New York State Legislature came to a standstill in 1829, lawmakers refused to share any new banks or recharter any existing banks. Forty-four of the New York failed in 1825, and many believe that the significant legislative changes in the banking regime was needed to support the financial system of the state. Others, however, fear that the main change in the law was too risky, especially since more than three-quarters of the state banks held the statutes, which were scheduled to expire over the next four years. On the table was a completely untested proposal for a Public Insurance Fund, which would back the notes and deposits of each state bank. The bank charters throughout New York quickly approached expiration, lawmakers faced a tough decision: they have to pass the bill and gamble with untried insurance fund, or they have to go look for more traditional solutions for the banking woes of the state "Hide
By Cole Bolton, David A. Moss Source: Harvard Business School 22 pages. Publication Date: December 20, 2007. Prod. #: 708037-PDF-ENG
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