The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1856-01-18

DO
N Y. Canal reve.
Do leis Isl
AK State stock. s2li 600
Michigan i72ooo
--s1 ,o2s, ss7 Is, coo, 1ss
Total September go 1855 s25 GA 100
The aggregate OF the securities held in trust
for han king cat tons and Individual bank
ers, including cash in deposit, September 80,
Showing decrease during the fiscal year Of s3i7 400
During the last fiscal year sixteen banking associa
TONS with aggregate capital of ST. os5 600 have been
organized ard have deposited the securities req uird by
law of which Ser eight organized by the share
holders exp safety fund banks, under the prov
oDs Of chapter 3lS Of tie Lass Of lsae and the remain
Individual bankers have comer ced the banking basi-
under the provisions of the general banking law
and deposited The requisite securities and received crcu
lAIion thereon.
During the same period four banking ASSOCIATE
and FIVE individual bankers have given notice of
their intention discontinue the business of banking
and have withdrawn portion of their securities upon
the surrender Of an equal amount Of circulating notes.
The accompanying table, number two, contains state
ment of the names of banking associations and the
hanks of individual bankers who have given notice of
their discontinuance of the business of banking
with the amount of circulating notes outstanding, aud
the securities or cash deposit held in trust for the
dcnp,ion of the
banks which have closed their business have redeemed
80 per cent Of their circulation and publishing
the two years. notice for OF their notes for
redemption, specifying the amount of outstanding circu
lation cash in deposit date Of notice and time wheu
ee will pre- and the association banker be entitled
70 thdrsw the secuIitiee
Table number four contains statement of the ma mes
Of such banking associations and individual bankers
have discon nued business with the securities
from the Department and given the requisite bons for
the redemption of their outstanding circulating notes.
under the provisions OF chapter 49, Laws of 1871
amended by chapter 6s of the Laws of 1851 together
with the OF the principals and sureies executing
such bonds sod the time when the Obligation 10 redeem
under the provisions Of sach bond and the statute will
expire
OF broken bar KS whose securities have been dis posed
by the for the redemption OF their circus
ton the several at which their notes redeemed
presentation the Bank Department aud when the
time for such redemption will expire.
TIE BANKING SYSTEM
In reviewing the banking history Of the State, it
appears that prior to tie of the raining act In
1904 liking privileges enjoyed and rcised by
individuals and copartnershps pleasure During the
existence colonial govern banking nstitu-
lions whatever were incorporated. Uncer the Sta.e
only banks inc )rporated pior to
1sO At that time there existed no Don
Of circulation be issued and there
provision law to protect thpubc against rredeem
sble and inflated paper circulation Under the restrain
ing of 1904 and the several others SUGGESTING It,
of inco, poraon became essential to the of
banking privileges. The incorporation placed
der many wholesome restraints but the redemption and
security Of the circulation imperfecy, i at ALL pro-
vided for.
the 1872 after the people had suffered much
by several bank failures and the inability of the failing
and insovent situations to redeem their circulating
notes. important step taken towards ha pertec
ton of the banking system, by the introduc ion
of the principle secure the circulation in behalf
Of the public. The law which was then passed,
called the Safety Fund act important intro.
ucing the principle Of protection than furnishing
permanent reliable security for the redemption of the
circulation. The safety fund system, creating fund
by annual contributions from the banks for tins redemp
ton Of the the discharge OF the debts of fail
ing institutions, operate. well for time in establishing
hs enps1S :e :. as enii.c and imparting character
and appearance of safety to the circution. This sys
TEN, however in short time pro red failure and In
adequate to the protec ion OF the circulating notes
When a severe commercial crisis swept through the
country and banking institutions were shattered
blast III accumulated fund wholly exhaus ed;
and the future con ributions OF the remaining banks
MP the Of the expiration of nearly all their
spece cha ters sntci lated by loans upon the credit
and Of the fund, 10 leave nothing for
protection the Of future failures and insolvency
uch deficiency insolvency Of the fund in great
measure attributed 20 the Illegal and excessive is
lions beyond the limits authorized by law sush egal
issue and its eec, the necessity OF something
more than mere statutory restriction agsas. eAsesnve
ting by Of ard ugh the agency Of one
Of the departments Of the go gernment
The failure and defects OF the Safety Fund act ei TO
the conception and adoption Of the present Banking sys
ten having FIR peculiar features the free aad unli
mited exerce OF banking privileges by Individuals and
inoorporaton except the issue of circulating notes
CURRENCY other than such shal have been
sianed and registered by the state Superintendent and
received from him. the securing the whole mount OF
circulation issued by deposit wiz the superinten-
dent of at least equal amou unit OF public stocks or
stocks and mortgages; and prohibiting under severe
pains and penalties the from
ing issuing 10 any banking association or indvduai
banker ci rculatIg notes To amount exceeding the
securities deposit. BY this mears under fair and
administration Of the systea the holders Of bank
notes fully protected fom loss The banking hsttu
lions country and the circulating medium provided
by them have become such essential and dispeusaoe
elements the commercial and business transactions Of
the community that the legislature cannot too rigily
and fecty guard ard provide for their secuy they
have therefore, with the view Of having their attention
appuslIy called to the subject and the opersons and
defects Of the system, made it the duty Of the Supern
tenssnt to report annually and psxss. any an %
proved and the security Of bill h,lders and depostors
increased.
In the early existence If the present banking system
the public lost much, and the reputation Of the system
suffered much by the admission OF securities bank
inr basis issued by the sister States in the
federacy, Who aithless to he. obligations or bank
upt n tter treasures, failed in the perform 'nc'
the same difHculiy in future, the LegsIa'ure hay'
wisely excluded all other stocks than tho.e :. Q
no bank failed 10 this STATE having circulation
wholly BY pubic stocks OF this State add Of the United
States the circulation which has not been redeemed
the oar value thereof and 10 such manner without inter
rupton that the ost nothing OF their efficiency AM
value in circulation until actual redemption.
On the other hand during the existence OF the system
there has only teen single Instance in which the crcu
Iation Of falling bank has redeemed at par whe
thsr circulation secured by bends and mortgages
ana mot any where secured by the stocks OF othe
states In such cases. ALSO the fsure has been inva
riably attended by nj least short space OF tine, dn
ring which assumptions were not made while awaiting
the sale Of the securitles The notes n the meanan
losing their value circulating medium, have bee
disrosed Of at great loss by the timd and necessi
tous. While the stocks Viii h are now received NEE
with immediate and ready sale In the market at price
varying from par TO large premium on the other nam
mortgages have brought average At security SAFE
only seventy per cent This ct Itself exhi
bits great superiority OF the stock over the real esta
basis for banking circulation and defect In the mort
gage security at arranged Such shou'
ks provided against practicable, for the improvement
a. the system II is the important that it shont
be done because the amount o. mortgages security
r circulation increasng in greater ratio tnan stocks
he laafna Mliln he nf mo-