"He hath an argosy bound to Tripolis, another to the Indies: I understand moreover upon the Rialto, he hath a third at Mexico, a fourth for England: and other ventures he hath."

Merchant of Venice.

There is no need to say much about the extent of the Commerce of the United States, since it is already the admiration of Europe, and its history is before every one in the shape of figures. The returns of exports and imports annually published are sufficiently eloquent.

It will be seen, from these returns, how great a reduction in the commerce of the United States was occasioned by the tariff, which attracted a large amount of capital from commerce, to be invested in manufactures. The balance has been nearly restored by the prospect of the expiration of the protective system; and both commerce and manufactures are again rapidly on the increase. The foreign tonnage of Massachusetts has increased fifty-three per cent. within the last five years, though, owing to a new mode of ship-construction, twice the quantity is stowed in the same nominal tonnage.

The commerce of the south-west was in high prosperity when I was there. When I was at Mobile, in April 1835, I was informed that 183,000 bales of cotton had been brought down into Mobile since the beginning of the year.[8] A friend of mine, engaged in commerce there, told me of the enormous interest on money then obtainable. Eight per cent. is the legal interest; but double is easily to be had. Another, a wealthy gentleman of New Orleans, speculates largely every season, for the sake of something to do, and makes a fortune each time, by lending out at high interest. He declares that he never loses, and never fails to gain largely; the commerce is so flourishing, and the demand for capital so intense. This is the region in which to witness the full absurdity of usury laws. They are evaded, as often as convenient, and serve no other purpose than to annex a kind of disgrace to a deed which must of necessity be done,—loaning out money at higher than the legal interest. The same evasion takes place in Massachusetts, where the legal interest is six per cent. The interest there, as elsewhere, rises just as high as the demand for money must naturally bring it.

I was acquainted with a gentleman who had lost seventy-five thousand dollars in an unfortunate speculation, and who expected to retrieve the whole the next season. The price of everything was rising. For my own share, I had to pay twelve dollars for my passage from Mobile to New Orleans: and twenty-five per cent. higher for my voyage up the Mississippi than if I had gone the preceding year. The fare I paid was fifty dollars. These two fares were the only exceptions to the remarkable cheapness of travelling in the United States and these would not be considered high anywhere else.

The Cumberland river, on which stands Nashville, the capital of Tennessee, and which empties itself into the Ohio, has scarcely been heard of in England; yet, of all the tobacco consumed in the world, one-seventh goes down this river. I ascended it in a very small steam-boat, one of twelve, six large and six small, then perpetually navigating it, and carrying cotton, tobacco, and passengers. Of these boats, one had carried, the preceding year, three hundred and sixty bales of cotton, of the value of three hundred and sixty thousand dollars.

When we look at the northern ports, and observe the variety, as well as the extent of their commerce, there seems good ground for the expectation expressed to me by many American merchants, that the English language will finally become familiar, not only over all the east, but over all the globe.

Salem, Massachusetts, is a remarkable place. This "city of peace" will be better known hereafter for its commerce than for its witch-tragedy. It has a population of 14,000; and more wealth in proportion to its population than perhaps any town in the world. Its commerce is speculative, but vast and successful. It is a frequent circumstance that a ship goes out without a cargo, for a voyage round the world. In such a case, the captain puts his elder children to school, takes his wife and younger children, and starts for some semi-barbarous place, where he procures some odd kind of cargo, which he exchanges with advantage for another, somewhere else; and so goes trafficking round the world, bringing home a freight of the highest value.

