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 ADDUESSK9 rj»TO THE 
 
 President of the Confederate States. 
 
 BY DTJFF 7 GRE 
 
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 J..T. BATERSON & CO., LITHOGRAPHERS AND PRINTERS, 
 
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Library, Univ. of 
 North Caroline 
 
 FINANCE 
 
 ADDRESSED TO THE 
 
 PRESIDENT OF THE CONFEDERATE STATES. 
 
 — ««Mt^jfe i i i ^mi 
 
 BY BUFF GREEN 
 
 Anxious to promote the public interests as far as in my humble sphere 
 I can do, I venture to suggest a plan -for the restoration of the value 
 -of the public credit, which, I hope, if aided by your approval, will b« 
 adopted by Congress, and is therefore respectfully submitted for your con- 
 sideration. . 
 
 1. That all payments from the Treasury of the Confederate States be 
 made in gold or else in coupon bonds, bearing a rate of interest which will' 
 be an equivalent for the use of money, or else in Treasury certificates 
 bearing no interest, of denominations suitable for currency, not exceeding 
 five hundred dollars, and convertible into bonds at the will of the holders. 
 
 2. That the bonds be of denominations not less, than one thousand 
 dollars, and convertible into certificates, deducting five per cent. 
 
 8. That all payments into the Treasury shall be made in gold or silver, 
 «r in Treasury Certificates. 
 
 4. That the Treasury Certificates shall bear date on the 1st of January, 
 April, July and October, and, if not funded or paid on account of public 
 dues, within six months from their date, shall be taxed five per cent., to 
 be deducted when funded or paid; and if not funded or paid, as aforesaid, 
 within twelve months from their date, then to be subject to a tax of ten 
 per cent., and to an additional tax of five per cent, for each additional 
 three months, during which they may not have been funded or paid as 
 aforesaid 
 
 5. The whole of the public debt, as far as practicable, to be placed on 
 the same basis, and all be made redeemable at the pleasure of the Gov- 
 ernment. 
 
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 6. That the certificates be made a legal tender, and neither the certifi- 
 cates nor the bonds be taxed, except as above provided for, unless it be- 
 comes necessary to increase the tax on the certificates, as a means of main- 
 taining tljeir relative value as money. 
 
 If, at a cost not exceeding the cost of Treasury Notes, I could, on the 
 , 1st of January, April, July and October, of each year, deposit in the Treas- 
 ury of the^Confeclerate. Government and of each of the separate States, a 
 sum, in gold, equal to the disbursements of each, for the next succeeding 
 three months, no one would dispute my claim as a public benefactor. I 
 propose to demonstrate : 
 
 1. That Congress have power to make the certificates thus to be. issued 
 a tender. 
 
 2. That the certificates, if made a tender, will be money. 
 
 3. That this paper money will be more valuable than gold as a circulat- 
 ing medium. 
 
 « 4. That this money will be more stable and uniform in value than gold. 
 • 5. That Congress can regulate the value of such a currency and cannot 
 regulate the value of gold. 
 
 6. That the measures proposed would not only diminish the burden of 
 the public debt, but would convert it into capital, which would be much 
 more available and beneficial in the progress and development of our in- 
 dustry, our agriculture, our manufactures, and our commerce, foreign and 
 domestic, than if the whole disbursements of our Government, State as 
 well as Confederate, were paid in gold. 
 
 7. ■ That under such a system of paper mOney, the States can organize a 
 system of banking, requiring each bank to place ample funds with # the 
 Treasurer of the State for the redemption of their notes, to be held in 
 trust, and applicable solely to that object. 
 
 8. That this would protect the public against loss by bank failures; and, 
 at the same time, enable the banks to increase their line of discounts and 
 to greatly increase their profits. 
 
 9. That^ whilst it would greatly increase the public and individual re- 
 sources, it would greatly diminish the burden of taxation. 
 
 10. That such a reform in our system of finance would ensure the pay- 
 ment of the interest and principal of the public debt, in a medium of much 
 greater value than that in which it was created. 
 
 11. That the conversion of our present system of currency into a 
 metallic, or into a paper, convertible into a metallic currency, would inev- 
 itably cause so great a depreciation of the values of labor and of property, 
 
 . ae to render the payment of the public debt impossible, and to make revo- 
 
lution and repudiation inevitable, after having reduced the whole country 
 to a state of distress, 'bankruptcy and despair, in which we would be unable 
 to make payment: 
 
 "12. The measures which I propose' will surely bring financial indepen- 
 dence and prosperity, whilst the present-system, if adhered to, will endan- 
 ger our political independence, and surely overwhelm us with national and 
 individual bankruptcy, and with unexampled disgrace, distress and ruin. 
 
 I am aware that many believe that ours is a hard money Government, 
 and that nothing but gold or silver can be made a tender: I am also 
 aware that many believe that it is impossible to prevent the depreciation 
 of paper money. I am further aware that these opinions are so deeply 
 impressed upon the public mind, that I must sustain my propositions by 
 influential and reliable authorities, as Well as by argument. 
 
 I proceed fir,st to show what money is, and. will then demonstrate that 
 Congress has power to convert the Treasury Certificates into money, by 
 making them a legal tender. The cause for which I plead, is the cause of 
 Civil and Religious Liberty, of right, of justice, of good faith, of pecuniary 
 independence, of human progress and prosperity, and I beseech you, the 
 Congress, the Legislatures of the several States, and the people, for the 
 sake of that cause, earnestly to consider the facts and argixments which I 
 respectfully submit in support of it. DUFF GREEN. 
 
 WHAT IS MONEY? 
 
 Worcester defines MONEY to be stamped metal, generally gold, silver 
 or copper, used in traffic, or as the measure of price : coin. 
 
 Money differs from uncohvsd silver in that the quantity of silver in each piece of money 
 is ascertained by the stamp it bears, which is a public voucher. — Locke. 
 
 2. Cash generally ; any current token or representative of value, as bank notes ex- 
 ' changeable for coin, notes of hand, accepted bills on mercantile houses, drafts, etc. 
 
 Wright. 
 Syn. — Money, originally stamped coin, is now applied to whatever serves as a circu- 
 lating medium, including bank notes and drafts, as well as metallic coins ; cash is ready 
 money, and is sometimes restricted to coin, or metallic money bearing a legal stamp ; 
 but it is commonly used to include bank notes, drafts, etc. 
 
 McCulloch, in his Commercial Dictionary, says : 
 
 When the division of labor was first introduced, commodities were directly bartered 
 for each other ; those, for example, who had a surplus of corn and were in want of 
 wine, endeavored to find out those who were in the opposite circumstances, or who had 
 a surplus of wine and wanted corn, and they exchanged the one for the other. It is 
 obvious, however, that the power of changing, and consequently of dividing employ- 
 ment, must have been subjected to perpetual interruptions, so long as it was restricted 
 to mere barter. The extreme inconveniences attending such situations must early have 
 forced themselves on the attention of every one. Efforts would, in consequence, be 
 made to avoid them, and it would speedily appear that the best, or rather the only 
 way, in which this could be effected, was to exchange either the whole or part of one 
 surplus produce for some commodity of known value and in general demand, and which, 
 
consequently, few persons would be inclined to refuse to accept as an equivalent for 
 whatever they had to dispose of. ***** . Now this commodity, whatever it 
 may be, is money. ■ 
 
 An Infinite variety of commodities have been used as money in different countries and 
 periods. But none can be advantageously used as such unless it possesses several very 
 peculiar qualiti.es. The slightest reflection on the purpose to which it is applied must 
 indeed be sufficient to convince every one, that it is indispensable, or at least exceed- 
 ingly desirable, that the commodity selected to serve as money should bo divisible into 
 the smallest portions. 2d. That it will admit of being kept for an indefinite period 
 without deteriorating. 3d. That it should, by possessing great value in small bulk, be 
 capable of being easily transposed from place to place. 4th. That one piece of money, 
 of a certain denomination, should always be equal in magnitude and quality to every 
 otheV piece of money of the same denomination. 6th. That its value should be com- 
 paratively steady, or as little subject to variation as possible. Without the first of 
 these qualities, or the capacity of being divided into portions of every different magni- 
 tude and value, money, it is evident, would be of almost no use, and could onlv be 
 exchanged for the few commodities that might happen to be of the same value as its 
 indivi^ble portions, or as whole multiples of them. Without the second, or the capacity 
 of being kept or hoarded without deteriorating, no one would choose to exchange 
 commodities for money, except only when he expected to be able, speedily, to re- 
 exchange that money for something else Without the third, or facility of transport- 
 ation, money could not be commercially used in transactions between places at consid- 
 erable distance. Without the fourth, or perfect sameness, it would be extremely difficult 
 to appreciate' the value of different pieces of money ; and without the fifth, or compara- 
 tive steadiness of value, money could not serve as a standard, by which to uieasure the 
 value of other commodities, and no one would be disposed to exchange the produce of 
 his industry for an article that might shortly decline, considerably in Us power of pur- 
 chasing. : T * 
 
 The union of the different qualities of comparative steadiness of value, divisibility- 
 durability, facility of transportation, and perfect sameness in the precious metals, 
 doubtless formed the irresistible reason that has induced every civilized community to 
 employ them as money. 
 
 John Taylor, Jr., defines money to be ". a token issued by G-OTerument. 
 aud made a tender in payment of debts." 
 
 Adam Smith said : 
 
 A, paper money consisting in bank notes, issued by a people of undoubted credit, 
 payable upon demand, without condition, and in fact always readily paid as soon as 
 presented, is, in every respect, equal in value to gold and silver money, since gold and 
 silver money can at any time be had for it. Whatever is either bought or sold for such 
 paper must necessarily be bought or sold as cheap as it could have been for gold i»nd 
 •ilver. 
 
 Bicardo says : 
 
 If there was perfect security that the power of issuing paper money would not be 
 abused ; that is, if there was perfect security for its being issued in such quantities as- 
 to preserve its value relatively to the mass of circulating commodities nearly uniform' 
 the precious metals might be entirely discarded from circulation. 
 
 Mr. Calhoun, in his speech in the United States Senate upon the re- 
 moval of the deposits on the 3d of January, 1834, said : 
 
 Whatever the Government receives and treats as money, is money in effect ; and if it 
 be money, they have the right under the Constitution to regulate it * * * * * 
 
 If Congress has the right to receive anything else than specie in its dues, they have 
 the right to regulate its value; and have aright, of course, to adopt all necessary and 
 • proper means, in the language of the Constitution, to effect its object. 
 
 McCulloch, under the title of " money," says : 
 
 No certain estimate can be formed of the quantity of money required to conduct the 
 business ol any country ; this quantity being in all cases determined by the value of 
 
money itself,, the service it has to perform, and the devices used for economizing its 
 employment. Generally, however, it is verv considerable, and when it consists wholly 
 of ,gokl and silver, it occasions a very heavy expense. There can, indeed, be no doubt 
 that the wish to lessen this expense has been one of the chief causes that have led all 
 civilized and commercial nations to fabricate a portion of their money of some* less 
 valuable material. Of the various subs'itutes resorted to for this purpose, paper is, in 
 all respects^ the most ; eligible. ***** Hence, the origin of bank notes. 
 
 These extracts not only prove that money may be' made of paj)er, but 
 that all civilized and commercial people have used paper money because it , 
 is more convenient and cheaper than specie, and that if not issued in excess, 
 it is more valuable than specie. 
 
 In his speech upon the Sub-Treasury, Dec. 19th, 1887, Mr. Calhoun 
 said: . ' 
 
 I am of the impression, to make this great measure, successful, and secure it against 
 reaction, some stable and safe medium of circulation, to take the place of bank notes, 
 ought to be issued. I intend to propose nothing. It would be impossible, with so great 
 a weight of opposition, to pass any measure without the entire support of the Admin- 
 istration ; and if it were possible, it ought not to be attempted where so much must 
 depend on the mode of execution. The best measure, that could be devised might fail 
 and impose a heavy responsibility on its author, unless it met with the hearty approba- 
 tion of those who are to execute it. 1 now intend merely to throw out suggestion?, in 
 order to excite, the reflection of others on a subject so delicate and of so much import- 
 ance — acting on the principle that it is the duty of all, in so great a juncture, to present 
 their views without reserve. 
 
 It is then my impression, that in the present condition of the *drld, a paper currency 
 in some form, if not necessary, is almost indispensable in financial and commercial opera- 
 tions of civilized and extensive communities. In many respects, it has a vast superiority 
 over metallic currency, especially in great and extended transactions, by its. greater 
 cheapness, lghtness. and the facility of determining the amount. The great desidera- 
 tum is to ascertain what description of paper has the requisite qualities of being free 
 from fluctuation in value and liability to abuse in the greatest pfy-fection. I have 
 shown, I trust, that the bank notes do not possess these requisites in a degree sufficiently 
 high for this purpose. k. 
 
 I go further. It appears to me, after bestowing the best reflection I can give the 
 subject, that no convertible paper — that is, uo paper whose credit rests upon a promise 
 to pay, is suitable for currency. It is the form of credit proper in private transactions, 
 between man and man, but not' for a standard of value, to perform exchanges generally 
 which constitute the appropriate functions of money or currency. ***** 
 
 On what, then, ought a paper currency to rest j I would say, on demand and supply, 
 simply, which regulates the value of everything else — the constant demand which the 
 Government has on the community for its necessary supplies. A medium, resting on 
 this demand, which simply obligates the Government to receive it in all of its dues, to 
 the exclusion of everything else, except gold and silver — and which shall be optional 
 with those who have demands on the Government to receive or not, would, it seems to 
 me, be as little liable to abuse as the power of coining. It would contain within itself 
 a self-regulating power. It could only be issued to those who had claims on the Gov- 
 ernment, and to those only with theiv consent, and, of course, at or above par with gold 
 and silver, which would be its habitual state ; for, so far as the Government was con- 
 cerned, it would be equal, in every respect, to gold and -silver, and superior in many, 
 particularly in regulating the distant exchanges of the country. 
 
 Nothing but experience can determine what amount and of what denominations might 
 he safely issued ; but it may be safely assumed that the country would absorb an amount 
 greatly exceeding its annual income. Much of its exchanges, which amount to a vast 
 sum, as well as its banking business, would revolve about it, and many millions would 
 thus be left in circulation beyond the demands of the Government. It may throw some 
 light on this subject to state that North Carolina, just after the Revolution, issued a 
 large amount of paper, which was made receivable in dues to her. l£ was also made 
 .a. legal tender, but which, of course, was not obligatory after the adoption of the Fed- 
 
eral Constitution. A large amount, say between four and five hundred thousand dollars,, 
 remained in circulation after that period, and continued to circulate for more than twenty 
 years, at par with gold«ind silver during the whole time, with no other advantage than 
 being received in the revenue of the State, which was much less than $1(0,000 per 
 annum. I speak on the information of citizens of that State in whom I can rely. 
 
 Again, in a speech of Oct. 3, 1837, after demonstrating that in conse- 
 quence of -the receipt of bank notes by the Government they had in a 
 great measure superseded the use of the precious metals, Mr. Calhoun 
 said : 
 
 I am not the enemy but the friend of credit. Not as a substitute, but the associate, 
 and the assistant of the metals. In that • capacity I hold credit to possess, in many 
 respects, vast superiority over the metals themselves I object to it in the form which 
 it has assumed in the banking system, for reasons which are neither light or few, and 
 that neither have been or can be answered. The question is not whether credit can be 
 dispensed with, but what is the best possible form — the most stable, least liable to 
 abuse, and the most convenient and cheap. I threw out some ideas upon this mostjm- 
 portant subject in my opening remarks. I have heard nothing to change my opinion. 
 X believe that Government credit, in the form 1 suggested, combines all the requisite- 
 qualities of a credit circulation in the highest degree, and, also, that the Government 
 ought not to use any other credit but its own in its financial operations. 
 
 Weaie told that the form I suggested is but a repetition of the old Continental 
 money — a ghost that is ever conjured up by all who wish to give the banks an exclusive 
 monopoly of Government credit. The assertion is not true; there 4s not the least 
 analogy between them. The one was a promise to pay when there was no revenue, and 
 the other to receive in the oues of the Government when there was an abundant 
 revenue. 
 
