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Brought forward, ........ $10,769,000 Last year the apparent circulation was, $14,464,000 Deduct bank notes on hand,
Increase of circulation this year,
Increase this year, ....
The Canal Fund and other loans have de.
creased, ... The balance of bank credits has decreas
Leaving an increase of means this year of.... .....
The character both of circulation and deposites is too fluctuating to authorize discounts upon them to their full amount, and probably the extension of discounts is about as great as would be prudent, and the amount is about as large as the banks could make it and keep within the limits of the law.
More than half the increase of deposites is occasioned by the accumulation of government deposites in the city of New York, which are less fluctuating, and therefore more available than ordinary individual balances.
Although the business of the banks during the last year has been large beyond example in this State, yet their means have been extensive, business has been active and prosperous, and we believe them all to be in a sound, healthy and safe condition.
The demand for money occasioned by the late calamitous destruction of property in the city of New-York; the increasing probability that the commercial interests of the country may be subjected to embarrassments growing out of our foreign relations; the strong probability that in any event a large portion of the government deposites may be drawn from New York, to be expended
elsewhere in the country; and the uncertainty, as yet, attending the manner in which the Branch Bank in New York is to be wound up, are all considerations, we think, which should inspire caution on the part of the banks, and induce them to prepare for a different state of the money market from that with which they have been favored the last few years, and especially the last.
Considering it desirable to be enabled to present a complete statement of the condition of all the banks of the State on the first instant, we previously addressed a circular to those institutions not subject to our supervision, requesting a statement of their condition on that day.
All of them have very cheerfully complied with the request, and furnished their statements, except the Bank of Rochester. Annexed will be found a table showing their condition individually, and aggregate statements of all the banks of the State, distinguishing between the Safety Fund banks and others, and between those located in the city of New-York and elsewhere,
For the purpose of instituting a comparison between our banks and others in respect to their means immediately available, (without resort to their discounted debt,) and those liabilities which they are subject to be called upon to discharge on demand, we have compiled the following table from a recent report of the Secretary of the Treasury, from our own reports and from the last report of the banks in Massachusetts.
LIABILITIES AND MEANS OF BANKS.
Country safety fund Massachusetts Bank of the United New-York city banks in the state of All the banks of the banks, May, 1835. States, Nov. 3, 1835. safety fund banks, New-York, Jan. 1, state of New York,
Jan, 1, 1836.
Jan. 1, 1836,
Immediate liabilities. Circulation, Individual deposites,. Government deposites,. Due to banks,
$9,597,000 $1,136,000 $10,224,000 $3,623,000 $1,351,000 $6,224,000
8,359,000 2,097,000 2,349,000 6,211,000 1,974,000 10,237,000 11,202,000 3,797,000 3,514,000 8,012,000 5,881,000 15,991,000 $29,158,000 $7,030,000 $16,087,000 $17,846,000 $9,206,000 $32,452,000
A comparison with all the deposite banks in the Union is suposed to be a very fair one, as they have been selected probably from among the best and soundest institutions in the country.
Their means, and those of our country banks, it will be seen amount to about 43 per cent of their liabilities. Those of the United States Bank, and the New York city banks, to a fraction more than 50 per cent. Those of all the banks of this State to over 46 per cent; and those of the banks in Massachusetts to about 28 per cent.
The Bank Fund now amounts to upwards of $530,000. A surplus of revenue arising from it up to the first of January, inclusive, amounting, as we estimate it, to about two and one-third per cent upon the amount previously paid in, is now in the treasury, and we understand will be divided in a short time among the banks entitled to it.
We are not aware that there has been during the last year, any complaint or any just cause of complaint of those practices which were the subject of investigation by the last Legislature, and have no reason to believe that they have been or will be again resorted to.
The measures adopted at the last session of the Legislature for the suppression of the small bank notes, have so far as they have yet gone into operation, occasioned as little inconvenience as, was to have been expected. The effects of the change were not sensibly felt until about the first of September, and since that time a large amount of specie has been put into circulation, which will very
much increased after the issues of the three dollar notes shall have ceased. As yet the banks in the interior have found no serious difficulty in obtaining the requisite supply of specie from the cities, and most, if not all of them, have been obliged to resort there for it.
It is believed that in general the law has been very fairly carried into operation, and with much less difficulty in consequence of the co-operation of some of the adjoining States, which have adopted the same policy. Our Canadian neighbors, however, circulate a very large amount of small bank notes, which are taken as freely on the adjoining frontier of this State, as our own notes or specie. In a considerable portion of St. Lawrence county, where the in
tercourse of the inhabitants is chiefly with Canada, the law is entire ly disregarded. It is more or less so in the counties bordering upon Vermont, in the extreme western counties, and in the city of New-York. It will be found impossible, we apprehend, to enforce the law effectually so long as the small notes are issued by the banks of the adjoining States.
There are but few ones and twos now circulating in the interior of the State, and the amount circulating in the other districts alluded to bears but a small proportion to the amount withdrawn by our banks.
Notwithstanding the discussion which this measure received in the last Legislature, and in the public prints, a large portion of the community seem not to have apprehended all the reasons for its adoption, and to have regarded it rather as a precautionary measure to protect bill holders against losses, than as one intended to effect more general purposes by enlarging the metallic basis, and thereby adding strength and stability to the entire currency of the country. Feeling no danger themselves, but possessing entire confidence in the ability of the banks, and finding some more inconvenience in the use of silver than small notes, when the effects of the law were first felt, they to a considerable extent regarded it with disfavor. Now since the small silver coins have got into circulation, and the trading community have become accustomed to the change, the law it is believed meets the public approbation much more generally, and to the banks so far as we know, is quite satisfactory.
The one and two dollar notes are already mostly out of circulation. The amount of bank notes in circulation, instead of being diminished by their suppression, it has been seen has increased more than two millions. This is undoubtedly owing to the abundance of money, the activity of business, and other causes unconnected with the measure alluded to.
One of the anticipated effects of the measure, was the enlargement of the stock of specie in the country banks, and this begins already to be apparent. The increase since the first of January last, is $148,000, and a considerable addition to the stock now possessed will be required to meet the demand to be occasioned by the withdrawal of the three dollar notes after the first of March.