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ished inducement to import any other commodity than corn. The defi. ciency would be attended with no other inconvenience than those resulting from an increase in the price of food; whereas, under the present system, the inconvenience resulting from natural causes is quadrupled by those resulting from interferences with the free employment of capital. The laborer is deprived of employment at the moment when the price of food is doubled.

The London Atlas of November 16th, contains the following remarks in confirmation of the views we have offered.

“ An opinion prevails almost universally, that the sole cause of the late derangement in our currency proceeded from the deficient harvest of 1833, which obliged us to import a large quantity of foreign corn for food; and that the sum of six or seven millions of pounds sterling being required in payment for the same, constituted so much balance of trade against us, to be liquidated only by an exportation of bullion to that extent. Such was the general opinion, and we must confess that, until lately, we viewed the subject in the same light. However, it has since been proved, by reference to the customhouse books, that the increase in the value of goods imported, resulting from the large quantity of foreign corn brought here, has been fully counterbalanced by an increase in the value of the British manufac. tures exported from the united kingdom. At the official rates of valuation, the exports of British manufactures, in the twelve months ending the 30th of September, 1839, were six millions of pounds more than the exports in the twelve months ending the 30th September, 1838. This shows that the supplies of foreign corn have been paid for by merchandise; and that, unless other disturbing causes had intervened, our currency might have remained uninjured, and bullion would not have been demanded for exporta. tion on account of the corn trade.

“We therefore come to the conclusion, that our currency was redundant, and that this led to large importations of American securities of all kinds, which found a ready market here, while English securities were scarce, and offered only a low rate of interest for investments. But this tendency on the part of the public to make investments in American securities, was fomented rather than checked by the Bank of England, which continued, for many months together, to accumulate and abstract from the market such English securities as might otherwise have offered to our capitalists the means of making investments, without being driven into foreign securities. That dur. ing the six months, from June to December, whilst the bank reduced her securities and the currency at the same time, there was no material loss of bullion, although very large imports of foreign corn took place in those six months; but in the following six months the bank had greatly augmented the amount of her securities, although she lost in the same period about six millions of billion, which certainly could not all have gone in payment for corn, because the value of the wheat bought and imported in these six months would not exceed three millions of pounds, or only half of the value of the bullion sent away."

When the bank overtrades largely, purchasing up the securities that in. dividual capitalists would desire to possess, deposits accumulate in her hands, because of the diminished value of money, and the difficulty of obtaining the usual rate of interest. Unless disposed to unite in the forma. tion of a joint-stock bank, the holding of a single hundred pounds stock in which would put at risk his whole property, the capitalist has no remedy

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but the purchase of foreign securities. It is the only mode of escape from the tyranny of the bank, and consequently is looked upon with jealous eyes by the officers of that institution. Mr. Horsley Palmer* is anxious that time-bargains in such securities should be declared illegal, and that 'heavy penalties should be “imposed upon such transactions." He would also have every bargain for passing such securities made “ chargeable with a stamp duty," with “ heavy penalties for evasion.”. Under the existing sys. tem, capitalists may remain at home, employing their capital abroad when not permitted to use it at home, but under that of Mr. Palmer they would be compelled to emigrate, “bag and baggage." The bank would have them in a net. It could say to them, “ You can now no longer make in. vestments in foreign funds, and you dare not place your capital in jointstock companies, where the whole property of every individual member is liable to be levied upon in case of any delay in meeting its engagements. You cannot associate with the prudent and the careful, who would be content with safe business and small profits ; and you dare not associate with those who overtrade largely in quest of large dividends. You will not place your capital with private bankers, or with the joint-stock companies that thus overtrade, because the rate of interest is not equal to the risk that is incurred, and therefore you must place it with us, because our power is such that we can always save ourselves from the evil consequences of our own acts, although they may be even so great as to render it neces. sary for us to crush a large portion of the merchants, and of the private and joint-stock bankers. We will give you no interest, but you will be secure. Such would be the language of the Bank of England, under Mr. Palmer's system. The “rest,” or surplus, would rapidly increase, and the dividends would again be 8 per cent, until, at length, those who had unin. vested capital would find it necessary to transfer themselves and their means to some other country, where they could be at liberty to invest them either at home or abroad.