 We are told that there is no instance of a Government paper that did not depreciate. 
 In reply, I affirm that there is none, assuming the form I propose, that ever did depre- 
 ciate. Whenever a paper, receivable in the dues of Government, has anything like a 
 fair trial, it has succeeded. Instance the case of North Carolina, referred to in my 
 opening remarks. The drafts of the Treasury at this im>ment, with all their encun;- 
 brances, are nearly at par with gold and silver. 1 might add the instance alluded to by 
 the distinguished Senator from Kentucky, in which he admits that as soon as the excess 
 of the issue of the Commonwealth Bank of Kentucky were reduced to the proper point its 
 notes rose to par. The case of Russia might also be mentioned. In 1827 she had a fixed 
 paper circulation, in the form of Bank Notes, but which were inconvertible, of upjvards of 
 $120,000,000, estimated in the metallic ruble, and which had for years remained without 
 fluctuation, having nothing to sustain it but that it was received in the dues of the 
 Government, and that too with a revenue of only about $90,000,000 annually. I speak 
 on the authority ot a respectable traveller. Other instances might no doubt be added, 
 but it needs no such support. How can a paper depreciate which the Government, is 
 bound to receive in all its payments, and while those to whom payments are to be made 
 are under no obligation to receive it ? From its nature it can only circulate when at par 
 with gold and silver, and if it should depreciate none could be injured but the Govern- 
 ment. • 
 
 It will be seen that his purpose was to organize a financial system for 
 the United Slates, in which the credit of the Government should be 
 received and paid away at par with gold. Small as the minority in which 
 he and his friends were, under the pressure of circumstances and the force 
 of his arguments, Congress, in 1846, passed an act which, as quoted by 
 Colwell, provides " that the Treasurer of the United States, the Treasurer 
 of the Mint of the United States, the Treasurers, and those acting as such " 
 at the various Branch Mints, all Collectors of Customs, all Surveyors of 
 the Customs acting also as collectors, all Assistant Treasurers, all receiver,'; 
 of public money at the several land offices, all Postmasters, and all public 
 
officers of whatever character, be, and they are hereby required to keep 
 'safely, without loaning, using, depositing in banks, or exchanging for other 
 funds than he is allowed by this act, 'all the public money collected by 
 them, o^ otherwise, at any time, placed in their possession or custody, till 
 the same is ordered by the proper department or officer of the Government 
 to be transferred or paid out ; that all collectors and receivers of public 
 money of every character and description shall so frequently as they may 
 ■be directed by the* Secretary of the Treasury or the Postmaster General, 
 to pay over to the Treasurers of their respective districts all public money 
 .collected by them or in their hands ; and" it shall be the duty of the Secre- 
 tary and the Postmaster General respectively, to order such payments by 
 the said collectors and receivers at all 'said places, at least as often as once 
 in each week, and as much more frequently in all cases as they in their dis- 
 cretion may think proper." It is farther enacted in the same statute, 
 "That on and after the first of January, 1847, all sums payable to the 
 United States shall be paid in gold or silver coin, or in'Treasury Notes 
 issued by authority of the United States, that on and after the first of 
 April, 1847, all payments shall be made in gold or silver coin, or in Treas- 
 ury Notes, if the creditor agrees to receive said notes in payment." 
 
 Oolwell quotes from the Secretary of the .Treasury's (Mr. Guthrie) re- 
 port, of December 3d, 1855, as follows : 
 
 The Independent Treasury Act still continues eminently successful in all its opera- 
 tions. ^ The transfers, for disbursements, during the fiscal year, to the amount of 
 $39,407,674 03, have been made at a cost of $10,762 35, while the premium on the sale 
 of drafts has amounted *o 830 431.87. The receipts and expenditures during the fiscal 
 year amounted to $131,413,859 59 have all been in the Constitutional currency of gold 
 and silver without any perceptible effect upon the currency or upon the healthy business 
 operations of the country. 
 
 And again from his annual report, December 1st, 1856 : 
 The amount transferred, for disbursement, during the past fiscal year was 
 $38,088,1 13.92, at a cost of $12,954.87 ; while the premiums paid ou sale of Treasury 
 drafts have been §54,924.16, leaving §41,978 29 over'and above the expenses. * * 
 The receipts and expenditures, during the fiscal year, have'amouuted in the aggregate to 
 $146,866,933.48', and have all been paid in the Constitutional currency of gold and silver 
 without any disturbing effect upon the currency, the banks, or business of the country. 
 
 Commenting upon this act, Col well says : 
 
 It proposed that all payments to :ind from the Treasury should be made in gold and 
 silver coin, or in Treasury notes issued under the authority of the United .States. Now 
 this was offering to the creditors of the Government their choice of specie or the very 
 best ■currency ivhich could be issued hi the country. No medium of payment which could 
 be devised would better accommodate the public creditors than Treasury Notes, issue'd 
 in forms and denominations to suit the wants and conveniences of the people. 
 
 I quote these extracts to demonstrate the correctness and' wisdom of Mr. 
 Calhoun's views of the proper use of public credit, intending, as I pro- 
 gress, to cite other faets, stronger if possible than these, to enforce the 
 necessity of adopting the measures which I propose. It is true that the 
 value of Treasury Notes, -under the system adopted by the Federal Govern- 
 ment, was kept at par with gold because the banks were required to redeem 
 their notes with specie. I propose to make our Treasury Notes convertible 
 into coupon bonds, worth as much as specie, and thus maintain their value. 
 
8 • 
 
 CAN CONGRESS MAKE TREASURY NOTES A TENDER T 
 
 In his speech upon tRe Sub-Treasury, delivered in the Senate March 
 10th, 1838, Mr. CalhouD said: 
 
 I do not deem it necessary to inquire whether, in conferring the power toQoin money 
 and regulate the value thereof, the Constitution intended to limit the power strictly tr> 
 coining money and regulating' its value, or whether it intended to confer a. more general * 
 power over the currency ; nor do I intend to inquire whether the word coin is limited simply 
 to metals, or may be extended to other substances, if through a gradual change they may 
 become the medium of the general circulation of the world. Whatever opinion there mnT. 
 be entertained in reference to them, we must all agree, as a fixed principle in our system 
 of thinking on Constitutional questions, that the power under consideration, like other 
 powers, is a trust power, and that, like all such powers.it must be so exercised as i<* 
 eifect the object of the trust, as far as it may be practicable ; nor can we disagree that the 
 object of the power was to secure- to these States a safe, uniform, and stable currencv. 
 The nature of the power, the terms u-ed to convey it, the history of the times, thV 
 necessity, with the creation of a common Government, of having a common and uniform 
 Circulating medium, and the power conferred to punish those who, by counterfeiting, may 
 attempt to debase and degrade the coins of the country, u.11 proclaim this to be the 
 object. * * * * ' * * * * * ■ * 
 
 If Congress has a right to receive anything else than specie in its dues, they have the 
 tight to regulate its value, and have a right, of course, lo adopt all necessary and proper 
 means, in the language of the Constitution, to effect the object. 
 
 Again, in reply, to Mr. Webster, March 22d, 1888, Mr. Calhoun said : 
 I now undertake to affirm positively, and without the least fear that I can be answered 
 — what heretofore I have but suggested — that a paper, issued by Government, with the 
 simple promise to receive it in all itg dues, leaving its creditors to take it or gold and 
 silver, at their option, would, to the extent that it would circulate, form a perfect paper 
 circulation, which could not be abused by the Government ; that it would be as steady 
 and uniform in value as the metals themselves ; and that if, by possibility, it should de- 
 preciate, the loss would fall, not on the people, but on the Government itself; for the 
 only effect of depreciation would be virtually to reduce the taxes, to prevent which the 
 interest of the Government would be a sufficient guarantee. I shall not go into the 
 discussion now, but on a suitable occasion I shall be able to make good every word J 
 have r?ttered. Iwvuld be able to do more — to prove thai it is within the Constitutional 
 power of Congress to use such a paper, in the mauageiiument of its finances, according tit 
 the most rigid rule of construing the Constitution j and that those, at least, who think 
 that Congress can authorize the notes of State corporations to be received in the public- 
 dues, ;. re estopped from denying itsjright to receive its own paper. If it can virtually 
 indorse by law, on the notes of specie paying banks, " Receivable in payment of the 
 public dues," it surely can order the same words to be written on a blank piece of paper. 
 
 As the power to coin " money " and regulate its value, and to piss all 
 laws necessary and proper to effect that object is expressly given to 
 Congress, and, as the purpose of the Constitution was* to enable Congress to 
 give to the States " a safe, uniform, and stable currency/' Mr. Calhoun 
 •refers to "the history of the times, and the necessity with the creation of 
 fe. common government of having a common circulating medium," in 
 support of his proposition, that whatever the Government may receive and 
 pay away as money is money, and that it is the duty of Congress to'reguiate 
 its value. 
 
 What was the history of the times ? and what was the necessity for 
 creating a common and uniform circulating medium ? 
 
 Ayres, in his Financial Register for 1857, in his chapter on Banks and 
 Banking in the United States, says : 
 
 The first description of paper money, as far back as 1690, was in form of Bills of 
 Credit, secured on the property and revenues of the Colony, but war. soon forced th* 
 
colonists to increase this currency to such an extent as greatly to depreciate its value 
 ^compared with specie. This formed a very powerful difficulty with the States, yet it 
 was made a legal tender, and received in payment of taxes and debts in New England 
 at the rate <tf 6s. the Spanish dollar ; in New York at 8s., and in Pennsylvania at 7s. 6d. 
 These variatRns in the nominal value of the currency created the greatest confusion, 
 which may be understood by the difference between its nominal and real value in 1748, 
 when these bills, to the amount of $3,000,000. were issued. A bill on London for £100 
 in specie was equivalent to a bill for £1,100 of this paper money of New England ; for. 
 £190 of New York; for £190 of East Jersey ; for £180 of West Jersey ; for £180 of 
 Pennsylvania; for £200 of Maryland; for £125 of Virginia; for £1,000 of North 
 Carolina; and for £700 of the paper currency of youth Carolina. A part of ihese 
 issues were soon afterward redeemed at two shillings in the pound, but the War of 
 Independence, in 1775, called forth the increased demand for an extended currency, 
 so that, in September of 1779, $160,000,000 were issued ; when Congress passed a law 
 that it should never exceed $2j00,000,o00, which sum it reached at the end of th« 
 year.. In 1780 and 1781 these bills ceased to have currency. 
 • » 
 
 Such was the "history of the times," which fully explains the necessity 
 
 of giving to Congress, as the common agent of all the States, the exclusive 
 and unrestricted power to coin money and regulate its value. The power is 
 not to coin gold and silver money. It is to coin money. This, brings us. to 
 the simple question : What is money? And inasmuch as the unrestricted 
 power to coin money and regulate its' value was given to Congress, without 
 reference to the material of which it is to be coined, the power to deter- 
 mine of what material it may be coined as well as the fineness, weight and 
 other properties of money, is necessarily vested in the discretion of Con- 
 gress- For the clause forbidding the States to issue bills of credit, or to 
 make anything else than gold and silver a legal tender proves that the pro- 
 priety of our "issue of paper money was under the consideration of the 
 Convention which framed the Federal Constitution, and the fact that whilst 
 the unlimited power to coin money and to regulate its value without 
 reference to gold, silver, or paper, was given to Congress, and the power to 
 iasue paper money was not forbidden to Congress but was forbidden to the 
 States, is conclusive to prove that it was not the purpose of the Convention 
 to forbid the issue of paper money by Congress. 
 
 That Mr. Calhoun would concur in this construction of the power of 
 Congress, appears in the quotation given above. He said : "Nor do I 
 intend to inquire, whether the word coin is limited simply to metals, or 
 may be extended to other substancesj if through a gradual change they 
 may become the medium of the general circulation of the world." There 
 can be no other interpretation to this quotation than that, if under any 
 circumstances, it becomes necessary to issue paper money, then Congress 
 may, if they deem' it expedient, coin paper money, and have power to pass 
 all laws necessary and proper to regulate the value of the paper money 
 thus coined, and consequently to make it a tender. 
 
 In this view of the power of Congress, the Treasury Notes or Certifi- 
 cates issued and paid away by authority of Congress, are money, and the 
 only question is, is it necessary,, and proper to make them a legal tender as 
 a means of regulating their value ? If so, then the power is vested in 
 Congress. 
 
10 
 
 CONGRESS CANNOT REGULATE TIIR VALUE OF GOLD SO' 
 
 AS TO PREVENT FLUCTUATIONS IN THE QUANTITY 
 AND VALUE OF A METALLIC CURRENCY. 
 
 The ■. EiHrJ/nrgh Review, of February, 1820, in a chapter 0n Banking, 
 
 Let us then endeavor briefly to inquire into the circumstances that determine the 
 quantity of money in a country • first, when the currency is wholly of gold or silver; 
 second, when it consists wholly of paper that is made a legal tender, but which is not 
 convertible at pleasure into the precious metals; and third, when the currency consists 
 partly of coin and partly of paper, immediately convertible into coin. 
 
 With respect to the.first, or that in which the currency of any given country consists 
 entirely of ; be precious metals, it is evident, inasmuch as they are always in demand, 
 and can be imported and exported at a very small expense, that the quantity of'precious 
 raetals which such a country would, in all ordinary ca*es, use as money, would be lim- 
 ited tq the quantity which was required to preserve ™.eir .value at the same level in it, 
 as in other countries. If on the <5ne hand, any greater additions were made to the 
 amount of gold or silver in circulation, than were required to preserve the currency at 
 this, its proper level, its value would fall, and there would, in consequence, be an imme- 
 diate expottalion of the precious metals ; and if. On the other hand, the amount of gold 
 or silver in circulation were unduly diminished, the opposite effects would be produced ; 
 the value of the currency would tnen be raised above its proper level, and there would 
 bean importation of the precious metals from all the surrounding" countries to restore 
 that equality of value which could not in either case be -permanently or even consider 
 ably derauged. , ■ 
 
 In the second case, we have supposed that of a country with a paper currency declared 
 to be a legal render, but not convertible at pleasure into the precious metals, it is evi- 
 dent, inasmuch as such a paper caA neither be exported to other countries, when it is 
 •issued in excess, nor imported when the issues are unduly limited; that it is- not pos- 
 sessed of the same principle c self-contraction and expansion inherent in a currency 
 consisting of the precious metals ; and that, consequently, its value mast always depend 
 on the extent to which it has bean issued compared with the demand.. ***** 
 The essential, difference, then, between a currency consisting wholly of the precious 
 metals and one consisting wholly of inconvertible paper, is this, that the value of the 
 former, in any particular country, can never differ, either permanent!)/ or considerably 
 ■from its value in others ; and that it's value, as compared with, commodities, depend on the 
 comparative cost of their and its production ; whereas, the value of the latter, in any one 
 country, may vary to any conceivable extent from its value in others; and its value, as 
 compared with commodities, does not depend on the cost of .producing it and them, but 
 to the extent to which it has-been issued compared to the demand. * * * * * 
 It re-nits from these principles, that convertibility into gold and silver, at the pleasure of] 
 the holder, is not necessary to give value to paper money; and that, if perfect security 
 'could be obtained that the power of issuing would not be abused, or that it would 
 always be issued irj such quantities as would render a one pound note uniformly equiva- 
 lent to the quantity of standard gold bullion contained in a sovereign, the precious 
 metals might be entirely dispensed with as a medium of barter, or used onlv to serve- as 
 small change. *■ * *' f * * _ * ■ ' * * 
 
 We are naturally led to the consideration of the third and most important head in out- 
 inquiry, or to that which has for its object to discover the circumstances which deter- 
 mine the amount and value of the currency of a country when it consists partly of coin 
 and partly of paper, immediately convertible into coin. 
 
 It appears, from what has been already stated, that an excessive quantity of tire 
 precious metals can never be imported into any country, which allows them to be freely 
 sent abroad, without occasioning their- instant exportation. But when the currency ot 
 any particular country, as of England, consists partly of the precious metals and partly 
 of paper, convertible into them, the effects produced by an over issue of paper are the 
 same as those resulting from an over issue of gold or silver. The excess of paper will 
 not -be indicated by a depreciation or fall in the. value of paper, as compared with 
 gold ; but bi/ a depreciation of the value of the whole currency, gold as well as paper, a< 
 
11 
 
 <-*>mpared with that of other States. ***** it is obvious that this issue of 
 paper must, have precisely the same effect ou the value of money as the issue of addi- 
 tional sovereigns. There cannot, it is clear, be any depreciation in the value of paper as 
 compared with gold ; for gold may be immediately obtained in exchange for it, and it is 
 as readily recajved in all payments throughout the country. The effect of increased 
 issues of notes, immediately convertible into gold, is not,' therefore, to cause any discre- 
 pancy between the value of paper and the value of gold, in the home market, but to 
 increase the amount of the currency, and by rendering it redundant or depreciated* as 
 compared with that of other countries, to depre-s the nominal exchange; and thus, inas- 
 much as notes do not circulate abroad, to cause the exportation of coin, and, compe- 
 <juentli/, a drain upon the bank. 
 
 I have quoted thus at length from the Review, because it gives the argu- 
 ment relied upon by the advocates of a currency convertible into specie. 
 It is the argument of the Bank of England, and lies at the foundation of 
 the power and of the measures and policy of that institution. It assumes, 
 1st. That inasmuch as they'are always in demand and can be imported and 
 exported at a very small expense, the quantity of precious metals which 
 would, in ordinary cases, be used as money in any country in w^iich the 
 currency consists entirely of gold and silver, would be limited to the quan- 
 tity which may be required. to preserve their value at the same level in it 
 as in other- countries. 2d. That the effect of a paper currency, convertible 
 into specie in case of an over issue, will be to reduce the value of gold as 
 much as if the excess consisted of gold, and in like manner to cause' au 
 export of specie. 3d. That the effect of a paper currency, which is a legal 
 tender and not convertible into specie, would§be, that inasmuch as it would. 
 not -be exported to other countries when it is issued in excess, nor imported 
 when the issues are unduly limited, its value- may vary to any conceivable 
 extent from its value in other countries ; and its value, as compared with 
 commodities, does not depend upon the cost of producing it or^them,' but 
 upon the extent to which it has been issued as compared with the demand. 
 4th. That it results from these principles that convertibility into gold and 
 silver, at the pleasure of the holder, is not necessary to give value to paper 
 money, and that, if perfect security could be obtained that the power of 
 issuing would not be abused, or that it would always be issued in such 
 quantities as would render a one pound note uniformly equivalent to the 
 ■■quantity of standard gold bullion contained in a sovereign, the precioi# 
 metals may be entirely dispensed with as a medium of barter. 
 
