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Veto Message

October 10, 1888

To the Senate:

I herewith return without approval Senate bill No. 2201, entitled "An act for the relief of Laura E. Maddox, widow and executrix, and Robert Morrison, executor, of Joseph H. Maddox, deceased."

An act of Congress approved July 2, 1864, provided among other things that the Secretary of the Treasury, with the approval of the President, might authorize agents "to purchase for the United States any products of States declared in insurrection, at such price as should be agreed on with the seller, not exceeding the market price thereof at the place of delivery."

Under the authority of said act the Secretary of the Treasury, with the approval of the President, prescribed rules and regulations to govern the transactions thus permitted, and appointed one H. A. Risley an agent to act for the United States in making such purchases.

On or about the 13th day of November, 1864, said Risley entered into a written contract with Joseph H. Maddox and two other parties, whereby the latter agreed to sell and deliver to Risley as such agent, at Norfolk or New York, 6,000 boxes of tobacco, 350 barrels of turpentine, and 700 barrels of rosin. It was also agreed that all products transported under the contract should be consigned to said Risley as agent and shipped on a Government transport, or, if not so shipped, should be in the immediate charge of an agent of Risley's, whose compensation and expenses should be paid by the sellers. Said products were to be sold in New York or Baltimore under Risley's direction, and one-fourth of the proceeds, after deducting certain expenses, costs, and charges, were to be retained for the United States and three-fourths paid to Maddox and his associates.

It was expressly provided in said contract as follows:

Nothing in this contract contained shall be construed as incurring any liability on behalf of the United States.

It appears that Maddox, very soon after the contract was made, acquired all the interest of his associates therein.

The president of the United States signed an order or permit for the transportation of the goods, in fulfillment of the contract, and for the passage of the parties selling such goods through the Federal military lines, the permit declaring, however, that such transportation and passage should be "with strict compliance with the regulations of the Secretary of the Treasury, and for the fulfillment of said contract with the agent of the Government."

Maddox and his associates were not at the time the contract was entered into the owners of any of the property they agreed to sell and deliver; but it is alleged that Maddox, as one of the parties to the contract and as assignee of his co-contractors, purchased 4,042 boxes of tobacco, worth at that time more than $735,000, for the purpose of fulfilling this contract.

The tobacco was purchased by him within the rebel lines in the State of Virginia. A part of it, he charges, was forcibly taken by the military forces of the Government and converted to its use or destroyed while being transported to its destination, and the remainder of it, having been detained in storage at Richmond, Va., was afterwards appropriated to the use of the United States or was destroyed in the fires at Richmond upon the capture of the city by the United States forces in 1865.

An action predicated upon the contract with Risley was brought by Maddox in the Court of Claims to recover the value of this property, but it was held by the court that the contract was void.

On appeal to the Supreme Court of the United States the decision of the Court of Claims was affirmed, upon the ground, as had been previously decided by said court, that under the law, the Treasury regulations, and the Executive orders concerning the purchase of products of insurrectionary States a purchasing agent of the Government had no authority to negotiate with anyone in relation to the purchase of such products unless at the time of the negotiation the party either owned or controlled them; that neither the law nor the regulations for its execution protected a speculation wherein the products to be sold were to be procured by the contractor within the rebel lines after the contract was made; that private citizens were prohibited from trading at all in the insurrectionary districts, and that the object of the law and the regulations to carry it into effect was to encourage the insurgents themselves to bring their products to agents of the Government.

With this adverse decision all chance of recovery upon legal grounds or before the courts was dissipated. But recourse to Congress still remained. As appears from a memorandum furnished in support of this bill, the alleged equities of the case were presented to the Forty-second, the Forty-third, the Forty-fourth, the Forty-fifth, the Forty-sixth, the Forty-eighth, and the Forty-ninth Congresses. Two adverse and more than two favorable committee reports have been made upon the claim. No bill for the relief of the claimant has, however, passed Congress until the present session, when a favorable condition seems to have presented itself.

The bill herewith returned empowers and directs the accounting officers of the Treasury to settle and pay to the representatives of Maddox the amount found due him on account of the loss and damage he sustained by the seizure by our military forces of the tobacco purchased by him under the agreement referred to, excluding, however, the tobacco destroyed by fire in the city of Richmond, and provides that said claim shall be determined upon the evidence taken and now on file in the office of the clerk of the United States Court of Claims and the War Department and any other competent evidence.

I fail to appreciate the equities which entitle this claimant to further hearing.

Every intelligent man should be charged with the knowledge that as a general rule commercial intercourse with the enemy is entirely inconsistent with a state of war, and that the law of 1864 had for its object the encouragement of the insurgents themselves to bring their products to us, and not the authorization of persons to roam through the insurrectionary districts and purchase their products on speculation.

Even if the claimant did not understand these conditions, he certainly knew that his contract was based upon a statute; that the agent with whom he was contracting was a creature of statute, and that such statute and certain regulations of the Secretary of the Treasury made thereunder regulated the right and limited the action of all the parties to said contract. These things sufficiently appear from the very terms of the contract and the permit signed by the President. The privileges and liberties contained in this permit are expressly granted "with strict compliance with regulations of the Secretary of the Treasury."

If before or after entering into this contract the claimant had examined these regulations, he would have found that they provided that "commercial intercourse with localities beyond the lines of actual military occupation by the United States forces is absolutely prohibited." He would have also found that such regulations expressly provided that the power of the agent of the Government to make contracts should be founded upon the statement that the contractor then owned or controlled the products for which he contracted. And yet the permit of the President, which so completely put the claimant upon inquiry as to what he might or might not do, seems now to be relied upon as the source of equities in his favor, and is pressed into his service under the guise of a sanction of his unlawful proceedings.

Besides the general knowledge the claimant should have possessed of the commercial disabilities consequent upon a state of war, and the information afforded him by his contract and permit, a proclamation of the president publicly issued September 24, 1864, furnished abundant notice of the kind of trading which would be permitted.

The property for which compensation is asked constitutes a part only of that agreed to be furnished. None of it ever reached the possession of the agent of the Government, but, as I understand the case, was at the time of its seizure or destruction still in the territory of the enemy and in rebellious possession. If in the circumstances detailed it was treated by our military forces in like manner as other property in the same situation, there would seem to be no hardship in holding that the contractor assumed this risk as one arising from his unauthorized and, if successful, his profitable venture.

Not being satisfied that there are any especial equities which entitle this claim to more consideration than many others where equities might be claimed in behalf of those who long ago violated our nonintercourse laws, I am unwilling to sanction a precedent which if followed might substantially work a repeal of these laws, regarded necessary and expedient by those charged with legislation during the War of the Rebellion, and who had in full view all the necessities of that period.

GROVER CLEVELAND

Grover Cleveland, Veto Message Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/205300

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