If, in 1835, or 1838,† the owners of the unemployed capital had had it in their power to create a bank for themselves, to trade on the same footing as the Bank of England, they would have said to that institution, “Pay us our deposits in the securities you have bought with them, or we must open a place of business at which we can lend out our own capital for our own benefit, which will compel you to sell those securities that you may cancel your liabili. ties. At present those deposits are currency, and in our efforts to obtain means of investing them, we are forcing up the prices of all descriptions of property, but so soon as they are cancelled, in either of the above forms, they will cease to be currency, and prices will fall back to where they started from. We shall then be able to lend out our capital at 4 per cent, and we doubt not that out of the profits of deposits and circulation, we shall be able to pay the expenses of management, while you will experience a diminution of circulation and a diminution of profits. Had they been free so to address the directors of the bank, they would not have found it necessary to purchase American securities. The spirit of speculation would have been checked on both sides of the Atlantic, and instead of existing complaints of unemployed laborers and impoverished capitalists, we should find universal prosperity.

President of the Bank of England. + For the effect of the loans of deposits upon the currency in these years, see vol. ii. p. 458.

In SCOTLAND, there never was any restriction upon the formation of joint-stock companies, and hence the system was always more sound than that of England, because less capital remained unproductive. Joint-stock banks commanded a degree of confidence in that country as they now do in England, that private banks wanted.

In France, we find a universal spirit of restriction. Freedom of trade, whether in money or in any other commodity, is unknown. When the bank expands, there are no means of checking its operations. The owners of capital are driven to gambling speculations of all kinds, to obtain interest for their capital. When it contracts, the speculators are ruined. The government being careful not to make any step towards freedom, there is little reason to hope that the mass of unemployed capital existing in the form of currency will be soon reduced, and until it shall be so there can be no hope of the establishment of steadiness in the operations of that country, so necessary for the improvement of the physical, moral, and intellectual condition of the people.

By comparing the results obtained in the present number with those of number four, the reader will see that the mass of the currency, and its un. steadiness, tend to increase with every increase of restriction. In New England, he will find the nearest approach to perfect freedom, the smallest amount of currency, the nearest approach to perfect equality of profit, and the least power of disturbance ; while in France and England, he will find restrictions abounding, producing a great mass of unemployed capital, great inequality of profit, and a great tendency to disturbance of the commerce of those countries, and of the world at large.

It may be asked, “ If the system of the United States be really better than that of England, how is it that the former appears to have been so much more seriously affected by the crisis of 1836 and 1839 than the lat. ter?" The answer is, “ that England is to the United States in the con. dition of a lender, and the latter is to the former in that of a borrower." In all cases of change in the currency, the debtor is the one most injuri. ously affected. The lender has only to say, “ you must pay," and the debtor will pay, if he has any regard to his credit, which is the case in the present instance. If the debtor is unable to pay, the creditor may then raise the rate of interest, as the Bank of England does, thus profiting by the irregularity of the currency. When that institution finds it necessary to contract, in consequence of having overtraded, she does not fail, but she compels her debtors to do so. At one time, she makes money very cheap, enlarging the currency rapidly, at the expense of the capitalist. The lat. ter endeavors to obtain interest, by exporting his capital to the United States. The currency of the latter is now expanded. " Prices rise. Im. portations are large. The bank changes its course and makes money scarce and dear. The capitalist wishes to withdraw that which he has exported, and demands gold from the United States. Prices now fall. Alarm is universal, and the currency is contracted. Importations cease, and the people of England are deprived of employment. No institution in the world possesses so great an amount of power as the Bank of England, and none has ever so grievously misused it, to the injury, not only of the people of England, but of the world at large. Were parliament to guaran. ty to the stockholders a dividend of 8 per cent for twenty years, on con

dition of relinquishing the monopoly which they now have, it would be the cheapest purchase ever made. Steadiness might then be established; but while the monopoly exists, it is impossible.

With the constantly increasing facility of intercourse with Europe, the people of the two continents are brought into more intimate connection with each other, and are liable to suffer more and more from any error in their respective systems of currency, and they must continue to do so until the errors are corrected.

England is to the monetary system of the world what the heart is to the body. So long as her action is regular, there will be regular action throughout the whole system. There may be local irregularity, but that can only be temporary. If a bank at Cincinnati or St. Louis pursue an injudicious course, issuing too large an amount of its notes, the error is discovered at New York or Philadelphia, provided they be not themselves in error. If New York do so, the error is speedily discovered in London, and a demand for bullion tends to correct the procedure.