 The Constitution authorizes Congress to "levy and collect taxes, duties*, 
 imposts and excises for -revenue necessary to pay the debts, provide for the 
 common defence, and ca,rry on the Government of the Confederate States," 
 "To coin money and regulate the value thereof and of foreign coins/' " To 
 regulate commerce with foreign nations," " To raise and support armies," 
 " To provide and maintain a navy," " To borrow, money on the 'credit of 
 the Confederate States," and to pass all laws which may be necessary and 
 proper to carry into execution any of the foregoing powers, etc. If to 
 make Treasury Certificates a legal tender be necessary and proper, as 'a 
 means of carrying on the Government of the Confederate States, of regu 
 lating the value of money, of regulating commerce with foreign nations. 
 ot raising ana supporting an army, of providing and maintaining a navy, 
 or of borrowing money on the credit of the Government of the Confederate 
 

 ;»1T' 
 'oiei 
 ■to 
 
 iff I 
 
 pet: 
 
 12 ■ 
 
 States, then the power is expressly vested in Congress, and as Congress ha 
 authorized the issue of paper money, it is the incumbent duty of Congres 
 to make it a tender, because it is impossible otherwise to restore or main^ 
 tain the value of Treasury Notes or Certificates as a circulating medium 
 and, as Adam Smith,"Ricardo, McCulloch, the Edinburgh Review, the Lok 
 don Quarterly, Colwell, Mr. Calhoun, and all other reliable writers on th 
 Subject of currency, agree* that if there is a perfect security that the powe 
 of issuing paper money would not be abused — that is, that if there can h{ 
 perfect security that it will be so limited in quantity as to maintain it; 
 value relatively to the value of the mass of circulating commodities — not o 
 gold, but of the mass of circulating commodities, nearly uniform, then th< 
 precio.us metals may be entirely discarded from circulation. 
 
 It is this principle which gives value to the notes of non specie banki irei 
 during their suspension — because, inasmuch as the public owe the banks 
 more than the banks owe the public, and the debt due the banks must \h 
 paid, in' bank notes or in specie, the demand for bank notes for this usr 
 maintains their value as a medium of purchase as well as of payment; ana 
 they are received and circulated by the public because, although they maj 
 not be a tender elsewhere, they are a tender to the bank of issue, and a? 
 the suan in circulation is presumed not to be more than is wanted for pay- 
 ment to the banks, that fact gives them credit and currency. Now., I will 
 demonstrate not only that the Congress can, by a judicious system of fund- 
 ing and taxing, as I propose, so limit the quantity of certificates in circula" 
 tion, as to make them uniform and stable in value, as currency, but that 
 inasmuch as they will not be subject to the contingencies which affect, the 
 value of gold in the foreign market, they will be more stable in value, aud 
 therefore a much better currency than gold. 
 
 The purpose of our Constitution was to enable Congress to create a com 
 rnon and uniform circulating medium for the* people of the Confederate 
 States If it be true, as asserted by the Review^ and as I admit it to be, 
 that specie will be exported when the price* in any foreign country is such 
 as to pay a sufficient premium, and that it will return when the value b< 
 ■too much increased that 'the price in that country from which it was ex 
 ported is so much greater than the price in that to which it was taken, as 
 to pay a sufficient premium; then, as Congress cannot regulate the contin- 
 gencies which may affect the value of gold in any foreign country,. and 
 consequently cannot regulate the quantity or the value of specie in aijy 
 other country, it is manifest that Congress cannot regulate the value of a 
 metallic or of a paper currency convertible into specie. Inasmuch as Con- 
 gress cannot regulate the value of a metallic or of a paper currency con- 
 vertible into specie, and can regulate the value of a fundable paper issued 
 by the Government, then as the exclusive power to coin money and to regu- 
 late its value is vested in Congress, it is the imperative duty of Congress 
 to regulate the value of the paper money which they have authorized to 
 be issued. The question is not whether Congress shall authorize the issue 
 of paper money. It is, will Congress regulate the value of the paper money 
 which they have already issued, and is its being a tender necessary to regu- 
 late its value ? 
 
13 
 
 1 1, "Can Congress discharge their duties in the. exigencies in which we are 
 *iaced,, without the use of the public credit, as money? •• If Congress is 
 
 /impelled to use the public credit as money, who can deny the power of 
 
 ^ongress to make it a tender, and to adopt all such measures as are neces- 
 i. j iry and proper to regulate its value ? If we admit that ,the value ©f 
 
 ,i'oney, whether it be metallic or paper, depends upon the quantity in cir 
 if -■-'•■■■ 
 
 i i 
 
 Nation, and that it is a fixed law of a metallic and a convertible paper 
 Wreney that specie will be exported whenever its value is greater in any 
 
 •jloreign market, and that it is a fixed law of' paper currency not convertible 
 
 j rito gold, that if the quantity in circulation be no more than is requisite 
 ,, ; jor use as money, it will be of^equal value* as gold, and that the precious 
 
 j aetals in such case may be dispensed with, then it follows that if Congress 
 aakes the paper, which they issue, a tender, and reduces the quantity in 
 abtirculation to the sum required for use as money, the paper thus issued 
 nljinay be made- as stable and uniform in value as gold. Can Congress, by a 
 judicious system of taxing, cause the excess of their issues -to be funded ? 
 ffi<fe[f five per cent, tax will not suffice, then impose a tax of ten per cent., but 
 wjaiy earnest belief is that the tax proposed will be sufficient. 
 tjij As such a currency will not be subject to the general laws which resju- 
 agitate the quantity and value of speck, it will be more uniform and stable in 
 rvalue than gold. For it is admitted that if, from any cause, cold is more 
 illl'valuable in England than elsewhere, then the quantity of gold in England 
 iliwill be so increased by importation from abroad, that its value will be-, re 
 ajiduced to the same level as it may be in the foreign countries from which 
 tM may have been imported ; then, if it shall appear that the importation 
 e.9iof gold will necessarily continue long after the requisite supplv of specie 
 [iihas been obtained, and that the inevitable consequence will be an undue 
 
 expansion of the currency to be followed by a re exportation of specie, and, 
 .^consequently, by an undue contraction of the currency, then it follows that- 
 (,,the precious metals, being thus liable to be increased and diminished in 
 
 quantity, must necessarily fluctuate so much in value that it is impossible 
 ,' to predicate upon them a stable and uniform, currency. This truth is 
 , forcibly illustrated by the annexed ,£able, prepared with great care from 
 .1 authentic official sources : 
 
14 
 
 'UV'iV showing the rate, of interest charged hy the Bank of England at the dates givtn. the quanlitn 
 of bullion in the Bank, the notes in circulation and the notes in reserve, with a statement of thr. 
 loans of tile Banks of the City of New York, the amount of their notes in circulation, and of thl 
 specie in their vaults, given in millions, omitting the small fractions. 
 
 
 BANK OF ENGLAND 
 
 
 flanks it» tfosefty©? Mew York 
 
 
 Rate of 
 
 Bullion 
 
 Notes in ! Notes ' 
 
 Loans 
 
 Specie 
 
 Circula- 
 
 DATE 
 
 Interest 
 
 in 
 
 Circulation! 
 
 ui 
 
 in 
 
 in 
 
 tion in 
 
 
 pur cent. 
 
 Millions 
 
 in Millions! Reserve j 
 
 Millions 
 
 Millions' 
 
 Millions- 
 
 1*52. Jan. 1 
 
 t 
 
 m 
 
 $88 
 
 i ' ! 
 $ 96 ! $58* 
 
 S .... 
 
 $..'. 
 
 s... 
 
 April 22 
 
 2 
 
 98 
 
 roe 
 
 574 
 
 
 
 
 1853. Jau. 6 
 
 24- 
 
 99 
 
 117 
 
 49 .-| 
 
 
 
 
 Jan. 20 
 
 3* 
 
 97 
 
 118 
 
 m 
 
 
 
 ... 
 
 June 2 
 
 n 
 
 91 
 
 117 
 
 11* 
 
 
 
 
 Sept. 1 
 
 4" 
 
 82 
 
 112 
 
 38* ■; 
 
 92 
 
 ii 
 
 S 
 
 Sept. 15 
 
 4* 
 
 * 79 
 
 112 
 
 31* 
 
 90 
 
 ill 
 
 9* 
 
 Sept. 29 
 
 5 
 
 *78 
 
 113 
 
 BL i 
 
 90 
 
 m 
 
 9* 
 
 1854. Mayil 
 
 H 
 
 63 
 
 105 
 
 23*. 
 
 90f 
 
 m 
 
 9^ 
 
 Aug.' o 
 
 5 
 
 66 
 
 101 
 
 31 
 
 98 f ■ 
 
 • .\ 
 
 ... 
 
 1SJ55. April 1 
 
 4* 
 
 75 
 
 96 
 
 *ty 
 
 ■ m 
 
 15 
 
 7^ 
 
 May 3 
 
 ± 
 
 78 
 
 100 
 
 53* i 
 
 93 
 
 14* 
 
 8 
 
 June 14 
 
 u 
 
 90 
 
 97 
 
 59-* 
 
 93 
 
 15 
 
 7* 
 
 • Sept. 6 
 
 4 
 
 7L 
 
 101 
 
 m'J 
 
 100 
 
 12 
 
 71' 
 
 Sept. 15 
 
 4'$ 
 
 68 
 
 98 
 
 37* 
 
 99 
 
 m 
 
 7i i 
 
 Sept. 27 
 
 5 
 
 64 
 
 101 
 
 31 
 
 97*. 
 
 10 
 
 7! 
 
 Oct. 4 
 
 5; 
 
 60 
 
 101 
 
 102 
 
 32* 
 
 95* 
 
 11 
 
 71 
 
 Oct. 18 
 
 6-7 
 
 55 
 
 51* 
 
 . 95 
 
 12* 
 
 7} 
 
 1866. May 2,2 
 
 6 
 
 51 
 
 96 
 
 19 *. 
 
 102i 
 
 13f 
 
 8} 
 
 May 29 
 
 5 
 
 56 
 
 98 
 
 51 
 
 102* 
 
 11 
 
 81 
 
 June 26 
 
 4**' 
 
 65 
 
 98 
 
 32 
 
 107 
 
 17 
 
 81 
 
 Oct. 17 
 
 5 
 
 51 
 
 105 
 
 31 : 
 
 105 
 
 101 
 
 &l 
 
 Oct. 26 
 
 8-7 
 
 51v 
 
 103 
 
 M* j 
 
 104 
 
 10* 
 
 Si 
 
 Nov. 13 
 
 7 
 
 48 
 
 .99 i 
 
 15 
 
 103* 
 
 12I 
 
 81 
 
 ' Dec. 4 
 
 6| ' 
 
 52 
 
 96 
 
 ior i 
 
 106 £ 
 
 12i 
 
 •8* 
 
 Dec. 18 
 
 - 6 
 
 53 
 
 93 
 
 49i 
 
 108* 
 
 11 
 
 8* 
 
 1857. Jan. 1 
 
 ■Q} 
 
 45 
 
 
 ..' 
 
 109 
 
 11 
 
 8* 
 
 June 1 
 
 • .. 
 
 55 
 
 ... 
 
 1 
 
 •• 
 
 115*. 
 
 ■ 13 
 
 8| 
 
 Sept. 1 
 
 5.- 
 
 57 
 
 
 
 US 
 
 loj 
 
 8* 
 
 Oct. 1 
 
 6*. 
 
 50 
 
 
 
 106 
 
 HI 
 
 8 
 
 Oct. 20 
 
 7 - 
 
 47. 
 
 ... 
 
 •• 1 
 
 97i 
 
 n 
 
 8 
 
 Oct 30 
 
 8 
 
 45 
 
 
 ! 
 
 95 
 
 12| 
 
 6* 
 
 Nov. 15 
 
 9 
 
 40 
 
 
 1 
 
 96| 
 
 16* 
 
 6* 
 
 Dec. 10 
 
 10 
 
 35 
 
 .. . 
 
 . . ■ '! 
 
 96*- 
 
 26 
 
 6*. ■ 
 
 Dec. 21 
 
 . . . 
 
 45 
 
 
 •• ' I 
 
 97* 
 
 28 
 
 6*. 
 
 Dec. 31 
 
 
 50 
 
 
 •• 
 
 98 
 
 27*, 
 
 6* 
 
 1858. Jan. 1 
 
 
 60 
 
 ••• . * 
 
 •• 
 
 984. 
 
 28* 
 
 H 
 
 •• Jlarck 1 
 
 
 85 
 
 
 .. 
 
 105' 
 
 32f 
 
 61 
 
 Aug: 1 
 
 
 80 
 
 
 
 120f 
 
 • 35 1 
 
 7| 
 
 Oct. 1 
 
 
 95 
 
 .... 
 
 .. 1 
 
 ... 
 
 ■ ...• ! 
 
 ... 
 
15 
 
 It will b$ seen that the average of specie and bullion held by the Bank 
 of England, from January 1, 1S52, to October 1, 1858, was about sixty - 
 three inillions»of dollars. If we assume this to be the u proper level," then 
 the fluctuations between ninety nine and thirty five millions of specie, and 
 the various fluctuations between two per cent, and ten'per cenU in the rate 
 of interest, as charged by the Bank, show that specie, as administered by 
 the Bank of Eugknd, instead of being the basis of a stable and uniform, 
 currency, is no more than the medium, through the agency of which a few 
 monied men are enabled, by the use of their credit ancrthe organization of 
 the Exchanges, to control and regulate not only the value of money, but 
 the values of property — spreading ruin and bankruptcy broadcast through- 
 out the world, enriching themselves by creating those fluctuations in the 
 values of money and of property, which, as they declare, it is their purpose 
 to prevent. 
 
 It should be remembered that it was the wars in India aud China which 
 created an extraordinary demand for specie in 1857. That from the com- 
 mencement of the war in the Crimea to the close of the wa?'s in India and 
 'China, the export of specie from the United States was more than two 
 I hundred and eighty millions of dollars. That the average bullion in the 
 i banks of the city of New York, from 1st July, 1S52, to the 20th October, 
 1857', was $11., 774, 785, and that Gibbon, in his history of the panic and 
 the suspension in New York in 1857, says that although there were seven 
 millions of* dollars withdrawn between the 10th and 17th of October, the 
 depletion in coin was but $5,483,804, and yet he says that the effect of the 
 panid, created by the loss of this sum in specie, was that : " The regular 
 discount of bills by the banks had mostly been suspended, and the street 
 rates for money, even on unquestionable securities, rose to three, four, and. 
 even five per cent, a month. On the ordinary securities of merchants, such 
 as promissory notes and. Bills of Exchange, mo'ney was not to be had at any 
 rate. House after house, of high commercial repute, succumbed to the 
 panic, and several heavy banking firms were added to the -list of failures. 
 * Commercial business was suspended everywhere. 
 
 The avalanche of discredit swept down merchants, bankers, monied corpo- 
 rations and "manufacturing companies, without distinction; old houses, of 
 accumulated capital, which had withstood the violence of all former panics, 
 were prostrated in a day, and when they believed themselves to be perfectly 
 safe against misfortune." 
 
 He gives a list of the sales at the broker's board of bonds and stacks, 
 which, he says, includes a wide range of securities, from the best down to 
 what are called " fancy," which shows an average depreciation of more 
 than one -third. These securities represented a class of investments exceed- 
 ing one thousand millions- of dollars, the depreciation of the exchangeable 
 value of which, being more than three hundred millions of dollars, was 
 caused by the withdrawal of five and a half millions of dollars from the 
 Banks in the city of New York.; which withdrawal was caused by the 
 demand for specie to pay the expenses of the war in the Crimea, in India,, 
 and in China. Now, if the United 'States had made hef disbursements in 
 certificates, made a tender, and receivable in payment of taxes, and con,- 
 
16 
 
 varlible into bonds bearing six per cent, interest, and reconvertible into 
 certificates which were a legal tender, and the banks had held twelve mil- 
 lions of such bonds, instead of twelve millions of specie, there would have 
 been no panic-— there would have been no run for specie- — no failure of 
 merchants, bankers, monied corporations, and manufacturing companies- 
 there would have been no depreciation of the value of bonds and stdeks, 
 and no loss of hundreds and hundreds of millions of dollars in the ex- 
 changeable values of property. 
 
 Is it not apparent that a system of paper money, made a legal tender, 
 resting upon the public credit as a basis, and regulated by a judicious sys- 
 tem of funding and taxation, maybe made more stable and uniform in value 
 than the system of banking and currency as regula'ed by the Bank of 
 England ? And this, I affirm, is the question involving no -less our interests 
 *fid welfare than the question of our political independence. We have no 
 alternative— we must adopt a system of finance which can be regulated by 
 our Congress, or the values of our credit, of our currency, and of our pro- 
 perty, will be regulated by the Bank of England, and the combination of 
 oionied men of whom that bank is but the agent. 
 
