Notes on the Money Market.

NEW YORK, AUGUST 23, 1848.

We note an improved condition of the money market within the past month. Loans have been made this week on demand at 7 per cent., and there is obviously less demand for money in the street. Our banks, for several months past, have been held in a state of suspense and inaction, in consequence of the excessive demand for coin to ship to Europe. These shipments have been heavy and continuous throughout the summer. We are glad to say that they have ceased. Bills on London are now selling at 9 @ 9 premium, and an abundance at these quotations, by the best signatures in our city.

A large portion of our indebtedness to Europe, has been recently paid in coin. This unfavorable balance of trade, arises in part from the heavy imports of foreign fabrics, but more especially from the fall in the price of cotton. Orders from this country to Europe, six and nine months since, were based upon fair prices for our cotton and upon a partial demand for bread stuffs. The political and financial troubles in Great Britain and on the continent, have tended to reduce the prices of our great staple nearly 50 per cent., and although the shipments have been very large to Europe, yet the proceeds are comparatively small.

The exports of cotton this year, as compared with the previous year, are as follows:

Exhibiting an increase of 616,000 bales for the year; but the proceeds of 1,700,000 bales in 1848 will not equal the sales of 1,182,000 bales in 1847. The entire crop of this year is, (thus far,) 2,282,000 bales against 1,750,000 bales for the same period last year, leaving only twenty days to complete the year.

To show the loss sustained by this country in the fall of cotton, it is only necessary to say that the ordinary insurance value of cotton per bale is $40-equal to $72,000,000, for the above foreign export of the current year; whereas, the value at present cannot be more than $25 per bale, equivalent to $45,000,000 only, a clear difference of twentyseven millions of dollars.

The failure of the Canal Bank of Albany, has excited much regret and some distrust. When an old monied institution thus suddenly breaks down, after repeated printed statements of its solvency, verified by its officers under oath, the people at large lose confidence in other institutions of the State. The Canal Bank has not, it is true, enjoyed the confidence of the Albany community for several years; but out of the city, people have no means of discriminating as to the value of one bank note over another of the same city. The report of the bank committee in our present number, exhibits gross mismanagement on the part of the active directors and culpable negligence on the part of those who did not attend to their trust.

A defalcation has occurred in the Brooklyn Savings' Bank, showing a fraud of some years' standing. If such transactions are allowed to occur, it is full time that a better system of book-keeping were adopted, and that directors should be appointed who can inform themselves of the true condition of the institution, without depending upon the say-so of their elerks.

The State of Pennsylvania has paid its semi-annual interest upon its public debt, due on the 1st day of August. It is a subject of mortification to citizens of Pennsylvania as well as to Americans generally, that such a State has authorised repeated payments of its interests in depreciated or uncurrent money. A considerable portion of that due in August, (as well as in previous instances,) was paid in Relief notes, which are now at a discount of 2 per cent. How different this is from the policy of New York! This latter State suffered a loss of seventy thousand dollars in one year (1837) in order to convert its uncurrent funds into specie, to pay off its creditors in legal money. While Pennsylvania allows such a pitiful course to be pursued by its officers, and possessing at the same time, an annual revenue of three and a half millions of dollars, it is not sur prising that its stock does not advance to its intrinsic value. At this moment, Massachusetts five per cents. are in demand at 92 and Pennsylvania five per cents. selling at 74 per cent. Hamilton says, "credit is an entire thing. Every part of it has the nicest sympathy with every other part. Wound one limb and the whole tree shrinks or decays. The legislators of Pennsylvania would derive much advantage from the study of the Hamiltonian system of finance and principles of public credit.

TRANSFERS OF BANK STOCK.

IN THE CIRCUIT COURT OF THE U. S. FOR THE FOURTH CIRCUIT, IN AND FOR THE MARYLAND DISTRICT.-SPECIAL TERM, JULY, 1848, JUDGES TANEY AND HEATH, PRESENT.

OPINION OF THE COURT AS DELIVERED BY JUDGE TANEY. Maria Lowry vs. The Commercial and Farmers' Bank of Baltimore, and others.

Communicated for the Bankers' Magazine.

In order to understand the points which arise in this case, it is necessary to state the facts somewhat in detail.

Talbot Jones of the City of Baltimore, died in the year 1834, having first duly made his last will and testament, and appointed his sons Samuel Jones and Andrew D. Jones his executors, to whom letters testamentary were granted in the same year.

