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FROM BOSTON. BOSTON, Dec. 30. By instructions from Lord Lyons, the Niagara, which arrived here on Saturday, will leave to-morrow for Liverpool, taking out Mason and Slidell. The Persia, now in the St. Lawrence, will come to Beston and take the place of the Niagara for Wednesday, A The Presidents and Directors of the banks of this city held a meeting this morning and resolved to suspend specie payment forthwith.
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Suspension of Spee1e Payments. BOSTON, Dec. 30.-By instructions from Lord Lyons, the Niagara, which arrived here on Saturday, will leave to-morrow (Tuesday) for Liverpool, taking out Mason and Slidell. The Persia, now in the St. Lawrence, will come to Boston and take the place of the Niagara for Wednesday, the regular day. The Presidents and Directors of the banks of this city held a meeting this morning and resolved to suspend specie payments forthwith. PHILADELPHIA, Dec. 30.-The banks of this city have resolved to suspend specie payments, in consequence of the suspension in New York,
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THEGENERAL HANK SUSPENSION. Our dispatches announce that the banks of New York, Boston and Philadelphia Lave suspended specie payment. It will doubtless be followed by the suspension of all the banks in the loyal States.
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pelled to work twice as much for the same money. We had the love and respect of all people, who sought our shores as an asylumnow strangers fear us, our citizens are unlawfully imprisoned for opinions, and many seek their safety by refuge to foreign lands. Our country is now no longer "the land of the free and the home of the brave." How sad is this thought; and how sorrow will weigh down the soul, when the people awake to the reality 'that the Government has employed forty thousand eager hands to pick their pockets, to pay the interest on, a national debt that no man can count-the cost of a Union lost, the price of our shame in the eyes of the world.How great is the crime for which abolition must answer? How fearful will be the retribution when it comes?-and it will come. The telegraph states that the banks of New York, Boston and Philadelphia suspended specie payments last Monday. Next the Administration may suspend specie payments, if it can't help it. Would that prove that we have a Government ? A year of trouble has closed.We fear the worst has not come yet. The wisdom at Washington does not excite much admiration The future is covered with clouds.
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NIGHT DISPA I CHES. From " whington. WASHINGTON, Jan. 11. Secretary Chase expects "⑆meet on Monday delagetion Ful resenting the banks of Boston, New York and Philadeipsis, for conference in financial matters. Since the suspensions, this eity has been flooded with small notes, many of them wortbless. Nest week the H use Committee on Wars and Means will offur, and hope 10 carry their bills imposing toxision, and revival of the tariff by an increase of duries. There are numerous applications for he mission Rome, which the North-western members claim is belonging to some one from their section. The Commissioner of Paten's is to be cal ed on by Congress to state whether Mr. Brown, formerly Agricultural Chief Cleak, is now employed by nim in Europe to purchase seeds. The.e was much fruit found with Brown's official conduct while are, and it he has been sent abroad is wil make 1 divirbance. The King Philip came up from the Lower Potonac this Lorning, and repor's meeting the Penes. cois between Mt. Vernon and Washington, bound "www The for was so thick lost night that the Stepping Stone was ob! ged 10 lay off Alexandria till his worning. At GOOD, she again started to run the rebel
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# THE FINANCIAL EMBARRASSMENT OF THE YAN- KEE GOVERMENT, BANKS AND PEOPLE, A circular was prepared in New York and sent over to Europe on the first of the year, having for its subject the financial condition of the United States It contained the following leading statement upon the suspension of the banks: The financial crisis impending at the issue of our two previous circulars culminated by a suspension of specie payments by the banks of the cities of New York, Boston and Philadelphia on the 30th inst. Bya singular improvidence, Government allowed itself to be dependent on their contributions to meet its daily expenditures, and consequently was compelled to follow their example and suspend payment on its demand notes, although the interest on its bouds, and probably on all its obligations to mature, will unquestionably be promptly met. The suspension was caused not by any lack of capital in the country, but for the want of policy or scheme of finance adequate to the emergency. The country never presented more substantial evidence of wealth than at the present moment. We have taken frequent occasion to set these forth, and have contributed something, we believe, to advance the credit of Government both at home and abroad. But the policy that has been steedily pursued by Government, from what motive we will not itquire, has directly tended to precipitate the crisis, and to leave it without means, while those of the country have been really untouched. The remedy is perfectly obvious and simple-which is to adopt a policy which, by drawing upon the resources of the people, shall give the Government abundant means and fully restore its credit. For the calender year which closed yesterday, we presume the current expenditures of Government were $300,000,000. Its revenucs were which derived from lands and import duties, did not probably exceed, if reach, $35,000,000, or one-tenth the expenditures. To make up the deficit loans were resorted to, the