The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1846-05-30

Government and State stocks have since the departure
Of the steamer Of the 10th instant fallen Of several per
cent and the transactions at the decline have only been
to very limited extent This shows that holders have
great confidence in these investments do not
further depreciation Government fvcs have, since the
from tho South was first received been
below para Circumstance which has not been realized
for years Should the money market experience great
er contraction 10 possible tho government and State
stocks generally viii roach a much lower point This
market far has been easy compared with those Of
the Southern and Western cities; but hardly
pect to escape the depression which has been
in other sections Of the country The demand for money
from the government has, yet been confined to Now
Orleans Tho public funds, deposit in that city, have
been expended in providing for the army Of occupation
and the deposits in other cities soon be required
carry the war with Mexico. The banks of the three
principal Northern cities-New York. Boston, and Phila
delphaheld deposits the LIST inst
ing Sss77 5s7 The withdrawal of this immense sum
in specie-and specie will only the purposes Of
the government-must produce a stringency in the
money market Of these three Cities that have very
injurious effect upon business generally and particularly
upon prices of all kinds Of stock A call for SO many
millions Of dollars in specie, must compel the banks to
act with great cauion-to call in all stock, or short
loans and restrict their discounts to very limited
amount.
We learn that, a. yet the public funds de-
post in these three cities have not been dis.
turbed. We should conclude therefore, that there
had been real for the depression that
at present exists, but that has been produced in
anticipation of such demand and that when the trans
fers werc actually made, much greater contraction
must DO resorted to moet them promptly in the shape
In which they will BIO made. When the passage of
Independent Treasury bill through the Senate
from the House Of Representatives, expected the
banks Of this city contracted their loans and discounts
rapidly that money became exceedingly scarce and tho
of interest in the street. for short loans advanced
from ak and per cent to twelve and eighteen per
cent in very short time. The the banks pursued
at that tme in anticipation of change in the financial
policy Of the government produced much cmbarrass
mcnt, that several failures took place among the
mercial classes and the market value OF all fancy stocks
became sevea per cent less than has been realized with
all the advices from the Rio Grande, and the pros
pect of protraced rupture with Mexico This shows
the power and influence of the banks which they from
time timc Adyance check any political
ment in which they interested They had object
in view, in producing the depression in the money
ke alluded to; and that prejudice the public mind
against the change contemplated in the finances Of the
government How far they succeeded in doing is i'm
possible to tell the of hostilites with
Mexico arrested all legislation upon tho subject and
ducod the banks relax the restrictions they had placed
upon the money market
The withdrawal Of the government depostes to carry
the war, will have very different effect upon the
banks than withdrawal to lock up in Sub Treasures
1t would not bepopuar for these institutions to place OBJ
strucons in the way Of the government at this crisis in
relation to it's finances cmbarrass tho mercantile
community than actually necessary for their own
safety &C. The transfer Of such large amount Of de-
posts from the three principal Atlantic cities cannot but
have very unfavorabe effect upon these markets, in
spite Of every effort tho part Of the banks to prevent
It but IL the general impression that 1t will be but
temporary Is in fact but transfer OF funds and al
though ct rst 1t will without doubt be severely felt at
those points from which the drain is made short time
will sufacs distribute the depoaites They will cir
culate through every channel Of trade, and eventually
come back to the starting point Money like watcr will
find its own level The regular course Of trade will
place capital where IL 10 the most valuable.
Tho Mexican war will distribute the thirteen millions
surplus dsposte to the credit ofhe Secretary
ofhe Treasury in about fifty banks, in different sections
of the country rapidly and more thoroughly than
any other methods will benefit all classes from the pro-
ducers In tho Western country down to the merchant
will pass through all hands and do immense deal Of
good whereas had not been for something Of this kind
there would have been continual contest between the
banks for the possession Of such large depos
and in the event of the reestabshment of the ndepend
contest between the State banks and the government
similar Out powerfully that between the govern
ment and the United States Bank