The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1848-05-13

The CURRENCY AND THE BANKs THROUGHOUT
raK CorNrRY.-The recent reports which were
circulated relative to the weakness and insolvency
of certain banks in South Carolina, may have been
exaggerated in that particular case; but rom APP
pearances throughout the country, in connection
with the banks and currency, we very much fear
that there are good grounds for anticipating some
unfortunate catastrophe in connection with the
banks and currency in the South and West, at no
distant day. We will explain in few words.
During the last few months the prices of cotton,
corn and other staples in Europe, have been so low
in a great measure to diminish the expectation
of those staples from this country. The banks and
the spectators throughout the country, in order to
ward off the effects of low prices, have been en-
deavoring to adopt measures TO enable them to
hold on to the crops beyond the period at which
they were usually sold, in hopes of realizing
higher prices at future time. The banks, there
fore, in connection with the spectators, have
been making vast issues of paper money, far
beyond the amount of State stocks or specie on
which these issues are made, to protect them in
case of any sudden revulsion in the trading por-
tons of the world. Some of the banks IN the
Southern and Western States, and also some in
the western parts of the Northern States, have a
most miserable amount of specie in their vaults,
which is based an extraordinary quantity Of paper
money and circulation. The relation between spe-
Gle and paper is too distant in many of these banks
The movement, however, enables the spectators
to keep up the price of flour, provisions cotton, and
various other arcles-to hold them on hand in ex-
pectation OF higher prices, and to prevent the ex
port of those articles to other countries to be sold
at the natural prices which they will bring. This
| is the situation of things here.
On the other side of the Atlantic, among our GUS
toners, the prospects of high prices are worse
than they have been for twenty years past. The
revolutions and changes going on in the old world
will throw, and have thrown, every thing into con-
fusion, diminished consumption, diminished pri-
ces, and every thing on which healthy and rising
trade depends. The prospects of any increase in
prices OF any of our staples, not only therefore,
bad, but are positively gloomy as they have been
IN the last twenty years, since the times of 1886
and Y. continuance of low prices, and de-
rangement of our foreign trade, will, therefore,
gradually bring to head and crisis the extra
ordinary efforts made by the country banks in the
South and West to keep up the prices of our sta
pies. We would not, therefore, be surprised to
see, IN the course of few months, serious revul
sion take place in our banking currency; and the
symptoms are already beginning to show them
selves In the weakness of the country banks, the
failure of some, and the disproporton between
specie and the issues of paper money. We would,
therefore, advise the public to look at, and be
ful of the currency of distant banking institutions
The banks of the large cities-New York, Phila-
delphia, and Batimore-are in tolerably healthy
condition. So are those of Boston, and those of
New England, in consequence of the system of
circulation and redemption which prevails there,
called the Suffolk system. But the banking cur
rency of other parts and of more distant regions,
should be looked at very carefully, before it passes
from hand to hand as value for goods. There are
breakers ahead, and the sooner the people take
care the better