in the office of the superintendent, under his direction, by such person as he shall appoint for that purpose, so that each denomination of such circulating notes shall bear the uniform signature of such register, or one of such registers. Such notes shall also have stamped on their face the words "secured by the pledge of public stocks."

The aggregate amount of notes thus issued to any bank or individual banker shall not exceed ninety per centum of the market value, nor ninety per centum of the par value, of the stocks, bonds or other securities so deposited with or transferred to the superintendent by such bank or banker. Such bank or banker, after having executed and signed such circulating notes in the manner required by law to make them obligatory promissory notes payable on demand, if of a denomination less than one thousand dollars, at the place of business within this state of such bank or banker, if of a denomination of one thousand dollars, payable at such place of business or at any redemption agency of such bank or banker, may loan and circulate the same as money according to the ordinary course of banking business as regulated by the laws and usages of this state. The securities so deposited with and transferred to the superintendent shall be held by him as security for such circulating notes and exclusively for their redemption and until the same are paid. The plates, dies and materials procured by the superintendent for printing and making such circulating notes shall remain in his custody and under his direction.

(Former section 64; R. S., 1530, 1531, 1533, 1540, 1555, 1578; L. 1882, ch. 409, §§ 70-74, 84, 116, 189, 306.)

Blank forms for conversion from the National to the State system may be obtained from the superintendent of the banking department.

1. It was adjudged by the court of appeals, in October, 1852, in Talmage t. Pell, 7 N. Y. 328, 347, 348, that associations, organized under the General Banking Law, "have no power to purchase State or other stocks for the purpose of selling them for profit, or as a means of raising money, except when such stocks have been received in good faith as security for a loan made by, of a debt due to, such association, or when taken in payment, in whole or in part, of such loan or debt." See, also, The Bank Commissioners v. The St. Lawrence Bank, 7 N. Y.

513.

All bank charters granted by this State, from 1791 to 1838, contained an express prohibition, substantially in the following words: "The said corporation shall not, directly or indirectly, deal or trade in buying or selling any goods, wares, merchandise or commodities whatsoever, or in buying or selling any stock created under any law of the United States, or of any particular State, unless in selling the same when truly pledged by way of security for debts due to the

said corporation." See the charters of every safety fund bank, as well as the charters granted before 1829.

The two charters of the National Bank of the United States, granted by Congress in 1791 and 1816, contained express prohibitions against trading in anything except bullion, etc.; also, against purchasing any public debt whatever. See these charters in the United States Statutes at Large.

The charters of the Bank of England, Bank of France, Bank of Scotland, and Bank of Ireland also contain express prohibitions against trading. See historical sketch, ante.

The principle of separating the issue from the banking department was in 1838 adopted by the legislature of New York; and in 1844 Sir Robert Peel practically carried into effect the same principle in dealing with the Bank of England, on the renewal of its charter in that year. In that renewed charter it is enacted, that there shall be transferred, etc., "to the issue department of the Bank of England, securities to the value of £14,000,000, whereof the debt due by the public to the said governor and company shall be and be deemed a part." See this act, Stat. 7 & 8 Vict. ch. 32.

'The object of this statute [Stat. 7 & 8 Vict. ch. 32] has been," says Mr. McCulloch, "to obviate the chances of over-issue and sudden fluctuations in the quality and value of money, by limiting the power to issue notes payable on demand," etc. "While the directors are left to manage the banking department at their discretion, their management of the issue department is subjected to what seems to be a well-devised system of restraint. The bank is allowed to issue £14,000,000 of notes, upon securities (of which the debt of £11,015,100 lent by her to government is a part); and whatever paper the issue department may at any time issue over and above this maximum amount of securities, it must have an equal amount of coin and bullion in its coffers. Hence, it is impracticable for the issue department to increase its issues without, at the same time, proportionally increasing its stock of coin and bullion, or to diminish the latter without proportionally diminishing the amount of paper supplied to the public and banking department."

In 1846 the people of this State made it a part of the fundamental law, that "the legislature shall provide by law for the registry of all bills or notes issued, or put in circulation as money, and shall require ample security for the redemption of the same in specie." Constitution 1846, art. 8, § 6; McCulloch's Dict. (London ed.) 82 to 88; Lawson's History of Banking (Am. ed.) 76, 77; Gilbart on Banking (4th Am. ed.) 61; Levi on Mercantile Law, 202; Cleveland's Banking Law, 83.

§ 84. Circulating notes of individual banker. The circulating notes delivered to an individual banker shall express only the individual liability of the banker and shall be signed by him only and not by any attorney or agent. Any banker or person acting as his attorney or agent who shall violate any provision of this section shall forfeit to the people of the state one hundred dollars for each offense, to be collected and paid into the treasury to defray the general expenses of the banking department.

The superintendent shall not issue circulating notes to any individual banker designating such individual as a bank unless as an addition to his own proper name. If such individual shall have partners in the business of banking at the time of commencing the same, such fact shall be shown by the words " and company," to be added to his own proper name, upon every note issued to him or them from the banking department.

