The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1851-01-09

some embarrassment must be expected TO result
nom important d change But il is hoped that
the temporary Inconvenience thus produced will
be compensated by the advantages attendant upon
system which lmparts to the circulating medium
the essential qualities OF uniformity and security.
In the last annual report from this office, the
attention Of the Legislature was called to the ap-
preaching necessity OF providing more extended
basis for the security OF circulating notes to be
issued under the general ban king law. 1t is be-
lieyed that this necessity has been reached The
formation OF new banks, and the re-org aniz alton
OF expiring institutions, create large and con-
stantly increasing demand for the securities which
the law authorizes the Comptroller TO receive ia
pledge for registered notes. While the demand
Tor ihese securities Is thus increasing, the supply
is steadily diminishing by the reduction OF the
State debt.
The present law requires that the whole amount
OF bills issued from the Bank Department shall be
secured by the hypothecation of an equal amount,
which may consist Of New York stocks exclusive
ly, or New York stocks and bonds and mortgages
in equal proportions; or the stock security may
consist in equal proportions of New York aud Uni
ted States stocks. During the last year the Com
mssloners OF the Canal Fund redeemed $4,000 Of
the State debt and the further sum of $3.50 900 be.
comes payable in January add April next. OF the
COO thus paid and TO be paid, nearly half
had been pledged by the banks a security for
circulation. The came process of reduction mast
be continued from year TO year, by the application
of the revenues of The Sinking Fund. The effect
OF this reduction, ia conn ectioa with the growing
demand for New York stocks for banking purposes
nts
the premium TO high rates, which cannot be afford.
ed by the legitimate profits of banking business II
is apparent then that some new species of securities
must be admitted in place Of our own stocks, alrea-
dy so difficult to procure, and which will continue
TO disappear from the market until the debt shall
have been extinguished in 1868 The question
arises, wha! form OF security shall be substituted;
what kind Of public stock, safe and convertible
IN all emergencies, is within our reach and
obtainaole by bankers, without paying ex-
travagant premiums! All will admit that no
class of obligations should be received as
a foundation for currency, which will not afford
perfect protection to the bill holder under the
most favorable crcumst ances. After much
reflection, the Comptroller is Of opinion that the
stocks heretofore issued by the cities Of this State
may safely be admitted on the same footing with
New York and United States stocks The princi-
pal amount Of city debt now existing in this State,
consists Of the stock created by the city Of New York
security and availability Of this stock is unquestion-
able: The smaller amounts issued by Albany, Troy,
and Bufaloare considered equally vausb BILE and sub
siantial NO objection is perceived to the adms-
zion OF stocks which may be issued hereafter by
Cities provided the Legislature will first pass law,
(Gs required not only by public considerations of
pollcy but BY the express injunction of the cOnsti
tuition restricting their power OF borrowing money.
The debt TO be created by city corporations should
be limited to certain per centage the assessed
valuation of taxable property, and should be made
the duty OF the authorities 10 levy annual tax for
the payment Of interest. Under such restraints,
their bonds cannot tail to be be sound and converti-
bic
The Comptroller would also recommend that the
banks be permitted to deposit United States stock
exclusively, instead OF recurring an equal share to
be in stocks of this State.
The high premiums borne by State and govern
ment stocks, and the difficulty experienced in OBJ
tanning them, has turned the attention OF bankers
TO bonds and mortgages as a basis for circulation,
and the amount of these securities offered at the
bark department Is rapidly increasing Bonds and
mortgages on improved and productive real estate.
possessing an intrinsic value, are considered safe
security for bill holders, and many considerations
may be urged in favor Of system which gives TO
landed property some Of the facilities inciden. to
other forms OF capital, by making it an element of
security IN the creation and regulation Of paper
currency. But in receiving mortgages, a rigid
scrutiny is requisite 10 ascertain that the title is
clear end the value unquesiioDable. The Comp
troller has aimed 10 exercise the utmost vigilance
IN this respect, and 10 exclude all securities which
were not deemed amply sufficient. A careful in
vestgaton OF the nature and value ofthe mortgaged
property, is made peculiarly necessary in consdera
ton OF the facs that some of the banks are mere
banks OF circulation, carried on in the names Of
distant and irresponsible parties, while the real
owner, acting under powers Of attorney, avoids
personal liability, aud no apital employed in
vested for the public security, beyond the stocks
and mortgages deposited in the bank department,
which IN many cases are purchased exclusively
from The proceeds Of the bills obtained thereon. II
s undoubtedly proper and expedient that mortgages
should continue 10 be received to the extent now
allowed, and under the restrictions now in force
but the Comptroller is Of opinion that any change in
creasng the proportion Of securities Of this descrp
,icn would be prejudicia to the ~ stem, and impsi
the pubic confidence in the stability of the cur
rency.
The Comptroller deems it his duty to call the
attention OF the Legislature 10 the growing impor-
sponsibil ities, and The magnitude Of its labors.
When itwed IN all Its aspects, II may be regarded
a. one OF the most responsible branches Of the
State administration. The duties devolved upon
II are ardOus and delicate, requiring business ca
pacity OF high ORDER frmness and integrity supe-
rior 10 all temptation. The people must rel upon
the intelligent and correct discharge of those
duties, as their only security for the protection and
integrity OF their circulating medium. To all who
are familiar with the extent and the complicated
functions OF the Comptroller's office, IL must be
evident that II II is physically impossible for that
officer 10 give TO the bank ddparment the personal
care and supervision which should be exercised in
the dncharRe OF 80 responsible trust. The present
Incumbent deems II due 20 his successor and 10 the
public, TO ask the Legislature TO relieve the Comp
froller from this portion Of his official abors. THIS
should be done by organizing the bank department
into separate and independent office, to be placed
under The charge Of commissioner clothed with
all The powers and responsibilities in respect to the
banks and the currency, which are now vested IN
the Comptroller Many considerations might be
urged 10 sustain the expediency Of such a change.
Originally, and tor many years, the duties OF the
Cfmptroiler's Office were within narrow range,
and almost exclusively fiscal IN their character.
lie was The auditing and accounting office, OF this
state, having general charge of Its fnancea, in
cuding funds and debts receipts and expenditures.
With the progress Of the State IN wealth and popu-
leton, these duties have been enlarged and multi
Pied. New powers have been conferred from
lime to time, until the incidents have outgrown
The original office
Az a member Of the Canal Board, the Comptrol-
Ter II require 10 devote nearly half Of the year
10 that important branch of the public service. As
commissioner OF the Canal Fund and Of the Land
Office, he Is charged with important and aborious
responsibilities. Add 10 these the supervision of
several millions of investments held for the School,
Literature, and Deposi,e Funds. the accounts and
correspondence with county treasurers, loan COM
mssioners auctioreers Indian age nts, State prison
age ts aud other ofcer instructions TO assessors,
the auditing of claims against the State, the return
IT non. resident lands aDo the collection Of taxes,
the distribution Of public moneys, the management
Of the State debt, the decision of questions arising