The Birmingham age-herald., 1914-09-12
POSTAL SAVINGS
 BILL IS VETOED
President Refuses to Sign Measure in Face of Ap-
 peal From White

Washington. September 1f-(special) In the face of s personal plea by Senator White for approval of the measure, Pres ident Wilson today vetoed bill provid- ing among other things that postal sav- ings deposits might be left by the govern ment" in state banks not members of the federal reserve system. The bill would have had large effect in the south, where the postal savings system is widely pat ronized because savings banks are com paratively few and where an appreciable proportion of state banks cannot enter the reserve system because of present capital requirements.
 From the tenor of the Presidents com ment it appears that the government is anxious that every bank possible should enter the reserve system and Is not dis posed to encourage any that remain out side the fold. Unless Senator Owen 5 amendment is passed. reducing to Sl5,0oQ the capital requirement, many southern banks will not be able to enter Even if this amendment is passed such banks will be obliged to raise their capital to S2J,0gt9 in one year thereafter
 The Presidents repeal message follows:
 With most of the provisions of the bill 1 am in hearty accord. They are admirably conceived and the changes of law which they propose undoubtedly would be very beneficial to the postals savings system butsa portion of section seeks to make change in the fed efal reserve act of last December which l venture to regard as unwise.
 Principle Sound
 "When the federal reserve act was ra eead if was thouyht wise ta make inc Inducements to state banks to enter the federal reserve system as many and as strong as possible It was, therefore, provided in that act that government funds be deposited only in banks which were members of the federal reserve sys- tenn. The principle of such provision
 Is sound and indisputable. The moneys under the control of the government ought to be placed only in those banks which are most directly under the su- pervsion and regulation of the Congress
 itself.
 Tt was recognized that the scattering of government deposits in small amounts among too large number of banks would in time of stress be of decided disad- vantage to the federal reserve system which seeks as much as possible to mobilize the financial resources of the country under one control The bill which I now return repeals that provi- sion so far it might apply to funds accumulated in the hands of the govern- ment under the postals savings system It Is with this provision of the bill that find myself unable to concur.
 Tt is my clear conviction, very re- spectfully urged and submitted, that as matter of principle, as well as of pol icy, we should strengthen and safeguard the new banking system zealously with T view to ultimate unifcation of the entire banking system of the country under the supervision of the federal reserve board. It would. in my judgment, be grave mistake to take away any of the bene- fits or advantages held out by the pres 'ent law to member banks to enter the system. and take them away just the system is about to be put into opera ton and the promise of the act of last December made good to the banks that have entered.
 Inconvenience Suffered
 ''I am not insensible of the inconven- fence which some banks might suffer if the postals savings funds were withdrawn at this particular time. though the law itself, of course, conveyed notice of that removal fully nine months ago. I am not sure that the federal reserve board would not be justified under the terms of the law as it now stands in exercis- ing a certain liberal discretion in de- termining the time and the rates at which deposits should be withdrawn from banks not within the system.
 l But, assuming that there has not been notice enough and that the withdrawal would of necessity be rapid or imme- l diate I venture to suggest that the l otherwise admirable bill which now | return might be amended and might, because of the financial circumstances now temporarily existing, be very ad- vantageously amended, to extend for an- other F months the period within which | banks not members of the federal re- serve system must surrender the deposits of the government.
 | May I take the liberty of suggesting | that this be done? It would remove from this bill the, only feature which 1 seems to be incompatible with sound public policy.
 .WOODROW WILSON" | 8~