Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1881-03-04
WALL STREET WINS.
THE RECENT FINANCIAL FURRY
BEARS FRUIT.
Fraud Hayes, Who Entered the Pfesiden-
tial Office by Steal, Retires from tho
Office With Perpetrating Theft Upon
the People for the Benefit ofthe National
Banks-veto of the Funding Bill.


Office With Perpetrating Theft Upon
the People for the Benefit ofthe National
Banks-veto of the Funding Bill.
WASHINGTON, March 4.-Following Is the
| message of the President vetoing the funding
bill:
To the House of Representatives; Having
considered the bill entitled An act to facilitate
refunding the national debt, am constrained
to return 1t to the House of Representatives,
in which 1t originated, with the following
statement giving my objections to its passage.
The imperative necessity for prompt action
and the pressure of public duties in this clos
ing week of my term Of Office compels me to
refrain from any attempt to make full
and satisfactory presentation Of my objec-
tions. The importance of the passage at the
present session of Congress Of some suitable
measure for refunding the national debt which
is about to mature is generally recognized. It
has been urged upon the attention Of Congress
BY the secretary of the treasury and in my last
annual message. Hsuccessfully accomplished
it will secure large decrease in the annual In
terest payment of the nation; and I earnestly
QQs
that another measure for this purpose may be
adopted before the present Congress adjourns.
While in my opinion 1t would be wise to au-
thorize the secretary of the treasury, In his
discretion, to offer the public bonds bearing
81 per cent. in aid of refunoing, should not
deem 1t my duty to interpose my constitution
al objection to the passage ofthe present bill
visions, which in my judgment, seriously i'm
pair its value and tend to the destruction of
the present national banking system Of the
country. This system has now been in opera
tion almost twenty years. No safer and no
more beneficial banking system was ever es-
tablished, and its advantages IN business are
free to all who have the necessary capital.
It furnishes currency to the public which
for the convenience and security Of bill holders
has probably never been equaled by any other
banking system. Its notes are secured by de
posits 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 refunding
measure. It is as as follows:
Section 5. From and after the LIST day of July,
1881, the per cent. bonds authorized by the
first section of this act shall be the only bonds
receivable as security for national bank circula-
tion, or as security for the safe keeping and
prompt payment of public money deposited
with such banks, but when any such money
deposited for the purposes aforesaid, shall be
designated for purchase or redemption by the
secretary of the treasury, the banking associa-
tion depositing the same shall have right to
substitute other issues of bonds of the United
States In lieu thereof; provided that no bond
upon which the interest has ceased shall be
accepted or continued on deposit as security
for circulation, or for the safe keeping OF pub
lie money, and in case the bonds so deposited
cbo11 not no will r,rnyidad
thirty days after interest has ceased thereon
the banking association, depository, etc. shall
be subject to the liabilities and proceedings on
the part of the comptroller provided for in sec.
tion 1924 of revised statutes of the United
States. And provided further, that section
of the act of June 20, 1874, entitled IAN act
fixing the amount of United States notes and
providing for the redistribution of national
bank currency and for other purposes" be-,
and the same is hereby repealed, and sections
5,159 and 5,160, revised statutes be, and the
same are hereby re-enacted.
Under this section it is obvious no addition
al banks will hereafter be organized except
possibly in few cities or localities where the
prevailing rate of interest is extremely low.
No new banks can be organized and no in
crease Of capital of existing banks can be OBJ
tanned except by purchase and deposit OF 3 per
cent. bonds. No other bonds of the United
States can be used for this purpose. The one
thousand million of other bonds recently is
sued by the United States and
bearing a higher rate of interest than per
cent, and therefore better security for bill
holders, cannot, after the 1st of July next, be
received as security for bank circulation. This
is radical change in the banking law. 1t
takes from banks the right they have hereto
fore had under the law to purchase and de-
posit as security for their circulation any Of
the bonds issued by the United States.
N n.xff fnv ftAt, Nf fol
ployed in banking is more than double the
rate of taxation upon the capital employed In
other legitimate business. Under these cir
cumstances, to amend the banking law so as
to deprive bankers of tie advantage of secur-
ing their notes by the most valuable bonds
issued by the government, will, it is believed,
in large part of the country, be a practical
vent 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 1t, who may purchase gov
ernment bonds bearing more favorable rate
of interest than per cent. bonds, prior TO
next July. To prevent further organization
of banks, is to put In jeopardy the whole sys-
tenn, by taking from 1T that feature that
makes, as it now is, bank system, free upon
the same terms to all who wish to engage In
it. Even existing banks will be in danger,
being driven from business by additional dis
advantages to which they will
be subjected by this bill.
In short cannot but regard the fifth sec
tion of the bill In the direction of destruction
of the national banking system. Our country,
after long period of business stagnation, has
just entered upon career OF nnexampled
prosperity. The withdrawal of currency from
circulation by national banks and the enforced
winding up Of banks in consequence, would
inevitably bring serious embarrasments and
disaster to the business of the country. Banks
of issue are essential instruments of modern
commerce. If the present efficient and admira-
BILE system of banking is broken down 1t will
inevitably be followed by recurrence
to other and inferior methods
of banking Any measure looking to such
result will be a disturbing element in our
financial system. 1t will destroy confidence,
and surely check the growing prosperity of
the country. Believing that the measure for
refunding the national debt unnecessary con-
nected with the national banking law, and that
any refunding act will defeat its own object
and imperil the national banking system, or
seriously impair its usefulness, and convinced