The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-02-28
THE PANIC MAKERS.
NEW YORK BANKING LAW AND
FOREIGN NEGOTIATIONS

1
FOREIGN NEGOTIATIONS
MI Buchanan, In his speech published in the
Globe OF Monday night, gives as reasons for his be-
ing friendly 10 an independent treasury" "ihe i'm
portation OF foreign goods into New York." which
he says, "very far exceeds according 10 our nfor-
nation, the corresponding importaiions during The
year 1886, although they were greater in that year
than they had ever been since the origin Of the Go
vernment." Added TO this, Mr.. Buchanan referred
TO the New York banking law, under which he said,
I" more than iiiy banks had been established in the
beginning Of January last, and know not how many
since, with permission to increase their capital to
four hundred and eighty seven millions Of dollars
Theprincipe on whichihese banks were established,
Mr.. B. regarded as novel," in so Far as State
loans and mortgages upon real estate are made 10
take the place OF gold and silver, and amount of
bank notes may be issued equal TO the amount OF
these securities deposited with the comptroller
The effect Of these observations Of Mr. Buchanan,
must be TO misead the public mind as to the facts,
and alarm the country.
Mr.. Buchanan may have been misled himself
by statement, that appeared in the New York pa
pers, of the number of packages of foreign goods
that had been sent TO the public store for apprase
ment and examination In the corresponding periods
Of 1886, ~, and 49, This formed no criterion Of
the quantity and value Of the goods imported. We
know II TO be fact, that, recently, owing to the
frauds that were detected last fall, much greater
number of packages have been ordered to the pub
lie stores than formerly out of each invoice. In
many instances, every package in an invoice instead
Of one out Of every twenty, has been thus ordered
There is one fact which, If Mr.. B. had adyertedto
might have operated to aay the alarm manifested
BY him ast these importations; and that Is in the
very face Of their daily arrivals foreign exchange
has declined. That is the most accurate barometer
by which TO ascertain the balance of trade between
commercial nations.
The following extract of a letter to the editor
from an esteemed friend, who is an intelligent and
practical banker in New York, furnishes good
reply 10 the panic views Of Mr.. Buchanan:
"You are alarmed about our paper system,
perceive, and especially about our new Banking
Law and its probable effects. II is a novelty in our
history and its results will be better determined by
ume and experience than by prediction. admit
mat nolhing Is more natural than to look for ca
amities in the event OF general extension of the
system among the several States. Credit and paper
may produce greater commissions than ever; vet the
very apprehension Of these troubles may save us
from their reality. II is certainly no very difficult
matter 10 check these paper extravagances provided
there can be kept up conservative power in some
quarter or other; and il seems to me there is bet
ter chance for this than there ever has been in
former periods: Because there will not be that
| unity Of feeling among the banks which existed
| when they had the same common origin There
will be ealousies and suspicious TO such an extent
as to keep them all on the alert about their credits
and issues. They will keep each other 10 more
| IL. A..
one may look occasionally to periods when universal
madness will rule the day, when the sober minded
even will not be safe from the decisions that some
times overwhem every land. These are events to
be expected in the natural of things and that
they may be very much aggravated by The p.eva-
lence OF vicious systems Of credit and banking there
cannot be doubt. The operations, thus far, under
the law in this State, have only been nominaAy
large There have been advertisements and notices
OF new banks, with published lists of Directors but
quite an absence Of Stockholders. In order to make
bank it is necessary to have same LILLE money at
least. Our comptroller will no, issue the bank notes
without State stock for their basis or one half State
stock and the other half in bonds and mortgages on
productive property half the value OF the land
live in house that would sell for 0O0 the lot
is worth $4,000. The comptroller would take it
in New York; is the only institution that has been
formed in this city, the stock of which has been
taken up This has been largely over-subscrbed,
and there are stockholders in ii residing in England
and in various parts of the United States, par,icu-
larly at the eastward, Boston, Rhode Island Con-
necticut &c. The capital is to be paid all in cash,
and it is the intention of the Directors to keep the
institution a sound one; and we mean and hope
ho aIv
upon the bank in specie We intend 10 be
servative power as well as an efficient aid to the
commerce of our city and country May our actions
be in harmony with our intentions.
There is another topic in your letter, in which
think you, with some Others may be mistaken, and
that is the importaions OF the present year. On
this subject am without facts and Of course, speak
at random, or rather from conversations with friends
in the importing line. have few lines from
gentleman Of intelligence, in whose judgment con-
fide good DEAL copy of which suboin. He
says
dan impression, which I think quite erroneous,
to some extent prevails, and has been indusriously
propagated by the papers, that the importation OF
drygoods this Spring, is to be unusually and very
inuriously large.
happears TO have arisen to considerable degree,
from the fact that, the Liverpool packets which sail
ed from that port from the 18th November onward
10 the LIST of January, had large cargoes and very
large freights These great cargoes, however, arose
not from there being more goods shipped in that
period than usual; but, first, from there being no
other ships than the packets to take freight for this
port Neat, from the transmission from Ireland and
Scotland of all the goods from those quarters 10
Liverpool in place Of their being shipped direct to
this place Not ship from Scotland has come to
this port believe, this year till the present week
Thirdly, from the iniermixture of larger proper
ton than usual of other merchandise than goods,
such as salt iron, drugs or dyes for manufactures
Fourthly from the fact that all the goods almost i'm
ported on account of Baltimore and Philadelphia,
have been sent to New York. in place of being ship
ped directly to their places Not single ship has,
thus far, arrived from Liverpool, at Boston. The
unusual amount of the freight has arisen in large
degree, from the exorblant prices charged, not from