The Butler Weekly Times Newspaper, April 5, 1894, Page 2

VETO OF BLAND’S BILL | the purchase of silver by the govern-| demand for the redemption of these; sent an ounce of silver in the treas | this section of the bill as embodying 5 |ment, thata glance at such comdi-| treasury notes in gold, but the pres jury. The debate upon this section | a plan by which the government will | tions a partial review of the law re-)ent situation, as well as the letter in congress developed a positive dif be obliged to pay out its seanty ‘bonds at a low rate of interest under authority in submission of that now | existing aud better suited tothe pro- PRESIDENT RETURNS THE jferred to may not be unprofitable. laud spirit of the law, appear plainly | ference of opinion as to its object etore of gold for no other purpose tection of the treasury. SEIGNIORAGE MEASURE | Between August 14, 1890, when the \to justify, if they do not enjoin up-|and meaning. Iam clear that the |than to force an unnatural addition T hope a way wil! present itself to UNAPPROVED. |law became operative, and Novem |0a him, a continuation of such re-| present perplexities of the secretary /of silver money into the bands of the near future for the adjust | ber 1, 1893, when the clause it con-| demption. {of the treasury ought not to be | our people. This is au exact rever- meut of our monetary rs in such . . : H - eo) i 1 y ew ic 5 “ v | 33 y ~ me " . aeunous sRorHisw Course-Be- |tained directing the purchase of The conditions I have endeavored | augmented by derolang upon him | sal ef ue pote use Rs See a comps noose and co ervative \ silver was repealed, there were pur-|to present may be thus summarized: , the execution via law so uncertain | dictates, if we are to preserve parity | manner as will afford to silver its lieves the Proposed Legisla- i cieasal by the secretary of the treas-; First—The government has pur jand confused. Iam not willing to| between gold and silver and main- proper place in our currency, but in tion is Inopportune. jury more than 168,000,000 ounces | chased and now has on hand suffi-|rest my objection to this section | tain sensible bimetallisw. the meantime I am extrewely solici- =a ‘of silver bulhon. In payment for|cient silver bullion to permit the|solely on these grounds;in my judg-! We have now outstanding more tious that whatever action we take WEAKNESS OF THE BILLSHOWN. it Presents Uucretainty and Invites Controversy .—And Would Force out Gold. Washington, D. C., March 29 — The President to-day sent to the House of Representatives the follow- message vetoing the Bland silver seigniorage bill: To the House of Representatives. I return without my approval House bill No. 4596 entitled “An| act directing the coinage of the sil- ver bullion held in the Treasury,and for other purposes.” My strong desire to void disa- greement with those in both Houses of Congress who have supported this bill would lead me to approve it if I could believe that the public good would not be thereby endang- ered and that such action on my part would be a proper discharge of my officiail duty. Inasmuch, how- ever, a8 Tam unable to satisfy my- self that the proposed legislation is either wise or opportune, my con- ception of the obligations and re- sponsibilities attached to the great office [ hold forbids the indulgence of my personal desire, and inexora- bly confines me to that course which is dictated by my reason and judg- ment and pointed out by a sincere purpose to protect and promote the general interests of our people. CAUSE OF THE PANIC. The financial disturbance which 3wept over the country during the ast year was unparalleled in its se- verity and disastrous consequences. There seemed to be almost an en- tire displacement of faith in our | financial.ability and a loss of confi- dence in our fiscal policy. Among those who attempted to assign causes for our distress it was very generally conceded that the operation of a provision of law then in force which required the govern- ment to purchase monthly a large amount of silver bullion and issue ita notes in payment therefor was either 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 so Jow in the depths of depression and timidity, and apprehension had 80 completely gained control in financial circles that our rapid recu- peration could not reasonably be ex- pected. 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 appar- ent. Confidence in our absolute sol- ‘wence is to such an extent reinstated -and faith in our disposition to adhere to sound financial methods is so far restored as to promote the most en ‘couraged results, both at home and abroad. The wheels of domestic in dustry have been slowly set in mo tion and the tide of foreign invest- ment has aguin started in our direc- dion. Our recovery being so well under way, nothing should be done to check our convalescence, nor ‘should we forget that a relapse at ‘this time would almost surely re-| duce us to a lower stage of financial | distress than that from which we are just emerging. WOULD BE RETROGRADING. I believe that if the bill under consideration should become a law it would be regarded as a retrogres- sion from the financial intentions in dulged by our recent repeal of the provision fercing silver bullion pur- chases; that it would weaken if it did not destroy returning faith and con- fidence in our sound financial tenden- cies, and that as a consequence our progress to a renewed business health would checked and a return to our recent distressing plight seriously threat- ened. be unfortunately | this bullion the government issues lits treasury notes of various denom- |inations, amounting to nearly $156, | 000,000, which notes were immedi jately added to the currency in circu-| |lation among our people. Such notes were by the law made legal tender in payment of all debts, public and private, except when otherwise ex presely stipulated, and were made | receivable for customs, taxes and all | public dues, and when so received might be reissued. They were also permitted to be held by banking as sociations as a