Bank of New Haven, from not having persisted in sending its notes home.[1]
In January, 1826, the applications for charters in New York City included twenty-seven banks with a capital of $22,500,000, thirty-one other companies with a capital of $14,300,000, thirty-six country banks with a capital of $13,200,000, thirty-nine other companies with a capital of $5,400,000, and fourteen additional companies with a capital of $5,500,000.[2] A year later there was a legislative investigation of alleged bribery and 1obbying.[3]
In order to escape the stringency of the New York law, several banks were also set up in New Jersey opposite New York, in order to do business there. In 1825-6, a number of these failed on account of more or less reckless or, as was alleged, dishonest banking. The two banks on Nantucket failed. They were one of Jacob Barker's jobs.[4] It was another scheme for playing off banks at a distance against each other.
In January, 1826, occurred the failure, at New York, of the Marble Manufacturing Company, which had been founded by one Malapar, a French oyster-house keeper. He ran away, but we hear that he was admitted to the poor-house in 1834.[5] In July there was a grand bank explosion at New York with trials for conspiracy. A large number of the companies which had been started in the preceding years were proved to be swindles. Two of the accused were sentenced to imprisonment for two years and two others for one year, but a year later the Supreme Court quashed the indictments for irregularity.[6] The New Hope Delaware Bridge Company is a good specimen of one class of companies which were in fashion at the time. It had a charter for building a bridge across the Delaware river, with perpetual banking privileges, dating from 1812. The company failed in 1821 and their property was put in the hands of a receiver in 1824. In 1825 they issued new notes and failed again in 1826. We hear of them again, however, as making large issues of notes which were worth six to twelve cents on the dollar.[7]
A law of December 3, 1827, enacted that the charter of every corporation that should thereafter be granted by the Legislature should be subject to alteration, suspension, and repeal.
Two pamphlets on banking were published at this time, which are worth noticing on account of the influence they had on public opinion and probably on legislation. McVickar[8] maintained that banks were not necessary to support credit or supply currency. Credit supports banks, not vice versa. Law cannot regulate credit. The present system of banks is "in too
- ↑ 29 Niles, 179.
- ↑ 29 Niles, 324.
- ↑ Life of Silas Wright, 67.
- ↑ 29 Niles, 275.
- ↑ 30 Niles, 237; 46 Niles, 301.
- ↑ Life of Jacob Barker, 201.
- ↑ Mackeinzie, Lives of Butler and Hoyt, 69; 30 Niles, 411. In 1848 the Governor of New Jersey was trying to get the Attorney-general instructed to proceed against this company. It had notes out for $100,000, all illegal, and failed three or four times, and had never had any capital. (2 Bankers' Mag., 502, 509, 510.)
- ↑ Hints on Banking.