The testator died possessed of a large amount of property of different kinds, and owned at the time of his death 282 shares of stock in the Commercial and Farmers' Bank of Baltimore, standing in his name on the books of the bank. The dividends upon this stock is the matter in dispute.

The testator by his last will bequeathed in trust for the complainant during her life, in the following words: "I order and direct that my executors hereinafter named, or the survivor or acting one of them, shall receive the dividends from time to time, declared and made payable on my stock in the Commercial and Farmers' Bank of Baltimore, in trust, that the said dividends shall be paid over or remitted by my executors, or the survivor, or acting one of them, to my sister Maria Lowry, now or lately of Dublin in Ireland, during her natural life, and

after her decease to her daughter Mary Lowry, should she survive her mother, during the life-time of the said Mary." And in the succeeding clause of the will, this stock together with other property, and also the general residue of his estate, is bequeathed to Samuel Jones and Andrew D. Jones and the survivor of them, and the heirs, executors, and administrators of such survivor, in trust, for sundry persons named in the will, in certain proportions therein mentioned, "subject to the devise of the dividends, (on this stock,) to his sister and daughter as aforesaid."

In 1839, upon a bill filed in the Chancery Court of the State, by some of the parties interested in the partition of the property bequeathed in the last mentioned clause of the will, a decree was passed directing among other things that Samuel Jones and Andrew D. Jones, should hold these 2S2 shares of stock in trust, to pay the dividends to Maria Lowry during her life, and after her death to be divided as mentioned in the decree. Mary Lowry the daughter, died before the decree was made.

In this proceeding, Maria Lowry, the complainant, was made a defendant, and the bill taken pro confesso against her, upon publication in the usual form. But process was never served upon her; nor did she appear or answer; nor had she any interest whatever in the suit. By the decree, Wm. B. Norman, Josiah Jones and Emily J. Albert are entitled to this stock upon the death of Mrs. Lowry ;-and on that account it has been supposed to be advisable to make them parties in the case before the court.

After the death of Talbot Jones, Samuel Jones carried on business on his individual account in the name of Talbot Jones & Co.; and the transactions in the name of Talbot Jones & Co. mentioned in these proceedings, are the transactions of Samuel Jones, on his own individual

account.

The stock in question continued to stand on the books of the Commercial and Farmers' Bank in the name of Talbot Jones until May 4th, 1842, when it was transferred to the Merchants' Bank by Samuel Jones-the other executor not joining in the transfer. This transfer, it appears, was made as security for a loan, obtained by Samuel Jones from the Merchants' Bank, on his own private account, under his mercantile style and name of Talbot Jones & Co.; and the money being afterwards paid, the stock was transferred to him by the bank, under the same name and style, on the 17th of June in the same year; and on the 20th of the same month, transferred by him as Talbot Jones & Co. to himself and Andrew D. Jones as executors of Talbot Jones.-On the 20th of August following, Samuel Jones signing his name as acting executor, again transferred this stock to the Merchants' Bank, which continued to hold it as a pledge for sundry loans of money, made from time to time, to Talbot Jones & Co., until the 11th of December, 1846, when it was transferred to a broker, and sold to pay a note which fell due on the 4th of that month, and had been protested for non payment. Talbot Jones & Co., that is to say, Samuel Jones stopped payment in September, 1846; and in January, 1847, petitioned for the benefit of the insolvent laws of this State. It is admitted on all hands that he is utterly insolvent, and unable to pay any part of the dividends due to the complainant.

After the last transfer to the Merchants' Bank, the dividends were either paid to its orders in favor of Talbot Jones & Co., or were drawn by the bank, and paid over to him, with the exception of the last dividend which fell due before the stock was sold. This is yet in the hands of the bank, except the sum of $39 48, which has been paid out of it for taxes on the stock.

Notwithstanding the transfer of the stock in 1842, the amount of the dividends were regularly paid over to the complainant by the executors until November, 1845. But the dividend declared at that time has not been paid to her, nor any of those subsequently declared. She had no notice of the transfer of this stock until October, 1846, after the last of the loans above mentioned had been made by the Merchants' Bank. And on the 3rd of December following, (the day before the note became due,) she gave the bank notice of her claim.

