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

converting Of the Legislature, had placed themselves
voluntarily in position ST. onger than that recommended
by the Superintendent evidently teaching the lesson that
when banking capital in this State, under general
finds Itself in danger of loss (and the loss under that
law failing alone upon deposltors aud stockhoders) 1t,
through managers, entrenches itself position, and
that speedily which looks 70 ultimate soyency instead Of
large profits.
The great and controlling law Of self interest once
learned through the rough road OF experience, is far
ef.cual rule OF human action than any statutory
PROVISIONS, however strictly enforced
Table No presents the outstanding circulation Of those
nco poraed banks whose charters have expired which,
the 30th OF September, 1857, was. 342i ,42l
DO. do. 1898, was.......... 2,aaS,2ol
Returned and destroyed during the pas, year. s972 7o
Table No. presents the names of the several banks
which have ceased the business OF banking, and whose
notes redeemed behalf OF the Superintendent at the
bank wbose is set opposite TO each and also the
time when such redemption by him will expire.
Table No presents the names OF the nsolvent backs,
the rate of redemption and the places where redeemed
portion of those named in table No. in the hands
of receivers, and their notes allowed to go to pro-
test and their securities sold by the Superintendent and
sufficient money retained in his hands TO cover their Cir
cnalion.
The balance paid over to their respective re-
THIS done at the suggestion of the Sapcrn-
tendeDt the only method by which the receiver OF
iIee bank could close his trust under our present
laws The superintendent most respectfully calls the at
tenon OF the Legislature TO the following SUGGESTIONS
FINAL CLOSING FREE BANKs.
By the Of chapter $40, Of the laws Of 1857,
the trustee or legal representative OF an Incorporated
bank after redeemng ninety per cent of its circulation.
may deposit with the Superintendent sum Of money
equal to the outstanding circulation of the bank and after
giving notice that the notes will be redeemed by him
during Fix years Immediately following such notice, the
Superintendent Mt the expiration Of the time mentioned,
refunds whatever money remains in his hands. the
trustee legal representative; and the notes then out
standing To he charge upon the property OF the
| bank a claim upon the trustee.
There valid reasons Why the same provision
should not be applied TO The receivers and asnees OF Tree
| banks and bankers.
closing OF banking catons and individual bankers are
not entirely satisfactory 10 The SUPERINTENDENT so lar as
they to the execution of bonds for the redemption
OF their outstanding Circulation after the expiration Oh TWO
years, during which the notes are redeemed ty hun
The difficulty IS twoiold. FIRST, the owners OF rhe
bank, banker, is not legally bound to destroy
the notes they be redeems curing the six years in
which he bound to redeem them by the terms OF the
bond executed TO the Superintendent The credit Of
free bank note is such that easily be again put
in circulation And in fact at the end of six years. whoa
obligation to redeem tie entirely, the
whole may be outstanding and in the hands Of the
community This wrong in principle, aud while the Su
charge that been even
in single Instance, stl there is existing why
il capnot take place, no legal enactment preventing 1t.
1L second POINT in relation 70 the bonding of bank note
Circulation is that although the bond is executed to the
SUPERINTENDENT, no express authority exists ior us
prosecution failure to comply with its pro
visions No occasion has yet arisen to test his power
IL relation to this point, as notice from him that he
wonld prosecute the bond several instances when tho
parties have refused TO redeem the notes presented has
resulted IN their prompt redemption on second present
alton.
The experience of tue Superintendent during the past
ear IL end ovorng to enforce The performance Of o5a
aety Fund the expiration of their charters renders
i'm anx TO have rs few occasions possible by which
c Is Compelled officially to apply 10 the courts, either to
oect moneys due the department TO enforce penalties
or the nonperiomance OF duty by the banks banking
associations and individual bankers of this State He
@ould therefore respectfully recommend that closing
bank be required to deposit (ater the redemption of
ninety per cent of its circulation as now required
by lawt. the fncney for the redemption OF its
outstanding notes, with the Superintendent to be
BY him deposited in some solvent bank in the city of
Albany; and the expiration Of years from the
making Of such deposit the balance OF money remaining
after edeemng all notes presented for redempon 10 DO
refunded the thereof and that the
standing charge upon the association ipdi-
yiIuai banker making such dep0st-thus aboiihng the
system OF bonding bank circulation entirely An.
