The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-07-24

itro A me hArforc iinaos july 81
Tbs lax sns In New York Save rescked the
highest amouet eyer XII OVID. bei1 z only million
and half II ct one hui bred millions OF dollars
TIE Bstion banks are equally expar ded, having In
citase1 thtir oaIs during the past week more tnan
quarter OF million, while their specie has been
recuced 20 tie same extent. TEIs extraordinary
expansion hiss tahen place AZ o time wren regular
commercial engagements AID business paper are
estimated ~ have reen reduced neayy enc hall
below their uz1ai amount at this season OF the
year.
The Itcessuy inference ID, tsAt the great increase
OF lCsns Las Deen made upon temporary hypo sheca-
tors Of srccS srd that they have contribute largely
to stimulate stock spt cuatons. There are three cir
cumstsIces which must, whersv yer they occur cause
q sudden contraction Ct the Nov York bank loans
and produce the usual results which follow upon
this operation Is Is expected that the imports will
largely jncreSse very sooD. This Facts upon the
banks in q twofola - anrer-it CAUSES drain al
Drain Of ape, Ia ut hon from the banks into the
inoel endtnt usasu ijr the purpose CT paying the
duties.
Wnen the enormous crops Of tee present season
largely irGsb.ed to the agricultural districts for the
flour, wrcaI cd corn forwarded for sale; and the
gold which hse OF late been freely drawn from the
country tors sDd Cities must wisa equal freedo u
be issnInad :, settle the balance OF trade, which
thea vii BE- turned against toe ssab, ard CONNER.
clsi srsnsariiors so long restricted by groundless
alarms CT vsslous kinds, will once more resume their
accustomed sctisty. The eff CT of that upon bank
Which, nov Jrg Idle for want OF profitable employ
NEXT, sde 70 torn the basis Of large discounts,
viii De wnherswu in orcer to BIZ employed In regu-
Ia = bnsii.,s.
IL ADDITION TO this, the merchants will require for
the discount Of cir business papsr large portion
OF the mOssJ now loaned on demand by the banks
for the purpcass Of speculation In stocks. The
county b. Ia will also call bone toee pr5aeut ba.
lanCes ia New York, in order to make their cus-
tcnsry advatcss TO the milles and owners Of pro-
duce.
We Cannot, therefore, agree with one of the prin.
cipal financial writer's for the New York press, taat
1t would be perfectly safe for the banks OF that city
still fuitber 10 expsrd tier present lire of dis
counts, merely because they happen to have on hand
four five millions more OF specie than they had at
the corresponding period Of lag. year.
Even at its present amount SIG 900 900, the specie
basis 10 absu, Dig and danRerOusly email with refer.
encs to the enorm0us magnitude Of the transactions
built upon narrow foundatitp. According to
the latest re,uns the leans Of the Back of E,gaud
upon pubic and private securities amounted to only
ed 500, 900 coo II this ratio Of specie to loans is
deemed necessary by the Bank Of England for It's
security how can il be sdered safe for the New
York bar ks 70 ieId 500 600. 900 with specie re-.
serve of cn,y SIG 100000?
very slight turn In the rate Of exchange, or 10
the current Ct ip rts, would drain them Of half of
their pittancs II gold in few weeks. II IL, more
over to he borIe in mind that the real capital of the
banks, which process 10 lend hundred Millions is
only about nifty millions, and consequently one half
OF their losrs merely represents fictitious valae or
arbitrary expansion Of the currency which has no
substantial stence, and is exposed at all times to
grievous ipjuiy OF these Who ore dependent upon
loans.