 In -June, 1852, the Bank of England held more than one hundred 
 'millions of dollars of bullion and specie, and interest was but 2 per cent , 
 and that on the. 10th of December, 1857, this sum was reduced to thirty. 
 five millions, and the bank interest was ten per cent. — the effect of this 
 pressure, on the London market, was that by the 1st of October, ,1858, the 
 bullion and specie in the bank had again increased to ninety-five millions, 
 and the rate of interest was again reduced. „ 
 
 The power of the Bank of England over the currency and credit of all 
 foreign commercial nations is forcibly exhibited by the ruinous effect upon 
 the credit and currency of the city of New York, and the consequent value 
 of propert) r . The average of specie held by the Banks of the city of New 
 York, from 1st September, 1853, to 20th October, 1857, was,* say eleven* 
 and a half millions of dollars; the pressure by the screw of the Bank of 
 England reduced this quantity to $7,843,231, and interest rose .to "three, 
 four and five per cent, a month,". " on unquestionable securities," and the 
 exchangeable value of property depreciated one third. But the tabic before 
 us shows that, although the demand for specie in London to meet the dis- 
 bursements of the wars in the Crimea, and in- India and China, had reduced 
 the bullion and specie in the Bank of England from ninety nine millions, 
 in June, '1853, to thirty five millions in December, 1857, and had reduced 
 the specie in the Banks of New York from seventeen millions, on the 26th 
 of June, 1856, to $7,843,231 on the 20th October, 1857, yet the effect of 
 the pressure by the Bank of England, and of the )*jfusal of the Banks of 
 New York to discount the best commercial paper, was to cause such a move- 
 ment of specie that, whilst the bullion in the Bank of England had, on the 
 1st of October, 1858, increased from thirty five millions to ninety-five 
 millions, the specie in the Banks of New York had, on the 8th of Mav, 
 1858, increased from $7,842,231 to $35,453,146. 
 
 Does it require argument to prove th;«t this fluctuation in the quantity of 
 specie held by the Bank of England and the baoks of New York, and in 
 
the rates of interest charged in London and in New York, was the conse- 
 quence of the fact that the currency in London and New York was a con- 
 vertible paper, predicated on a specie basis, and that, by refusing to renew 
 discounted commercial paper and increasing the rate of interest, the de- 
 mand for specie caused it to flow toward London and New York, the con- 
 trolling commercial centres, until the accumulation was much beyond the 
 sums requisite to maintain the value of specie at the " proper level?" 
 Thus we see that the average held by the Bank of England was sixty-three 
 millions, and that the average of the banks of New York was a fraction 
 more than eleven millions, yet as soon as the banks in London and New 
 York applied the screw with sufiicieirt force, the quantity in the Bank in 
 London rose from thirty-five to ninety-five millions, and the sum in the 
 Banks of New York rose from less than eight to more than thirty five mil- 
 lions. Thus, the tide roseiu London more than fifty per cent., and in New 
 York to more than three hundred per cent, above the " proper level ;" and 
 it is worthy of note that the fluctuation of the quantity of bank notes, in 
 London and New York, was much less under this severe, pressure of the 
 bank screw than the fluctuation of the quantity of specie. Thus the dimi- 
 nution of specie in the Bank of England was sixty four millions, whilst 
 the reduction of bank notes was but twenty five millions, and the loss of 
 specie by the New York banks under the panic was $5,483,864, whilst the 
 notes in circulation were reduced but one million and a half. 
 
 Is it not apparent, from these facts, that, if the value of money is regu- 
 lated by its quantity, the fluctuations in the quantity of specie being greater 
 than the fluctuations in the quantity of bank notes, a paper currency, made 
 a legal tender and predicated on an issue of public credit, and regulated 
 by a proper system of funding and taxation, will be more stable and uniform 
 in, value than it is possible for a metallic or convertible paper to be ? Is it 
 not apparent that, if from any cause, gold is so much more valuable in Lon- 
 don than it may be in the foreign market, that the Bank of England finds 
 it necessary to so increase the rate of interest, and so reduce the discounted 
 commercial paper as to cause the 'precious metals to flow back to London, the 
 same pressure of the Bank screw which forces gold to flow from New YoriJ 
 to London, will cause it to flow from South America, from Africa, from 
 India and China, and from the Mediterranean and Continental Europe to 
 London? , And if we assume that sixty three millions in the Bank of 
 England indicates the proper specie level for England, and that eleven and 
 a half millions in the Banks of the city of New York indicates the propor 
 specie level for the United States, is not the fact that immediately after 
 the pressure by the Bank of England, in December, 1857, the specie in 
 that Bank increased from thirty-five millions to ninety-five millions, and 
 that it also increased in the Banks of the city of New York from less than 
 eight millions to more than thirty-five millions, conclusive to prove that 
 Congress cannot regulate the quantity or the value of the precious metals; 
 and that the public credit, in the form which I propose ; may be so regu- 
 lated as to create a currency more uniform and stable in value than gold ? 
 
 The purpose of the Constitution is to establish justice, insure domestic 
 tranquility, and secure the blessings of liberty to ourselves and our posterity. 
 2 
 
IS 
 
 Is it just that we should be compelled to pay a debt in a currency worth, to 
 tbe creditors, twenty times the sum which tliey paid for it? Take the case of 
 those who have made fabulous millions by dealing in .foreign merchandise 
 purchased with the public credit at the rate of twenty dollars of Treasury 
 Notes for one of gold. Is it just that we shall be compelled to pay them one 
 hundred and twenty per cent, per annum interest, when our promise is to pa/ 
 them but six per cent. ? And will not thepayment, in gold, of six per cent, 
 interest on the nominal amount of the debt, be equivalent to the payment of 
 one hundred and twenty per cent, on the debt created ? If the interest is 
 paid in a currency of equal value to that in which the debt was created, will 
 not the just claims of the public creditor be discharged i If, instead of 
 making payment in the same medium in which the public debt was contracted T 
 we are compelled to pay it in a medium worth twenty times as much, will we 
 not increase the public debt twenty fold, and will not this increase the burden 
 of the debt more than one hundred fold \ Mr. Calhoun estimates the relative 
 value of the propert}', as compared to the money of a commercial country, to 
 be thirty for one. If we assume the amount of our public debt to be only 
 two thousand millions of dollars, contracted in a medium so depreciated that 
 it requires twenty paper dollars to purchase one of gold, the effect, upon the 
 values of property, of paying that debt in gold will be not as. twenty to one r 
 but as thirty times twenty to one — that is, not only to increase the burden, of 
 our debt, payable in the medium in which it was created, to forty thousand 
 millions of dollars, but to thirty times forty thousand millions of dollars — for 
 whilst it will "increase the value of the medium of payment twenty fold, It will 
 reduce the value of our property thirty fold, and thus it will consequently in- 
 crease the burden of debt and taxation in the same relative proportions, for 
 the burden of the debt will be increased in the same proportion as the ex- 
 changeable value of our labor and of our property is diminished. If, on the 
 other hand, we make payment' in tbe same medium in which the debt was- 
 contracted, and so regulate that medium as to increase its exchangeable 
 value nearly or quite twenty fold, and thus maintain the exchangeable value 
 of our property, and at the same time that we diminish the burden of the 
 public debt, relatively increase its value in the hands of the public creditor, 
 the hopes of calculating avarice may be disappointed, but who can deny that 
 the fullest claims of justice will be satisfied ? 
 
 But, under the Constitution, Congress have power to regulate "commerce 
 with foreign nations," and under that power can transfer to England, and to 
 those who consume*Bi , itish goods, a large part of the burden of our public 
 debt. As we progress, it will be seen that England is chiefly responsible for 
 the war in which we are now engaged, and that' strict justice, as well as a 
 wise political economy, calls for the measures of retaliation which it is in our. 
 power to inflict. 
 
 In the Cotton Planters 1 Convention, held in Macon on the 4th July, 1861, 
 I suggested the propriety of the purchase, by the Confederate Government, ot 
 the entire Cotton crop, as a means of sustaining the credit of the Government 
 and providing funds for prosecuting the war. It was in reply to my personal 
 argument, urging the propriety and necessity of this measure, that Mr. Mem- 
 minger issued his remarkable letter, intended to act on the business conven- 
 
19 
 
 tion held in Macon, in October, 1861, in winch he denied the power of Con- 
 gress to authorize the purchase of Cotton ! ! There are none, now, so blind 
 as not to see the propriety of my suggestion, and the culpable ignorance, to 
 call it by no harsher name, of the Secretary of the Treasury. Cutton is now 
 worth, in Liverpool, from fifty six to sixty cents per pound. The 
 present high price is the result of a deficient supply, and the impos- 
 sibility of obtaining it elsewhere than from the Confederate States. 
 If the market is- thrown open, the competition will soon reduce 
 the price to less than one third the sum which the Government could realise 
 if Congress were to authorize the purchase and hold it for an arbitrary 
 price. The monopoly of tobacco by France and the high duties levied by 
 England illustrates the effect. If we assume that the average cotton crops 
 for the next ten years after peace will be but four millions of bales, of five 
 hundred pounds each, and the whole is purchased at a price which will enable 
 the Government to pay the producers twice the sum which they could other- 
 wise obtain, and yet leave a margin of profit, as great or greater than the 
 price paid the producers, it is obvious that the monopoly by the Government 
 would not only greatly benefit the producer, but place in the public Treasury 
 ample specie funds to sustain the public credit so as to render the Treasury 
 Certificates equal to gold. Say that the Government price to the producer 
 was fixed at thirty cents per pound, and to the consumer at sixty ; this, upon 
 the four millions of bales, would give six hundred millions of dollars per an- 
 num to the producers and a like sum to the Government. If to this be added 
 the like profits on our tobacco and naval stores, it will be seen that a wise 
 administration of our finances will en'able us to pay our public debt and main- 
 tain the value of our currency. If the producer is unwilling to sell, and 
 prefers ,a foreign market, then let ' the export duty be such as to protect 
 the value of that purchased by the Government, and secure the profits on the 
 Government monopoly. 
 
 CAN CONGRESS MAKE TREASURY CERTIFICATES A TENDER 5 
 
 I am aware that it is believed by some that Congress cannot, make Treasurv 
 Certificates a legal_ tender, alleging that the effect will be to impair the obli- 
 gation of contracts. The Federal Constitution provides that Congress shall 
 pass no law impairing the obligation of contracts, and yet under the power to 
 enact a bankrupt law, the old Congress released bankrupt debtors from the 
 obligation to pay their debts. Our Constitution provides that "ho law of 
 Congress shall discharge any debt contracted before the passage of the same.'' 
 To authorize payments in the certificates which Congress have issued and paid 
 out as money, will not be to discharge the debt without payment. As prop- 
 erly remarked by Mr. Calhoun, the meaning and purpose of the Constitution 
 are explained by reference to the history of the times and the circumstance* 
 connected with its adoption. Ours, with the exception of a few modifications, 
 is a transcript of the Federal Constitution — that part which gives to Congress 
 power to coin money and to regulate its value is a literal copy. We, there- 
 
20 
 
 fore, recur to the purpose of granting these powers, and fiad. that it was " to 
 secure to the States a safe, uniform and stable currency," and that it was given 
 to Congress, because, if each State were permitted to coin money and regulate 
 its value, aud to make the money coined by them a legal tender, there would 
 be no guarantee that each would^not coin money for itself, and that, instead of' 
 having a money common to all the States, and of equal value in all, the value . 
 of the money of the -several States would not be as various as the coinage and 
 regulations of each might vary from the coinage and regulations of the other 
 States. Thus the money of account of England is pounds and shillings ; of 
 France, livres and francs; of Germany, the Rix dollar; of Russia, the ruble, 
 aud of Spain, the dollar. As all contracts are made, and books and accounts 
 are kept in the money of account, the necessity of having, for a people living 
 under a common government, one common money of account, is obvious ; 
 and hence the necessity of vesting the power of coinage and regulating the 
 value of money in Congress. If an Englishman, a Frenchman, a German, an 
 American, and a Russian, were each, in his own money of account, to offer to 
 purchase the same property, one offering to pay in sovereigns, another in 
 livres, another in Rix dollars, another in rubles, and the other in American 
 dollars, scarce one man in a million could estimate the relative value of the 
 several offers, because all men are accustomed to the money of account of that 
 country in which they live, and in which their transactions are made, and few, 
 very few are sufficiently familiar with the money of account of other countries 
 to use it in the purchase or sale of commo'dities without - an estimate of "its 
 value in Jbeir own money of account. Thus, as the Spanish dollar was cur- 
 • rent in the States, and was worth in the money of account of New York eight 
 shillings, whilst it was worth in*the money of account of Virginia but six, if 
 a citizen of New York were to offer thirty shillings per barrel for fiour, the 
 Virginian would inquire what shilling was meant ? the shilling of New York 
 or of Virginia ? Was the offer at the rate of eight or six shillings to the dol- 
 lar ? As I have before remarked, it was not the purpose of our Constitution 
 to restrict our Congress to the coinage of gold or silver. It was not to pre- 
 vent the use of paper money, for inasmuch as it did forbid the States, and did 
 not forbid Congress, to make paper money a legal tender, and gave to Con- 
 gress an unlimited control over the coinage and the value of money, it is con- 
 clusively apparent that the subject of paper money was under the consideration 
 of the Convention, and that Congress may, in their discretion, coiu paper 
 , money. To me, it is an unanswerable argument in favor of the exercise of 
 this power by Congress, that the purpose of the Constitution being to create, 
 for the people of the Confederate States, a safe, uniform and stable currency, 
 Congress can so regulate the value of paper money not convertible into specie, 
 as to make it safe, uniform and stable in value, and cannot so regulate the 
 value of a metallic or of a paper currency convertible ifito specie. It is gen- 
 erally assumed and admitted that the value of the precious metals, as well as 
 of paper money, depends upon the quantity in circulation. I hold that this 
 principle is modified by the circumstances under which they are used, and 
 that their value, and the quantity requisite to maintain their relative value as 
 compared with other commodities, depends upon the regulations which con- 
 trol domestic and foreign commerce. 
 
21 * 
 
 Experience fully proves that the value, in the foreign market, of cotton, 
 rice, sugar, naval stores and tobacco, does, not depend upon the cost of pro- 
 duction in the home market, but that it does depend upon the circumstances 
 under which they are sold in the foreign market. 
 
 We. have seen that the Constitution took from the States the power to coin 
 money and regulate its value, and gave it to Congress because the purpose 
 was to create a common currency, of uniform value in all the States, and ex- 
 perience had proved that it was necessary to deprive the States of the power 
 to coin money and to regulate its value, and vest it in Congress as the common 
 agent of all the States, as the only means of preventing that confusion and 
 diversity of the money of account and depreciation of the value of the cur- 
 rency, which had been the result of the control over the coinage and the 
 currency theretofore vested in each of the several States. We have also seen 
 that the power which the Bank of England can exert over the currency of all 
 other countries, which is predicated on a specie basis, is such, that, by refusing 
 to renew the discount of commercial paper, and increasing the value of money 
 in London, by increasing the rate of interest, that ; bank can compel the banks 
 in the United States to suspend specie payments, as was the case in 185*7, 
 when but for the demand in London for specie to pay the expenditures of the 
 wars in the Crimea, and in India and China, there would have been no press- 
 ure upon our banks, and no depreciation in the exchangeable values of our 
 property ; whereas, the actual depreciation was from thirty to fifty per cent, or 
 more. Is it wise, or can any one believe that it was the purpose of the Con- 
 stitution to "vest in the Bank of England that power over our currency of 
 which it was the purpose to deprive the States ? What is the Bank of Eng- 
 land, and what are the motives, and wAo are the persons, and what are the 
 interests that regulate its measures and policy, that we should give to that 
 Bank a control over the values of our currency, and i>f our credit and pro- 
 perty, of which we have deprived the Legislatures of our own several States? 
 Are not the directors and managers of that Bank English merchants, whose 
 duty it is to exert the powers and influence which they possess for the advance- 
 ment of British interests ? 
 
 THE BANK OF ENGLAND. 
 
 It is proper that, at this point, we should pause and inquire, what have 
 
 BEEN THE MOTIVES WHICH HAVE REGULATED THE MEASURES AND POLICY 
 
 of the Bank of England ? And wtiat has been the effect of the financial 
 management of that Bank? It originated in a loan at eight per cent, of six 
 millions of dollars to the Government, and became the agent of the Govern- 
 ment in the collection and disbursement of the public revenue. Besides the. 
 eight per cent, as interest on the sum advanced, the Bank received $20,000 a 
 year as the expense of management. 
 
 The capital is now $72,765,000, all of which is lent to the Government at a 
 rate of about three per cent, per annum, and yet it pays a dividend of seven 
 per cent.! Its notes are a legal tender, except at its own. counter, and it is 
 the only joint stock bank which can issue notes in, or within sixty-five miles 
 of it, or can draw or accept bills of exchange on Lcmdon. It receives the 
 public revenues,, and holds the deposits' of the various public offices — being 
 not less than $20,000,000. For discharging these duties and registering 
 
22 
 
 transfers and paying the dividends on the public debt, it now- receives 
 $640,000. It is a close, corporation, managed by twenty-four directors, 
 icho furnish no accounts to the proprietors. Eight go out every year and 
 eight come in. • When the period ot election draws near, the directors make 
 out what is termed a house list, giving the names of those whom they wish 
 to have as colleagues, and this list is uniformly elected. This hody is absolute 
 in the extreme, and perfectly free to act as it sees ft under all circumstances. 
 It is led by no authority and restrained by no responsibility. 
 
