New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1849-01-06
The Controllers Report.

| gmelt cd nl.ch more tnan ordinary iutert = r.n
! which, when prltad. ne shaA Obtain m-cn -sei-l
/ lli0-msi 10.
/ lu the meantime ~ must be content to-day.
wilh copying ihar part 0f the Report which re-
/ stes o. the s-o'eet Cd Banking. IT, this subject
/ Mr. Fillmore has devoted time. thought ana r.
/ search tie mas examined both % the eNis.irs
/ Banking Systems with imparsialty and ca.nuess,
aud submits frankly and hrni.y' il@ feslhs AAl
/ conclusions - " L.cl lie has arrived.
The suggestions made . other states WIKI a
/ view o the Ultimate establishment oi Uniform
/ currency foRIug from harmonious but inde-
/ pendent Institutions vii attract immediate, AMI
/ We doubt aot b. many states ia'1lso bic con-
/ s.ieraton.
But we viii Jet the CoyrRoIlER speak ur
/ himself
There are row osy.,ens Of banking carried on 10
tbs state O1s called The Slfafy -s1 >s.-eu walsh
fret authorized b. 80. Lsery oalA Se llslns "
ils sys.em has received special set oi nc9f Pofai1n
from the Legislature These charters were lof nm
tied period generally having about 'Neniy yesrs %
r-u here are seventy eight 81 tlesc oAlAs ans ~
branches 10. ID operation Wiz 40 a. 81 'tP-A
q $ 6- 80 The charters ~ some gu t-- 80 -
pre 10 each year until l-co, when iEe .asi Will Ter
. mnsie-
Ta.. system Va. regulated By genera law. w.. %
In rh O. watch Ras incorporated mo every claf
ter oy which esch Bans Was eollred O. have At ~
-.-sr.l rssd in before Il commenced business and u
also required annually . contribute one -. % -s
per cent upon - capital o. common iuLl s..eo
lLf4 -A.l 4-AiA --A-A -iN-.-
. per cent upon tee capita. OF eacn sank "llen
fund Ras denor mated tie ba4s tald snd vas ~ oe
spyet % the payment Of ine deots 81 a5 ,Hs1 On.
Bank contributing the same, and 10 case llr l-l vas
at any time diminished y payments from IL tae nsnAs
again require u make tasir annual
TIL each bad IN deposit tie per cent on " cap "a
STOCK Ihis fund. in common paF ince nas otti ca4-
tie Slfeiy FHAd, which has nlAly gwen name 70 'le
Apot5er feature Of TIL. system was that three Bank
Conmiss0Ders we've - Be sppolniea' el.A .1I=s Pow
er. o. supervise and inspect the several banA. the
state representing me wnnle p pre- h-4 we DaAA
u certain district which included the City Ban g. AID
/ the Banks OF another district which included al
tee 0.her Country banks caca presumed - nave an
tszonstc Interests were q Re represtn ted m tAls
/ Commission Il vas supposed that each would be A
check upon the other. To effect this, toe Governor
/ and nate were o appoint one Commlssllner ana
toe Banks 10 the s0theru part o toe state snliher hl
the remaining Banks bird Whether this mode OF
ointment was found not 20 answer the expeciri1ns
Of the OF lnsl projectors, the dominant party de
| sired O. use this p0Rer a. political engine . ln
known % the Controller tui The Jaw Wa chan "a 10
I7 fch "a 90 a. % give the appointment 0i al ihrce
| % the Government and senate
/ Tai. of course br0ug { them within the vortex of
the great political wh.rpoo - the state and the place
va. sought for and conferred upon partkan aspranis
without due regard 10 al cases % their qualcati rs
o. discharge The delicate turst committed o. them ns
state of things under the administration 0 Dotn me
great political parties Of the state continued until l-i
when the Legislature abolished the Office, and conferred
the power of examining these banks upon this Depart
M III. NLtLtfcI tutlt Vas ltn7oA ~ 800 70
b4nd had made All incorrect report OF "ss IN an IN
safe or unsouni condition 10 90 banking business
Tho Free Bank system 70 is sy ed Hss established
/ 10 les lch 2t0) By tbs systen every individual
and association authorized TO engage IN no bust
ness of banking and on depOsitng WIKI the controller
the stocks OF the uad states. of 90 any state WHICH
should BE- made equal o. i've per cent stock or suen
stocks and bonds and mortgages 10 the same lunt
| or less, on improved prosucuvc, aud unihcumo-r'
real estate worth double the amount secured by the
| mortgage, over sad above AT buildings thereon, and
La. ..HHHH % ||HIH
the Controller required 70 deliver % such ind'idu
al Or association An qIai amount oi BANK notes ivf
| circulation duly numbered registered. and counter
| signod 10 his Office.
