Dodgeville chronicle. [volume] (Dodgeville, Wis.) 1862-current, 1874-05-01
NUMBER "a.
The Veto Message.
WASHINGTON, April


| titled An 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 re-
gret at not being able to give my assent to a
measure which has received the sanction of a
majority of the legislators chosen by the peo-
pie to make. laws for their guidance, ands |
have studiously sought to find sufficient argu-
ments to justify such assent, but unsuccess.
! fully. Practically it is a question whether
the measure under discussion would give an
additional dollar to the irredeemabie paper
currency of the country or not, and whether,
by requiring three .fourths of the reserves to
be retained by the banks and prohibiting
interest to be received ON the bal
ance, it might not prove con-
traction. But the fact cannot be concealed
that, theoretically, the bill increases the paper
circulation 500, 900, 900, less only the amount
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 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 Congress,
would olamor for such imitation as would give
| the expected relief. The theory, in my belief,
is departure from the true principles of
finance national interest, national obligations
to creditors, Congressional promises, party
4
and from the personal views and promises made
| by me in every annual message sent to Con-
| gress, 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 rebellion,
and not yet referred to- s that of an 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, un-
/ hIc INN a ratI1 10 nia
basis, and no substitute for it be devised. 1t
| should be commenced now, and reached at the
earliest practicable moment consistent with
fair regard to the interests of the debtor
| class. Immediate resumption, if practicable,
| would not be desirable. 1t would
pei the debtor class to pay beyond their contracts
| and would bring bankruptcy and ruin to thou-
| sands. Fluctuations, however in the paper value
the me easuss OF M all values gold is Detrimental
business an involuntary gambler, for, in all sales
| where future payment Is TO be made, both partie
speculate to what will be the value of the cur
rency 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.
| still adhere to the views then expressed,
AS early as Dec. 4, 1865, the House of Repre-
sentatives passed resolution, by a vote of LA
| yeas to nays, concurring in the views of the
| Secretary of the Treasury in relation to the
| with view to as early resumption of specie
payments as the business interests of the
country will permit, and pledging co-opera-
| tive action to this end as speedily as possible
The first act passed by the Forty-first Con-
gress, on the 18th day of March, 1869, was as
follows:
An act to Strengthen the Public Credit Of the
BE 1t enacted, etc., That in order to remove any
doubt as to the purpose of the Government to dis
charge all Its obligations to the public creditors,
and To settle conflicting questions and interpreta-
tions of the law by virtue of which such obliga-
uons have oeen contracted, It Is hereby provided
solemnly pledged to the payment in coin. or its
equivalent Of all the obligations of the United
States, and of all the bearing obligations,
except in cases where the law authorizing
the issue of any such obligations has
expressly provided that the same be paid in
silver; but none of said interest-bearing obliga
ions not already due shall be redeemed or paid
before maturity unless at such times as 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 lower rate of inter-
est than the bonds to be redeemed can be sold at
pledges its faith to make provision at the earliest
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 provision at the
earliest practicable moment for the redemp-
tion of the 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 be
issued, should never exceed $400, ,000, 600. The
amount in actual circulation was actually re-
duced to 1856, 100000, at which point Con-
gress passed the act of Feb. 4, 1868. suspend
ing the further reduction of the currency.
The $44, ,000, 600 have ever been regarded a
reserve to be used only in case of an emergency,
such as has occurred on several occasions, and
or1cfn yIax, 4In
nues suddenly fall below the expenditures,
and such reserve is necessary because the
fractional currency, amounting to $780, 900,
is redeemable in legal-tenders on call. 1t may
be said that such return of fractional cur
rency for redemption is improbable, but let
steps be taken for return to a specie
basis and it will 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 sufficient low
point, with the amount of United States notes
to be issued permanently fixed within proper
limits, and the Treasury so strengthened as to
be able to redeem them in coin on demand, it
will be then safe to inaugurate system of
free banking, with such provisions as to make
the compulsory redemption of circulating
notes of banks in coin or United States notes,
themselves redeemable and made equivalent
to coin. As a 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 in
creased so as to pay the current expenses,
provide for the sinking fund required by law
and also surplus to be retained in the Treas
ury in gold. [ am not believer in any arti-
fetal 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 exactly in
ION 10 fhn .1xf rf anfr1 hat
it can be converted into. While coin is
not used as circulating medium or the cur
rency 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 sur
plus. The balance of trade has nothing to
do with the question. The duties on imports,
being required in coin, create limited de-
mand for gold, and about enough to satisfy
that demand remains in the country. To
increase this supply see no way open
but by the Government boarding through
the means above given, and possibly by
requiring the National Banks to aid.
It is claimed by the advocates of the meas
ure herewith returned that there is an un-
equal distribution of the banking capital of
the country. I was disposed to give. great
weight to this view of the question at frst,
there still remains $4,O00,0O0 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, ,009,
600, more to be taken from those States hav-
ing more than their proportion. When this
is all taken up, or when specie payments are
fully restored, or are in rapid process of res
toration, will be the time to consider the
question of "more currency"
(Signed) U. s. GRANT.
EXECUTIVE MANSION, April q, 1874.