Morning herald. [volume] (New York [N.Y.]) 1837-1840, 1837-07-07

CoURsE OF THE NoRrHBaN AND SOUTHERN TRADE.
The following important letter we hasten TO lay be-
fore readers II contains information that at this
moment, will 60 far TO let us into proper under
standing as TO the nature of the trade between the
north and south. Tomorrow we shall follow up the
SUBJECT and lay the whole system open for the bcne-
fit OF our readers, and those merchants who have
succeeded to the late overgrown dynasty.
SAVANNAH, GEORGIA. June, 1887.
In compliance with the wishes contained IN your
late communication to me, relative 10 the condltlon OF
the southern states, their trade, &c. at THIS tlme,
Will endeavor 10 give you such information as Aas Ial
len under my observation during my res deHce at the
south. The most part Of my commercial lie having
been spent al the morrill, and not little OF ~ IN the
city OF New York, l have been led 10 examine INTO
the method OF doing business at the SOUTH Compar-
ing il with the morrill, find on examination that the
principle of doing business between the two IS an ex-
treme arising from the long credits allowed by the
northern merchants on the one hand, while little or no
credit is gwen by The southern merchant on the otner
True II is, that the southern merchant on visiting the
north for the purchase of goods has represented that
he was compelled TO sell his goods on long credit
on his return home. The northern mechanism Their
generosity believing this be the CASEY have extend
ed to him liberal and long credits
From what have seen in respect to credit am
led TO believe, that the northern merchants, hereto
FORE have been mlsinformed this SUBJECT or have
not had it in their power TO inform themselves cor
recIy TO how they sto6d relation to the trade OF
the south. One fact alone would sufficient to
convince any one engaged IN trade, that there
was vast difference between the sale of pro-
duce at the south and the sale of merchandise al the
north-the first being for ready money, the latter at
almost unlimited credit Take, for instance, the
article of cotton. If you wish 10 purchase 100
bales, you know you cannot do SO except for cash IN
hand by draft convertible into cash, nothing at the
south like credit being known with the planter in the
sale of his produce.
The question then naturally comes up to what is
done with the price Of the 100 bales cotton. | an
swer, II goes from the planter the portion necessary
TO the trader TO pay for his suppesfor he has neither
excuse Conscience with cash in his hand, to ask Of
the trader cash on his supplies Following this sub
ject up you will again ask to what use the trader will
put this money received for his goods. answer, that
inasmuch he has obtained long credits on the pur
chase OF goods, he avails himself of the ready money
in hand and turns his attention to objects of specula-
tion be they produce lands, any thing else-gene-
rally however prefelng the first being sooner con-
verble INTO money.
The condition Of the country, with its widely
tended trade, its easy TO credit brought about
an artificial prosperity giving impetus TO specula
uon IN almost every thing that presented itself The
whole south became party 10 It the consequence
was, lands worth only few years since, ~ the acre,
advanced to $40 and $l2 and negroes worth $500 to
Sl2 and $780, So in like manner the produce Of the
SOIL cotton, having ranged from 2 cents, above its
real worth with constant increase of it's product,
almost beyond f not quite SOY its actual consumption
taking into consideration the growth Of il in other
parts of the world. The southern trader then, for
furnished by the NORTH has dew ated from his legiti-
mate business, and become q Spectator. Now for
some time past, they have been more or less success
ful IN Their operation. Recent reverse events,
little or nothing 10 pay their speculations, with
heavy losses, taking from them all they had
made before, and consuming nearly all they had sb
tanned on credit also.
To give you an idea Of the manner and ease, opera
tons IN cotton have been carried on at the south,
will suppose trader from the south 10 have awaited
himself to the value of 000 in goods, the usual
credit, at New York. He disposes of part of these
goods, say SO 600, for cash. With this he goes into
the market and purchases cotton, which he ships TO
his factor on whom he draws for certain amount of
money, with which he again enters the market, and
purchases more cotton, shipping and drawing, as be-
tore an. so he goes on purchasing and drawing, add
ing cotton TO cotton, In quantity almost without
limit II profit comes from II very well, and there
is chance OF paying the $4,000 obtained on credit;
but if unfortunate, and the cotton should pay loss
which, am seny to say has been generally the case
o. late will require long to loose the % 600 part
of the $4,000 obtained on a credt-conseguenty the
New York merchant in the end, is the sufferer.
regret to say that instances of this description are
quite numerous al the South; many OF which have
fallen under my observation -one Of which will re-
late, OF house that commenced business as general
traders with cash capital of s5 600, which enabled
them TO obtain what credit they wished at the North,
on their purchases. AT the expiration of eighteen
months they failed. On winding up their affairs, il
was ascertaned that they had made, on the sale Of
their goods, near 10000, in profits So much for The
legitimate business On examining their speculative
business which wasin cotton II was found that they
had lost very $4,000; consequently, they can
pay but small portion Of their Northern debt.
You ask how, al the present time the Planters
stand, IN relation 10 the Merchants If they not
much IN debt To them and il so, whether the coming
crop will not pay them so to lessen largely the debt
now due the North from The South
In answer TO yosr first inquiry, can only say that
the planters are but little in debt 10 the merchants
or, in other words, almost independent Of them. Ar
10 their Indebtedness hemfor the sake of the north
wish the planters moreln debt to the merchants
than they are. The amount due the merchants from
the planters, at the most not over the profits they
have realized on the sale Of their goods.
In answer 10 your third inquiry, doubt not the
northern merchants under the impression that the
present growing crop will pay If not all, large pro
portion of the debt now due them from the soulh.-
Would that this to be the But from my
knowledge Of the manner in which business has beer
conducted feel assured that very small proportion
of the value of the coming crop will fall into the hands
Of the northern merchants. In looking into this sub
ect you will find that the planters have received
commodauon Com their factors in drafts, which they
have converted into cash through the medium Of
bgnks the proceeds of which they have paid the mer
chants for their supplies. The account, therefore
now stands between the planters his factor, and the
banks. The merchants having received the avalls OF
this accommodation, Of course the planters are not
further indebted to them.
In examining the condt on Of the southern states
such as LOUISIANA, Mississippi Alabama &c, you
will find the condition of affairs to correspond with
what have stated The cotton croD of the past sea-