Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-04-23
Presidential Veto OF the Senate
Finance Bill
AS Theoretical if not Practical
Initiation,
And a Violation of Principle, Ex-
pediency, Duty, and Congress
siOnal and Party Pledges.
He would Postpone Free Bank
ing till Specie Resumption.
Urges Increased Taxation for a
Sinking Fund of Gold,
And Tells the South and West
There is Already $29 ,OOO,-
600 of Currency Author
lied but Uncalled for.


was in session from half past eleven until
nearly two, and finances were the single
subject of discussion. The following Pres
idential message shows the result:
To the Senate of the United States
Herewith / return the Senate bill number
GIT, entitled san act to fix the amount of
United States notes and circulation of
National Banks, and for other purposes, -
without my approval. In doing so, L must
express my regret at not being able to give
my assent TO a measure which shas received
the sanction of a majority of the legisla-
tors chosen by the people to make the laws
for their guidance, and | have stndiously
sought 10 find sufficient arguments to Jus
tify such assent, bet tunSucceSsfuliy. Prac-
tic3lly il is question whether the meas
uTe under discussion would give an addi-
tiOnal dollar to the iTTedeemable paper cur
rency 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 balance, it
night not prove to be d contraction. But
the fact cannot be concealed that theor,,t-
ically the bill increases the paper circu-
latiOn one hundred million Of dollars, less
only the amount OF reserves restrained from
NASu1dtAOA " tiAC aioN NiSiCIiS VI tAiC stCOHu
section.
The measure has been Supported on the
theory that it would give increased circula-
tion. II Is fair inference, therefore, that
if in practice the measure should fail 10
create the abundance of circulation expect
ed Of 1t, the friends of the measure, partie-
ulaTly those ont Of Congress, would clamor
for such imitation as would give the ex-
pected relief. The theory, in my belief, is
departure from the true principles of
finance, national interest, national obliga-
tionS TO creditors, Congressional promises,
party pledges on the part of both political
parties, and of the personal views and
promises made by me in every annual mes
sage sept to Congress and in each inaugU-
raj address. In my annual message to Con-
gress in December, 1869, the following
passage appears:
"Among the evils growing out of the re-
OelliOn and not yet referred to, is that of an
irredeemable currency. 1t is an evil which
| hope will receive yoarmost earnest atten-
ton. 1t is your duty, and one of the high
est duties of the government to secure the
citizen a medium of exchange of fixed, up-
varying value. This implies a return to a
specie basis and no substitute for it can be
devised. II should be commenced now and
reached at the earliest practicable moment
consistent with fair regard to the interest
of the debtor class. Immediate resump-
tiOn if practicable would not be desirable.
Il would compel the debtor class to pay be-
yOnd their contracts the premium of gold at
the date OF their purchase and would bring
bankruptcy and ruin to thousands. Fluc-
tuatiens, however, in the paper value of the
measure Of all values, gold, is detrimen-
tai 10 the interests of trade. 1t makes the
man Of business an involuntary gambler,
for in all sales where future payment is to
be made both parties speculate as 10 what
will be the value of the currency to be paid
| earnestly recommend to you then, such
legislation as will insure a gradual return
to specie payments and put an Immediate
stop 10 fluctuations in the value of cur
rency.
l still adhere to the views then express
ed. As early as Dec. 4, 1865, the House
OF Representatives passed a resolution by a
vote of 144 yeas to O nays, ,concurring in the
views of the Secretary Of the Treasury in
relation to the necessity of a contraction of
the currency with view to as early re-
SUMPTION of specie payments as the bust
ness Interests of the country will permit,
and pledging cooperative action TO this
end as speedily as possible. The first act
PISSED by the FOrty-First Congress on the
18th day Of March, 1859, was as follows:
'An act to strengthen ehe public credit Of
the United States. Be it enacted. etc,
that in order to remove any doubt as to the
purpose OF the government to discharge all
its obligations to the public creditors and
TO settle conflicting questions and interpre-
tatiOns of the law by virtne of which such
obligations have been contracted, it is here
bv provided and declared that the faith of
the United States is solemnly pledged to
the payment in coin or its equivalent of all
the obligations of the United States and of
all the interest bearing obligations, except
in case where the law authorizing the issue
of any such obligations has expressly pro-
yided that the same may be paid in lawful
morley or other currency than gold and sill
yer, but none of said interest bearing obli-
cations 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 sold al par in coin; and the United States
also sOlemnly pledges its faith to make pro-
vision at the earliest practicable period for
the redemption of United States notes in
coin" ..r-r-r
This act still remains as a continuing
pledge of the faith of the United States to
make provision, at the earliest practicable
moment, for the redemption of the United
States notes in coin. A declaration, con-
tanned in the act of June 20, 1864, created
an allegation 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 circula-
ton was actually reduced to three hundred
and fifty-six millions of dollars, at which
point Congress passed the act of Feb. 4, 1868,
suspending the further reduction of the cur
rency. 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 be-
low the expenditures and such a reserve
is necessary, because the fractional currency,
amounting to fifty millions, is redeemable
in legal tender on call. Ii may be said that
such a return Of fractional currency for re-
demptiOn is impossible; but let steps be
taken for a return TO specie basis, land it will
be found that silver viii 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 am ount OF
United States notes to be issued perma-
nently within proper limits, and the Treas
ury be so strengthened as to be able to re-
deem in coin on demand, it will then be
safe to inaugurate a system of free banking
with such provisions as to make compuiso-
nv the redemption of the circulating notes
of the banks in coin or United States notes,
themselves redeemable and made equiva-
ent to coin ..s --
As measure preparatory TO free bank
ing, or for placing the Government con-
dition TO redeem lis notes in coin at the
earliest practicable moment, the revenues
of the country should be increased so as to
paw the current expenses, provide for the
sinking fund required by law, and also a
surplus to be retained in the treasury in
gold. | am not a 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 Ia
paw. and is valuable exactly in proportion
/ to the amount of coin that it can be con
verted into. While coiE is not used as a