Each bank in this State redeems its notes to an amount equal to its whole circulation, once in about 75 days. And it has been thought advisable to direct the banks to avail themselves of this process of redemption six months in advance of the prohibition upon their circulation among our citizens. This, it is supposed, will have a great tendency to prevent a contraction of the currency. In order to test the effect of the measure, the committee recommend a resolution calling upon the banks next year to report the exact state of their circulation. The committee are fully conscious of one difficulty attending their measure, and that is, the exclusion of small bills of banks in other States. The present law upon that subject, is almost inoperative; partly because the penalty is imposed upon both parties, thus making it the interest of each not to enforce it, partly because of a distinction, which seems to be invidious, between bills of our own banks and those of other States, and partly because there is a prevailing opinion that that measure is calculated only for the benefit of the banks. The two latter will be removed by the proposed extension to our own bills, and the former by attaching the penalty to one party only. It has been suggested to the committee, to adopt more rigorous measures in regard to the circulation of foreign bills, than our own; but this course would preserve the same distinction which is now complained of, and would be calculated to defeat that co-operation of the neighboring States which is so essential to the full adoption of the measure. By evincing to the adjoining members of the Union, a disposition to deal by them as by our own citizens, by spreading before them the advantages of our measures, and by exhibiting to them the precise operation with us, it is to be hoped that they will be induced to unite with us. If, however, this hope should prove to be unfounded, it will not then be too late to adopt a course sufficiently severe to protect our citizens from suffering loss by the operations of those of other States. DOCUMENTS. (No. 1.) TABLE Showing the excess of issues of the several Banks over the amount of their respective capitals, as they existed on 1st January, 1834, and 1st December, 1834. Note. It will be observed that the 36 banks named in this table have fallen off in their eirculation in eleven months. The committee have taken $2,000,000 as the average in their calculations. ... (No. 2.) TABLE showing the excess of loans of the several Banks over the amount of twice their capital, compiled from the returns made to the Bank Commissioners, January 1, 1834, and January 1, 1835, and from other legislative documents. Hudson River bank, |