New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1851-01-10
THE BANKING SYSTEM.


The currency of the State is in a sound and
prosperous condition. Not single bank failure
has occurred during the past year The business
of bsnkipg, under the General Banking law, ls
rapidly increasing, by the creation of new banks,
and the deposit of additional securities, as basis
for circulation, by existing institutions The Prln-
ciples embodied in the General Banking law, as
modified by subsequent legislation, have received
the sanction of public approval and may now be
regarded as the basis upon which our banking sys-
tenn is permanently established
The charters Of the Safety Fund Banks are
gradual expiring, and there is reason to con-
Clude tbst as their present privileges terminate,
the most of them will re0rganze and continue
their operations under the General Banking sys-
tenn Ia the manner authorized by the act Of 1919.
In making this transition from the old to the new
system. they will be required to deposit specific
securities with the Comptroller for the entire
amount of their circulation.
The permanent investment of so large q por-
tion Of theircspitsl will necessarily diminish their
available means for the accommodation of the
business classes, to considerable extent, aud
some embarrassment must be expected TO result
from go important q change But il Is hoped that
the temporary inconve nience thus produced will
be compensated by the advantages attendant
upon system which imparts 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 is
sued under the general banking law. 1t is be-
ieved bat this necessity has been reached The
formation OF new banks and the reorganz alton of
expiring institutions, create large and constant.
ly incrr asiDg demand for the securities which the
law authorizes the Comptroller to receive in
pledge toy registered notes While the demand
Tor these securities is thus increasing. the supply
u 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
securec ytne hypOthecatlon of au equa amount,
which may consist OF New.YOrk stocks exclusive
~, or New York stocks and bonds and mortgages
in equal proportions or the stock security may
consist IA equal proportions OF New.York and Uni
Ted STATES stocks During the last wear the Com.
missioiers of the Canal Fund redeemed s4ae 600
OF the State debt, and the farther sum Of $500 900
becomes payable in January aud April next OF
the g. 800 900 thus paid and to be paid nearly one
half has been pledged by the banks as a security
TOR circulation. The same process OF reduction
must be continued from year to year by the appli-
cation Of the revenues OF the Sinking Fund. The
effect Of this reduction, in connection with the
growing demand for New York stocks for banking
purposes and for foreign investment, has been TO
enhance the premium to high rates, which cannot
be afforded by the legitimate profits OF banking
business. Ii 10 apparent then that some new sPe-
ces OF securities must be admitted In place OF our
own stocks already go difficult TO procure, and
which ill continue TO disappear from the market
until the debt shall have been extinguishedin 500.
Ihe question arises, what form of security shall
De substituted what Kind Of public stock safe and
Convertible in all emergences, is within our reach
and obtainable by bankers. without paying ex-
rsvsgsnt premiumsi All will admit that no