of this State or of the United States, which, it is presumed, will be ample security for the redemption of all bills in circulation. Could this system of banking be generally adopted in the several States, it can hardly be doubted that it would prove highly beneficial. It would create a demand for their own State stocks. The interest paid upon them would be paid to their own citizens. Every man who held a bank note, secured by such stocks, would have a direct interest in maintaining inviolate the credit of the State. The blasting cry of repudiation would never again be heard, and the plighted faith of the State would be as sacred as national honor; and lastly, it would give them a sound and uniform currency. If, then, in addition to this, Congress would authorize such notes as were secured by stocks of the United States to be received for public dues to the national treasury, this would give to such notes a universal credit, co-extensive with the United States, and leave nothing further to be desired in the shape of a national paper currency. This would avoid all objections to a national bank, by obviating all necessity for one, for the purpose of furnishing a national currency. The national government might be made amply secure. The law might provide that all bills secured by United States stocks should be registered and countersigned in the Treasury Department, as the notes circulated by the banks in this State are now registered and countersigned in this office. This would enable every collector, postmaster, or other receiver of public moneys, to know that they were receivable for public dues. The stock of the United States by which their redemption was secured might be so transferred to the State officer holding the same, that it could not be sold or transferred by him without the assent of the Secretary of the Treasury; and in case of the failure of the bank to redeem its notes, it might be optional with the Secretary of the Treasury to exchange the notes held by the government for an equal amount of the United States stock held for their redemption, or let it be sold and receive the government's share of the dividends. In this way the national government would always be secure against loss. But this suggestion is foreign from the chief object of this report, and is merely thrown out to invite attention to the subject. But, in conclusion, the comptroller has no hesitation in recommending that the free bank system be modified in the particulars above suggested, and that it be then adopted in preference to the safety-fund system, as the banking system of this State. It cannot be supposed that banking under this system will be as profitable as it has been under the safety-fund system. It is, therefore, desirable that every facility should be given to capitalists who engage in it, that can be granted consistent with the security of the public, and that no unreasonable or unjust system of taxation should be adopted which discriminates invidiously against them; but persons engaged in banking should be taxed like all other citizens. SIR: I transmit to you herewith a copy of two acts of the legislature, passed at the recent session, containing provisions of much importance to the banking institutions of the State. The first of these is an act amendatory of the general banking law. It will be perceived that the first section makes a material change in the character of the stock' securities required to be deposited with the comptroller, as a security for the redemption of circulating notes. Under the previous law, the comptroller could receive no other than stock of the State of New York, bearing, or made equal to six per centum. The present act provides that one-half the amount of stock securities deposited in this office may consist of stocks of the United States, "in all cases to be, or to be made, equal to a stock producing an interest of six per cent. per annum." Banking associations and individual bankers who have heretofore deposited stocks of this State, and who may desire to avail themselves of this provision, will be permitted to withdraw the securities now held, and to substitute therefor, stocks of the State of New York and stocks of the United States, in equal proportions. The succeeding sections of the act referred to are intended to enable the stockholders of the safety fund banks, as their respective charters shall expire, to preserve the continuance of their institutions, by a re-organization under the provisions of the general banking law and the several acts amendatory thereof. To facilitate the ransition from one system to the other, without embarrassment to the banks or the community, the comptroller is authorized to receive a deposite of securities in amounts of not less than $10,000, which may be increased from time to time for three years, within which time the deposite must be made equal to the minimum sum of $100,000, required to be pledged by associations formed under the original provisions of the general banking law. By the second of the acts hereto annexed, the legislature have prescribed the manner of giving effect to the provision of the constitution, which imposes a personal liability upon stockholders in moneyed incorporations, in the event of their failure. The nature and extent of this liability is wisely defined, to the end that each stockholder shall be responsible for himself only, for an additional amount equal to the stock he may hold, and that our citizens investing their capital in moneyed institutions may know in advance the utmost limit of the liability to which they may be subjected. It is hoped and believed that the provisions of this act will be satisfactory to those interested in our banking institutions, and to the community at large. The interest of stockholders and of the public, in respect to the soundness and safety of the capital employed in the business of banking, may be regarded as identical. It is conceived that the limited liability now imposed, so far from exposing share-holders to increased dazard, will tend to insure the safety of their investments by inducing vigilance and prudence in the administration of their affairs, and thus afford new safeguards for the protection of their own interests and the rights of their creditors. With this additional inducement to the exercise of reasonable care, and with the results of past experience to serve as a warning against the danger of illegitimate and expansive operations, it is hardly conceivable that a moneyed institution possessing a bona fide capita!, and administered under the guidance of honest directors, should suffer a loss of its entire capital and expose its owners to further contributions. Very respectfully, WASHINGTON HUNT, Comptroller. Extracts from report of Washington Hunt, esq., Comptroller of State of New York.-January 2, 1850. BANK FUND. It will be seen from the following statement that the stock issued on account of this fund was reduced, in the last fiscal year, $121,132 45, leaving $779,696 22 now outstanding, to be redeemed from the balance in the treasury and the future contributions of the banks. To this sum is to be added the outstanding claims against the Bank of Watervhet, for which stock has not yet been issued, estimated to amount to about $80,000. Doubts having existed as to the validity and extent of one of the principal claims against that bank, the question has been submitted, by the consent of all parties, to William L. Marcy, as sole referee. The case involves important legal principles, and an examination of intricate accounts and witnesses. When the balance actually due fron. this bank shall have been accurately ascertained, it will become the duty of the comptroller to issue safety-fund stock for the amount. There is little reason to doubt that the future contributions of the banks will be found fully adequate to redeem all the existing claims upon the fund. The comptroller is of opinion that authority should be given to invest any accumulations of money belonging to the bank fund in the purchase of outstanding stock, under certain restrictions, to be defined by law. Balance of six-per cent. stock issued on account of the bank fund, per chapter 114, Laws of 1845, remaining unpaid, and redeemable as follows: |