The southern press. [volume] (Washington [D.C.]) 1850-1852, 1851-10-06


South Carolina, assisted by MIR. $. f.. BURGE'
are our duly authorized agents for the States q
South Carolina and Georgia, TO collect monte
due this office, and receive subscriptions.
EgMr MAzYcK is our agent for Charleston
icy The bank panic in New York is reporte'
to be subsiding.
Commercial centralism is as bad as political
The currency and credit of the whole Union ar
dependent on the will, the wisdom, the folly, thu
honesty and the treachery of the banks in th,
city of New York. They have deposits and
circulation amounting TO some thirty or forty
millions--and have now less than six millions
in specie. They do not usually have more thar
about eight millions. This is not a sufficient
metallic basis for so large an amount of imme.
diate liabilities US forty millions of deposits and
circulation. II subjects the banks to n long
chapter of accidents. great fire, foreign rev
olution, blasted CROP riot rumor, may
cause run which will result in suspension, OF
mt least in rapid curtailment of discounts, and
many private failures. aa'
But unsafe as the system is in New York
and of itself, its connection with that of Other
States, renders it much more 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 a circulation of nine
millions for three millions of deposits in New
York. Hence it will be seen that the basis Of
Ohio currency is a 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
a half a aassiea
This is what the law allows. We suppose
no banker of honesty or sense, would permit his
paper to become 80 insecure as that. But the
banks of Ohio and of other States are in the
habit Iof regarding "a deposit in a New York
bank as equal, or even superior to so much spe-
Gle as basis of circulation. And hence the
currency of the whole country is subjected to
the wo-fold 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 a 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 80. In cas-
of n bank panic, and the failure of many banks
and the consequent offer in market Of larg
amount of State stocks, the price of them, in
panic stricken market, would fall fifty per cen
There would not be enough specie to buy ther
Mt par and besides, as they pay only commo
interest, capitalists would prefer investing a
such time in property Mt 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-ony
note-holders.
OF course, the great resources Of the 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 grsat-being
equal to their capital, deposits, and circulation
combined, deducting their specie on haDd--yet
the discounts cannot be paid quick enough for a
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 small portion of that can be
accessible to bank debtors in 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
leeting it.
b.