The enterprising merchants of Salem are hoping to appropriate a large share of the whale fishery; and their ships are penetrating the northern ice. They are favourite customers in the Russian ports, and are familiar with the Swedish and Norwegian coasts. They have nearly as much commerce with Bremen as with Liverpool. They speak of Fayal and the other Azores as if they were close at hand. The fruits of the Mediterranean countries are on every table. They have a large acquaintance at Cairo. They know Napoleon's grave at St. Helena, and have wild tales to tell of Mosambique and Madagasca, and store of ivory to show from thence. They speak of the power of the king of Muscat, and are sensible of the riches of the south-east coast of Arabia. It entered some wise person's head, a few seasons ago, to export ice to India. The loss, by melting, of the first cargo, was one fourth. The rest was sold at six cents per lb. When the value of this new import became known, it was in great request; and the latter sales have been almost instantaneous, at ten cents per pound: so that it is now a good speculation to send ice 12,000 miles to supersede salt-petre in cooling sherbet. The young ladies of America have rare shells from Ceylon in their cabinets; and their drawing-rooms are decked with Chinese copies of English prints. I was amused with two: the scene of Hero swooning in the church, from 'Much Ado about Nothing;' and Shakspeare between Tragedy and Comedy. The faces of Comedy and of Beatrice from the hands of Chinese! I should not have found out the place of their second birth but for a piece of unfortunate foreshortening in each. I observed to a friend, one day, upon the beauty of all the new cordage that met my eye, silky and bright. He told me that it was made of Manilla hemp, of the value of which the British seem to be unaware; though it has been introduced into England. He mentioned that he had been the first importer of it. Eight years before, 600 bales per annum were imported: now, 20,000. The merchants doubt whether Australia will be able to surmount the disadvantage of a deficiency of navigable rivers. They have hopes of Van Diemen's Land, think well of Singapore, and acknowledge great expectations from New Zealand. Any body will give you anecdotes from Canton, and descriptions of the Society and Sandwich Islands. They often slip up the western coasts of their two continents; bring furs from the back regions of their own wide land; glance up at the Andes on their return; double Cape Horn; touch at the ports of Brazil and Guiana; look about them in the West Indies, feeling there almost at home; and land, some fair morning, at Salem, and walk home as if they had done nothing very remarkable.

Such is the commerce of Salem, in its most meagre outline. Some illustration of it may be seen in the famous Salem Museum. In regard to this institution, a very harmless kind of monopoly exists. No one is admitted of the museum proprietary body who has not doubled the Capes Horn and Good Hope. Everybody is freely admitted to visit the institution; and any one may contribute, either curiosities or the means of procuring them; but the doubling of the Capes is an unalterable condition of the honour of being a member. This has the effect of preserving a salutary interest among the members of the society, and respect among those who cannot be admitted. The society have laid by 20,000 dollars, after having built a handsome hall for the reception of their curiosities; but a far more important benefit is that it has now become discreditable to return from a long voyage without some novel contribution to the Museum. This sets people inquiring what is already there, and ensures a perpetual and valuable accretion. I am glad to have seen there some Oriental curiosities, which might never otherwise have blessed my sight: especially some wonderful figures, made of an unknown mixed metal, dug up in Java, being caricatures of the old Dutch soldiers sent to guard the first colonies. A reasonably grave person might stand laughing before these for half a day. I had no idea there had been so much humour in the Java people.

The stability of the commercial interest in the United States was put to the test by the great fire at New York. All the circumstances regarding this fire were remarkable; no one more so than that not a single failure took place in consequence.

For many days preceding this fire, the weather had been intensely cold, the thermometer standing at Boston 17 degrees below zero. On the Sunday before, (13th of December 1835,) I went to hear the Seamen's friend, Father Taylor, as he is called, preach at the Sailors' Chapel, in Boston. His eloquence is of a peculiar kind, especially in his prayers, which are absolutely importunate with regard to even external objects of desire. Part of his prayer this day was, "Give us water, water! The brooks refuse to murmur, and the streams are dead. Break up the fountains: open the secret springs that thy hand knoweth, and give us water, water! Let us not perish by a famine of water, or a deluge of conflagration; for we dread the careless wandering spark." I was never before aware of the fear of fire entertained during these intense frosts. It is a reasonable fear. A gentleman, bent upon daily bathing, was seen one morning disconsolately returning from the river side; he had employed three men to break the ice, and they could not get at a drop of water. What hope was there in case of fire?

The New York fire broke out at eight in the evening of Wednesday, the 16th of December. Every one knows the leading facts, that 52 or 54 acres were laid waste; many public buildings destroyed, and property to the amount of 18,000,000 of dollars.