 The following table, carefully prepared from the official data, shows the 
 •amount of Exchequer bills and public deposits held by the Bank of England, 
 the bank notes Jn circulation, the commercial bills discounted by the bank, 
 and the actual taxation from 1808 to 1831 : 
 
 
 Exchequer Bills 
 
 Publie Deposit 
 
 Circulation 
 
 Bills Discount* d 
 
 Actual Taxation 
 
 1808 
 
 $74,781,970 
 
 $58,807,240 
 
 $85,556,450 
 
 $64,750,500 
 
 $310,733,605 
 
 1809 
 
 76,538,865 
 
 55,468,240 
 
 97,870,900 
 
 77,377,500 
 
 349,399,410 
 
 1810 
 
 85,983,385 
 
 59,750,'233 
 
 123,909,950 
 
 100,353,000 
 
 339,127,985 
 
 1811 
 
 109,421,240 
 
 50,959,270 
 
 116,534,250 
 
 71,777,000 
 
 326,355,500 
 
 1812 
 
 105,825,950 
 
 51,950,650 
 
 115,134,400 
 
 71,458,000 
 
 323,760,625 
 
 1813 
 
 ' 127,956,800 
 
 51,967,020 
 
 124,140,600 
 
 61,651,000 
 
 241,514,300 
 
 1814 
 
 174,912,425 
 
 60,791,135 
 
 341,141,450 
 
 66,429,000 
 
 351,201,765 
 
 1815 
 
 130,970,430 
 
 58,687,180 
 
 136,243,350 
 
 74,735,50ft 
 
 355,015,710' 
 
 1816 
 
 130,487,155 
 
 54,038,300 
 
 43,49.y;."> 
 
 133,793,600 
 
 57,082,000 
 
 313,203,355 
 
 1817 
 
 135,491,190 
 
 ■ 147,718,900 
 
 19,803,000 
 
 260,678,745' 
 
 1818 
 
 136,285,060 
 
 35,334,435 
 
 131.010,750 
 
 21,826,000 
 
 269,836,090 
 
 1819 
 
 . 127,095,740 
 
 22,684,865 
 
 126,263,420 
 
 32,575,000 
 
 250,455,540 
 
 1820 
 
 95.869,985 
 
 18,567,210 
 
 • 121,496,700 
 
 19,418,000 
 
 275,319,465 
 
 1821 
 
 78,764,765 
 
 19,600,785 
 
 111,476,500 
 
 13,383,500 
 
 277,650,365 
 
 1822 
 
 68,344,795 
 
 20,539,265 
 
 87,328,950' 
 
 16,833,500 
 
 226,278,072 
 
 1823 
 
 59,313,385 
 
 " 27,633,175 
 
 96,156,200 
 
 15,619,000 
 
 272,234,845 
 
 1824 
 
 73.245,935 
 
 36,110,835 
 
 100,660,600 
 
 19,849,000 
 
 277,282,375 
 
 1825 
 
 87,072,830 
 
 20,786,570 
 
 96,994,200 
 
 24,607,500 
 
 268,857,500 
 
 • 1826 
 
 87.569,405 
 
 21,071,355 
 
 107.817,800 
 
 24,541,500 
 
 156,574,650 
 
 1827 
 
 99,^)47,975 
 
 21,119,335 
 
 '213,788,000 
 
 6,222,000 
 
 256,558,585 
 
 1828 
 
 •103,413*880 
 
 19^108,485 
 
 106,787,550 
 
 5,317,000 
 
 263,715,950 
 
 1829 
 
 100,362,200 
 
 19.313,280 
 
 97,780,900 
 
 11,253,500 
 
 251,188,915 
 
 1830 
 
 104,558,080 
 
 23,809,760 
 
 107,223,500 
 
 4,599,500 
 
 258,541,925 
 
 1831 
 
 92,282,760 
 
 19,700,510 
 
 92,638,150 
 
 7,668,000 
 
 233,097,870 
 
 
 $2,451,493,265 
 
 £877,252,000 
 
 $2^720,183,100 
 
 $881,449,500 
 
 $7,330,022,260 
 
 PUBLIC CREDIT BETTER THAN THE NOTES OF THE BANK. 
 
 * 
 
 By reference to .Mr. Calhoun's speeches, as quoted, it will be seen that 
 ■ North Carolina maintained for y^urs a circulation of irredeemable paper 
 money of four times the sum of the annual taxation, whifh did not depre- 
 ciate, although it was not a legal tender ; the value -being maintained by the 
 fact that it was receivable at par with gold in the payment of taxes.; and 
 also, that Russia, upon a current revenue of ninety millions of dollars, sus- 
 tained, at par with gfikl, a ci rrent circulation of irredeemable paper of one- 
 hundred and twenty millions of dollars. Is it not apparent that, if instead 
 
23 
 
 of 'borrowing the credit of the Bank, the Government of England had issued 
 its certificates, receivable in the payment of taxes and fundable at a proper 
 rate of interest, the value of the public credit would have been equal to the 
 value of the notes of the Bank of England ? The table shows that the an- 
 nual average of the Exchequer bills held by the BaDk, -and upon which Gov- 
 ernment paid interest, was $102,145,552 
 
 and the average public deposits was — 35,552,166 
 
 and the average sum of taxes was 305,446,758 
 
 making a fund of $444,144,476 
 
 placed by the Government with the Bank as its agent, and which sum was 
 used by the Bank as the basis of its issues. *tf the Government had applied 
 these resources to sustain its own credit, and that cedit had been made a 
 legal tender, instead of making the notes of the Bank a tender, inasmuch as 
 the public credit of England would not have been subject to the laws which 
 regulate the export and import of sppcie, the quantity of the public credit, in 
 circulation, could have been regulated by Parliament, and the value of the 
 currency would have been much more uniform and stable than it has been 
 under the regulations of the Bank. Is it not also apparent that, in that case, 
 there would have been no such fluctuations in the quantity and values of 
 money and of credit; no such suspensions of banks; no such depreciations 
 in the values of property and of labor ; and no such individual distress and 
 bankruptcies as the management of that Bank has caused, not only in Eng- 
 land, but throughout the commercial world? 
 
 Why did. the Government pay interest oh the Exchequer Bills ? Was it 
 •not because these bills, instead of being a tender, represented the unfunded 
 debt, and the, payment of -interest was necessary to make them of equal value 
 as bank notes, which were a tender? ^If so, by making the public credit, 
 issued as certificates, receivable in payment of taxes, a tender (that is, con- 
 verting them into money), the payment of interest would no longer be re- 
 quisite to maintain the value of so much as was requisite for use as" money ? 
 And who, with our own experience, will deny that Parliament could, by a 
 judicious system of taxing the unfunded certificates, cause^ajl to be funded, 
 except the sum requ site for use as money ? Is it not further apparent that 
 ^uch a use of the public credit would save to the people and the Government 
 the whole of the interest on the sum used as currency ? If we assume that 
 the sum thus used would be no more than the annual taxes, as this average, 
 as given in the table, was $305,446,758, the interest upon that sum, at three 
 per cent, only, would be an annuity of $9,163,402.74, which, if com- 
 pounded at three per cent., would create a sinking fund which would sooU 
 absorb the whole public debt of England ! This, however, is apart from the 
 ruinous effect which the management of the Bank has had, and will have, 
 upon individual credit and upon the progress of individual industry and the 
 general prosperity of. this country-. 
 
 That England herself is not satisfied with that system appears in the fact 
 stated by Hardcastle, in his treatise upon Banks and Bankers, that the bare 
 titles of the acts .of Parliament passed upon the subject of the affairs of the 
 bank " occupy more than 200 pages of the index of the statutes at large." 
 
24 
 
 Surely there must be some defect in a system which requires so much tin- 
 kering — and I, for one, am unwilling that the tinkers who have so botched 
 their own system shall be permitted to regulate ours. And that is the very 
 danger which threatens us. • m ' 
 
 Let me be distinctly understood. I do not complain of or censune'the 
 bank as a bank. It is not the bank, but the system as regulated by Parlia- 
 ment, and those who manage the bank under that system, which I-believe 
 rests upon three fundamental errors. 
 
 1st. That the paper circulation should at no time exceed the value of the 
 gold and silver of which it supplies the place. 
 
 2d: That the paper circulation should depend upon the quantity of the 
 bullion in the Bank and be regelated by the foreign Exchange. 
 
 3d. That whenever there is a foreign demand for gold, the Bank, by refus- 
 ing to discount commercial paper, and the sale of Exchequer bills, shall 
 diminish the quantity of bank paper in circulation and so increase the de- 
 mand for- gold, as a means of payment, as to render gold of more value in 
 England than it may be in the country to which it may have gone, and thus 
 coerce its reflux to the Bank. 
 
 These, we believe, are fundamental principles in the management of the 
 Bank, and we believe them to be fundamental errors, as the history of the 
 Bank and of the worlfl, so far as the world has been under the influence of the 
 bank, demonstrates. This error is the more striking, when we take into con- 
 sideration the causes which induce the export of gold. In case of wars, gold 
 may be in greater^ demand elsewhere, and being at a premium, will be sent 
 abroad. In case of foreign loans, a premium will be given which w\\\ cause 
 it to be exported. In case of bad harvests, foreign wheat must- be paid for 
 in gold. In all such cases the. bank refuses to renew discounts. If this does 
 not produce a sufficient pressure, then she goes' into the market, sells Ex- 
 chequer bills in exchange for bank •■notes, and thus renders the demand for 
 gold so severe as to compel the reflux. That some idea may be formed of 
 the effect of this turning of the bank screw, I quote from Hardcastle. He 
 says : 
 
 Our banking system is bad in the extreme ; it has been everything by turns, but what 
 it ought to be, and gotbing long. It is not only bad itself, but it communicates evil to 
 everything around it. It is an epidemic that arrests and affects all classes ; a plague 
 that corrupts and kills high and low, poor and affluent, without distinction — a thousand 
 incidents have taken place in this city within a year [London in 1842] which exhibit 
 our monetary affairs in a most deplorable condition. ..... I have seen, last 
 
 spring, a bill broker go from house to house, of an afternoon, with the bills of a country 
 bank, accepted by first rate firms in Lombard street, and cash could not be got for them 
 at five per cent, interest and one and a half per cent, commission,, I have known, about 
 the same time, a man with £10,000 Exchequer bills, unable to raise £4,00o upon thun 
 at his banker's, and that bank one of the best in Lombard street. I have known a ci'y 
 banker, at the beginning ol last year, confess, in a mixed company, that he would be 
 glad to allow ten per cent, for money for six months to come. At the same time, I have 
 known another banker in Lombard street pay eight per cent, for an advance of money, 
 on Exchequer bills ; and ten per cent, to be charged on the discount of a bill of Ex- 
 change, the acceptor of which was then, and still is, a Bank Director. These are facts 
 that tell the true story of our banking system — these are realities that prove our dis- 
 tress While they last, credit is prostrate, labor fails of its market, and 
 
 property almost ceases to be wealth. ...... Our currency .has resembled the 
 
 shifting sands that impede the navigation of some of our most capacious harbors, and 
 
25 
 
 defy the skill of the most experienced mariners. We have been dealing -frith a series 
 of experiments, and each succeeding writer has distinguished himself by showing where 
 
 and how it was that the last experiment had proved »a particular failure 
 
 The Bank of England had the complete control and absolute management of the finances 
 of the whole country, and the losses which the country has now, for fifty years or so, 
 sustained by repeated abuses of that currency in the hands of the Bank, have been in- 
 calculable ; so wild and extravagant have been the alternate expansions and contrac- 
 tions ; so suddenly and capriciously have the value of money and prices been jerked up 
 and tossed down, that it is not unreasonable to compare the Bank Directors to a set of 
 awkward showmen at a fair, with the trading interests of the nation in a great ill-con- 
 trived swing-swong, which at one moment they fling up high in the sky, and at another 
 
 bring down so low as to drag the ground and rake the gutters with it 
 
 The habit of tampering with the currency was contracted by these gentlemen at an 
 earljr period. We can trace it distinctly as far back as 1782, and find it persevered in 
 up to 1839, invariably with the same pernicious results. ... . . A heavy panic, 
 
 fraught with great commercial distress, ran through the years 1*783 and 1784, which has 
 been brought home to the Bank by more than one conclusive witness. 
 
 In 1814, the Dutch ports were opened, the harvest was deficient; and 
 
 that most searching of the calamities, to which our artificial condition is exposed, no 
 sooner visited the land, than the importation of foreign corn occasioned a great decline 
 in the price of this principal article or' agricultural produce, which gradually extended 
 to the price of commodities generally Unprecedented suffering now took place; the 
 storm swept the country through, and raged with increasing violence until 1819, by 
 which time the agricultural and banking interests generally were reduced to the lowest 
 pitch of distress. Farmers were insolvent everywhere ; mercantile firms became bank- 
 rupt by thousands and levelled their connexions indiscriminately in the dust ; whilst as 
 to the bankers, between those who either partially suspended business or wholly broke, in 
 
 the years 1815 or 1816, there was a diminution of no less than 240 firms 
 
 fn noticing the moving causes of the calamities of 1816, we should bear in mind that 
 the cessation of hostilities on the continent was an established condition of the long 
 promised resumption of cash payments. Much of the panic then existing is referable 
 to a proposal for carrying that measure into effect, in 1818. 
 
 The Bank made some preparations for the change by a partial contraction of its is- 
 sues. But the depression of all the leading interests of the country was too intense, 
 and the notion was quickly abandoned. 
 
 He quotes Mr. Atwood, in 1818, as saying: 
 
 In the midst of this fall of prices, what operation in business could proceed without 
 loss or, ruin? There has been no firm in which the capital of the merchant, none in 
 which the capital of the manufacturer, could be invested without the half of it being 
 sacrificed during this calamitous period. We have been thrown back upon a condition 
 of events in which all industry and enterprize have been rendered pernicious or ruinous, 
 and where no property has been safe, unless hoarded in the shape of money, or lent to 
 others on double security. 
 
 He quotes further from Mr. Atwood's evidence before a committee : 
 The reward of labor being destroyed, the laborers, who can each produce four times 
 as much of the comforts of life as they and their families could possibly consume, are 
 starving while superabundance reigns around them. They find no employment, because 
 the organ of industry, which is money, does not exist in sufficient quantities to give 
 productive classes a reward for their exertions. The peasant idly wanders about, and 
 looks over the hedge of the uncultivated farm, where the land is suffering for want of 
 his labor, but at the same time the farmer has neither the profit nor the labor to bring 
 the land into cultivation. 
 
 Speaking of the crisis in 1836, Hardcastle says: 
 
 Of the bankruptcies that then took place, and of the extreme depression of our manu- 
 factures and commerce, it would be impossible to give any exact account. Prices fell 
 forty per cent. In the manufacturing districts there was no. employment for the work- 
 men; merchants stopped payment in numbers, not because they were insolvent and had 
 
26 
 
 no property, but because no market was to be had for their goods, no discount for their 
 bills, no advance upon their stocks. It was a rare and melancholy sight to behold Eng- 
 lish merchants going through the Gazette in numbers, while their warehouses were full 
 of commodities, and their characters unimpeached for knowledge of business, integrity 
 and exemplary conduct ; vet such were the incidents that characterized the panic of 
 1836. 
 
 . . . . . There was another panic in 18S9 which may be said to have extended 
 itself by a series of fits and convulsions all Uirough the years 184 ( > and 1841, at which 
 date our commercial system was reduced to the lowest ebb of distress. The number of 
 banks which skipped or disappeared during this interval was unusually great, the diffi- 
 culty of getting money as rigid as ever, and the stagnation of our commerce, the scarcity 
 
 of good mercantile paper, extreme Late in 1S40 began the storm which, 
 
 continuing to rage all through 1841, and not even as yel (in 1S42) blown over, has' 
 swept away, during its protracted and ruinous course; an unusual number of banking 
 establishments. A history of these misfortunes, in their various details, is here out of 
 the question; to trace the separate cases to their source, and detail at length their con- 
 sequences, would fill a volume, and then, in all probability, leave the subject unex- 
 hausted I had prepared a summary of the losses occasioued by the' different failures 
 amongst the private and joint stock banks during the last two yea-s, but the amount 
 appears so formidably large on the one side and so small on the other, that it would be 
 invidious to publish it. . '.-■'.. . . • . . . 
 
 The cause of the^e disasters are explained 'by tha eminent banker, Jones 
 Loyd, who, speaking of* the crisis of 1840, said : 
 
 Against the actual exhaustion of its treasure by a drain through the foreign ex- 
 changes, the bank, under almost any circumstances, has the power of protecting her- 
 self; but to do this she must produce upon the money market a pressure ruinous from 
 its suddenness and severity ; she must save herself by the destruction of all around her. 
 
 I havesaid that, among- other causes, the creation of foreign loans in Eng- 
 land will cause a demand for bullion- for export, and, consequently, cause 
 fluctuationsin the quantity and value of money, and, in proof of this, I re- 
 fer to 
 
 THE CRISIS OF 1820 AKD 1826. 
 
 If we recur to the history of the times it will do much to establish the 
 truth of the arguments, and to enforce the ne essity of adopting the measures 
 which I propose as the only means' of preventing the frequent recurrence of 
 the overwhelming disasters which have fallen upon the commercial world, and 
 especially upon the United States, as the consequence of the demand for specie, 
 created by the measures and policy of the Bank of England. 
 
