Spirit of Jefferson. [volume] (Charles Town, Va. [W. Va.]) 1844-1948, 1874-04-28
THE CURRENCY BIEL-YETo BY
PRESIDENT GRANT.


Senate to-day:
To tie Senate Of Tie Ui,ited Strtes.:
Herewith return the Senate bill, No. GIT.
ertitled .'An Act to fix the amount of United
States notes and the circulation of National
banks, aud for other purposes" without my
approval.
In doing so must express my regret at
not being able to give my assent TO measure
which has received the sanction of majority
of the Legislators chosen by the people to
make laws for their guidance, and l have
studinusiy sought to find sufficient argument
to justify such assent, but uusuccessfuIIy.
Particularly it is question whether the
measure under discussion would give an adj
ditional dollar to the irredeemable paper cur
renew of the country Lot, aud whether by
requirirg three>fourths of the reserves to be
retained by the banks, and prohibiting in>
terest to be received on the balance, it might
not prove contraction. But the fact can>
not be concealed that that theoretically the
bin increases the paper circulation one hun
dred millions of dollars 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 it would give increased circulation.
1t is fair inference, that if, in practice,
the measure should fail to create tho abuud>
ance of circulation expected of it, the friends
of the measure, particularly those out of Con-
gress would clamur for such Initiation as would
give the expected relief
The theory, in my belief, is departure
from true principles of finance, National in
terest, National obligations to creditors Con-
gressional promises, party nIedges-on the
part of both political parties-and-of personal
views and promises made by me in every an
nual message sent to Congress, aud in each
inaugural address.
In my annual message to Congress in De-
cember, 1869, the following passages appear:
Among the evils growing out of the rebel
lion, and not yet referred to. is that of an ir-
redeemable currency. 1t is an evil which I
hope will receive your mosG earnest attention.
1t is duty, and one of the highest duties, of
Government to secure to the citizen medium
of exchange of 6xed, uuvaryiog value. This
implies a return to specie basis. and no sub
sttute for it can be devised. it should be
commenced now, aud reached at the earliest
practicable moment; consistent with fair re-
gard to the interests of the debtor class. I'm
mediate resumption. if practicable, would not
be desirable. 1t would compel the debtor
class TO pay beyond their contracts the pre-.
MUM 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. It
makes the man of business an involuntary
gambler, for in ali sslcs where future pay
mept 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 insure a
gradual return to specie payments, aud put
an immediate stop to fluctuations in the value
of currency" I still adhere to the views
then expressed.
As early as December t, 1865, tho House
of Representatives passed resolution, by
vote IA yeas to nays, concurring ''in the
views of the Secretary Of the Treasury in re-
lation to the necessity of contraction of the
currency, with view to as early resumption
of specie payments as The business interests
ofthe country will permit" and pleh"ipg ''co-
operative action to this end as speedily as pos
sible."
The fist act passed by the Forty first Com
gress, on the 18th day of March, 1869, was
as follows:
An Act to strengthen tie public credit of
the United States.
Be At enacted 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 cues
tiops and interpretations of the law, BIZ vir>
tue of which said obligations have been con-
tracted, it is hereby provided and declared that
the faith Of the United States is solemnly
pledged to the payment in coin, OF Its rquiva-
Lent, of oil the obligations Of the United
States and of The interest bearing obligations,
in rrh fhn los bpr
the issue OF any obligations has especially pro
vided that the same may be paid in lawful
money, or in other currency than gold and
silver, but none of the said interest bearing
obligations, not already due, shall be re-
deemed or paid before maturity, unless at such
times as the United States notes shall be con-
vertible into cola at the option of the holder, or
unless at such time bonds of the United
States, bearing q lower rate of interest than the
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 prnc>
ticable period for the redemption of the
redemption of the United States notes in coin.
This act still remains as continuing pledge
of the faith of the United States ''.o make
provision at the earliest practicable moment
for the redemption of the United States notes
in coin.
A declaration contained in the Act Of June
so, 1864, created an obligation that the total
amount of United States notes issued or to
be issued should never exceed four hundred
millions Of dollars. The amount in actual
circulation was actually reduced to three
hundred and ftty>six millions of dollars, at
which point Con gress passed the Act of Feb
ruary 4. 1868, suspending the further reduc>
ton of the currency. The forty>four millions
have ever been regarded as a reserve to be
used only in case of emergency such as has
occurred on several occasions, and must occur
when, from any cause, revenues suddenly fall
below the expenditures, and when reserve
is necessary because the fractional currency,