Several particulars were given to me on the spot, three months afterwards, by some observers and some sufferers. At a boarding-house in Broadway, where some friends of mine were residing, there were several merchants, some with their wives, who dined that day in good spirits, and, as they afterwards believed, perfectly content with their worldly condition and prospects. At eight o'clock there was an alarm of fire. It was thought nothing of; alarms of fire being as frequent as day and night in New York. After a while, a merchant of the company was sent for, and some little anxiety was expressed. Two or three persons looked out of the upper windows, but it was a night of such still, deep frost, that the reflection in the atmosphere was much less glaring than might have been expected. Another and then another gentleman was sent for. News came of the absolute lack of water, and that there was no gunpowder in the city—none nearer than Brooklyn. The gentlemen all rushed out; the anxious ladies went from the windows to the fire-side; from the fire-side to the windows. One gentleman and lady in the house, a young German couple, just arrived, and knowing scarcely a word of English, were unaware of all this. None of their chattels, not even the lady's clothes, had been removed from their store in Pearl Street, where lay her books, music, wardrobe, and property of every sort. Pretty early in the morning the poor gentleman was roused from his slumbers, could not comprehend the cause, went down to Pearl Street, and, amidst the amazement and desolation, just contrived to save his account-books, and nothing else. In the morning, the lady was destitute of even a change of raiment, in a foreign country, of whose language she could not speak one word. There were kind hearts all around her, however, and she was quite cheerful when I saw her, a few weeks afterwards.

The lady of the house was so worn, weary, and cold, by three in the morning, that she retired to her room; desiring her domestics to call her if the fire should catch Broad Street; in which case, it would be time to be packing up plate, and moving furniture. In a little while, there was a tap at her door. Broad Street was not on fire, however; but some of the gentlemen had come home, smoked and frost-bitten, and eager for help and warm water. One gentleman, who had nothing more at stake than three chests of Scotch linen, (valuable because home-woven,) of which he saved one, losing a superb Spanish cloak in the process, was desirous that his wife should see the spectacle of the conflagration. She walked down to the scene of the fire with him, after midnight. They took their stand in a square, in the centre of which an immense quantity of costly goods was heaped up. It was strange and vexatious to see the havoc that was made among beautiful things;—cachemere shawls strewing the ground; horses' feet swathed in lace veils; French silks getting entangled and torn in the wheels of the carts. The lady picked up shawls and veils; and when her husband asked her where she proposed to put them, could only throw them down again. After she had left the place, the houses caught fire, all round the square, fell in, and burned the costly goods in one grand bonfire.

There had been occasional quarrels between the merchants and the carmen. The carmen conceived themselves injured by certain merchants. Whether they had reason for this belief or not, I cannot pretend to say. They thought this a time for revenge. Some crossed their arms, as they leaned against their carts, and refused to stir a step, unless twenty dollars a load were paid them on the spot. Some few refused to help at all. This must have been a far more deadly sorrow to the sufferers than the ruin the fire was working. One carman was very provoking when a French gentleman had not a moment to lose in saving his stock. The gentleman said coolly at last, taking out his money, "For what sum will you sell your horse and cart?" The temptation was irresistible to the carman. He named 500 dollars for his sorry hack and small vehicle, and was paid on the instant. The French gentleman saved goods to the amount of 100,000 dollars. It was a good bargain for both.

At six in the morning, when the necessary explosions had checked the fire, the gentlemen of the household I have mentioned, being completely ruined, for anything they knew to the contrary, came home; and the ladies went to bed. Some of the least interested consulted what should be done at dinner-time; whether the company in general could bear the subject; whether it was best to talk or be silent. It was a languid, sorrowful meal: the gentlemen looking haggard; their ladies anxious. The next day, they were able to talk,—to describe, to relate anecdotes, and speculate on consequences. The third day, all were nearly as cheerful as if nothing had happened: though some had lost all, and others, they knew not how much.

The report of the fire spread as news through the upper part of the city, the next morning. Some friends of mine had walked home from a visit, upwards of a mile, at eleven o'clock, and neither heard nor seen anything of the fire.

The larger proportion of the New York merchants were thus deprived at a stroke of their buildings, stocks, in many cases of all books and papers, and, lastly, of the benefit of insurance. The insurance companies were plunged in almost a general insolvency. The only relief proposed, or that could be offered, was an extension of time, without interest, to the debtors of the government for payment of bonds given to secure the duties upon goods recently imported: and this small relief could not be obtained till too late to be of much use.

