The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-11-15
MASSACHUSETTS.
ANOTHER LITTER FROM NATHANIEL APPLETON ON

ANOTHER LITTER FROM NATHANIEL APPLETON ON
THE TIMES.
writer in the Boston Post Of 30th nit undertakes to
sriisc OF the positions taken in my letter on the
money crisis. His style courteous, and he seems
in his opinions that consider him entitled 70 re
spccul reply But it evident that this writer and myself
Osk the subject from entirely different points OF view
The great question with him is whether the banks can ex
pand under financial crisis and he thinks they
cannot. Now what is financial crisis, and what Is its
sanseP It is scarcity Of money, growing out Of the con
fraction Of the bank circulation II s caused by the &C.
MON Of the banks but does not control that seton
The only legitimate ground for contraction by the banks
y the eux Of coin from the country TO degree 70 cndan
Ter their circulation This Is the only cause which ever
did produce financial crisis in this country.
When the export of specie ceases the crisis Is ought to
be, over The banks then hold their own At least.
Eow my argument is that the export Of specie ceased
after early part Of September and could only be made
1t loss, compared TO bills Of exchange Here, con
TEND the contraction ought TO have ceased instead Of
which the New York banks have continued the contfac
6cn Of their liabilities from eighty eight millions on the
t2th OF September seventy millions the 10th Of
October and still further since 1t this continued
traction Of which complain after all occasion and neces
shy had ceased.
stringent than otherwise but il the subsequent and con
6nued turning Of the screw which has produced the
appalling state Of things which now exist. The whole
history Of banking cannot show equal example OF gno
rance Of the principle and science OF banking "a
has been exhibited by the New York bank managers.
As for the horrid mistake, proposed that the
New York banks should expand their loans ten or fifteen
millions Immediately TO replace themselves rs near Us
nay be in their position the 18th September. This
your correspondent thinks impossible in so short time
How mpossbleY The contraction went on at tho rate OF
Sour five millions week; there can certainly he no
Aifcuy in expanding fast faster provided there be
mercantile houses enough left standing TO borrow H.
Your correspondent seems To make distinction
between deposits and circulation which does not exist
n fact They arc essentially the same thing. They
are convertible into each other at the pleasure Of the
preseason. l do not understand what he means by
the banks liQuidating their debts in the shape OF
deposits crcdtsn This only apply TO those banks
which have stopped payment. Neither can agree that
deposits or circulation shall be cased As the means o.
Al 1hayar Ito whi.
10 hold for their convenience and arc increased or
diminished by the expansion or contraction OF the banks
m their oans They compose the circulating medium and
the OF the mercantile community 10 whom they
belong In the present s forced and unnecessary
contraction Of which we complain The means OF each
bank consists in lis specie shown in ts daily balances
the Clearing House The aggregate means consist IN tho
aggregate specie Of all the banks The proportion OF spe
sie their liabilities is proper comparative view Of their
strength This proportion January last was vi
70 SO 100000 III per cent This was continued with
httlc variation until tho last Of August when di
nhea 10 per cent but increased in september to
~ l6 and H. per cent showing at th. very time OF this
disastrous contraction greater relative means ha AZ any
banks have furnished all the aid possibe-as much
nuy the pressure and crisis as they did under tho
hchs-t expansion OF their loans. Your correspondent
Will thus perceive his elaborate tables have no bear
hg hi my view Of the
Your correspondent speaks OF custom OF the New
York banks. lie says" custom prevails extensively
Of dsco ming large amounts OF paper with the express
understanding agreement that onequarter or one half
shall Law "A bank till another discount IA Obtained upon the
aIne condition. Is this truoS am sorry FOR H. have
hesitation N pronouncng 1t pcrnieious custom II
smarks very much of usury.
II seems 10 be well understood that tho actual suspen
spn Of the New York banks not the result VI natural
sacses but from the disgust and Indignation Of tho
crchan who viewed the action Of the banks IN u. true
kght and we're determined let them know that driven
the wall and crushed they were, they were st able
retaate by using their power This WAS aceng out the
common principle. OF human nature but was probably IN
fortunate furnishes pretcxt for continuing the sys
TEN Of contracting necessary 10 their Resumption u
poor prrtcrt there can, in TACT be no doubt that
the true way restore confidence and act the whees OF
nrade in motion IN 10 adopt liberal expansion ny dts-
scunts This In the direct and shortest road 70 resump
DIM which would then easily VI tself Why should
ne New York banks continue 70 keep their currency
the value 81 specie in any other part OF the woriY
Your correspondent say--The evils upon Va arc inc
100 great expansion OF both OF merchants and bank
ng inst tHtiopsN
do not arrce with him No doubt there are cases in
which individuals and banks have extended their credits
- their own injury; but the present evil arises wholly
srcm sudden check and stoppage OF The credits which
the New Yorh banks had freely given. The present
evil y not tho much, but too little credit
easy 10 aecvy credit and appand pnre specie cur
vepey But who does nod know that 4 " system 81 CT
tended credit which has built up the wealth and rrocrty
q The country NATHANIEL hfiffVSs