If it shall appear, by the return of any individual banker or by the report of any person designated by the superintendent of banks, that any other person is interested with such individual banker directly or indirectly in the securities deposited by him for the purpose of obtaining circulating notes, or in the business of circulating such notes, or in the benefits or advantages thereof, the superintendent shall withhold all interest and dividends on the securities deposited with him, by such banker, and all circulating notes from such banker, until he shall have filed in the banking department a certificate, signed and acknowledged by every person so returned or reported as interested in such securities, stating that such person is interested with such individual banker in the circulating notes obtained or to be obtained by him, and in the benefits and advantages of circulating the same. Such certificate shall be evidence that the person signing and acknowledging the same is a general partner with such banker in the business of banking, and as such is liable with him individually for all the debts and obligations created or made by such individual banker in his business.

(Former section 65; R. S., 1531; L. 1882, ch. 409, §§ 76-78.)

§ 85. When bank may receive interest or dividends upon securities deposited. The superintendent may give to any bank or individual banker depositing and transferring securities to him pursuant to this chapter, a power of attorney to receive the interest or dividends thereon, and such bank or banker may thereupon receive and apply such interest or dividends to its or his own use. Such power may be revoked if such bank or banker fails to redeem the circulating notes so issued, or if, in the opinion of the superintendent, the principal of such securities shall become an insufficient security for the redemption of the circulating notes issued; and the superintendent may in his discretion, upon the application of any such bank or

banker, change or transfer any securities deposited by it or him for other securities of the kinds herein before specified, or he may retransfer such securities or any part thereof to the bank or banker depositing the same upon receiving and canceling a proportional amount of the circulating notes delivered by him to such bank or banker, in such manner that the circulating notes remaining outstanding shall always be secured in full.

If the securities so deposited for the redemption of circulating notes shall, in the opinion of the superintendent, become insufficient for that purpose, he may receive the dividends on all such securities and deposit the same in some safe bank in the city of Albany in his name in trust for the bank or banker to whom the same may belong, on such terms and at such rate of interest as the superintendent may deem most conducive to the interest of any such bank or banker, and to be withdrawn and paid over whenever in the opinion of the superintendent the securities of such bank or banker shall be sufficient to warrant it.

If it shall appear from any examination made by or at the instance of the superintendent that any bank or individual banker is in an unsound or unsafe condition to do business, or that the business of banking is not prosecuted by it or him at the place where such circulating notes are dated and purport to be issued, or is not transacted in the manner prescribed by law, the superintendent shall withhold and refuse to issue and deliver any registered notes to such bank or banker, and shall retain the interest on all securities held in trust for such bank or banker until such time as he shall be satisfied that such bank or banker is in a sound or safe condition to do banking business, and that the business of banking is transacted by it or him at the place where such circulating notes are dated and purpor o be issued.

(Former section 66; R. S., 1532, 1533; L. 1882, ch. 409, §§ 82, 83, 85.)

§ 86. Redemption agencies. Every bank or individual banker issuing circulaing notes, except those whose place of business is in the city of New York, Albany, or Troy, not already having made such an appointment, shall forthwith appoint in writing an agent who shall keep an office in the city of New York, Albany or Troy, for the redemption of all circulating notes issued by it or him which

shall be presented to such agent for payment or redemption; and such appointment shall be delivered to the superintendent forthwith and filed in his office. Any bank or individual banker or other person may be such agent. If any such bank or banker shall omit to appoint such agent forthwith, the superintendent shall appoint such agent for such bank or banker and file such appointment in his office.

The superintendent shall, immediately after such appointment and filing thereof in his office, publish during such times as he may deem proper, a list of such agents in the state paper and in at least two daily newspapers in the city of New York.

If the agent of any bank or banker shall neglect or refuse to redeem its notes on demand, such bank or banker shall pay to the person making such demand, interest on such notes at the rate of twenty per centum per annum. If such redemption and payment of interest is not made at such office within twenty days from the time when first demanded, such bank or individual banker may be proceeded against by the superintendent of banks in the same manner and with the like effect as though insolvent; and such bank or banker shall not issue or put in circulation any bills or notes; and the superintendent shall also proceed in the manner directed in section ninetyone of this chapter. Every bank and individual banker outside of the cities of New York, Albany, and Troy shall redeem and pay on demand all circulating notes issued by it or him presented for redemption or payment at the office of its or his such agent in the city of New York, Albany or Troy, at a rate of discount not exceeding one-quarter of one per centum.

(Former section 67; R. S., 1533, 1534; L. 1882, ch. 409, §§ 86-90.)

1. When the circulating notes of a bank are not paid immediately upon their first presentation for payment, the holder may commence suit for the amount thereof, and add twenty per cent. interest, without waiting twenty days. The notes must be presented on or after the expiration of twenty days, and a demand be made, to enable the holder to apply to the comptroller (superintendent) for payment, or subject the association to forfeiture for non-payment. The association which has once made default in payment, must at its peril provide its agent with funds to redeem its bills whenever they are again presented for payment, even after the twenty days prescribed by law. Bank Comm'rs v. James Bank, 9 Paige, 456.

2. The right of action against a bank to recover moneys on deposit does not accrue, until a demand and refusal of payment has been made; and the presentation and demand of payment of the depositor's check by a wrongful holder, the