COMMERCIAL CHRONICLE AND REVIEW. STATE OF THE MONEY MARKET-TARIFF COMMERCE OF NEW YORK-IMPORTS AND EXPORTS -MR. WEBSTER-LOANS-MEXICAN WAR-TREASURY NOTES-TOLLS ON NEW YORK AND PENNSYLVANIA CANALS-PRICE OF LEADING PRODUCTS-BOSTON BANK DIVIDENDS-NEW YORK BANK DIVIDENDS-COMMERCIAL PROSPERITY-EXCHANGES ON NEW YORK-PRECIOUS METALS-LEADING IMPORTS AT NEW ORLEANS, ETC., ETC. THE state of the money market is quite easy. That is to say, on proper securities, money can be borrowed at a price below the legal rate of 7 per cent. The banking institutions loan freely at 6 per cent, and short loans have been made "at call," at 5 per cent. This is, in some degree, owing to the causes which we have pointed out in former numbers, viz: the feeling of relief which we mentioned in our September number as the consequence of the final settlement of the commercial policy of the country, and the conviction that the panics anticipated, and partially effected, last winter, as the result of the adoption of the new commercial and financial policy, were but the baseless fears of the timid, and the bugbears of the politician. Although the tariff does not actually take effect until December 1st, its practical operation upon the currents of business was felt at the date of its passage. Goods immediately began to be warehoused for the benefit of low duties after December 1st, and buyers of those goods which are to undergo the greatest reduction hung back under the supposition that they would be cheaper in consequence. The duties on goods warehoused in Boston for September amounted to $240,000. The mere fact that such opinions were entertained, sufficed, in some degree, to insure their correctness; and prices of imported goods fell very low, involving a great sacrifice to the importers. The quantities imported also fell off to a very considerable extent. The following is a statement of the imports and exports of the port of New York, for nine months : COMMERCE OF NEW YORK.-VALUE OF IMPORTS AND EXPORTS. It is observable that, up to the close of June, and during the time when great panic was manifested in certain quarters, in relation to the action of the subtreasury, and which panic ceased under the wise movement of Mr. Webster in asking certain specific questions of the finance committee in relation to its operations, the imports into the country were in excess of last year. That is to say, from January to July, the imports were $2,500,000 more than in the same period of the previous year. Since the close of June, the imports have been less than last year; that is to say, for the quarter ending September 30th, the imports into the port of New York were $3,323,053 less than in the same quarter of 1845. This state of the import trade evinces the fact that the political apprehensions entertained from Congressional actions were not common to the commercial classes, whose operations were, until the definitive action of Congress, more extensive than in the previous year. The effect of anticipated low duties has been, not only to diminish imports, but to throw into warehouse those goods which bear high duties, to avoid the operation of the new law. The influence of this upon the money market has been to lessen the demand not only for remittances in payment of imports, but for duties. Up to the close of June, the government collected in cash from the importers of New York, $9,494,430, against $8,744,200 last year, being an increase of $753,229. Since June, it has collected $5,395,724, against $7,377,367 in the same time last year, being $1,981,643 less; or, in other words, the importers of New York have had to pay the government, in round numbers, $2,000,000 less in the quarter ending September 30th, than in the same period of 1845. It is also true that, from the close of June, to the first of October, the government diminished its deposits in this city from $5,105,918 to $3,211,848, being $1,894,075 drawn from the banks, and sent to New Orleans for war expenditures. This money being drawn from the banks was necessarily by them called in from loans; and, so far from producing any pressure, money continued to become cheaper. In the first part of October, the Secretary made application for a loan, or rather intimated that he should want four to five millions before January, and the banks offered it at 6 per cent, and finally at 5; but more than 5 per cent was refused, inasmuch as that 5 per cent treasury notes were a preferable mode of borrowing, and several millions, bearing such a rate of interest, will float in the exchange with service to the community. When the Mexican war burst suddenly upon the country in May last, there was a surplus in the hands of the government of some $11,000,000, and which had been at the command of the treasury department for more than three years, and had been loaned by it to some fifty banks, free of interest, and, at the same time, the government had been paying 6 per cent interest on a similar amount of its stock outstanding. The circumstance of the war made it probable that that amount would be absorbed in extra expenditures, and that some $10,000,000 in addition would be required to meet current expenditure. Accordingly, on the twenty-second of July, a law was passed, allowing of the issue of $10,000,000 of treasury notes, under the limitation of the act of 1837. That is, the notes to be receivable for all public dues, to be paid at the end of the year, to bear not more than 6 per cent interest, to be "purchaseable" on presentation at the depositories of the government, and the interest to cease at the end of the year. For a temporary deficit, this was, undoubtedly, the best mode of proceeding; but it implied that the deficit should be but temporary, and that the treasury should be in funds in the following year, to meet the $10,000,000 of notes falling due. Should, however, the war unfortunately be prolonged, and the debt increased in amount, the treasury would be