 To supply the Government of*the United States with funds, to prosecute the 
 war of 1812, the Banks in the Southern and .Western States were. compelled 
 to suspend specie payment. Congress in - 1 81 G chartered the Bank of the 
 United States as, a means of aiding, or rather of coercing, the resumption of 
 specie payments. The Indian tide to large tracts of fertile lands was extin- 
 guished by the peace, which lands were immediately surveyed and put upon 
 the market. The notes, of the suspended banks were received in payment for 
 these lands and for duties ; these notes were placed in the Bank of the United 
 States as Government deposits, and by that Bank presented to the local Banks 
 for specie. Sir Robert Peel's bill requiring the Bank of England to resume 
 specie payment of her one pound notes in 1822, and generally in 1825, passed 
 in 1819, the consequence was that the specie which was thus withdrawn from 
 the local banks by the Bank of the United States, was withdrawn from that 
 Bank by the operations of commerce and remitted to England, until, in Au- 
 
27 
 
 gust; 1825, the specie in the Bank of England had increased to more than 
 seventy-five millions of dollars. But the pressure created by the Bank of the 
 United States upon the local banks, had been such, and the opposition to the 
 Bank became so great in Virginia, Maryland, Tennessee, Kentucky, Ohio, and 
 other Southern and Western States, that it was arranged between Mr. Cheves, 
 then the President of the Bank, and JVIr. Crawford, the Secretary of the Trea- 
 sury, that large sums were left on deposit with certain selected local banks, 
 upofl condition that they would convert the notes of other local banks into 
 specie, to be by them deposited in the Bank of the United States. Thus, the 
 Banks. of Edwardsville in Illinois, and of Missouri at St. Louis, being on oppo- 
 site sides' of the river, were each made depositaries, with large standing 
 deposits, upon condition that they would cash the notes of each other and 
 remit, by the same steamer, the specie thus obtained to the Branch of the 
 United States Bank in Louisville, Kentucky. Mr. Cheves, then the President 
 of the Bank, in a Report to the Stockholders, in 1S22, says : "The specie in 
 the vaults at the close of the day, on the 1st of April, 1819, was only 126,745 
 dollars and 28 cents, and the Bank owed to the City Banks, deducting bal- 
 ances due to it, 79,125 dollars and 99 cents. It is true, there were in the 
 mint 267,978 dollars and 9 cents, and in transitu" from Kentucky and Ohio, 
 overland, $250,000; but the Treasury dividends were payable on that clay to 
 the amount of near 500,000 dollars, and there remained at the close of the 
 day more than one half the sum subject to draft. * * * * 
 
 On the 12th of the, same month, the Bank had in it# 'vaults but 71,522 dol- 
 lars and 47 cents, and owed to the City Banks .a balance of 196,148 dollars 
 and 47 cents; exceeding the specie in its vaults 124,895 dollars and 19 cents. 
 * * - •* J * The Bank in this situation, the office in New York 
 was little better, and the office in Boston a great deal worse. At the same 
 time, the Bank owed to Baring Brothers & Co., and to Thus. Wilson & Co., 
 nearly 900,000 dollars, which it was bound to pay immediately, and which 
 was a charge, upon its vaults to that amount. It had, including the notes of 
 its offices, a circulation of six millions of dollars." 
 
 The effect of this pressure was another suspension of specie payments, and 
 a depreciation of more than fifty per cent, of/ the exchangeable values of pro- 
 perty, and the Government of the United States was compelled to compro- 
 mise with the purchasers of public lands on the deferred payments, allowing 
 them to consolidate their payments theretofore made at the rate of less than 
 fifty cents on the dollar. That is, a party who had purchased lands and paid 
 ten thousand dollars, owing thirty thousand, was permitted to relinquish lands 
 to the amount of thirty thousand dollars in pavrnent of his debt, and apply 
 the ten thousand paid, at the rate of less than fifty cents on the dollar, in pay- 
 ment for lands not relinquished. Such were the effects, in England and in the 
 United States, of the delusion which enforced the necessity of maintaining a 
 •specie currency. And for whose benefit? Did it benefit the people, or the 
 Government of England, or of the United States ? No ; for inasmuch as the 
 delay in the resumption of specie payment by the Bank of England, and the 
 large amount of its paper in circulation, enabled the country banks and pri- 
 vate bankers greatly to increase their issues, the effect was to beget in England 
 a. spirit of speculation, which embraced not only large foreign loans, but ran 
 into the working of foreign mines and other visionary and delusive schemes. 
 
28 
 
 The Edinburgh Review, of 1826, gives a table showing in detail the sums ad- 
 vanced by England on loans to Prussia, Spain, Naples, Denmark, Columbia, 
 Chili, Poyais, Peru, Portugal, Austria, Greece, "Buenos Ayres, Brazil, Mexico, 
 Guatemala, Guadalaxara, which, with other advances on French, Russian -and 
 American securities, made the sum $522,692,500 advanced by England, on 
 foreign account, during the eight years, from 1818 to 1825, inclusive.. It is 
 apparent that the advances made upon these loans must have created an ex- 
 traordinary demand for specie in England, and it is obvious that, as the loss 
 of five and a half millions of dollars, in 1857, by the banks of New York, 
 created results so disastrous, as described by Gibbon, the export of so large 
 an amount to pay off 'the foreign loans, produced the overwhelming losses,- 
 bankruptcies and distress so forcibly referred to by Hardcastle and the Edin- 
 burgh and London .Quarterly Reviews, and that that monetary crisjs was caused 
 by the fact that the currency of England was convertible into specie, and that 
 the demand for specie thus produced, compelled the bank, to use the words 
 of Jones Loyd, quoted above, to " save herself by the destruction of all 
 around her." 
 
 I give the following from the London Quarterly, of September, 1832, 
 illustrating the effect of changing a paper into a metallic currency : "As a 
 single specimen of the condition of our internal trade, we give the memo- 
 rial of the iron and coal masters of Shropshire, Staffordshire and Wales, 
 presented to Earl Grey by a deputation in October last, after being signed 
 by more than three-fourths, of the trade in those great manufacturing dis- 
 tricts." 
 
 We, the undersigned, iron masters and coal masters of the Staffordshire ' iron and 
 coal districts, think it our duty respectfully to represent to His Majesty's Government 
 the»following facts: 
 
 1. That for the last five years, ever since what is called the panic of 1825, we have 
 found, with very slight intermissions, a continually increasing depression iathe prices of 
 the products of industry, and more particularly in those of pig and bar iron, which have 
 fallen respectively, Torn upward of 81. per ton to under 31. per ton, arid from £15 per 
 ton to under £5 per ton. 
 
 i. Against this alarming and long continued depression, we have used every possible 
 effort in our power to make bread. We have practiced all manner of economy, and 
 have had recourse to every possible improvement in the working of our mines and manu- 
 factories. Our workmen's wages have in many instances been reduced, and such reduc- 
 tion has been attended with, and effected by, very great distress ; but the royalties, rents, 
 contracts, and other engagements, under which we hold our respective works and mines, 
 have scarcely been reduced at all, nor can we get them effectually reduced, because the 
 law enforces the payment in full. 
 
 3. The prices of the products of our industry having thus fallen within the range of 
 the fixed charges arid expenses' which the law compels us to discharge, the just and 
 necessary profits of our respective trades have ceased to exist, and. in many cases a posi- 
 tive loss attends them. 
 
 4. Under these circumstances, we have long hesitated in determining what line of con- 
 duct our interest and oUr duties require us to adopt. If we should abandon our respec- 
 tive trades, our large and expensive outlays in machinery and erections must be sacrificed 
 at an enormous loss to ourselves, and our honest and meritorious workmen must be 
 thrown, in thousands, upon parishes already too much impoverished by their present 
 burthens to support them ; and, if we should continue our present trades, we see nothing 
 but the prospect of increasing distress and certain ruin to all around us. 
 
 5. In our humble opinion, the great cause which has been mainly instrumental in pro- 
 ducing this depression and distress in our respective trades, and among the productive 
 classes of the country generally, is the attempt to render the rents, taxei, royalties, and 
 
.;♦,,.' 29 
 
 ither various engagements and obligations of the country, convertible, by law, into gold, 
 it £3 17s. 10^-d. per oz. This low and antiquated price of the metallic standard of 
 'alue is no longer capable of effecting a just and equitable distribution of our products 
 jet ween the producer and the' consumer ; it renders incompatible the permanent exist- 
 mce of remunerating, prices, without such a reduction of taxation as we cannot hope to 
 ;ee effected in time to afford us any relief — and it thus tends, ultimately and surely, to 
 lestroy the industry, and the peace and happiness of the country. 
 
 6. That until the establishment of a circulating medium of a character better suited 
 o the various and complicated demands of society, and to the increased transactions and 
 Dopulation of the country, and more competent to effect an interchange, and preserve a 
 •emunerating level of prices in the products of industry generally, we can see no pros- 
 ject of any permanent restoration of the prosperity of our trades, or of the country 
 jeing able to escape the most frightful sufferings and convulsions. 
 
 We, therefore, most respectfully, but very earnestly, request the early attention of 
 lis Majesty's Government to these great facts and considerations,, and we insist that 
 hey will recommend to Parliament the speedy establishment of some just, adequate and 
 efficient currency, which may properly support the trade and commerce of the country, and 
 ireserve such a remunerating level of prices as may ensure to the employers of labor the 
 air and reasonable profits of their capital and industry, as well as the means of paying 
 he just and necessary wages to their woi kmen. 
 
 Such are the views of practical working men in England of the opera- 
 ion of contracting a debt in paper money at the rate of $150 for. one hun- 
 Ired, and paying the interest of three per cent, on it in specie. If such 
 was the effect there, what will be the effect here of paying the interest, in 
 specie, on so large a debt as we will have contracted, at the rate of twenty 
 rbr one ? ' The London Quarterly says : 
 
 Our country gentlemen must learn to penetrate the arcana of the Exchanges, and 
 'athom the depths of the banking system, if they mean to preserve their broad acres 
 :'rom the grasp of the mortgagee, and their title deeds and mansions from the blaze of 
 ■evolutionary fires. Difficult and obscure, indeed ! Yes, the subject is difficult, just "as 
 difficult to the public comprehension as is - juggler's trick, by which, with a " heigh, 
 presto!" he conjures the half crown we thought we had safe in our pocket into his own. 
 How the money vanished it is not so easy to say ; but it is nevertheless certain that we 
 aad it, and ought still to have it, but he has got it. So it was exactly with the currency 
 uggle. Few of the sufferers can explain or understand how it happened, but the fact 
 s very plain to them that they have somehow lost a great deal of money, and other 
 oersons have got hold of it. A little consideration, however, may, we think, render the 
 lature of the trick intelligible to the simplest. It is very clear that those who are in 
 jusiness pay nearly the same sum in taxes, at present, as when the'goods they deal in sold 
 br double their present prices ; so that they really pay two hundred weight of wool, or 
 )f cheese, or of sugar, or two pieces of cloth, linen, or calico, or two tons of iron or hard- 
 ware, to the tax gatherer, for one that they formerly paid ; and the taxes, reckoned in 
 'foods, which is the only sure way of knowing their cost to the producers of goods, by 
 whom they are paid, are clearly twice as high at the end of sixteen years of peace, as 
 'hey were at the close of a long war ! Is it wonderful then that the productive classes 
 are laboring under severe distress ? That peace, which usually brings plenty, has thrown 
 way her emblematic horn, and selected hunger for her motto! And can there be any 
 loubt that the fall in prices, which has wrought this fearful evil, is the necessary result, 
 foretold by ourselves and many others at the time, of the legislation ol 1819 and J826, 
 which, by crippling the banking system of England and attempting a currency of dear 
 netal for one of cheap paper, has Caused a continually increasing scarcity of money and 
 contraction of credit ? . . . . . . . 
 
 If we succeed in showing that the unjust restrictions, kept up by the present laws, on 
 he circulating medium of exchange, have had the effect, within a few years past, of 
 ■ilently but forcibly transferring a vast amount of property from the possession of one 
 ;lass to that of another, who had no just right or title to it — of covertly despoiling, in 
 short, one portion of the community, namely: the persons engaged in industry, for the 
 benefit of another portion, the owners of fixed money obligations, payable out of the 
 
30 
 
 labor and capital of the former — it will be acknowledged that, until the laws which have 
 perpetuated and continue "o, sanction this wholesale swindling are repealed, there is no 
 safety for property ; nor can there be any reliance on the stability of those institutions, 
 of .which a confidence in the security of property is the indispensab|tf foundation. 
 
 Remarking upon the Staffordshire memorial, the Review says : 
 
 The sufferers here most correctly attribute their losses to the late increase in the value 
 of money, but they seem to look for relief, in a deterioration of the standard. In this 
 View we do not concur with them, only because we think so desperate a remedy is not 
 necessary, for that other and unexceptionable plans may be resorted to for the relief of 
 industry. ..... Next to a direct increase of the supply of the precious metals, the 
 
 most obvious resource setlms to be to augment the efficiency of that which we possess, 
 by a degradation of the standard — in other words, by diminishing the intrinsic value of 
 the coinage; cutting, for instance, our sovereigns, shillings, and other pieces of money, 
 into two or more parts, which should each, by law, retain the nominal value of the 
 whole. This is, in substance, the proposal which seems to find most favor with the per- 
 sons who have spoken or written on the subject of the currency for some years past. It 
 is this, as we have seen, that is advocated by the iron trade, and by their powerful 
 champions, the Messrs. Atwood. .It is this to which Mr. Weston, and a large body of 
 agriculturalists have been long pointing as the only practicable mode of permitting them 
 to come to an equitible adjustment with their creditors, public and private 
 
 , ; . .*. We acknowledge, indeed, the force of the retorts levelled by the advo- 
 cates of this alteration against their opponents, when the necessity of preserving the 
 national faith inviolate'is. thrown in their teeth. Tljey ask, with bitterness, and with 
 justice, too: 
 
 "Is faith to be kept only with the monied interests? Was no good faith to be kept 
 with the landholder, the merchant, the manufacturer, the vast laboring population who 
 bore the weight of the national struggle, who cheerfully made great and numerous 
 sacrifices during the war, and who continue the real strength and greatness of the King- 
 dom? 3 o faith whatever was kept with them. They, through their representatives, en- 
 gaged themselves to a debt of so many pound notes — but not to the same number of 
 sovereigns— to a debt consisting of money, at its then value, but they protest being held 
 responsible for the same annual sum now that its value has been artificially doubled. 
 Does not good faith require that the scale should be held fairly between debtor and 
 creditor? Was it consistent with the national faith, upon the plea of arresting the 
 progress of depreciation in 1819, to turn the tables wholly the other way, and, by re- 
 viving an obsolete standard, to give to monied obligations a value that is a command 
 over the produce and property of others, which t*ie persons originally forming those con- 
 tracts could never have contemplated, and which consigned at once to overwhelming 
 and unmerited ruin, the commerce, the manufactures and agriculture of the empire?" 
 
 We freely admit the weight of these remonstrances. We acknowledge that, through 
 an overstrained anxiety for observing the letter of the national faith, the spirit of the 
 obligation was disregarded and a gross injustice committed on the great body of pro- 
 ducers throughout the Kingdom, as well as on all debtors. It is true — 
 
 " Nothing could be more honorable than the feeling which induced our statesmen to 
 return to the ancient standard ; but, to our sorrow, their estimate of its effects was 
 much below the mark. They did not see what a revolution of property would ensue. 
 They consulted our honor, our reputed solvency, but not our real means. Mr. Kicardo 
 
 told them the change would be five per cent. Events have proved it fifty 
 
 There remains another course for consideration ; one which we have urged for some 
 time past upon the public, as the true mode of relief from our monetary difficulties. 
 . . . . . We mean the removal of the mischievous restrictions which now fetter 
 the circulation of credit through this country, and the concession of the free *ight of 
 commerce to provide itself with whatever instruments it may require for effecting its 
 exchanges uninterfered with by those officious legislative intermeddlings which expe- , 
 rience has sufficiently proved to be fatal to almost everything they touch, but to nothing ' 
 so much so as to the currency. It is physically impossible to carry on the commerce of 
 the civilized world by the aid of a purely metallic currency — no, not though our gold and 
 silver coins were every tenth year debased to a tenth ! Why, in London alone, five 
 
31 
 
 millions sterling (825,000,000) are daily exchanged at the Clearing House in tlie coarse 
 of a few hours. We should like to see the attempt made to bring this infinity of trans- 
 actions to a settlement in coined money. Credit money, in some shape or other, always 
 has, and must have, performed the part of a circulating medium to a very considerable 
 extent. And (by one of those wonderful compensatory processes which so frequently 
 claim the admiration of every investigation of civil as well as of physical economy) 
 there is in the nature of credit an elasticity which causes it, when left unshackled by 
 law, to adapt itself to the necessities of commerce and the legitimate demands of the 
 market. . . . . The only measures which appear to us to be needed upon the expira- 
 tion of , the .Bank Charter, are : 1st. That all banks be required to'deposi.t security in 
 Government stock to the full amount of the notes they issue 2d. That the law be re- 
 pealed which forbids the issue of notes under five pounds. 3d. We would make the 
 notes of metropolitan banks only convertible into bars of bullion, on the plan of Mr. 
 Kicardo, and allow the notes of country banks to be paid in those of the metropolitan 
 banks." 
 
 The following table, compiled from data, given by John Taylor, Jr., and 
 Ayres' Financial Register, gives the amounf, of debt bonded, the equivalent 
 in three per cent consols, the stock created for one hundred pounds in money, 
 the highest and the lowest prices for consols, and the market value of paper 
 currency per cent., from 1800 to 1S24, inclusive : 
 
 
 Amount of 
 
 Equivalent 
 
 Stock ere- 
 
 'the 
 
 The 
 
 Market value of 
 
 Years 
 
 Debt 
 
 in 3 per cent. 
 
 ated for £100 1 
 
 Highest 
 
 Lowest 
 
 paper cur- 
 
 
 Bonded 
 
 Bonds 
 
 in Money 
 
 Price 
 
 Price 
 
 rency per cent. 
 
