As recharter any present banks or lawmakers refused to charter any new banks the New York State Legislature had come to a standstill in 1829. Four of New York's forty banks were unsuccessful since the 1825, and several legislatures considered that an important change in the banking regime was needed to shore up the financial systems of the state. Others, however, feared that a major change in the law was overly dangerous, particularly since over three quarters of the state's banks held charters that were slated to expire over the next four years.
On the table was a completely untested suggestion to create a compulsory public insurance fund that would back deposits and the banknotes of every state bank. As bank charters throughout New York State quickly approached expiration, lawmakers faced a tough decision: should they pass the bill and gamble with the untried insurance fund, or should they go seek a more conventional solution to the state's banking woes?
The Campaign for Bank Insurance in Antebellum New York case study solution
PUBLICATION DATE: December 20, 2007 PRODUCT #: 708037-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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