Democratic Northwest. [volume] (Napoleon, Ohio) 1869-1894, 1881-03-10

other purpose, be and the same is here
By repealed and Secs. j.IJ9 aud 5.IGO re-
vised statutes. be and the same are here
by re-enacted.
UNDER THIS SECTION
it is obvious that no additional banks
will hereafter be organized. except possi-
bly, in few cities or localities where the
prevailing rates Of interest in ordinary
business are extremely low, No new
banks can be organized and no increase
Of capital of existing banks can be OBJ
tanned except by the purchase and deposit
of three per cent. bonds. No other bonds
of the United States can be used for that
purpose. The one thousand millions of
other bonds recently issued by the United
States, and bearing a higher rate of in-
terest than three per cent. and therefore
better security for the bill holder, cannot,
after the first of July next, be received as
security for bank circulation. This is
RADICAL CHANGE
in the banking law. 1t takes from the
banks the rights they have heretoforeIhad
under the law to purchase and deposit as
security for their circulation, any of the
bonds issued by the United States, and
deprives the bill-holder of the best secur-
ity which banks are able to give. by re-
quiring them to deposit bonds having the
least value of any bonds issued by the
Government. The average rate of taxa
ton of capital employed in banking is
more than double the rate of taxation
upon the capital employed in other Iegit-
mate business. Under these circunl-
stances to amend the banking law so as
to deprive the banks of the advantage of
securing their notes by the most valuable
bonds issued by the government, will, it
is believed, in a large part of the country,
be a practical prohibition of the organiz-
ing of new banks, and it will prevent the
existing banks from enlarging their capi-
tai. The National banking system, if
continued at all,
WILL BE a MONOPOLY
in the hands of those already engaged in
it, who may furnish Government bonds
bearing more favorable rate of interest
than three per cent. bonds prior to next
July.
To prevent further organization of
banks is to put in jeopardy the whole
system, by taking from it that feature
that makes, as it now is, a banking sys-
tenn free upon the same terms to all who
wish to engage in it. Even the existing
ban ks will be in danger of being
DRIVEN FROM BUSINESS
by the additional disadvantages to which
they will be subjected by this bill. In
short, cannot but regard the fifth sec
ton Of the bill as a step in the destruc-
ton of the National bank system. Our
country after long period of business
stagnation, has just entered upon career
of unexampled prosperity. The with
drawal of currency from circulation by
the National banks, and the enforced
winding up of banks in consequence,
would inevitably bring serious embarrass-
ments and disaster to. the business of the
country. Banks of issue are the essen
tial Instruments of modern commerce. If
the present efficient and admirable sys-
TEN of banking is broken down it 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 fl
nancial system. 1t will destroy conf
decce and surely check the growing pros
perity of the country. Believing that a
measure for the refunding of the Nation
al debt is not necessarily connected with
the National banking law, and that any
refunding act will defeat its own object
if it imperiled the National banking
system, or seriously impaired its useful,
ness, and convinced that section five of
the bill before me, would, if it should
become law, work a great harm,
herewith return the bill to the House OF
Representatives for their further consid.
Grafton which is provided for in the con.
stitution.
(Signed) RUTHERFORD B. HAYES.