I am not a believer in any artificial method of making paper money equal to coin when the coin is not owned or held ready to redeem the promises to pay, for paper money is nothing more than promises to pay, and is valuable exactly in proportion to the amount of coin that it can be converted into.  While coin is not used as a circulating medium, or the currency of the country is not convertible into it at par, it becomes an article of commerce as much as any other product.  The surplus will seek a foreign market as will any other surplus.  The balance of trade has nothing to do with the question.  Duties on imports being required in coin creates a limited demand for gold.  About enough to satisfy that demand remains in the country.  To increase this supply I see no way open but by the Government hoarding through the means above given, and possibly by requiring the national banks to aid.

It is claimed by the advocates of the measure herewith returned that there is an unequal distribution of the banking capital of the country.  I was disposed to give great weight to this view of the question at first, but on reflection it will be remembered that there still remains $4,000,000 of authorized bank-note circulation assigned to States having less than their quota not yet taken.  In addition to this the States having less than their quota of bank circulation have the option of twenty-five millions more to be taken from those States having more than their proportion.  When this is all taken up, or when specie payments are fully restored or are in rapid process of restoration, will be the time to consider the question of “more currency.”

U.S.  GRANT.

EXECUTIVE MANSION, Washington, May 12, 1874.

To the House of Representatives: 

I return herewith without my signature House bill No. 1331, entitled “An act for the relief of Joab Spencer and James R. Mead for supplies furnished the Kansas tribe of Indians.”  I withheld my approval of said bill for reasons which satisfy me the claim should not be allowed for the entire amount stated in the bill, and which are set forth in the letter of the Secretary of the Interior of the 7th instant, a copy of which, with the accompanying papers, is herewith transmitted.

U.S.  GRANT.

DEPARTMENT OF THE INTERIOR,

Washington, D.C., May 7, 1874.

The PRESIDENT.

SIR:  I have the honor to return herewith engrossed bill H.R. 1331, entitled “An act for the relief of Joab Spencer and James R. Mead for supplies furnished the Kansas tribe of Indians,” and to state that said bill was the subject of a report made to the Department by the Commissioner of Indian Affairs on the 11th ultimo, with which he submitted letters from Enoch Hoag, superintendent of Indian affairs, and Mahlon Stubbs, Indian agent, representing that the justness and correctness of the claim of Spencer & Mead had not been established, and suggesting that further proceedings in the premises be deferred until a thorough investigation of the facts and circumstances of the case could be had.