Happily, the fire occurred at one of the least busy seasons of the year. The merchants could concert together for the saving of their credit: and they did it to some purpose. Their credit sustained the shock of all this confusion, uncertainty, and dismay. The conduct of the merchants who had not directly suffered, and of the banks, was admirable. They threw aside all their usual caution, and dispensed help and accommodation with the last degree of liberality. The consequence was, that not one house failed. It seems now as if the commercial credit of New York could stand any shock short of an earthquake, like that of Lisbon.

Some merchants had the unexpected pleasure of finding themselves richer than they were before. One was travelling in Europe with his lady, when the news overtook him that the hundred and fifty stores in which he had property were all burned down. He wrote that he and his lady were hastening to Havre, on their way home, where they must live in the most economical and laborious manner, to repair their fortunes. With such intentions they crossed the Atlantic; and on landing were met by the intelligence that they had become very wealthy, from their ground lots having sold for more than ground, stores, and stock, were worth before.

I saw the fifty-two acres of ruins in the following April. We traversed what had been streets, and climbed the ruins of the Exchange. The pedestal of Hamilton's statue was standing, strewed round with fragments of burnt calicoes, which people were disinterring. There was a litter of stone pannels, broken columns, and cornices. Bushels of coffee paved our way. A boy presented me with a half-fused watch-key from the cellar of what had been a jeweller's store. The blackened ruins of a church frowned over all. The most singular spectacle was a store, standing alone and unharmed, amidst the desolation. It belonged to a Jew, was fire-proof, and contained hay, not a blade of which was singed. This square-fronted, elongated, ugly building, standing obliquely, and as clean as if smoke had never touched it, had a most saucy appearance: and so it might, so many erections, equally called fire-proof, having disappeared, while it alone remained.

By the next July, the entire area was covered with new erections; and long before this, doubtless, all is to the outward eye, as if no fire had happened.

But for the testimony afforded by this event, of the substantial credit in New York, the enormous prices given for land,—the above-mentioned ground lots, for instance,—might cause a suspicion that there was much wild speculation. I trust it is not so. The eagerness for land is, however, extraordinary. A lady sold an estate in the neighbourhood of New York, for what she and her friends considered a large sum; and a few weeks after she had concluded the bargain, and soon after the destruction of eighteen millions of the wealth of the city, she found she might have obtained three times the amount for which she had sold her estate. The whole south end of the city is being rapidly turned into stores; and it is obvious that the mercantile princes of this emporium have no idea of their conquests being bounded by any circumstance short of the limits of the globe.

Is there anything to be learned here, as well as to admire? any inference to be drawn for the benefit of other nations?

An English member of parliament wrote to a friend residing in one of the American ports, inquiring whether this friend could suggest any course of parliamentary action by which the commerce of England, or of both countries, could be benefited. The American replied by urging his friend to work incessantly at a repeal of the corn laws, and in any way which may keep the United States continually before the eyes of the commercial rulers of Great Britain. "You talk," said he, "of your commercial arrangements with Portugal. Well and good! but what is Portugal? She has two millions of priests and beggars; and at the end of the century she will have two millions of priests and beggars still. What will the wealth and productions of the United States be then?" If the United States have now 18,000,000 of people, and their population is increasing at an unexampled rate,—a free and an opulent population,—the interest of Great Britain is plain;—to have a primary regard to the United States in the arrangement of her commercial policy.

SECTION I.
THE CURRENCY.

The fundamental difficulty of this great question, now one of the most prominent in the United States, is indicated by the fact that, while the practice of banking is essential to a manufacturing and commercial nation, a perfect system of banking remains to be discovered.

When it is remembered that the question of the Currency has never yet been practically mastered in the countries of the Old World; that in America it has fallen into the hands of a young and inexperienced people; that it is implicated with constitutional questions, and has to be reconciled with democratic principles, it will not be expected that a passing stranger will be able to present a very clear view of its present aspect, or any decided opinion upon difficulties which perplex the wisest heads in the country. The mere history of banking in the United States would fill more than a volume: and the speculations which arise out of it, a library.

It is well known that there was an early split into parties on the subject of the constitutionality of a national bank. Washington requested the opinions of his cabinet upon it in writing; and Hamilton gave his in favour of the constitutionality of a national bank: Edmund Randolph and Jefferson against it. The question has been stirred from time to time since; while Hamilton's opinions have been acted upon.

