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PRESIDENT BUCHANAN'S MESSAGE. James Bxto...
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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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Joint-Stock Banks. The Merchants, Banker...
ill Scotland , and with bankers in the provincea , the Iiondon and "Westminster Bank , ¦ which as our readers are aware was the earliest joint-stock bank established in London , announced in their first prospectus that they would introduce the system , of allowing interest on deposits , and the rate they offered was 2 \ per cent ., terms which would yield them at the time a fair- profit . Other banks arose , subsequently , producing competition , until the principle was pretty
generally established of allowing 1 percent , below what thV Bank charged on first-class bills . It waa originally intended never to go beyond 5 per cent ., but the same spirit of competition , coupled with a desire to show large figures in their published accounts , broke down that limit , and if we are not misinformed , as much as 9 per cent , has been paid by some of these banks on money borrowed from the public . We believe that bow the highest rate paid is 8 per cent ., which is 2 per cent , under the Bank rate .
It was with regret that we observed a short time since , in a weekly journal supposed by some persons to derive information and opinions on matters of finance from a Treasury official , an approval of the system of allowing a rate of interest on 9 nonei / at call closely approximating to the Bank rate . This approval waa deliberately pronounced at a time when it was understood that there was a
difference of opinion among the various banks as to the policy of borrowing at so high a rate . It is extremely satisfactory to learn that this approval is in direct opposition to the sounder views of Sir CosinawAiiL Xewis , which we have quoted above . The enormous power exercised by the joint-stock banks and discount houses , in consequence of their large amount of deposits , haa iiob vet received sufficient Attention . Mr .
Wegtjeli 2 T estimated the amount on deposit with thel-iondon joint-stock banks at thirtyfive millions ; the discount houses must , at the very least , , hold fifteen millions more . At the lowest estimate , the amount of these deposits was , in May last , when he gave his evidence , fifty millions , all repayable upon demand , or at a short notice . At that time , the total deposits in the Bank of England amounted to sixteen millions only , and against thi « sixteen millions , the Bank held in hand upwards of five millions in
re-Berve . It is quite clear that it would not answer to place deposit money in Government securities , on old-fashioned banking principles , emee these return only from 3 Z . 7 s . to 3 Z . 16 s . per cent . Ordiuary banking moneys find their way into the Funds , because of their absolute security and convertibility ; but money borrowed at high interest must be lent on mercantile securities , repayable at some future date , which securities are in the meantime inconvertible , as it is not the custom of London bankers to re-discount bills . It is also obvious
thatthe money on deposit must all be invested very closely ; for if only one-tenth be held ready to meet demands , instead of one-third or one-fourth , as the Bank had against their liabilities * a large portion of profit is consumed . To put it quite plainly : supposing a bank hold a . million ou deposit , at 8 percent . The interest is , of course , at the rate of 80 , 000 ? .
a year . If one-tenth were kept to meet daily demands , 9 Q 0 , O 00 Z . would remain to be employed , and any rate below 8 / . 18 s . per cent , would bo a dead loss . It is , therefore , quite impossible that anything liko one-tenth can bo kept unemployed , and one-third to onefourth , be ifc remembered , is the ordinary re-Borve of tho Bank of England . Mr . Wequeian calls attention to thia subject in his letter to tho CuANOisrjLOit ov rim Exohbqubb , dfttod 10 th November last year .
" The joint-stock banks of London , judging by their published accounts , have deposits to the amount of thirty millions . Their capital is not more than three millions , and they have on an average thirfcy-one millions invested in one kind ; of security or another , leaving only two millions of reserve against all this mass of liabilities . It is impossible to foresee the consequence of the failure of one of these large establishments ; and it is a branch of the subject which , in my opinion , more pressingly requires the attention of Parliament than any alteration in the Banking Acts of 1 S 44 and 1845 . "
When he penned this letter , he little anticipated the trials and difficulties which the following year has produced , and it must be a matter of congratulation with him , as it is with the whole mercantile community , that the ^ London banks have passed through a period of probably unparallelled . pressure and distrust . Two large Scotch banks succumbed , besides the Northumberland District Bank , the Liverpool Borough Bank , the Wolverhampton Banking Company , and the
deposit house of Sanderson and Co . ; but thanks to the energy and skill displayed in the management of the Xondon banks , the storm has passed over , every banking engagement has been punctually met , and we may fairly hope to see shortly brighter and better days . "When the next period of pressure comes round , we doubt very much whether we shall find bankers receiving money at anything' like the rates now prevailing ; and we trust that future Governors of the Bank of
England will not have again to comment on published accounts showing a reserve so little commensurate with the enormous obligations of our banks of deposit .
