The American. [volume] (Washington [D.C.]) 1857-1857, 1857-10-28
THE CAUSE OF THE MONEY
PR ESSTIRE.

FHESSUMEs
Mr. Nathan Appleton, of Boston, an eminent
merchants, has addressed letter to the Boston.
Daily Advertiser, in which he gives the causes of
the present pressure, throwing the whole respons-
ibility upon the New York Banks M
When men Of Mr.. Appletons age, experience,
integrity, and high character, moral and mercan-
tile, speak upon subjects that come home to the
business and bosoms Of every member Of the
community, they viii be listened to with attention
We quote from his letter what seems to be its
pith and marrow:
Hunts Merchants Magazine contains tables
Of the weekly returns Of the banks Of the city Of
New York for the years 500 and 1857, which fur
nish complete view of their operations They
throw food Of light on the present state of
things The return for January 3, 1857, shows
$lO4 100000 Of liabilities, with ST., $4,000 in
specie.
preceding six months, and this state of things con-
tinued with little change, but with slight ten
dency to increased expansion up to the 10Th Of
August The greatest expansion was on the I'd
Of May when the liabilities were $l08, 900, 900,
with $12,000,O00 of specie. The return of 18th
of August shows $lOl ,0O0, 900 Of liabilities and
$ll, $50 900 of specie. From this rapid con-
traction commenced, the liabilities being reduced
on the 9th Of September to $8 000, 900, with $I0,
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
London had fallen below the point at which specie
could be shipped without loss. Can any mortal
man give me a reason or apology why contraction
should continue a day after this point had been
reached? The banks were then stronger than they
had been forstwo years. But contraction did con-
tinue until, on the Sd Of October, the liabilities
had been reduced to SIC, 600, 0oO-thus reducing
The circulating medium Of New York city, from
July, $s2,O00,0O0, or upwards of 30 per cent
Tremspdousl Was the like ever known in the
history of banking? have no hesitation in say
ing it is the continued contraction Of the New
York banks since the 9th Of September, without
the slightest necessity, which has brought about
the present disastrous crisis. WV, n a1itgfit
There was no decided 0ver-trade. There was
no speculation, except by a 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 September, by
the rate of exchange on London. Why continue
contraction fartherp Was not eighty-eight mil
lions, with ten and quarter millions of specie,
being III per cent, as safe proportion as one
hundred and four millions in January, with eleven
millions of specie, or II per cent. on their labi-
ties g aF ts.t.
"There is but one answer. TheNew York banks
have been acting under panic, and that panic
they have communicated to others, until there is
almost total loss of confidence. The consequences
are before us, 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 thousands
of laborers the inability to bring 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 on London. In my whole
experience have never known crisis as severe
as the present and, must say, 80 wholly un-
called for. ~ agef7a 9t5.. A "
al was bank director in 1914, when New York
and all the States South and West suspended spe-
Gle payments. Boston had ample means and stood
firm, while many croakers thought it madness for
Boston to hold on, when all the rest of the conn
try suspended. She did SO, however, and all New
England with her, and thus saved them the losses
which accompanied the resumption in other States
in the terrible Revision Of 18l9."