part of their lawful reserves. On the demand of the holder these treasury- notes were to be redeemed in gold or silver coin in the discretion of the secretary of the treasury; but it was declared as a part of this redemption provision that it was “the established policy of the United States to maintain the two metals on a parity with each other upon the present legal ratio, or such ratio as may be provided by law.” The money coined from such bullion was to be standard silver dollars, and atter directing the im mediate coinage of a little less than 28,000,000 ounces the law provided {that as much of the remaining bul lion should be thereafter coined as might me necessary to provide for the redemption of the treasury notes issued on its purchase, and that any gain or signiorage arising from such coinage shall be accounted for and paid into the treasury.” SEIGNIORAGE OR GAIN. This gain or seiguiorage evidently so much of the bullion owned by the government as should remain after using a suflicient amount to coin as many standard silver dollars as should equal in number the dol- lars represented by the treasury notes issued in payment of the en- tire quantity of bullion. These treasury notes now outstanding and in circulation amount to $152,951,- 580, and, although there has been thus far but a comparatively small amount of this bullion coined, yet the so called gain or seigniorage, as above defined, which would arise from the coinage of the entire mass, has been easily ascertained to bea quantity of bullion aufficient to make when coined 55,156,681 standard sil- ver dollars. Considering the intrinsic relation between gold and silver the mainten- ance of the parity between the two metals, as mentioned in this law, can mean nothing less than the mainten- ance of such a parity in the estima- tion aud confidence of the people who use our money in their daily transactions. Manifestly the main- tenance ot 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 discre- tion of the Secretary of the Treasury, tke exercise of this discretion if op- posed to the demands of the holder, is entirely inconsistent with the effective and beneficial maintenance of the parity between the two metals. MUST PRESERVE PARITY. If both gold and silver are to serve us as money, and if they to- gether are to supply to our people asafe and stable currency, the ne- cessity of preserving this parity is obvious. Such necessity has been repeatedly conceded in the platforms of both political parties and in. our Federal statutes. It is nowhere more emphatically recognized than in the recent law which repealed the provision under which the bullion now on hand was purchased. This \law insists upen the “maintenaace of the parity in view of the common use of the two metals and equal the market and the payment of This proposed legislation is so} debts.” The Secretary of the Treas- related to the currency conditions|}ury has therefore for the best of growing out of the law compelling | reasons not only complied with every f f power of every dollar at all times in! coinage of all the silver dollars ne- 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. Second—There are outstanding and now in circulation treasury notes issued in payment of the bullion purchased amounting to $152,951,- 280. These notes are legal tender in in payment of all debts, public and private, except when otherwise ex pressly stipulated; they are receiv- able for customs, taxes and all pub- lic dues, when held by banking associations they may be counted as part as their lawful reserves and they are redeemed by the govern- ment in gold at the option of the holders. These advantageous attri- butes were deliberately attached to these notes at the time of their issue, they are fully understood by our people to whom such notes have been distributed as currency, and have inspired confidence in their safety aud value, and have undoubt- edly thus induced their continued and contented use as money, instead of anxiety for their redemption REVIEWING THE BILL. Having referred to some incidents which [ deem relevant to the subject it ren ains for me to submit a specif- ic statement of my objections to the This bill consists of two sections, exclud ing one which merely appropriates a sum sufficient to carry the act into effect. Sec. one provides for the im- mediate coinage of silver bullion in the treasury which represents the socalled gain or seigniorage, which arise from coining all the bullion on hand, which seignorage would be $55,156,681. It directs that the money 30 coined or the certificates issued thereon shall be used in the payment of public expenditures, and provides, if needed, that the secre- tary may, in his discretion, issue sil- ver certificates in excess of such coinage not exceeding the amount authorized to be declares that as soon as possible after the coinage of this seigniorage, the remainder of the bullion held by the government shall be eoined into legal tender sil- ver dollare, and held in the treasury for the redemption of treasury notes issued in the purchas of said bullion. It provided that as fast as bullion shall be coined for the redemption of said notes they shall be re issued but to be cancelled in amounts equal to the coin held at any time in the treasury derived from the coinage bill ncw under consideration. of seigniorage coined. Sec two be issued on such coin in the manner now provided by law. It is especial- ly declared in the section that the act shall not be construed to change ex- isting laws relating to the legal tender character or mode of redemp- tion of the treasury notes issued for the pnrchase of the silver bullion to be coined. UNFORTUNATELY CONSTRUCTION. The entire bill is most unfortu- nately constructed. Nearly every sentence presents uncertainty and invites controversy as to its meaning and intent. The first section is es- pecially faulty in this respect, and it is doubtful whether its language will permit the consummation of its sup- posed purposes. I am led to believe that the promoters of the bill intend- ed to provide for