other and Necessary to present laws in
ton closing and insovent banks the opinion OF the
Superintendent TO direct him to pay into tue treasury
Of the State all unclaimed balances remaining in his hands
after the expiration of six years from such deposit
Table No. 10 presents the OF the banks and
bankers that have closed their business and bonded
their circulating notes. with the OF their
residence tho sureties u their bonds and the time
when the penalty Of the bond 10 redeem their notes
pres. The number Of banks thus bonded, the Sapern
dent hopes will add force to his recommendations to
qure deposit Of money hereafter for six years instead OF
bond, however sound and solvent the principal and
surees OF such bond be ut the time OF its execution
Table No II presents the number Of notes and their re-
specye DENOMINATIONS counted and destroyed for the
free and Incorporated banks during the past year. in the
department and their aggregate amount in dollars The
amount s some millions IN advance OF the usual business
| OF the Office.
| Table No. II presents the number of bank note
plates destroyed during the past year, under section s.
| and the denominations OF The notes upon each
FuyD.
Table No. IS presents the Of the receipts and
disbursements OF this fund, and also AN estimate Of its
yearly condition until the hnai payment of the stock the
last OF which falls due the urst of February 1866.
will be noticed that the statement shows that the
debt may be hquidated the first Of February,
1853, leaving OF s., i4O 10; but assuming
| that the stock will not be pad until due, first o.
! February, 1866, the estimates continued until
that date, and until the expiration Of the charters Of all
The incorporated bapks showing final balance at that
cate, over The am mt necessary To pay the outstanding
! stock Of S70,OG6 IS
Al the close Of the fiscal year $50 there will be an
soute deficiency OF soo2s 49, An eiot WI DC made by
the Superintendent to convert portion of the mortgage
securities into money 10 this deficiency, to extend
the time of pay upon PORTION of the stock for one
year at which time there Will be abundant means 10 meet
| the amount tlus extended.
In presenting the Gnal result Of tbs fund, showing an
excess OF $40 O66 rs but lust state til 1t this Is but
estimate based upon suppo. that every dollar
considered good ia viii paid, The estimate Of
1853 showed surplus of $3i, ltgl The reduction
shown from that sum arises from the failure Of three
safety fund 6suk, whose payments, had they continued
unu The expiration OF their charters, would have been
Sufficient 70 raise the surplus 10 the original estimate.
There 20 doubt that the entire stock issued
on account o. this fund viii De paid ia uil, and leave
! handsome surplus.
suit at law against bank which had refused to pay
the 9st nsalment OF The safety funn has be pending
several years between the trustee of expired hauk and
tue people OF te state VI Ne" York The OanN iund was
the real plaintiff ~ interest," although the suit brought
in tie name of the people OF the state 1t s,rg ted
that the amount due from several other banks payment Of
which hat been refused, should abide the result of
su their condition In relation 10 their payments being tho
game The suit was commenced pr.yious 20 the aci Of
1851 Ibis act changed the time OF payment of the cDutr
buobs Of the several banks u this fuud by Inserting the
words son or before the 3lst OF Dacn,bfg In rac Of
| con or before the lst Of January."
The SUIT ~aa tried IN the courts below, and a verdict
rendered in favor Of the people Of the state, but Gna
y carried TO tue Court of Appears BY the defendant, for
ultimate decision. The decision OF that tribunal was
| adverse to the claim. 1t is almost needless for the
| Superintendent to express his astonishment and
disappointment at such result. Still, he learned
this important fact, that there nlnitessimal
point of between the 3lst Of December and the
I, 1st Of January precisely at which corporation
ceased to exist aud that, exactly the right moment
10 prevents from paying sum OF moncy due the safety
fund for toe privileges and exemptions had enjoyed dur
Ing The preceding year Ia other words the charter OF
Bank Of Utica, whose trustee. Mr. Walker, defendant.
in this suit continued force ty chapter ZIG OF the
laws Of 1929, until the LIST Of Januy 1850. Tie bank,
by the acceptance OF this confirmation OF is charter
placed itself under the provisions OF tie Safety Fund act
by the CONDITIONS Of which It was bound TO pay toe
f.st.. f.. EuTT .g Il.