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months of February and March last, and of which the Bank of Central New York became the owner and holder, by regular indorsement, and which, being dishonored, were regularly protested for non-payment. The defendant having neglected to pay them, this suit was instituted by the plaintiff, the President of that Bank, to enforce their collection—and a demurrer to the declaration has been interposed. On this state of the pleadings, a question is raised respecting the constitutionality of the Statute, entitled, “An act to authorize the business of banking;” passed April 18, 1838, and usually called the “General Banking Law;” and under which the Association of which the plaintiff is president, was organized as a Banking Company.
The defendant’s Counsel contends, that the Statute is unconstitutional, because the associations which it authorizes, and which are, or may be organized under it, are corporations; and as the Statute provides for the creation of an indefinite number of them, it is in violation of the ninth section of the seventh artiticle of the Constitution of this State; which is in these words: “The assent of two-thirds of the members elected to each branch “of the legislature, shall be requisite to every bill appropriating. “the public monies or property, for local or private purposes, “or creating, continuing, altering, or renewing any body politic “ or corporate.”
* It is a source of deep regret, that the defendant, either to delay or defeat the collection of what appears to be a just demand, should, at this inauspicious moment, in the progress of our Country, its commerce and business, attempt to raise a doubt of the validity of a law, which, thus far, has produced a most benign and beneficial influence and effect, upon our embarrassed affairs and depressed community. Numerous banking institutions have been established under it, which are now in successful operation;
and especially, in our commercial metropolis, several have been
organized with large and increasing capitals, furnished by domestic and foreign capitalists, relying on the faith and soundness of our institutions and laws, which are now in full and successful operation, conducted by citizens distinguished for their patriotism, moral worth and financial experience and talents. These institutions are already identified with the business of the City in which they are located; have extensive connections with the monetary affairs of our State and Country; are daily engaged in large financial transactions with the different States. of our Union; and with foreign houses of wealth and credit, with whom they have already formed large and substantial arrangements, highly beneficial to our struggling commerce, which is now seeking new foreign associations, to supply the place of those destroyed by our late commercial misfortunes.
Should the defendant succeed in his defence, or even raise a serious doubt of the constitutionality of our General Banking Law, those beyond the reach and direct influence of the activity and excitement of our commercial emporium, engaged in their libraries, or taking refreshing walks in their quiet villages or fields,” can scarcely realize the extent or depth of the injury. and distress produced, by destroying, or paralyzing fianancial agencies, so powerful and active, as the banks established in the city of New York under this Statute.
The bare agitation of this question must, to some extent, impair confidence, but a real doubt will fly even swifter than the wind across the Atlantic, defeat arrangements to draw foreign capital to the aid and relief of our laboring and almost exhausted Country; will prolong and increase the feverish excitement in which our monetary affairs are involved; still farther diminish and obstruct the energies of our slowly and fitfully recovering commerce, and business.
*All the Justices of our Supreme Court reside in villages in the country, and the Chief Justice cultivates a farm. - -- -->
If the defence prevails, a deep and almost irreparable wound will be inflicted upon our own citizens. All the banks created by our General Law will fall directly within the highly penal provisions of the Restraining Act, and all the securities held by them will, consequently, be void; and especially the bonds and mortgages taken and transferred to the Comptroller, and forming the basis and security of the most convenient and safe currency ever devised. The bills will fall valueless on a confiding and innocent community, and those least able to bear, will sustain the greatest losses. Humble, but bright hopes will be blighted; fair prospects of reasonable gains, and just rewards of virtuous industry, destroyed. The associations will be compelled to wind up their affairs; prosecutions will multiply, and litigations flood our courts. The morals of our citizens will become corrupted by holding out to them strong temptations to dishonesty. Every debtor to the associations organized under the law, who is unable or unwilling to pay his debt, will be invited, by the strong motive of interest, to delay, if not defeat his creditor. The unprincipled will take advantage of the misfortune, to increase his gains by plundering the meritorious. Confidence will be lost in the security which our laws profess to give. Mistrust will take the place of confidence, violence that of peace, and we shall be carried rapidly, by this torrent of dishonesty and crime, far towards anarchy and ruin. Facilities for business will also be materially curtailed. Those who survive the shock will be discouraged. Enterprize, and active talent will leave the State, and seek a more secure and auspicious theatre for effort.
Safety or security from our laws can no longer be hoped for, or promised. This Act was passed on the recommendation of our late Chief Magistrate, and in all its features is in exact accordance with his recommendation. It was passed by a Senate consisting of a large majority of his political friends, and by an Assembly containing a like majority of his political opponents. The bill underwent a full discussion in each House, was passed by a large majority in each, and received the cheerful approbation of the Governor. It was given to the community under the highest sanctions that our institutions and public opinion could bestow. It commanded and received the wary confidence of the wealthy capitalist, as well as the freer faith of the enterprising man of business. It has gone to Europe with the recommendations of all; is highly approved by her most distinguished financial talent; has and is drawing millions of foreign capital to our shores; and, if it should now be prostrated, not only would the measure bring, in foreign judgment, great discredit on our institutions, and thus check the progress of liberal government, but it would literally destroy all confidence in our monied institutions and financial legislation; withdraw from our country, to a great extent, the foreign capital now here, and entirely prevent for years, the investment of any more. Such a catastrophe will, moreover, injure, if not seriously impair, the public credit of our State; she will lose her most powerful and willing supporters in carrying through the several large and extensive works of internal improvement which she has already, and must soon, undertake. She has already had substantial evidence of what she may expect from the banks, which have sprung up, at once, into full stature, from the ashes of the extinguished spirit of banking monopoly, which has so long oppressed all our citizens, except a favored few.”
These views are not presented with the wish or expectation, that they will deter this Court from a fearless discharge of its duty, in considering and determining upon the constitutionality of this Law, but for the purpose of awakening a profound and anxious attention to the momentous question presented for their decision, and in the hope, that they may induce the Court to form and announce their judgment at the earliest day possible, consistent with a just regard to the grave character of the subject.
*The Bank of Commerce has already made large loans to the State, by accepting those offered to the public by the Canal Board.
My intention is to present and fairly meet every argument or suggestion, which has, or can be made against the validity of this Statute, whether insisted upon by the Counsel for the defendant, or not; with the hope, that this discussion may not only satisfy this Court of its constitutionality, but that the public mind may be composed, so far as my humble efforts can accomplish that end, by exhibiting, in a clear light, the firm basis on which the institutions rest, which have been organized under, and are protected by it.
I'...'. We have in this State prohibited by statute for so many years, both individuals, and companies incorporated and unincorporated, not specially authorized by law, from carrying on the business of banking, and permitted it to be done only by corporations created specially for that purpose; that we have come to regard banking as a franchise, an attribute of sovereign political power, which a citizen cannot exercise, or acquire, except by legislative grant. This is a great error. The direct converse of the proposition is the truth. The States of this Union are prohibited by the Constitution of the United States from emitting bills of credit. (Con. U.S. Art. 1, Sec. 10.) Although the bills of credit, in the mind of the Convention who framed that Constitution, and intended to be prohibited, were unlike, in many material respects, bank bills of the present day, yet the Supreme Court of the United States have held, that “bills of credit” are general terms of broad import, and do embrace bank bills, issued by a State, on the faith of the State, to circulate as money; and consequently have decided, that a State has not authority to issue such bills. (Briscoe and others, vs. The President and Directors of the Bank of the Commonwealth of Kentucky, 11 Peters’