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President Buchanan's Message. James Bxto...
PRESIDENT BUCHANAN'S MESSAGE . James Bxtohattats- acceded to the Presidency of the United States at a period of unusual difficulty , and since his accession the difficulties have increased . In the brief history of the United States , there have been times when the internal affairs of the Republic have been convulsed by greater political conflicts , and party feeling has at such times been much more violent : with embarrassments of this kind Mr . Buchanan has not to contend . They have required all the energy of a Washing-ton , a Jefferson , or a Jackson ; they have reduced weaker men to the most painful of positions . But perhaps at no period have the affairs of the Eepublic demanded a greater exercise of the qualities which distinguish Mr . Buchanan above his predecessorspractical sagacity , unprejudiced desire to act for the best , and cool judgment . When he ascended the presidential chair , the Mormons had already established themselves in Utah , and had laid a way for that rebellion which has since become flagrant ; but they had not actually repulsed n party of the republican troops sent to sustain the federal authority in a recosnized State . The Nebraska-Kansas
difficulty bad begun , but it had not been hardened by time , and complicated by the dishonesty as well as tho fanaticism , by the ineptitude as well as the rashness , of the subordinate officials . And although tho " unparalleled prosperity" of the Union , liko that which we have witnessed at home , had paved tho way for reaction and crisis , the
crisis had not taken place . Without pressing too severely on tho character of the gentlemen who immediately preceded Mr . Buchanan , wo did feel much anxiety nt tho last election , that tho man chosen , should be of power and character to restore the dignity of tho chief magistracy . Wo foresaw tho embarrassments tliat would surround him , and desired to havo at the head of tho
Republic a man whose clear insigfct wodldenablB him to discern ihe path through every intricacy . It is with some satisfaction , then , that we peruse the first message of ' the new President , and perceive how completely our anticipations have been justified . For even the ordinary English reader can learn fe & na the striking quiet and clearness of its language , the lucidit y of its arguments , and the simplicity of its purpose , that the administration of the Republic has fallen to a real statesman .
The first subjeet which Mr . Btjohanatt handles is that vast one of crisis and currency . In this part of his message he will be found to be completely of aeeord , in prineiple at least , with the predominant opinion amongst our statesmen . He agrees with them in thinking the precious metals the most convenient and the safest standard of
value ; he sees the dangers which attend the spurious extension of credit by the creation of paper money , But a curious omission in the Federal constitution prevents the chief magistrate from enforcing his views on these points , perhaps restrains even Congress , and leaves the Republic , as a whole , at the mercy of its several parts , the States . "While the sovereign right of coinage is reserved to the ¦ Federal Government , the issue of notes is left unrestrained to the banks of the
Statessome one thousand four hundred in number- j and the wholesome laws that regulate the metallic currency become powerless as soon as they are applied to the paper currency . Some advantage will be gained , even if the President were able to do nothing more than point out the character of these dangers ; but he also points out the possibility of ' a remedy , in the passing of an Act of Congress which , would make it the irreversible organic law
of each bank ' s existence , that a suspension of specie payments shall produce its civil deatfe . The instinct of self-preservation would then compel it to perform its duties in such * manner as to escape the penalty and preserve life . The only question remaining after this clear exposure of dangers , and indication of a re ^ medy , is , whether Congress is up to the standard of the President in intelligence or patriotism .
The President was the diplomatic medium for carrying on' the negotiations respecting Central America—a course of litigation between England and America still unclosed . "VVe have seen it lately represented with singular dishonesty that the American Government puts upon the CiiAYTON-BuLWEit
convention a construction designed to keep open for the United States a power of encroachment . The real point in dispute is occasioned by the fact that the English Government has put a construction upon the treatydesigned to preserve to this country the right of encroachment , on the main of ' ¦ Honduras and the island of Ruatan with its
companion islands . This point we hove already made sufficiently clear : the President repeats the leading facts , but avows his willingness to efl ' aco all past negotiations and bargaining and to begin afrcyh in the amicable hope of closing the dispute . It is a thousand pitiea that statesmen either of Prance or England should permit themselves to make inroads on national independence and on liberty in the name of the
independence of races and of human freedom ; but such is the fact . Tlio humane Las Casas persuaded statesmen to encourage African migration to America , in order to spare the feeble Indian races of the West Indies ; and thus ho originated the horrors of tho slave trade . In order to put a forcible suppression upon tho slavo trade , our statesmen have driven it into a clandestine form of emigration , and they aro at thia moment einbarrasfi-
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Citation
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Leader (1850-1860), Dec. 26, 1857, page 11, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/cld_26121857/page/11/
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