greater portion of them being made in the city of New York. The expenditures being largely made in distant portions of the country, the balance of indebtedness at the close of the year turned against the city, so that the payments of coin by the bauks failed to return to them, leaving them no other alternative but to discontinue their advances, as a means of retaining the specie still remaining in their vaults. At the close of the last week the amount held by the banks was $29,357 712 This soon will be reduced by the amount of $3,500,000, which they agreed to advance for the purpose of enabling the Treasury to meet, in specie, the January interest upon the liabilities of Government. Upon the third $50,000,000, the banks will have paid $25,000,000, making their total advances $125,000,000. Of this amount, the Government has returned, say $38,000,000, being proceeds of sales outside the banks, and has agreed to account for $12,000,000 more as proceeds of such sales. We take it for granted that the banks will go no further upon the agreement of the 19th of August. It is neither for the interest of the Government nor the public that they should. It is now clearly seen that the alliance between them and Government was both unbusinesslike and unfortunate, as it bas in effect converted their capital into Government bonds, which are not money-capital should never lose the attribute of money-while it led Government, so long as all its wants were supplied, to put off the adoption of any plan or system of finance, necessary to produce even its expenditures upon a peace footing, upon the enlarged scale which the rebellion rendered inevitabl. The arrangement was a most improvident one for both parties, and both were equally interested in bringing it to an early termination. The aid of the banks should only have been availed of to meet a present emergency. When this was passed, the advances made by them should have been returned, and the expenditures of the Government met by the people, either in long loans or by taxation of one kind or another. For this reason, we have for some time past advocated a suspension of specie payments as the necessary step to the adoption of a permanent and adequate policy. Such a policy should be a system of taxation, which, with customs revenues, will yield annually (say) $150,000,000 to $200,000,000. Customs may be made to produce probably $50,000,000 or $60,000,000. We are then left the various modes of internal taxation, such as property and income tax, stamps, and excise tax or duties England raises in all some $350,000,000 annually. We can certainly raise one-half this amount with as much ease as she raises the whole. We have an equal population, and in many respects superior resources. No one doub's the ability of our people to pay such tax. Its collection, as far as Government is concerned could be anticipated by demand Treasury notes, waich by being made receivable in payment of such tax, would be readily taken by the government creditors, and till redeemed, pass current as money. Government could thus at once be placed in funds to the amount of the probable revenue from all sources for the year. Its credit may in this way be so fully re-established that it may continue to negotiate loans to an amount sufficient, with its revenue derived from taxation, to meat all wants. The plans suggested as alteruatives to that stated, appear to us to be not only inadequate to the emergency, but as likely to prove disastrous in their results. The one to which Mr. Secretary Chase inclines that of Frew Banking, tased on Government bonds, would, if reader-od obligatory, force the banks of the country into general Equidation instead of creating new ones. If left optional with the public no one will avail himself of it, as no one is going to purchase Government bonds as a conditicu of issuing circulation, when the same thing can be done now under State laws, without any such deposit The bank notes of the New England States, which are whollyğunsecured pass throughout the country at alless rate of discount than those of this State which are amply secured. The guaranty of a deposit of United States stocks for all the bills issued by the former would not add in the slightest degree to their solvency. They are now abundantly secured by an admirable system of banking. They are equivalent to gold, which is certainly all the pubiie demand. The great dinger resulting from Mr. Chase's scheme is that Congress will waste time over it which could just now be better employed. The suspension by the banks operated as a great relief to the public mind. Prices at the Stock Exchange rose very rapidly the advance over days previous being, in many instauces as great as 5 and 6 per cent. Gold was never more abundant than at the present moment. It will not probably command for the future any premium The effect of the suspension will be to correct a vicious system of national finance, which was an incubus upon the operations of business and trade no longer to be borne. We have no doubt that this system will be followed by one fully adequate to the crisis, although much precious time may be lost upon impracticable schemes, and in experiments which are always incident to new experience. AN IMPORTANT ARRIVAL -The Houston Telegraph of the 1st inst. legros from good authority that a steamer has arrived in a Texts port within the past week, under British colors bringing 45 tons cannon powder, a large amount of rifle powder, 700,000 army caps, 5000 cannon primers, and a considerable amount of coffee, dry goods, bagging, rop, etc. Columbus Enquirer. DIED, Near Centreville, at 5 o'clock the morning of the 9th of January, WM BROOKENBROUGH PEEGPS, son of the late Major Jefferson Phelps, of Covington, Ky., and grandson of the late Judge Wm Brockenbrough.of Richmond, in the 25th year of his age. Mr. Phelps.
