New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1857-10-13


that the degree of security guaranteed to the holders
Of claims against our city and State banks should
be distinctly and fully understood. With view to
furnish that information we give the following state
ment of the legal provisions on that subject.
Our present banks, with very few exceptions,
are based upon the General Banking Law. These
banks can only issue bills furnished to them by the
State Superintendent Of the Bank Department,
and these bills can only be furnished upon the de.
post Of stocks of the State Or for half the amount
Of the United States either six per cent stocks or
to be made equivalent to six per cent stock, and
not to be received at any rate above par, or above
their market value Or, instead of stocks, one.
half the security deposited may be in bonds and
mortgages, bearing seven per cent interest, upon
improved, productive, unincumbered lands in the
State exclusive of any buildings thereon, ard not to
exceed two ffths in value of the lands thus mort.
gagged
This deposit (Which on the part of the existing
banks consists mainly of stocks of this State) is
designed to serve as special security to the bill
holder. All the banks are required to redeem
their bills on presentation at their own counters;
ard those not situated in the cities of New-York,
Albany or Troy, to keep an agent in one of those
cities, to redeem their paper on presentation at
discount not exceeding a quarter per cent But
the object aimed at in this provision has been more
fully accomplished by the American Exchange and
Metropolitan Banks Of this city, who have under
taken the business of bringing all the country banks
to prompt settlement and Of requiring them to re-
deem their notes in this city.
Upon the failure of any bank to redeem it's bills,
the law requires that within fifteen days the Super
int ndent Of the Bank Department proceed to
redeem the dishOnored notes out Of the trust funds
in bis hands, The holder, however, in general has
no occasion to wait for bis money AS the bills are
them on deposit and in payment; and in this way,
without any run or panic or loss to the holders, the
dscredited notes are Withdrawn from circulation.
In addition to this special security provided for the
bllholder under the General Banking Law, the Con-
sttuton also provides that in of the insolvency
f any bank, the billholders shall have preference
over all other creditors. This provision is Of espe
cial Importance to the billhoders Of the few old
safety. fund banks.
Such being the security provided for the bill.
hold or, we come now to consider the position of the
other dtors ofthe banks including the depositors
The depositors are also entitled to be paid in specie
on demand and for being so paid they have the fol-
lowing securities: First, The Constitutional pro.
vision which forbids the Legislature to pass any
I, act ssnctioning in any manner, directly or in
directly, the suspension of specie payments BY any
bank issuing bank notes Of any description, thus
leaving the banks the alternative either of paying
specie or of winding up their business; second,
The security Of all tee property belonging to the
hank, including the amount of capital originally
paid in, and On which its business is done; and
third, The Constitutional provision by which the
stockholders in every corporation and joint stock
association for banking purposes, issuing bank
1 otes of any kind, or paper credits to serve as
money, are responsible Individually for all its debit
and liabilities to the amount of their interest in the
stock BY this important provision the creditors Of
the banks have not only the security Of all
the capital engaged in banking operations,
but the security Of an equal amount OF
capital not so engaged, but IN the private
pockets of the individual stockholders. As it Is
well known that the stock Of our city banks Is
largely held BY retired capitalists not engaged in the
sctive operations Of trade, this security i' Of
tie highest portance aud it must be considered
as having been largely increased by the recent e1-
tensve Gales Of bank stocks BY which large amount
Of those securities has passed out Of the hands Of
d erchsrts hard pressed and with large Liabilities
into the bands Of moneyed men. Every such sale
must be considered as furnishing an additional secu-
ry to the credioIs Of the banks; serving to trans
fer 60 much Of the stcck FROM owners whose i1di-