New-York daily tribune., 1857-10-21
BANK SUSPENSION.

~ ne Editor u the n. Y. Tribune
SIR: Your criticisms this morning upon the letter Of
"One Of the Champions Of an Extra Session." which
appeared in The Times Of yesterday, are hardly fair
You reprint manifest error either of the printer
Of the pen in which the writer of that letter appears
10 advocate an equal proportion Of specie with the
cash liabilities Of sbarki and you justly say that such
conditions "would tumble the strongest with the
"weskest into common insolvency" In the former
part Of his letter. the writer advocated "a proportion
"of one of specie to every three Of cash liabilities,
q a. having been found by experience SAFE. This it
wss evidently his intention propose. The fact that
four Of our city banks appear by their published state
menb, TO have maintained nearly this proportion,
proves that II is compatible with modern banking.
You may AK Why they have suspended with the rest
Ihe answer Is, that state Of panic ss not one 81
ssasosi II is fair to presume that if all our banks
nso mNnfaned that proportion, the disastrous panic
woed not have occurred. II curious fact that one
- ne bahksreferrsd to has not suspended even under
ne nnuence Of surrounding financial ruin Could 1t
nave maintained s stand If Its specis had been but one
N xnf CeUly not There must be some safe proper
non between specie strength and CASH labiliy-some
poinf sale hon fear and dstrust and which shal not
huctuste in fal expansions and conraotions 40 a. 10
cause pienulness or scarcity Of what Is called mo-
pey" and which, in great measure, means, not de-
osis" bat e balances which appear TO the credit of
its customers on the books Of the bank, called dc.
pcsas!
Is It not reprosoh 10 age and country that frat
class mercantile notes should DC begging in the street
q from 2 10 par cent per month The frequent
curepce Of periods of pressure and high rates Of inter-
ess has excited Suspicion that these fluctuations have
been purposely caused in order to give opportunities
Coz "shaving krstcsss paper at high rates! Such
suspison may be unjust, bat 1t certainly does exist
Men II perience have been tempted, by facility
Of obtaining discounts at bank TO give improper cred
fs or TO engage in enterprises in which they woald
not otherwise have ventured and, when they have
faiify embarked upon this seductive bat dangerous
sea, change has suddenly come over the spirit OF
ther dresn the note Of alarm has been sounded the
safety screw hss been turned; discounts in bank have
oeseed and the only refuge has boen the street at
2 Per cent per month p
Whee bank action is unrestricted, AZ is eithia its
poner TO cause these fluctuations. Is IL then, too
much 70 esk tnAt this power be limited and that thes
rP9oschfu results bs put end to as far Is pract
cable
If Il can be Ahcwn that the expansions and contrsc-
tons Of bank crecits not the primary cause of the
evil complained Of, then these institutions NAV claim
immunity from State regulations. II is no new tbnc
for state to saert the right to regulate the yaue
Of morey" The constitutional provision that Con
sress shsll have such power shows how the framer.
Or that instrument viewed this subject Was that pro-
vision the offspring Of an Idle fear Ou bitter
Sxpssiepce proves the importance Of Il, and the only
consolation og present losses and disasters rs ths hope
hat they VIII lead TO the adoption Of some ps1 10 pre-
vent their frequent recurrence.
In Eahing these remarks it Is not imagined tbs. any