Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1858-03-02
From the Nelo Fork Herald, February "a.
The Plethora of Specie, and where Il
- will Lend.

The city banks showed on Monday evening
nearly thirty-twO millions of specie; an in
crease of over million on the week previous,
accompanied, singular to state, by reduction
in the loans and discounts. 4 similar album
z dance of specie is reported by the banks of
New Orleans In London the Bank of Eng
land holds SIS, 900, 900 in specie against thirty
last October. The Banks of France and
Prussia were never so rich in specie as they
are at present.
The history of the revulsion of last fall
rightly understood explains this startling
and widespread phenomenon. We have pub
( lished statistical reports of the effect of the
revulsion upon the commercial world of the
United States, carefully compiled by CONNER
cial agencies; they go to show that throughout
the country not over two per cent. of the
houses engaged in commerce found it necessa-
ry to suspend or break last fall. Evidently,
this proportion bears no just relation to the
alarm and excitement created by the rsyul
sion; ii does not represent the amount of
damage done. Many houses lost money which
did not suspend; much business was destroy
ed without absolutely breaking any one.
This damage must be taken into account i'll
any reliable review of the effect of the revul-
sion: we can guess at its extent by compar-
ing the present operations of the Clearing
House at this city with its operations at the
middle of last year. They show a decline of
oue-half The weekly totals are one-half
what they were during the height of the ex-
citement in the early part of the summer of
1857. Ii may therefore be assumed that the
revulsion of last fall not only broke two per
cent of the mercantile houses throughout the
country, but destroyed fifty per centof the bust
ness done. Ii may likewise be conjectured that
the same figures will answer for the foreign
commercial world; that while two per cent of
the European merchants broke during the
crisis fifty per cent of the entire business done
by the European mercantile world has since
ceased to be transacted
Ii is the money which was used in transac-
ting this business, and which the destruction
thereof necessarily liberated, which has now
found its way into the banks. 1t has come out
of the pockets of the merchant, the mechanic
the ship owner, the agriculturist. the private
banker and money lender. Ia az tive CONNER
cial times all these classes are constantly re-
ceiving and for time holding quantities of
specie; in time like the present they have
none, bills answering their purpose quite "a,
well as gold, and there being no very proms-
Ing employment for money; and in such
times, accordingly, coin flies to the bank 1t
may be said in round numbers that one-half
the money with which the mercantile busi-
ness of the commercial world is done either is
or is going TO be stored in banks ut the great
financial centres:-we add, "going to be-,
for the indications are that the banks will
hold this summer very considerable more than
they do now. AT the present rate of exchange
for instance, gold cannot be shipped proiita-
BILE to England; thus, the whole draught from
California will be retained here, and the coun-
try will continue to forward its surplus TO the
great centres until business revives-thas is to
say, till next fall at earliest
1t is no exaggeration to state that the effect
OF this accumulation of specie at New York
New Orleans, London, Paris, Frankfort, Ike.
will be greater than was ever produced bv
the discovery of gold in California and Aus
tralia- The gold is nor only added to the
basis for banking in greater quantity than
those gold bearing countries ever produced t;
but 1t Is here already, in bulk, with no risk
of transportation to undergo, no time to be
wasted IN voyages, no frittering away oflarge
amounts in semi-weekly dribleIs. In Cahior-
MIA and Australia stimulated an Increase of
production, an augmentation of enterprise, a
development ofindustry and rise la prices
such as the world had never witnessed before.
tt 10 but logical and reasonable to expect that
the pending accumulation of gold Mt the
banking centres viii in course of tins lead
to similar results and occasion similar changes.
Thus far the elect OF the plethora OF specie
has been chiefly seen upon the stock market
Since October last, when the city banks sus-
pended, State and railway securities have risen
In market value some thirty per cent on AN
average; and nom the immense extent OF the
daily operations IL would appear that there
are many who do not consider the summit by
any means reached " yet. This imitation and
activity OF stocks Is the effect of the anxiety
OF capitalists TO get something to do with
tneir money BY and by, these men will have
driven stocks SO high that people will be
aIrsad 70 have anything to do with them. and
tnen tne capitalists viii turn their attention
70 produce, cotton, &c. These will share The |
Impulse given to stocks, and will impart il, |
on Their side, TO other branches of trad. until
o. last the whole comm rec and Industry q,
the country will find itself surg ng ON the tide
OF fresh Imitation more unboundld aud more
headiong than the last. That this must i,e
followed by corresponding reaction, in all
probability briefer and sharper than the lat.
stands to reason we may see il soon enough.
IL will be curious % watch IL last year . ex-
perience has brought forth any fruits.-N T.
8sSrd, 24h Fsb.