The ground of objection is a very strong one. It lies in the provision that "all powers not delegated to the United States by the constitution, nor prohibited by it to the States, are reserved to the States or to the people." No power to establish corporations is, in any case, delegated by the constitution to the United States; nor does it appear to be countenanced by any fair construction of the permissions under which its transaction of the general business is carried on.

The answer to this is, that the supreme law of the country may give a legal or artificial capacity, (distinct from the natural,) to one or more persons, in relation to the objects committed to the management of the government: in other words, that the government has sovereign power with regard to the objects confided to it; all the limitations of the constitution having relation to the number of those objects. This was Hamilton's ground; and this is, I believe, the ground which has been taken since by those who shared his opinions on the main question. To me it appears as unsatisfactory as any other mode of begging the question. If the power of making corporations is to be assumed by the general government, on the ground of its being implied, the whole country might be covered with corporations, to which should be entrusted the discharge of any function exercised by the general government.

In countries differently governed from the United States, it appears as if it would be most reasonable either to have the currency made a national affair, transacted wholly by the government, on determined principles, or to leave banking entirely free. In neither case, probably, would the evils be so great as those which have happened under the mixture of the two systems. But in the United States, the committing the management of the currency to the general government is now wholly out of the question. Free banking will be the method, some time or other; but not yet. There is not yet knowledge enough; nor freedom enough of production and commerce to render such a policy safe. Meantime, various doctrines are afloat. Some persons are for no banking whatsoever: but mere money-lending by individuals. Some are for the abolition of paper-money, and the establishment of one public bank of deposit and transfer in each State. Some are for private banking only, with or without paper money. Some are for State incorporations, with no central bank. Others are for restoring the United States Bank.

No objections against banking and paper-money altogether will avail anything, while commerce is conducted on its present principles. It answers no practical purpose to object to any useful thing on the ground of its abuse: and while the commerce of the United States is daily on the increase, and the only check on its prosperity is the want of capital, there is no possibility of a return to the use of private money-lending and rouleaus.

The use of small notes may well and easily be discontinued. The experiment has been tried with success in Virginia, Maryland, and Pennsylvania. The prohibition might, perhaps, be carried as high as to notes of twenty dollars. There seems no adequate reason for the public being, further than this, deprived of the convenience of a representative of cash; a convenience so great that there is much more probability that the ingenious Americans will devise some method of practically insuring its convertibility, than that they will surrender its use. It has often occurred to me that out of the currency troubles of the United States, might arise such a discovery of the true principle (which yet lies hidden) of insuring the convertibility, or other limitation, of a paper currency, as may be a blessing to the whole commercial world. This is an enterprise worthy of their ingenuity; and one which seems of probable achievement, when we remember how the American merchants are pressed for capital, and how all-important to them is the soundness of their credit. The principle lies somewhere, if it could but be found: and none are more likely to discover it than they.

Private banking is, in the present state of affairs, necessary and inevitable; so that there is little use in arguments for or against it. Capital is grievously wanted, in all the commercial cities. There must be some place of resort for small amounts, and for foreign capital, whence money may issue to supply the need of commercial men. There must, in other words, be money stores; and, in the absence of others, private banks must serve the purpose. The amount of good or harm which, in the present state of things, they are able to do, depends mainly on the discretion or indiscretion of their customers; who, in common prudence, must look well whom they trust.

As for State incorporations, it cannot be said that they are absolutely necessary; though the arguments in favour of their expediency are very strong. More and more money is perpetually required for the transaction of commercial business; and in a different ratio from that required by the affairs of farmers and planters; since the latter receive their returns quickly; while the merchants of the sea-board have theirs delayed for long periods, and consequently require a much larger amount of capital. These larger amounts must come mainly from abroad, whence money can be had at four and five per cent. interest; while at home, from six to twelve per cent. is paid, even while foreign capital is flowing in. It is obvious that this foreign capital will enter much more abundantly through the credit of a State bank than through private banks. Small amounts of capital, dispersed and comparatively unproductive, will also be more readily brought together, to be applied where most needed, in a State bank, than among many small firms. The States of New York and Pennsylvania have carried on their improvements, their canals and rail-roads, as well as much of their commerce, by means of foreign capital; and the surpassing prosperity of those States may be considered owing, in a great degree, to this practice. The incorporation of a bank is not always to be considered in the light of a monopoly; it may be the reverse. It may enable a number of individuals, by no means the most wealthy in the community, to compete, by an union of forces, with the most wealthy. Corporations may be multiplied, as occasion arises, and, by competition, give the public the benefit of the greatest possible amount of service done at the least cost.