When the stock was first transferred by Samuel Jones to the Merchants' Bank, a certificate was issued by the Commercial and Farmers' Bank in the following words:

COMMERCIAL AND FARMERS' BANK OF BALTIMORE,

No. 707. May 4th, 1842. This is to certify that the Merchants' Bank of Baltimore is entitled to two hundred and ninety-two shares in the capital stock of the Commercial and Farmers' Bank of Baltimore, on each of which thirty dollars have been paid; but which have since been reduced by Act of Assembly to twenty dollars a share-transferable at the said bank only, personally or by attorney.

292 shares.

TRUEMAN CROSS, Cashier.

This certificate was delivered by Samuel Jones to the Merchants' Bank when he obtained the first loan, and was re-delivered to him when the money was paid, and the stock transferred to Talbot Jones & Co. A similar certificate was again issued by the Commercial and Farmers' Bank, when the second transfer was made to the Merchants' Bank, and was retained by it, until the stock was transferred to the broker, to be sold as herein before mentioned.

This is a summary statement of the facts, so far as they are material to the decision of the case. It is very clear that the money due to the complainant has been grossly misapplied; and the question is whether she is entitled to relief against the banks, or either of them-Samuel Jones is undoubtedly liable. But as he is admitted to be insolvent, she can obtain no redress from him. As concerns the Merchants' Bank, we see no ground upon which it can be held liable, beyond the amount of dividends remaining in its hands. It does not appear that the bank when it accepted the pledge of this stock, or when it made its loans, had any reason to suppose that the stock had ever been held by Talbot Jones; or that it was transferred to the bank by Samuel Jones as one of his executors. In order to obtain the loan upon the pledge of this stock, Samuel Jones did nothing more than produce the certificate of the Commercial and Farmers' Bank, shewing that 282 shares of stock had been transferred to the Merchants' Bank. But the certificate did not shew by whom it had been transferred-nor to whom it had pre

viously belonged. And according to the usual course of business, the presumption was that it belonged to Samuel Jones himself. The Merchants' Bank appear to have acted under that impression. For when the first loan was paid, and the lien of the bank thereby released, it transferred the stock to him individually, by the name of Talbot Jones & Co.; and not to the executors of Talbot Jones.

It is very true that the instrument of transfer upon the books of the Commercial and Farmers' Bank, shewed it to have been made by Samuel Jones in his character of executor; and, in general, a party must be presumed to have notice of every thing that appears upon the face of the instrument under which he claims title. But a transfer of stock cannot in this respect be likened to an ordinary conveyance of real or personal property. The instrument transferring the title is not delivered to the party. The law requires it to be written on the books of the bank in which the stock is held. The party to whom it is transferred, rarely, if ever, sees the entry, and relies altogether upon the certificate of the proper officer of the bank, stating that he is entitled to so many shares-that is to say, that so many shares have been transferred to him by one who had a lawful right to make the transfer. The case of Davis vs. The Bank of England is a strong one on this head. The three per cent. consolidated annuities, created by the English Government, were made payable at the Bank of England, and transferable at the bank in the manner pointed out by law. A large amount of these annuities which belonged to the plaintiff in that case, and stood in his name, were transferred under a forged power of attorney. The property did not pass by this transfer-yet the court held that subsequent bona fide purchasers from the fraudulent transferree, whose name had been registered in the books of the bank as the owner, were entitled to recover from the bank the amount of dividends falling due on these annuities-although the bank was also liable to the true owner of the stock, whose name had been forged.

In the case now before the court, the executor had a legal capacity to make the transfer, and the legal title to the stock passed to the Merchants' Bank. And as it paid a valuable consideration, and had no notice, actual or constructive, of any violation of trust, upon which the transfer could be impeached in equity, it had a right to sell the stock for the payment of the note for which it was pledged, and to make to the purchasers a valid title.

A different rule would render the right of every purchaser of stock in a bank insecure, or liable to doubt, and greatly impair its value. And would moreover, seriously disturb the usages of trade, and the established order of business in relation to this subject, in a manner highly injurious to the community. For purchasers always rely on the certificate of the bank in which it is held, as conclusive evidence of the ownership. Most commonly, the purchase is made through a broker, and the buyer does not know who is the seller, or who makes the transfer. The certificate of the bank tells him that he is entitled to so many shares; and he pays his money upon receiving the certificate without further enquiry. It would be unjust and inequitable to charge the stock in his hands with any equitable incumbrance or trust, how