The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-11-02


NANclERs-Itis we'll known to all who have
business with Europe that the usual-in fact
the only--mode of transmitting money to Lon
don, Paris and the European centres Of trade,
is by bills Of exchange drawn on those places
by the great bankers. If A of New York de-
sires to pay q hundred Thousand dollars to u
of London, he buys from G, benker of the
former place, bill of exchange on London, at
sixty days sight, for that sum, and sends it by
post. The operation originated in this way.
New Ysgk merchants bought forr, cotton and
other produce here for export to Europe; by
speciel arrar cement, when they shipped these
commodities they drew on tie European con-
sigree for specified sum which he had agreed
to advance on each cargo; paid the farmer or
producer with the proceeds of the sale of their
drafts IN this market, and allowed the bank OF
Discount to send to 'Earope the discounted
drafts for collection-with the bills of laAing
ATTACHED. These drafts were drawn at sixty
dayv, because it was The intention of all parties
thar the cargo against which they were drawn
sht ald arrive at the port Of destination before
they fell due.
This arrangement was made at time when
fhur, cotton and provisions were the only ex-
ports of this county; and when slow sailing
vessels were the. only vehicles of communca-
I ton. Of late years some changes have taken
l place in these matters. Steamers have replac-
ed sailing vessels: hence all articles save the
bulky staples can be sent from New York to
Liverpool with almost .unerring certainty
| within q fortnight. Again. since the discovery
of Ca1lfornis,. a new article ofexport has figured
largely in our trade table: this is gold. We
send between thirty-ive and forty five millions
of gold every year to Liverpool The bulk of
this goes fromEew York. A few parcels are
shipped from Boston, but they are usually
made up here, end forwarded by express for
shipment.
The whole Of this gold is sent opt by /. few
large houses, in the steamers. The shippers
draw againstit: but though the gold reaches
its destination in fortnight and is instantly
convertible into cash, the drawers here will not
draw on their correspondents at any shorter
date than the.e!d sixty days, without cbarg-
ing much higher rate. They adhere to
the old plan, cn the pretended principle of
conservation. But the fact is obvious that
their real object in drawing at sixty days is to
retain the use of the money for forty or forty
five, paying enly the low rate Of interest
charged in England. The American debtor is
at their mercy. He desires to pay his British
creditor, and would prefer, as he has the gold
here, to pay him By sight draft. But it is
against the general custom of the bankers to
grant any such drafts, and he is compelled to
accept sixty dGy draft, or pay high pre-
MUM for one payable in London at sight
That this practice is fraught with much in
convenience to small dealers here, trading
with small dealers on the other side, is too OBJ
vious to need illustration. Indeed, that they
should be at all at the mercy of the large
houses, as they are, is an evil which ought to
be cured. Nothing shows more clearly the ne
cessity of a thorough shake-down and revolu-
ton in our commercial world than the fact that
tiese mammoth bankers who give the law to
the,s.reet and the trading community are in
fact for the most part traders on capital
which they obtain on E,ere specious pretexts,
and by the force Of their influence from mer-
chants weaker than themselves. A good solid
house, with powerful connections on the other
side, that would agree to Graw at sight for any
sums, is sadly needed to set the public free
from these financial despots; that it would be
richly repaid for its independence, cannot be
questioned.