The Sun.
London, England, 1838-05-17 00:00:00

THE UNITED STATES.

THE NEW " GENERAL BANK LAW." ned
A Bill had been introduced to the York Legislature. ca.--
" General Bank Law," to authorise the creation of new banks, and to";
Assembly had resolved that they should always retain specie tut
the
journals of 129 per cent. upon their issues. On this project, one 0. the
journals contains the following remarks which ably illustrate
or
working of this intended new system, though, perhaps, on one.
two points, they border slightly on the extreme; nevertheless, the pi
are useful.
" By this law any number of persons, foreigners or natives, resident:
or otherwise, can establish a bank with a capital not under 10,0;
dollars ; but to any extent beyond, by putting in trust, under the St3‘.,,
Comptroller, United States or State Stocks to half the aniount---0`
other half in good mortgages on real estate. The A 530630011 is then
authorised to issue an equal amount in paper money, retaining ab"Ystha:
a basis 12i per cent, in specie of its issues. The pa,hpearlfiggotioidglctoirltbfYari:
Comptroller, and the original capital—half stocks,
—remains always in trust, as a fund to redeem the issues in case
°
vulsion, accidents, or mismanagement. rota
" These are the leading points of the new system, as it differs f

the old.
" The present incorporated banks loan out all their capital and credit
in exchange for mercantile paper, retaining a per centage for a sPeCie
basis. In the new system the capital can never be diverted from its Inn.'
pose, and nothing but the credits of the bank can be issued at all, deduct
ins from the amount of these credits the sum retained in the shape
specie. To put this in plainer language, we give the following analysiB
of a bank on each system :

OLD DANK SYSTEM. NEW BANK SYSTEM.
Dollars. Dollars.
Capital lOO,OOO fixed 100,000
Loans, authorised 250,000 ditto 87,500
Specie, any or none 100,000 ditto 12,500
This table represents the capacities of both systems. The new Bank
system is certainly the strongest; because, if the original capital is
worth its face, it never can be loaned out on commercial paper as
the old man may be. This might curtail the profits of the new sYs,j.
tern, but the deficiency is made up by the capital in stocks and
houses, still yielding them a revenue, while, in addition, the Hanle eal.e.
)la
tal becomes the basis of a currency, always redeemable in specie.
It also gives to the men of real property all the power to create _
currency, Bank
"We conceive this law to be in fact worth all that Congress or ,
conventions can do in years. It is the establishment of a specie-PanYtite:
banking system, inimitable in extent, amount, force, power, an ,hc
ence. It will make Wall-street more than ever the centre ofre,
money transactions of the United States, and ultimately the cent r
the Exchanges of the commercial world. The simultaneous estab 15"
ment of steamers between this port and Europe only confirm the sway
of empire in this glorious Island.
" Such is our situation—such is the opening--such is the Pr-s-„
Have we the elements to put this system into motion ? Cats
built up at all?
" We conceive it can, and that very shortly. During the last
ltecif:
months the various states throughout the country have authorised lsdsois.,
of stocks, in the aggregate, probably, to the amount of 30,000,000
v:ons
in addition to the existence of nearly 100,000,000 dots., by pre
0,,
acts f incori.oration. Here are the materials that will constitute
w",,,
half the capitals of the new system. The owners of these
receive the yearly interest, at the same time that they may ad
Lf
the ptofirs, under good managers, of banking on the saMe. , real
The other half of these capitals are to be in mortgage' di„g 50
AcCOreN,
estate. Of this there is abundance, even in New York. york
the last annual returns, the real estate of the State of thirds
amounted to 600,000,000 dollars and more. Supposing that two-banx,
is already mortgaged, the remainder is quite sufficient for all the
ing purposes to set an empire on her legs. for 1"
" Here are the elements of the fixed capital—what have We
specie basis of 121 on the issues? 00Win6
64 An abundance. From every part of the world, the specie,'
of the
stoats,
to
into the United States. Under the power of the cotton cropso dot-
south, set in action by Mr. Biddle, we have seen probably 6,ooo,poouna
tars coining into the country since January last, from the world nybe ot,
During the next six months probably 6,000,000 dollars more will
tracted here--making in this city an aggregate of 12,000,000 Jolla
specie, which authorises, under the new syste-n, issues to the isl°°"iid to
~
87,000,000 dol. with a fund to an equual amount, as a trust fund
guard against ultimate accident. our"
We present the strong features of the new system—remindin‘t
readers that its power is only limited by the capacity of the count"o3l
" In pursuance of this new state of things, we learn that 'e,sing
banks of very large capitals, on the new system, are already orga, , 'yr', of
in Wall-street—one in particular, .of at least 80,000,000 1101:3,-0 ° t
capital. Isaac S. Bronson is said to be preparing one, the 1331.'h00.
London probably another, and several Trust Companies think cf his
ing their institutions into banks. Mr. Biddle can also organ,,:"
agency in Wall-street to any extent he pleases under the new 10'4%