The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1874-05-01
VETO,
Message of President Grant yetoing the
Senate Finance Bttl.

senate Finance I'LL.
To The Senate Of Me United States:
Herewith return Senate bill No. GIL enti-
tied " An act to fix the amount of United
States notes aud the circulation OF national
banks, and for other purposes" without APP
proval. In doing 70, | must express my re-
greet at not being able to give my assent to a
measure which has received the sanction OF a
majority of Legislators chosen by the people
to make laws for their guidance, and hag
studiously sought to find sufficient arguments
to- justify such assent but unsuccessfully.
Practically, il IL a question whether the meas
IRE under discussion would give All additional
dollar to the irredeemable paper currency OF
the country or not, and whether. 10y requiring
three-fourths of the reservesto be retained by
banks aud prohibiting interest to be received
on the balance, it might not prove contrac-
ton. But the fact cannot be concealed that,
theoretically, the bill increases the paper cir
cuation 800, 600 900, less only the amount of
reserves restrained from circulation by the
provisions of the second section. The meas
IRE has been supported on the theory that II
would give increased circulation. Ii IL a fair
inference, therefore, that, il in practice the
measure should fail to create the abundance
of circulation expected of 1t, the friends OF
tho measure, particularly those out OF Con-
gress. would clamor for such imitation az would
give the expected relief This theory, in my
belief, is a departure from the true principles
tioRs to creditors, Congressional promises,
party pledges on the part of both the political
parties, and of the personal views and PROM
ises made by me in every annual message
sent to Congress, and in my inaugural ad-
dress.
In nv annual message to Congress in De-
cember 1869, the following passages appear ::
Among the evils growing out of the re-
bellon, and not yet referred to, Is that of an
irredeemable currency. 1t il 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 a
medium of exchange OF fixed, unyarying
value. This implies return to aspecie basis,
and no substitute for it can be devised. 1t
should be commenced now, and reached at
the earliest practicable moment consistent
with a 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 to pay, beyond their cor
tracts, the premium on gold at the date of
their purchases. and would bring bankruptcy
and ruin to thousands. FluctuatIon. how
ever in the paper value OF the measure Of all
values, gold, is detrimental to the interest Of
trade. 1t makes the man of business an in
voluntary gambler. for in all sales where fu-
ture payment is to be made, both parties spec
ulate as to what will be the value of the cur
rency to be paid and received | earnestly
recommend to you, then, such legislation as
will ineure gradual return to specie payment,
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 ia
yeas to nays concurring i'll the views of the
Secretary OF the Treasury, in relation TO the
necessity OF contraction Of the currency with
view to az early resumption of specie pay
ments as the business interests of the coun-
I.Nla 1gt
ton to this end, speedily ~ possible. The
first act passed by the Forty-first Congress-,
on the 18th day of March, 1869, was AZ fol-
lows
:" An Act to Strengthen the Public Credit Of the
United States.
'Be ii enacted, ETC., That, in order to remove
any doubt to the purpose Of the Govern
ment to discharge all its obligations 20 the
public creditors, aud to settle conflicting ques-
tons and interpretations of the law in virtue
Of which such obligations have been contract
ed, it is hereby provided and declared that the
faith of the United States il solemnly pledged
to the payment in coin, or it's equivalent, OF
all the obligations OF the United States aud
Of all the interest-bearing obligations, except
in cases where the law authorizing the issue
Of any such obligations has expressly provided
that the same be paid in lawful moneys, or
other currency than gold and silver: but none
OF said interest-bearing obligations not al
ready due shall be redeemed or paid
before maturity, unless at such time notes
of the United States shall be convertible into
coin at the option of the holder. or
unless at such time bonds Of the United States
bearing a lower rate Of interest than the bonds
to be redeemed can be sold at par in coin and
the United States also solemuly pledges it's
faith to make provision at the earliest practi-
cable 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-
ton Of United States notes in coin. A decla-
ration 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 Si00,000,000. The
amount in circulation was actually re-
duced to $3.50, 600, 600, at which point Congress
passed the act of Feb. 4. 1868, suspendng the
further reduction of the currency.
The $44, 100000 have ever been regarded a
reserve to be used only in case of an emergen-
cy, such as has occurred on several occasions,
and must occur when. from any cause. the
revenues suddenly fall below the expendi-
lures; and such reserve IL necessary be-
cause the fractional currency, amounting to
200, COO, 900, IL reoeemable in legal-tenders on
call. 1t may be said that such return of
fractional currency for redemption il improb-
able but let steps be taken for return to a
specie basis aud it will be found that silver
will take the place of fractional currency
as rapidly as 1t can be supplied
When the premium OH gold reaches
sufficiently low point, with the amount
of United States notes to be issued
permanently within proper limits, and tho
Treasury 80 strengthened as to be able to
redeem them IN coin ell demand. it will be
then safe to inaugurate system Of free
banking, with such provisions "a to make the
compulsory redemption of circulating notes
of banks i'll coin or United States notes, them
selves redeemable aud made equivalent to
coin. AS u measure preparatory to free
banking, or for placing the Government in a
position to redeem it's notes in coin at the
earliest practicable moment, the revenues of
the country should be increased ~ as to pay
the current expenses, provide for the sinking
fund required 10y law, and also surplus to be
retained III the Treasury in gold. am not a
believer i'll any artificial method Of making
paper money equal to CON- when coin
IL 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 proportion TO
the amount Of coin that it can be converted
into While coin il not used as q circulating
medium, or the currency Of the country is not
convertible into 1T at par, it becomes an arti-
Gle of commerce AZ much as any other product
The surplus will seek foreign market az will
any other surplus. The balance Of trade has
nothing to do with the question The duties
on imports, being required in coin, creates a
limited demand for gold, and about enough
to FatiefV that demand ratnai,e IL, N co,,n.,-