Definitions of Safety Fund
The beginning of reform in the banking system. The Safety Fund Act was passed by the New York Legislature in 1829, upon the suggestion of Governor Martin Van Buren. It required that banks chartered by the State should pay into the State Treasury a certain percentage of their capital stock to serve as a fund out of which the liabilities of any of them that might fail should be made good. But the deposit was eventually found too small, and a different system was adopted later.