The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-10-12

The great financial storm through which the
country is now passing has made itself felt more
particularly in this metropolis, because New
York is the heart of the whole commercial sys-
tenn Of the continent The great artery OF the
trade and commerce of the United States has its
seat in this city, and nothing can affect any
branch Of business throughout the country with
out making an instantaneous impression here.
Therefore it is tibet by obtaining the figures
which represent the movement Of trade and COM
merce here, We can calculate pretty closely the
general movement thereof In the country at large.
Such calculations are eminenty valuable at this
time, as they will serve to enlighten the public
upon the true condition of affairs, and may dis
sipate much of that intense alarm which now
prevails, and the existence of which only adds to
the difficulties that surround us.
During the great expansion which prevailed
last summer in every department of trade, the
returns of the Clearing House in this city
showed that the business Of each day,
as represented by the notes and checks
of mercantile firms, averaged twenty five millions
of dollars. This, Of course, only exhibited the
amount of transactions done under the credit
system Estimating this as only the fourth or
fifth part of the business Of the whole country,
dene under the came system, it would follow that
during that season of undue expansion the
amount Of credit transactions done 10 the United
States averaged from a hundred to hundred
and twenty five millions of dollars per day. The
revulsion that has been going on for several
xr,ael-s most hos ra3uoa1 Inv holt tha
amount of these credit transactions The returns
of the Clearing House now show that the banks
Of this city have contracted so that the daily
amount of business done in that form has fallen
to twelve millions of dollars and the probability
is that if there were similar mode of getting at
the extent Of credit transactions daily done
throughout the whole country at this time, the
proportion. This shows the extent of the fuan-
cial hurricane, and the revulsion in trade that
has already ensued from it.
But these figures do not, by any means, repre
sent the gross business transactions of day.
They merely show that portion thereof which is
done under the credit system. There are no
means Of getting at the amount Of business done
for cash but it is estimated by those who are
best qualified to judge, that it is at the present
moment probably double that done on credit In
other woIds, while the credit transactions of the
city range at about twelve millions of dollars per
day, the cash transactions range at from twenty
to twenty five millions And we suppose that the
same proportions would nearly hold good If ap-
piled to the business Of the whole country.
There is one important fact shown by these
curious figures and that is that the present inan-
cia revulsion only affects, to any serious extent,
those who do business on credit, and who are,
therefore, altogether dependent on the action of
the banks But the great everyday trans
actions Of trade done on cash principles
are of much more magnitude. These may be
to certain extent, injuriously affected by the
financial revulsion but still their vitality will
remain unimpared II all the banks, and all the
railroad stocks, and all the paper securities of
the country were wiped out of existence to-mor-
row there would stll remain materials enough to
start again in few months on q new and better
system. There is some consolation in that refec-
trade and commerce are at hand; and therefore If
thepresent fabric should be entirely dissolved there
need be no alarm for the future Of the country.
In the meantime, however, there is q tremen-
dous struggle going On between the banks and
the merchants two great constituent portions
of the credit machinery. They are actuated by
different ideas, different views and different in
rent theories as to the proper way of getting over
the existing difficulties The merchants think that
the banks ought to expand and supply facilities
in the way of discounting paper, at least equal
to those which they extended before the panic set
in The banks take q different view Of the mat
ter, and, instead of expanding they contract
There does not, however, exist much unanimity
among the banks themselves. While the ma
jority lean to the principle Of contraction, there
ore still some which favor-though they do not
attempt TO practice-that Of expansion but ex-
paDsion involves the suspension Of specie pay
ments, and that lie forbidden by the constitution
of this State. The fifth section of the eighth
article Is in these words -
Toe Legislature shsn have power pass any law
ssnctonirg ssy manner directly Indirectly The
pndon OF specie pa, menn BY an, person. an ocsuou on
oosporsiioc isuirg osnE notes OF any oesS1ps on.
2hAsn"usu '.-A1 7SSaVH As 80 e~Pi'Sis In uO"y lDe
to the Legislature any power to authorize the
suspension 0. specie payments as ii IL possible
for language 10 make it. still, it is thought
10y those who advocate expansion and suspension
Of specie payments, that there may be some way
Of gettrg round its express provisions Neither
constitution nor laws cen compel banks to make
specie payments when they cannot do 30, any
more than they can compel the performance Of
any other imposiblity. There arc certain occa-
tions wherein the interests OF the whole conmu-
Lity require the temporary abrogation Of laws
otherwise salutary and requisite And this GER