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SUSPENSION OF THE BANKS OF THE EAST. ERN CITIES. From the Louisville Journal of the 31st ult, we learn that a general SUIR of payments was the banke of pension upon by specie 1) eastern resolved cities, on the 30th ult. The movement was simultations, 80 far as the banks of N. York, Beston, and Philadelphia, are concerns which shows a concert of action The determination in New York was, it 18 apologetically stated, unani nously r solved upon, in consequence of the heavy draft upon the banks for coin, caused by their large advances to the government." Their financial condition, rendered the step coin to twenty-two cordary-their from it was thirty-nine considered, having been millions reduced ne. in two weeks The telegraph says the banks of Philadelphia resolved to BUS pend in consequence of the suspension in New York," while it is simply ancounced that the banks of Boston held a meeting and resolved to suspend forth with." The Journal states that all the talk in the business circles of Louisville, was concerning the suspension of the easternbanks, an announcement of which was made by telegraph at noon on the 30th. It was previously known that the movement was advised by the Treasury Department at Washington, and generally thought " to be a wholemovement." also that the suspension can some expressed The opinion is "have and no serious effect upon the trade of the Western States; on measure commerce the contrary, the favor." In is connection generally regarded with with this subject the financial article of the same paper says: "Our local banks which have withsfood the financial revolotions of the past, will con inue to redeem the issues of the branches local ted in loyal districts, and we are advis. ed that the Ohio and Indiana banks will likewise continue to pay specie, at least for some time to come." The movement of the New York banks was forced upon them. During the week ending the 28th ult., their balance sheets exhibted the following resuits : Decrease in loans. $1.017,912 decrease in circulation, $119.898 de crease in deposits, $845.560. These figures were favorable to the banks to the extent of $55,454 and had there been no other transactions would have created no alarm. But the loss of specie, on government and foreign account, was $7,955,932. which exhibited a difference against the coin balance of $7,900,479 The neceasity of an inflated circulatin the may ing medium Ohio and West, Indiana enable keep the banks of to their notes afloat in their own localities for a while, but they cannot maintain the position long. The suspension must become a general one, and financially our will 8 on ocempy the same as position enemy commercially the South.Memphis Appeal.
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purely speculative, revived. If the recent victo. ries should defeat the passage of the Treasury Note bill, the gold speculators would be punished even sooner than they will be if the bill passes and an adequate tax bill is at once pressed forward. The scheme of the sub-committee of Ways and Means for a tax bill was laid before the whole committee to-day. It is to be hoped that it will be reported to the House without delay. The stock market was lower to-day. The want of outside business renders the task of the bull speculators very difficult, notwithstanding the ease in money and the improvement in public feeling. The public appear to be buying State stocks with some boldness. Virginias rose 2 per cent, Tennessees 1, North Carolinas 11/4 and Missouris 11/6. Inexperienced persons must be careful how they are tempted to purchase the securities of the rebel States. It is impossible to say what bonds they may not have issued during the past year, under the pressure of war: and, though the proceedings of the Confederate government are of course null and void, it is clear that each State may be held answerable for any securities which may have been issued by the proper State authorities, even under the influence of the rebel leaders. The debt of Virginia was quite as much as she could take care of before the rebellion, and the resources of the State were not increasing. Railway shares were irregular to-day, but generally lower. At one time there was quite a smart decline in some stocks; but at the second board the speculators bid up the market, and prices closed better than they had been. We note, however, a decline of 2 per cent in