Port Tobacco times, and Charles County advertiser. (Port Tobacco, Md.) 1845-1898, 1857-10-29

diminishing the circulating medium of the whole
country. tits deep responsibility, and demands
sound discretion and much wisdom in its regula-
ton. Unfortunately there appears to be no
unity of action, no controlling principle, in the
management of this power. 1t is divided between
ffty-hve banks, each acting its own separate part,
under the influence of different opinions and diff
ferent interests. Banks are public institutions
they are founded on the public good; and the
duty of consulting the good of the community in
the use Of their great powers is as sacred as that
of providing for their own safety. There is ap-
parently no individual of sufficient influence to
bring this heterogeneous mass to unity of action
in crisis like the present, as was Albert Gala
tin, whilst he lived.
The circulating medium Of the city of New
York consists in the liabilities Of her banks in the
form of deposits and circulation. Their daily
loans and discounts increase or diminish their
liabilities. AS these liabilities are greater or less,
is money plenty or scarce. They constitute the
fund out of which all operations must be per-
formed.
Hunts Merchants Magazine contains tables Of
the weekly returns of the banks of the city of
New York for the years 1856 and 1857, which
furnish complete view of their operations
They throw food of light on the present state
of things. The return for January 8, 1857, shows
104 millions of liabilities, with II, l72, 600 dol
lars in specie.
This varied very little from the returns of the
preceding six months, and this state of things
continued with little change, but with a slight
tendency to increased expansion up to the 18th
of August. The greatest expansion was en- the
I'd Of May when the liabilities were 1O8 millions
with IL millions of specie. The return of 18th
August shows 1O1 millions of liabilities, and H.
100000 of specie. From this a rapid contrac-
tion commenced the liabilities being reduced on
9Th Septembers to SO millions, with 10, 227 900
of specie. Here the contraction ought to have
ceased. The object was to stop the export of
specie. That had been done. Exchange on Lon
don had fallen below the point at which specie
could be shipped without loss. Can any mortal
man give me reason or an apology why con-
traction should cantinue day after this point
had been reached? The banks were then stronger
than they had been for two years. But contrac-
ton did continue until, on the Sd of October, the
liabilities had been reduced to Is millions thus
reducing the circulating medium of New York
city, from July, 80 millions, or upwards of 80 per
cent. Tremendous Was the like ever known
in the history of banking? have no hesitation
in saying, it is this continued contraction of the
New York banks since the 5th of September,
without the slightest necessity, which has brought
There was no decided overtrade. There was
no speculation except by few houses in sugar.
There was no doubt an excess of imports, but no
greater than for several years. and the effect Of
these was wholly cured on the 9Th of September,
by the rate of exchange on London. Why con-
tinue contraction further? Was not SO millions
with 1O4 millions of specie, being III per cent
as safe proportion as 104 millions in January,
with IL millions Of specie, or II per cent. on
their liabilities.
There is but one answer. The New York banks
have been acting under panic, and that panic
they have communicated to others, until there is
almost total loss of confidence The conse-
quences are before U.S. in the paralysis Of all trade
from Bangor to New Orleans, the stoppage of
banks through great part of the United States
the stoppage of factories the discharge Of thou
sands of laborers, the inability to bring our large
crops of produce to market, the ruinous rate of
two or three per cent. a month on the strongest
paper, ruinous depreciation in the price of all
stocks, and even on exchange in London. In my
whole experience, have never known crisis so
severe as the present, and, must say, so wholly
uncalled for.
was Bank Director in 1914, when New
York and all the States South and West suspen-
ded specie payments. Boston had ample means
and stood firm, whilst many croakers thought it
madness for Boston to hold on, when all the rest
Of the country suspended. She did SO, however,
and all New England with her, and thus saved
them the losses which accompanied the resump-
ton in other States in the terrible revulsion of
1919.
In 1884, Mr.. Biddle was flagiiously endeavor-
ing to force Congress to grant him charter,
through the distress he had it in his power to in
fict on the country. In March Of that year a
committee of the merchants and bankers of New
York informed him that unless he changed his
course, and would agreee to their terms, which
were that the United States Bank should cease
to call on the other banks for thirty days, his
course would be denounced at the Adjourned meet
ing of the exchange,
Mr.. Biddle, at the last moment, agreed to then
terms, in consequence of which the county was
Immediately relieved. But Mr. Biddle was reck.
less enough, when the thirty days expired, with.
ont the slightest necessity to call for these balan-
ees, and give the screw another turn.