The Cheyenne daily leader. [volume] (Cheyenne, Wyo.) 1870-1884, 1881-03-04
VETO.
esldent Hayes Last Message to
Congress.
He Objects 60 the Fifth section OF the
Refandiag Afiii.
Aad EuIegizes the national Banking

the funding bill:
To the House of Representatives:
Having considered the bill entitled
an act to facilitate the refunding Of the
national debt, l am constrained to re-
turn 1t to the house of representatives,
in which it originated. with the follow
ing objections to its passage:
The imperative necessity for prompt
action and the pressure of public duties,
In this the closing week of my term Of
Office, compels me to refrain from any
attempt to make full and satisfactory
presentation of any objections to the
bill. The Importance Of the passage at
the present session of congress of suit
able measures for refunding the nation
al debt which is about to mature, is
generally recognized. 1t has been
urged upon the attention of congress
by the secretary Of the treasury. and in
my last annual message, If such
refunding bill is fully accomplished. it
will secure q large decrease in the an
nual interest payment of the nation,
and / earnestly recommend, If the bill
before you shall fail, that another meas
ure for this purpose be adopted before
the present congress adjourns. While,
In my opinion, it would be wise to
authorize the secretary of the treasury,
In his discretion, to offer to the public,
bonds bearing 81 per cent. interest, in
aid OF refunding, should not deem 1t
my duty 10 interpose my constitutional
objection to the passage of the pres ent
bill, II 1t did not contain in its fifth
section provisions which, in my judg-
ment. seriously impair the value and
tend to the destruction Of the present
national banking system Of the coun-
try. This system has now been in op
Grafton almost twenty years, and no
safer nor more beneficial banking sys-
tenn was ever established. Its advan-
tages as business are free te all who
have the necessary capital. 1t furnished
currency to the public which, for con-
venience and security of the bill holder
has probably never been equalled by
that Of any other banking system. Its
notes are secured by deposits with the
government, of interest bearing bonds
of the United States. The section of
the bill before me which relates to the
national banking system, and to which
objection is made, is not an essential
part Of q refunding measure.
Under this section it is obvious that
no additional banks will hereafter be
organized, except, possibly, in few
cities or localities where the prevail
ing rates Of interest in ordinary bust
ness are extremely low. No new banks
can be organized and no increase of. the
capital of existing banks can be OBJ
tained, except by the purchase and de-
posit Of three per cent. bonds. No
other bonds.of the United States can
be used for the purpose. The one
thousand millions of other bonds re-
Gently issued by the United States and
bearing a higher rate of interest than
three per cent, and therefore better se-
curity IN the bill holder, cannot, after
.de 1st Of July next, be received as Sc
curity for bank circulation.
This is radical change in banking.
1t takes from the banks the right they
have heretofore had under law to pur-
chase and deposit as security for their
circulation any Of the bonds issued by
the United States, and deprives the
bill holder Of the best security which
banks are able to give, by requiring
them to deposit bonds having the least
value Of any bonds issued by the gov
ernment.
The average rate of taxation of the
capital employed in banking is more
than double the rate of taxation upon
the capital employed in any other legit-
innate business. Under these circum-
stances, to amend the banking law so
as to deprive the banks of the advant-
ange Of securing their notes by the
most valuable bonds issued by the gov
ernment, will, it is believed. in large
part Of the country, be the practical
prohibition Of organizing new banks,
and prevent the existing banks from
enlarging their capital.
The national banking system, if
continued, at all, will be monopoly
in the hands of those already engaged
in it, who may purchase the govern
ment bonds bearing a more favorable
rate Of interest than the three per cent.
bonds proper to next July. To prevent
hrther organization of banks, is to put
IN Jeopardy the whole system by taking
J from it that feature that makes, as it
now IL a banking system free upon the
same terms to all who wish to engage
in it. Even the existing banks will be
in danger Of being driven from busi-
ness by the additional disadvantages to
which they will be subjected by this
bill.
In short, l cannot but regard the fifth
section Of the bill as step in the direc-
ton Of the destruction of the nations
banking system. Our country, after
long period of business, has just en-
tsred upon career of unexampled
prosperity. The withdrawal Of the cur
rency from circulation by the national
banks, aud the enforced winding up Of
the banks in consequence, would iney,
itably bring serious endorsements
and disaster to the busineae OF the
n