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 be 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 neighbours, 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 intercourse of the inhabitants is chiefly with Canada, the law is entirely 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 one's and two's 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of the state, and the amount circulating in the other districts alluded to, bears but a small proportion to the amount withdrawn by our banks.

Although the creation of banks creates no new capital, yet banks do furnish to the community, beyond the amount of their capital, a credit which answers the purposes of capital to men in business.

They also distribute capital in their neighbourhoods drawn by means of their stock from other places and other investments, and locally, therefore, produce an actual increase of capital.

Banking with us is an experiment, in a great measure unknown to the rest of the world, and we should therefore proceed with caution, as the lights of experience may guide us.

The question is, how far is it safe to extend this system of credit?

Upon any rational calculation which we are capable of making, we cannot believe that the amount of additional bank capital actually required, and which might be safely granted, bears any respectable proportion to the amount petitioned for. But yet we do believe that some additional bank capital is required, and may safely be granted.

The following table will show the progressive increase of capital, other means and business of the safety fund banks, for the last four years, by which it appears that their loans to the community during that period, have almost doubled.

$18,755,000 $20,175,000 $22,730,000 $26,231,000 $26,531,000

PROGRESSIVE INCREASE OF CAPITAL OF THE SAFETY FUND BANKS.

2,122,000

2,745,000

2,572,000

3,657,000

3,088,000

2,409,000

2,094,000

6,049,000

5,783,000

7,909,000

8,402,000 12,290,000

14,110,000

15,402,000

14,464,000 18,955,000

12,005,000 12,215,000

$38,665,000 $43,044,000 $51,515,000 $58,736,000 $68,733,000 32,824,000 35,568,000 46,496,000 52,853,000

59,663,000

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.

wise

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 otherThe $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.

Loans and discounts..

Circulation of the Banks in the State of New-York,

Jan. 1,

1836.

One dollar bills.

One & a hf. do.

$195,515,00 | One hundred dollar bills $1,783,100,00

764,50 One hundred & fifty do.

600,00

443,931,00 Two hundred

do.

200,00

1,957,915,00 Three hundred

15,839,00 Four hundred

do.

40,400,00

*No returns received from the Commercial Bank of Buffalo, (273,003,) and the Chautauque Co. Bank, (168,078,) increasing the total to $21,647,443 97. (See page 212.)

SAFETY FUND ACT.

Abstract of the Act passed April 2, 1829, called the Safety Fund Act.

1. Every corporation, with banking powers, hereafter created in this state, or whose charter is renewed or extended, is to be subject to it for these purposes.

2. To create and continue the fund hereby established, every such bank shall, on or before the first of January, in every year, pay to the State Treasurer, a sum equal to one half of one per cent. on its capital stock paid in, after excepting therefrom that part of it held by the state, and at that rate for the time such corporation shall have been in operation, if less than one year.

3. At the time of making such payment, the corporation making it, shall deliver to the State Treasurer, a statement signed and sworn to by its president and cashier, of the actual amount of its capital stock paid in, and designating the amount owned by the

state.

4. Such payments are to continue until every such incorporation shall have paid three per cent. upon its capital stock, which is to be a perpetual fund, by the name of "The Bank Fund," to be applied to the payment of such debts (exclusive of the capital stock) of any of the said corporations, which shall become insolvent, as remain unpaid after applying its own property.

5. The Comptroller and Treasurer of the State are to keep proper accounts of "the bank fund," and the former is, from time to time, to report its conditions to the legislature.

6. The “bank fund" is to be the property of the contributing corporations, in proportion to their contributions, but the Comptroller shall, from time to time, invest the same, and all moneys belonging thereto, in the manner provided for as respects the school fund. The Comptroller may sell any such stocks in which such funds may have been invested, when necessary to meet any charges. on the fund.

7. The income of such fund, after deducting the salaries of the bank commissioners, shall annually be paid by the Comptroller to the contributing corporations, in proportion to their contributions, (excepting such corporations as shall become insolvent, dissolved, or whose charters shall expire.)

8. Whenever "the bank fund" is reduced by paying the debts of an insolvent bank, below the sum provided in the 4th section of this act, every bank then existing, or thereafter to be created, shall, on or before the first of January in every year thereafter, pay to the State Treasurer, such sum designated by the Comptroller, not exceeding a sum equal to one half of one per cent. on its capital stock; which payments shall continue to be made by every bank until the said fund shall be reimbursed to the amount specified in the 4th section, when such payments shall be suspended, until "the bank fund" is again diminished by other insolvencies, when the said payments shall be resumed, and so on:

9. The Court of Chancery, immediately after a final dividend of the effects of such insolvent corporation shall have been made