FINANCIAL AND COMMERCIAL REVIEW. THE pressure on the money market noted at the date of our last has continued throughout the month. The banking institutions have persevered in a strictly stringent course and business paper of the best descriptions, embracing that of importers generally, has been sold at 1 and 2 per cent. a month freely. The jobbers appear not to have been so severely pressed, their obligations maturing not until the present month and later. Notwithstanding this difficulty with paper having definite time to run, money could be borrowed "at call" on stocks, allowing a reasonable margin at the legal rates, say seven per cent. The condition of money affairs presents a singular anomaly in the history of our commerce. The general relations of the interior to the cities, and of the latter to Europe, are very different from any state of things previously experienced. Hitherto we have been an agricultural country without any very adequate market for the productions of the seil. The seaboard and commercial cities have been the chief customers for farm produce. It is obviously the case that in a country like ours, where extreme poverty is no where prevalent, that the quantity of food which a commercial city will consume has a natural limit, beyond which a market cannot be forced. On the other hand our fertile and limitless west, under the hands of energetic and intelligent cultivators, brings forth limitless quantities, and the wants of the producers in the shape of supplies and manufactured goods are for the most part restricted only by the extent of sales. It has therefore been the case that the unaided purchases of the seaboard have not been sufficient to supply the agricultural interests with all their wants; hence they have uniformly been in debt to the cities, New-York chiefly; or in financial phrase, exchanges have been in favor of New-York. When a money pressure took place, it was mostly because the cities were in debt to Europe for goods supplied to the country, and the payment of which from the latter it was difficult to collect. The establishment of banks was the machinery by which the country was kept in debt to the cities. It was through ability to discount notes that the jobber took the note of the country dealer, payable at the bank in his locality. It was preferred that the notes should be payable in the neighborhood of the maker, because its nonpayment would more directly affect his credit, and he would use every effort to meet it. The goods he bought on that credit he sold on time to his customers, waiting until "next crop" to pay. If his note fell due, he could meet it, by procuring a discount from the local bank, which operation was merely shifting the direct debt to the city dealer from himself to the bank. The city merchant deposited the note with his city bank, by which it was sent to the country bank for collection. When paid into the latter, the city bank was notified and the merchant received credit on their books for the amount. The payment was not actually made, but became a "balance due" from the country to the city bank; when the city banks were pressed, they enforced the payment of these balances, and the country banks were compelled to send specie'; the crops being short, the dealer could not collect, he could not therefore meet his note, and the whole community clamored for more bank capital, while a general suspension took place. During the last year all this has been reversed. The demands of Europe have been superadded to the consumption of the seaboard, and sales of produce are 50 per cent. more than ever, while the absence or restricted action of the country banks has kept the purchase of goods moderate. The country banks, where they exist, have discounted drafts drawn against "shipments," and the flow of produce to the Atlantic has accumulated credits in the cities in favor of the interior in excess of the purchase of goods. In order to estimate this great change in the preponderance of balances, we may compare the last two years with 1835-6, which ended in the suspension of 1837, and 1838-9, which ended in a second uspension, as follows: These figures show a complete reversal of the whole order of business. The results recapitulated are as follows: In those former years, suspension inevitably resulted, because the cities owed Europe for near $50,000,000 worth of goods, which the interior had consumed, and could not pay for. The cities have now purchased of the interior $42,647,331 of produce, which they have sent to Europe, and cannot readily get payment thence; hence, instead of the current of debts being from the interior through the cities to Europe, it is from Europe through the cities to the interior. The effect of this upon the bank balances of Massachusetts and New-York is seen as follows: Due from Due to Due to Due from Due from Due from Mass. Country. 1839......561,102..2,062,215..1,501,113.. 1846....1.967.343..2,250,421.. 1847....4,808,714..3,116,753.. ..3,250,205..2,358,781.. 283,073..5,154,715.. ..1,691,961..9,256,815.. Due to Due from Country. N. York. ..6,608,986 ..1,504,886..3,649,829 ..2,948,560..6,308,751 In 1839, the New-York and Massachusetts banks sustained themselves, while all at the south and west went down. This year, instead of there being $1,501,112 due Massachusetts from banks in other states, Boston owes the banks in other states $1,691,961, and its whole balances were $4,808,714 against, instead of 561,102 in 1839. It is for this reason that the pressure there has been so intense. The same feature to a greater extent is apparent in the New-York returns. The city banks owed over 94 millions in December, in balances, to the interior, while the commercial capital, locked up in produce, which could not be readily realized, was farther depleted for the payment of goods im ported, and was also exposed to the financial operation of the London houses. Such a combination of circumstances was calculated to produce an almost unexampled pressure upon the seaboard, while the interior was comparatively free from distress. The difficulty of negotiating bills, and the improving state of the foreign markets, checked exports, and caused stocks to accumulate in the cities, while prices fell. In the city of New-York, the exports for December were, as compared with previous years, as follows: Specie..... EXPORTS FROM THE PORT OF NEW-YORK, FOR DECEMBER. Foreign free Goods....71,798. dutiable" ...224,682.. .....344,042... Domestic Goods.....1,497,668.......1,468,632.......) ..2,516,733.. 