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President
Cleveland
Message on the Repeal of the Sherman Silver Purchase Act
(August 8, 1893)
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 related to our natural
resources, nor is it traceable to any of the 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. . . .
Values supposed to be fixed are fast becoming conjectural, and loss and
failure have invaded every branch of business.
I believe these things are principally
chargeable to Congressional legislation touching the purchase and coinage of
silver by the General Government.
This legislation is embodied in a
statute passed on the 14th day of July, 1890, which was the culmination of
much agitation on the subject involved, and which may be considered a truce,
after a long struggle, between the advocates of free silver coinage and those
intending to be more conservative. .
This law provides that in payment for
the 4,500,000 ounces of silver bullion which the Secretary of the Treasury is
commanded to purchase 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 said notes may be reissued. It is, however, declared in
the act to be
"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."
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 establishing a discrimination in favor of
gold.
The policy necessarily adopted of paying
these notes in gold has not spared the gold reserve of $100,000,000 long ago
set aside by the Government for the redemption of other notes, for this fund
has already been subjected to the payment of new obligations amounting to
about $150,000,000 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. .
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 silver.
At this stage gold and silver must part
company and the Government must fail 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
nations of the first class, nor could our Government claim a performance of
its obligation, 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 and the currency of the world
through general international cooperation and agreement, it is obvious that
the United States will not be in a position to gain a hearing in favor of
such an arrangement so long as we are willing to continue our attempt to
accomplish the result single-handed. . .
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 other civilized states, nor is it justified in 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 in the land. 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 misfortune of others, the capitalist may protect
himself by hoarding or may even find profit in the fluctuations of values;
but the wage earner-the first to be injured by a depreciated currency and the
last to receive the benefit of its correction-is practically defenseless. He
relies for work upon the ventures of confident 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. .
It is of the 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 the 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 their 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. 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 early 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 stiffrages, desire and expect, and to the accomplishment
of which every effort of the present Administration is pledged. But 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 July 14, 1890, 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.
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