New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-03-04

lure. is generally recognized It has been urged upon
The attention fCongress by The Secretary Q,
ury and In nv last annual message. III successfully
accom- psbed IL will secure large decrease 10 tne an
nual interest payment Of the Natop ana eainestiy
for this purpose lie adopted before the pres
emit Congress adj0urns. Whie In my oplhleeu a., !.
would be wise to authorize the secretary Oh eGo
fTre asurv IN bis discretion to offer 70 the puDnc
bonds bearing 3io per cent interest ID ald Of reIuu
inc. should not deem it my duty to interpose my
constitutiooal objection to the passage o. the pres
ent BILL If it did not contain IN its fifth sectloh
provisions which, in my Judgment seriously Impair
the value and tend to the destruction "f the PRS
ent National bank ing system OF the country: Inio
system has now been IN operation almost twenty
years. No safer nor more beneficial banking NsVon,
was ever established. Its advantages az ouseess
free TO all who have the necessary capital IL lu!
nishes currency ~ the public. which for cohVeni-
ence and the security of the bilihoder naS prop
ably never been equalled ov tnat OF any t d.mns;t
with the Government of the iDterest-bearng Donns
of the United States. The section OF the pm De-
tenn and to which objection is made, ID not an essen
tial part Of a refunding measure. 1t is as follows:
SECTION 5. From aud after the 1st day Of July ISL
ton Of this shall BIZ thr only bonds recss
and prompt payment Of the pubic money deposited ed
with c0 esn gu, sa ns Ur
drmptiOn bv the 5, ctetary or The Iroasun to
reb TO- snSSt@ oner Issues Of the bonds the United
States In lieu thereof provided thai no oonn un o
nana' as senrlfv for circulation or for saek epng
OF the public money and III case bonds 80 Heos.ru
sha NOT be Withdrawn provided 10y law
within thirty days interest has ceased thereon .e
banking association drIoslng tne same sa ~ , oo
to GO ns prSVaed aS or 9s4 Revised
s fsat EI ,at Of r act Of jun co. 1s
act fixing the amount Of United Safes nJes providing
Tor otter b. Ind The same hereby repealed
and Sections 5i59 5I6O OF the Revised Statutes be
and the hereby reenacitd.
IIndar this aactiOn obvious that no
banks will hereafter be organized. except, POSSIBLY
in few cities or localities where the prevahng
rates of interest In ordinary business are extremely
low No new banks can be organized, and no ~
crease OF the capital of existing banks can oe Oh
tanned, except by the purchase ana deposit OF ,nfes
can be used tor the purpose The VI ;OOO, 0UOoOo
of other bonds recently issued by The United States
and bearing higher rate of interest than three per
cent and therefore q better security for the bill
holder cannot after the LIST of July next DO received
as security for bank circulation. Tins is radical
change in the banking law. II takes ON the banks
the right they have hitherto lad under the law 10
purchase and deposit security for their circulation
y Of s sns O Sepsves the bhSdS
the best security which the banks are
able to give by requiring them TO deposit bonds
having the least value of any bonds issued by the
Government. Tue average rate of taxation OF cap
ital employed in banking Is more than double the
rate of taxation upon capital emploved IN o1her
legitimate business Under these circumstances, to
amend the Banking law 80 as to deprive the banks
of the advantage of securing their n0ies Dy the
most valuable DOnOS leSueu ny inc Oofoinncht'
will. it Is believed. large part OF the country,
be practical prohibition of the organizing OF new
banks and prevent the existing banks from enlarg-
Ing their capital. .,
The National banking system, If continued at all.
will be q monopoly IN the hands OF those already
engaged in it, who may purchase purchase, 0overnment
Interest the three cent bond prior to next
July. To prevent the further organization OF banKs
Is to put IN jeopardy the whole system by taking
from il that feature that makes IT, as II now 49,
banking system Tree upon the same terms to all who
be in danger of being driven from business by the
additional disadvantages to which they Will he sub
jected by this bill. In short cannot but regard
the It'll section of the ball step IN the direction
of the destruction of the National banking system
Our country, after long period OF business depes
sion, has Just entered upon career Of unexampled
prosperity. Withdrawal of the currency from cir |
cuatOn by the National banks and the enforced |
winding up OF the banks in consequence, would IN
evitaby bring serious ADVERTISEMENTS ana disaster
to the business OF the country. Banks OF issue are
essential instruments of modern commerce..
If the present efficient and admirable system OF |
banking is broken down. 1t Will inevitably DC fol-
lowed by recurrence to other aud inferior methods
of banking. Any measure looking 10 such result |
will be disturbing element In our financial system |
Ii will destroy confidence and surely check the
growing prosperity of the country. Believing that
a measure for refundlng the National DEBT Is not
necessarily connected with tue National banking
law, and that any retunding act Will defeat lis
own object If it imperIlled tue National banking
system or seriously impaired lis usefulness and con-
ylDced that section of the bill before would II
IT should become law. work great barn. mere |
with return the bill TO the House OF Representatives,
for that further consideration which Is proXineu lor
In the Constitution. RUIHtRFORD Is. HAYES.
kJecnare Mansion March 8, 1881.
MEN STILL on THE TRICK,