Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1874-04-29
TIE FINANCE BILL.
The Veto Message OF the President i'm
Full.

Herewith | return Senate bill GIT, entitled
&C An act to fix the amount Of United States
notes and the circulation of the national banks,
aud for other purposes without my approval
In doing so [ must express my regret at not
being able to give my assent 10 a measure
which has received the SaDctOn OF q majority
Of the legislators CHOSEN by the people to
make laws for their guidance, and | have stu
diOuslv sought to find sufficient arguments to
justify such assent, but unSucCesStully. Prac-
tical.. tins question whether the measure
under discussion would give an additional
dollar tOsthe lIredeemable paper currency Of
the country or not, AID whether by requiring
three-fOurths of the reserve to be retained by
banks, and prohibiting interest to be received
Oh balances it might not prove contraction
bill. The TACT cannot be concealed that, thee.
reticallv, the bill increases the paper crcula-
ton $10a ,000, 900, less only the amount OF re-
serves restrained from circulation 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. therefore, that it in practice the
measure should tail to create the abundance
OF circulation expected Of it, the friends Of
the measure, particularly those out OF Con-
gress, would clamOr for such inflltion as
would give relief. The theory, in my belief
is departure from the true principles of
finance, national interest. ma tional obligation
TO creditors, Congressional promises, party
pledges on the part of both political parties,
and Of the personal views and promises made
by me III every annual message sent to Con-
gress, and III each inaugural address. In my
annual message to Congress in December,
1867, the following passages appear:
Among the evils growing out of the rebel
lion, aud not yet referred to, Is that of ire
deemable currency. 1t is all evil which hope
Will receive your most earnest attention. 1t
is a duty, and one Of the highest duties OF
the government, to secure to the citizen
medium of exchange OF fixed, unvarying value.
This implies d return to q specie basis. and
no substitute for it can be devised. It should
be commenced now, and reached at the EARL.
est practicable moment consistent with a fair
regard TO the interest OF the dobtOr class.
Immediate resumption. If practicable, would
not be desirable. 1t would compel the debtor
class to paw beyond their contracts the pre-
MUM on gold at the rate 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.
1t makes the man of business an Involuntary
gambler, for in all cases where future pay
ment is to be made both parties speculate as
to what will be the value of the currency to
be paid and received. l earnestly recommend
to you, then, such legislation as will insure a
gradual return to specie payments, and put
an immediate stop TO the fluctuations IN the
value Of currency.
L sui aUn6f0 TO tQe views tl6O expressed.
As early as Dec 4, 1865, the House OF Repre-
sentatlves passed @ resolution, bv a vote OF
I44 yeas to nays, concurring in the views of
the Secretary of the Treasury in relation to
the necessity OF a contraction of the currency
with the view D as early 4 resumption of
specie payment as the business interests of
the country Will permit, and piedging COOP
eratlve action to this end as speedily as posi-
BILE. The first act passed by the Forty-tirs
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, etc, That in order to remove
any doubt as to the purpose Of the govern
nent to discharge all its obligations to public
creditors and to settle the conflicting ques-
tons ana interpretations of the law of values,
of which such obligations have been con-
tracted. 1t is hereby provided and declared
that the faith of the United States is solemniy
predge to the payment III coin, or Its equlva-
lent, of all obligations or the United States,
and OF all interest bearing Obligations, except
in cases where the law authorizing the issue
of any such obligations has expressly provided
that the same be paid 10 lawful money or
other currency than gold and silver: but none
OF the interest-bearing obligations rot already
due shall be redeemed or paid for before ma
tutity, unless at such times az tne United
States notes shall be convertible into coin at
time bonds OF the United States bearing
lower rate of interest than the bonds to be
redeemed can be sold at par in coin; and the
United States also solemnly pledge 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 faith Of the United States to
make provision at the earliest practicable
moment Tor the redemption Of the United
States notes i'll 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 500, 600 COO
The amount in actual circulation was actually
reduced to 1856, 100000, at which point Con-
gress passed the act OF Feb. 4, 1868, sus-
pending the further reduction of the cur
rency. The S44, 900, 600 have even been re-
garded reserve. to be used only in case Of
an emergency, such as has occurred on seve-
raj occasions and must occur when from any
cause the revenues suddenly fall below the
expenditures, and such reserve is necessary,
because the fractional currency, amount
ing to $50, coo, 900, is redeemable IN
legal tenders on CALL 1t may be sid that
such return of fractional currency for re-
demption is improbable: but let steps be
taken for d return to specie basis, and it
will be found that silver will take the place
of fractional currency as rapidly as it can be
supplied. When the premium on gold reach
es sufficiently low point, with the amount
of United States notes to be issued perma-
nently 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 a system of free banking, with
such provisions as to make compulsory the
redemption Of the circulating notes of banks
in coin or United States notes, themselves re-
dee1nabe and made equivalent to coin. AS a
measure preparatory to free banking, Or for
placing the government in a position to re-
deem its obligations in coin at the earliest
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 retained in
the treasury in gold. | am net 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 exactly 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 a foreign