STATE OF NEW-YORK. 
 
 No. 2. 
 
 IN SENATE, 
 
 January 6, 1836. 
 
 MESSAGE 
 
 From the Governor, relative to the relief to be given 
 to the city of New- York. 
 
 TO THE SENATE AND ASSEMBLY. 
 Gentlemen; 
 
 The situation of that portion of our constituents who 
 have been directly affected by the recent destructive fire in the 
 city of New-York, requires your immediate attention. Unless 
 your aid is promptly interposed, the consequences of this disaster 
 will soon become more severe and extensive. The citizens of New- 
 York appointed a committee to confer with me in relation to the 
 relief to be afforded by the State in this great emergency. Their 
 views on this subject are presented in a communication addressed 
 to me, which I herewith transmit to you, with a request that it 
 should receive your early attention. Several projects for relief 
 accompanied the communication of the committee, and I have 
 deemed it proper to transmit them also along with it, that you may 
 be apprised of the various modes of giving relief which have been 
 suggested. 
 
 It is of the first importance that the claims on the insurance com- 
 panies for losses should be speedily adjusted. Many of the mer- 
 chants who have these claims, depend principally upon the pay- 
 ment of them for the means of again commencing business, and 
 they are exceedingly anxious to have them settled as soon as prac- 
 ticable. The memorial from the common council and citizens of 
 New-York on this subject, will require your immediate considera- 
 
 [Senate No. 2.] A 
 
[Senate- 
 
 tion. It appears by the accompanying statement of the committee, 
 that about one half of the insurance companies have become in- 
 solvent in consequence of their heavy losses, and that most of those 
 that are not so, are, from the same cause, very much embarrassed. 
 
 A very large amount of property in New-York usually kept un- 
 der insurance, is now in effect without it, in consequence of the 
 failure and embarrassment of these institutions, and the owners at 
 this time feel a peculiar uneasiness on this account. It is proper 
 that you should give them the means of effecting safe insurances 
 without obliging them to go abroad for- that purpose. Your atten- 
 tion ought therefore to be particularly directed to this object. 
 Where it is practicable to re-organize the old companies, it seems 
 to me to be advisable to do so; and if new companies should be re- 
 quired, I see no objections to granting charters for them: but in 
 resuscitating the old, and in creating new companies, you ought to 
 confer only the rights and powers appropriate to the business of 
 insurance, and carefully restrain them from using any other. 
 
 The corporation of the city of New-York, it is understood, will 
 apply to you for authority to raise six millions of dollars, to be 
 used principally in purchasing, or advancing money on, the bonds 
 which have been taken by the insurance companies on the invest- 
 ment of their capitals. I cannot anticipate any objection to this 
 measure, and I hope there will be no delay in acting on it. 
 
 The immense destruction of property by the fire may render 
 further measures of relief necessary. There appears to be a con- 
 siderable diversity of opinion as to what should be the nature and 
 character of them. Such measures should have reference to the 
 peculiar circumstances of the case. The embarrassment caused 
 by the disaster will only be temporary, and the measures of relief 
 should therefore be of a similar character. In addition to the mea- 
 sures already mentioned, it is generally suggested that an increase 
 of capital, or of bank accommodations, will be necessary to ena- 
 ble the commercial community to sustain, in a proper manner, the 
 pressure caused by their heavy losses. 
 
 The banks in the city of New-York have now about one million 
 of the surplus moneys belonging to the Canal fund. The Commis- 
 sioners of that fund are authorized to borrow eight hundred and 
 sixty thousand dollars for the completion of the Chenango canal. 
 No considerable part of this sum will be wanted until after some 
 
No. 2.] 3 
 
 part of the tolls of next year shall have been received. If the 
 Commissioners should immediately issue the stock for this loan, 
 they would be enabled, by this means and by using some other 
 stock under their control, to place in the banks of New-York, in- 
 cluding the sum now loaned to them, two millions of dollars, with- 
 out producing any inconvenience to the pecuniary affairs of the 
 other parts of the State. The accruing tolls of the Erie and Cham- 
 plain canals can be applied to finish the Chenango canal, and the 
 portion of the two millions belonging to this canal, can, at the same 
 •time be transferred to the Erie and Champlain Canal fund, and 
 thus the whole two millions become a part of the surplus revenue 
 of that fund. The debt for the payment of which this surplus is 
 pledged, will not be due till 1837 and 1845. The whole of the 
 two millions can therefore be loaned to the banks in the city of 
 New-York until July, 1837, and if necessary, the principal part of 
 it continued until July, 1845. To give greater efficiency to this 
 sum in affording relief, it might be distributed among the Safety 
 Fund banks in that city, with authority to each of them to regard 
 the portion it may receive as so much increase of capital, and to 
 discount on it as such for the time they may retain the loan, or for 
 such a period as you may think proper lo designate. This arrange- 
 ment would give these banks the privilege to extend their accom- 
 modations five millions beyond the amount they are now authoriz- 
 ed to discount. Although these banks might not be able to avail 
 themselves of this privilege to the full extent, they could undoubt- 
 edly increase their accommodations three or four millions. 
 
 If this and the other measures should not be adequate to the exi- 
 gencies of the crisis, the abilities of these banks might be still fur- 
 ther enlarged under proper limitations, as to amount and time, in 
 ease they should become the borrowers for any specified time less 
 than a year, of any portion of the moneys which the city may 
 raise under the authority proposed to be given to it, or if they 
 should procure funds for a similar period from any foreign source. 
 
 In these or any other measures suitable to the case, and calcu- 
 lated to give speedy and effectual relief to our fellow-citizens of 
 New-York, I shall give you my cordial co-operation. 
 
 W. L. MARCY. 
 
 Albany, 6th January, 1836. 
 
f 
 
 Digitized by the Internet Archive 
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 https://archive.org/details/messagefromgoverOOmarc 
 
t)ocuments accompanying the Message* 
 
 COMMUNICATION FROM THE NEW-YORK COMMITTEE. 
 
 Albany , January 2 ; 183G. 
 
 His Excellency Gov. Marcv. 
 SIR, 
 
 The committee appointed by the citizens of New-York, to con- 
 fer with your Excellency in relation to the calamity which has 
 befallen their city in the destructive conflagration of the 16th and 
 17th ultimo, beg leave to repeat in this form, the substance of the 
 remarks and statements which have been verbally made to your 
 Excellency on this interesting subject. 
 
 The deep sympathy which has been expressed in the principal 
 cities of the Union on this afflicting event, which, falling imme- 
 diately on our city, will be felt in every part of the State of 
 New-York; the generous interest in our welfare, and desire to 
 afford the most effectual relief, evinced in the recent proceedings 
 of our sister cities of Albany and Utica; and the solicitude mani- 
 fested by yourself, and the other members of the State government, 
 to co-operate in any measures of assistance and relief which may 
 be adopted by the Legislature, encourage us to hope that the dis- 
 tress and difficulty arising from this disaster, unprecedented in ex- 
 tent, and appalling as it may have appeared at first, will be speedi- 
 ly removed: and the remembrance of our present misfortune serve 
 only as a cause of exultation for the fortitude evinced by our own 
 citizens under its pressure, and their energy in recovering from its 
 effects, and of gratitude for the liberal aid which will have been 
 extended to us in all quarters in the hour of adversity. 
 
 The resources, of the city of New-York, and the enterprise and 
 perseverance of its inhabitants, are a sure guarantee that she will 
 soon recover from the effects of this calamity, and the present 
 scene of devastation be restored to its wonted activity and splendor; 
 but it may be readily imagined that the doubt and uncertainty 
 arising from the conflicting interests of individuals and associations, 
 may require the interference of the Legislature to expedite legal 
 proceedings, and avoid expense; and the difficulty of rendering 
 available our resources, justify us in appealing to their liberality 
 to afford temporary relief to the sufferers. 
 
 To accomplish these objects, and to carry out the beneficent in* 
 
f Sknatk 
 
 tchtions of our fellow-citizens throughout the State, the committee 
 would respectfully suggest the adoption of the following measures: 
 
 1. The passage of a law to enable the fire insurance companies 
 who have become insolvent by the late fire, to settle with the 
 claimants for losses in a more summary and less expensive manner 
 than is now prescribed by law. 
 
 For this object, the draft of a law recommended by a sub-com- 
 mittee of the general committee of citizens, is herewith submitted, 
 which has been prepared under the direction of gentlemen of emi- 
 nent legal reputation. In addition to this law, we would suggest 
 a provision to compel the insured on unexpired policies issued by 
 the insolvent companies, to surrender the same, and to receive back 
 the amount of their unearned premium. 
 
 The number of fire insurance companies in the city of New- 
 York and Brooklyn is twenty-eight, with an aggregate capital of 
 about nine and an half millions. Of this number, fourteen, whoso 
 capital stocks jointly amount to upwards of five millions, have be- 
 come insolvent by the fire, and it is apprehended will not be able 
 to pay more than from fifty to sixty per cent of their losses. The 
 remaining fourteen have all suffered in a greater or lesser propor- 
 tion, but it is hoped they will be able to satisfy all claims for losses, 
 and several of the number continue their business with reduced 
 capitals. 
 
 The passage of this law, in the opinion of the committee, should 
 be one of the first measures adopted by the Legislature, to enable 
 the insolvent offices to proceed promptly in the settlement of losses 
 according to their ability to pay; to secure to each of the claimants 
 his fair rateable proportion of the assets of the assurers, and no 
 more; and to remove, as speedily as possible, all obstructions in 
 the way of a resuscitation of such of the companies as may be dis- 
 posed to call in new capitals, and recommence business. 
 
 2. The immediate passage of the law about to be applied for by 
 the corporation of New-York, to enable them to effect a loan, and 
 create a city stock for six millions of dollars, to be appropriated to 
 the assumption of the bonds and mortgages in which the capital 
 stock of the insurance companies is principally invested; thereby 
 relieving to that extent the mortgagors, who are spread over the 
 whole of the city, and embrace in their number a large proportion 
 of that class of our citizens, whose avocations preclude them from 
 advantageously raising funds on a sudden emergency, while it fur- 
 nishes the means of rendering available the property of the com- 
 panies to the payment of their debts. 
 
 3. As there is little reason to hope that the amount of property 
 in buildings and merchanize lost by the fire will fall much short of 
 twenty millions of dollars, the amount of funds to be raised by the 
 corporation loan, together with the sum of two millions agreed to 
 be advanced by the Bank of the United States, will, it is appre- 
 hended, be inadequate to afford sufficient relief; and it is therefore 
 respectfully suggested that the Legislature should extend further 
 aid, by passing a supplemental bill, authorising the corporation 
 of the city to increase their loan to ten millions of dollars in the 
 
No. 2.] 
 
 whole, if necessary, and to appropriate any portion of the surplus 
 that may remain after providing for the bonds and mortgages held 
 by the insurance companies, in affording facilities to the community 
 through the medium of the banks of the city, and adding to the 
 security thereby created a pledge of the faith of the State for the 
 eventual redemption of such stock. 
 
 4. Every facility should be granted for the reorganization of the 
 insurance companies, by the passage of a law authorizing the pre- 
 sent companies, after they shall have liquidated, by compromise or 
 otherwise, all claims for losses, and cancelled their outstanding 
 policies, to proceed in the creation of a new capital, and to re- 
 commence business under their old charters, or to grant new char- 
 ters at the option of the applicants, dispensing with the lcgafnotice 
 required in applying for new acts of incorporation, or for the al- 
 teration of existing ones, extending in some cases the term of their 
 incorporation, and generally by granting such advantages and pri- 
 vileges, not inconsistent with the public good, as may enable them 
 to fill their capital stock, and proceed without delay in effecting 
 new insurances upon the immense amount of property which is 
 now virtually uninsured, or about to be insured in other places at 
 greatly enhanced premiums. 
 
 No class of our citizens has suffered so severely, and none are 
 so worthy of commiseration, as the stockholders in the insolvent 
 companies. The former prosperous condition of those companies, 
 the high character of the individuals concerned in their manage- 
 ment, and the regularity and apparent certainty of the dividends, 
 conspired to render this species of stock a favorite investment for 
 the property of widows, orphans, minors, persons retired from bu- 
 siness, benevolent and charitable institutions, and for small estates 
 in trust. Hence we are called to sympathize with hundreds who 
 have lost their all — who retired to rest on the fatal night of the 
 sixteenth of December, in the comfortable hope that the means 
 were secured, in trusty hands, from whence their future support 
 was to be derived, and awoke to the painful reality that all was 
 lost, and themselves dependent upon the reluctant charity of others. 
 
 In the measures recommended for the resuscitation of the com- 
 panies, relief may be afforded to a limited extent to this interesting 
 class of sufferers, by giving them the preference over all others in 
 subscribing to the new stock, and perhaps realizing thereby a small 
 advance on the sale of it to others better able than themselves to 
 retain it. 
 
 It is confidently hoped that the Legislature will repeal all the 
 laws of the State, which by construction may render stockholders 
 liable beyond the amount of their stock, or directors for losses, 
 except such as may be occasioned by their individual misconduct 
 While any doubt remains on this subject, it cannot be expected 
 that the stock of such companies will be taken, or their affairs 
 conducted by persons of character and responsibility; and the own- 
 ers of property in New-York will be compelled to look for indem- 
 nity from loss by fire, to other cities, where such liabilities do not 
 exist. 
 
8 
 
 [Senate 
 
 5. The diminished amount of capital employed in fire insurance 
 being now inadequate to the protection of the property in New- 
 York, and our recent experience of the insecurity of investments 
 in insurance stocks rendering it doubtful if new companies can be 
 filled at present, the committee take the liberty of recommending 
 a repeal of the law prohibiting insurance companies in other States 
 from insuring property in the State of New-York, or subjecting 
 such companies to taxation. 
 
 0. The committee are deeply impressed with the good policy of 
 encouraging the introduction of capital into the State at all times, 
 and particularly desirous to urge it as a measure of relief at the 
 present. A loss of such magnitude as that which we now deplore, 
 cannot.be overcome without increasing the number of borrowers; 
 and it is therefore important to encourage competition, by increas- 
 ing the number of lenders. They would, therefore, recommend a 
 repeal of the law subjecting the property of non-resident mortga- 
 gees to taxation. 
 
 7. Towards the end above alluded to, the Secretary of the Trea- 
 sury has, with a promptitude that entitles him to our grateful ac- 
 knowledgements, directed the transmission of as much of the avail- 
 able funds of the Government as could consistently, with other 
 claims, be appropriated to the relief of our community; but this 
 most desirable aid will prove wholly inoperative, unless the exist- 
 ing restrictions on bank discounts are modified to meet the emer- 
 gency. Immediate action on this head is the more requisite, as the 
 season of extensive transactions is at hand, when our great inte- 
 rior is accustomed to look to the city of New-York, not only as 
 the source of their stated supplies, but as a mart for the products 
 of their own industry. To accomplish this object, we would re- 
 spectfully suggest the adoption of a law authorizing the banks to 
 regard the public deposites, or other loans of a permanent charac- 
 ter, as additional capital, and to increase their discounts in the 
 ratio of such addition. 
 
 Several plans embracing detailed views of the best course to be 
 pursued in the application of funds required to be raised, have been 
 placed in our hands by individuals of distinguished character for 
 financial skill and experience: we beg leave to submit them to the 
 consideration of your Excellency, to be disposed of in such man- 
 ner as you may deem proper. 
 
 \Ve have the honor to be, 
 
 With sentiments of great respect, 
 Your Excellency's most ob't serv'ts. 
 
 PHILIP HONE, 
 DANIEL JACKSON, 
 JAS. B. MURRAY, 
 CH. AUGS. DAYIS. 
 
 Committee. 
 
No. 2.J 
 
 9 
 
 PROJET A. 
 
 The United States have now in the treasury nearly twenty mil- 
 lions of dollars. It is the right and duty of Congress to place the 
 public money in safe hands. If that can be done, and a low rate 
 of interest obtained for it, instead of leaving it in places less safe, 
 and without interest, the general weal would be promoted by such 
 a disposition of at least part of the money. This exactly corres- 
 ponds with the suggestion in the report of the Secretary of the 
 Treasury just issued, that the surplus revenue be invested 1o meet 
 the anticipated deficit, after the year 1842, in such manner as to 
 disconnect the fiscal agents of the Government from " the danger- 
 ous relation of borrowers from the treasury for reloaning, and for 
 private gain." 
 
 Now, let the State of New-York offer to take six millions of 
 this money at an interest of three per cent per annum, for five or 
 ten years, and pledge its faith to restore it at the time agreed on. 
 If the United States should accept this proposition, which it is be- 
 lieved they will, inasmuch as it would establish no perplexing pre- 
 cedent, nor be subject to any constitutional objection, then it will 
 be in the power of the State of New-York to select trustees, un- 
 der the guaranty of the city; or otherwise, to exchange or substi- 
 tute this money for the bonds and mortgages belonging to the in- 
 solvent insurance companies, and thus enable them at once to di- 
 vide their assets among their creditors, preserve mercantile credit 
 unimpaired, greatly facilitate the collection of the public revenue, 
 and what is, perhaps, more important, it would create a fund equal 
 to the difference between the rate of interest to be paid to the 
 United States, and that to be received on these bonds and mortga- 
 ges, which might justly be applied to the relief of the widows, or- 
 phans, and other helpless and dependent persons whose means of 
 subsistence, having been invested in the stock of these insolvent 
 insurance companies, have been prostrated or annihilated. 
 
 PROJET B. 
 
 In regard to the most advantageous application of the proceeds 
 of a stock to be created under the pledge of the faith of the State 
 or City of New-York, or both, it is proposed that an investment 
 of it in the purchase of the seven millions of stock owned by the 
 Government in the Bank of the United States, would be a most 
 beneficial operation, 
 
 That stock is something rather extraneous to the ordinary finan- 
 ces of the treasury. It was originally part of the public debt, and 
 as such has been regularly reimbursed; and when paid back under 
 the general and final distribution of the bank, will be, to that ex- 
 tent, a clear surplus, independently of the revenue. 
 
 [Senate No. 2.] B 
 
1(1 
 
 [Senate 
 
 Considering the difficulties between the Government and the 
 Bank, and looking to the length of time before the stock may be 
 ultimately paid, and to the uncertainty of receiving much interest 
 for the ensuing two years, it ought to be the desire, as it appears 
 to be the policy of the treasury to dispose of it promptly, and in 
 the whole upon reasonable terms. 
 
 Notwithstanding that the stock of the bank is quoted nominally 
 at above par, yet if so large a portion as the Government share 
 should be brought into the market at any time hereafter, it could 
 not be expected to bring par. 
 
 In this view of the case, it is proposed to purchase of the Ge- 
 neral Government this stock at par, on a credit of ten, fifteen or 
 twenty years, at as low a rate of interest as possible. That the 
 Bank of ihe United States should immediately cash it in whole or 
 in part, and that the amount so cashed should be disposed of in the 
 purchase of the bonds and mortgages held by the insurance com- 
 panies. 
 
 If it is deemed important to prevent the relation of a borrower 
 and lender between the State and General Government, the State 
 stock could be sold in the market at a handsome premium, which 
 added to the gain on a judicious disposal of the Bank stock would 
 create a large fund to be distributed among the most necessitous 
 sufferers by the failure of the insurance companies, or in such other 
 manner as the State or City might decide. 
 
 PRO.TET C. 
 
 The State to create a scrip, redeemable in 20 years, for a sum 
 which, including the amount proposed to be created by the city of 
 New-York, shall be ten millions of dollars; or if New-York should 
 reconsider, and suspend further acting on the proposed loan of six 
 millions, then the State to create as above the sum of ten millions, 
 for. account of the city of New- York. 
 
 A mixed commission to be appointed to take charge of said scrip, 
 for purposes of sale, distribution and application. This commission 
 to consist of nine members, viz. the Bank Commissioners, (three;) 
 three to be appointed by the corporation of New-York, (to be no- 
 minated by the mayor;) and three by the banks of New-York 
 * subject to the Safety fund law. The duty of these commissioners 
 shall be, 
 
 1. To distribute this scrip among the banks of the city of New- 
 York subject to the Safety fund law, and pro rata to the capital of 
 each bank respectively, and at such rates of premium as shall be 
 agreed upon. 
 
 2. Said banks must agree to furnish said commissioners a sum 
 sufficient to purchase from the insurance companies who may have 
 suffered by the conflagration of 16th and 17th December, such 
 bonds and mortgages held by said companies as may in the opinion 
 of said commissioners be deemed good security, giving 30 days' 
 
No. 2.] 
 
 11 
 
 notice ufter entering on their duties, for the discharge of this por- 
 tion of said duty. 
 
 3. When this duty shall have been completed, the said commis- 
 sioners shall report to the Comptroller the amount applied by them 
 to the purchase of bonds and mortgages as aforesaid, and the 
 amount of scrip held by each bank; which amount of scrip thus 
 held by the banks respectively, and not appropriated to the pur- 
 chase of bonds and mortgages as aforesaid, shall constitute and be 
 used by said banks as so much additional capital, and on which 
 their discount line may be extended as now by law permitted. 
 
 4. The premium which may be paid by the banks on the scrip, 
 shall be paid over to the different insurance companies, pro rata 
 with the amount of their capital lost by the fire, to be by them 
 distributed to such of their stockholders who may in their opinion 
 require aid, giving a preference to females, orphans, and infirm 
 persons. 
 
 5. The security to be furnished by the banks for the faithful 
 payment of interest and final redemption of the scrip or bonds cre- 
 ated by this law, shall be fixed on by the commissioners. 
 
 Which several duties being discharged, the commission ceases, 
 and the Bank Commissioners assume the supervision in the usual 
 course of their duties. 
 
 As the premium which the banks may be disposed to pay will 
 mainly depend on the rate of interest the bonds may bear, and the 
 facility of negotiating them, it would be agreeable lo all parties, 
 as it could be injurious to none, to allow each bank the privilege 
 of indicating on the bonds the place of payment of interest and 
 principal, and also to name a shorter term of payment than the 
 law may allow, as said banks may prefer liquidating at a less re- 
 mote period than 20 years. On the surrender of the bonds to the 
 city or State, the liability of the banks originally receiving the 
 same, ceases. 
 
Ex IGtbria 
 
 SEYMOUR DURST 
 
 IPben you leave, please leave this book 
 
 Because it has been said 
 "Ever'tbing comes t' him who waits 
 
 Except a loaned book." 
 
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