The People's vindicator. [volume] (Natchitoches, La.) 1874-1883, 1881-03-26
The Funding Bill Vetoed
WASH!>GTOS. u. C.. March 3.


4" th" l!onsc"f Representatives:
HiIili. considered the bill entitled IAN act
u lac!iint"ihe 1utr!ingo OF he National debt"
lam constrained to return it to the House of
representatives., in when it n.i.inated with
the following statement of my objections to
1t passage: The imperative necessity for
pTo'iip' acton, ana the pressure OF public
uH'"' III TINS. the CLOSING week of my term OF
oih'', co'ilrc, me to refrain fcnm any ttcinpt
l" make any iuliy Satisfactory present a,ion of
| ny ""|c''InsiO the oil. Ine Importance OF
Inc passage AZ the prcscn, session of Con-
eres> OF suitable measure for retiInaing the
National debt which is about to mature is
generally recognized. 1t mas lccn urged upon
the attention OF Congress bs the Sec e,ary Of
the lrcn>nry, and in my las. annual message,
IL successfully accomplished, il will seclre Il
large decrease in the annual interest PAYMENTS
or the Nation, and earnestly recommend that
II the bill before me shall fail. another
measure for this purpose be adpp.ea before
the present Congress udjourns While. in nv
OPINION, 1t would be wise to authorize the
secretary OF the Treasury. in his discretion, 10
oaer I" inc pubic bonds beating 81 per cent
tn'ercst Ill ald OF rcflnlng, shou not
occ'h IL my duty to interpos" my Cons,itu-
''onai objection to the passage of the present
OH Il it did not contain i'll its fifth Sec
ton provisions which. in my Judgment.
seriously impair the value AMI tend to the de-
str'iction OF the present National Banking
system OF the country. This system has now
''-h III operation almost twenty years. NJ
s;'icr nor more beneficial ankiny system wa,
ever established. Its advnnta yes as a business,
are free to all who have the necessary capital,
II furnishes Il currency to the public which.
lOr convenience and security of the bill
holder, has probably never been eaualed by
that OF any other banking system. It's notes
are secured ny deposit with the Government
OF Understanding bonds of the United
states. The section of the bill before me which
rclatcs TO the National Banking system, and
10 which object on is mace is not an essentia,
part Of a rcfunding measure. 1t is as follows:
"SECrION 5. From and after the first ,ay
OF July. 1881, the thrcc-pcr-cent. bonds. au-
thorized by the first section of this act
Shall be the only bonds receivable as security
for National Bank circulation, or as security
Tor 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
stltute other issues of the bonds of the
United States in lieu thereof: prorided that no
bond upon which interest has ceased shall
lie acccplci or continued on deposit rs secu.
rlty for circulation or for the safe keeping of
the public money. and in case the
bonds so deposited shall not be withdrawn, as
provhledhy law. within thirty days after inter-
est has ceased thereon. the banking associa-
ton dtposlt!ng the same shall be subject to
liabilities ana proceedings on the part Of the
Comptroller provided for in Section 5,2N of
the Revised Statutes Of the United States; and
provided further, that Section OF the net Of
June 20. 1874, entitled An act fisin. the
amount Of United States notes and providing
1Crthe redistribution OF National Bank cur
rency and for other PURPOSES be and the
same Is hereby repealed, and Sections j. $50 and
$3.50 OF the kcvi ed Statutes be and the same
are hereby rc-enacted.'
Finder this section it f. obvious that no add.
Ionat banas will Hereafter be organized. OK.
ccpt possibly in few Gil cS Or localities where
the prevailing rat 8 Of interest in ordinary
business are extremely low. No new banks
can be organized. and 10 increase of the capi.
tai Of exist ,g banks can be obtained, cxcept
by the purchase and deposit Of three per cent.
bonds. No other bonds OF the United States can
DC used for that purpose. The mA thousand
millions Of other bonds recently Issued by the
United states, and bearing Il higher rate of in
terest than three per cent. and, therefore. y
better security for tiie biii-holder. cannot,
after the lst Of July next, be received as seen
rity for bank crc,llation This is a radical
change IN the Rtnkin. law. II tikes from TIKI
ranks tn right they have heretofore I'd un-
Ger the law topurchase and deposit as sccuri-
" Tor their circulation any of the bonds issued
by the United States, and dcp.ives the hill.
holder OF the best security which the banks arc
able to give. by requiring them to deposit
tonds having the least value of any bond,
issued by the Government. The average
rare OF taxation OF capital employed in bang
ing Is more than double the rate of taxation
upon capital employed in other legitimate
business. Under these circumstances, to
amend the Eanking law go us to deprive the
banks OF the advantage Of securing their notes
by the most valuable bonds issued b. the
Government will, it IS believed. in u laree
part OF the country tc practical prohibition
ol the organizing OF new banks, and prevent
existing tanks from enlarging their capital.
The National Banking system, If con. !
tinued at all, will be monopoIv
in the hands Of thos, already engaged
In it. who may purchase Government
bonds Tearing m ire favo able interest than
the ,h"cc'pcr.ccnt. bonds, pior t. next July,
10 prevent tho further organization of banks
is to put In jeopardy the who'c system BY TAX.
ing from it that feature that makes it. as it now
Is, banking system free, upon the same
terms, to all who wish to engage in it, Even
the existing banks will be in danger of being
driven from business by the additional disad-
vantages to which they will be subjected nv
this bill.
In snort. cannot but regard the fifth see.
tlon OF the oil Us step in the direction of
the destruction Of the National Banking ave-.
TEN OF our country. which, after long 10
ROD OF business dep cssion, has Just entered
upon a career OF unexamp.ed prosperity.
Inc withdrawal of currency from circulation
by tue National Banks, and the enforced wind.
N"s up OF inc BANKS IN consequence would
inevitably bring serious em,,,rrass.
inents aud dsastcr. to the business of ,he
country. Banks Of issue arc essential instr,,.
ments OF modern commerce. II the present
ehcient and admirable system of banking ia
broken down. 1t will inevitably be followed nv
recurrence to other and inferior methods Of
banking. Any measure looking to such Il
result will he DISTURBING element in our
hnancial system. 1t will destroy confidence
ana surely check TIE growing prosperity of
the country. !.
Believing that the measure for refundinv
the National debt is not nccessa, lily connected
with the National Banking law. and that any
Kc'unding act will defeat IT'S own object IL il
imported the National Banking system or 50.
rlously impaired its usefulnns ), and convinced
that scc'io, Of the bill ccforc me would
IL it should become law. work great harm
herewith return the l,ili TO the House Of Ron.
reScntatives, for that further co,s;loro.,