Democratic Sentinel, Volume 17, Number 30, Rensselaer, Jasper County, 11 August 1893 — MESSAGE TO CONGRESS [ARTICLE+ILLUSTRATION]

MESSAGE TO CONGRESS

THE PRESIDENT CONSIDERS FINANCE ONLY. Ho Favors the Immediate and Unconditional Repeal of the Sherman Law, and Holds It Principally Responsible for the Present Alarming Business Situation. Text of the Document. President Cleveland's mes aje to the LUId Congress, assembled in extraordinary session, is comparatively brief. The message is special rather than general in its character, and is limit id to the necessities of the financial situation. Mr, Cleveland insists upon the unconditional repeal of the Sherman law, and he attribute-: to it principally the ills with which the country is nowthreatened. The document in full reads as follows: To the Congress of tho United States: The existence of an alarming and extraordinary business situation, involving the welfare and prosperity of all our people, has constrained me to call together in extra session the people’s representatives in Congress, to the end that, through a wise and patriotic exercise of the legislative duty with which they solely are charged, present evils may be mitigated and dangers threatening the future may be averted. Our unfortunate financial plight is not the result of untoward events nor of conditions

felated to our natural resources: nor is it traceable to any of tho afflictions which frequently check national growth and prosperity. With plenteous crops, with abundant promise of remunerative production and manufacture, with unusual Invitation to safe investment and with satisfactory assurance to business enterprise, suddenly financial distrust and fear have sprung up on every side. Numerous moneyed Institutions have suspended because abundant assets were not immediately available to meet tbe demands of frightened depositors: surviving corporations and individuals aro too content to keep in haud the money they aro usually anxious to loan, and those engaged in legitimate business are surprised to find that tho securities they offer for loans, though heretofore satisfac ory, arc no longer accepted. Values supposed to be fixed aro fast becoming conjectural, and loss and failure have invaded every branch ot business. The Silver I’urchase Law. I believe these things are principally chargeable to Congressional legislation touching tiie purchase and coinage of silver by the general government. ThiH legislation is embodied in a statute passed on the 14th day of July. 18.10, which was the culmination of much agitation on the subject involved, and which may be considered a truce, after the long struggle, between the advocates of free silver coin age and those intending to be more conservative. Undoubtedly the monthly purchases by the Government of 4.500,030 ounoes of silver, forced under that statute, were regarded by those interested ;n silver production as a certain guaranty of its increase in price. The result, however, has been entirely different, for immediately following a spasmodic and slight rise the price of silver began to fall after the passage of the act, and has since reached the lowest point ever known. This disappointing result has led to renewed and persistent effort in the direction of free coinage. Meanwhilo, not only are tho evil effects ot the operation of the present law constantly accumulating, but the result to which its execution must inevitably lead is becoming palpable to all who gins the least heed to financial subjects. This law provides that in payment for the 4,500,000 ounces ot silver bullion which the Secretary of the Treasury is commanded to purchaso monthly there shall be issued Treasury notes redeemable on demand In gold or silver coin, at the discretion of the Secretary of the Treasury, and that t aid notes may be reissued. It is, however, declared in the act to be “the established policy of the United States to maintain the two metal 3 upon a parity with each other upon the present legal ratio or such ratio as may be provided oy law." This declaration so controls the action of the Secretary of the Treasury as to prevent his exercising the discretion nominally vested in him, if by such action the parity between gold and silver may be disturbed. Manifestly a refusal by the Secretary to pay these Treasury notes in gold, if demanded, would necessarily result in their discredit and depreciation as obligations payable only in silver, and would destroy the parity between the two metals by cs; abllshiug a discrimination in favor of gold. Up to the 15th day of July, 1R93, these notes had been issued in payment ot silver bullion, purchased to the amount of moro than $147,000, 000. While all but a very small quantity of this bullion remains uncoined and without usefulness in the Treasury, many of the notes given in its purchase have been paid in gold. This is illustrated by the statement that between the first day of May, 1802, and the fifteenth day of July, 1893, the notes of this kind issued in payment for silver bullion amounted to a little more than fifty-four millions of dollars, and that during the same period about forty-nine millions of dollars were paid by tho Treasury in gold for the redemption of such notes. Drain Upon the Gold Reserve.

The policy necessarily adopted of paying these notes in gold has not spared the gold reserve of MOU.roo.ijoo long ago set aside by the Government for the redemption of othernotes, for this fund has already been subjected to the payment of new obligations amounting to about $160,000,090 on account of silver purchases, and has, as a consequence, for the first time since its creation, been encroached upon. We have thus made the depletion of our gold easy, and have tempted other and more appreciative nations to add it to their stock. That the opportunity we have offered has not been neglected is shown by the large amounts of gold which have been recently drawn from our Treasury and exported to increase the financial strength of foreign nations. The excess of exports of gold oyer Its imports for the year ending June 30. 1893, amounted to more than eighty-seven and a half millions of dollars. Between the first : day of July. 1890, and the fifteenth day of July, j 1893, the gold coin and bullion in onr Treasury ■ decreased more than one hundred andthlrty- ; two millions of dollars, while during | the same period the silver coin and ! bullion in the Treasury increased more than one hundred and forty-sevtn millions of dollars Unless Government bonds are to be constantly Issued and sold to replenish our exhausted gold, only to be again exhausted, It Is apparent that the operation of the Silver Purchase law, now In force, leads in the direction of the entire substitution of silver for the gold in the Government Treasury, and that this must be followed by the payment of all Government obligations in depreciated Bilver. At this stage gold and silver must part company, and the Government must fall in Its established policy to maintain the two metals on a parity with each other. Given over to the exclusive use of a currency greatly depreciated according to , the standard of the commercial world, we could no longer claim a place among the nations of the first class, nor could our Government claim a performance of Its obligations, so far as such an obligation has been Imposed upon It, to provide for the use of the people the best and safest money. If, as many of Its friends claim, silver ought

