ler, deeming such a disposition of the fund incompatible with the interests of the banks, had preferred letting it remain unemployed in the treasury, in the hope that a more favorable state of the money market might occur and enable him to invest with a better prospect of income.

That hope the committee deemed problematical, as many of the securities were annually diminishing in amount by the payments made on the principal, while much of what remained was in the hands of those who held them for income only, and rarely, if ever, offered them for sale.

The prospect of investing in the specified stocks, that committee believed, was at least uncertain, if not impracticable. Impressed with this belief, and having in view the large and important increase to the fund, which has since occurred, the committee then recommended an enlargement of the powers of the Comptroller, in order that a safe and profitable investment might be made in other than the specified securities.

This recommendation was not sanctioned by the Legislature of that year.

During that year, however, the Comptroller was able to purchase for the fund, canal stock, amounting to $8,082.40, which left in the treasury, at the end of that year, $12,118.37, uninvested. In his annual report to the Legislature in 1832, (Assem. Doc. No. 4, p. 21,) he adverted to the situation of this fund, and remarked that "moneys had been kept constantly in readiness to make the investment of the remaining part of the capital of this fund, and offers had been made for stocks, at as high a rate of premium as he believed he should be justified in paying, by the institutions interested in the fund; but he had not been able to obtain them. He was informed that foreign capital in large amounts was seeking investments in the stocks of this country, and that coming from places where money was cheaper than with us, the holders offered a higher premium for the desirable stocks than would be considered discreet to pay as an investment of capital here;" and he submitted to the Legislature whether it would be advisable to enlarge his powers of investment, or to compel him to invest the fund in the specified stocks, regardless of the sacrifice.

On the 27th Jan. 1832, the Comptroller, at the call of the Senate, reported to the Senate that at that time the fund amounted to $85,983.37; and that all of it was univested, except the small sum already paid out for canal stock. And again on the 19th of March, 1832, the same officer reported to the Assembly the then state of the fund, which had been in no respect changed, except by a few payments to it, and he reiterated his suggestions as to the difficulties of investment without some modification of the law.

From this review it is manifest that the evil lies with the law, and not with the executors of it. Yet, notwithstanding these repeated suggestions of the fiscal officer of the government, and notwithstanding that the bank committees of both houses united in a recommendation of measures intended to afford an adequate remedy, no alteration has been made in the law, and the capital of that fund has continued to diminish, by payment of salaries and premium on investments, until it is $10,275.69 less than of right it ought to be, and with but slight prospect of future improvement.

But this is not all the difficulty attached to this subject. The diminution of the capital of the fund caused by the payment of the salaries can be made up to it by the income to be produced by suitable investments. But it is otherwise with the deficiency caused by the payment of premiums; that cannot be charged to or be refunded by the income, whatever it may be.

The law directs a resort to particular stocks, which cannot be procured at par, yet makes no provision for the advance. Those stocks bear in market a price varying from 10 to 20 per cent premium, and the Comptroller is entirely at liberty to invest the whole of the fund in such manner as to reduce its amount from $600,000 to $500,000 or $550,000. Hence a diminution of the fund itself is inevitable from the law as it now stands; for it will be reduced, either by the salaries of the Commissioners or by the premiums paid for the desired stocks.

To the banks it may not be a matter of so much consequence whether the loss happens to them in capital or income. But to the people it is a matter of much moment, that this fund should not be diminished under any pretence. While, then, the banks have a right to expect that we will protect them against the loss which

seems so inevitable under the existing law, the public security demands that we preserve unimpaired a fund which has elevated the banking character of our State, and has shed abroad upon the community a confidence in our institutions which will be productive of the happiest results.

The safety of the fund is a matter of still more importance, in which the banks and the State are alike interested. It ought to be deposited beyond the reach of danger, and any other disposition of it is calculated to excite well grounded alarm. And it is a matter of surprise to the committee, that its present situation has not made a deeper impression upon the Legislature.

Where then is it? It lies in the vaults of a bank having only a small capital of $225,000, and not subject to the safety fund, and the anomaly is presented of drawing from 58 banks, possessing a capital of more than 20,000,000 dollars, subject to frequent examinations and other provisions for the security of the public, and bound together by a common tie, a portion of their funds to guard against their failure, and intrusting it to the care of an institution with only one-tenth part as much capital and free from all these salutary restraints and investigations,

The committee repeat, that they do not by these remarks mean to be understood as expressing any disapprobation of the conduct of the officer charged with the care of this trust fund. He has but obeyed the laws as he found them, and the error is in the provisions of those laws. Nor do they intend to raise any doubts as to the perfect solvency of the institution referred to; in that and in the integrity and capacity of its chief officer, the committee have entire confidence.

But when they reflect that that institution is as liable to misfortune and bankruptcy as others which have flourished and fallen before it, and perhaps more so, from the fact that other banks are not bound by the ties of our system to sustain it in its hour of peril. When they reflect, too, that the loss of this fund will result in the deprivation of the security intended by that system, or in the imposition of a direct tax upon the whole people, to supply the deficiency: And when they advert to the disastrous consequences sure to flow from such a calamity, in the destruction

of public confidence and in the overthrow of our system, and the consequent ruin of hundreds of our fellow-citizens, they are well persuaded that they will be fully justified in their efforts to remedy the evils complained of.

To effect that object they have prepared a bill and directed their chairman to ask leave to introduce the same.