The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1874-04-23
WASHINGTON.
The Pre.,denr. Veto Message.

~ Tue ceH0te OF Me Cnated states:
Herewith l return the Seuate bill numbe
| 6l7, entitled "An Act to fix the amount o
United States notes and the circulation o
National banks and for other purposes" with
out my approval. In doing so 1 must expires
my regret at nof being able to give my assen
to measure which has received a sanction o
the majority of legislators chosen by the peopl
to make laws for their guidance, and 1 hav'
studiously sought to find sufficient arguments
to justify such assent, bat unsuccessfully
Practicaly,it is question whether the measure
under discussion would give an additional dol
lar to the irredeemable paper currency of thu
country or not and whether, by requiring
hree-fourths of the reserves to be retained by
the banks and prohibiting interest to be re
ceived on the balance, it might not prove a
contraction; but the fact cannot be concealed
that theoretically the bill increases the paper
circulation 100000, O0O less only the amount
OF reserves restrained from circulation by the
provision of the second section. The measure
has been supported on the theory that 1t would
give increased circulation. 1t is fair infer
ence, therefore, that if in practice Congress
should fail to create the abundance of circula-
ton expected of it, the friends of the measure,
particularly those out of Congress, would clam.
or for such imitation as would give expected re-
lief. The theory, in my belief, is departure
from the true principles of finance. National
interest," national obligation to creditor, Con-
gressional promises, party pledges on the part
of both political parties and of the personal
views and promises made by me in every an
nual message sent to Congress and in each
inaugural address.
In my annual message to Congress in De-
cember, 1869, the following passage appears:
Among the evils growing out of the rebel
lion and not yet referred to, is that of an ire
deemabe currency. 1t is an evil which I hope
will receive your most earnest attention 1t is
duty and one of the highest duties of govern
ment to secure to citizens a medium of ex-
change of fixed, unvarying value. This i'm
plies return to specie basis, ard no substi-
tute for it can be devised. 1t should be COM
menced now and reached at the earliest practi-
cable moment consistent with fair regard to
the interests of the debtor class. Immediate
resumption, if practicable, would not be desira-
BILE. 1t would compel the debtor class to paw
beyond their contracts. The premium on gold
at the date of their purchase would bring
bankruptcy and ruin to thousands The fuc-
tuation, however, in paper value of the measure
OF all values, gold, is detrimental to the inter
ests 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
cure ncy 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 value of the currency
still adhere to the views then expressed.
As early as December 4th 1865, the House of
Representatives passed resolution by.a vote of
la 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 an early resumption of specie pay
ments, as the business interests of the countr,
will permit and Dledging cooperative action to
this end as speedily as possible. The first act
passed by the 41st Congress, on the 18th day of
March, 1869, was as follows:
An act to strengthen the public credit of the
United States.
Be it enacted, that in order to remove any
doubt as tc the purpose OF the government to
discharge all its obligations to the public cred
itors and to settle conflicting questions and in
terpretations 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
legations of the United States and of all the in
terest-bearing obligations except where the
law authorizing the issue of any such Obliga-
tions has expressly provided that the same may
De paid in lawful money or in any other cur
rency other than gold or silver, but none of
said interest bearing obligations, not already
due, shall be redeemed or paid before maturity
unless at such times as United States notes
shall be convertible into coin at the option of
the holder or unless at such time the bonds of
the y nIted States bearing lower rate of in
terest than the bonds to be redeemed, can be
sold at par in coin; and also the United States
sOlemnly pledges its faith to make provision at
the earliest practicable period for the redemp-
ton o. United States notes in coin.
This act still remains as continuing pledge
of the faith of the United States to make pro-
Vision sG the earliest practicable moment for
the redemption Of United States notes in
coin.
A declaration contained in the act of June
20, 1864, created an obligation that the total
amount of United States notes issued or to ne
issued should never exceed $780, ,OOO The
amount in actual circulation was actually re-
dnced to $356,00 900, at which point Congress
passed the act of February 4, 1868, suspending
the further reduction of Currency, and the
$44 ,000 900 have ever been regarded as re-
serve to be used only in case of emergency,
such as have occurre, on several occasions and
must occur, when, from any cause the revenues
suddenly fall below the expenditures, and such
reserve is necessary because the fractional cur
rency amounting to $50,OO0,0OO is redeemable
in legal tender on call. 1t may be said that
such a return of fractional currency for redemp-
ton is impossible, but let steps be taken for
hoe; c,,I - H.,
that silver will take the place of fractional
currency as rapidly as it can be surplanted.
When the premium on gold reaches sufi-
GENTLY low point with the amount of Unite
States notes to be issued permanently within
proper limits; and the Treasury so strengthened
as to be able to redeem them in coin on de-
mand, it will then be safe to Inaugural te sys
tenn of free banking with such provisions as to
make compulsory redemption of circulating
notes of banks in coin or in United States
notes, themselves redeemable and made equiv
lent to coin. As measure preparatory to
free banking or for placing the government in
a condition to redeem its notes at the earl
lest practicable moment, the revenues of the
country should be increased so as to pay the
current expenses, provide for the sinking fund
required by law and also a surplus to be re-
tanned in the Treasury in gold.
am not 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 valuable ex-
actly in proportion to the amount of coin that
it can be converted into. While coin is not
used as 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. The surplus will seek
foreign market, as will any other surplus.
The balance of trade has nothing to do with
the question. The duties on imports being re-
quired in coin, create limited demand for
gold and about enough to satisfy the demand
remains in the country To increase this sup
ply see no way to open but by the govern
ment hoarding 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
distribution of the banking capital of the
country. I was disposed to give great weight
to this view of the question at first, but on re-
Election it will be remembered that there still
remains $40OO00O of authorized bank note
circulation assigned to the States having less