If New York and Philadelphia go wrong, their error is propagated throughout the union, constantly increasing in extent, until they are compelled to endeavor to correct it at the cost of ruin to the trading part of the community. If London go wrong, the error is propagated throughout the world, as we have recently seen to be the case; and it can be cor. rected only at an enormous expense of human happiness. It is therefore of the highest importance to the people of the United States that England should adopt a system tending to promote the profitable investment of capital at home, and preventing its accumulation in the form of currency.

ART. V. SPECULATIONS ON COMMERCE.

How wonderful are the results of commerce! Yet we scarcely notice them ; in fact, we are scarcely sensible of their extent and variety. They are around us, like the air we breathe-so common, that we either overlook them altogether, or neglect to appreciate them as we ought to do. To say nothing of the effects of commercial intercourse in promoting civilization or in advancing the cause of Christianity, topics important enough and extensive enough to demand a separate consideration, how greatly does commerce promote our personal comfort and our individual convenience! We partake of its advantages every hour, enjoy its comforts with every meal, and perceive its benefits at every fireside. We are indebted to commerce for our every-day conveniences, and every night that we sleep upon a bed of down, or curled hair, we are indebted to the enterprise of the merchant for the luxury. Look at the commonest table, and in ordinary cases you will find it supplied with manv of the products of foreign countries, or of their manufacturing establishments. You see everywhere the evidences of commerce ; the result of the sagacity of our merchants, and of the skill and indomitable spirit of our seamen. The rare and valuable, as well as the more ordinary and less luxurious productions of every climate, the rich and costly, as well as the less expensive and more substantial manufacture of every people, are, by the united capital, enterprise, and labor of these

own

two classes, offered alike to the poor and the wealthy. Such is the spirit of our merchants, and such the skill and daring of our navigators, that no sea is left unvisited, no country unexplored, which can yield any thing for the

purposes of trade, or for the promotion of the great objects of life. As a comparatively new country, we are necessarily greatly indebted to commerce. We are yet dependent on others for some productions which our own soil and climate are capable of producing. We are yet dependent on others for some articles which our own skill and industry may hereafter easily provide for us. We are yet dependent on others for raw material, which our resources, when fully developed, will abundantly afford. But these things are daily becoming less imperative. We are fast becoming, more and more, a manufac turing people, and consequently, less and less dependent on foreign coun tries and foreign artisans. But we are still wedded to the work of for. eigners, and often, from mere habit, give it the preference. In addition to this, we scarcely know, as a community, what we do manufacture. We are occasionally surprised when told that such or such an article is of American workmanship. We never dreamed that anybody on this side of the Atlantic had thought of manufacturing such an article. It never oc. curred to us that it would be worth the while to direct any portion of our capital and industry to the production of an article of such small import, and it is true that many articles are now manufactured in this country of which the mass of our citizens know nothing.

The effect of this, it might be supposed, would be to lessen commerce, and diminish, in no small degree, our intercourse with foreign nations. But it is not so. The diminution, for a long series of years, would scarcely be perceived, so slowly do American articles get into use, and so rapidly does our population increase. Excepting with a very few articles of manufacture, the product of our own establishments falls so far short of the increasing demand, that the amount of importation actually increases at the rate of some ten or twenty millions per annum, while our exports have in. creased but few millions, and in some years have sensibly lessened. These statements are easily susceptible of proof, from previous pages of this magazine. Besides, we can hardly mention an article of any importance, heretofore supplied to us by foreigners, which is not still an article of im. portation.

Commercial intercourse also, is constantly introducing new articles among us, which go far, not merely to keep up the usual amount of our annual importations, but to increase it. So that, in fact, there is no diminution to commerce perceptible at present, by reason of our manufactures. Whether there ever will be any, whether it must not always be on the in. crease, are questions not necessary to be considered now. It would seem that so long as the world subsists, so long as nations, kingdoms, or tribes continue, so long as there are different climates, different seasons, and different productions, there can be no termination or falling off of commercial intercourse. Commerce is simply the traffic of nations, and traffic can. not cease so long as there are people to carry it on. The intercourse of civilized nations, the main instrument and the most powerful agent of civ. ilization and refinement, is itself a portion of the spirit of civilization, and when it ceases, it would almost seem that mankind must return to an original state of barbarism.

It is to be kept in view that in relation to commerce, as in regard to all

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