The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1860-01-07

This statement is given to present the great
change which has taken place during the past ten
years in the position Of capital employed in the bu-
riDess OF banking, and the currency iss led By the
parties engaged in that pursuit. The most marked
feature this state Dent is the discrepancy bet
1850 ana 1863 and this too, while the actual circu-
lstiob OF bank notes was the 10th of June,
1850, s242l4 34l; and on the 18th of June, 1858,
$2l,079,i93, being absolutely sl35 Jas less bank
note circulation issued BIZ the banks Of this State in
1858 than in 1850. This extreme curtailment Of
currency arose, in part, from the partial resump.
tion Of the banks in the fall Of 1857. But it will be
observed that the per centage of circulation in
essed 10 on)y2i ls-l00 per cent during the year
ending on the 25th Of June, 1859; and the actual
smUuut Of currency in circulation, and in use on
that day, was only s26,759.9l5, an increase upon
that Of 1850 of only .2,5i4y574. This presents
singular result.
The discounted debt of the banks was, on the
25th day of June last, in round numbers, Sl85 000
600, against nearly slYl 900 600 the 9Th day Of
June, 1857 that being the highest line of "loans
and discounts reached by the banks of this State
during the past ten years.
notes." from June, 1857 to June, 1859, was over
81 100000 This brings the gross earnings of the
banks within one or two per cent OF the most pros
porous year ever enjoyed by them, and this, too,
with circulation curtailed nearly 100000 from
IFS highest point in 1851; deposit line reduced
IS 100000, and an increase Of specie reserve,
from the same point, Of SS,000,000. The SupeTln-
fendent belieres that the near ending in June,
cd by the banks during the past ten gears.
There are two deductions to be made from these
figures by comparison. The first Is, that while the
banks maintain their present position Of resources
and liabilities, or nearly they will keep the pub
lie faith entire, both in their management and uti
ty and in their entire safety 10 the community and
that their present position is one of great strength,
and in fact it may be considered impregnable from
any cause arising within our own borders. They
hold over twenty per cent of specie upon their en-
tire deposits, and the New York city banks have
nearly thirty per cent in specie their net deposits
The banks Of his Stale are carrying line of
loans dad discounts to,ti,n the smallest fraction
Of eighty per cent Of their capital, deposits and
circulation Ia other ,cords. they haze on int
rest, Including loans and discounts, stocks and
bonds and mortgages, tcice the amount OF their
capital.
10 force bank liabilities as an aggregate, be-
y0nd this point the Superintendent does not belisre
10 be prudent; and particularly so, achen the
importation Of foreign goods Is so unusually
the ultimate burden Of payment must fall upon the
consumer, the capital Of the city of New York
must in the main, stand between the foreign credit
or and any default which may be made in the
prompt payment by the parties who become the
purchasers, IL not the consumers, of this vast
amount of tie products of foreign industry. Be-
You'd this single coud in the horizon of banking,
every indication of safety and consequent pros
perty and profit is palpable, If ordinary prudence
Is exercised.
The increase and decrease of the business of the
country arising from the manner in which its
business transactions were formerly conducted,
owing 10 the closing of our rivers and canals, made
of neeessity, a luctuating demand upon the banks
for money, thus producing what may be called a
spasmodic line OF loans and discounts This is now,
in measure, unnecessary, from the facility Of
transacting business the entire year through chan
nels Of transportation that are continually open.
Less excuse for sudden expansion and consequent
contraction Of bank facilities exists than ever
before.
ro bo.x a,.;5o,co IF so,cd no nl-;nr tbo ,%ao
OF line of loans and discounts IL requires but
little wisdom in those who examine the quarterly
reports made to this department to learn in what
institutions the customers, as well as the stock
holders, are the safest.
The second deduction to be drawn from the pre-.
cedipg figures il, that the business Of the country
has in q measure ceased to be transacted through
the medium Of bank notes. The multiplicity Of
banks themselves has in part produced this result
While banks were few in rum Der, aud dstantly To-
Gated from each other, an individual check was not
available as immediate means between parties
traDsacfipg business, however good the same might
be. The facilities now for cashing checks and
drafts by tie readiness with which any citizen can
reach bank, If he resides in any part of the State
except John Browns tract, is such that bank ac
count is rs necessary TO one class of citizens, al
most, as to another The Superintendent does not
doubt but that the actual number Of depositors in
banks at the present time number twenty to one
ten years ago. This Of necessity curtais currency
and has in fact reduced it TO its present position
decimal parts Of dollar; and that comparatively
small one, when we compare the amount
Of the business OF the State with its currency.
While unwilling to accede to the proposition that
bank edits are currency, proposition strongly
enforced by some gentlemen who find pleasure, II
not profit (which is at least problematical) in cur
rcncy tinkering, yet he readily admits that as the
deposit IS made in the bank to meet check when
presented it performs Of tho functions Of cur.
rency in forcing the bank to pay its debts to its
depositors created by such deposit at such time as
he. the Geposisor, pleases; and that bank can
place itself in false position by extending too far
its line of loans and discounts upon its deposits as
well as upon its Circulation. The one more dan
gerous from its concentration and scomparasive
insecurity, while the other is widely diiTnsed
through the community and secured bya deposit
in this department.
1; is almos: unnecessary for the Superintendent
to say hat the experience Of ls57 and 1s5s con-
firms his opinion thet the element of weakness, in
our present method of banking, is in stimulating
deposits by the payment Of interest or Offering any
other extra ordinary nducement to concentrate
balances in that shape in our hanks All the bust.
ness OF the country which leyitima.ely belongs to
the banks IN this State viii find its way to them
~ = to, sact;ap. Berord the natural and easy