1844. .645,915.. ------20,498. 1845. .133,786... 1847. 1,788,867 43,822....... .65,878.. .....101,973.. ....118,345.. ..29,178 ...97,923 .....4,211,300......1,944,694 Total for Dec........1,926,237......2,479,087.......... 2,796,314. .4,395,523.... 3,840,662 The exports of specie for the month w re large, and the decline in the quantity of American produce sent abroad very considerable, notwithstanding that it was in ample supply and freights low. This, by reducing the quantity of bills offering, considerably supported the rate of undoubted paper, and gradually produced a real scarcity, when be fore it was only artificial. It is, however, the case that the pressure has, to a very considerable extent, produced a counter order and suspension of orders given for goods. The actual spring importations will not, in any degree, equal the original orders sent. In the mean time the money market of England is slowly recovering. The influx of specie into the Bank of England, noticed in our last number, has continued, and the amount on hand has now again reached the important sum of $12,000,000, and the rate of interest from 8 to 9 per cent. has been reduced to 4 a 5 per cent. as the minimum bank rates for the best paper; but the distrust of second rate had, at the latest dates, by no means been removed, nor was there any rate for discount of that class of paper. There can, however, be no continued cheapness of money on the part of the Bank without its gradually finding its way into all the channels of business, and reviving that demand for produce which the absolute paralyzation of all enterprize had destroyed. The railroads, above all other enterprizes, had been mainly instrumental in promoting the demand for foreign produce. The money pressure causing those concerns to suspend, has thrown out of employ some 500,000 persons and their families, on whose part large purchases of food will become impossible. The low price of money will probably again revive the railway “calls,” and with the revival a renewed demand for produce, in addition to the actual deficit in Ireland, will be experienced. On the 1st of March, however, the sliding scale of corn duties will be restored, probably because the declining revenues of the government require the revenues to be derived from them; otherwise it is not easy to account for the resto ration by a free-trade minister of corn duties, that, under existing laws in 1849, are to be repealed altogether. The present suspension of Sir Robert Peel's act for the amendment of the Corn Law, expires on the 1st of March next. It appears from the answer given by the President of the Board of Trade to an inquiry which was made on this subject, that it is not the intention of the government to propose a further suspension of that law. Should there be no further legislation on the subject, an event quite probable, the import duties on wheat will be regulated by the following scale: When the average price of wheat, for six successive weeks, is under 48s per qr., the daty will The following are the weekly averages of prices throughout the kingdom, returned in the last six weeks, the aggregate average being 52 shillings per quarter. There have been considerable exports of flour and grain from New-York, to go into bond prior to March 1st, to take advantage of the anticipated rise that duty may produce after that date. It is no doubt the case that had the supply of shipping been last year equal to the emergency, the quantity of produce sent hence to England would very much have exceeded the actual shipments. At this time last year, the freight of a barrel of flour was 8s. sterling, or $2 per barrel, and grain 30d. or 60 cts. per bushel. The former is now 18. 6d., and the latter 6d., making a difference of $1.62 per barrel in the freight, while the price is nearly the same. The quotations for breadstuffs in this market have been as follows: 1848. Jan. 1. Feb. 1. Mar. 1. Apl. 1. May 1. June 1. July 1. Aug.1. Sept.1. Oct.1. Nov.1. Dec.1. Jan. Genesee..$550 $6 874 $700 $7371 $7 871 $825 $7 25 100 Corn..... 74 1 05 $6 50 $575 $5 75 $6 62} $6 25 $6 25 96 1.00 1 12 98 77 70 75 75 Oats...... 40 50 47 81 90 874 48 54 The high freights, as we stated in our article at that time, caused a great activity in shipbuilding, and the increase in 1847 over 1846 was over 55,000 tons, mostly seagoing ships. The suspension of the English navigation laws, so as to permit foreign vessels to bring to England produce the growth of other countries than that of the vessel, had the effect of sending hither a large tonnage, to take advantage of the high freights. The tons cleared distinguishing the flag and produce shipped in each, were as follows: Tons. American. Foreign. Total. Produce shipped in Total. 1845..... .2,053,977.....930,275.....2,984,252.....75,483,123.....23,816,653......99,299,776 1846.......2,221,028.....968,178.....3,189,206.....78,634,410.....23,507,483.....102,141,893 1847...... .2,202,393....1,176,605.....3,378,605.....97,514,472.....52,796,192.....150,310,664 The American tonnage was, it appears, fully employed at enormous freights, and its utmost capacity at prices equal to $2 per barrel for flour was only equal to the transportation of $97,514,472 of produce. If the transportation had been limited to their capacity, that would have been the limit of the exports, inasmuch however as that foreign vessels had unusual privileges granted them by England, which was compelled to get grain as she could, the means of transport were enhanced 208,427 tons, and the United States had the sale of $52,796,192 more produce than would have been the case had foreign vessels not been available. For the coming year, the supply of produce will be large and freights low. Should therefore the reviving trade of England again enhance demand, the vessels will be in far better condition to supply any quantity. The supplies in Europe are indeed good, but the same causes which produced enormous consumption in Great Britain are in operation to bring about similar results there, viz: the enormous railway expenditure. The calls in Paris, for 60 days, amount to 100,000,000 franes-say $20,000,000. Belgium, Bavaria and Austria are also contracting