embarrassed by the constantly recurring maturity of these notes, and a stock loan for a term of years, would be the most desirable. Some $2,240,000 of the notes were, however, issued up to October 1st, at an interest of 1 mill per cent per annum, a merely nominal rate, too low to support the notes in the market, and they fell to a discount, which caused them to be returned to the treasury in payment of customs. The Secretary then made the application for a loan which we have alluded to above. The position seems to be thus, however: if the anticipations of a speedy peace, which have been indulged in, prove fallacious, the amount of war expenditure, and the length of time it is to continue, becomes altogether uncertain. The quantity of stock which the government will have to put upon the market, becomes matter of conjecture, and consequently, its value speculative. Hence an indisposition to take it at a low rate. Should, however, the hopes of a speedy peace be promptly realized, the amount of money which the government will want, becomes fixed and determined, and its value will depend more upon the state of the money market; and, in the present prospect, a 4 per cent stock would command par. The Secretary refused to give 6 per cent, a fact which would augur well for his hopes of peace. Apart from this incident of the money market, and the state of the import trade to which we have alluded, the evidences of prosperity are great and increasing. Among these evidences, the tolls on the public works are the most conclusive. On the great avenues between the Western States and the Atlantic States, they have been as follows, up to October 1st: New York canals, fiscal year, to Oct. 1.......... Total......... $3,273,362 $3,746,743 $473,381 On the New York canals, the increase is near 20 per cent, and on both, the excess over last year, increased as the season progressed, stimulated by the enhanced foreign export trade. The railroads and other public works in all sections show a similar improvement, giving unerring indications of growing business activity. The prices of the great leading products of the country have improved as follows: The advance in these prices in face of the large receipts, is sufficient evidence of the prosperity of the great interests engaged in their production, while the high freights and active employment of the shipping appears alone to check a greater animation, and a further advance in prices. The aggregate receipts of some articles of produce at tide-water on the Hudson, from the commencement of navigation in 1845 and 1846, to and including the first week in October, have been as follows:: *Of this quantity about 160,000 bushels were received prior to the new crop coming into market. The increase in flour and wheat is equal to 719,042 barrels of flour. These large quantities have been disposed of at advancing prices, and without being checked by that pernicious disposition to wait for a rise, which has so frequently spoiled the market, and ruined the operators. The large quantities that come down pass altogether out of the market, and leave it in a healthy state to receive future crops. The income of tolls on public works, the quantities transported, and the rise in prices since June, do not alone afford evidence of a fair state of prosperity. The dividends on banking institutions at the leading points, afford the same evidence. The Banks of Boston declare their dividends in April and October: In the year 1840, the dividends amounted to $608,475, and in 1842, $914,050. 1840 was the lowest point, and since, the Boston bank profits have increased $297,525, or 35 per cent; and the dividends for the last half of 1846 were by far the largest of the series. The winter dividend, owing to manufacturing operations, is generally the largest. The New York bank dividends present similar results. They do not make their dividends all in the same month, as do the Boston institutions; but, generally speaking, the second dividend for the year has been the largest. The dividends are as follows: * The Boylston Bank is a new one, and its first dividend was in October for the year. The capital of the Freeman's Bank was increased $50,000, and the Merchants' Bank, $500,000. In addition to their dividends, the Butchers and Drovers' Bank declared 4 per cent, or $20,000 extra, for a dividend omitted in 1842. The whole dividends amount to 7.09 per cent on the whole capital, and the amount is $182,511 greater than in 1845, and the second dividend in 1846 is $18,756 larger than the amount of the first dividend. We have in all these items, the results of a regularly increasing prosperity. The panic fears which were partially excited during the session of Congress, were not, it appears, generally participated in. The great commercial interests were healthy and active, and the consequences are increased profits to capital and means of transportation; and this has been the case in the face of six months of "existing war." Notwithstanding all the fears engendered, both in relation to the continuance of the war, and its probable injurious influences, capital has been fairly employed, and labor in demand. A great support to confidence has been the prospect of the intercourse with England and Europe. There probably was never a time when a combination of circumstances conspired to throw, to such an extent, into the lap of the western country, the surplus wealth of England and Europe, in exchange for their produce. The large export of food that is taking place, with every appearance of continuing still to grow in magnitude, in the face of a disinclination to import, from various causes, may tend, for a season, to make the precious metals the best means of remittance. During the last three years, the exchanges have been remarkably steady, and the movement of specie either way has been unimportant. The following are quotations of exchange by each packet for the last three years: |