 1S00 
 
 £20,500,000 
 
 £32,185,000 
 
 £158 50d. 
 
 67i- 
 
 60 
 
 £100 00s. 2d. 
 
 18-01 
 
 36,910,000 
 
 . 63,578,100 
 
 174 54 
 
 70 
 
 54+ 
 
 ■91 12 6 
 
 1802 
 
 25,000.*000 
 
 32,990,630 
 
 132 17 
 
 79 
 
 66 
 
 91 14 2 
 
 1S03 
 
 12,000,000 
 
 20,483,330 
 
 173 55 
 
 75 
 
 50i 
 
 97 6 10 
 
 1804 
 
 14,500,000 
 
 26,390,000 
 
 135 00 
 
 m 
 
 53| 
 
 97 6 10 
 
 1805 
 
 22,500,000 
 
 • 41,800,000 
 
 177 20 
 
 62 
 
 Ol 
 
 97 6 10 
 
 1806 
 
 20,000,000 
 
 33,200,000 
 
 167 70 . 
 
 64f 
 
 &8J 
 
 97 6 10 
 
 1S07 
 
 15,700,000 
 
 24,798,290 
 
 159 20 
 
 " 64f 
 
 . 57| 
 
 97 6 10 
 
 1808 
 
 14,500,000 
 
 23,530,622 
 
 162 67 
 
 60£ 
 
 22§ 
 
 97 6 10 
 
 1809 
 
 22,532,100 
 
 35.218,740 
 
 161 39 
 
 m 
 
 63| 
 
 97 6 10 
 
 1810 
 
 21,711,000 
 
 33,112,106 
 
 152 67 
 
 71 
 
 63+ 
 
 97 6 10 
 
 1811 
 
 24,000,000 
 
 39,724,620 
 
 166 53 
 
 &6| 
 
 61J 
 
 86 10 6 
 
 1312 
 
 34,721,325 
 
 57,198;3S0 
 
 130 00 
 
 63 
 
 551, 
 
 92 3 2 
 
 1813 
 
 64,755,700 
 
 118,736,690 
 
 134 87 
 
 67* 
 
 " 54J 
 
 79 5 8 
 
 1814 
 
 • '24,007.400 
 
 36,839,930 
 
 164 17 
 
 72* 
 
 61* 
 
 77 2 
 
 1815 
 
 54,135,589 
 
 102,7S7,340 
 
 191 52 
 
 655 
 
 575 
 
 ' 74 16 6 
 
 1816 
 
 
 
 
 64| 
 
 59. \ 
 
 •83 5 8 
 
 1817 
 
 
 
 
 62 
 
 62 
 
 , 70 6 10 
 
 1818 
 
 
 
 
 72 
 
 73 
 
 95 11 
 
 ma 
 
 
 
 
 79 
 
 • 64| 
 
 97 8 
 
 1820 
 
 
 
 
 m 
 
 65s • 
 
 106 
 
 ■ 1S21 
 
 
 
 
 78| 
 
 6SJ 
 
 100 .0 
 
 1S22 
 
 
 
 
 83 
 
 75s 
 
 100 
 
 1823 
 
 
 
 
 &§f 
 
 72 
 
 100 
 
 1824 
 
 
 
 
 96| 
 
 S4£ 
 
 100 
 
 Total, 
 
 £427,473,114 
 
 £723,570,-672 
 
 
 
 
 
 A v' rage 
 
 
 
 £167 60 
 
 73 
 
 63 
 
 £93 15s. Id. 
 
 * It will be seen that, although the Bank of England suspended payment in 
 179V, the notes were at par with gold in 1800 and again in 1820, and con- 
 tinued at par until it resumed payment in 1825, the average depreciation 
 during the suspension being less than seven per cent. It is a striking fact 
 
32 
 
 that the greater part of this depreciation was during the years from 1810«to 
 1815, inclusive, when the loans and subsidies given to her allies, and the 
 expenditures of the French war, created an extraordinary demand for specie 
 to be disbursed on the continent (these loans and subsidies amounting to the 
 enormous sum of $301,047,813 ! !!). 
 
 McCulloch, in a note (p. 78)., says: 
 
 So early as December, 1794, the Court of Directors (of the Bank) represented to 
 Government their uneasiness on account of the debt due by the Government to the 
 Bank, and anxiously requested a repayment of at least, a considerable part of»what had 
 been advanced. In January, 1795, they resolved to limit their advances upon Treasury 
 bills to £500,000 ; and, at the same time, they informed Mr. Pitt that it was their wish • 
 that he would adjust his measures for the year, in stick a manner, as ?wt to depend on 
 any assistance from them. On the 11th of February, 1796, they resolved, "that it is 
 the opinion of this Court, founded upon the experience of the late Imperial loan, that if any 
 further loan or advance of money to the Emperor, or to any of the foreign States, should, 
 in the present state of affairs, take place, it will, in all probability, prove fatal to the 
 Bank of England" 
 
 If we recur to the value of money, as compared witli the value of the mass 
 of circulating commodities, it will be seen that this difference between the 
 value of bank notes (paper money) and specie indicates an increased value 
 of the precious metals rather than a decreased value of paper money. 
 
 By reference to the table given above, it will be seen that, in 1814, the 
 public credit was depreciated nearly 84 per cent., and that the value of paper, 
 as compared with gold, fluctuated between l2i and 6l£ per cent., and yet, 
 the Edinburgh Review, speaking of the effect of the'eauses then operating on 
 prices in England, says : 
 
 The bank failures that then occurred were the more distressing, as they chiefly affected 
 the industrious classes, and frequently swallowed up in an instant the fruits of a long 
 life of unremitting and laborious exertion. Thousands upon thousands, who had, in 
 1813, considered themselves as affluent, found they were destitute of all real property, 
 and sunk, as if by enchantment and without any fault of their own, into the abyss of 
 poverty! The late Mr. Horner, the accuracy and extent of whose information on such 
 subjects will not be disputed, stated in his place in the House of Commons, that the 
 destruction of the country bank paper, in 1815 and 1816, had given rise to an universality 
 of wretchedness and misery, which had never been equalled, except, perhaps, by the 
 breaking up of the Mississippi scheme in France. 
 
 Engaged, as England was, in a struggle upon which, as she believed, de- 
 pended her maritime and commercial supremacy, she was compelled to ad- 
 vance loans *and subsidies to her allies, and hence we find that the Bank was 
 allowed to suspend specie payment in 1797, and that in the years 1814 and 
 1815 Englaud advanced, in loans, and subsidies, to Spain, Portugal, Sicily, 
 Sweden, Russia, Prussia, Austria, France, Hanover, Denmark, and other 
 minor Powers of the Continent, £19,366,307 15s. 9d. (or 890,831,539), and 
 it is, therefore, apparent, that inasmuch as the current expenditures of the 
 British army on the Continent, as well as these large loans and subsidies, were 
 paid iu specie, the demand for specie to meet these payments caused the rela- 
 tive depreciation «of bank notes, the fall of prices, the destruction of the 
 country banks, and the consequent failures, bankruptcies and distress. Had 
 England used her credit, as I propose, instead of using the Bank credit, there- 
 would have been no such failures of her banks and no such fall of prices or 
 depreciation of the values of property. Is it not obvious that, inasmuch as 
 the whole capital of the Bank consisted of the public credit, the Government, 
 
33 
 
 having the power of taxing and funding, could have purchased gold at the 
 same price, or less, than that which the bank paid for it ? Why, then, did 
 the Government give her credit bearing interest in exchange for bank notes 
 bearing no interest ? 
 *As bank notes were not current on the continent the Government could 
 ot pay the loans and subsidies to their allies' in bank notes, and were, 
 therefore, compelled to give a premium for gold ; and hence the deprecia- 
 tion of bank notes as compared with gold. 
 
 PAPER MONET. 
 
 McCulloch, in his article upon the general principles of banking, says : 
 
 Every country has a certain number of exchanges to make ; and whether these are 
 fleeted by the employment of a given number of coins of a particular denomination, or 
 y the employment of the same number of notes of the same denomination, is, in this 
 respect, of no importance whatever. Notes which have been made a legal tender, and 
 are not payable on demand, do not circulate because they are of the same real value as 
 the commodities for which they are exchanged, but they circulate because having been 
 selected to perform the functions of money, they are as such received by all individuals 
 in payment of their debts*.. Notes of this description may be regarded as a sort of 
 tickets or counters to be used in computing the value of property, and in transferring it 
 from one individual to another. And as they are nowise affected by fluctuations of 
 credit, their value, it. is obvious, must depend entirely on the quantity of them in circu- 
 lation as compared with the pavgrnents to be made through their instrumentality, or the 
 business they have to perform: By reducing the supply of notes below the supply of 
 coins that would circulate in their place were they withdrawn, their value is raised above 
 the value of gold ; while by increasing them to a greater extent it is proportionally 
 lowered. 
 
 Hence, supposing it were possible to obtain ,vny security other than convertibility into 
 the precious metals, that notes declared to be a legal tender would not be' issued in excess, 
 but that their number afloat would be so adjusted as to preserve their value as«com- 
 pared with gold nearly uriitorm. the obligation to pay them on demand might be done 
 away. But it is needless to say that no such security can be obtained. Whenever the 
 power to issue paper, not immediately convertible, has been conceded to any set of 
 persons it has been abused, or, which is the same thing, such paper has been uniformly 
 uver issued or its value depreciated by excess. 
 
 It will be seen that McCulloch's objection to an unconvertible paper is 
 limited to the fact that whenever the power to issue such paper has been 
 conceded to any sat of persons they have uniformly issued it in excess. It 
 is apparent that he refers to an issue of such paper by banks and bankers, 
 and 'not to an issue by Government under such a system of taxation and 
 funding as would limit the sum in circulation to the sum wanted as money. 
 I agree that an over issue will depreciate the value of such a paper, and 
 therefore I propose not that it shall be issued by the -banks but by the 
 Government, and that the excess be fanded, and that the funding shall be 
 coerced by a judicious system of taxing. He adds i 
 
 Iu 1793, 1814, 1815, 1816, and in 1825, a very large proportion of the country banks 
 
 were destroyed, and produced by their fall an extent of ruin that has hardly been 
 
 ,- equalled in any other country. And when such disasters have already happened it is 
 
 surely the bounden duty of Government to hinder by every means in its power their 
 
 recurrence. 
 
 McCulloch was the partisan of the Bank of England, and his remedy 
 
 for the evils of which he complains was to strengthen that bank by making 
 
 ' large bars of gold, instead of the current coins a tender, and to prevent an 
 
 ' issue of small notes by the country banks. He believed that the large 
 
34 
 
 dealers would not run upon the bank for specie, and that the holders of 
 small notes were liable to become alarmed and demand payment. His 
 remedy was suspension on small sums and masses of bullion for large. I 
 would recur to the large sums remitted by the Government to the continent, 
 for the support of the armies and in the payment of subsidies, as the ca*use 
 of the demand for gold in 1814, 1815, and in Ik 16, and I would explain 
 the monetary crisis of 1825 by the fact that the foreign loans contracted 
 and the vast speculations entered into in England after the war, and before 
 the resumption of specie payments created so great a demand for specie to 
 comply with the engagements then entered into, thai^ the pressure upon the 
 bank and the contraction of the currency below the specie level produced 
 then the ruinous depreciation of the values of property as compared with 
 gold. For, as before remarked, it. is obvious that it was the increased value 
 of gold, and not the decreased value of bank notes, which caused the dis- 
 asters so forcibly described. If, instead of placing in the bank an annual 
 
 average of Exchequer bills of '., $102,145,552 
 
 and of deposits : 36,552,166 
 
 and of the public revenue .' 805,446,344 
 
 making of public resources $444,044,062 
 
 the Government had issued its own credit, in a shape suitable for cur- 
 rency, which was a legal tender, and receivable in payment of the public 
 dues, and fundable at a proper rate of interest and reconvertible into cur- 
 rency, limiting the amount in circulation to the sum requisite for that pur- 
 pose by a proper system of taxing the excess; and had required each bank 
 to place in the treasury an amount of the reconvertible funded debt as a 
 security for the payment of their notes, there would have been no such 
 speculations in foreign loans; no such depreciation of the value of credit 
 or of property would have then occurred ; and consequently there would 
 have been no such bankruptcies and distress. The power to coin money 
 and regulate its value is vested in the British and French Governments as 
 in ours, and as the French livre of 1789, contains only the seventy- 
 eighth part of the original livre of the year 800, and the English pound 
 unit, contains but a small fraction more than one-fourth part of the original 
 pound sterling, and the individual obligations, as well as the public debt of 
 England, had been contracted when the currency was abundant and cheap, 
 instead of urging the issue of the public credit as money regulated aft 
 proposed, an effort was made to reduce the value of the coinage by increas- 
 ing the alloy or diminishing its weight, and the issue before the British 
 public was the use of bank notes or of a metallic coin thus depreciated, 
 they preferred a bank note convertible into specie ; I would restore the 
 value of our currency by making it convertible, not into specie, but into a 
 six per cent, re-convertible bond, and would coerce the conversion by 
 taxing the excess, instead of depreciating the value of metallic coins by 
 increasing the alloy or reducing the weight. . Few, I presume, will deny 
 the power of Congress thus to depreciate the coins of gold or silver; and 
 as in that case the depreciated dollar would still be a dollar, it is clearly in 
 the power of Congress to reduce the value of metallic coins much below 
 what would be the value of the currency under the system which I pro- 
 
35 
 
 pose. If the alloy in the metallic coins was 1 so increased, or the weight 
 was so reduced, as that its exchangeable value would be no more than the 
 value of the paper dollar issued by Government, the dollar would be a dol- 
 lar still, and as much a legal tender as it now is. If Congress can so re- 
 duce the value of gold, as a tender, the argument that Congress cannot 
 make paper a tender, because to do so would impair the obligation of con- 
 .' tracts, by authorizing payment in a less valuable medium, is untenable. 
 The fallacy of that argument is further illustrated by supposing that A, 
 being indebted to B, has, in his possession, corn, wheat, sugar, beeves, iron, 
 or any other articles , liable to be taken for the public use, and upon the 
 sale of which he relies to obtain the means of paying the debt due to B j 
 yet, the Government sends an agent who forcibly takes A's property, and 
 compels him to take Treasury Notes in payment. If the Treasury Notes are 
 a legal tender, they can be used to pay A's debt to B ; but if not a tender, 
 and Congress has no power-.to make them so, upon what principle can the 
 seizure of the property of A be justified? If it be "necessary and 
 proper" to pay A in Treasury Notes,- which I maintain it is, certainly it is 
 also "necessary and proper" to enable A to pay his debt in the same 
 money which the Congress have compelled him to receive, for the very 
 purpose of the Constitution was to "establish justice;" and, surely, it is 
 not justice if the Government deprives A of the means of payment, and 
 at the same time arms B with the power of the law to enforce it. The 
 promise of A would be to pay in dollars ; Congress has authorized the 
 issue of paper dollars, and compels the public creditors to receive them in 
 payment. And why do we permit Congress to do this ? Is it not because 
 it is "necessary and proper' for carrying into execution" the powers 
 "vested by the Constitution in the Government of the Confederate 
 States ?"• If Congress has power to issue and compel the creditors to re- 
 ceive, in payment, a depreciated paper money, surely Congress may pass 
 laws making it a tender to the creditors of those who have been coerced by 
 the Government to receive it.j and especially it the effect will be to greatly 
 increase its value when it is used by the Government. 
 
 CAN CONGRESS REGULATE THE VALUE OF A METALLIC OR A. 
 PAPER CURRENCY CONVERTIBLE INTO GOLD? 
 
 It is the duty of Congress to regulate the value of money. Can Congress 
 regulate the value of gold or silver? How, and by. what standard, will they 
 measure their value? Sir William Petty said that the day's food of an adult 
 man, and not the day's labor, is the common measure of the value of silver; 
 John Taylor, Jr., says that the corn consumed in the production ; and Adam- 
 Smith and Ricardo, and the Edinburgh Review, say that the labor requisite 
 to produce them is the proper measure. of the value of the precious metal*. 
 If the value of gold depends upon the value of the day's food, or of the corn 
 consumed, or of the labor expended in producing it, it follows that the value 
 of gold must fluctuate as the value of the food, the corn, or the labor used in > 
 producing it may fluctuate. Chivalier says : " If there be anything confirmed 
 by history, it is that the efforts of Government are powerless to regulate the 
 
36 
 
 value of gold and silver in relation to other commodities." If Congress cannot 
 regulate the value of gold and silver, it is manifest that they cannot regulate 
 the value of specie or of a paper money convertible into specie. If Congress 
 cannot regulate the value of a metallic currency, because they' cannot regulate 
 the cost of gold and silver, the power ;to regulate its value is rendered more 
 difficult by the fact that, inasmuch as the precious metals are of universal use 
 among all civilized nations, and are easily exported from one nation to any 
 other, the value of metallic money in the Confederate States will be regulated 
 by the contingencies which may effect its. value in the foreign markets; which 
 value will be determined by circumstances, over which our Congress can ex- 
 ercise no control. This is further illustrated by the annexed diagrams — for 
 the two first of which I &w indebted to Mr. Edward Hazlewood, of London, 
 and for the other to Gibbon's work on the Banks and Banking in New York i 
 
 T> I .A, GS- :e, -A. 2VE 
 
 Showing the Fluctuations in the 'rate of interest charged by the Bank of England, as regulated by the 
 Amount of Bullion in its vaults, the figures in the margin representing the Bullion in million* 
 of dollars (from $35,000,000 to $100,000,000), and the irregular lines indicating the rates oj 
 interest. 
 
