The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-08

deposits OF
and corresponding increase Of loans Of over
thus reducing the specie reserve to less than 10 per
The year ending July rs, 1857, the fifty two weekly
statements show that the same process was pursued
with Increased vgo not to say rsckiessness The specie
rest fell of TO 81 1856 64S while deposits to $92
400 444 The former decreasing nearly 81 500 000 the
latter increasing nearly s. Loans and discounts
rising TO Sill Average specie rest less than IL
From this poin. the weekly average OF the Is! OF
August shows an increase Of loans and discounts from
specie reserve fell of slightly, and deposits rose nearly
81, 600. Specie fell of over 81 100000 Deposits
rose $780, eo From this day would seem that both
upon HIS line Of loans and DISCOUNTS the other
his bank deposits The banks succeeded 10 reducing their
Line y The 10th Of say Eins wSeS over sa @
The banks holding their specie reserve quite steady with
occasional slg hi fluctuations until the 18th ended By the
banks suspeudDg specie payments
Ore OF the strange pecartes Of this whole proceeding
is, during this whole time from August 1853 to the
pension the srcula'ono the city banks scarcely fucu-
This fact would seem clearly demonstrate that what
may lead to a sui pension either by foreign do
mestc demand for CON- the currency OF banks, pro-
perry secured, is not an element in its production.
This proposition Of the Superintendent to compel the
banks in the city Of New York to maintain average e
20 per cent OF specie upon their weekly balance re-
turning To tie point Of action voluntarily assumed and
aimed by them for two years. from the 9th of August,
1858, to July rs, 1855 We ali remember those years
assed proserosy not only with the people of the State,
the averages Of the banks Of the city Of New York
1853 pas ssS 1854 hoaGs rs S So s c sss s s. Pa s.
sp Ss Of be eS 81 YoI ss .5
the great 6alance wheel that seadeo the and
commerce OF The country They must occupy that posi-
ton Nature settled this feet whea she created Msnhst
tan Island, an6 the hsrbor with which is surrounded
In presenting his views to the Legislature Of what
should be the basis OF banking IN that city the Supern
tender. but acknowledges the fact tina. upon the yste
there adopted rests tae entire success OF banking in THIS
State However novel and strange his views may appear
upon extending specie basis upon deposits alone they
las honest convictions, derived from careful exam
nation Of the whole difficulties that surround the
monetary affairs OF state They presented with the
full knowledge that they are TO be examined AID Com
mened upon by bankers of experesce and ssgscty far
beyond his own He also admits that thew probably
ahtagotsc toorthodox barking heretofore understooa
| By bsLSersin this State He would himself have pro
nounced ,hen heteyodox in banking sixty DAYS before
the Suspension. Az before stated, they honest
victics from careful al examination o the whole sub
! ject a his capacities and position will admit
TLcy presented 10 the IL gsa,re only from sense
| OF duty from which be ccuA not escape, and for its
neglect no apology could be msde for him while Su-
! New York.
Table No shows the increase Of the number banks
their respective capitals their Circulation and the kind
and description OF securities deposited by them IN this
Office aso the actual condition Of te department % the
| 30th OF September, 1857
comparison OF toe present table with the one Of SINH
tar character in the report Of the Superintendent last
year exhibits some facts that are worthy O, attention
During the fiscal year ending Both OF September, 1856
twenty i've associations and three individual bankers
commenced business with capitals, shown by certi-
cafes filed N this Office, of 81 $4,000 actual pad up
! capital, 81 ,227 $50.
