The republic. [volume] (Washington [D.C.]) 1849-1853, 1851-10-06
From the albany Register, October /
Money Matters.

The crisis in the money market OF which we
forewarned our readers n few weeks ago has come.
The causes various. The construction OF such
extent OF railway either Just completed or 5tli
in progress, has created constant demand for
capital, which it has now become difficult TO sup
ply. That demand alone is sufficient to create IA
pressure in the money market. 1t was met for q
time by the sale of bonds and stocks abroad. The
strngency of the market in Europe, particularly
in England, at this time, not only checks that sale,
but gives rise TO a new danger-viz., that the bonds
and stocks which have been already sold there
may be thrown back upon own MARKHAM
event which would create such demand for spc-
Gle would prove disastrous to BAN ks and banking
business. The banks therefore, must curtail their
discounts, and diminish their circulation, and be
prepared for storm. The enormous debt we have
been creating in Europe exists principally in the
shape OF stocks and bonds OF States and corpora
tions. Pay day, come when ii will, must necessa-
rily be blue one 1t takes no small share of CAL
ifornia gold to pay the interest on them. Interest
and fresh importations exhaust our means, with
out applying any thing to old scores
The crops of the country are indeed abundant,
but, with the exception Of cotton, the demand for
them in Europe is very limited, and they cannot
in years of famine, be relied on to adjust bal
ances or effect exchanges there AT home, the
market for them 10 not nearly equal to the supply
and ID growing daily less, in consequences OF tho
stoppage and failure of domestic manufactures,
for want of little protection against foreign com
petition. We throwing up, rather being
thrown out OF other cmployments, and becoming
nation of agricultural producers without any cor
respondent consumption, and with only very
limited and unreliable market elsewhere. lho
consequence realizing in the very low
prices and exceedingly slow sales OF our grams
and other surplus products. The customers OF the
country dealer unable to pay him the balances
on his books against them for former purchases,
and must restrict new ones within the limits OF
necessity He is unable to take their produce pay
ment because he cannot offer remunerating prices,
nor draw against it with confidence if he sends il
forward The country banks close sympathetically
with the ightness of those in Wall street. He can
not get discounts, therefore, and is unable to pay
the merchants below. This increases the want Of
accommodation on their part and lessons the
chances of obtaining it, Those whose credit ex
tended, and whose paper is maturing, must obtain
temporary loans at enormous rates or fail, and
there are plenty of lenders ready to take ndvan-
age of that state OF things to increase the rates of
usury. Those who cannot obtain money at such
prices must fail and unless there is letting up"
most OF those also who do obtain il for time at n
high interest. The high prices fast up profile,
and eat rapidly into capital. Those banks which
are unsound subjected to the same ordeas
individuals, and must one after another go by the
board. The result of all this is that confidence
which money and commercial transactions mainly
rest isdestroyed and neither banks nor individuals
will make legitimate loans to any but those whose
credit ia above suspicion, and scarcely to them.
The money OF the country, instead OF circulating,
s locked up for fear of loss.
This state of things exists in no small degree at
this moment and unless the stringency in the
market relaxes, and confidence is speedily re-
stored, must grow worse and worse. And 1T ID
easy to see that in such event, now probably,
failures will have but just commenced and that
hundreds of those who are now struggling to avert
hard fate, must ultimately yield TO IT and go
down.
1t is difficult to foresce what may happen but
where the relief is to come from is not yet quite
apparent. California gold has been coming in all
tho WHILE and, if it could not prevent crisis, it
can hardly be relied on as a summary remedy.
How can confidence be restored and money Golfers
unlocked? That is the question. And it is one not
easy to answer at present There is no certain re-
medy for it, the removal of the causes which have
produced the stringency, and that is no easy mat
ter The work on unfinished railroads will proba-
bly, have to be suspended to great extent, and
that will help some An improvement in the mo-
ney market abroad would help good deal. The
rest must be left mainly to the operations OF time
and chance. Speculations, over-trading, and over
valuations will cease of course.