The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1848-01-10
Rumor. OF Peace and Panic.

The rumor. of peace and panic from Washing
ton, begin TO be interesting, though not decisive.
Ever since the American army crossed the Rio
Grande, we have been in expectation of peace,
on the Friday or Saturday of every next week
The same expectation, for the same days, still
continues, and probably may continue to the end
of the present year (; but whatever the chances
of peace may be, the evidences of drain on the
money market are much more certain. If Mexl-
CO were to make peace with the United States
tomorrow, il is highly probable that this coun-
try could not get out of the affair without fur
Their loan of fifty orsixty millions of dollars, TO
pay all outstanding debts, and to liquidate all
those which will come in thereafter. One thing
is certain, therefore that the government will
require more money, much more than will ac
crue from the revenue, and that money must
come In large masses, from the capitalists and
banks, principally in the Atlantic cities.
Now, in the event of great drain caused by
the wants of government, to disburse in the
Mexican war, and also drain produced by the
action of the Bank of England, it is very evil
dent that there must be an extreme pressure in
the money markets of the principal cites-a
pressure greater, indeed, and more extensive,
than any that has been felt since the year 1887.
Is well, therefore,, dt tils PoitiCuidi Poiht vi
time, in our relations both with England and
Mexico, as far money is concerned, to exa-
mine our position, to look over the field of opera
lions, to take in sail, and prepare for storm of
=, ind. either OF short or long continuance,
ana OF very uHeGca.y .---:.-
According TO the returns made by the principal
banks in the large cities of the country, the
amount of gold and silver in their vaults bears
only very small proportion to the amount oil de-
posts and circulation, both OF which items are
liable, at any time, and at any moment, TO be
called for in specie. 1t lsvery easy TO stave off
the public, in whose hands the circulation may
principally be found; for a certain large sum Of
money is always required TO liquidate and pay for
the different small transactions of human life and
ordinary existence. This amount will not run in
on the banks requiring redemption; but it is
what is in the hands of depositors, who are gene
rally capitalists, and who can, at any moment
bring about a crisis in the money market when
they choose, and produce a suspension OF the
banks TO suit their own interest The suspension
Of those institutions, in the year 1887, was
caused by depostors or capitslisfs, who wished
the banks 10 suspend in order to oppose the
action Of the United States government, a,
that time, in reference TO the charter Of the
United States Bank. There was similar
dram for the circulation but that is never of any
moment.
The depositors, and those in their confidence
are the persons who produce suspensions and
cause revulsions in the money market, depress
prices, and bring about those events called crises
in commercial affairs. Now in such places asWall
street, in New York, or the money mart of any
other large city, the only rule ofaciion among ca
pitalisfs is "whether it will pay l' If all the ca
pitalists in this country who hold deposits in the
banks, were to unite in general action for the
purpose Of making pressure in the money mar
ket, or causing bank suspension, they could
reduce the prices of our great staples-tobacco,
cotton and acknowledgements or thirty per
cent, being equivalent TO a reduction on the
annual crop, of fifty or sixty, or even one hun
bred millions of dollars, in the aggregate value
The same causes would operate on the prices of
real estate-houses, buildings, and all sorts of
property.
II will be seen, therefore, that it is in the
power OF our capitalists, who hold bank stock,
aud who are the principal holders of deposits, TO
bring about pressure in our money market. or
such movement as would reduce the prices of |
all our principal commodities as much as the re- |
cent pressure has caused on these staples in the |
English market,
Indeed. the movements in the London money
market, during the last Ave OF elk months, have
been merely an operation in that latitude, SINH. /