The daily union. [volume] (Washington [D.C.]) 1845-1857, 1854-06-01
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COMMERCIAL
FROM OUR ooMMERorAL ooRREspoSDEsr.

NKw YoRK, May so, 1854
The strngency which has had place in the eastern markets
long producing apparently great change in the west
currency. The multiplication OF banks at the West
coding TO the tables recently published in the Union has
been very great under the free banking laws introduced into
States II appears that the quantity of held by
the several banks has increased s22 since ls5l
figure which indicates pretty nearly the increase of secured
ercuaons OF this amount about So 900 has been in
the States. IL follows that that of capital
been surplus capital the West those stocks have
been purchased from the East and in doing have absorb
ed equal amount Of exchange The exchanges the East
supplied either against produce railroad loans The
latter up 10 last summer abundant while the rise in
produce and the activity in empoyments caused demand
for currency This state of affairs favorable to the
alton Of banks stocks could be purchased at the East pledged
for notes which paid out for the exchange drawn against
railroads and the supply Of money increased long
exchanges favorable to the West The cessation Of
all railroad negotiation turned the exchanges long time
When the freebankng law of New York into opera
on in 1885, gave rise TO vast number of banks Of cou
aton based upon stocks and mortgages the debris
subsidng speculation Most of those banks passed into OBJ
vion but the itself has been altered and amended
year SINCE to meet and remedy the abuses which the ngnu
y of bankers engraed upon it, One feature however
it remained il that the individual association could
buy stock receive its equivalent in bills to lend at
per cent money Thus, the Of $50 900 could in
vest il at cent in stock get paper money for the
stock and lend at cents making 10 cent for the
of his capital In addition to this he could locate his
bank in out of region expensive to reach, and
when his carried the of trade
they inevitably are Wall street. he had the right through
agent commonly interested broker to redeem them at
discount 1t calculated that all the money in the
State thus redeemed six times in year. making AZ per
cent, which would pay all and leave 3per cent
clear This immense shave the law exerted itself to reach
but could not Finally it done by the adoption of the
Suffolk SYSTEM, through the agency of the Metropolitan
Bank which collects and sends home for redemption the
notes of all banks that do not protect them in Wall
street. BY this the shave is reduced to "a e
per What the West wants is similar protection
against the East and all the banks find themselves called
upon specie exchange somewhat faster than 1t is
yenent supply it. 1t follows that continuation of this
of affairs would involve the retirement of the crcua
resale of the stocks at the East to supply the
exchange The high prices and activity in produce at
the East have, by enhancing the supply Of produce bills
modified the difficulty; but prudent banks that section do
either by greater supply modified demand through dimn
shed purchases Of goods The railroad investments have
certainly been very liberal SCALE and eastern banks
have favored them in the view of obtaining circulation for
bills at the West The Connecticut bank commission
complain that banks loaned s507 O00 sixth
Of their aggregate capital New York broker
railroad securities circulation issued in New England,
under the Suffolk system Immediately returned to the ssuer
because every bank being compelled keep account good
in Boston, hunts up and forwards hther every bill Of all
other banks The four hundred banks of New England
therefore, constantly clearing the circulation of all superHu
bills At the West there is nothing Of this, and notes
put hang in circulation for bank each commercial
centre-Deroit, Cincinnati, st. Louis, Chicago &cwhch
shall compel all banks within the sphere of their action
keep their protected each place. The currency
would be weeded and eastern flow off to
point where they would be available in the
1 changes
The of railroad investments in New York in
Il the following return Of the State engineer;