114

POSTAL  SAVINGS

Cong.,  2  Sess.),  whose  history  has  previously  been
narrated  in  connection  with  the  discussion  of  the
raising  of  the  limits  on  deposits, 15  was  passed  by
both  houses  of  Congress,  authorizing  deposits  of
postal  savings  funds  “in  solvent  banks,  whether
organized  under  national  or  State  laws,  and
whether  member  banks  or  not  of  a  reserve  bank,
.  .  .  being  subject  to  national  or  State  supervision ­
  and  examination.  .  .  On  September
11,  1914,  President  Wilson  vetoed  this  bill,  and
communicated  his  reasons  therefor  in  a  veto  message ­
  to  Congress. 10  In  this  message  he  said:
“When  the  Federal  Reserve  act  was  passed  it
was  thought  wise  to  make  the  inducement  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
should  be  deposited  only  in  banks  which  were
members  of  the  Federal  reserve  system.  The
principle  of  such  a  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  supervision ­
  and  regulation  of  the  Congress  itself.  It
was  recognized,  also,  that  the  scattering  of  government ­
  deposits  in  small  amounts  among  too
18  Supra,  pp.  85-87.
16  House  Doc.  No.  1162,  68  Cong.,  2  Sess.