To the House of Representatives of the United States:
I return with my objections to the House, in which it originated. the bill entitled "An act for the relief of Hockaday & Leggit," presented to me on the 15th instant.
This bill appropriates $59,576 "to Hockaday & Leggit, in full payment for damages sustained by them in reduction of pay for carrying the mails on route No. 8911; and that said amount be paid to William Leggit for and on account of Hockaday & Leggit, and for their benefit."
A bill containing the same language, with the single exception that the sum appropriated therein was $40,000 instead of $59,576 passed both Houses of Congress at their last session but it was presented to me at so late a period of the session that I could not examine its merits before the time fixed for the adjournment, and it therefore, under the Constitution, failed to become a law. The increase of the sum appropriated in the present bill over that in the bill of the last session, being within a fraction of $20,000, has induced me to examine the question with some attention, and I find that the bill involves an important principle, which if established by Congress may take large sums out of the Treasury.
It appears that on the 1st day of April, 1858, John M. Hockaday entered into a contract with the Postmaster-General for transporting the mail on route No. 8911, from St. Joseph, Mo., by Fort Kearney, Nebraska Territory, and Fort Leavenworth, to Salt Lake City, for the sum of $190,000 per annum for a weekly service. The service was to commence on the 1st day of May, 1858, and to terminate on the 30th November, 1860. By this contract the Postmaster-General reserved to himself the right "to reduce the service to semimonthly whenever the necessities of the public and the condition of affairs in the Territory of Utah may not require it more frequently." And again:
That the Postmaster-General may discontinue or curtail the service, in whole or in part, in order to place on the route a greater degree of service, or whenever the public interests require such discontinuance for any other cause, he allowing one month's extra pay on the amount of service dispensed with.
On the 11th April, 1859, the Postmaster-General curtailed the service, which he had a clear right to do under the contract, to semimonthly, with an annual deduction of $65,000, leaving the compensation $125,000 for twenty-four trips per year instead of $190,000 for fifty-two trips. This curtailment was not to take effect till the 1st of July, 1859.
At the time the contract was made it was expected that the army in Utah might be engaged in active operations, and hence the necessity of frequent communications between the War Department and that Territory. The reservation of the power to curtail the service to semimonthly trips itself proves that the parties had in view the contingency of such curtailment "whenever the necessities of the public and the condition of affairs in the Territory of Utah may not require it more frequently."
Before the Postmaster-General ordered this curtailment he had an interview with the Secretary of War upon the subject, in the course of which the Secretary agreed that a weekly mail to St. Joseph and Salt Lake City was no longer needed for the purposes of the Government--this, evidently, because the trouble in Utah had ended.
Mr. Hockaday faithfully complied with his contract, and the full compensation was paid, at the rate of $190,000 per annum, up to the 1st July, 1859, and "one month's extra pay on the amount of service dispensed with," according to the contract.
Previous to that date, as has been already stated, on the 14th of April, 1859, the Postmaster-General curtailed the service to twice per month, and on the 11th May, 1859, Messrs. Hockaday & Co. assigned the contract to Jones, Russell & Co. for a bonus of $50,000. Their property connected with the route was to be appraised, which was effected, and they received on this account about $94,000, making the whole amount about $144,000.
There is no doubt that the contractors have sustained considerable loss in the whole transaction. The amount I shall not pretend to decide, whether $40,000 or $59,576, or any other sum.
It will be for Congress to consider whether the precedent established by this bill will not in effect annul all restrictions contained in the mail contracts enabling the Postmaster-General to reduce or curtail the postal service according to the public exigencies as they may arise. I have no other solicitude upon the subject. I am informed that there are many cases in the Post-Office Department depending upon the same principle.
James Buchanan, Veto Message Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/202079