New-York daily tribune., 1859-01-12

If any knowledge eIisted anywhere among us on
the subject of banking, one would look for it in
NJ .acbusetts, whose intelligent people have always
taken the lead in trade and manufactures, and
where every village, almost, has its bapk-the
business of banking having been carried on in that
State and on the whole, with satisfactory success
for soms seventy years past Yet IT Is plain
enough, from the late Message Of the Governor OF
Massachusetts,, that the good people Of that State
who may be supposed, as to this matter at least,
TO speak BY the mouth of their Gcyernor-aTe
quite % much in q state Of bewildermeut on this
,ufject a. any Of the rest Of US; seeing the whole
matter through thick fog, which leads them con.
.tanty into mistakpg wndmils for giants, and hen.
coops for houses. As Gov. Banks has compressed
his ,peculstons on this subject into limited space,
we shall quote at length what he has tos aboutit;
"Tbe ba, ret arus show that while specie in bauks
has been ased to Oh ll27l5, against - Gil o
Last year. the loans have been Increased 10 the came
period of time from $2 AS 572 to the sum OF &lOl-
662 9i7 Indicating that the ability and conddei oe de-
rived fr larger amount OF specie has enabled me
banks TO increase the amount OF loans, from whic1
their profits are oerved. The experience Of tee past
year would also to naicste that tie hGsncsl
poton Of tho country Is strengthened by the increase
of sps ce tleiaes Of ueIest are reduced approach
ing equality with the lower rates Of European
Countries.
"The currency 10 the basis of the system Of credit
which cur people have thought to be so closely con-
neced vth the prosperity. No legislation should be
omlttee ther, fore that win add 10 its stability and
county rendering il equal in value at al times to the
coin which It purports to represent There danger
that the present low rates of interest and abundance
Of ey may encourage a desire 10 enlarge facilities
for speculation and to increase bank capital, thereby
turning capital r, permar ent and productive invest
ens, which give employment to industry aud increase
the proc ucis OF the country. The object OF banks
thoud be 10 facilitate by temporary loans the dlstou'
ton Of TIE products OF custry; but such producs
reeut generally from more permanent investments OF
capital such as improveme MS 10 lands and the con-
stTaction Of machinery manufactures shps and raul
waye.
An excessive paper currency counteracts the sd-
vabtaees TO be derived from Incidental protection TO
American industry BY stimulating, in the sans degree,
excessive impoytatoIs Of foreign manufactures. We
carnot reasonably claim addit onsl support for
industry by protective legislation, while we uuneoNs
ssrily stn ulste mpcations by ipjucicons expansion
If credit and to make the present rapid increase Of
,psce pIsts 1t for such undue exp .nsor, will result
nct only IN the partial exclusion of gold and silver but
aso In the scceleraon Of usnci WILSON'S and pie
pare the way for the overthrow Of al State institutions
81 red,t by tie ntrated power Of the Federal
Government. UpOr these subjects invite attention
10 tie Report of the Bank Commissioners.
In his observations on the increase Of the loans
OF the banks and on the mnudon OF the rate oil IN
terest, the Governor seems to w to have left totally
out Of view the main element BY which those
conditions are Determined. In his reference to
the bark return' hs onits all notice Of the state
Of the deposits, and ascribes the increase OF loans
"to the ability and confidence derived from
Larger amount Of specie" Had that been the
case, there must have been an increase Of the cir
culation equal 10 the increase Of loans. since it 10
only 10 ihst way that an increase Of specie
merely, can give to q bank an increasing power
to lerd. TIE Goverior ovsrlooks the state Of tie
circulation no less than he does the state Of the de-
posits; but we shall venture to assert, without
having seen the returns, that they win ahow An
amount Of circulation Il present ooasiderabH ~
low tAs svsrass Of tAs foar yeau pesoslias tAs