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October, 1839, was the period at which the New Orleans banks suspended for the last time under the immediate influence of the breaking down of the late National Bank, after a year of great paper expansion. The result now clearly illustrates the policy of suspension as a mere matter of interest to the banks themselves. They have struggled on for three years exempt from the obligations of paying their debt, and have by their paper issues driven the precious metals from all that section of the country, under the pretence of "relieving the people." This process has extinguished $10,000,000 of bank capital and reduced the outstanding credits twenty-five per cent. The effect upon the business of the people we endeavored to point out in our last Number, by showing that in precisely the same proportion in which bank facilities were curtailed, did the quantities of produce sent to market increase, and vice versa. Since the banks have been going through with the process of curtailment, which began in June last, a current of specie has been setting in, in that direction, and has reached near $4,000,000. Of this amount about $2,500,000 has gone into the vaults of the banks, as the deposites of private individuals, and the remainder has gone into general circulation, being disbursed in the payment of produce. The accumulation of specie in the vaults of the banks has not induced them to increase the issues of their credits, because the specie has been mostly placed with them in the
3,623,303 1,197,892 3,774,007 2,847,497 4,343,533 5,415,230
character of special deposites, and was liable to be withdrawn and disbursed at any moment. Hence the circulation of the specie-paying banks is scarcely thirty-three per cent. of the specie they hold, and has been increased in sixty days but about $128,000, although in that period more than $4,000,000 worth of produce has been received at that point, and a large part of it exported. During the corresponding period of 1839, after the suspension, the circulation was extended $1,200,000. This may indicate that the agency of bank notes in business transactions this season, is scarcely ten per cent. of what it was in that year.
The future movements of the banks rest upon public opinion. If confidence is so far restored that the planters will hereafter consent to take bank notes instead of specie for their produce, the specie now in the banks will remain there, and become the basis of paper issues so great as speedily to put a stop to farther imports of the precious metals, and fill all the channels of circulation with paper, instead of gold and silver. In 1839, it appears, when the banks stopped, the proportion of specie to circulation was $1 to $1 53. As the season advanced, this proportion increased until it reached in April, 1840, $1 to $2 25. If it should now be increased to the same extent it would reach $8,000,000, throwing $7,000,000 paper dollars among the people, an operation that would speedily cause an export of the precious metals, and produce a new
distress. If, on the other hand, the precious metals are demanded in all payments, a continued import will be sustained until the channels of circulation are full, and prices rise firmly on such a basis, free of all tax payable to the banks, and impregnable to all the movements or attacks of foreign institutions. We thus frequently recur to the position of the New Orleans banks, because that city being the leading point of export for agricultural produce, the state of affairs there affects the whole country; and also because what we, in our September Number, called "the first impulse of re-action," when noticing the activity of the precious metals, is now producing consequences which, with the opening spring, must necessarily be felt through out the Union. All the indications of returning animation are apparent at all those great commercial centres where capital accumulates as trade declines, but as yet in a more marked degree at New Orleans than elsewhere. The exchanges are now equalized, and the supply of bills will keep pace with the growing demand, having hitherto exceeded it; and exchanges, payable in a uniform constitutional currency, will regulate themselves by the great laws of supply and demand.
States 6 per cent. stock to be sold in case of emergency to redeem the notes. This stock basis affords no security at all. It would not be paying the notes, it would only be funding them; precisely like the "relief notes" of Pennsylvania; because the notes would only require to be redeemed in times of panic, or of difficulty, such as now, when the 6 per cent. stock of the government is nearly unsaleable. If, then, discredit is attached to the Government paper so far as to exhaust in their redemption the specie reserve, the same discredit would attach to the $5,000,000 six per cent. stock, which would represent $10,000,000 of paper afloat. These notes would be greatly depreciated, and the holders would be the only bidders for the stock when offered for sale. Having obtained it, their debt would not be paid, but only funded in a six per cent. stock, and the remaining notes would become the prey of brokers to sell to the Government debtors, and the Government of necessity would pay them out to its creditors as fast as it received them, either for its dues or for the stock; and $10,000,000 of worthless paper would constantly be afloat. The President seems to be aware of such a contingency, because he limits the issue to $15,000,000; whereas, had he full confidence in the inherent soundness of the currency thus created, there would be no reason why it should be arbitrarily limited. On the other hand, should no panic arise, the bills could not be kept in circulation at par. The treasury notes now in circulation answer the purpose of currency and exchanges which could be performed by the proposed notes; but, besides those properties, they bear 6 per cent. interest, and are largely held by the banks as well as by individuals. A large amount of the small denominations are kept as ready money, in the pockets of individuals, who sell a $50 note as their occasions may require. Their money is thus always at interest, and yet readily available. Notwithstanding these favorable circumstances they are scarcely at par in New York, and are at 1 per cent. discount in New Orleans; yet the amount outstanding is scarcely $10,000,000. It is true that the proposed bills are to be redeemable in specie at the place of issue, which is not the case with Treasury notes.
