The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1874-04-30
THE CURRENCY BIIaI.

PRESIDENT GRANTS VETO MESSAGE.
Grant returning without his approval, the Cur
rency bill passed by Congress:
To the Senate of the United States:
| Herewith I return Senate bill. No. 6l7, emit
tied IAN act to fix the amount OF United States
notes and the circulation OF national banks,
and for other purposes, without my approval.
In doing so must express my regret at not
1 being able to give my assent to a measure which
has received the sanction OF a majority Of the
Legislators chosen by the people to make laws
for their guidance, and have studously sought
to find sufficient argument to justify such as
I sent, but unsuccessfiIly.
Practically, it is a question whether the meas
ure under discussion would give an additional
dollar to the irredeemable paper currency of
the country OF not, and whether by requiring
tnree-fOurths OF the reserves to be. retained by
the hanks, and prohibiting interest to be re-
celyed on the balance, it might not prove a
contraction. But the fact cannot be concealed
that theoretically the bill increases the paper
circulation one hundred millions Of dollars, less
only the amount Of reserves restrained from
circulation by the provision of the second c.
ton. The Increase has been supported on 1.-THE
theory that it would give increased circulation.
1t is fair inference therefore, that it. in prac-
tice, the measure should fail to create the album
dance Of circulation expected of it, the friends
of the measure, particularly those o,t of Con-
| gress, would clamor for such imitation as would
give the expected relief.
| The theory, in my belief, is a departure from
the true principles Of finance, national interest,"
national obligations to creditors, Congressional
promises, party pledges-On the Dart of both
political parties, and of personal views and
promises made by me in every annual message
sent to Congress, and lin each inaugural ad-
| dress. " Ai,.-gs n3sa 80 XII,
In M, annual message e s. to Congress in De-
cember,9 1859, the following passages APP
pear: e
4 Among the evils growing out of the rebel
lion and not yet referred to, is that OF an irr
/ deemable currency. 1t is an evil which hope
will receive your most earnest attention. It is a
duty, land one Of the highest duties of government
to secure to the citizens a medium OF exchange
Of fixed, unvarying value. This implies a re-
turn to a specie basis, and no substitute for it
can be devised It should be commenced now
and reached at the earliest practical moment
consistent with fair regard to the interest of
the debtor class. Immediate resumption, if
practicable would not be desirable. It would
compel the debtor class to pay beyond their
contracts the premium on gold at the date of
their purchase, and would bring bankruptcy
and ruin to thousands. Fluctuations, however,
in the paper value of the measure of all values
gold, is detrimental to the interests OF trade
1t makes the man Of business an involuntary
gambler, for, in all sales where future payment
is to be made. both parties speculate as to what
will be the value OF the currency to be paid and
received. earnestly recommend to you then,
such legislation as will ensure gradual return
to specie payments, and put an immediate stop
to fluctuations In the value of currency
| | still adhere to the views then expressed
AS early as December 4, 1865, the House of Rep
resentatives passed a resolution, by vote OF
IA yeas to nays, concurring ''in the views Of
the Secretary OF the Treasury in relation to the
necessity OF a contraction of the currency, with
view to as early resumption of specie pay
ments as the business interests OF the country
will permit" and pledging s.co-opefative &C
ton to this end as speedily as possible
The first act passed by the Forty-frst Con-
gress, on the 18th day Of March, 1862 was as
follows: San act to strengthen the public cred
it of the United States.
s'Bs 1t enacted, &C., That in order to remove
any doubt as to the purpose of the Government
to discharge all its obligations to the public
creditors, and to settle conflicting questions and
and interpretations Of the law, by virtue 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
obligations of the United States, and of all the
interest bearing obligations, except in cases
where the law authorizing the issue OF any such
obligations has expressly provided that the
same may be paid in lawful money. or in other
currency than gold and silver, but none of the
misunderstanding obligations not already due
shall be redeemed Or paid before maturity, I'M
less at such times as the United States notes
shall be convertible into coin at the option Of
the holder, or, unless at such time bonds OF the
United States bearing lower rate of interest
than the bonds to be redeemed, can be sold at
par in coin. And the United States also pied
ges its faith to make provision, at the earliest
practicable period, for the redemption OF the
| United States notes in coin.''
This act still remains as q continuing pledge
of the faith OF the United States ito make pro-
visions at the earliest practical moment for
the redemption of the United States notes in
| conn.,
A declaration contained in the act of June
80, 1864, created an obligation that the total
amount of United States notes issued, should
never exceed four hundred millions of dollars.
The amount in actual circulation was actually
reduced to three hundred and ifty-six millions
of dollars, at which point Congress passed the
act Of February 4, 1868, sllspendng the further
reduction of the currency. The f0rty-four mil
| lions have been regarded as a reserve, to be
| used only in case OF emergency, such as has oc-
/ Cured ON several occasions, and must occur
when from any cause revenues suddenly fall
/ below expenditures and such reserve 4 nee
essary, because the fractional currency, amount
ing to fifty millions, is redeemable in legal ter
| ders on call.
1 It may be said that such a return of fraction
al currency for redemption is impossible. But
let steps be taken for return to a specie basis,
and it will be found that silver will take the
place OF fractional currency as rapidly as it can
be supplied, and when the premium on gold
reaches sufficiently low point. With the a.
mount of United States notes to be issued per-
manently fixed within proper limits, and the
| Treasury strengthened as to be able to redeem
| them in coin ON demand, it will then be able to
! inaugurate system of free banking, with such
provisions as to make compulsory redemption
Of the circulating notes OF the banks in coin, or
| in United States notes themselves, redeemable
and made equivalent to coin.
! AS a measure preparatory to free banking, or
! for placing the Government in a condition to
redeem its notes in coin sat the earliest practi-
cable monient,s' the revenues of the country
should be increased so as to pay current expen-
ses, provide for the sinking fund required by
| law, and also surplus to be retained in the
Treasury ff gold. I am not believer in any
| artificial method of making paper money equal
| to coin when the eailf is not owned OF held
ready to redeem the promises to pay; for pa
per money is nothing more than promises to
pay, andis valuable exactly in proportion to
the amount OF coin that it can be converted
| into. While coin is not used as q circulating
medium or the currency of the country is not
convertible into it at par, it becomes an article
| of commerce as much as any other product