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February 1, 1834.
Of the Bank Commissioners.
Albany, February 1, 1834. Hon. WILLIAM BAKER,
Speaker of the Assembly. Sir—We have the honor to transmit herewith the annual report to the Legislature required from us by law, and are,
To the Honorable the Legislature of the State of New York.
The Bank Commissioners, pursuant to the “ Act to create a fund for the benefit of the creditors of certain monied corporations, and for other purposes," respectfully submit the following
The business operations of the past year have been uncommonly extensive and prosperous, and enterprise of every description has been liberally rewarded. The agriculturalist has again been favored with abundant crops and favorable markets, and the effects are visible in the general improvement and embellishment of the country, and in the rapid and almost universal appreciation in the value of real estate. Capital has every where met a ready demand, commanding at all times, even in the city, where most abundant, the full legal rate of interest; and in the country it has been used at a higher rate, in many of the profitable enterprises of our citizens. Trade and commerce seem to have been conducted with an activity unknown for many years; and to have distributed their gains with a bountiful hand, among the busy population of our commercial metropolis.
The banks, whose office it is to furnish the means of facilitating the exchanges of the country, and whose operations are so intimately connected with the business operations of the community, have of course enjoyed a full participation in this general prosperity. Those in the country, during the whole year, have been enabled to sustain a large circulation, and to provide, without difficulty, for its prompt redemption. All have done a profitable business, and may generally be said to have been easy in their circumstances.
It is true, that a considerable pressure upon- the money market has been felt in the city during the last two or three months; but it has thus far been confined to the city. The country institutions were never more easy, and money in the country seldom mor plenty. Stocks seem to have been affected far more sensibly tha any other description of property; and it is believed that the pres sure has fallen much more severely upon the dealers in stocks an: money than upon those engaged in mercantile pursuits. Credit i general certainly stands high, and is as yet unshaken.
Much has been said as to the causes which have operated to produce this state of things; for if business men were ever to look fa easy times, it would seem to be when foreign exchange is in our favor, when all our crops are abundant, markets good, and · business of every kind active and prosperous. Yet it is precisely under such circumstances, that we find a severe pressure upon the money market, confined in its operation to those places immediately within the influence of the Bank of the United States.
Although the recent change in the manner of collecting duties upon imports has occasioned a greater demand for money than usual, there can be no doubt that the pressure is chiefly attributable to the rapid and extensive reduction of its debt by the United States Bank, and the consequent effect of that measure, in alarming the timid, and inducing capitalists to withdraw from the market, in anticipation of its increased severity.
This bank, with its immense capital and other resources, certainly possesses the power of suddenly expanding and contracting its issues to an enormous extent; and the exercise of that power, whether for good or for evil, deeply concerns the whole community. It assumes to regulate the currency of the country, and control the operations of the local institutions; and we have recently seen it extending its own discounts more than twenty millions, and its circulation more than five millions, in a single year; and now find it curtailing those discounts at the rate of ten millions in four months.
We need be at no loss for the reasons of this vascillating policy at this time, and it is fortunate for the country, that the pretest for it has occurred at so favorable a period. We entertain no fears for the stability of the local banks in this State. If there is any solidity in the credit of the country, any value in what we have been in the habit of denominating property, the banks in this State cannot be otherwise than safe. A continuance of this unnecessary