New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1851-10-04

but still sensible contraction throughout the
country. As our City Banks are forced to
contract Business and Employment are d.
minished. The building Of houses, ships,
steamboats,. &c. is arrested or postponed.
Less money is put in circulation by capital
lists, builders and employers IN other ca
pacites less Is paid by working men to
rrocers, butchers. markct-men. tallorS, &c,
and a large amount OF Country Bank paper
hitherto pretty constantly employed IN the
cities Is sent home to the issuing Banks tor
Coin to meet the demand for export steadily
pressing on the City Thus the contraction
and pressure become general, though more
tardv and less stringent at the eXtremtieS
than in the center. Now business men be-
cin to give way--the weak. the rash or IN
prudent going first; but, if the pressure con-
tinues. they are followed in time By others.
And the failure OF these, if continued. leads
at length to a suspension fspecie payment
if not absolute insolvency, on the part of
more or less Banks.
We have thus glanced at the origin
and natural course of pressure. as hitherto
experienced among us. At present, strong
counteracting influences are at work TO ar
rest or modify such career. One OF them
is the novel and vast influx of Gold from
California. but for which Commerce and
Business would have been brought up with
a round turn months ago. Another Is the
wholesome lesson of Experience. which we
trust has kept our Importers. Banks and
Dealers generally considerably less exposed
to Revision in the present than they were
at the commencement Of former pressureS.
And a third most important safeguard
against general disaster is the system of
GeReral Banking happily established in this
State.
This system is hardly dozen years old
1t replaced that essentially corrupt and haZ-
ardous engine of Regency despOtsm known
as the Safety Fund System established
on the official recommendation of Martin
Van Buren,, when for a few DAYS Governor
of the State OF that system the radical
vices were-l No Bank could be estab-
lished but by special act of legislation,
rendering Banking a monopoly controlled
bv the rulers of the State and employed to
increase and perpetuate their power. ,.
The safe, prudent, solvent Banks were com
PEELED to contribute annually OF their earn
ings to secure or recompense the public for
the mismanagement, prodigalty and rascal
tv of the other sort. 3. This contribution,
while it lulled the public into false securi-
ty, and really did make up, after slow
fashion, for the defalcatIons OF insoyent
Banks chartered under it, proved utterly
illusorv and worthless in a season OF reyul-
sion and widespread calamity. 1. The
State was repeatedly called upon to sustain
its Safety Fund paintings by heavy loans Of
its credit or by passing acts enabling them
TO refuse payment on their outstanding obi
ones.
This system went down in the crash of
1881. and carried It's Political authors and
godfathers down with it, Each had in turn
upheld the other through their alternate
perils in former years : but storm had at
length arisen which Frustrated both. \
Wing ascendancy in the State Councils
was established for the first since the death
of Clinton. by the election of 1887, and one
of it's first fruits was our present system Of
General FREE BANKING.
This system dispenses with all Chartenng
or express grants Of power from the State.
Any citizen or company OF citizens may
establish 4 Bank by complying with the
legal requirements binding upon all. Each
Bank is responsible for its own manage
ment and required to fulfill none bat is own
voluntary obligations. Capital may be IN
vested in one to any extent which expert
ence shall prove profitable, and the amount
increased or reduced as circumstances shall
render advisable Banking is placed on the
same footing with other avoeations, and
subjected TO the same incidents Of profit and
loss, capacity or incapacity. Those who
understand it and prosecute it according to
sound principles, can do well by It; those
who mismanage or neglect their business
are pretty certain to lose by it, as in every
thing else. The State does not make itself
in any manner responsible for the Banks,
and will not borrow money TO sustain nor
pass suspension acts to favor them. What
i, Joas ~ simnlv IN reouire Of each Rank