Rensselaer Republican, Volume 26, Number 32, Rensselaer, Jasper County, 5 April 1894 — A VETO MESSAGE. [ARTICLE]

A VETO MESSAGE.

The President Disapproves The Bland Seigniorage Bill Seasons for His Action and - * sion ot the Financial Situation. ’ 'Lhe President, Thursday, gen* to tne House of Representatives the following message vetoing the Bland bill: To the House of Representatives; I return, without my approval. '• e bill numbered 4,596, entitled "An act directing the coinage of the silver bullion held in the Treasury, and for other purposes.’’ The financial disturbance which swept over the country during the last year was unparalleled in its severity and disastrous consequences. There seemed to be almost an. entire displacement of faith in our iinanclalabUity, and loss of conlidence in our fiscal policy. Among those who attempted to assign causes for dur distress, it was generally conceded that the operation of a provision of law then in force, which required the Government to purchase monthly a large amount of silver bullion and issue its note in payment therefor, was cither entirely, or to a large extent, responsible for our condition. This led to the repeal, on the first day of November, 1893, of this statutory provision. We had, however, fallen sb lbw in the depth of depression and timidity, and apprehension had so completely gained control in financial circles, that our rapid recuperation could not be reasonably expected. Our recovery has, nevertheless, steadily progressed, and though less than five months have elapsed since the repeal of the mischievous silver-purchase requirement, a wholesome improvement is unmistakably apparent. Confidence in our absolute solvency is to such an extent reinstated, and faith in our disposition to adhere to sound financial methods is so far restored, as to produce the most encouraging results, both at home and abroad. I believe that if the bill under consideration sbould become a law it would be regarded as a retrogression from the financial intentions indicated by our recent repeal of the provision forcing silver bullion purchases, that it would weaken if it did not destroy returning faith and confidence in our sound financial tendencies, and that, as a consequence, our progress to renewed business health would be unfortunately checked and a return to our recent distressing plight seriously threatTnedT’Consid'jring relation between gold and silver-«the maintenance of the parity between the two metals, as mentioned in this law, can mean nothing less than the maintenance of such a parity in the estimation and confidence of the people who use our money in their daily transactions. Manifestly the maintenance of this parity can only be accomplished so far as it is affected by these Treasury notes and in the estimation of the holders of the same by giving to such holders on their redemption the coin, whether it is gold or silver, which they prefer. It follows that while In terms the law leaves the choice of coin to be paid on such redemption to the discretion of the Secretary of the Treasury, the exercise of this discretion, if opposed to the demands of the holder, is entirely Inconsistent with the effective and beneficial maintenance of the parity between the two metals. The Secretary of the Treasury has. therefore, for the best reasons. not only complied with every demand forthe redemption of these Treasury notes in gold, but the present situation, as well as tiie letter and spirit of the law, appear plainly to justify, if they do not enjoin upon him a continuation of such redemption. The Government has purchased and now has on hand sufficient silver bullion to permit the coinage of all the silver dollars necessary to redeem in such dollars the Treasury notes issued for the purchase of said silver bullion and enough •besides to coin, as gain or seigniorage. 55,156,681 additional standard silver dollars. The President then states his objections to the bill at length; alleging that it was Improperly drawn, nearly every sentence being uncertain in its construction and meaning. Continuing the President said: I am not willing, however, to rest my opposition to this section solely on these grounds; in-my judgment-sound—firrance-aoes not commend a further infusion of silver into our currency at this time, unaccompanied by further adequate provisions for the maintenance in our Treas ury of a safe gold reserve. Doubts also arise as to the meaning and construction of the second section of the hill. If the silver dollars therein directed to be coined are. as the section provides, to be held in the Treasury for the redemption of Treasury notes, it is suggested that, strictly speaking, certificates cannot be issued on such coin in the manner now provided by law. because these dollars are money 'held in the Treasury for the express purpose of redeeming Treasury notes on demand, which would ordinarily mean that they were set apart for the purpose of substituting them for these Treasury notes. They are not. therefore, held in such a way as to furnisli a basis for certificates, according to any provision of existing law. If, however, silver certificates can properly be issued upon these dollars, there is nothing in the section to indicate the characteristics and functions of these certificates. If they were to be of the same character as silver certificates in circulation under existing laws, they would at best be receivable only for customs, taxes and all public dues; and under the language of this section it is, to say the least, extremely doubtful whether the certificates it contemplates would be lawfully received even for such

purposes. Whatever else may be said of the uncertainty of expression in this till, they certainly ought not to be found in legislation affecting subjects so important and far reaching as our finances and currency. In stating other and more important reasons for my disapproval of this section 1 shall, however, assume that under its provisions the Treasury notes issued in payment for silver bullion will continue to be redeemed, as heretofore, in silver or* gold, at tho option of the holders, and •that if, when they are presented for redemption, or roach the Treasury in any other manner, there are in the Treasury coined silver dollars equal in nominal value to such Treasury notes, then and in that case the notes would be destroyed and silver certificates to an equal amount substituted. I am convinced that this scheme is ill-advised and dangerous. The fact that gold can be realized upon them, and the further fact that their destruction has been decreed when they reach the Treasury, must tend to their withdrawal from general circulation to be immediately presented for gold redemption. or to bo hoarded for presentation at a more convenient season. I regard tliis section of the bill as embodying a plan by which the Government will be obliged to pay out its scanty store of gold for no other purpose than to force an unnatural addition of silver money into the hands of our people*. This han exact reversal of the policy which safe finance dictates, if we are to preserve parity between gold and silver, and maintain sensible bimetallism. Wo have now outstanding more than 1338.000,000 In silver certificates issued under existing laws. They are supplying the purpose of money usefully and without question. Our gold reserve, amounting to only a little more than 1100,000.000, is directly charged with the redemption of 18 16.000.000 of United States notes. When it is proposed to inflate out silver currency, it is a time for strengthening our gold reserve Instead of depleting it. I cau not

conceive of a longer step toward slivci monometallism than we take when we spend our gold to buy silver cirtifi cates for circulation, especially in view of the practical difficulties surrounding a replenishment of our gold. This leads me to earnestly present the desirability of granting to the Secretary of the Treasury a better power than exists to issuebonds to -protect ‘onr-gnid —reserve, when sor —any reason it should be necessary. I am not insensible to the arguments in favor of coining the bullion seigniorage now in the Treasury, and I believe it could, be done safely and with advantage if the Secretary of the Treasury had the power to issue bonds at a low rate of interest under authority in substitution of that now existing and better suited to the protection of the Treasury. I hope a way will present itself in the near future for the adjustment of our monetary affairs in such a comprehensive and conservative manner-as will afford to silver its propbr place in our currency; but in the meantime I am extremely solicitous that whatever action we take on thiasuhject may be such as to prevent loss-and discouragement to our people at home, and the destruction of confidence in our financial management abroad. Grover Cleveland.— t?.:;ecutive Mansion, March 29 iSM.: