different lines have been united into great systems. There were, in 1900, 8095 miles of road and over 12,000 miles of track in the State. The total traffic in 1899 was 150,000,000 passengers, moved 3,500,000,000 passenger miles, and 170,000,000 tons of freight, moved 24,000,000,000 ton-miles—being one fourth of the passenger traffic and one-fifth of the freight traffic of the entire country. The principal railroad systems crossing the State are the New York Central and Hudson River, the Erie, the Lackawanna, the New York, Chicago and Saint Louis (with the West Shore), the New York, Ontario and Western, and the Lehigh Valley. Other important systems enter at the east and west. There is a State board of railroad commissioners, having general supervision of railroads and their operation with reference to public safety and convenience. The board is empowered to investigate and report violations of the law.
Banks. The paramount position of New York City in the American financial world places New York State in the lead among the States in the number and resources of its financial institutions. The first bank of the State was the Bank of North America, incorporated in 1782. In 1791 the second bank was chartered under the name of the Bank of New York. In 1804 an act was passed prohibiting banking and the issuing of currency in the State except under a special charter from the Legislature. Due to the high profits, banking charters were eagerly sought and became political favors. At the time of the declaration of war with Great Britain in 1812 there were twenty banks in the State, and twenty-four more were chartered between 1812 and 1829. As the bank charters were for a limited number of years, and most of them were to expire in 1831, the banks in 1828 made a combined effort for a general renewal of their charters. But a strong opposition developed to this plan. The careless distribution of charters to political friends had produced bad results, and the New York currency was becoming less secure. A reform of the banking system was therefore undertaken in 1829, and the plan of securing bank circulation by the formation of a safety fund was successfully carried through. The law required all banks with new or renewed charters to contribute one-half of one per cent. of their capital annually to a common safety fund, out of which losses from bank failures were to be covered. A board of three bank commissioners was created by the same bill, and quarterly examinations and annual reports provided for. In 1832 fifty-two banks were members of the safety fund, and twelve did not belong to it.
The financial crisis of 1837 was heavily felt in New York, where the banks suspended specie payments, and bills of many concerns passed at a discount. The chartered banks became the object of popular dissatisfaction, which expressed itself in a demand for a free banking system. As a result of this agitation a free banking law was passed in 1838, which, in order to secure the bank currency, compelled the investment of the bank capital in New York State bonds or equally good securities and their deposit with the State. This was the plan afterwards adopted by the Federal Government in the national banking system. For some time both systems of banking worked side by side, notwithstanding a great deal of friction. For twelve years (1829-41) this safety fund was not drawn upon, as no chartered bank failed during that time. But the failure of six banks in 1841 so exhausted the fund that a law was passed in 1842 limiting the guarantee to circulation only, and not to all the liabilities of the failing banks. As the charters of the chartered safety fund banks expired, most of them reorganized under the free banking law. This was amended in 1840 by limiting the deposits to New York State bonds, as many of the other securities deposited had proved worthless. In the many bank failures during the crisis of 1841, this system of deposits proved its value, preventing serious losses on circulation.
In the severe financial crisis of 1857 this system was again put to a severe test, but notwithstanding a general suspension of specie payment for some time, the banks remained firm. At the time of the introduction of the national banking system the New York banking was not only the greatest, but also the most secure in the country. The new system was therefore not welcomed, and specially heavy taxes were imposed on the national banks. These taxes were, however, declared unconstitutional by the Federal courts. The State banks were forced to obtain national charters, and from 309 in 1863 the number of State banks was reduced to 45 in 1868. After that their number increased but slowly until 1880 (70), when a steady increase began. Since 1894 capital has preferred the new form of organization known as trust companies, which, while doing a general banking business, are yet different enough to have a more favorable system of taxation. Savings banks have existed in the State since 1819, and their number grew rapidly, especially after the Civil War, increasing from 71 in 1863 to 150 in 1873. Though since then their number has gradually diminished, the amount of deposits has increased immensely. See article on Bank, Banking. The condition of the banks in New York State in 1902 is shown as follows:
| National banks |
State banks |
Private banks |
Trust companies |
Savings banks | |
| Number | 352 | 193 | 14 | 70 | 127 |
| Capital | $126,058,000 | $25,515,000 | $223,000 | $53,225,000 | $ |
| Surplus | 80,643,000 | 17,326,000 | 73,000 | 70,887,000 | 115,540,000 |
| Cash, etc. | 199,777,000 | 75,396,000 | 191,000 | 10,481,000 | 9,339,000 |
| Deposits | 785,921,000 | 253,412,000 | 2,611,000 | 881,001,000 | 1,051,689,000 |
| Loans | 772,391,000 | 218,836,000 | 1,798,000 | 701,284,000 | 464,997,000 |
The system of clearing houses originated in New York City. The total exchanges for the first year (1854) were more than five and a half billions, and in 1900 more than sixty billion dollars. Consolidation has latterly become a prominent feature of the banking business of New York, about thirty small banks having been bought out
