Burlington free press. [volume] (Burlington, Vt.) 1827-1865, 1859-01-14
BANKING OPERATIONS FOR 1858.

The Boston Advertiser recently reviewed
the course of Banking operations for the last
year at the great financial centres of New
York and Boston, in an article which has at
tracted considerable attention, from the
force Of the facts and figures collected in it.
The leading characteristics of the year, as
summed up by the Advertiser from the
weekly bank returns, have becn-lst "A slight
increase of Banking Capital, amounting to
about $4,000, 900 in the two cities I'd, an
abundance of specie in the vaults, the aver
age of specie so held for the year being far
more than double the average for either OF
the three years preceding; 3d,a very slight in
crease of circulation during the year, and Il
total circulation not equal to the average for
either Of the three preceding years 4th, a
steady increase of deposits, now at a higher
point than was ever known 9Th, n very great
expansion Of loans. On this point wa(DNe
the figures and remarks of the A41srti..r,
which seem to us worthy Of some consdsta-
ton by the community at large, as We'll as
by those moro Immediately concerned.
the most remarkable change which has Ia ken
place however, is the expansion of loans which has
gone on with wonderful rapidiy, until tho aggrc-
gate of discounts has reached limit nc;cr before
touched in either City. In 1857, the maximum
was reached in this City July 18TH when the loans
amounted to S5I ,OO5 .9S5 and in New York August
sth, when they amounted to Sl22 OF, 2j2. Tho
Boston Bnnis touched The point Of extreme depres-
sion, Oct. 18th, Immediately after the suspension,
their loans then amounting to Sis ,i54,4'H, while
the New York Banks continued to reduce until
Nov. Is, when their loans were only 81 ,9G3 1870
Since these dates they have expanded with occa.
sional fluctuations, until the last week of 1888
when the loans in Boston we're j9,70l ,0il the
highest amount in the history of our Banks. and
in New York 81 2G,7lG,3Gi nearly the highest ever
known there,
It appears, therefore, that for some cousc, the
banks have gone on through the year extending
their operations, until they have now, in nearly
every important particular, carried their linbili-
ties TO higher point than ever before, and this
has been done with degree of :haste far beyond
what is dictated by prudence. There ha. been M
demand for money for legitimate business purposes
Mt any time during the year, which could justify
such an enormous expansion as has taken place.
The Banks appear to have gone on, encouraged by
the extraordinary amount of specie held by them
precisely as they did in 1857, entirely forgetting
the severe lesson taught by the experience Of that
year, rs 10 luc udnptT ol SUCH Idllu lHcIt0st
beyond the aver &c line, when an unexpected de.
mand for specie may compel sudden and danger
Gus reduction in the loans.
1t is hardly worth while to speculate as to the
causes Of this demand for money, to which the
Banks have been ready to respond 1t is certain
that in the ordinary channels of business there is
such activity to create call for such extended
facilities, and there is too much to suppose,
that the demand has arisen from increase of
speculation, rather than of legitimate trade. We
coal, ii
such an enormous loan based upon such tounda-
ton is exposed. We are willing to assume that tho
Banks have provided for their own interest and
have not EXTENDED their credit. to this enormous e1
tent without receiving ample security, The interest
OF the community, however, exposed to serious
danger by such an undue stimulus rs is now ap.
piled, demands extreme caution in deciding upon
the course to be taken in future. 1t is perhaps
Fortunate that the Of business for the year
has been such it actually has been, since other
wise a sudden demand arising might prscipitate a
crisis, with a. little warning as in 1851.