The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1881-03-11
H. ra.1i.s BIN vstsel
WAsn1rorox, D. C., March q

he Fanling BIN vefsel
WASHINGTON, D. c., Marcha
THE following is the message Of Pres
ident Hayes, vetoing the Funding bill:
To the Heuse Of Representatives:
Having considered the bill entitled IAN cot
10 facilitate the fundin3of tho National debt"
fam constrained to return It to the House Of
Representatives, In which 1t originated, with
the following statement Of my objections -
its passage: The imperative necessity for
prompt action, and the pressure Of public
duties In this, the closing week Of my torn OF
Office. compel me to refrain from any attempt
to make'any fuzzy satisfactory presentation OF
my objections to the bill. The importance Of
the passage at the present session Of Con-
gress Of q suitable measure for refunding the
National debt which is about to mature II
generally recognized. It has been urged upon
the attention OF Congress by the Secretary Of
the Treasury, and In my last annual message.
II successfully accomplished, it will secure Q
large decrease in the annual interest payments
Of the Nation, and earnestly recommend that
II the bill before me shall fail, another
measure for this purpose be adopted before
the present Congress adjourns. While, in my
opinion, it would be wise to authorize the
Secretary Of tho Treasury, in his discretion, to
Offer to the public bonds bearing 81 per cent.
interest in aid Of refundin9, I should not
deem it my duty to interpose my Constitu-
tional objection to the passage of the present
bill II It did not contain in its NTH SEQ
ton provisions which, I'm my judgment,
seriously impair the value and tend to the do
struction Of the present National Banking
system of the country. This system has now
BEEN in operation almost twenty years. No
safer nor more beneficial banking system was
ever established. Its advantages as q business
are free to all who have the necessary capital
1t furnishes q currency to the public which,
for convenience and security Of the bill
holder. has probably never been equaled BY
that of any other banking system.i Its notes
are secured by deposit with the Government
Of fnterest-bearing bonds of the United
States. The section of the bill before me which
relates to the National Ranking system, and
to which objection is made, is not an essential
part of refunding measure. 1t is as follows:
."SEcTION 5. From and after the first day
Of July, 1881, the three-percent. bonds an
thorized by the first section of this act
shall be tho only bonds receivable as security
for National Bank circulation, or as 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: pr0rded, 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,.s34 of
the Revised Statutes of the United States; and
provided further, that Section of the'act Of
June 20, 1874, entitled AN act fixing the
amount Of United States notes and providing
for the redistribution of National Bank cur
rency and for other purposes be and the
same is hereby repealed, and Sections j, l59 and
8, 100 of the Revised Statutes be and the same
are hereby re-enacted.'' l'l
Under this section it Is obvious that no addf
tional banks will hereafter be organized, ex-
cept possibly 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 the capt.
tai of existing banks can be obtained, 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 higher rate of in
terest than three per cent, and, therefore,
better security for the billholder, cannot,
after the LIST of July next, be received as secu-
ifvyf hon mir Afi T11iu
change in the Banking law. 1t takes from the
banks the right they have heretofore had I'M
der the law topurchase and deposit as securi-
ty for their circulation any of the bonds issued
by the United States, and deprives the bill
holder of the best security which the banks are
able to give. BY requiring them to deposit
bonds having the least value of any bonds
issued by the Government. The average
rate of taxation of capital employed in bank
ing is more than double the rate of taxation
upon capital employed in other legitimate
Under these circumstances, to
amend the Banking law 50 Us to deprive tho
banks of tho advantage of securing their notes
by the most valuable bonds issued by the
Government will, it is believed. in q large
part of the country Re a practical prohibition
# the organizing of new banks, and prevent
existing banks from charging their capital.
Inc NatOudi DauhiHg system, III con.
nued at all. will be monopoly
n the hands of those already engaged
n it, who may purchase Government
ponds bearing more favo able interest than
he three-per-cent. bonds, prior to next July.
10 prevent the further organization Of banks
s to put in jeopardy the whole system by tax
ng from il that feature that makes it, as il now
s, 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
lriven from business by the additional disad-
7antages to which they viii be subjected by
his bill.
In short, / cannot but regard the fifth sec
ion Of the bill as 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
,pon career of unexampied prosperity.
The withdrawal Of CURRENCY from circulation