The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1859-01-07


s,itution for the redemp,ioa OF circulating notes,
resting his objections to their reception upon their
noonver,oy Ione ,,nre the fact tha, The present Jaw
governing the securities 10 be received Tor Circulating
notes works manifest njnsuce 10 large poruon OF 'ue
banks and bankers engaged IN the business oil banking III
this State The experience OF the Superintendent, IN con
yerting securities held in irus. by INN into immediate
means redeem the notes of failed banks, has taught
this lesson.
The present law in relation the description of secar
ties be deposited with bm requires, IN the language
the statute, that they shal be New York State stocks
ali 10 be- " be made 10 be. equal TO STOCK pr
ducing six cent annum or at least one nan ,u
amount deposited shall be IA the stocks 81 the stale
New York, before mentioned, AM not exceeding on
hall stocks Of the United States in all cases TO be- or 70
be made be- equal stock producing an interest OF
six per per annum and shall not be lawful Tor The
Superintendent take such stocks at rate above their
par value, above their current market value "Or
the securities shall not be less than onehslf in such
Stocks and one bail IL bonds ana mortgages upon I'M
proved productive unnenmoered lands M THIS state, ex
elusive OF any buildings thereon, SAID mortgages bearing
Of not tsai cent auhum ana
10 amount not exceeding twohths the value oil said
Laws Of 1881
The experience of this department proves that tae bonds
and mortgages sold by the superintendent lof The re-
denption of circulating notes not only during the dis
asers OF the past year but from the beginning OF our free
bank system, have Toazel bai ABOUT eighty cgb per
Of the amount for which circulating notes had been
issued upon thcm while the aggregate securities includ
ing both stocks and mortgages, every during
the pane OF 1857 wih two exceptions have brought
than sufficient TO reGeem Tie issued up
on them These exceptions arose from the frau inlent
character of the mortgages IN case ami the peculiar
copon OF the stocks beld n,he other the stock falling
due during the year which the bank failed, thus real
2ing little no premium u pay tue deficiency arising
from the sale OF the mo- tgages.
The practical effect Of receiving tbe present
securities upSn the system of DapSmg,
pursued in this stlto is simply this: Those banks
which wisely, i the opinion ot tie Superintendent
elect to place stocks alone u tue ep8tnieat security
foe circulating notes Issued 10 them, obliged. from the
tsnty attached mortgag, securities, TO place
'he hands of the Superintendent stocks to be- or to be
made to be- equal 10 siocs bearing SIX per cent interest
per anuura while five per cent stock and has oeen,
with the exception Of few days ia Catober, 1897, worth
open kci par tn other words, Tue same rule
OF security applied bank whose secured
alone h. stocks, 10 whose circulating notes
secured ty stork7 aud r,ai estate, ~h the result OF
this class OF securities Is that the superior value
of the stocks made 10 pay the inevitable loss upon the
mortgages. This right aud proper far relates
The notes secured by stocks aud real estate but manifest
" unjust banks bankers who have chosen to
secure their notes by stocks alone
The Superintendent has no hesitation in saying that the
circulating notes OF bank secured by Ave per cent
stock this State, by i've per stock Of the State
of New York Jhe United States equal parts of each
apundan,ly secured those secured by similar
Six per cent stocks and an equal amount OF bonds and
Under this manifest injustice aud unequal operation of
our present laws in relation TO the securities 10 be depo
Sed by the banks in tins department the Supe
does pot hesitate 10 mend that the Bank Department
be allowed TO issue al banks bankers whose de-
post security consists OF alone par crcua
tion upon five per stock OF tins state or of this
State the United States, equal PARTS nj each Also
that every bank or banker may ny retiring all Of lis or
his mortgages be permitted under the direction of the
Superintendent to change the die upon his
from "siock and real estate, to pabe stocks" Only,
and be subject TO The rule if stocks alone had
been originally deposited
In making the above recommendation, s but just TO
say that the Superintendent governed b. his experience
of the converbiy OF the securities in his hanis during
the difficulties and disasters attending our banks during
the ian OF sa7 ana also oy 1s iact .na' s,uco voc ios
of this State of the United States has been sold by IT,
except a, premium
Table No presents in detail the securities of each
banking association md individual banker held in
by this Department. and the amouat of Circulating notes
issued thereon.
