Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-09-11
VETOES AMENDED
P. 0. SAVINGS BILL
Wilson Objects to Clause AL
lowing State Banks to Have
Deposits of Funds.

President Wilson held conferences to-
day with Secretary McAdoo and Post
master General Burleson about House
bill 1867, amending the postal savings
system act, and Immediately after these
conferences the President wrote a veto
of the measure, which he transmitted to
Congress.
The President bases his objections to
the bill on section 2 Of the measure,
which permits the deposit of postal saw
ings funds in banks that may or may not
be members of the federal reserve act
The section objected to would give nom
member banks Of the country the same
right to postal funds as banks that are
members.
The Presidents Veto.
The President sets forth his objections
In the following veto message:
ITO the House Of Representatives:
Il return herewith House bill No. 1867.
entitled An act to amend an act approved
June %. 1910. authorizing postal saw
ings SYSTEM without my approval.
With most of the provisions Of the bill
am in hearty accord. They are admi-
rably conceived and the changes of law
which they propose would undoubtedly be
very beneficial to the postal savings sys-
tenn. but portion of section 2 seeks to
make a change in the federal reserve act
Of last December which l venture to re-
gard as unwise.
When the federal reserve act was
passed 1t was thought wise to make the
inducements to state banks to enter the
strong as possible. 1t was, therefore
provided in that act that government
funds should be deposited only in banks
which were members Of the federal re-
serve system. The principle of such a
provision Is sound and indisputa BILE
The moneys under the control OF the
government ought to be placed only in
those banks which are most directly
under the supervision and regulation Of
the Congress itself.
1T was recognized, also. that the acat.
tertng OF government deposits in small
amounts among too large a number of
banks would In time of stress be of
decided disadvantage to the federal re-
possible to mobolize the financial re-
sources Of the country under one control.
The bill which now return repeats that
provision so far as 1t might apply to
government under the postal savings sys-
tenn. 1t is in this provision of the bill
that find myself unable to concur
A Grave Mistake.
1T is my clear conviction, very re-
spectfully urged and submitted that as
a matter Of principle as well as of policy
we should strengthen and safeguard the
new banking system very jeaiously with
a view to the ultimate unitication of the
entire banking system of the country un-
der the supervision Of the federal reserve
board. 1t would, in my judgment be a
grave mistake to take away any OF the
benefits or advantages held out by the
present law to member banks to enter
the system-and take them away just az
the system is ABOUT TO De put INTO opera
ton, and the promises Of Inc act OIL last
December mace Sooo 10 the DanRS tna'
nave entered.
II am not insensible OF the incon-
venience which some banks might suf-
fer II the postal savings fuuus were
| withdrawn at this particular time
though the law ITSELF of course, con-
veyea notice OF that removal 1ully nlne
mouths ago. l am not sure that the
federal reserve board would not be
| JUSTIFIED under tine terms Of the law
| AS it now stands in exercising a GER
/ tain hyeral discretion in determining
| the time and the rate at which de-
| rosits should be Withdrawn from banks
not within the system. But, assuming
that there has not been notice enough
and tiat the withdrawal would Oh
necessity be rapid or immediate. ven
| ture to suggest that the otherwise ad-
mirable bill which l now return might
| oe amended and might. because OF the
financial circumstances now tempo
carily existing. be very advantageously
amended. to extend for another twelve
| aonths the period within which banks
| .ot members of the federal reserve
| ,ystem must surrender the deposits OF
| The government. May I take the lib
rty Of suggesting that this be done!
| t would remove from this bill the
| .nly feature which seems to me In
ompatible with sound public policy.
| WOODROW WILSON.
| The White House,
September IL. 1914"