Press and daily Dakotaian. (Yankton, Dakota Territory [S.D.]) 1880-1889, 1881-03-03
Veto of tho Refundine Bill

It is my duty to interpose my consti.
tutional objection to the passage of the
present bill, if it did not contain in its
fifth section, q provision which in my
judgement would seriously impair the
value and tend to distroy the present
national banking system of the country.
If successfully accomplished it will Sc
cure large decrease in the annual in
terest payment of the nation, and it is
earnestly recommended that if the bill
shall fail. that another measure for the
purpose be adopted before the present
congress adjourns,. while in my opin-
ion it would be wise to authorize the
secretary of the treasury in his descfe
ton to offer to the public bonds bearing
SH per cent interest in aid of refunding.
This system has now been in operation
almost 20 years. No safer or more bene-
fetal banking system could be establish
ed. It's advantages as business are free
to all who have the necessary capital. 1t
furnishes currency to the public, which
TOR convenience and security of bill hol-
ders, has probably never been equalled
by that or any other banking system. Its
notes are secured by deposit with the
United States government of interest
bearing bonds Of the United States. The
section of the bill which reaches to the ma
ional banking system, and to which OBJ
jection is made is not an essential part
Of refunding measure. Fifth section
Of the funding bill already published.
Under this section it is obvious that
no additional banks will hereafter be Or
ganized, except, possibly. in a few cities
or localities where the present rates of in.
terest in ordinary business are extremely
low. New banks can be organized and
no increase of capital Of existing banks
can be obtained except by purchase and
deposit of three per cent bonds. No
other bonds of the United States can be
used for the purpose. The one thousand
million of other bonds recently issued
by the United States, and bearing high
er rate of interest than three per cont,
and therefore better security for the
bill holder cannot under this act be re.
ceived as security for bank circulation.
This is q notable change IN the bank
ing law as it takes from banks the right
they have heretofore had under the law
to purchase and deposit as security for
circulating any bonds issued by the Uni
ted States and deprives the bill holder
of the best security which banks are able
to give by requiring them to deposit
bonds receiving the least value of any
bonds issued by tho government.
The average rate of taxation Of capi.
tai imposed on banking is more than
double tho rate OF taxation upon the
capital employed in other legitimate bus.
iness. Under these circumstances, to
amend the banking law 30 as to deprive
banks OF the advantage Of securing Their
notes by the most valuable bonds issued
by the government, will. it is believed, ir
large part of the country, be practical
in prohibiting. in part. Of organizing
new banks and the present existing banks
from enlarRing their capital. The ma
tional banking system, il continued
at all, will. be . monopoly in th,
hands of those already engaged. It alst
may purchase government bearing bondl
at . more favorable rate Of interest thar
the three per cent. bonds prior to nex
July; to prevent the further orgsnizatio,
of banks, is put in to jeopardize th,
whole system by taking from j
that feature that makes, as j
now is, . banking /. system fire.
TO all who wish to engage in it. and eve1
existing banks will be in danger Of be
ing drawn from the business by the ad
ditional disadvantage to which they viii
be subjected by this bill.