The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-11-20
The Banks and Financial Affairs.

| YET pay specie on demand for checks. very few
institutions refuse it to their customers and all,
we presume, will redeem their own paper in
| specie If required to do 30. The New Orleans
banks have already resumed In this State, we
suppose that the solvent country banks will
soon be placed on their old footing. There
only remain the New England and Pennsylva-
mia banks with few isolated cases in the South
and West, on which the effects of the late re-
vulsion are still felt. As to the Pennsylvania
banks, the period Of their resumption has been
fixed by statute, and will not probably be anti
cipsted OF the prospects of the New England
banks, the public are not apprised; but the
feeling at Boston, as here, is very buoyant and
every encouragement will be given to the banks
| to resume.
| The first stage Of our troubles may therefore
be considered as passed. The banks, having
broken the merchants, and consequently gone
| to pieces themselves, have now resumed their
standing in the community; with the stain, it is
| true, of having forfeited their charters and
| broken faith with the world; but still without
| any suspicion of insolvency. The next step is to
| pick up the merchants This, we imagine, will
| be found no such simple matter. Very
| many houses which have broken and OBJ
! tanned extensions will never be able to
pay up at the maturity of their renewed
| paper. In many instances, the assets of sus-
pended houses will depreciate so largely as to
leave not enough to cover their Indebtedness.
This will be especially the case with dry goods
dealers, and dealers in fancy articles and OBJ
jects of luxury. There is reason to fear that
the revulsion has only just touched this class of
merchants, and that the worst for them will
come when their renewed paper natures. From
the same cause, no doubt, houses of higher
standing in the financial world. but whose as
sets consist chiefly of suspended paper or dry
goods paper, may find it very difficult to meet
| their present engagements, or to fulfil any ex-
tension they may have obtained from their Gre
ditors. There is as yet very little sunshine in
the financial horizon for these classes Of houses.
But, when this is said, and this allowance
made. it must be admitted that there remains,
outside of all suspended or embarrassed firms, a
vast commercial community which will COM
mence business, so to speak, after the present
liquidation, in perfectly solid and wholesome
condition. For every house that has suspend
ed, there are score which have weathered the
storm safely; we have heard the disaster Of the
one trumpeted at every corner, hlazoned in
every newspaper, while the solvency and ease
of the score of sound firms have never once been
whispered. In the great staple trades of the
country there have been remarkably few fail
ures. Among the dealers in grain corn and cotton
no great firm was overthrow during the crisis;
the grocers suffered very little indeed; the vas
bulk Of the hardware dealers stand firm; so do
the bulk of the leather dealers, and many other
branches of productive trade. Indeed, with
the exception of parties interested in railways,
the dry goods dealers and the bankers con-
cerncd with these, it may be said that there is
no leading trade in the country in which the
insolvent firms do not bear an infnitessimally
small proportion to the solvent ones.
1t is necessary to bear these facts in mind in
studying the extraordinary condition Of fnan-
cial affairs in New York at the present time.
No such spectacle as that presented by Wall
street during the past week has ever been wit
messed here before. The banks, with over
twenty millions Of specie in vault, with more
on the way, and with the power, in their sus-
pended condition, of refusing to pay out any of
ii. if they choose; exchange so low that specie
cannot be shipped for the present; money worth
from three to four per cent on call, and the best
paper done at five and six; trade nearly at
stands'ill, no new engagements making, every
body trying to bring his affairs into the narrow
est compass possible; the Board of Brokers
alone exhibiting an unparalleled scene of ac-
tivity, excitement, and inaation-such sight,
we repeat, has never been witnessed in this or
perhaps, in any other community before.
The next news from England must be bad.
Whatever artiice the London Times and the
American railway dealers may use to conceal
the facts from the public. We know enough al
ready to he satisfied that the panic through
which we have gone here Ii just beginning
there. The bank has resolved to meet it-not
hs our banks insanely did, by contracting at
The rate Of three to five millions a week-but
by raising the rate of discout which, while it
breaks no undoubtedly solvent house makes all
ose money, and infalliby throws over weak
concerns. That general panic must follow
gith no one knows what consequences to the
ank and the public-is perfectly obvious; and
at such panic must be fraught with ex-
ernest danger to all concerns largely interest
, in American securities or American trade,
inuite az certain. But after we have taken
f. granted panic in London, with interest at
l or IL per cent and half dozen great
weeks in the banking world, what then! We
al debtors not creditors Of England; she suf-
fe by our insolvency, we do not suffer by
he. Whether we pay her or no, she must
sci out specie to buy our cotton, for her mills
cmot be stopped; but the commerce of Eng
lai may undergo almost any quantity of
Sinks without necessarily hurting II fatally by
threcol.