Such are the leading arguments in favour of State Banks. The objections to them are in part applicable to faulty methods of incorporation, and not to the principle itself. The special exemption from liabilities to which individuals are subject; the imposing of such inhibitions elsewhere as render the affair a monopoly; the making responsibility a mere abstraction, are great, but perhaps avoidable evils. So are the methods by which charters have been obtained and renewed; the method of "log-rolling" bills through the legislature; and other such corruption.[9]

An objection less easily disposed of is, that by the creation of any great moneyed power, means are afforded of controlling the fortunes of individuals, and of influencing the press and the political constituency. If these objections cannot be obviated, they are fatal to banking corporations. If, however, any means can be devised, either by causing a sufficient publicity of proceedings, or by granting charters for a short term, renewable on strict conditions, or by any other plan for establishing a true responsibility, of uniting the benefits of incorporated banks with republican principles, it seems as if it would be a great benefit to all parties in the community.

The difference of opinion which has made the most noise in the world, is about a National Bank.

It appears to have been contemplated, in the first instance, to place the currency of the United States under the control of the general government; according to the spirit of the provisions of the constitution, that Congress should have power "to coin money, regulate the value thereof, and of foreign coin:" but without affording to Congress any power to control the fortunes of individuals, as may be done by certain banking operations. The state of the colonial currency had been deplorable.[10] The object now was to substitute a uniform and substantial currency, instead of the false representatives which had been in use: and to put it out of the power of the States to alter the terms of contracts by taking advantage of the faults of the currency. Nobody would take the continental bills; and gold and silver were deficient. A national bank was the resource; and the old United States Bank was chartered in 1791; it being ascertained that its issues were based on real capital, and a strict watch being kept over its operations.

This bank was believed to be wanted for another purpose;—to watch over and control the State Banks. It was not the first institution of the kind in the United States. The Bank of North America had been chartered in 1781, under the authority of the Continental Congress: but by soon accepting a charter from the Legislature of Pennsylvania, it ceased to be a national, and afforded the precedent of a State Bank. New York and Massachusetts had soon State Banks also. They were prudently conducted; and their notes presently banished the coin. The power of Congress over the currency was gone. All that could be done now was for the National Bank to control the State Banks, and keep their issues within bounds, as well as it could.

Occasional disorders happened from the misconduct of country banks, prior to 1811. The renewal of the charter of the United States Bank was then refused. The government was pressed by the evils of war; and the check of the superintendence of the Bank being withdrawn, the local banks, out of New England, came to the agreement, (too senseless to be ever repeated,) to suspend specie payments. All issued what kind and quantity of paper pleased themselves, till above twice the amount of money needed was abroad; and the notes were in some States five, in others ten, in others twenty, below par. The New England people, meantime, used convertible paper only; and under the law which provides that all duties, imposts, and excises should be uniform throughout the States, were thus compelled to pay one tenth more to the revenue officers than the people of New York, who used the depreciated currency: and one-fifth more than the Baltimore merchants.

This state of things could not last. A national bank was again established, in 1816, for the purpose of controlling the local banks. Its charter was for twenty years, with a capital of 35,000,000 dollars, to which the federal government subscribed one fifth. Its notes were made receivable for any debt due to the United States.

Its purpose was presently answered. The local banks had, in three years, resumed cash payments. The management of the United States Bank, during the rest of its term, has been, upon the whole, prudent and moderate. That a power has not been abused is not, however, a reason for its continued exercise, if it be really unconstitutional. President Jackson thinks, and the majority thinks with him, that it is contrary to the spirit of the constitution, (as it is certainly unauthorised by its letter,) that any institution should have the power, unchecked for a long term of years, of affecting the affairs of individuals, from the further corners of Maine or Missouri, down to the shores of the Gulf of Mexico; of influencing elections; of biassing the press; and of acting strongly either with or against the administration. The majority considers, that if the United States Bank has great power for good, it has also great power for harm; and that the general government cannot be secure of working naturally in its limited functions, while this great power subsists, to be either its enemy or its ally.

