The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1849-01-07

vote for be bill almost shape
The Committee at fifteen minutes past three
O'Clock, and on motion the House adjourned.
The Comptrolier's Report.
From the Albany Evening Journal, Jan.
The Annual Report OF the Comptroller commu.
ncsted to he Legislature to day 1t Ia docume mt Of
much more than ordinary interest from which, when
printed, We shall derive much useful information
In the mean time must be- content TO day. with
copying that Of the Report which relates to the
subject Of banking To this subject Mr. Fillmore has
both Of the existing banking with impartalty
and calm and submits frankly and firmly the re-
suits and conclusions at which has arrived
The s3geesions made to other Ststrs with view to
the ultimate establishment of nu'torm rrency ow-
ing from harmonious but indepe ndent institutions
will attract i'm mediate, and we doubt not in mauv
States, favorable consideration
But We will let the Comptroller spesk for himself:
There are row two systems Of banking carried on in
this State. One called the Safety Fund System which
was first authorized In 1929 Every bank to
this system has special act Of poration
from the Legislature These charters we're for Q
limited period generally having about twenty years
run There seventy eight Of these ba INKS and two
branches now in operation with aggregate aoital
OF $40 t3S $780, The charters of Of them will ex.
pirs In each until 1865 when the last will tsrm
nate
This system was regulated by q general law. a. Of
1929 ch 9f) which was incorporated into every char
ter by which each bank was required to have all ito
capital paid In before 1t commenced business and 1.
was also required annually to contribute half Of
one per cent upon its capital to common fund, de-
posted with the state Treasurer until such fund
should amount to three per cent upon the capital Of
each bank, which fund MAS denomi mated the 6 Bank
Fund" and be applied to the me at Of the
debts Of ne0lvent bank contributing the IA mo-
and In case the fund vt any time diminished BY
psynente from 1t, tbs banks again required to
post the three per cent on It's capital stock This
fund In common par)ance has been called the Safety
ssna. wn'cn mas nns,ay gwen name to the system
Commissioners to be nted wit large powers
to supervise and inspect the several banks the State
ss representing the whole people, and the banks Of
certain d. strict which included the city banks oa
the banks Of another district which included all thc
other country banks ca ,h presumed to hs,e antaco
nistic interests, to be repressnte in this com
mission. 1t was supposed that e.cn would b. a chsck
upon the other. 70 effect this, the Governor and
banks in the southern part of tina state another and
the remaining banks third. Whether this mode Of
appointment vas found not to answer the expectations
OF the original projectors the dominant party de-
sired to ree this po~er political engine il I'M
known to the Comptroller; but the law Cha uged
three to the Governor and Senate.
Tbis Of course, brought them within the vortex Of
the great political whirlpool of the State and tho place
was sought for and conferred upon partisan asprans
without due gard in all their qualifications
TO discharge the delicate trust committed to them
This state Of things under the adm Of both
the great political parties Of the State until
1S43 when the Legislature abolished the once and
conferred the power of examining these banks upon
this department. whenever there to suspect
that bank HAD made an incorrect report, was in
unsafe unsouR6 condition to do banking husi.
ness.
The Free Bank System, as It is styled, was ostab.
dual and ss.ocist'on authorized to snssg- in the
Of aud dspositing with thee omp-
troer the stocks of the United Slater auy State
whsch should be made equal to FIVE per cent stock
or tuch stockr tnd bonds and mortgages the same
anount or less. improved, productive. and unin-
cum bered roe estate worth doubts the
by the mortgage over and above al, buildings thereon
and bearing interest Of ut least SIX per amt per
mum. tho Comptroller required to deliver to such
individual or a,sociation. an equal amount of bank
notes for circulation duly numbered registered, and
counters gp' d In his Office.
n In ycr n Qn~A If
ratiop They could oontrsct, and be sued Ia the
name Ct their president, and the sharcs trans
fIablc at the pleasure Of the shsrehoders who were
not liable in their individual for the debts Of
the socition there nothing IN the that
required individual bankers to deposit ny particular
securities befoys they commenced banking.
The country then flooded with stocks from almost
and the %
ton soon followed. Many States that did not reru.
date failed to meet their obligations. confidence
impaired, credit shsken, and stocks geueraryde.
precisted in the market; the cons-c usnce that
Iieved its error in 1870 (ch $685. by excluding all
stocks except those issued this and required
FndnS . s =.
1874 required individual bankers deposit securities
to the amount OF at least $50 0Oo End associations to
the amount of sle0 900 before they entitled to
any notes for circulation The stringency CT the
money market in l647 admonished the legislature
that the security Of these not sun. cient
and in 1s4s, they required the stocks deposit.
ed to be stocks Of this State, and equal
to q six per cent stock; and the bonds auti mort.
cages to bear an interest Of seven per Mt nun
and that they thould not he for amount ediug
two hs Of the value Of tho land by the
gage. This IL the free bank system 1t stands.
and 1t takes it's from the that freely
permitted to embark in It who comply With the rules
prescribed. 1t is 'Eo monopoly exclusive right
granted by the Legislature cd few-bEt open
to al who can sive the requisite security.
soth OF these systems have been In operation long
one would advise the continuance of both Two rival
systems cannot exist without creating saousies among
those interested and aiding much to the compl-xty
and labor OF this department. The time has
VII. the Legislature must chooe between thsl That
both have defects no one can doubt Tibet Of
e ere defects admit Of remedy ia equally clear
Which then is or be made the safrss aud best sys-
TEN der the constitution a. It now stands?
In order to determine this question properly several
things TO be tshep into aud the first
pg, 1t would doubtiess be desirable to create banks
which should be able to sischarge every obligation,
not only to the bill holder bat to depositers and ali
Others to whom IL should incur any liability But this
10 inro The safety fund which was intel ded
to provide such security, would have been ample to
failed but It has been exhausted in paying depostors
and other creditors of the peolvent Ia and IL
years to come Tbus, by attempting more than could
b. accomplished The Legislature failed to the
bin holder which was IN its power and foI the remain
Ing eighteen years that Of these charters have
10 run the safety fund yi-de him security. IL s
apparent th-p that security all labiien cannot
be provided and the Sta IL under moEe obligation
to attempt tbi. impossibiity than It would be the
equsly absurd one Of making merchant capable
Of meeting all the obligations he sbould incur
II humbly conceived the duty Of the State in this
case begins and ends with fur nishng good and safe
currency for the people To furnish this currency so
fsr rs consists of dit II exclusive pr
vleer granted by the state aud the State should
care Tint In granting ~ the people secured from
In petition and loss Any may receive depeshes,
or dicounts note or loan money or draw bill Of
chs nge.
These, II 10 admitted, are banking operations But
They are open TO all. Those who engage in them n.
JOY no exclusive privilege But not with those who
are authoriz 10 isue bank notes to circulate
p,y. TN, i. banking operation confined TO the few
us sprtrogative enjoyed exclusively by the money
bpeboi Tue country and they should not enjoy Il
without giving the mow simple security Tbis duty Ia
Jus'Iv imposed for the privilege which Ia granted.
bnumpg. then, that the great object Of legislation
on ibis subject ts TO provide sound currency By
s'sns annie security to the bin holder the H.
nov can tbs best BE- accomplished, IL NUT be- borne
IN A1iDd that sety IN ba derived much Of thar
credit from the inoivi1uals who were ipeo,oorstsd
By gaming special charter In each case the IegisIs
tpre Asd " In It's power in some measure to control
this matter