FREE BANKING TO WAIT ON REDEMPTION
 When the premium on gold reaches a sufficiently low point, with the amount of United States notes to be issued per manently within proper limits, and the treasury is so strengthened as to be able to redeem them in coin on demand. it will then be safe to inaugurate system of free banking with such provisions as to make compulsory the redemption of cir culatlng notes of the banks in coin or United States notes, themselves redeema- ble or made equivalent to coin. As a measure preparatory to free banking or TOT placing the government in condi- tlon to redeem it's notes in coin at the -