This seems to be proved by the charges brought against the late Bank by President Jackson. Whether they are true or false, (and the gravest of them do not appear to have been substantiated,) they indicate that power is in the hands of a central institution, which no federal establishment ought to have, otherwise than by the express permission of the constitution.

As for President Jackson's mode of proceeding against the Bank,—it is an affair of merely temporary interest, unless he should be found to have exceeded the authority conferred on him by his office. He does seem to have done so, in one particular, at least. His first declaration against the renewal of the charter, was honest and manly. His re-election, after having made this avowal, was a sufficient evidence of the desire of the majority to extinguish the Bank. It was, no doubt, in reliance on the will of the majority, thus indicated, that the President removed the deposits in a peculiarly high-handed manner; and also exercised the veto, when the two Houses had passed a bill to renew the charter of the United States Bank.

With the last of these measures, no one has any right to quarrel. He exercised a constitutional power, according to his long-declared convictions. His sudden removal of the deposits is not to be so easily justified.

The President has the power of removing his Secretaries from office, and of appointing others, whose appointment must be sanctioned by the Senate. The Secretaries of State are enjoined by law to execute such orders as shall be imposed on them by the President of the United States:—all the Secretaries but the Secretary of the Treasury. In his case, no such specification is made; obviously because it would not be wise to put the whole power of the Treasury into the hands of the President. President Jackson, however, contrived to obtain this power by using with adroitness his other power of removal from office. Mr. Duane was appointed Secretary of the Treasury on the 29th of May, 1833; his predecessor having been offered a higher office. It is known that the predecessor had given his opinion in the cabinet against removing the Treasury deposits from the Bank; and that Mr. Duane was an acknowledged enemy of the Bank. On the 3rd of June, the President opened to the new Secretary his scheme of removing the deposits. Mr. Duane was opposed to the act, as being a violation of the government contract with the Bank. He refused to sign the necessary order. While he was still in office, on the 20th of September, the intended removal of the deposits was announced in the government newspaper. On the 23rd, Mr. Duane was dismissed from office; and Mr. Taney, who had previously promised to sign the order, was installed in the office. On the 26th, the official order for the removal of the deposits was given. No plea of impending danger to the national funds, if such could have been substantiated, could justify so high-handed a deed as this. No such plea has been substantiated; and the act remains open to strong censure.

Just before the expiration of its charter, the United States Bank accepted a charter from the Legislature of Pennsylvania. It remains to be seen what effects will arise from the operation of the most powerful State Bank which has yet existed.

The problem now is to keep a sound currency, in the absence of an institution, believed to be unconstitutional, but hitherto found the only means of establishing order and safety in this most important branch of economy. Here is a deficiency, which cannot but be the cause of much evil and perplexity. It must be supplied, either by increased knowledge and improved philosophy and practice among the people, or by an amendment of the Constitution. Meanwhile, it is only time and energy lost to insist upon the return to a mere metallic currency. Society cannot be set back to a condition which could dispense with so great an improvement as paper-money, with all its abuses, undoubtedly is.

The singular order which last year emanated from the Treasury, compelling the payments for the public lands to be made in specie, will not have the effect of making the people in love with a metallic currency. If this measure is intended to be an obstacle to the purchase of large quantities of land, or virtually to raise the price,—these are affairs with which the Treasury has nothing to do. If it is intended merely to compel cash payments, as far as the administration has power to do so, it seems a pity that those who undertake to meddle with the currency should not know better what they are about. The scarcity of money in the eastern States has been well nigh ruinous, while large amounts of specie have been accumulated in the west, where they are not wanted.

The mischief thus caused has been much increased by the injudicious method in which the deposits have been distributed among the States, according to the Deposit Bill of the session of 1836. The details of the extraordinary state of the money-market in America, last year, are too well known on both sides of the water, to need to be repeated here.