Pacific Mail, 5/8 in Erie, 3/8 in Hudson 1/2 in Illinois, 1/2 in Galena, and 1 in Toledo. The market at the close steady, the following being the last quotations:-United States 6's, registered, 1881, 90 a 901/4; do. 6's, coupon, 1881, 89% a 90; do. 5's, coupon, 1874, 7934 a 79% Indiana 5's, 75 Virginia 6's, 57 a 58; Tennessee 6's, 55 a 55 1/4; North Carolina 6's, 66 1/4 a 6634; Missouri 6's, 48 a 4814; Pacific Mail, 941/8 a 94 1/4; New York Central, 821/2 a 825/; Erie, 34 1/2 a 34% do. preferred, 581/2 a 585/; Hudson River, 381/4 a 385/5; Harlem, 121/2 a 1234; do. preferred, 30 a 30; Reading, 43 a 431/2; Michigan Central, 535/8 a 53% Michigan Southern and Northern Indiana, 2214 a 22 3/6; do. guaranteed, 43 1/4 a 433/; Panama, 119 a 11934; Illinois Central, 62 a 621/4; Galena and Chicago, 68 a 681/4; Cleveland and Toledo, 44 1/8 a 44 1/4; Chicago and Rock Island, 541/2 a 54% Chicago, Burlington and Quiney, 621/2 a 63: Milwaukee and Prairie du Chien, 20 a 201/2; Cleveland, Columbes and Cincinnati, 1081/2 a -: New York Central 7's, 1876, 1031/2 a 1041/2; Erie third mortgage bonds, 96 a Michi gan Central 8's, first mortgage, 1011/4 a 1011/2; Illinois Central bonds, 7's, 931/4 a 93 1/2. The business at the Sub-Treasury was as follows to-day:$557,329 Receipts. 172,000 00 -For customs 521,462 Payments Balance 5,203,444 74 The exchanges at the Bank Clearing House this morning were $16,488,296 24, and the balances $828,248.53 By the Kangaroo we have advices from London to the 5th inst. The London money market is reported as easy; but gold continued to be drawn from the Bank of England for transmission to the Continent. Consols were dull and without fluctuation, closing on the 4th at 923/4 a 92% The London Shipping and Mercantile Gazette of the evening of the 4th inst. thus notices American stocks:The transactions in American securities comprise:Virginia State, 471/2: Erie shares, 7 per cent Preference, 48 to 8; Illinois Central, 1872. 79% do. $100 shares, $85 paid, 44; do.. all paid. 531/2 New York Central $100 shares, 721/2 Pennsylvania Central bonds, first mortgage, convertible, 82. The position of the British money market during the past month is thus described in the Bankers' Magazine and Commercial Digest:The progress of affairs, financial and commercial, has been certainly more satisfactory than it was supposed it could be. considering the late position of relations with America. Previously to the receipt of the answer of Mr. Seward to the demand of Earl Rassell great anxiety was expressed. since it was confidently predicted that no reparation would be offered. but that hostilities must eusue. The natural result was that trade experienced a further check, business at the Stock Exchange became restricted, and the only movement by which profitscould be secured was the enhancement in war risks at Lloyd's When, however it was announced that Messrs. Slidell and Mason would be released, and that the attitude of the a federal authorities was altogether conciliatory, then general recovery occurred: the markets became animated. the appearance of affairs having entirely changed. Thismay be well imagined when it is intimated that the bank reduced the rate of discount to 21/2 per cent. the abundance of money through the payment of the dividends, with the influx from other sources, having lowered the quotation out of doors for first class bills to 2% per cent. The Bank of France subsequently reduced their terms to 4 1/2 per cent. which indicated an improved condition of things. Such is the current plethora. notwith standing the Indian railways have been in the market, completing dehenture and other subscriptions to the extent of about £2,000,000. actually absorbing that acunt, that prime selected paper has been taken as low as per cent. On the Stock Exchange money has positively gone 'begging' at 1 per cent, and is now only quoted at 1 1/2 per cent. It must, nevertheless. be admitted that this plenteousness arises in a great degree from the stagna. tion of general mercantile business and from the indis position manifested to engage in adventures of any description without they are based on the most solid foundation. The suspension of specie payments by the banks of New York, Boston and Philadelphia, and also by the federal government. bas not created any surprise, and. beyond marking the effects of the civil war in Ameri ca. has not been regarded with any great interest. is Stock Exchange. WEDNESDAY, Feb.