the coinage of the bullion constituting the gain into standard silver dollars, and yet there is positively nothing in this section to prevent its coinage into any de- scription of silver coins now author- ized under any existing law. I sup- pose it was also intended in case the needs of the treasury called for money faster than the signiorage bullion could actually be coined, to present the issue of certificates in advance of such coinage; but its lan- guage would seem to permit the issuance of such certificates to the amount of seigniorage as stated, one-half of which would not repre- cessary to redeem, in such dollars, | provided for, and silver certificates | ment, sound finance does not com- mend a further infusion of silver into our currency at this time unaccom panied by further adequate provision for the maintenance in our treasury of a safe gold reserve. DOUBT AS TO BECOND SECTION. Doubt also arises as to the con struction of the second section of the bill. If the silver dollars therein directed to be coined are, as the second section provides, to be held in the treasury for redemption of treasury notes, it is suggested that, eertificates 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 treas ury notes on derrand, 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 furnish a basis for certifi cates according to any provision of exisiting law. If, however, silver cer- tificates can properly be issued upon these dollars, there is nothing in this section to indicate the characteristics and functiovs of thes certificates. If they were to be of the same charac ter 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 the section it is to say the least, extremely doubtful whether the certificates it contem- plated would be lawfully received even for such purposeer. Whatever else may be said of the uncertainties of expression in this bill they cer- tainly ought not to be found in leg- islation affecting subjects so import- ant and far reaching as our finances and currency. Iu stating other an more impor- tant reasons for my disapproval of this section, I shall, however,assume that uuder its provisions the treas- ury notes issued in payment for sil- ver bullion will continue to be re-| deemed, as heretofore, in silver or at the option of the holdere, and that if, when they are presented for redemption, to reach 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 will be destroyed and silver certificates to an equal amount sub stituted. Iam convinced that this scheme is ill advised and dangerous. As an ultimate result of its opera tion treasury notes, legal tender for all debts, public and private, and which are redeemable in gold or sil- ver, at the option of the holder, are to be replaced with silver certificates 'which, whatever, may be in their character and inscription, will bave none of these qualities. In anticipa- tion of this result,and as an immedi- ate effeet, the treasury notes will naturally appreciate in value and de- sirability, The fact gold can be re- alized upon them, and the further fact that their destruction bas been decreed when they reach the Treas- ury must tend to their withdrawl from general circulation to be im- mediately presented for gold re- demption or to be hoarded for pre- sentation at a more convenient seas- on. WOULD REDUCE GOLD SURPLUS. The sequel of both operations will be a large addition to the silver eur- rency in our circulation and a eor- responding reduction of gold in the Treasury. ‘The argument has been made that these things will not oc- cur at once because along time must elapse before the coinage of anything but the seigniorage can be entered upon. If the physical effects of the execution of the second section of this bill are not to be realized until far in the future this may furnish a strong reason why it should not be passed so much in advance: but the postponement of its actual opera- tion can not prevent the fear and logs of confidence and nervous pros- tration which would immediately follow its passage and bring about its worst consequences. I regard than $338,000,000 in silver certiti- cates issued under existing laws. They are serving the purpose of money usefully and without ques- tion. Our gold reserve, amounting to only a little more than $100,000,- 000, is directly charged with redemption of $346,000,000, of Unit ed States notes. When it is pro posed to inflate our silver currency it is a time for strevgtheniwg our gold reserve instead of depleting it. Ican not conceive of a longer step toward silver monometalism that we take when we spend our gold to vuy silver certificates for circulation, especially in view of the practical difficulties surrounding the replenishment of our gold. BOND TO PROTECT THE RESERVE. This leads me to earnently present the desirability of grauting to the Secretary of the treasury a better power than now exists to issue bonds to protect our gold reserve when for any reason it should be necessary. Our currency is in such a confused conditiou and our financial affairs are apt to assume at any time so critical a position that it seems to me sucha course is dictated by ordinary pru- dence. Tam not insensible to the argu ments in favor of coining the bullion seignoirage now in the treasury and 1 beleive it could be done safely and with advantage if the Secretary of the Treasury had the power to issue the | out his subject may be such as to pre- vent loss and discouragement to our people at homeand the destruction of contidence in our financial manag. ment abroad. Grover CLEVELAND, Executive Mausion, March 29,1894 To Down Spocks. A wealthy bachelor declared that s horrid bag had g!ared at him through the night. His friends ‘iaughed at him but he insisted that the house was haunted He grew ill, complaining of extreme heaviness in the stomach. his appetite failed, he | grew sallow, emaciated and despond- ent, believing he was going to die, the apock being a wa.uing, aud de. ‘elared he could hear funeral bells ringing in bis ears and even hinted jat suicide. 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