Northern Times.
Liverpool, Merseyside, England, 1857-10-26 00:00:00

UNITED STATES SECURITIES-

THE FINANCIAL CRISIS

(From Me London Circular of Mr. IT'il:qam I ance.)
Since the suspension of specie payments in May 1837,
and the general failure of banks in Octob.r, 1839, New
York and the other commercial cities in the United Stales
have not known so great a crisis as was apparently culmi-
natir g, when the last telegraphic despatch from New York
reached Halifax on the Bth instant. The continued mone-
tary pressure in New York has caused the Bank of
England to rale the rate of interest to 8 per cent—a ra`e
known only in the E❑glish railway panic year cf 18't7.
The crisis in the United States has been brought about
by the general inflation of credit, particularly that affo, dod
to existing railways and those in progress, by importers
having gradually increased their limit of credit with
British and Continental manufacturers, from the
want of a batter system of negotiating exchange,
now carried' on through the agency of a select
number of houses, also by land speculations in the
Western States—circumstances which have all combined
in causing the present troubles. The expansion of railway
enterprise, without the ordinary assistance of foreign
capital, has created an amount of floating debt heretofore
unknown in railway financi 1 operations. The imports of
the country hive greatly exceeded the exports ; accep-
tances given in payment for geode land and rail way progress
have been renewed from time to time, until distrust in
railway management arose, and it was found impossible to
keep the wheel in ination. The stock and bond s curities
of the railways being deposited as security for payment
have been thrown upon the ma,ket without regard to con-
sequences. Banks found themselves large owners of
inconvertible paper, when they were suddenly subjected to
a demand for specie. Such as have been managed with
care will weather the storm, but many founded on an
insecure basis have been unable to meet the demand.
Credit for a time has been destroyed, and exchange upon
England can only with difficulty be negcciated at par, or
4s. 6d. the dollar.

It will doubtless be some conside-aVe time before confi-
dence in American investments is again restored ; the
United States being indebted t England and Germany at
least 100,000,000 dollars upon the New York balance of
trade for the present year. The corn c-op of the States is
most abundant, particularly in the west, Chicago alone
having shipped 4,673,445 bushels of wheat and 6,199,479
bushels of corn up to the 2il.h September. The cotton
crop promises well, and the supply of gold will probably
be as good as heretofore. Yet, wi-h the exception of gold,
the produce of the country is comparatively usele a for
the discharge of its debts. A general distrust prevails,
and no advances can be obtained at reasonable rates
upon either produce or sock. Gold is going out from
tit's country to purchase both produce and securities,
thereby increasing the debt of the United States, so
that fir a time the loss must be chiefly borne on this side
of the Atlantic. The United States treasury is disbursing
as much of its surplus as possible; the New York banks
are contracting thei' loans, as will be seen by the statement
below. Imports will decrease, produce will come forward
and be shipped at greatly reduced rates ; and, af'er a year
or two of priva'ion, the country will be more truly pros-
perous than ever, and busine,T, for a time at least, be
founded on safe principles. The natural productions of
the country will soon found a surplus trade in its favour.
With the exception of the government stocks, no class of
United States securities has escaped the general depression.
In Sta e stocks, Indiana 5s have receded since Sept
1855, 12 percent; Virginia 6e, 20 per cent; Missouri 6s,
274 per cent ; Ohio 6s (1886), 204 per c •nt on their par
value. In railway bonds the fall has been very severe,
even in those which are supposed to be well secured ; Erie
3rd mortgage declined 41 per cent; Erie convertible, '7l,
71 per cent; Illinois construction b-,nds, 33 per cent; New
York central, 7 per cent bonds, 271 per cent; Michigan
South and North Indiana sinking 'fund 50 per cent, &c;
Terre Haute and Alton, 2n,1 mortgage 55! per cent on their
par value since Sept 1855. In railway thares,wh'ele possibly
will prove altogether valueless in many companies, from the
necessary increase of preferential capital to carry on the
works, the depreciation has naturally been very severe
Erie shares, which were sold July, 1856, at 6-11, have been
done at 10; New York Central, within two years, hive
fallen 51 per cent ; Michigan Central, 7o per cent ; Michi-
gan South and North Indiana 90, par cent; Illinois
Central, 63 per cent ; La Crosse and Milwaukee, 83 per
per cent; Galona and Chicego, 73 per cent; Pennsylvania
Central, 22 par cent on their par values, since Sept , 1855 ;
the chief fall in bonds and shares being within the last
month. _ _ _ _

In the London market there has been a considerable
amount of business consequent on the depreciated prices.
These stocks and bonds quoted on the Sock Exchange
rule at higher rates here than in America, alth-ugh gene-
rally it is the rever. e. Illinois shares and bonds being
largely held in this country, have receives the greatest
attention. and have been m3intained in price, although the
success of that particular railway has been mainly depen-
dent on a land scheme, and a greater part of the purchase
money for the land sold is in outstanding bulls. The
construction bonds of this company being secured upon the
railway and lands appear to have a higher intrinsic value
than that assigned to them, if the shares of the company
are of the value quoted.
The state of the New York banks, at the dates men-
tioned, was as follows :
Sept. 19, 1857. Sept. 20, 1157. Cot. 3, 1857. Oct. 4, 1856,
dole. dole. do s dole.
Capltal.. 61,430,000 .. 61,180,000 65,130,000 .. --
Loan' ...108,777 421 107 791 433 .. 105,035,499 .. 107,931,7 .7
Specie .. 13,556 186 13,327.095 .. 11,403,413 .. 11,015,134
Orculatn. 8 073 801 .. 7,838,708 .. 7,!!16,102 .. 8,.30,628
Deposits 75,772,774 .. 73,315,611 .. 67,978,657 .. 88,730,803