American citizen. [volume] (Canton, Miss.) 1864-1890, 1881-03-12
The Funding Bill Vetoed.
WAsHINGToN, ID. c.,

HE IOllOWlnp is the message OF fr0S-
ident Hayes, vetoiDg the Funding bill:
To the House of Representatives.:
Having considered the bill entitled IAN act
to facilitate the funding of the National debt"
lam constrained to return 1t to the House of
Representatives, in which it originated with
the following statement of my 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
ONCE compel me to refrain from any attempt
TO make any fully satisfactory presentation of
my objections to the bill. The importance of
the passage at the present session of Con-
gross of a suitable measure for refundine the
National 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.
IL successfully accomplished, it will secure a
large decrease in the annual interest pay ments
Cl the Nation, and earnestly recommend that
II the Dill before me shall fail, another
measure for this purpose be adopted before
the present Congress adjourns. While. in my
opinion, 1t would be wise to authorize the
Secretary Of the Treasury. in his discretion, to
o1er to the public bonds bearing 81 per cent
interest in aid Of refunding, I should not
deem it my duty to interpose my Constitu-
tional objection to the passage of the present
Dill If it did not contain in its fifth sec
ton provisions which, in my Judgment
struction OF the present National Banking
system OF The country. This system has now
IN In operation almost twenty years. No
s.sIer nor more beneficial tanking system was
ever established. Its advantages as a business
arc free to all who have the necessary capital.
1t furnishes u currency to the public which,
Tor convenience and security of the bill
holder. has probably never been eaualed by
that of any other banking system. Its notes
are secured by deposit with the Government
of Understanding 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 a refunding measure. 1t is as follows:
"SECTIoN s. From and after the first day
of July, 1881, the three-per-cent. bonds au-
thorized by the first section of this act
shall be the only bonds receivable as security
for National Bank circulation, or security
for the safe keeping and prompt payment of
the public money deposited with such banks,
but when any such bonds, deposited for the
purpose aforesaid, shall be designated for
purchase or redemption by the Secretary OF
the Treasury, the banking association de-
posting the same shall have the right to sub
stitute other issues of the bonds of the
United States in lieu thereof; prouided, that no
bond upon which interest has ceased shall
be accepted or continued on deposit as secu-
rity for circulation or for the safe keeping OF
the public money. and in case the
bonds SO deposited shall not be Withdrawn, as
provided by law, within thirty days after inter
est has ceased thereon, the banking associa-
ton depositing the same shall be subject to
liabilities and proceedings on the part of the
Comptroller provided for in Section 5,234 of
the Revised Statutes of the United States; and
provided further, that Section of the act of
June 90 1874, entitled An net fixing the
amount of United States notes and providing
for the redistribution of National Bank cur.
rcncy and for other purposes be and the
same is hereby repealed, and Sections 8, 1853 and
5,16o of the Rcvi ed Statutes be and the same
are hereby re-enacted."
Under this section 1t is obvious that no add.
tiOnal banks will hereafter be organized, ex-
ccpt possibly in few cities or localities where
the prevailing rat of interest in ordinary
business are extremely low. No new banks
can be organized, and no increase of the CAPT
tai of exist lg banks can be obtained, except
by the purchase and deposit of three per cent.
bonds. No other bonds Off the United States can
be used for that purpose. The one thousand
millions of other bonds recently issued by tn
United States, and bearing higher rate Of III
terest than three per cent, and, therefore,
better security for the bfll-holder, cannot,
after the LIST of July next, be received as secu-
rity for bank circulation. This is a radical
change in the Banking law. 1t takes from the
hanks the right they have heretofore had I'M
der the law topurchase and deposit as securi-
Nv tho Trnitod Stote. ord danri,-os tho nil
ho,aar - az h.st .ao,,r;,,, ,~tin,, ~ ha.h..
- .. -. - r,,-.,,;.,,. e., - a.-.-,.
100. ha,7;r. .hn Loot yaI,,o - 49,, hr,d.
issued nv the Government The aver.ge
rate ~ tsration of cantoI emn,ovod In bonL-
inu ia more than double tho rate of ta,atio,
upon capital employed in other legitimate .
business. Under these circumstances, to
amend the Banking law SO as to deprive the
hanks of the advantage of securir q their notes
hv the most valuable bonds fss,ed nv tho
Gove-nment will. IT ia believed. in n large
part of the country q a practical probibItion
Of the organizing of new banks. and prevent
rxistino hanks from enIaryinp their captt.l
The National Banking system. If con-
tipued Mt all. will he mononoIv
in the hands Of those already enrsvc1
in II who NAV purebase Goverrment
bonds hearing a more favorable ;ntere.t than
he tbrec-ner-ccnt bonds p-ior 70 ncxt J,,Iv
70 prevent the further organization of hanks
IS to nut in jeopardy the whole system by TAX
nR from il that feature that makes it, as IL now
is. a banking system free. upon the same
erms. to all who wish to engage in IT. Even
he existing banks will be in danger OF being
driven from business by the additional disad-
ysntaRes to which they will be subjected by
his bill.
ion of the bill as a step in the direction of
he destruction of the National Banking sys-
EN- Of our country. which, after long Pc
'iod of business depression, has just entered
lpon career OF unexampied prosperity.
me withdrawal or currency from circulation
y tno N~i % LAM s,Ana tne eniorceu VINO.
.s, ~ =, prtna " e.,n,.s quen.u, weunu
o.4. ~, ,;sa..a 80 h,,.,,,.. 20 ~
a-. 30. 80 TO-, ~, n.sn...,s, -
sa ss.- Ie ...