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MONETARY AND COMMER CIAL. MONETARY. MONDAY EVENING. May 2. Hon. E. G. Spaulding, President of the Association of National Banks, has written a letter to a New York banker to show that it was the policy of concentrating the gold of the country in the Sub-Treasury which caused the general suspension of specie payments in 1861. The banks of New York, Boston, and Philadelphia had agreed to loan to the government about $150,000,000, and expected that this amount would be checked out by the government in the same manner as a loan to an ordinarv borrower, and that the currency-oconomizing facilities of the Clearing House would be brought into use. But, instead of this, the Secretary required the whole of the money to be counted ont and paid into the Sub-Treasury, and this 80 disturbed the gold reserves of the banks that the general suspension of specic payments followed. If Mr. Spaulding's arguments in this connection were applied to the resumption and maintenance of specie payments they would be against the concontration of the gold of the country in the Treasury, and show that, if specie payments are to be resumed and maintained by the National Banks, it must be by a system under which every National Bank will be obliged to guard and preserve its own reserve of gold, and not rely on redemptions in greenbacks oven after the government may have resumed. The idea of a single gold reserve in the Treasury for all the currency, is popular, because as long as there is no financial disturbance, it would economize the use of gold. It also has what seems to be a precedent in the Bank of England, which does, in fact, hold the specie reserve for all the currency of that country. But the specio reserve there is watched with the most nervous care, and is preserved by the power of the bank, to raise the rate of discount in a manner that would be impracticable in this country, unless the government went into the banking businees and loaned money on commercial paper. It is plain that, after specio payments are once resumed, the greenbacks must be got out of the way as fast as possible without a crisia, for as long as they should remain in existence they would be the means by which a foreign drain of specie would cause a suspension of specie payments again. Seeing then, that it is necesFary that the banks should be deprived of their facility for making nominal redemptions in greenbacks, and that there must be a contraotion of the greenbacks and an increase of National Bank notes, before there can be any resumption of specie payments, and that, in order to maintain specie payments after resumption, the greenbacks must be got rid of entirely, it is apparent that the true policy is to provide for the gradual but complete retirement of greenbacks, and for an increase of National Bank notes unlimited by law. Then the gold that would otherwise be hoarded in the Treasury would be absorbed by the banks, and become the reserve against their circulation, which would increase as fast as the business of the country demanded it. The New York Journal of Commerce saya that,nt the proper point in the consideration of the Tariff bill, Mr. Lawrence, of Ohio, will introduce the following amendment for the partial renowal of the Reciprocity treaty with Canada: And be it further enacted, That the President shall be and is authorized to enter into a convention with the proper authorities, providing that coal, fish, salt. timber and lumber of all kinds round, hewed, and sawed, unmanufactured in whole or in part, the growth and product of the United States, or of the Dominion of Canada, New Brunswick. Nova Scotta, Newfoundland, or Prince Edward's Island, shall be admitted into each country espectively free of duty for ten years, and until therwise determined RI act or Congress, on the
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law of 1846 kept all bank notes out of the treasury, the government suffered no loss from the suspension. As hard money was locked up, however, and could not be obtained to pay duties, the government issued $20,600,000 more Treasury notes.for that purpose, and to meet payments by the government, which there was not sufficient coin to meet. The government did not rely upon coin to meet the demands, and it has never done so in a crisis, but has always relied upon paper money in the form of Treasury notes, as was done in this instance. Treasury notes have never failed to do what the government required, unless the law, as in 1862, purposely crippled them in providing that they should not perform all the functions of gold and silver coin. Paper money issued by the government has always been fruitful in good to the people. It never failed. 18. When the war with the south came on did the government in the war to preserve the Union rely upon coin? Certainly not. It first borrowed money of the banks of Boston and New York. The banks made the loaning of this money an excuse for suspending specie payments, hoping to loan the government their own notes for six per cent bonds, giving $80 of them for a $100 bond, for their suspended bank notes. This was the de. gree of patriotism and hard money devotion that animated Wall street then. But the government for the $60,000,000 borrowed, paid the banks adding 10 per cent for its use, and issued $60,000,000 demand notes. These notes, these banks then suspended labored to discredit, and would have done so but that the Secretary of the treasury ordered the notes receivfor duties on imports, and afterward congress made them full legal tender money. They were then at par with gold and always so remained. The nation could not and did not rely upon hard money. Had the United States attempted the suppression of the rebelion and the preservation of the Union with hard money, it would probably failed for want of money, the sinews of war. 19. In 1862 the government still placing no reliance upon hard money, which could not be had, issued the greenback or Treasury notes, making them legal tender for everything but interest on the public debt and for duties on imports. The great misfortune of the country was that they were not made full legal tender for all debts due the United States as all other Treasury notes had been. They would then have been at all times at par with gold, and gold would not have been needed even for interest on the public debt, and a thousand million dollars would have been saved to the people. These notes conquered the south and restored the Union, paid off the army and the navy, built the Pacific railroads and sustained the country during four years of long and bloody war, and have been an important factor in all the years of peace that the country has since enjoyed. What paper money issued by the government has done for the United States since 1860, is more than coin has done for any nation on earth in any hun dred years since creation. If we were to banish the costly national bank money and use only gold, silver and Treasury notes, made full legal tender, and continued so to do, we would become the richest nation on earth in twenty-five years, and would so remain as long as we continued their use. In conclusion we briefly cite to the fact that the many millions of gold coin deposited with the United States treasury, without interest, in exchange for government certificates, made equally legal tender with the coin deposited, is of itself conclusive proof of both the confidence in government issues of paper money, and of the preference for it by even the owners of gold coin. Even silver certificates issued by the government, based upon silver at the ratio of 16 to 1, are current money every where and readily accepted in payment of debts and for the exchange and transfer of all kinds of property.