The question in relation to some national paper machine "to regulate exchanges" is, and will continue to be, matter of discussion until-unless previously interfered with-mercantile principles shall have vindicated themselves, and exposed the fallacy of attempting to stem the current of commerce with paper issues. The Chief Magistrate has, as was anticipated, in his annual message, again brought his Exchequer Scheme to the notice of Congress. The general features of the project are those which we discussed in our last Number, as the plan which had received the approbation of Daniel Webster, Esq. The subject is treated of in the Message much in the manner that a timid person handles a loaded weapon. He is aware that its object is mischief, and is afraid that it may explode in his hands. The proposal is simply to issue $15,000,000 of paper dollars on the credit of the Government, in payment of the Government debts. There is nominally $5,000,000 of specie to be retained to redeem the notes, and also $5,000,000 of United
This latter fact is the reason why the Treasury notes do not come into competition with Bank issues, while the proposed notes would do so directly. The notes are to be paid out for Government debts; and being so paid out, the greater proportion of them will be redeemable in the city of New York, where most of the financial movements of the Government are made. The circulation of all the city banks of New York has seldom been over $10,000,000; and should $10,000,000 of Government bills be put afloat here in addition to the present circulation of the banks, great confusion and difficulty must necessarily be created. There would be no demand for Government notes except from its debtors, who would purchase them from the creditors at the market rate. As the Message expresses it, "this is the chief purpose of the proposed Exchequer, thereby realizing the great want of the age." This is really a singular expression. If the great want of the age is $15,000,000 of paper promises to circulate as money, the age is certainly
stock of the United States at any price from one end of Europe to the other without finding a bidder. Now a Whigelected President, after recounting this disgrace, proposes to issue Government paper money as a means of borrowing, a means never resorted to except in time of war, and to cap the climax, uses the following arguments in support of his proposition:
In a former Number we took occasion to remark on the great change which had overtaken the Whig party in their views on financial matters, when we published a letter from Mr. Cushing, defending his plan of an exchequer, on the ground that it did not differ materially from the project of Gen. Jackson. The late Message of the Chief Magistrate affords a similar in stance of recantation. When in 1837, a revulsion overtook the commercial world, and the Federal Government, like States, corporations, banks, and individuals, was caught with large expenses and a diminished revenue, it had recourse to an issue of Treasury notes to a very small amount, which, with the sagacity, vigilance, and prompt energy of Mr. Woodbury, the then Secretary, sustained the character and credit of the Federal Government when all other financial operations throughout the country were prostrated. This issue of notes was the constant object of the vituperation of the whole Whig party. For years all the attacks of mercenary editors, political brokers, and spouting politicians, were directed to these unlucky notes. That Whig party have now been twenty-two months in power, and have hawked a six per cent.
"It purports to do no more than pay the debts of the Government with the redeemable paper of the Government-in which respect it accomplishes precisely what the Treasury does daily at this time, in issuing to the public creditors the Treasury notes which, under law, it is authorized to issue.
The choice, in the present state of public sentiment, lies between an exclusive specie currency on the one hand, and Government issues of some kind or the other. That these issues cannot be made by a chartered institution, is supposed to be conclusively settled. They must be made, then, directly by Government agents. For several years past they have been thus made in the form of Treasury notes, and have answered a valuable pur
So, then, after nearly two years of experiment, the Whig party are driven back upon something which they recommend as being as good as the old policy of the Democratic party which answered a "valuable purpose." This, however, for reasons given above, is not the case.
The Report of the Secretary of the Treasury shows a most extraordinary state of the finances. It appears that the expenses of the present year are actual and estimated at $34,000,000, of which $9,000,000 was for debt; and receipts, $34,166,593, of which $18,000,000 are from the customs, $1,000,000 from the public lands, and $15,166,593 from loans. This is the result of the economy (!) of the new administration. In our September Number we took a brief survey of the course of the Government finances since 1831, down to the first six months of the present year, showing the great change which had taken place in the Government finances since the accession, in March, 1840, of the present party to power. The present state
This gives an expenditure of $25,000,000 for the current expenses of the year, and $9,000,000 on account of the public debt. Now it appears from the statements in our former article alluded to, that for the whole seven years of the late administration so frequently and freely charged with extravagance, the expenditures, independent of debt, averaged but $22,652,619 per annum, during a period of great general speculation and very high prices. Hence it seems that the new administration, whose watchwords were economy and retrenchment, have exceeded the extravagance of the former Government by $2,347,381, thereby extending the national debt $6,000,000. This being the case, what becomes of the cries against the former administration that had in "four years pushed the expenditures $30,000,000 beyond the revenue?" The customs receipts during the third quarter have been large, owing to the fact that the new tariff makes the whole duties on imports payable in cash at the same moment that the bonds of former exports have been falling due. During the months of July and August, there was a strong probability that no tariff bill would be passed, and the duties would for some months at least remain at the then low rate. This caused orders for large amounts of goods to be sent abroad, which on their arrival were unexpectedly met by exorbitant high rates of duties payable in cash. Hence the customs of the quarter were swelled beyond what they would have
Fourth Quart., esti.
