The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-01-21
DEPRESSION or STOCKS So,


In an article on the subject of the continued de-
cline in the value of Stocks of all kinds, and on ne
causes of that decline, the Philadelphia Norh Anne
rican has the following remarks:
Bank, Railroad, and nearly every other description
of stock continues to decline gradually and almost
daily III tins market The same downward tendency
in the prices of nearly all kinds of stock is exhibited
in the markets of New York, Boston and Baltimore
The stocks issued by States that have never failed to
pay the interest it fell due, and whose integrity has
never been suspected, such Ohio, and of Banks
whose capitals believed TO be perfectly unmpair-
ed, and are conducted by some of the most intelligent
merchants of the country, such the Bank of Com
merce Of New York, have recently fallen very much
in price. Stock of the State of Ohio, hearing six
per cent interest per annum, has been sold in New
York at GO per cent. or 80 per cent discount and
the stock of the Bank of Commerce at - per cent.
or 20 per cent discount. We have selected these
two descriptions of stock to notice, because be-
eve there cannot be a doubt entertained as to the
perfect solidity of either of them.
The natural inquiry is, what is the cause that has
led to this state of things, altogether without pre-
cedent in this country That is a question Of the
highest Importance. The subject is worthy of the
closest investigation. skilfu physician first ascer-
tans the seat of the disorder Of his patient and then
prescrlbes the remedy. So in political economy,
without knowing the cause, the effect cannot he either
counteracted or provided against
TO US 1t is clear that the reduction in prices which
we now daily witness is caused by the decrease Of the
circulating medium This we think can be made clear
ly manifest to every one. Few persons in this coun-
try aware of the influence that an increase or
decrease in the circulating medium has on prices
In England the effects Of an increase decrease OF
the issues Of the Bank, to the extent of only mil
lion of pounds, is Immediately witnessed in the rise
or fall, as the case may be- in the price of stocks
II appears that, between January, lS4l and Janua-
ry, 1912, the Safety Fund Banks of New York have
reduced their circulation from about fifteen millions
and quarter Of dollars, the amount the former
period, to little more than eight millions the
amount out at the latter period and it is estimated
that the free banks during the period, have re-
duced the amount of notes issued by them more than
million and quarter, which taken together, has
caused an aggregate reduction of the circulation OF
the Banks of the State of New York from about
500, 500 900 to 81, 100000 This reduction
has taken place most undoubtedly principally dur
ing the last four or five months During that period
all will recolect that, the Safety Fund Banks of the
city of New York have pursued most rgidly, the
tringent policy; and Also that in the same period a
number of the free and two three of the Safety
Fund Banks have fallen From these causes has the
contraction in the currency we have named arisen
This great and sudden reduction of the circulating
medium of the country by the action of the banks OF
single State, has exerted an immediate and direct
influence in every part. But 1t is not in New Yo'k
alone that the contractiye policy has been pursued
In nearly every quarter of the country the pro-
cess has been going on during the same period.
When the facts we have given are duly weighed,
who can fail to perceive the real cause of the daily
decline which they WITNESS in the prices of stocks,
and some other descriptions of property 1t must, 1t
appears to us, be apparent to all We fear that the
effects are yet to be experienced in both an embar-
RAISING and distressing degree. This subject is one
that opens wide field for useful comment to the
effects that yet to be produced the foreign and
domestic business of the country. To these subjects
we shall direct our inquiries in some Of our subsc-
quent articles.