The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1859-01-07
ss,Slo,5ss ~
s2s,42e,522 90

same time Of 1,slo, Ala 90
Making the total amount Of reduction during
T,, me yea, - AZ 90
past fiscal year Of the currency issued by this depart
men Still greater is the contrast Of the actual circua-
tion Of all the banks, including the chartered and free
banks, following the suspension of October, 1857
The extreme point Of actual bank note circulation in
this State by our own institutions was reached the
soth H. Of September 1856 amounting at that date to
s34 0l9633 1t fell during the year previous to the
pension to s27 904, this being the actual circulation
on the Goth of September 1857 days previous
to the suspension Of specie payments. steady and
constant reduction Of the volume Of actual currency
followed and the 18th of the following March be-
came reduced TO s22 1853 or this reduction of
rency, amounting during the year to $11 309, ,475,
746 occurred between the 26h of September 1857
and the 18th of the following March.
The world has been heretofore taught through the heo-
retica opinions Of political economists, that suspen
sion of specie payments would and must necessarily be
followed by an expansion of paper money, alike detri-
mental and demoralizng TO the public. While the Super
inendent looks upon suspension Of specie payments by
our banks as great evil and detrimental TO the interests
Of our people, he most respectfully submits that the evils
arising from suspension this State not from an
increased volume of currency as it is utter impossible
" under secured currency like our own, but from a
ducton OF that volume made of necessity by the banks in
their efforts to resume payment again in coin.
The past theory Of the effects Of a suspension when
applied to system based upon secure cur
rency, experience has proved to be erroneous.
No suspension can take place, or rather be pro-
duced by issue Of currency OF description,
and the evil effects Of It only felt by business
ana the producing classes by an inevitable contraction OF
ke for the products Of the 0ther-both produced by
tracing currencystead OF increased credits FOR the one
and higher prices for the other by an expanding one
The bank circulation OF this State in proportion to
the business transactions Of citizens can only be
pared to the decimal coin in daily use for change.
To prove this look the absolute circulation Of our
banks as before stated the 18th Of March last S22
hardly sufficient to give each citizen of State
passage by railroad from Albany to Buffalo, The whole
amount would be expended for food alone by nhabi-
in less than single month, at the present prices of
our agricultural products.
The contraction in March had reached point beyond
which the necessity Of its forbade its further reduce
tion; or persisted in by our banks the supply would
have reached from the neghborng States since tho
date referred to- the volume Of currency has steadily
creased to 407 the 25th Of September and will
increase for the year to come.
What does this expansion and contraction Of currency
proven The simple fact that under system Of free
banking with a secured currency-as before re-
marked by the Superintendent in former report-"Tho
teuchsone Of profit and loss TO the citizens employed in
banking in this state, guarantee of the solvency
OF banks than statutory enacmens however strin-
gent may be their provisions character
SECURITIES DEPOSITED DEPARTMENT FOR OR
CuIArNG NOTES ISSUED
An effort Made during the last session Of the Iegs-
laure in accordance with the recommendation Of the Su-
perinendent TO hereafter exclude bonds and MORTGAGES
basis Of security for circulating notes issued from tha
Office signay faled aud the experience VI the SV-