The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1881-03-10
HAYEs'S LAST.
The Funding Bill Returned to the House with
the PretidentS Objections Instead Of His Sig
nature

the Presidents Objections Instead OF HIS Sig
nature.
WAsHIN GToN, D. c., March 8.-The following Is
the message Vetoing the Funding Bill
To THE HOUSE OF RRPREsRNTATIvRs:-HaVing
considered the bill entitled IAN Act to Facilitate
the Funding Of the National Debt" I am con-
strained TO return II 10 the House Of Representa-.
tives, in which II originated, with the following
statement Of my objections to ib passage: The
imperative necessity for prompt action and pres.
sure OF public duties In this the closing week OF
my term OF once compel me to refrain from any
attempt to make full and satisfactory presenta-
ton OF objections 10 the BILL The importance Of
the passage at the present session Of Congress Of
suitable measure for refundinR the National debt,
which is about To mature, is generally recognized.
1t has been urged upon the attention Of Congress
by the Secretary Of the Treasury and In my last
annual message. II successfully accomplished 1t
will secure large decrease IN the annual Interest
payment Of the Nation, and / earnestly recon-
mend II the bill before me shall fail that another
measure for this purpose be adopted before the
present Cor gress adjourns While In my opinion
1t would be wise TO authorize the Secretary Of the
TIE aiury, in his discretion, to offer to the public
bonds bearing 81 per cent interest in aid Of re-
funding. should not deem ii my duty to inter.
pose my constitutional objection to the passage Of
the present bill If 1t did not contain In Its fifth
section provisians which in my judgment serious.
ly impair the value and tend to the destruction Of
the present National banking system Of the
country. The system has now been In operation
almost 20 years. No safer nor more beneficial
banking system was ever established. It's advan- |
ages as business are free to all who have neees
sary capital II furnishes currency to the public
which for convenience and security Of the bi l. |
holder has probably never been equaled by that |
Of any other banking system It's notes are se' |
cured by deposit with the Government Of interest
bearing bonds of the United States. The section |
Of the bill before me which relates 10 the Nation
al banking system, and 10 which objection is |
made, is not an essential part OF refundiI 6 |
measure II is as follows;
SECTION s. From and after the 1st day OF July. |
1884, tht per cent, bonds, authorized by the artt
section Of this act shall be the only bonds re.
ceiVabe as security for National bank circulation
or as security for safe keeping and promp pay
ment Of public money deposited with such
purposes aforesaid, shall be deposited for pur.
chase or redemption by the Secretary Of the
Treasury, the banking association depOsitiDg the
same shall have the right TO substitute other issues
of bonds OF the United STATES In lieu thereof;
provided, that no bond upon which interest has
ceased shall be accepted OF continued on deposit
as security for circulation or for safe keeping as
public money, land In case bonds 80 deposited
thirty days after interest has ceased thereon the
banking association depositing the same shall be
subject TO liabilities and proceedings on the part
Uf the Comptroller, provided for in section 524
Revised Statutes Of the United States ard, pro-
vided further, that section Of the Act Of June
oath, 1874, entitled An Act fixing the amount OF
United States, providing for redistribution of Ma.
tiOnal bank currency and for other purposes be
and the same il hereby repealed, and section 5159
aud 5160, Revised Statutes, be and the same 10
hereby re enacted"
Under this section II Is obvious that no add.
honal banks will hereafter be organised, except,
possibly, in q few cities where the prevailing
rates OF interest In ordinary business are ex'
tremely low. No new banks can be organized.
and no increase Of capital Of the 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 81 00O,OOOOOO Of other bonds
recently Issued by the United States, and bearing
4 higher rate of interest than 3 per cent, and
therefore better security for the bilhholder, can
not after the LIST OF Suly next be receivable as &c.
3urity for bank circulation.
This Ia a radical change In the banking law. II
axes from the banks the right they have hereto
lore had under the law topurchRse and depOsitas
security for their circulation any Of the bonds is
Iued by the United States, and deprives the bill
holder Of the best security which banks are able
o give, by requiring them to deposit bonds hay |
ng the least value Of any bonds Issued by the
Government.
The average rate Of taxation Of capital employ.
ID in banking is more than double the rate Of
axatiOA upon capital employed In other legit- |
nate business Under these circumstances to |
mend the banking laws 90 as to deprive banks OF
he advantage Of securing their notes by the most
yRluable bonds Issued by the Government will, II |
Q believed, In large part Of the country be q |
PRACTICAL prohibitson Of organizing new banks
md prevent the existing banks from enlarging
heir capital.
The National banking system, II continued at
II, viii be monopoly In the hands Of those al
eRdy engaged IN 1t, who may purchase Govern
nent bonds bearing more favorable rate OF In
crest than per cent bonds prior to next July. ,
70 prevent further organization Of banks Is put
q ieopardy the whole system by taking from 1t
hat feature that makes 1t, as 1t now is banking
yBtem free upon the same terms to all who wish
0 engage In II. Even existing banks will be In |
anger 81 being driven fEom Riob business Sa 6y add
ected by this bill.
In short, cannot but regard the fifth section OF
he bill as q step In the direction Of the destruc-
ion Of the National banking system. Our ooun-
ry, after long period Of depression has just en-
cred upon career Of unexsmpled prosperity,
The withdrawal Of currency from circulation by
he National banks, and the enforced winding up
4 the banks In consequence, would inevitably
ring serious embarrassment and disaster to the
business Of tke country, The banks of issue are
ssential instruments Of modern commerce.
II the present efb cient and admirable system Of
,anklng is broken down II will inevitably be fol
owed by recurrence to other and Inferior
Methods OF banking. Any measure looking to
uch a result will be disturbing element to our
financial system.
Il win destroy confidence and surely check the
rowing prosperity Of the country. Believing
hat measure for refunding the National debt Is
necessarily connected with the National Banking
law. and that any II funding act will defeat its
,Wn object II 1t imperiled the National banking
ystem or seriously impaired It's usefulness, am
convinced that section 1--WE Of the bill before me
would, II 1t should become law, work great
larm. l herewith return the bill to the House Of
for that further consideration ,
which is provided for In the Constitution.
RUTHERFORD B. HAYES.
Executive Mansion, March 8, 1881.