gations by the free banks prior to that of May, 1840-and even that statute, as appears from its legislative history, although expressly including associations, was only intended to apply to "notes and bills issued or put in circulation as money." Admitting, however, that it comprehended "obligations" such as the present, its very enactment was an admission that no such prohibition previously existed. Else, why did it declare, in the form and with the title of amendment, that "no banking association, (after the 4th of June, 1840, for that is its legal effect,) or individual banker, as such, should issue, or put in circulation any bill or note of said association or individual banker, unless the same should be made payable on demand and without interest." If such was the law already, why declare it over again, and why call the act an amending act? Or, if its previous existence was so doubtful as to require and receive a more explicit declaration of the legislative will, what justice is there, the provision being penal, in exacting on the part of strangers a previous knowledge of its requirements on pain of forfeiture, fine and imprisonment? These obligations, however, (that is for the $175,000 remaining unpaid,) although given before, were renewed, it is said, after the act of 1840, and were renewed in a form, being for nine and ten thousand dollars each, somewhat modified, so far as respects amounts, from that originally stipulated; although even those sums, it is obvious, are altogether too large to admit the idea of a currency. Assuming, however, that the renewed certificates, whatever their denominations, are within the act a proposition, I imagine, which the District Attorney would find it not very easy to establish on a criminal trial-they are, in that case, simply void, and leave the original obligations standing in full force. My conclusion, therefore, is, for the reasons above stated, and others discussed by me more at length in deciding the case of the Palmers, that the State of Indiana, in some one if not in all aspects of the transaction, is entitled to recover, and that a decree ought to be entered accordingly.*

COMMERCIAL CHRONICLE AND REVIEW.

CONTINUATION OF THE MONEY PRESSURE-CAUSES OF COMMERCIAL EMBARRASSMENT-FRAUDS IN FAILURES-GROWING DISREGARD OF COMMERCIAL DISHONOR-CHANGE OF POLICY IN THE MANAGEMENT OF BANKRUPT ESTATES HIGHLY IMPORTANT-DEPRESSION OF THE RAILROAD INTEREST, WITH THE CAUSES AND CURE-LOSS OF THE ARCTIC-MARINE INSURANCE-BANK PANIC, WITH STATISTICS OF BANK RETURNS-DEPOSITS AND COINAGE AT PHILADELPHIA, NEW ORLEANS AND SAN FRANCISCO MINTS-CASH DUTIES RECEIVED AT NEW YORK, PHILADELPHIA, AND BOSTON -FOREIGN IMPORTS AT NEW YORK FOR SEPTEMBER, AND FROM JANUARY 1ST-IMPORTS OF DRY GOODS-EXPORTS FROM NEW YORK FOR SEPTEMBER, AND FROM JANUARY 1ST-EXPORTS OF PRODUCE, &c.

THE past month has been a very trying season for commercial credit. There has been a pressure upon the banks, and they have been obliged in turn to contract their accommodations, and this reaction has been mutual, until the stringency has been severely felt by all classes of the community. In all parts of the country there has been a sifting of credits, and houses which were really insolvent have been obliged to go to the wall, while some which were solvent but widely extended have been seriously embarrassed. As a whole, the mercantile classes have borne the trial nobly, and with here and there an exception, no one has gone down whose credit had not previously been more or less doubted. Some appear to have taken the opportunity offered in the disturbed state of com

New York Times.

mercial affairs to suspend payments, and defraud their creditors; while others have stopped in order to avoid the sacrifices which would have been necessary to meet their obligations at maturity.

There is in this country by far too little sensitiveness in regard to bankruptcy; and in times like the present, when there appears a plausible excuse for failure, the bankrupt suffers too little censure, to insure a wholesome dread of permitting his credit to be dishonored. This grows in part from our wonderful recuperative energy. In every community there are notable examples of those who have failed in business, but have started again with renewed credit and obtained a fortune. In such society, and with such examples constantly before them, our young men are apt to look upon commercial dishonor as a trifling evil, leaving no stain which cannot be completely expunged by subsequent success. The laws in many of the States are by far too favorable to the fraudulent bankrupt, and allow creditors too little opportunity to discriminate between the unfortunate and dishonest. Two great principles ought to be recognized in every case of bankruptcy. First-that the bankrupt shall have no power over his estates the moment he becomes insolvent; and secondly-that his assets shall be equally divided among his creditors without distinction or favor. The adoption of these as ruling principles would correct two great and growing evils. First, the im pudent assumption on the part of the bankrupt that he has a right to dictate terms of compromise to his creditors; and secondly, the unjust method of distribution now in vogue, which recognizes a certain portion of the debts as confidential, to be paid in full, while a meager per centage is doled out to other creditors. These principles once adopted, and enforced by judicious legal enactments, (as they are in a few of the States) then every debtor would be obliged to do his utmost to repair the wrong he has done in contracting obligations he could not discharge. If his failure were the result of unforeseen difficulties, against which common prudence could not have guarded him; or even granting a want of judgment, if his errors have been those of the head and not of the heart, and the majority of his creditors are satisfied that he had no fraudulent intent, he can have no difficulty in obtaining a release by surrendering his whole assets. We would even go further, and allow a legal discharge by the courts, when the creditors could show no fraudulent intent, or extraordinary mismanagement implying recklessness of purpose. In every case however, where the bankrupt refuses a thorough statement of his affairs, and boldly demands a release upon his own terms, with a hinted alternative of a refusal to pay anything, creditors owe it to themselves to probe the matter to the bottom, and to refuse all compromise until the debtor shall be compelled to make a complete exposition of his course, and give up all his means to satisfy the claims against him. The matter of "confidential" debts has become somewhat notorious through the developments in connection with certain recent failures in New York city, where about half of the liabilities were assumed as of this class, and paid in full, while the other half were left with little or no provision. It is easy to see that through such favoritism the friends of the bankrupt, by whose influence perhaps, he has obtained credit from others, may obtain the payment of their own claims, while those whom they have led into bestowing undeserved confidence, will get little or nothing. If a debtor wishes to give especial security to any particular

