Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1874-04-30

of reserves restrained from circulation BY the
provisions of the second section. The meas
ure has been supported on the theory that it
would give increased circulation. 1t Is a fair
inference, therefore, that, if in practice the
measure should fail to create the abundance
of circulation expected of it, the friends of
the measure, particularly those out 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 obliga-
tons to creditors, Congressional promises,
party pledges on the part of both political
parties, and from the personal views and
promises made by me in every annual message
sent to Congress, and in each inaugural ad-
dress.
In my annual message to Congress in De-
cember, 1869, the following passage appears:
Among the evils growing out of the rebellion,
and yet referred TO, is that of irredeemable
currency 1t is an evil which hope will receive
your most earnest attention. 1t is duty, and one
of the highest duties of the Government TO secure
TO the citizen medium of exchange Of fixed, IN
varying value. This implies a return to specie
basis, and substitute for it can he devised. 1t
| should be commenced now, and reached at
| the earliest pracucable moment consistent
with fair regard to the interests of the
/ debtor class. Immediate resumption, if prac-
! ticable, would not be desirable. II would COM
pei the debtor class pay, beyond their contracts
the premium on gold at the date of their purchase
| and would bring bankruptcy and ruin TO thou
| sands. Fluctuations, however, in the paper value
OF the measure OF all values, gold, Is detrimental
10 the interest of trade 1t makes the of bust
ness 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 cur
rercy to be paid and received. l earnestly recon-
mend to you, then, such legislation will insure
\ gradual return TO specie payments and put an
immediate stop TO the fluctuations in the value of
| currency.
| I still adhere to the views then expressed.
| As early as Dec. 4, 1865, the House of Repre-
! sentatiyes 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 contraction of the currency
! with view to as early resumption of specie
payments as the business interests of the
| country will permit, and pledging cooperative
| action TO this end as speedily as possible. The
| first act passed by the Forty-tirst Congress,
on the 18th day of March, 1869, was as fol-
| lows:
| an act to Strengthen the Public Credit Of the
United States:
BE 1t enacted, ETC., That, in order to remove any
doubt to the purpose of the Government to dis
charge all its obligations to the public creditors,
and setLle conflicting questions and interprcta-
lions of the law by virtue of which such obliga-
lions have been contracted, it is hereby provided
and declared that the faith Of the United States is
| solemnly pledged to the payment in com, or It's
| equivalent of all the obligations of the United
| states, and OF all the lntereSt-Dearlng OOllga-
| tons, except in cases where the law authorizing
| the issue of any such obligations has expressly
| provided that the same be paid in law
full money, or other currency than gold and silver;
but none of said Understanding ohliga-
| tiOns not already due shall be redeemed or paid
before maturity unless at such times the United
States notes shall be convertible into coin at the
option of the holder, unless at such time bonds
of the United States bearing a lower rate of inter-
est than the bonds to be redeemed can be sold at
par in coin; and the United States also solemnly
|
| practicable period for the redemption of United
| States notes in coin.
This act still remains as a continuing pledge
| of the United States to make provisions at the
| earliest practicable moment for the redemp-
| ton of the United States notes in coin.
| 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 exceed $500, 000, 900. The
| amount in actual circulation was actually re-
| duced to 1856, 900, 900, at which point Con-
| gress passed the act of Feb. 4, 1868, suspend
| ing the further reduction of the currency.
The $44, 000,O 900 have ever been regarded as
a reserve to be used only in case of an emer-
| gency such as has occurred on several occa-
| sions, and must occur when, from any cause,
| the revenues suddenly fall below the eXpendi-
lures, and such a reserve is necessary because
| the fractional currency, amounting to So, 000,-
| coo, is redeemable in legal tenders on call. 1t
may be said that such return of fractional
| currency for redemption is improbable, but
| let steps be taken for a return to a specie
| basis and it will be found that silver will
| take the place of the fractional currency as
rapidly it can be supplied. When the pre-
| MUM on gold reaches a sufficiently low
| point with the amount of United States notes
| to be issued permanently fixed within proper
! limits, and the Treasury so strengthened as 10
| be able to redeem them in coin on demand, it
! will be then safe to inaugurate a system of
| &c tn NAL yp
| the compulsory redemption of circulating
| notes of banks in coin or United States notes,
| themselves redeemable and made equivalent
| to coin. As measure preparatory to free
| banking, or for placing the Government in
| position to redeem its notes in coin at the
| earliest practicable moment, the revenues of
| the country should be increased so as to pay
| the current expenses, provide for the sink
| ing fund required by law, and also a surplus
| to be retained in the Treasury in gold. |
am not a believer in any artificial method
| OF making paper money equal to coin, when
coin is not owned or held ready to redeem
| the promises to pay; for paper money
| is nothing more than promises TO pay, and is
| valued exactly in proportion to the amount of
| coin that 1t can be converted into. While coin
is not used as circulating medium, or the
| currency Of the cOuntrylS not convertible into
| it at par, it becomes an article of commerce as
much as any other product. The surplus will
| seek a foreign market as will any other sur
plus. The balance of trade has nothing TO do
with the question. The duties on imports, be-
ing required in coin, create limited demand
for gold, and about enough to satisfy that de-
mand remains in the country. To increase
| this supply see no way open but by the Gov
eminent boarding through the means above
| given, and possibly by requiring the National
| Banks to aid.
1t is claimed by the advocates of the meas
ure herewith returned that there is an unequal
l hIItJn nf no hon ito1 Dff na
country. was disposed to give great weight
to this view of the question at first, but, on
reflection, it will be remembered that there
still remains 100000 of authorized bank
note circulation assigned to States having less
than their quota, not yet taken. In addition
to this, the States having less than their quota
| of bank circulation have the option of S25,-
O00,0O0 more, to be taken from those States
having more than their proportion. When
this is all taken up, or when specie payments
are fully restored, or in rapid process of res
toration, will be the time to consider the ques-
ton of "more currency"
| (Signed) U. s. GRANT.
| EXECUTIVE MANSION, April %, 1874.