The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1860-01-07

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Manage.
The report of the Superintendent of the
Banking Department of the State of New
York, just made to the Legislature, is pub
lished in another column, and is in some
respects a very suggestive document, while
in others it is lamentably deficient in
the instruction which might be expected
from such an official. The facts and figures
are well calculated to alarm, and the
Superintendent himself appears to be some
what alarmed. The excessive expansion of
the banks, and the excessive importation Of
foreign goods, with another fact to which the
Superintendent does not advert-the diminished
and diminishing demand Of the South-are
ominous of coming disaster. The banks, it
appears, are doing an immense and profta-
BILE business, and therefore there is danger. It
was so before the last panic. The Superinten-
dent says" The year ending In June, 1857,
was the most profitable year enjoyed by the
banks during the past ten years." He lays
down principle taught by experience, that
''when the line of investments of a bank reaches
beyond, say seventy. eight or eighty per cent
of its capital deposits and circulation, 1t is
stimulating the business Of the community
around il beyond healthy and steady action,
and extending itself beyond prudent and
safe use Of its capital and credit"
Now, what are the banks doing at the pre-
sent moment? Let the Superintendent an
swer:-
The banks Of this State carrying line OF loans and
discounts within the smallest fraction Of eighty per cent
ndrtRrn NOtha
they have on interest, including loans and DISCOUNTS
stocks and bonds and mortgage twice the amount OF
beyond this point the Superintendent does not believe to
be prudent and particularly whom the importation OF
sent year. Those banks in tho city Of New
York. particularly should carry rm and steady line or
ton, and should remember that while il is easy 70 ex
pand in apparently good times the necessary contraction
meet the changes Of our almost certain periodical con-
difficulty under which both the banks and their borrowers
labor when necessity for such contraction exists, always
created by previous expansion
We should say that the banks have already
exceeded the point of prudence, were it not
that they have an interest in creating panic,
particularly when they have Judges in this city
so lenient that they will not carry out the law
and place them, the moment they suspend
specie payment, in the hands of receiver to
| wind them up. It is clear that the Superin.
tendent apprehends danger, but he has no
remedy to suggest to the Legislature. On the
contrary, he says 'it is idle to invoke legisla-
tive aid to control capital in the business of
banking" Yet depositors in the banks of New
York have no security whatever So profta-
BILE is banking in this State that the capital in
vested in it increased from forty-four millions
in 1s49, to nearly one hundred and eleven mil
lions in 1859. This capital is employed by
three hundred banks.
Now let us see what is the security of the
noteholders. 1t appears that the total amount
| of securities held in trust by the government
| for banks of this State is upwards of twenty
eight millions of dollars ($2s,O6s,3 1850, and
| consists of the following
Bonds and mortgages .$6178,9l2 70
New York State stocks. 2036 %
United States stocks. lS64,lN 0o
Oncf State stocks. ooo,Ioo u
VAsn on deposit. 1oJoe4 %
| On the faith of these securities there has
| been issued q circulation Of nearly twentysix
and half millions of dollars csc, AGO ,632),
| while it appears that the amount of circulation
issued to banks under special charter is up
wards of ten millions (slO,0OO,s4D, and for
tu1s sACAV 40 nv SoVuAAsy w SAC OAAAVAuCAo, AVA
does the Superintendent suggest any legisla-
| tive provision to remedy the evil
| It is worthy of remark that while Governor
Morgan sent a message to the Legislature on
| Tuesday, which occupied seven columns Of the
| HERALD, and while he descanted at great
length upon variety of subjects, some of
which were better omitted, and others were of
comparatively small moment, he dismissed the
| important subject of the banks in few lines,
| in which he gave some statistics, but avoided
| giving the public other information which
| would enable them to understand the value Of
| the figures. This is the more unaccountable
| as Mr.. Morgan has been New York merchant,
and therefore ought to be thoroughly conversant
| with the subject. One would suppose that it
is the duty Of the Governor of the State to
warn the people of the insecurity of nearly one
| third Of the bank notes of the State, and we
further think it would not be amiss to recon-
mend change in the law, compelling these
| charter banks to come under the general bank
| ing act Nor would the Governor exceed the
limits Of bis obligation, or of aound discre.
tion by cautioning the community against Ca
madam money, which is exactly in the same
| predicament as the notes of our charter banks,
| or Safety Fund. The example of the failure of
| two Canadian banks during the year, flooding
the northern part of this State with their worth
less and unredeemed paper, might have sug-
gested to Governor Morgan the propriety of
| some salutary observations on the subject
There is general impression on the public
-
of New York are as good as gold to the hold
ers. That, however, is not the case with all
the banks and in the late panic two banks OF
this State failed whose notes are selling at q
large discount, those of one of them only
realizing from twenty to twenty-five cents on
| the dollar. They belong to the class of banks