The herald and mail. [volume] (Columbia, Tenn.) 1873-188?, 1874-05-01
NATIONAL FINANCES.
Presidential Veto of the Senate Finance
Bill.

/
5 The cabinet was in session from hal
past eleven until nearly two, on the 22l
and finances were the single sslia5eef 3
l discussion. The following presidential
message shows the result
10 the Senate of the United States
!; Herewith I return the senate bill
, number GIT, entitled "An act to fix thu
amount of United States notes and cir
culation of national banks, and for 9th
er purposes" without my approval
In doing so, [ must express my regret
at not being able to give my assent to 6
measure which has received the sane.
ton of a majority of the Legislators
chosen by the people to make the laws
for their guidance, and have studious-
ly sought to find sufficient arguments
to justify such assent, but unsuccess-
fully. Practically it is a question
whether the measure under discussion
would give an additional dollar to the
irredeemable paper currency of the
country or not and whether by requir-
ing three-fourths of the reserves to be
retained by the banks, and prohibiting
interest to be received on the balance,
it might not prove to be contraction.
Bat the fact cannot be concealed that
| theoretically the bill increases the pa
per circulation one hundred million of
dollars, less only the amount of reserves
restrained from circlation by the pro-
visions of the second section.
| The measure has been supported on
| the theory that it would give increased
circulation. 1t is fair 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 out
of congress, would clamor for such in
fation as would give the expected re-
| lief. The theory, in my belief, is de-
parture from the true principles of f.
nance, national interest, national obli-
cations to creditors, congressional prom
ises, party pledges on the part of both
political parties, and of the personal
views and promises made by me in eve
ry annual message sent to congress and
in each inaugural address. In my aunu-
al message to congress in December,
1869, the following passage appears
Among the evils growing out of the
rebellion and not vet referred to, is that
of an irredeemable currency. 1t is an
evil which [ hope will receive your
most earnest attention. It is your duty,
and one of the highest duties Of the
government. to secure the citizen a me-
dunn of exchange of fixed, unvarying
value. This implies a return to a specie
basis and no substitute for it can be de-
vised It should ! e commenced now
and reached at the earliest practicable
moment consistent with fair regard to
the interest of the debtor class. Imme-
diate resumption if practicable would
not be desirable. 1t would compel the
debtor class to pay beyond their con-
tracts the premium OF 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. It 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. I
earnestly recommend to you then, such !
legislation as will insure a gradual re-
turn to specie payments and put an i'm
mediate stop to fluctuations in the value |
of currency"
I still adherS to the views then ex-
pressed As early as Dec. 4, 1865, the |
house of representatives passed reso-
luton by vote of IA yeas to 6 nays,
concurring in the views of the secre
tarv of the treasury in relation to the |
necessity of a contraction of the cur |
rency with view to as early a resump- |
ton 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-f 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 en-
acted, 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 con-e
ficting questions and interpretations O
the law by virtue of which such obliga-
tions 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 interest bearing obligations,
except in case where the law authorizing
the issue of any such obligation has ex-
pressly provided that the same may be
paid in lawful money or other currency
than gold and silver, bnt none of said
interest bearing obligations not already
due shall be redeemed or paid before
maturity, unless at such time as the
United States notes shall be convertible
into coin at the option of the holder, or
unless at such time the bonds of the
United States bearing a lower rate of
interest than the bonds to be redeemed
can be be sold at par in coin; and the
United States also solemnly pledges its
faith to make provision at the earliest
l. Il l,o 0f
United States notes in coin."
This act still remains as a continuing
pledge of the faith of the United States
to make provision, at the earliest prac-
ticahIe moment, for the redemption of |
the United States notes in coin. A dec
IaratiCn n, contained in the act of June
20, 1854, created an allegation that the
total amount of United states notes is
sued, or to be Issued, should never ex-
ceed four hundred millions of dollars.
The amount in actual circulation was
actually reduced to three hundred and |
ffty-six millions of dollars, at which
point congress passed the act of Feb.
z, 1868, suspending the future reduc-
ton of the currency. The forty-four
millions have ever been regarded as a
reserve, to be used onlv in case of |
emergency, such as has occurred on sew
eral occasions, and must occur when,
from any cause, revenues suddenly fall
below the expenditures and such a re-
serve is necessary, because the fraction
al currency, amounting to fifty millions,
is redeemable in legal tender on call.
1t may be said that such a return of
fractional currency for redemption is
impossible; but let steps be taken for a
return to specie basis, and it may be
found that silver will take the place of
the fractional currency as rapidly as it
can be supplied.
When the premium on gold reaches a
sufficiently low point with the amount
of United States notes to be issued per-
uanently within proper limits, and the
treasury be so strengthened as to be
able to redeem 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
the circulating notes of the banks in