to occupy a larger place in our currency ana the currenoy of the world through general International co-operation and agreement, it is obvious that the United States will not be In a position to gain a hearing In favor of snch an arrangement so long as we are willing to continue onr attempt to accomplish the result single-handed. Resulted in a [.ark of Confidence. The knowledge In business circles among our own p ople that our Government can not make its iiat equivalent to Intrinsic value, nor keep inferior money on a parity with superior money by its own indefiendeut efforts, has esulted In Buch a ack ot confidence at home in the stability of currency values that capital refuses its aid to new enterprises while millions arc actually withdrawn from the channels of trade and commerce to become idle and unproductive in the hands of timid owners. Foreign investors, equally alert, not only decline to purchase American securities, but make haste to sacrifice those which they already have. It does not meet the > ituation to say that apprehension In regard to the future of our finances is groundless, and that there is no reason for lack of confidence in the purposes or power of the Government in the premises. The very existence of this apprehension and lock of confidence, however caused, is a menace whicti ought not for a moment to be disregarded. Possibly if the undertaking we have in hand were the maintenance of a specific known quantity of silver at a parity with gold, our ability to do so might be estimated and gauged, and perhaps, in view of our unparalleled growth and resources, might be favorably passed upon. Rut when our avowed endeavor is to maintain such parity in regard to ar. amount of silver Increasing at the rate of fifty millions of dollars yearly, with no fixed termination to such increase, it can hardly be said that a problem is presented whose solution is free from doubt. The people of the United States are entitled to a sound and stable currency and to money recognized as such on every exchange and in every market of the world. Their Government has no right to injure them by financial experiments opposed to the policy and practice of othe*

civilized states, nor Is it justified iu permitting an exaggerated and unreasonable reliance on our national strength and ability to jeopardize the soundness of the people’s money. This matter rises above the plane of party politics. It vitally concerns every business and calling and enters every household iu the land. Harmful Effects to the Wage-Earner. There is one important aspect of the subject which especially should never be overlooked. At times like the present, when the evils of unsound finance threaten us, the speculator may anticipate a harvest gathered from the misfortunes of others, the capitalist may protect himself by hoarding or may even find profit in the fluctuation of values; but the wage-earner—the flrstto be injured by a depreciated currency and the last to roeeive the benefits of its correction—is practically defenseless. He relics for work upon the ventures of eonildent and contented capital. This failing him, his condition is without alleviation, for he can neither prey on the misfortunes of others nor hoard his labor. One of the greatest statesmen our country has known, speaking more than fifty years ago, when a derangement of the currency had caused commercial distress, said: “The very man of all others who has the deepest interest in a sound currency aud who suirer by mischievous legislation in monetary matters is the man who earns his daily bread by his daily to 1.” These words are as pertinent now as on the day when taey were uttered, and ought to impressively remind us that a failure in the discharge of our duty at this time must especially Injure those of our countrymen who labor, aud who, because of their number aud condition, are entitled to the most watchful care of their Government. It is of tho utmost importance that such relief as Congress can afford in the existing situation be afforded at once. The maxim, "He gives twice who gives quickly," is directly applicable. It may be true that tho embarrassments from which the business of the country is suffering arise as much from evils apprehended as from those actually existing. We may hope, too, that calm counsels will prevail, and that neither the capitalists nor the wage-earners will give way to unreasoning panic and sacrifice their property or the.r interests under the influence of exaggerated fears. Nevertheless, every day's delay in removing one of the plain and principal causes of the present state of things enlarges the mischief already done and increases the responsibility of the Government for its existence. Congress Invoked to Act Promptly. Whatever else the people have a right to expect from Congress, they may certainly demand that legislation condemned by the ordeal of three years' disastrous experience shall be removed from the statute books as soon as their representatives can legitimately deal with it. It was my purpose to summon Congress in special session earlv in the coming September, that we might enter promptly upon the work of tariff reform, which the true interests of the country clearly demand, which so large a majority of the people, as shown by their suffrage, desire and expect, and to the accomplishment of which every effort of the present administration is p. edged. lint while tariff reform has lost nothing of its immediate and permanent importance, and must in the near future engage the attention of Congress, it has seemed to me that the financial condition of the country should at once and before all other subjects be considered by your honorable body. I earnestly recommend the prompt repeal of the provisions of the act passed duly u, IKW). authorizing the purchase of silver bullion, and that other legislative action may put beyond all doubt or mistake the intention and the ability of the Government to fulfill its pecuniary obligations in money universally recognized by all civilized countries.

PRESIDENT CLEVELAND.