large loans for the same objects. These must cause a diminution of the surplus food of Europe through increased consumption, and promote the interest of the United States in relation to the English demand. The finances of the Federal Government have had an exceedingly beneficial effect upon the general state of the commerce of the Union, notwithstanding the untoward circumstance of a large war expenditure. During the past year, according to the report of the Secretary of the Treasury, has arrived in the country as above stated, a net amount of $22,276,170 of specie, of which near $20,000,000 came from England in gold. Nearly all this large amount passed into the hands of the Treasury, and was coined into American pieces. The whole receipts of the Federal Government for eleven months, ending with November, 1847, were $48,667,826, and the disbursements $48,226,516, making an aggregate of $96,894,142 received and paid out in specie by the Federal Treasury in eleven months. These receipts were for loaus, lands, customs, and all other modes, by which . money flows into the department. Of the whole amount, near $30,000,000 was received at New-York, according to the following official report: Hon. R. J. WALKER &c. &c. &c. U. S. Assistant Treasury Office, Sir--In obedience to yours of the 24th ultimo, requesting a statement of the specie deposited in this office in each month, from the first of January, 1847, to the close of the month of November, I make the following Report: 764,804 91 July... ......... 3,476,822 89 1,959,685 00 | September.... August... .3,679,597 47 October. 3,127.112 10 .5,763.787 53 .2,119,412 06 .1,253,361 68 .620,955 83 $29,904,744 19 In addition to the above, there has been received from the mint of Philadelphia, as The operation of this current into the Treasury was to effect the coinage of the foreign money as fast as it arrived in the country, a process, which in the last few months has had a powerful conservative influence upon the position of the banks of New-York. Those latter institutions have usually, through the absence of a mint in New-York, and partly through an absurd notion that their own interests would not be promoted by making American coin too plenty, held mostly foreign specie, principally sovereigns. In the last four months, since the pressure has been severe in England, the most prompt means of placing money in London has been seized upon without much regard to expense, all the sovereigns that could be had have been sent back. In the month of December, $1,648,346, and in the first half of January, $1,500,000 in sovereigns were sent to England, and they became very scarce in New-York, so much as not readily to be obtained. The specie, $9,000.000, which the banks held November 1st, was reduced to $4,200,000 January 16th. Of the $6,000,000 which has been exported since October, none of it is American coin. Foreign money not being a legal tender in England, its value is only that of bullion, and is purchased by the bank at the rate of £3 178. 9d. per ounce for standard gold. Light sovereigns or American coins have no currency in England. They must be sold as old gold, any given weight of which is worth materially less than the same weight of coin. English heavy sovereigns cannot be exported to advantage when the price of good bills is under 110; and as American coin is worth at least 14 per cent. less for remittance, it cannot be exported under 111. The operations of the Treasury have, therefore, by coining all the gold that arrived, materially protected the banks by throwing obstacles in the way of the export of coin. They have also greatly promoted the soundness of the national currency, by putting the gold into a shape that will circulate freely. Foreign coins will not circulate freely; the people, generally, are not acquainted with their appearance and value, and great hesitancy is manifest in accepting a foreign coin. For this reason by far the largest amount returns to the hands of brokers, and through them tot he banks, which supply in exchange a paper circulating medium, with which at least the public are more familiar. The foreign coins thus remain in bank useless for all practical purposes, except shipment to England. Had this been the case during the last four months, it is probable that where one dollar has been exported, three would have gone, and the solvency of the institutions long since have been jeopardised. The export, as we have stated, has been confined to foreign coins, and probably had those been more scarce, the amount sent away would have been less, for the reason that the movement has not grown out of an actual debt to England from the United States, but an artificial operation. The Loudon houses could latterly command money in London at 5 per cent., and it has been worth 7 per cent. to 24 per cent. per annum in New-York, where their branches could sell bills on London at 111, Under circumstances so favorable, the market becomes eased, or thus a branch by drawing on its principal at 11 premium, and employing the proceeds of the bills here at rates over 7, when the money to meet the bills there can be had at 54, makes a good operation. As the season progresses and bills fall, they may be purchased at perhaps 107 a 108, and the London house thus reimbursed. It would seem also the credit of the United States being good in Mexico, and specie freely obtainable for the government drafts, it has been necessary to send but a small amount thither. The report of the Quartermaster's Department states as follows: The 20th section of the Independent Treasury Law provides, that "When means are furnished him (the disbursing officer) in drafts, shall cause those drafts to be presented at the place of payment and properly paid according to law, and shall make his payments in the money so received for the drafts furnished, unless in either case he can exchange the means in his hands for gold and silver at par." The law also allows of payment being made in Treasury notes at par, if the creditor assents. In Mexico, specie is the staple export, and most of the mines are worked by English companies, and the results shipped to England at great risk and expense. The miners have to send down the specie under guard to Vera Cruz, where it pays export duty, and is shipped per steamer to England. The United States officers present drafts on New |