One principle stands out conspicuously from the history of the last few years: that no President or Secretary should be allowed the opportunity of "taking the responsibility" of meddling with the currency of the country: in other words, the taxation should be reduced, as soon as in equity and convenience it can be done, so as to bring down the revenue to a proportion with the wants of the government. If the general government is to have anything to do with the currency at all, it should be by such business being made a separate constitutional function. To let the Treasury overflow,—and leave its overflowings to be managed at the discretion of one public servant, removable by one other, is a policy as absurd as dangerous. The most obvious security lies, not in multiplying checks upon the officers, but in reducing the overflowings of the Treasury to the smallest possible amount. This is President Jackson's last recorded opinion on the subject. It appears worthy to be kept on record.

SECTION II.
REVENUE AND EXPENDITURE.

There is less to be said on this head than would be possible in any other country. When it is known that the United States are troubled with the large surplus revenue accruing from the sale of the public lands, the whole story is told. The stranger will hear much lamentation in the Senate about the increase of the public expenses, and will see Hon. Members looking as solemn as if the nation were sinking into a gulf of debt: but the fear and complaint are, not of the expenditure of money, but of the increase of executive patronage.

The Customs are the chief source of the revenue of the general government. They are in course of reduction, year by year. The next great resource is the sale of the public lands. This may be called inexhaustible; so large is the area yet unoccupied, and so increasing the influx of settlers.

This happy country is free from the infliction of an excise system; an exemption which goes far towards making it the most desirable of all places of residence for manufacturers who value practical freedom in the management of their private concerns, and honesty among their work-people. The brewer and glass-manufacturer see the tax-gatherer's face no oftener than other men. The Post-Office establishment in America is for the advantage of the people, and not for purposes of taxation; and every one is satisfied if it pays its own expenses. A small sum is yielded by patent fees; and also by the mint. Lighthouse-tolls constitute another item. But all these united are trifling in comparison with the revenue yielded from the two great sources, the Customs and the Public Lands.[11]

The expenditures of the general government are for salaries, pensions, (three or four hundred pounds,) territorial governments, the mint, surveys, and improvements, the census and other public documents, and the military and naval establishments.

The largest item in the civil list is the payment to Members of Congress, who receive eight dollars per day, for the session, and their travelling expenses. The President's salary is 25,000 dollars. The Vice-president's 5,000. Each of the Secretaries of State, and the Postmaster-general's, 6,000. The Attorney-general's, 4,000.

The seven Judges of the Supreme Court are salaried with the same moderation as other members of the federal government. The Chief Justice has 5,000 dollars; the six Associate Judges 4,500 each.

The Commissioned Officers of the United States army were, in 1835, 674. Non-commissioned Officers and Privates, 7,547. Total of the United States army, 8,221.

In the navy, there were, in 1835, 37 Captains, and 40 Masters-commandant. The navy consisted of 12 ships of the line; 14 first-class frigates; 3 second-class; 15 sloops of war; 8 schooners and other small vessels of war.

The revenue and expenditure of most of the States are so small as to make the annual financial statement resemble the account-books of a private family. The land tax, the proportion of which varies in every State, is the chief source of revenue. Licenses, fines, and tolls, yield other sums. In South Carolina, there is a tax on free people of colour!

The highest salary that I find paid to the government of a State is 4,000 dollars, (New York and Pennsylvania;) the lowest, 400 dollars, (Rhode Island.) The other expenses, besides those of government, are for the defence of the State, (in Pennsylvania, about forty pounds!) for education, (two thousand pounds, in Pennsylvania, the same year,) prisons, pensions, and state improvements.[12]

Such is the financial condition of a people of whom few are individually very wealthy or very poor; who all work; and who govern themselves, appointing one another to manage their common affairs. They have had every advantage that nature and circumstances could give them; and nothing to combat but their own necessary inexperience. As long as the State expenditure for defence bears the proportion to education of 40l. to 2,000l., and on to 80,000l., (the amount of the school-tax, now, in Massachusetts,) all is safe and promising. There is great virtue in figures, dull as they are to all but the few who love statistics for the sake of what they indicate. Those which are cited above disclose a condition and a prospect in the presence of which all fears for the peace and virtue of the States are shamed. Men who govern themselves and each other with such moderate means, and for such unimpeachable objects, are no more likely to lapse into disorder than to submit to despotism.

[8] The value of the cargoes which arrived at Mobile in 1830, was,