The New York herald., 1862-12-15

snc0 january L. .$45 lbo ,696 6,4O5 z26 81 ,20O,O4
The bank statement which appeared in last
Tuesdays HERALD showed a deposit average Of
1853 ,6O2 TIT. being decrease from the preceding
statement of IS, ,390,939; loan average Of l7l,-
483 .Ss7. being decrease Of 81 478 409; aud spe.
Gle average of t37 .662 ,S88, being q decrease of
$3.50. AIS. The circulation stood at 81, 1874, ,8ls,
having varied but little for several weeks. It Is
understood that the statement which will be CON-
piled tomorrow will show a further heavy decrease
in deposits. and probably q moderate decrease in
loans also. The banks are very slow to reduce
their discounts. Their means are being drawn
from them by the wants of parties interested in the
purchase of cotton and the movement Of Western
produce; and, were they on specie basis, q sense
Of duty and self-protection would have compelled
them, ere this. to have effected substantial reduc.
tion OF their discount line. The specie return con.
veys no information whatever. II is privately
understood that the banks hold some twenty mil.
lions Of gold, the balance of their reserve" being
special deposits, of which they the custodians
merely. By keeping this gold, and lending on it,
they are assisting most powerfully the speculation
in gold, which has already deprecated the curren.
cy twenty-five per cent.
/ The position of the New York city banks, and
the action to be taken with regard to them by the
Legislature, are subjects of very general comment
at the present time. Whenth constitution of this
State was adopted, theIegislature was expressly
eforbidder to legalizea suspension of specie pay
ments, and tn, understanding among the profcs.
sion and the people was that suspension would be
instantly followed by the appointment of receiver
to wind up the suspended bank. Accordingly, when
the banks suspended on October Is, 1867, ap-
plicaton was at once made ih three or fouf cases
for the appointment Of receivers. The Supreme
Court denied the applications, on the ground that
a suspension of specie payments was not of itself
evidence Of insolvency. II was we'll understood
at the time that this was only the prctext for the
decision, which was really based on the co mmon
sense view that nothing would be gained by wind
ing up the banks, while such proceeding would
aggravate the sufferings Of the public. II was
likewise understood that an informal hint was
giy,.n 10 the banks by the supreme bench that
policy looking to resumption at an early
date must be al once and steadily pursued.
The banks acted on the suggestion. Curtail-
ment and contraction became the order of
the day. In the course OF few weeks the
bank loans which had been as hgl, as Sl2o0oo,-
Odo were reduced 10 sa4 900 900: and The cfror'a-
ton was reduced to something over $6 COO. 600.
This judicous policy checked the tendency TO spe.
culation which had nanfes sted itself immediately
after the suspension, kept gold down TO fraction
al premium, and enabled the banks TO resume
within . few months. II was partly the fresh re.
collection Of this unmoested suspension, and part
ly the unsettled condition Of the country. which
enabled the banks 10 suspend second time, in
1851, without fearing for their charters. No an.
plcstion was made in this instance for receiver.
and 10 all outward appearances the banks went on
with their business just as though they were not
broken, and not liable 10 he wound mn
whenever the State officials chose TO per.
form their duty. Taking advantage of
the extraordinary iMpnnity which they en-
ioyed. and realizing the profits which the condi.
tion Of the country offered 10 Spectators, the sus-
pended banks in 1897 and 1867, undertook TO pur.
sue a policy diametrically opposite TO the policy
which they had adopted after the suspension OF 1867
and TO the only policy which could by any posi-
bility enable them TO resume specie payments
Instead Of curtsiling they began 70 expand their
loans; instead Of calling in their circulation, they
increased IL az rapidly az they could. They have
thus swelled their discounts from sI20 900 600 70 |
$40 600 000 and their circulation from s. GOO 600
10 $40 000, 900, besides usinp an enormous amount
Of country bank paper. u is high time that
somebody should inguire--vhese is this going 10
end? il is very clear that IL our banks |
90 on at this rate none o5 us will live
20 see q resumption Of specie payments.
II any public good were attained by the
present unparalleled bank expansion there might |
be some excuse for Il, something 70 urge in miti.
cation Of the thorough execution of She law. But
IL is wholly bad. II has generated a wild and
senseless speculation; il has helped 10 canAc an
enormous advance in the prices Of all articles
which are consumed by the poor; u has assisted |
the advance in gold and the depreciation Of the |
currency; and now It's authors are actually seek
ing 10 persuade Congress TO ruin the nation out.
right by q further issue OF irredeemable paper.
Under the circumstances. u would appear that
Governor Seymour and the Legislature will have
very simple duty 70 perform. The people Of this