creditor, let the act be done when the obligation is incurred; after a man is insolvent, we hold that he has no claim to the assets in his hands, and has no moral right to divide them among his creditors according to his own interest or caprice.

During the recent pressure the railroad interest has been very much affected, and the whole fabric of internal improvements has been shaken to its foundations. The panic has partially subsided, but there is still a great want of confidence in most of these enterprises, and it will be a long time before they will recover the standing they have lost. A similar depression occurred a few years since in England, and both were the result of the same cause; the whole system was managed by a few individuals, chiefly for their own benefit, without any attempt on the part of those who contributed the means to control or direct their expenditure so as to secure a resulting benefit to the only lawful interest. Here and there, we find an exception to this, and the corporations which have been managed honestly for the highest good of all interested, have been very little disturbed by the storm, unless their credit may have been crippled by the general distrust.

The sad calamity by which several hundred lives have been lost, and one of the noblest specimens of naval architecture buried in the depths of the ocean, has excited the sympathies of all classes of the community, but has cast an especial gloom over commercial circles. The loss of the Arctic has been the crowning misfortune of a long series of marine disasters, which will make the current year unenviably famous in nautical records. The value of the ship and cargo probably exceeded one million of dollars. The marine insurance companies have lost within the last fifteen months far more than their aggregate profits, and were the business of the year to be taken by itself as a basis for a fair estimate of the risk of underwriting, the rates would have to be still more largely increased.

The Bank panic to which allusion was made in our last, has continued, and a number of the banks throughout the country have been obliged to suspend. In New York city, the Eighth Avenue, the Knickerbocker, and the Suffolk, were forced to suspend, and will probably go into liquidation. The circulation of the last two is abundantly secured. In regard to the first, the security is less positive, owing to the deposit, as part of it, of $30,000 bonds and mortgages, which are not so available at a moment's warning as State or Government stocks, even if honestly represented at the time of deposit. We are more than ever satisfied that specie, or the highest class of stocks form the only reliable basis of bank circulation. The former is the only legitimate security for paper money, but as it is so easily spirited away, stocks may to some extent be substituted. Bonds and mortgages are not convertible with sufficient ease, even if genuine; and their genuineness cannot be ascertained with sufficient certainty to place them in the first rank as securities to be deposited with a public officer who has no pecuniary interest at stake.

The specie in the banks has fluctuated some during the month, but has generally been lessened. The following is a continuation of the comparative statement of the weekly averages of the New York city banks. In the last the Knickerbocker and Suffolk are not included:

We also annex a comparative statement of the Boston city banks, continued

Capital......

The following is a monthly statement of the condition of the banks in Massachusetts out of Boston, including a number of new banks which have recently gone into operation. Six banks have neglected to make returns:-

Loans and discounts......

Specie

The new banks are the Brighton Market, the City, (Worcester) the Conway, the Grafton, the Miller's River, and the Townsend. The North Bridgewater has increased its capital $10,823.

We continue our statement of the deposits and coinage at the Philadelphia and New Orleans mints; but this will no longer contain the same relative proportion of the production of the precious metals, as part of the receipts from San Francisco are in coin from the mint there and pass directly into circulation here, and part are retained for use in California :

DEPOSITS AND COINAGE AT PHILADELPHIA AND NEW ORLEANS MINTS.

We also annex a comparative statement of the deposits of gold at the Philadelphia mint, since January 1st:—

$32,051,942 $36,299,258 $40,864,048 $31,136,579

The falling off in deposits does not indicate any decrease in the production in California, a large amount being now shipped without being deposited at the mint. This difference will be greatly increased from henceforth, as the new Assay Office in New York is now in operation, and all of the gold intended for shipment will be deposited there in exchange for bars, which will be always on hand. We annex a statement of the deposits and coinage at the mint in San Francisco for the month of August, which did not reach us in time for our last number:-