Total for Year.
been in several years by all the cash duties paid on the new imports in addition to the maturing bonds. In the next year, when all outstanding bonds shall have been matured and the revenue depends entirely upon the imports of that year, the receipts are likely to show a great falling off, giving occasion for a further increase of the present debt.
No positive indication has yet appeared in Congress, of its probable action on the Exchequer question. We have every reason, however, to feel assured that it will be impossible to unite a majority on any measure which can receive the Executive sanction. The Democrats will stand fast to the principles of the Independent Treasury, from which Mr. Tyler's Exchequer plan is certainly very far removed, and there is no danger that the latter will be forced on them by the united force of the voting majority. Independent of other reasons for embittered hostility to the policy and wishes of the President, many of them really regard the Sub-Treasury as unpopular with the people-one of the greatest mistakes they have ever committed. Well knowing that its restoration will be the first glad and proud act of the next Congress, they think it their policy to leave it to be thus done by the Democratic party, in the hope that it will operate against its authors in 1844. Be it so; on this point we shall harmonize beautifully, and we can desire no better issue on which then again to go before the People.
NEW BOOKS OF THE MONTH.
Self-Culture. By WILLIAM E. CHAN-
Nothing which can come from the gifted and lamented Channing, on the subject of human improvement, whether individual or social, can fail to be worthy of serious and profound study; and of all that he has left behind him on this subject, nothing, in its way, is superior to this Essay or Discourse on Self-Culture. It shows very clearly the deep interest which the author took in the great move ments of the day for the melioration of the moral, intellectual, and physical condition of the Laboring Classes. For several of the last years of his life, almost his whole mind was given to the consideration of what could be done to work out a higher order of civilisation for mankind, and a better condition for the poorest and most numerous class. No man amongst us was more struck with the fact of the wide disparity there is in men's social positions, even in this land of boasted equality; and no one felt more deeply the utter worthlessness, nay injustice, and mischievousness of our artificial distinctions of ranks or classes. His great principle was always, "Honor all He saw in all men, in the lowest, the most wretched,-nay, in the most polluted and debased, something to love and reverence, some traces, faint indeed, but not all obliterated, of that image of God in which the human soul was originally created. He could not see man's noble nature wronged in any of its aspects without being filled with horror, and he protested with a sweet, eloquent, but with a loud and startling voice, against all the forms of man's injustice to man. This was his mission and his glory.
Dr. Channing's great effort for several years was to enlist the more favored classes in the work of elevating the less favored. "But," said he, one day, to the writer of this notice, "I have been laboring under a mistake. I have wished to make the more favored classes the instruments of reforming their less favored brethren; but I have found that the instruments with which I attempted to work, needed themselves to be reformed quite as much as the classes which I proposed they should reform." In consequence of this he came at length to turn
his attention more directly to the depressed classes themselves, and sought, as it were, to find out some means by which the slave could work out his own freedom. noble discourse, full of a truly Christian Hence this Discourse on Self-Culture,-a spirit, and of an enlarged benevolence; full also of wise suggestions; but it is characterized by an object common to the greater part of reformers, namely, that of underrating the influence of external cirintellectual evils they seek to redress. cumstances in producing those moral and You must take the drunkard from the gutter, wash him, and dress him up in clean and decent clothes, before you can tinuing to walk in the paths of sobriety. count upon his forsaking his cups, or conSo you must, in general, bring the poor and needy physical relief, before you can do more than palliate their moral and social evils. It is in vain that you tell a man to be contented with his lot, when he sees it is that which all men despise, and in vain that you call upon men to be inderun away from as fast as they can. It is pendent in their spirit and bearing-to maintain the dignity and self-respect of freemen, when they are dependent on the will, caprice, or else the ability of others for the very means of subsistence. You will never make all men free, independent, moral, till such is your industrial relations, that every man can be sure always of employment if he wishes it, and that by moderate labor he can obtain, not only an honest but an honorable living. theless, we esteem very highly this DisNeverit republished, and in a style of great course on Self-Culture, and are glad to see neatness and beauty.
Pleasant Memories of Pleasant Lands.
who like the kind of reading it contains, This is a very agreeable book for those and the publishers have done all that we could ask of them to increase its attractiveness. The volume is beautifully printed and done up, and a fair specimen of the finished style in which our Boston publishers send out their books.
Of Mrs. Sigourney's merits as a poet, and also as a prose writer, we have not now to speak for the first time. She is, if we may so say, one of the established reputations of the country, and her name