The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1852-07-11

Cp0BtruCtfOu uctot0IOre
proved before me, by the adavts Of persons long en-
gagged in the business banking that ths subject the
custom and practice Of bankers has been uniform and
hitherto unquestoned On this point no contradictory
aahdayits are produced. The right to receive bank
notes issued by distant bank TT discount which shall
reduce them to their current value at the place whore
taken indispensable to transaction ofbusines
Such either be taken at their actual value
they cannot be taken at all not expected they WI
par in market 1t might for short time best promote
the circulation of tbe country banks thus to exclude
their bills from banks in the city Of New York but it
would heavily the commercial and
Of society and bring about state of things contem
great mischief, would demand an entire and immediate
change Of legislative policy. The statutes regulating
banking seem to imply that bank receive depreci
aed bank bills at their current value The third
ton OF the set concerning foreign bank notes." passed
May 1899 ohibts any banking association from lend
ing paying ont for paper discounted purchased by
them any bank bill note evidence of debt which
not received Al rr the said association debts
to the said association This fairly implies that bank bills
may be below par only the Or wing out that
is prohbitedt being expected that the bank taking
them VIII return Them to the bank issuing them to ITS
agent fol redemption 1t is here ofremark that in
tine section last referred to- the words bill note evil
dence OF debt used to include bank bills
IN the Fame sense have given them in my construction
o. the first clause OF the eighteenth section Of the general
banking law of 1888, where the words used
The statutes regulating the redemption of bank
notes at discount by agencies established in New York
Albany or Troy have bearing upon the question
discussing These statutes make it obligatory each of
the country banks establish an agency and authorize
each TO redeem, through such agency fourth of
one cent aud they forbid the purchase by any bank
OF It's own notes ut amount less than what purports
be due thereon at other place than at and through
such agency. The C cts Of these provisions two
foll First to prevenr depreciation Of such bank bills
below one fourth of per cent and secondly, TO pre-
vent bank making profit out of the depreciation of
its paper The statute in atcrfcres with the
purchase receiving Of such papcr by other banks at
its cur en value, which under the present system
lot be at d count Of more Than fourth of per
cent.
II charged in the complaint the defendant had
been engaged in redeemipy country bank of this
state for banks FOR which it not the legally appointed
rcdeemng agent But that charge is fully denied in the
an!weg and is entirely unsupported by evidence Re-
deInption in plies more than purchase receiving
of TIE discount Ii implies that 1t is done in
behalf of and to extent at least for the benefit of
the bank whose notes are purchased received in
other words that It is an agent Of the bank though
authorized D., law. for such purchase
Inc Question have Iii cussed is the important and
controlling one in the controversy out of which this
ton has arisen Another point was, however made in
be" ali o. the plaintiff on tho argument That the de-
PENDANT is not bank of circulation, and that orga
nizaton can be complete, far TO confer banking
powers on an association unless 1t Is bank of circula
tion a. well IS OF ditcouat and deposit. This point, if
properly bfore me- presents Two questions for determ
nation ct fact viz: whether the defendant is bank
of circulation aud of law, viz whether it must
cessay be bank Of circulation to enable it to enjoy
not in contempa ion by the parties when they pre-
pared FIR tn motions Nothing il said the subject
in the rleadngs, in the affidavit served for the pur
pose Ct these motions "a an affidavit sworn to on the
day Of The argument Edward Beknap states that within
the last preceding twenty -four hours he had made in
~.
Icndant bad not received from the Comptroller from
the pelntondent of the bauk department. any crc
latits notes This affidavit, not having been served
the defendants be used the application
further injunction. 1t can only be used. if at all in
answer to the other motion TO yacate the
in sc>ce And am by means certain that il would
be available for that purpose for the plaintiff ought
not Low to be permitted in to the application
made TO yacate the mi auction to make new point en-
TREY different from any hing suggested in the complaint
on the affidavit which the injunction allowed
and inconsistent with the grounds there taken. The
bong bank transacting other than banking bust
The additional point made is, that dsfen.
CANT Is not bank and therefore has no right to transact
banking business
ON theargument, however, an Aft lavit made on the
slime day by James Mccall, the President OF the Me-
tropolitan Lark read. ny which it shown that
imni, diately the organization of that bank the
sum o. one hudred thousand dollars deposited by
with the Comptroller security for the circulating
notes which should be issued by said bank and that
order ha been given by the bank to the head Of the
bank tmrt for issue of the bills OF said bank
and that q they could be got ready for such
purpose they would be put in circulation. 1t is not
stated when The order was given or what has been the
~ a statute passed Apr. II 1S4s amendatory of the
act authorizing he business Of banking, it enacted
that ali banking shall be banks t discount
and deposit well OF circulation. The evil this sta
tue vas des ned to remedy was not that banks of dis
ctnas and deposit established which not
tapLs ~ circulation but the contrary, viz That banks
OF circulation only in existence which had no bank
irg house, and transacted no busiues OF discount AMI
deposit Tie object OF the statute TO break up the
Irucce Of issuing circulation merely for the purpose of
rtdecpirg il Gt q cuLt TINT afforded profit. do
not myle.f the ev of allowing the establishing of
hanks c discount and d post ouy. which not banks
Of circulation The ianluage Of the statute may per.
haps lie ad enough to ustan the legal position taken
ly the plaintiffs cUunsei II so, however fixed
amount If circulation oughs To b. specified, that a
nominal circulation should not be dcemeda
pigucc with The rcqui-ition
But whatever may be the true construction of the
statute feel warranted, the facts before
and on chamber motion to issue I'M JUNCTION
tha shall entirely suspend all business operations of the
uefo Hdsrt. not satisfied that under the
stIucon claimed the defendant is amenabe to any such
severe penalty. II the requisite depo
sitcd with tie Comptroller Immediately the organiza
ton Of the bank security tor its circulation and that
Fuch circua ion is TO be issued Ii there has been
mi appr henon Of the law hitherto in this respect
which has suffered the correction be- readily
made The neglect does not yitae the previous organi
zation IT could in way promote the public interests
of the bank and wind up its affairs because Of the
which the defendant is ready to remedy, those
institution shull not. therefore. award the
injunction pray for this motion. but shall leave the
plantf to claim such injunction the trial of the
he question fully examined it, by amending the
peadings or otherwise, the question can be then pro-
perly rafCd.
The motion TO vacate the injunction must be granted
and the motion for a further injunction denied.
ELEGRApHIC