II may not be aiss for the Superintendent here say
that he believes every issued every FREQ bank
the State 10 be amply secured The best possible proof
OF the strength Of tins Class Of bank note Is the
fact that during the three years the department has been
his charge Curing of which general suspcn
sion Of specie ments occurred) the entire loss upon
this pton Of currency has been but 81 $3.50 Ca of
which $50 ~ the result Of fraudulent representa-
lions OF the value OF premises morgaged to the depart
security for circulating notes contngency which
cannot arse under the present regulations govern
ing this class OF securities.
The failure Of the Reciprocity, late sacIets Harbor
Bank, the Bank Of Orleans, aud the Yates County
Bank Incorporated institutions, adds largely 10 the loss
upon our STATE currency They are all in The hands of
receivers appointed by the courts, and OF
jurisdiction control Of the Superintendent Il under
stood that liberal dividends will be made, finally, TO the
note holders. This opinion Is based upon letters from
their respective receivers
Table No presents the increase Of bank capital for
years also the Increase and decrease OF cir
culaon issued By This department the banks banking
associations and individual bankers during that period
noticeable fact that while the amount OF
tai has risen, in round numbers, from ss5 000 900
in ls4q to $4,000 600 in 1855, currency has pre-
scented slight comparative increase, with occasional Auc
tuaons, Until II has fallen bac, TO within nearly SO 600
600 OF the amount le49. This tends ~ add stability TO
banking system shows the truihinness Of the
mark of the Super il his years report
''that whatever may lead suspension OF specie pay
mens, either by foreign or domestic demand for coin
the currency our banks properly secured not an ee
THIS is perhaps the proper place for the Superintendent
70 express lbs views upon the PROVISIONS OF tne present
law in relation The examination Of tie condition Of
banks By special agent, or By the Superintendent him
sell.
By The provisions of chapter els Of the Jaws Of 1913 tho
Office OF Bank Commss.ouer was abolished, and certain
powers OF examination Of the affairs OF bank whose sol
vency suspected dcvoved upon The 81 ent
ana also the POWER OF examination Is given hm ly chap
ter 81 OF the laws OF S4 and by CHAPTER ~ Of the
Of 1864
courts ana The officers OF the banks
Superpendent endcavors in person by agent 20
II has only attempted by The rresen 81
gernteudeDt The result Of tho attempt was, by tue time
his agent bad obtained sgbt insight into the real cOnd
ton Of the affairs OF the bank he was politely met by its
appointed by the court at the solicitation OF the
ocers themselves, and told that hs duties we're ended
aud h the property and Effects OF the bank beyond
his control ard po"er, evcn Cor examination.
The effect Of this power OF examination simply, If the
bauk realty solvent 10 procure the endorsement OF the
Superintendent, and il nsoyont It's Affairs placed il
the IL nds OF before such examination be
completed or made OF any use 10 the public.
there two valid and subsstlng objections 20 the
strtc In relation 10 an examination III any bank By the
useless il. operative effect as TO the public safety, aud
leavos upon the taiG OF the people impression that
the sup riniendeu exercise power ami
over banks. hey Ond that connected with the currency
they issue. IL he upon the examnat
OF the Affairs OF bank which ne suspects Of making
incorrect Imperfect quarterly report, Is in al
upsound unsafe condition; bat all experience teaches
us that insove.t bank never exposed that insoi-
yency, or aBy danger OF such result, in lis quar-
terry report. Figures and aDdayts made by
bank officers 10 expose insolvency deftcatons They
the figures. most useful adjuncts 10 conceal the real
condon OF affairs, and the aw Is keeping tir promise Of
protection before the public eye alone, AID throwing
ostensbe ponsbihty upon he Superintendent which
IL is utterly Impossible for hum TO uni The law with It's
present provisions, rs simply imperative statute.
promising beDeisa results from the vigilance Of the
Supernte ndent, and utterly producing
effects apparently promised by IT, however watch
ful and energetic ne may be-
In the second place, 1t is in direct CONFIRMATION N
the spirit aud meaning, understood by the
present Superintendent, Of our general bank law,
which looks, aad properly so. to the ques
ton Of currency alone and that nj the
fee Of all other parties in interest The constitution aud