during the present fiscal year ending sO,h September
1857 but nne associations aud three individual bankers
have conmerced business, with capital as shown by
certificates, of se,275ooo; actual paid up capital,
si,3G4 49,
The twenty five ASSOCIATIONS and three individual bankers
deposited in securities required by iaw IN this
ofce So 572 le4
The nine associations and three individual bankers de-
posted securities, as before imentcoed, in this
They received circulating noics .......... Sss SIS
/ Still more worthy OF attention is he FAC, tha, Of
the twenty five associations that began business in 1855
but two were combinations OF banks whose charters
had expired, while I'VE out Of the nine com
mencng business in 1857 we're OF that cescrp-
ton The contrast Is lesson to be needed by capitalists
but four associations commencing business IN 1857 and
one Of them declining to take Circulating notes against
Hs the general bank law reached the goal Of all our
general laws for associstng captaR We know that
general railroad plank road Insurance. and msnufac-
turing laws stimulated associations for the prosec
thosc interests to fuch ndeprce to use common but
| pressive phrase, the business was overdone
appears TO the Superintendent that have nearly II
no. Guie arrived at the result in banking by the
multiplication Of the nuxter OF banks ana the snancss
Of their capitals The FOR bank stock has received
check, the recovery from which will be very gradual
entire One ~ the errors OF the interior banks IS
! endcavorirg to bank upon circulation alone In
other words placing nearly II all, their osptal in
this department. Every DOLLAR OF circulation received
by any bank whatever under The bank law should
be backed by at least dollar Of actual capital IA the hands
a the banker Willie the sky ia bright aud the
ea uadisitfbed, with reasonable amour, of deposits. he
may sail gsy aud prospcrousy along hut he eatrely
united TO meet the periodical tina, must snd wa
ovcrsse him under the peculiar organization Of the bust
| ness affairs Of our oourtry
The system OF banking upon circulation alone unsafe
and unouud for The banker, unless favored by circu-
stances not Usually the fortune OF bankers class in
! the interior of ue state.
In saying this tie Superintendent does not mean 10 in
woke legislation on this subject II attempted viii be
futile and only add another monument 10 former efforts
| q this DESCRIPTION, In other general laws,
The TACT that create themselves corpora,ors by
| complying with certain provisions OF law, name the
locality aud the amount capital they propose 10 employ
ia the business Of banking end retaining bat capital IN
their hands leaves the question Of the amount OF
cspia they actually employ within their own bosoms
| wi ich 10 i,fai enactment con control.
This question being upon which great difference Of
opinion exists the Superintendent will try % illustrate by
| sr example.
1he general bank law admits Any number Of persons to
associate for the purpose Of banking suppose The mini
capita OF uc persons associated 20 be $4,000
and the associates ten you please; they place 500 90
Ia this Ipparns Ut In securities required by law This Is
evidence Of ownership ~ the capital IL only posses
zion. This the nearest pon. upon the question Of capt
tel you can reach by leg aton, a. dvcss the associates
IT. II Il theirs well II not, their creditors must look
10 H. They make the usual affidavit OF paid W capt
tai admit Is actually paid w in mouey aud
/ owned bond fSs by the ASSOCIATES They
menoe n. business Of banking. They choose TO
employ but the circulating no'p~ el0o 600 received
s % ,rcvcr her 1o,sas ,besovs n , nr
money the s2ooooo 81 tbs capital Of their bank
Nothing but Law to prevent the ioanng q money by
every bark 20 any and all ts stockhoiers The appca
tor o. this provision the directors alone Of the banks
the state, would reduce the discount line ofour banks
| over $40 eco coo
fortunately, there s higher law than legislatures
frame upon THE suhectthat Of cxpcrcrcetcachirg the
reocsriy Of connecting capital with circulation, az ncccs-
10 the prosecution successfully and probably Of the
busue az making Tho teachings ofthe last few months
70 the bankers Of the interior upon this oo,ed point will
not he forgotten and will be acted upon promptly when
THE preSen stoi IN our onetary Affairs passes away
As before remarked, Il is futile 20 legis'ate upon this
question OF capital The decision OF the court IN relation
| 10 this department, IN regard 10 the amount n
securities associations and individual bankers shall have
in the custody &c the superintendent places the wfoe
question che proportion Of capital 10 currency n the op
ton Of the banker himself True. he places 800 900 IN
securities 10 The hands Of the super ntendep an ssso
ciaton and demands and receives s2o,o0O, or less
amount, in notes he chooses withdraws the $40 600,
aud discounts the notes of his associates returns W
VI the Parties whom borrowed and commences
the business Of banking according 10 the judicial consruc