The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1859-08-19


welded by theocratical government will be
more than compensated for by the position Of
greater temporal honor and dignity accorded to
the Pontif as President of the italian Confede-
ration.
These are probably some of the features of
the scheme mapped out in Louis Napoleon's
mind in connection with the future Of Italy II
the neutral Powers, instead of occupying them
selves with timid speculations in regard to pro-
jects which exist only in their own imagination,
were to aid him In carrying out his views for the
consolidation Of italian independence, they
would be doing more to insure their own
safety than all their formidable ornaments are
likely to effect.
The New York City BanA.-Vvh.t IL Their
Policy!
On another page we publish returns of the
city banks Of New York for about seven months,
or from the beginning Of May to the end of No
vember in the several years of 1854, 1857, and
1858, and for upwards of three months in the
year 1859, showing in tabular form the loans and
deposits, specie and circulation, during those pc
RODS, and exhibiting at glance the fluctuations
in the banking thermometer operated upon by
unseen agencies regarded by the simple as mys
terious and beyond explanation. But the rise
and fall of loans and deposits, their expansion
and contraction, are produced by laws as certain
in their results az these which influence the mer-
curry in the tube, or those which diminish and To-
crease the volume of iron and other metals The
changes are produced by the principles of specu-
lation in real estate-charges which affect the
commercial and trading interests, the mechanical
ard every branch OF business throughout the
whole community. The unseen demigods of
Wall street can thus plunge the whole commu-
nifty into the deep distress of panic or elate them
with very high degree Of prosperity, which is
usually the precursor of commercial crash.
They sit behind the scenes and pull the strings,
like the politicians, aud the great mass of the
community are perfectly ignorant OF what is go
ing on till the terrible results astound them like
thunder clap in clear sky
We will endeavor to explain the moltts ope,a,ld
of the machinery.
When the spectators want to produce panic,
in order to purchase real estate at low figure
they withdraw their deposits from the banks
The consequence is contraction in the loans
of the banks, and commercial men, no longer OBJ
tanning the usual accommodation, are unable to
meet their engagements, and they burst up.
Every body becomes frightened, and takes his de-
posts from the banks, deeming them no logger
secure. This increases the evil The banks
themselves sufer by failures, and become more
cautious in giving credit. The value of money
is increased, and those who have lent on mort
gage on demand call for their loans, for they
can now get any price for the use Of caah from
merchants ready to explode. Real estate is
thrown on the market in vast quantity, for those
who have borrowed money on it must pay up
aDd IL Is sUId TO meet the demand. Many, too.
who own real estate free from mortgage or in
cumbrsnce desire to sell because they can invest
the proceeds to far better advantage in loans to
merchants and traders.
Thus real estate is brought down, and then is
the time for the spectators to operate in it.
They buy it up in all directions When the panic
has blown over the spectators again deposit in
the banks, and the banks again expand their
loans, and the prices of real estate and of every
thing else go up, and when they are at the high
est figure the Spectators sell; aud then they go
to work again to bring about another panic ia
the very same way they did before.
An examination of the figures which we pub
lish will demonstrate these conclusions In the
year 1854 loans expanded from ninety millions
ard quarter on the 18th of May to ninety
three and nearly three. quarter millions on
the 9th Of August and then went down to eighty
one and half millions on the 10Th of November.
In the deposits there was corresponding rise
and AL. From sixty one and half millions on
the eth Of May, they rose to nearly seventy.
nine millions on the 10th of August, and fell to
sixty millions on the 18th of November This
decline was precipitated by the Schuyler frauds.
But the fluctuations that year were inconsider-
able compared with those Of the year 1851 On
the I'd Of May in that year the loans were one
hundred and fourteen and half millions nearly
On the Sth of August they were one hundred and
twenty-five miliors. On the 18th Of November
they fell to ninety.four Millions The deposits
fell from sixtyeeht millions on the lst Of August
to forty-two millions on the 18th Of October
This explains the panic which shook the com.
nercial fabric to its foundations Here were
twenty-six millions suddenly withdrawn from
tie banks in order TO he invested in real estate
which, by the came operation, was reduced to
the lowest ebb. The banks called in their loans,
ard refused to lend any more A crisis and a
crash were inevitable
In 1858 the fluctuations were slight and only
such as are produced by accidental causes. But
now, in 1859, there are marked changes which
are calculated to alarm. The loans on the l4th
Of May were $l29,CSO,OOO; on the 18th of
August they are reduced to Sill 100000 The
deposits, which were $sS,S72 900 on the 7th of
May, are reduced on the 18th of August to
s7l,49O,ooo.