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

capitalists of this State. To this time attempts
were made, and successfully too, under its provL
sioDs create institute Ms, not for legitimate bank
Ig. but for the purpose OF the propretors thereof
making money upon mere circulation alone.
Banks were located literally In the wilderness;
notes were signed by powers Of attorney,
given TO irresponsible persons, Us presidents and
cashiers. Every device was act to work to prevent
the return Of notes to the location IL the bank for
redemption, and they we're never issued or signed
at the place Of business, as shown by the face OF
The note itself The entire business was carried on
al the agency OF the bank, either In the city OF New
York Albany or Troy. This was literally comply
ing with the provisions of the act 1870 which al
lowed, rather compelled oil banks, banking assoc
Citations and individual bankers, located out OF those
Cities 10 redeem their notes through an agent IN
one OF them, at one-haf of one per ce0t discount.
Strong Efforts were made to induce the Legislature
to reduce the amount of discount to one-quarter OF
one per cent These efforts failed, although con-
tinued during the sessions of ls49 and 1850 In
1851 the act Of $40 was so amended as to reduce
the discount upon country currency to nequarter
of one per cent. This act literally closed the door
10 iileginate banking in this State. With scarcely
an pton, that class Of banking associations and
individual bankers gave notice to close their busi-
ness: and within the year neatly million ofdollars
Of this class Of currency wasreturned and destroyed
in this department. never to be again replaced IN cir
cnlaton for the purpose only Of purchasing it at
discount at their respective agencies. For the rst
TINE in the history of our bank legislation the
Legislature seemed to have ascertiined the liked
Idct tubt Huudn sdsdCiy Couiu uos HouAo {" -"
which would control the issue Of paper money
made solely for the purpose Of realizing profit
upon its purchase by the issuer himself unless it
made the transaction u source OF no profit to the
parties interested therein. As before remarked,
this act closed, in o great measure, the banks Of
mere circulation, and the general Bank law began
to produce the fruits expected by its advocates.
BY reference to the figures in relation to the per
cenfage Of circulation upon capital given below it
will be seen that in 1850 the amount of circulation
OF bank notes in this State fifty per cent upon
the entire banking capital OF the State. II did not
fall of but one per cent in 1851, but immediately
after the passage Of the act Of 1851 it fell of three
per cent upon the capital, while capital increased
$4,000 600; and the absolute circulation in June,
1851 and 1852. not changing quite half million
Of dollars the increase being in favor of the latter
year. Thus the circulation of the legitimate banks
supplied tie place of that Withdrawn by the
closing Of those created for the purpose Of circu-
lation ale ne.
The following is statement of the per centage
Of actual circulation upon the capital Of the banks
in this State dciudiDg all descriptions, for the pas
ten years.