Phenix gazette. [volume] (Alexandria [D.C.]) 1825-1833, 1833-09-03
MONEY MARKET IN BOSTON.

There are in operation, in the city OF Boston,
BANKS, with al aggregate
banking capital ,rifie short Of TWENTY NIL
LIONS or DOLLARS! yet, with this numper
of Banks (which one would think sufficiently and
$50 large an amount Of capital,) greater than can
be found in any other city IN the Union IN pro-
PORTION to the population and amount OF trade,
the mercantile and trading community are de
prived, in agreat measure, Of the usual faoiit'es
afforded bv Banks IN other parts of the country.
In New York, Philadelphia and Baltimore, the
Money Market IS represented as "easy," while
in Boston, the universal cry announces scarcity
of Money. Many Of our Banks are mere bro.
Eers' shoIs, where money is loaned only at rate
Of interest, considerably above the legal rate
Usuraus or illegal interest is not, perhaps, taken
directly, for those who manage these affairs have
.hrewdness enough to transaet business in such q
way 40 not to subject their several banks to Tor.
feiture of their ehatters. 1t is stated by those,
whoae experience Ia most Improbable school'nas.
ter M this case) has taught them The rudiments OF
the art of shaving as practised in the most ap-
proved Institutions that it is the daily practice OF
MANY Of the Banks to issount notes for certain
sums Of money, aid pay out to the respective ap
pl,cants, four ffhs, nine tenths. of the amount
loaned, in their own bills some other Bank in
the city. and pay the remainder OF the sun by
CHECK on some distant Bank, (either in or out
of the state For this check premium is charg-
ed, large enough to cover the rate OF interest
! agreed upon between the borrower and the Bank
In some cases, no portion Of the sum discounted
ia Maid in money, but in Check on Bank 10
one of the southern cities, for which premium
is charesd This check the borrower sells 10
broker Bank, al q discount-paying, IN discount
and d, en,iun,, about ten or twelve per cent. Tor
his loan.
The merchants aud traders give to the Banks
where this usurous and illegal traffic is CARRIED
on, the. mild name "t Trading Banks; md the
re-: ark is pretty often made on the Excnauge
tina; n,Jority Of Banhs haze got into Me way
of trading. We have called this traffic Meeal-
not that IL is contrary to the letter " me fnc;
for we are aware that nur laws regulating Banks
and Banking" are 80 loosely framed. and compo'
sed of such conveniently equivocai Or unmeanins
ptraseology that it does no, require any extraor-
binary degree OF sharpness to violate their spirit
with impunity. II requires some management.
however. on The part of the Banks to keep up the
rate of interest to seven or eight per cent; and.
in order to effect this object, portion OF their
capitai is loaned on notes Of New-York mer-
chants. Ithas been said that more than the whole
amount Of Banks capiiai is in New York. AZ
the notes thus discounted fall due. they are
sent to New.York Banks for collection.
Thus large balances in favor Of Boston Banks
accumulate 10 the Banks at New-York. If the
balances thus standing 10 New York to the ere.
dit of the Boston Banks we're called home, our
money market would be relieved. and our news
papers might, perhaps once in while announce.
what would be extremely gratifying to their
readers-that :. money is easy" But no such
good news at that can bv looked for here. The
immense sums thus credited IN New.York to
Boston Banks is reioaned on New York paper ss.
il is'called; while the balances which our banks
ma, happen to get against those OF New-York.
are paid of IN specie, and this makes the scarcity
still more pinching.
To add to the vexations, which the local Banks
thus bring upon men Of business in this commu.
nifty. the Bank Of the United States 10 pursuing
course but little calculated TO secure the good will
Of the public. The agitation OF the question
Of withdrawing the deposifes. has produced de-
termination the part Of the directors OF this in.
sttution to place the Bank 10 On attitude Of great
strenpth-both in regard to the amount oi specie
and to the description Of notes comparatively
small IN amount) which they discount. do
nestle bill of exchange, drawn at so OF 80 days.
on which, besides interest. quarter OF one per
cent. exchange is demanded. 10 the only kind Of
naner which the Branch in Boston will discount;
and even Of this, bat . very small portion Of
what Is ifered.-Boston Cour.
MUSEUM