Morning herald. [volume] (New York [N.Y.]) 1837-1840, 1840-02-11
BosroS, Feb. 9th, 1910.

THE SUFFOLK BANKS SYSTEM.
| Mr. BENNETT
Dear Sir have been a constant reader of your
paper for the last year; and the articles the money
market have had from their soundness, perspicuity,
and variety of detail my highest admiration 1t may
little too much like Boosting, to declare New
York the centre of the monetary world but that it
is getting to be very rapidly, there can be no
manner Of doubt 1t is not necessary, in order that
a city should become the centre of great money ope-
rations, that she should possess vast capital it is
sufficient that she is the theatre which capital
| can be most successfully employea-and, then it
will be sure to go. The financial affairs of the
country, therefore, sagey discussed, with reference
I. New York and its institutions, of permanent
| interest to the whole Union. Belle wing that your
paper contains the soundes views in relation to the
subject and that its influence must be felt very gene
rally, am induced to write to you Tor the purpose
of suggesting the importance OF maturing some plan
by which your State currency can be improved
| Having large dealings with New York, and being
much among the middling class OF traders,-those,
W hose dependence is rather upon sound currency
than upon bank ac accommodation, think have seen
the great cause of embarrassment among the class
above referred They have goods-they have bills
receivabe--they owe but little but, they receive
nothing, and can, therefore, pay nothing Their
toners, scattered through the State, are IN similar
predicament for which there is but one remedy
and that is a sound and equal currency.
In your paper alusiOn is made very frequently to
the Suffolk Bank system, but do not think that suf-
fcent stress is laid upon its importance, or that its
goods effects are sufficiently appreciated; Were
the system adopted in New York, believe that
in one month your trade would be entirely relieved.
Before the Suffolk Bank system was adopted in New
England our currency was precisely in the state
yours now is. The only floating money was country
money, at discount of from to three per cent.
City bank notes were driven from circulation, and
were used only to pass from bank to bank, and the
community were compelled to bear the loss upon
the country bank circulation. The remedy was
adopted the city banks received the country notes
at par, and Immediately drew the specie unless
funds provided for the redemption of their Cir
cuation in Boston. 1t placed the burden of the cir
culation where it should always be, upon the party
benefited by it, namely, the banks it kept health
full control over Them and it enabled the city banks
to increase their circulation to sufficient extent
l have been told in New York, that the same
course is impossible there for several reasons, and
among others, that the brokers have such power,
that ii the city banks received country notes at par
they would be upon at once for the whole
amount of circulation This argument seems to me
| entirely unsound. For in the first place, certain
amount of bills are wanted for circulation, and the
city bank notes would take place of uncurrent mo
ney in part at least; the moment Buffalo bank bill
good city bank bill it would keep also in
circulation, and the run for specie would not equal
| the amount; the city banks could provide for the
| emergency without interfering with their usual
operations. In the next place, if the argument be
sound one il is easy to provide against it by making
the measure gradual one; let the banks begin by
bills of large denomination, and make them par
after deposit of ten days, until they could force the
country banks to provd funds to redeem their bills
which would not be delayed three months, if
many weeks; and every bank forced into the mea-
sure would add much additional means towards
carrying out the general measure. Ii is only ne
cessary for united action the part of the city
banks TO bring this measure about at once. They
must fix upon some bank that shall assume the
direction, establish foreign money department,
range the details, make il fixed point To be accom-
plished to bring the whole currency of the State at
par in New York, and your city would find itself re-
Heyed of load that weighs with appalling
force its best interests.
There never will be better time to accomplish
this desirable measure than the present. The crcu-
lation is much reduced and every department Of
business is in state of contraction. Ii is idle to
leave matter of this sort to legislation they
make provision for the various exigencies that
may occur-the city banks alone can do it.
NEW ENGLAcpER.