Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1881-03-30
The National Banks,

Jne state is equally clear.
The National Banks.
In the United States senate, Senator
Voorhees, has presented the following reso-
luton in. relation to the late action of few
national banks in view OF the possible en-
actment of democratic measure for refund
ing the maturing government bonds
ResolUed, That the hostile attitude assumed by
the national banks toward the refunding of the
national debt at low rate Of interest and the re-
cent attempt to dictate the legislation of congress
on that subject are contrary to the best interests
OF the people, and well calculated to excite their
alarm for the future.
The resolution may be accepted as an in
dication of democratic hostility to the ma.
tional banks and as sample of democratic
candor In stating an issue; but as state
ment of facts, it is entitled to the generous
measure of deduction which must invariably
be made for democratic statement where
politics has the slightest bearing. In COM
mon with some of the best and most reliable
as well as non-partisan democrats, like SEN
ator Bayard, many republicans believed it a
hazardous experiment to attempt to place
three per cent loan, and since it was morally
certain that three and one-half per cent bond
would be readily taken, they were unwilling
to risk the injurious consequences that might
follow the failure of three per cent loan.
Their apprehensions were verified and their
objections strengthened by tho fact that the
advocates of three per cent, before the final
passage of the bill, had found it necessary
to consider supplemental measure to re-
lieve the banks of the government tax on
their deposits as an inducement to take the
proposed loan. Still many republicans were
in favor of a three per cent rate, provided
the time for payment of the bonds would be
placed sufficiently far into the future to
make the permanency of the loan fair off
setting advantage against the low rate of in
terest. On the sole question of the rate of
interest the refunding bill would not have
encountered the fatal opposition either OF
the banks or of the republican party. This
fact was clearly and decisively developed by
the discussions in congress, by the press,
and by President Hayes veto message.
The "hostile attitude assumed by the
national banks was towards the fifth Sec
ton of the refunding bill, which made it a
measure OF force against the banks, radically
and injuriously changing the provisions of
the law under which they had been induced
to deposit their bonds in the hands of the
government. 1t took from the banks the
right to purchase and deposit as security for
their circulation any of the bonds issued by
the United States, and deprived the bill
holder of the best security the banks are
able to give by requiring them to deposit
bonds having the least value OF any federal
bonds in the market 1t repealed the pro-
visions under which bank desiring to
hquidate its affairs could deposit legal
money in return for the surrender of its
bonds, making it possible for the banks to
recover possession of their securities only
by the slow process of gathering in their
own notes from the four corners of creation,
whittier the meritorious features of the sys
TEN had suffered them to stray, and present
ing them for cancellation. A provision in a
refunding bill limiting the exercise of the
right of free suffrage could hardly have been
more out of harmony with the spirit of our
free institutions than the provisions of sec
ton five relating to the national banks. 1t
was an attempt to force the banks, under
penalty of forfeiture if they resisted, of
rights and privileges solemnly guaranteed
them in their compact with the government.
1t is no stretch of language to call it a
Bourbon measure, for such means of forcing
loan were resorted TO and rendered nfa-
nous by the old absolute monarchies of the
Bourbon type centuries ago. In resenting
this proposed breach of plghted faith the
banks did precisely what any private or
corporate interest would and should do
under similar circumstances The rate of
interest which the bill proposed TO fix for
the new securities had nothing whatever to
do with the action of the banks. Had the
bill omitted section five, which was wholly
foreign to the subject of refunding-a rider
in fact, to accomplish an Interior and sinister
purpose,-it would have become a law, the
action by the banks, condemned in the
Voorhees, resolution, would never have been
taken, and hardly a ripple would have been
made upon the face of the financial stream
Now if this experience has developed, as
is claimed by the enemies of the banks,
weak spot in our financial system; il it has
shown that the banks or a combination of
banks have it in their power to control and
dominate the financial, and consequently
every other, interest in the nation,--let that
fact be made the subject OF investigation
and OF restrictive legislation Every mate
rial interest in the nation should not exist or
flourish by the sufferance of few moneyed
institutions. There is no evidence that such
is the fact, but critical examination of the
subject can do no harm, and legislation If
any is had or undertaken, should proceed
directly on the main issue and not as side
show TO refunding measure, nor still less
on false charge OF hostility to refunding
the national debt at low rate of interest.