1836.

2,122,000

2,745,000

2,572,000

We have hertofore expressed the opinion that in the distribution of bank capital, the public interest would be better promoted in most instances, by increasing the capitals of existing banks, than by the creation of new ones.

The reasons for that opinion are given in our report of 1834, and we think they apply with peculiar force at this time. It is capital that is now wanted, not currency. The circulation of the banks is now much larger than usual, which shews that money is plenty, although capital may be wanted, and certainly is in demand.

It can be furnished to the community with a less increase of circulation by enlarging the present, than by establishing more banks.

In the city of New-York, where we think more capital is required, we should esteem it desirable to enlarge the capitals of the smallest class of banks, as well as to raise some of the others up to the highest class.

In the country there are some few instances in which new banks would better accommodate the public, (without being particularly objectionable in other respects,) than an increase of existing capitals, although generally we should think otherwsse.

The $100,000 capitals we have always considered too small, and within a suitable time should deem it desirable to have them increased, as well for the purpose of affording more security for their liabilities, as more accommodation to the public.

If any new bank capital shall be authorized, it will be important, to have it taken by individuals who possess actual capital to invest, without raising it upon the credit of the stock itself, as we have found has sometimes been done. The law now requires the capital to be actually paid in, and there can be no hardship in requiring the money to be raised without pledging the stock upon which it is paid.

This may be accomplished by a provision prohibiting the hypothecation of the stock for any purpose whatever, say for one year after the original issue of the certificate; and in our opinion it would be a wise and salutary provision.

We also suggested in our report of last year, the propriety of prohibiting all the banks from receiving hypothecations of the

stocks of other banks, and subsequent observation and reflection have confirmed the impression then entertained, that such a provision would be salutary in its influence, without being justly considered as oppressive, either upon the banks or the holders of such stocks.

Respectfully submitted.

C. STEBBINS,
GEO. R. DAVIS,
LEWIS EATON,

Bank Commissioners,

Albany, January 23, 1836.

DOCUMENTS

Accompanying the Report of the Bank Commis

sioners.