GROVER CLEVELAND.
EXECUTIVE MANSION, January 28, 1895.
To the Senate and House of Representatives:
In my last annual message I commended to the serious consideration of the Congress the condition of our national finances, and in connection with the subject indorsed a plan of currency legislation which at that time seemed to furnish protection against impending danger.[14] This plan has not been approved by the Congress. In the meantime the situation has so changed and the emergency now appears so threatening that I deem it my duty to ask at the hands of the legislative branch of the Government such prompt and effective action as will restore confidence in our financial soundness and avert business disaster and universal distress among our people.
Whatever may be the merits of the plan outlined in my annual message as a remedy for ills then existing and as a safeguard against the depletion of the gold reserve then in the Treasury, I am now convinced that its reception by the Congress and our present advanced stage of financial perplexity necessitate additional or different legislation.
With natural resources unlimited in variety and productive strength and with a people whose activity and enterprise seek only a fair opportunity to achieve national success and greatness, our progress should not be checked by a false financial policy and a heedless disregard of sound monetary laws, nor should the timidity and fear which they engender stand in the way of our prosperity.
It is hardly disputed that this predicament confronts us to-day. Therefore no one in any degree responsible for the making and execution of our laws should fail to see a patriotic duty in honestly and sincerely attempting to relieve the situation. Manifestly this effort will not succeed unless it is made untrammeled by the prejudice of partisanship and with a steadfast determination to resist the temptation to accomplish party advantage. We may well remember that if we are threatened with financial difficulties all our people in every station of life are concerned; and surely those who suffer will not receive the promotion of party interests as an excuse for permitting our present troubles to advance to a disastrous conclusion. It is also of the utmost importance that we approach the study of the problems presented as free as possible from the tyranny of preconceived opinions, to the end that in a common danger we may be able to seek with unclouded vision a safe and reasonable protection.
The real trouble which confronts us consists in a lack of confidence, widespread and constantly increasing, in the continuing ability or disposition of the Government to pay its obligations in gold. This lack of confidence grows to some extent out of the palpable and apparent embarrassment attending the efforts of the Government under existing laws to procure gold and to a greater extent out of the impossibility of either keeping it in the Treasury or canceling obligations by its expenditure after it is obtained.
The only way left open to the Government for procuring gold is by the issue and sale of its bonds. The only bonds that can be so issued were authorized nearly twenty-five years ago and are not well calculated to meet our present needs. Among other disadvantages, they are made payable in coin instead of specifically in gold, which in existing conditions detracts largely and in an increasing ratio from their desirability as investments. It is by no means certain that bonds of this description can much longer be disposed of at a price creditable to the financial character of our Government.
The most dangerous and irritating feature of the situation, however, remains to be mentioned. It is found in the means by which the Treasury is despoiled of the gold thus obtained without canceling a single Government obligation and solely for the benefit of those who find profit in shipping it abroad or whose fears induce them to hoard it at home. We have outstanding about five hundred millions of currency notes of the Government for which gold may be demanded, and, curiously enough, the law requires that when presented and, in fact, redeemed and paid in gold they shall be reissued. Thus the same notes may do duty many times in drawing gold from the Treasury; nor can the process be arrested as long as private parties, for profit or otherwise, see an advantage in repeating the operation. More than $300,000,000 in these notes have already been redeemed in gold, and notwithstanding such redemption they are all still outstanding.