The southern press. [volume] (Washington City [i.e. Washington, D.C.]) 1850-1852, 1851-10-08

MONDAY, OCTOBER 6, 1851.
az Mr.. RoBERT E. SEYLE, Charleston,
South Carolina, assisted by Mr.. s. +. burgess
are our duly authorized agents for the States Of
South Carolina and Georgia, to collect monies
dine this Office, and receive subscriptions.
DIR. MAzYcK is our agent for Charleston.
WThe bank panic in New York is reported
to be subsiding.
Commercial centralism is as bad as political.
The currency and credit Of the whole Union are
dependent on the win, the wisdom, the folly, the
honesty and the treachery of the banks in the
city of New York. They have deposits and a
circulation amounting to some thirty or forty
millions-and have now less than six millions
in specie. They do not usually have more than
about eight millions. This is not sufficient
metallic basis for SO large an amount of imme-
diate liabilities as forty millions Of deposits and
circulation. 1t subjects the banks to long
chapter of accidents. A great fire, foreign rev.
olution, blasted crop, riot, rumor, may
cause run which will result in suspension, or
ut least in rapid curtailment of discounts, and
many private failures.
But unsafe as the system is in New York,
and Of itself, its connection with that of other
States, renders it much moro dangerous. Ac-
cording to the general banking law of Ohio, the
circulation of banks in that State is regulated
by the specie they have on hand, or the amount
of their Eastern deposits. These deposits are
chiefly in the New York banks. Banks in OHIO
are allowed by law TO have circulation of nine
millione for three millions Of deposits in New
York. Hence it will be seen that the basis Of
Ohio currency IS New York credit Of one-third
of the amount and the basis Of that credit at the
present moment is coin Of one sixth of its
amount Hence the actual specie basis of a
dollar of circulation in Ohio is one-sixth OF one
third of its own amount, or about FIVE cents and
q half.
no banker of honesty or sense, would permit his
paper to become 30 insecure as that But the
banks of Ohio and of other States are in the
habit of regarding deposit in New York
bank as equal, or even superior to SO much spe-
Gle as q basis of circulation. And hence the
currency of the whole country Is subjected to
the tw o-fod or four-fold contingency of the hon.
esty and ability of the interior banks which make
the issues, and the New York banks that hold
the deposits.
The circulation Of large part of the New
York city banks, is secured by deposit Ct the
stocks Of that State, or the United States, with
the Comptroller, who, in case of failure, is au-
thorized to sell the stock he holds of the de-
linquent bank, and redeem the notes. We OBJ
serve the New York papers are very positive
that banks whose circulation is thus guarded,
are entirely safe We don't think so. In case
of bank panic, and the failure Of many banks,
and the consequent offer in market Of large
amount Of State stocks, the price of them, in n
panic stricken market, would fall fifty per cent.
There would not be enough specie to buy them
ut par: and besides, ms they pay only a common
interest, capitalists would prefer investing at
such time in property at great sacrifice, which
would pay much higher interest or income.
But the deposits of stock with the Comp
troller don't protect the depositors at all-only
note-holders.
or course, the great resources Of TIE banks
are their loans, or discounts. These consti-
tute the great portion OF the banks capital,
and IL due from responsible men, will make
the banks ultimately safe. But although the
amount Of bank discounts Is very gisat-being
equal to their capital. deposits, and circulation
combined, deducting their specie on hand-yet
the discounts cannot be psid quick enough for
panic. The loans and discounts of the banks
of the United States cannot be less, at present,
than eight hundred millions-the total Of specie
In all the United States is probably not one hun.
dred-and but sms1 portion Of that can be
accessible 10 bank debtors in a short period.
The New York banks would require one-third
of the specie in the United States TO pay their
circulation and deposits, and Of course never
could acquire such sum, particularly in period
of alarm, when all other banks were also col
lecting il.