New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-02-21
,yJ11 THE FUNDING BILL BE VEToED'


WILL THE FUNDING BILL BE VETOEDT
More than one-eighth of the entire circula-
ton of banks of this city was surrendered
within twenty -four hours after the Senate
passed the Three Per Cent bill. 1t is supposed
that some other banks will retire circula-
ton TODAY. The amount will not be very
large. in any case, for the entire clrcula-
ton of the banks of this city is only
SIS, 100000; the portion based upon
five and six per cent bonds is compare
lively small; and some of the banks whlch
hold such bonds will prefer to keep them'
in the belief that they will not be disturbed
because three per cents cannot be sold under
the pending bill But outside OF this city the
disposition to escape the highwayman's clutch
of the pending bill is at least as strong.
Representative Clahn, of Massachusetts,,
thinks that the amount of circulation
surrendered will be about half the
amount covered by redeemable bonds
and the amount so covered Is now
1915, OOO,O 900. Yet lie seems to think that a
violent contraction of $100,000O0O in
single week, though it might produce some
thing of a commercial panic" would not be
reason for veto of the bill, and. with
Secretary Sherman, "cannOt see any grounds
"upon which the President could base
"vetop 1t did not take President Grant long
to find reasons for vetoing bill less danger
Gus. Nor is the country inclined to believe
that President Hayes is more ready than
General Grant would be to put his name to a
bill involving great injustice, fragrant bad
faith and the possibility of serious COM
mercial disaster.
The fifth section of the bill seeks to rob the
banks of part of the value of their bonds,
which they have intrusted to the Treasurer
under the provisions of the act of 1874, by
deriving them of the power to get back those
bonds for years. 1t is as if TRUST company,
having received the funds of thousands OF de-
pOsitors under rules mutually acceptable,
should suddenly inform its creditors that it
would not deliver up their property until they
had complied with few conditions which
it would take years to perform. The
President would call that robbery In
n cOrporatiOn; what else would 1t De
in the Government, if perpetrated by his sig
nature of the pending bill2 Nor can there be
higher or better ground for refusing TO APP
nrove bill than the fact that 1t IS already
causing general alarm, and may produce a
u,idesnread industrial and commercial disaster.
If that is not reason enough for veto, the veto
NJ the imitation bill, which Senator Sherman
onnroved. was utterly reasonable. Whether
tho three ner cent bonds can be sold or not is in
deed n matter about which honest differences
of opinion can exist But the fifth section,
intention lily so framed as to take effect
before the banks generally could protect them
/ I'D Iooirp fo lnalr nm md
| virtually confiscate their bonds without giving
the banks opportunity to draw them out In
accordance with the stipulations of laws ex-
listing when they were deposited, is both dis
honest and dangerous. No Republican Presi'
| dent ought ever to give vitality and force 10y
his signature to bill embracing such pro-
vision.
On Saturday afternoon, it was the prevail
ing opinion that all danger and difficulty
would be removed by the passage of tho
bill reported that day, which removes the tax
on deposits. Undoubtedly, the situation would
be greatly improved if that measure should
pass The tax on deposits yielded 81, 438, 1874 sc
last year-almost Iii per cent on the entire
amount Of bonds held for circulation. In tho
aggregate, were it not for the provision tC
prevent expansion OF contraction of circula
ton according to the varying needs of bust
ness, the banks could better afford to hold
three per cent bonds for circulation, if relieved
from this tax on deposits, than they can now
| to hold four per cent bonds and to pay the tax
But, unhappily. the tax does not fall where
the circulation is greatest. Its removal would
| give no help of consequence to many banks
which will be compelled to surrender circu
lation if the Funding bill becomes
q law, while it would be exceed
ingly beneficial to other banks in this
city and other commercial centres, which have
| little or no circulation. Still the general re.
suit would be so good that if this tax should
be removed refundmg ut s per cent might be
made O success. There would still be gros.
dishonesty and injustice IN the treatment Of
some of the banks But it might be fairly
claimed that in the aggregate they had been
compensated for the rights Of which the Fund
| ing bill had deprived them. This abatemen
| of taRation was proposed by Secretary Sher'
man, and is now proposed by thu
same Democratic committee which framed
the Funding bill. Many who favored
| that bill will urge the removal of this wal
tax, not only as measure just and wise IL
| itself, but as q sort of escape-pipe, which ha
now become absolutely necessary to proven