BANKS. In 1804 two banking companies were chartered by the Legislature, one to do business in Newark and the other in Trenton. A general banking law was passed in 18)2 for the protec tion of depositors. This law remained in force t ill 1850. Reports were made obligatory. the total indebtedness and the rate of discount were limited.f But the provisions of the were avoided, and a number of speculating banks tlo(aled the State with worthless paper. This condition of affairs and the suspension of specie payment in 1837 led to a reform in 1850. Another general banking law was passed. Under this statute the bank circulation had to be guaranteed by deposits of collato•al security—bonds of States, etc. The limits of loans on real estate were strictly set and investigations of the banks made possible. In 1860 there were eight banks of issue. Besides these, there were a number of specially incorpo rated banks of discount and deposit. In 1859 the number was 36. but most of them availed them selves of the national banking law, and there were only five left in 1870. State banks became somewhat more popular toward the end of the century. They numbered IS in 1902.
In 1565 there were 55 national banks, and in 1900, 115. A Department of Banks and Insur ance was established in 1891. The banking \vas revised in 15119. Trust companies have rap idly multiplied in I he State since 1880. tinder the influence of the organization of gigantic corpora tions. which have made the State conspicuous. In ten years the number of these increased from 4 11 to 23, and the deposits increased eightfold. Saving. banks were established early (1825). A law for regulating them was passed in 1576. it remains :limos( unchanged. The condition of the vrr•ious banks in 1902 is shown in the fol lowing table: FINANcEs. The beginning of the Civil War found the State in a satisfactory financial condi tion. It became involved in heavy tva r expenses, and a loan of $2.000.000 and a State tax of $100. 1100 for war purposes were authorized in 1561. In 1560 the total war debt amounted to $3,305, 200. Besides. the minor civil divisions of the
State (counties and towns) spent more than $23.. 000.000 for war purposes. This debt was totally extinguished by the rmlemption of the last $71,. 000 on January 1. 1902.
In the matter of taxation New Jersey is in advance of many States, having long ago solved the problem of eonllict between State and local taxation by entirely dividing these t WO fields. Even 1840 and 1550 the income of the State was largely derived from taxes on the gross receipts of railroads (`transit duties' was Ilwir official designation), taxes on capital stock of railroads, Pte. .\ State tax upon general prop erty was only introduced in ISO1 for war pur poses, aml though it existed for twenty years, it was exceedingly small. III 1850 75 per cent. of the income was derived from corporation taxes. New• laws for taxation of railroads, as well as other corporations. were passed in 1554 and 1855, and were declared mist itutional after a hard struggle. Since then the only Stale tax on general property is collected for the purposes of the school fund. The whole sum collected is returned to the towns. This is therefore a State tax in form only.
The income of the State Government is derived from taxes on railroads (70 to 75 per cent.) and other corporations (15 per cent.), and fees, licenses, etc. Since 1890 taxes on new corpora tions, of which so many have been formed in New Jersey, have constituted a large share of the receipts. In 1902 the total receipts of the gen eral State fund were $4,317,846, of which $2, 866,363 came from corporation taxes. The ex penditures reached $3,924,S11, leaving a balance of $393,035. lint of the general fund, $883,978 was distributed among the counties for school purposes. Besides, the State collected am l re distributed among the counties 81,486,806 as school tax, and $400,784 as a local railroad tax. The school fund amounts to $3,839,692. Though there was no debt, the sinking fund contained $172,550.