, 1861-12-30

II
Market, lrat board STEADY: second board veak-
TIE New YORK BANEs AND THE GOVERNMENT
LoAS.-We take the following from the New York
Commercial Adrertiser:
>, 4 letter has been made public, addressed to
tee Of the associated banks of this CITY and under
stood to be written by the President or Of opr
largest benks, upon tie subject Of the loans which
have been made by the banks to the Government.
Aftereta1iug that the former never intended to be
other than the medium between the people and
the Government, Immediately supplying the money
the many could be gathered in, the account be-.
tween the contracting parties is thus set down:
The banks have now advanced. $l1e, GOO, 600
And have received back in reimburse
ment Of sales to the public, shout. 3s:0o,o0o
Leaving them now in advance. .-...... 81, ,ooo oc0
and have agreed to advance about thirty millions
more, which at this moment Is the whole OF theif
undertaking.
Four months have now passed since the banks
commenced these advances, and their expccta-
tions have not been realized aeto the extent Of
their relief from the private subscriptions. which
have recently greatly diminished, For this reason
1t wae determined that the last advance was On
bonds suitable for the European market, By which
they expected at least to be able to effect loan in
Europe should the state OF exchange render it de-
sirable- The recent excitement growing ont Of
the affair Of the Trent has rendered that resource
quite unreliable, and the banks will be compelled
10 continue their advances without immediate pros
pect Of relief. either at home or abroad,
turned against the city, and the specie paid into
the treasury does not now, as formerly, return in
to the banks. It is now nearly time to decide
nfty millions Of which they have the option until
the1st Of january # that question is answered in
the negative, in the view Of the writer the Govern
ment has 10 option but to pay it's creditors in de-
mand notes, which will then become the currency
Of the country. The question then remains, ought
money mo- T Without fnii rovisfon for It's paymcnt
And on this head the writer remarks:
It is very clear that this currency cannot be
ceiycd by banks under their present legal ob1iga-
tions to treat all credits on their books as ex-
| pressing an equivalent Of coin. Leaving all 1ogi-
cal conclusions from this statement undEawn what
will be the situation Of the Associated Banks sitter
commencing to take this currency?
| With one hundred millions Of Government loan
still on hand. they will possess strong and unde-
paper money which thes thereafeer receive must
ldrgely accumulate on their hands. thus all the
loans. So long as the banks In New York receive
such circulating notes on deposit they Will remain
at par throughout the country, aud those who hold
| them will naturally seek to secure for them the
guaranty Of the Associated BankR, by placing then
On deposit, aud making them the basis Of exchange
Ths natural s9n1Es f trade must pFSduss AZ
rency, and deposits in banks must largely increase
and be represented in their vanlts as Government
notes, and in their books az legal obligations.
Banks who have taken en- and are now W. carrying tht
Government Loans. is rapidly passing into tn.
hands Of those who hare not shared in this patr3
oric work; and when new currency shall flow tt
| New York. in the natural course Of trade, the ba
zig on which it rests will be found to be held else
where.
Whether the resort by government to paper mo
ney be immediate ely or remotely probable. is it no
wiae that the decision respecting 1t should now b
| nader and the more go because the payment &
every calf Of 10 per cent upon their governmen
engagement renders the banka less able to main
tain q free choice.
The decision by the banks to receive such note
as money amounts practically to taking so ntc
additional Government loan at par, and to the Gel
tainty of having 1T rapidly accumulate in th
Tic estimation. It amounts to guaranty by th
| Associated Banks that the notes shall be maiI
tanned at par throughout the country.
Surely the assumption Of such. risk, and th
yalue Of such boon. requires ample compensation
, Ffyst-By securing from Cclgress a Law indeu
nifying the banks from loss ftt any depreciation
their hands Of tho loans aEes taken, and not r
! sold.
4Second-By declining to take the Governme1
a notes aa money, mill the passage Of an act fur
; ishing ample guarantees OF payment by sRecl
: war lax, which, together with the ordinal
: sources of revenue, shall be eathclent to pr
d | vide
l. For the ordinary expenses Of the Cover
4 | ment.
t,s,ta To- paythe interest promptly on all loans co
0 8. To redeem. say, within one year, all the d
Q mand notee to be issued. Said notes to be in
Il cases receivable for payments to governmenti
q With This provision fairly and fully 5nade, II
ment 1oans and notes. will possess both Under
nifty for the pnst and security for the future"