As,ocisrou. under this law were species Of corpo-
ration They could contract sue and be-. sued tn TIE
names oil their President snt the shares were transfer
able a the pleasure 81 toe shareholders Who were DOT
liable IN their individual capacity for the debts 81 the
Association But there was nothing 10 Toe ACT thN Ic
qlred individual bankers o. deposit any particular
amount a securities b. fore they commenced banking
The country vss then flooded with stocks from almost
every stse aud the Consequence was that numerous
banks sprung into existence under this az" hepud.a
ton coon followed Many states that di not re- ud4ie
failed 70 meet cir obligations confidence Wa impair
81 credit was shaken and stocks generally deprecated
10 ihe market the consequence was that many oanA'
failed and the Legislature partially retrieved l error
In IL % (ch $685. BY excluding all stocks except those
issued By ths STATE aud required those 70 BE- or 70 De
! made equal 70 a q We per cent. stock
Finding the small banks unsafe the legislature 10 l-ii
reqyr,d ind duai baukers T. deposit securities % the
| amount on AZ Iea., $4,000 and associations d the
amount of : 90 before they were entitled % any
| no,cs for circulation. The siringcncy ~ the money
market Ia -l7, sdmou4shcd the legislature That tne
security Of these not SUM lent ani To l-t- ueJ ~
qured the stocks deposited De stocks ut THIS STATE
and equal 70 3 per cent STOCK ami the bonds and
morts to bear nteres3 Of seven per cent per
snuum and that they should not be for an amount tx
cerdlng twofths of the value Of the land covered By
the mortgage This s the frss bank system as It now
stands and il takes II from the TACT that al are
frtelg permitted 10 embark In IL who comply WITH the
Irrrfaa bod - u IL
rzht granted hy the legislature O. favored ieV-0ut
Il open 10 al who can give the eqlisite security.
| Both Of these systems have been IN operation long
enough 10 test their merits u - presumed that no
| one would advise the continuance OF both Two rival
systems exist without creating ealouses among
those interested and sdiing much ~ the compleAlty
| and labor OF this department. The time hes come
| when the LEGISLATURE must choose between them
| That both have defects one can doubt That come
OF these deiecis admit Of remedy = equally clear
Which then Is or be made the saiest snd best sys
/ TEN under the Constitution Is Il now stands
In order 10 determine this question properly several
things are 10 De taken into consideration and the nfs
what IS the duty OF the state IN reference % banking
II would doubtless De desirable to create banks "hicn
should ts able % discharge every Obligation not uuy
10 the b! hold q but 20 deposors, and al DINERS 10
whom should incur any liability. But this Is impos
sble The Safety Fund which Was Intended 10 provide
such security would have been ample 20 redeem al ne
circulation vi the banks which have failed, but u nas
been exhausted IN paying dep0stors ard other cfcdl
tors Of the rs0lgent banks an1 i now norsseei Tor
Al Il will probably produce for eighteen years o come
Thus by attempting more than could be accomplish
ed the Legislators failed 70 secure the bill holder
which was 10 s power and for the remaining eighteen
wears that some OF these charters have 70 ran the
| safety Fund yields him security Il "a apparent
then that security for al liabilities cannot be provided
and the state Is under more OBLIGATION 70 attempt
hi. impos 5iy than Il would be the equally absurd
one II making every merchant capable Of neeuDs a.
toe obligations be should incur
Its humby conceived the duty Of the state In this
Gaze begins and ends With furnishing good and sale
currency for the people To furnish this currency so
far as Il consists Of paper or credit IS en- exclusive pus
ege granted y the STATE ant the state. and should
take care tbs, IN granting Il tire people are secured
| from imposition and loss Any Nan may receive De.
posit,s Or discount note or loan money OF draw =
| BIZ Il exchange.
These il Is admitted are banking opersiions Bat
they are open o. al Those who engage Ia them CO. y
no exclusive privilege. But not 80 with those gno are
authorized q issue bank notes ~ circulate AZ money
Ths i. banking operation confined . the few % s a
prerogstvo enjoyed exclusively by the money kngs Of
tao euull D.. h. - sse@ls --ly ~i-lput -fiD
/ tie rnosl ample security. This duty = Justly imposed
. | for the privilege which i granted
Assuming that the great object Of legisl.ion ca
this subject Il . provide sound currency BY giving
ample security - The BAL holder, The question = 10"
can te. best 5e accomg. .hed ls must BE- borne 10
miui that safety Fund Banks derived much u her
f~,r, Individuals Who Incorporated. 81