37 
 
 DIAGRAM 
 
 owing the Fluctuations of the Amount of Notes issued by, and of the Liabilities of the Bank of 
 England, for ten years, from 1844 to 1854. 
 
 I » ■ 
 
 DOLLARS lg4 4 18 4 5 18 4 6 18 4 7 1848 1849 1830 1851 1852 1853 
 
38 
 
 The second represents the liabilities and the issues of the Bank of England 
 from 1844 to 1858, inclusive, the horizontal lines each representing five 
 millions of dollars. Thus, in 1844, the issues of the bank were less than 
 one hundred and forty millions of dollars, and, in 1847, they were less 
 than one hundred and ten millions;; and yet, in 1852, they were one hun- 
 dred and eighty. ( Now, as the effect of an over issue of a paper, converti- 
 ble into specie, is ■ to depreciate the value of the whole currency, gold as 
 well as paper, and consequently to cause the gold to be exported, inasmuch 
 as the issues of the Bank of England are regulated by the quantity of spe- 
 cie in its vaults, it is obvious that the regulation, which requires the Bank 
 to reduce its issues under an unfavorable' foreign exchange, >and allows an 
 increased issue of bank notes when the exchange is favorable, must, of ne 
 cessity, create that fluctuation in the value of money and depreciation in 
 the values of property which characterizes the history of British banking 
 and finance. 
 
 The pretence of those who manage the Bank is, that they prefer a paper 
 convertible into specie, because it is more stable in value than an incon- 
 vertible paper would be. By reference to the first diagram, it will be 
 seen that the figures on the margin represent the years, and the slims of 
 bullion in the Bank; the perpendicular lines the months, and the horizon- 
 tal lines indicating each five millions of dollars. The irregular lines repre- 
 sent the fluctuations in the quantity of specie in the Bank, whilst the 
 figures on these lines represent the fluctuations in the rates of interest 
 charged by the Bank. Thus, in January, 1852, the bullion in the Bank 
 was eighty-five millions, and in February, interest was 2£ per cent.; in 
 June, the bullion was more than one hundred millions, and interest was 
 but two per cent., whilst in January, 1857, there was in the Bauk say 
 forty-six millions, and interest was, in March, 6£ per cent. The 'bullioe 
 rose, in July, to fifty-seven millions, and interest was 5£ per cent. It con- 
 tinued at the same level until October, and interest was 5 per cent.; from 
 October 1st to 10th December, it ran down to thirty-five millions, and in- 
 terest rose to 6£, 8, 9 and 10 j>er cent. The effect of the severe pressure 
 for gold in London was a universal panic throughout the commercial world, 
 forcing a current of gold toward the great commercial centres of London, 
 Paris, Vienna and Hamburg. The aceumulation at these centres was 
 greatly beyond the sum requisite to maintain the proper specie level. This 
 is forcibly illustrated by the table given on page 14, and by the third dia- 
 gram, for which I am indebted to Gibbon's work on the "Banks and Banking 
 in New York." 
 
 I have explained that the effect of this contraction and expansion of the 
 specie and. circulation of the Bank of England, instead of giving uniform- 
 ity and stability to the monetary system of England, is to cause the most 
 ruinous fluctuation in the values of money and of property, not only in 
 Englaud, but in all other countries having a metallic or convertible paper 
 currency, and having extensive commercial relations with England. The 
 diagrams and statistics, taken from Gibbon's very valuable work, show that, 
 whilst the pressure of th^ Bank screw in London compelled the Banks cf 
 New York to so diminish their discounts as to cause unexampled pecuniary 
 

 
 
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39 
 
 losses and distress, the ultimate effect was to accumulate in. the Banks of 
 New York, by force of the reaction, more than three times the sum, in 
 specie, requisite to maintain the value of the credit and circulation of the 
 Banks 6% New York on a' par with specie— demonstrating, beyond question, 
 that the credit of the Banks of New York does not depend upon the specie 
 in their vaults, but upon the securities, consisting of mortgages on real 
 estate, and the bonds of the State and of the United States, deposited with 
 the State as collateral security for the payment of their notes, and upon the 
 solvency of those who deal with the banks, and use the credit and circula- 
 tion of the banks in their purchases and payments. 
 
 The operation of the financial system, predicated on a metallic basis, is 
 this: England, by the magnitude and expansion of her commerce, can 
 create balances in her favor in most of all other countries with whom she 
 trades. By refusing to renew her discount of commercial paper, and by 
 the sale of exchequer bills, the Bank of England can render money so 
 much dearer in London, than it may be elsewhere, as to coerce the greater 
 part of the balances to be paid in specie. Thus say that th,e commercial 
 balances due to England are $100,000,000, and the demand, for specie in 
 payment, brings to London eighty millions of dollars, of which fifty mil- 
 lions are an excess beyond the sum required to reduce the value of money 
 in England to the " prope? level," the extra demand having put the pre- 
 cious metals of all other countries in motion towards London, would create 
 an excess greatly beyond the wants of Loudon. The bank, which but yes- 
 terday demanded ten per cent., and refused to' discount the best commer- 
 cial paper, even at that rate, to day will be in the market, seeking invest- 
 ment at two per cent. ! ! Is it surprising that those who regulate the foreign 
 exchange, and make untold profits by the movement of specie,, insist upon 
 a specie basis ? 
 
 It will be impossible to create such a demand for money under the 
 system which I propose. The certificates of our Government, made a legal 
 tender here, will not be a tender in London. They will be money here, 
 but, as they will not be money in London, they cannot be exported to Lon- 
 don. With us they may be made equal to gold for the purchase of our 
 exports, and through our exports we can command whatever we may de- 
 fcire of foreign merchandise. Whilst the large sum of the public debt will, 
 as I have said, become the basis of bank issues, the payment of which, 
 being secured by the convertible bonds of the Confederate States, will, at 
 no time, be affected or depreciated by a foreign demand for specie. In that 
 case, speeie, like cotton, will be a commodity, the value of which will de- 
 pend upon the demand for it. If we wish to obtain foreign exchange to 
 pay for British goods, and the British merchants, or the British bankers, 
 or their ascents, refuse to take our Treasury certificates in payment, we must 
 give, in exchange for it, our cotton, or some other exportable commodity 
 whieh we can purchase with our Treasury certificates, or with our. bank 
 notes, predicated upon the bonds which represent the certificates that have 
 been funded. If the British gold is worth more than our certificates, then 
 we must demand so much the more for our cotton, if payable in our cur- 
 rency. We must l'egulate the value of our surplus produce by the relative 
 
40 
 
 value of our currency, ^he. value of gold, as compared with silver, is as 
 fifteen to one ; yet, with us, silver is a legal tender, although it is not a 
 tender, but as small change, in England. If we can so regulate the value 
 of our paper money as to make it equal to silver in the purchase of foreign 
 exchange, then all that we have to do is to so regulate the price of all 
 other commodities that their price, if sold for our paper money, will com- 
 mand the same amount of foreign exchange as if they were sold for silver 
 or gold. If the price of gold be twice the value of our paper, then our 
 cotton should bring twice the price in our paper money as if sold for gold. 
 If we make the paper money a tender, and regulate the quantity, in circu- 
 lation, by a proper system of taxing and funding it,'we can make it of equal 
 value as gold in the payment of debts and the purchase of property, in' 
 eluding foreign exchange. 
 
 Such paper money will be worth more than specie, as I now pro 
 eeed to demonstrate. By the report of the Secretary of the Treasury of 
 thg United States, there were in the banks in the non slaveholding States, 
 in 1860, $44,662,408 of specie, and in the banks of the slaveholding 
 States, $38,912,129. This sum was held by the banks to enable them to 
 -redeem their circulation, which, in the Northern States, was $119,997,469, 
 and in the slaveholding States, $87,107,108. It paid, no interest, and, to 
 use the words of Adam Smith, was so much dead capital. What the sum held 
 by individuals was, I have no sufficient data to state, except that the coin- 
 ■ age in the United States, from 1850 to 1856 inclusive, adding six months 
 of 1857, was $415,226,717.74, of which there were exported $285,881,176, 
 leaving $129,345,541.74. Now, if we assume that the interest, upon the 
 specie held by the banks and the public in the Confederate States, is but 
 ten millions ($10,000,000) per annum, and that that sum was substituted, 
 by the public and the banks, by the six per cent, convertible bonds, as I 
 propose, the saving to the banks and to the public, holding specie, would, 
 in forty years, be $1,660,285,359. j 8 ^-- and yet, great as this saving would 
 be, it is, as it were, small, very small indeed, as compared to the effect 
 which the increased stimulus given to the productive industry of the coun- 
 try would be, and to the saving in the expenditures and taxes of the Gov- 
 ernment of the Confederacy and of the several States. The States cannot 
 make their Treasury Notes a legal tender, but they can issue their certifi- 
 cates, fundable in six per cent, convertible bonds, and authorize the sus- 
 pension of specie payments by their banks, if the holders of bank notes 
 refuse to receive the fundable certificates of the State or of the Confede- 
 rate States in payment, upon condition that the banks have deposited, with 
 the Treasurer of the State, the convertible bonds of the State or of the 
 Confederate States, to be held in trust for the payment of. their notes. Ir 
 such case, the holders of the notes will know that the banks cannot fail ; 
 and, unless" the value of the money be less than the interest paid upon the 
 bonds, the v'dtes will not be presented for payment, and the value of the 
 currency, will be as uniform as the rate of interest paid upon the bonds. 
 As tb _e will be no apprehension of their failure, there will be no induce 
 ment to run upon the banks; and, as money would be abundant and cheap, 
 the greater part of the surplus capital of the whole country would be in- 
 vested in public securities or in banks, whose profits would consist chiefly 
 
41 
 
 in the circulation of their own notes. And, as under such a system, there 
 would be no sudden or ruinous contraction of the currency — no sudden or 
 ruinous depreciation of the values of property, it would be the business of 
 our banks to stimulate the energies, industry and enterprise of our people, 
 by an advance of the requisite capital, whenever the previous habits and 
 character of the* applicant, sustained bythe requisite security, would justify 
 it. This is not theory. The principle has been fully tested in Scotland. 
 I refer to the comment of the London Quarterly Review for March, 1830, 
 upon the Report of the select committee on promissory notes in Scotland 
 and Ireland in 1826, and give the following extracts upon 
 
 SCOTCH BANKING. . 
 
 If, however, the privilege of issuing- negotiable notes was granted to banks only on 
 terms which would' remove all doubt from the public mind as to the solvency of these 
 establishments, a run never would practically take place. The holders of the?e notes, 
 knowing that they ran no possible risk of loss, would be no more disposed to rush with 
 them into the different banks, to be converted into cash, than to run with a sovereign 
 into the mint to have it exchanged for bullion. The cause of every run upon banting es- 
 tablishments is the fear which, from whatever unforeseen cause, seizes the public mind 
 that they may not be solvent. Let the ground of this fear be effectually removed; 
 assurethe public mind that, as fai, at least, as concerns the notes circulated by a bank- 
 ing establishment, it cannot prove insolvent, and these runs will never take place. 
 
 That a system of banking might be organized in this country, (England)^ which 
 would practically remove every danger and inconvenience attendant upon the issue of 
 one pound notes," is a fact capable of being demonstrated by the evidence of actual ex- 
 perience. It has already'been put to the test in one part of His Majesty's dominions, 
 and has been found to stand its ground, unaffected by the violent and sudden fluctua- 
 tions which, at various periods, have taken place in the transactions of trade and com- 
 merce We need not tell our readers that we allude to Scotland, where the circulating 
 medium (with the exception of silver for change) consists wholly of paper, and where a 
 sovereign, as,a current coin, is rarely ever seen.' But, although it be well known that paper 
 money forms the whole circulating medium of Scotland, we are inclined to suspect that 
 the principles of the banking system of our Northern neighbors are not generally under- 
 stood, or, at least, generally appreciated in this part of the empire. Nothing but the 
 want of adequate information, as to this subject, could have led to the attempt which 
 was made, in 1826, to meddle with the banking system of Scotland, and deprive the in- 
 habitants of that country of institutions, under the protection ot which they had reached, 
 and continued to enjoy, a high degree of public as well as private prosperity. Our 
 wary neighbors, however, led on by the redoubted Malagrowther (Sir Walter Scott), 
 successfully resisted the attempts of the Treasury to force upon them the u?e of a me- 
 tallic circulating medium, and, by that means, secured themselves (in as far a3 the inti- 
 mate connexion of the two countries could permit) against the difficulties and inconve- 
 niences which the change, effected at that period, in our monetary system, has entailed 
 upon this part of the Island. An impression prevails very generally, < n this side of the 
 Tweed, that the superior stability of the Scottish Banking system rests upon the pro- 
 verbial sagacity and wariness of the inhabitants of Scotland, and not upon any pecu- 
 liarity inherent in the system itself. From this it is inferred that a circulating me- 
 dium, which has been found safe among our Northern neighbors, would be attended with 
 danger and insecurity, if adopted here. This, however, appears to us a mistake. The 
 security of Scottish banking arises from the general pringiples on which the system has 
 been organized, and not from anything which is peculiar either to the character or the 
 habits of those by whom its operations are conducted. If adopted elsewhere, these 
 principles, would, we feel persuaded, be attended with similar results: hence it becomes 
 important to point out their n ture and trace their effects. 
 
 * * Even in times of commercial panic and confusion, the inhabitants of Scotland 
 never, for a single moment, harbor the suspicion that their principal banks can, by possi- 
 bility, fail. * * * The principles on which the banks are established place their 
 solvency beyond all doubt. All the banks which issue note? are joint stock companies, 
 
42 
 
 consisting of a great number of partners, and possessing a large capital, not merely 
 subscribed, but actually paid up, and invested in mortgages or in Government securi- 
 ties. This fund is always ready to cover any losses which the bank maj' sustain in it* 
 transactions. ****** This is in ..truth the foundation of the unlipfited 
 credit enjoyed by the Scotch banks; it is the basis of that undoubting confidence winch 
 the public repose in their stability. The public confidence does not rest upon the credit, 
 the discretion or the integj-ity of the directors ; it has a much more stable foundation 
 for its support ; it is based upon actual capital which can neither be withdrawn nor di- 
 minished without the knowledge of the public. 
 
 In that country, as we have said, a sovereign is seldom' seen, except in the card case 
 of an old maid, or the cabinet of some recluse virtuoso. One of the witnesses says; 
 
 There is a prejudice against gold in Scotland. This prejudice is simply on account 
 of the trouble attending it : it is weighed ; when it is found light, the people refuse it ; 
 the country people are afraid to touch it. There is not a district in Scotland but where, 
 if you were endeavoring to pass a sovereign, they would say, if you had a note of any 
 bank in Scotland they would prefer it. 
 
 .There i-<, no doubt, a small quantity of gold in the coffers of the different bankers, 
 in order to meet the occasional whim of some capricious customer ; but that a bank 
 should be asked to give gold in exchange for notes is an event which happens so rarely, 
 that a very trifling sum, indeed, is found fully adequate to meet all demands of this 
 kind 
 
 " Although," says a witness, examined before the committee, " I have been for ten 
 years in an office tiiat, perhaps, does more business than any other individual office in 
 Scotland, or out of London, 1 can state, as my experience, that 1 have never refused gold 
 to any person that wished it. They only a*k it when they have occasion to j^o to 
 Ireland or to England, or to emigrate to America. I could state it as a fact that ten 
 thousand sovere gns would have supplied all the demands for the ten years 1 have 
 been in Glasgow." "The rottenness ami insecurity of the Engji-h system of banking 
 are known to aggravate very greatly the effects of the pmics to which all bodies, 
 trading upon cie'dit, are unavoidably subject. The general distrust prevailing at. such 
 periods is particularly directed toward the English banks, which are sure to be the 
 first to feel the raging of the storm. The weakest of these fail, and this adds fuel to 
 the flame which had already burs,t forth. A partial want of confidence is- thus speedily 
 converted into a general panic, and all banks, whatever may be their opulence and 
 character, suffer more or less from the consequences. Even banks, upon which no actual 
 run takes place, sustain great losses during these seasons. Uncertain of the direction 
 which the tempest may take, they are all compelled to make preparations to meet it* 
 violence, and the sacrifice of property required for this purpose has frequently been 
 enormous. The faintest whisper or the most trifling accident, often proves sufficient to 
 inflict incalculable losses on English Banks. * * * * * The bankers of Scotland 
 do not, like those of England, derive their profits from the employment of floating bal- 
 ances left in their hands without interest by those who deal with them. On the con- 
 trary, they allow interest for every pound of capital deposited in their hand ; this in- 
 terest is always less by one per cent. /than that which they charge upon the loans ad- 
 vanced to borrowers; and the difference between the interest paid and that charged 
 upon the whole of the capital entrusted to their management, forms the only source 
 whence the profits of Scotch banking accrue." * 
 
 " My this practice, allowing interest upon all deposits, these banks attract every shil- 
 ling of unemployed capital which any inhabitant may happen to possess. r i he wit- 
 nesses, who were examined by the committee of 182*, estimated the average of these 
 deposits at about twenty millions sterling. Persons possessed of small capitals in Scot- 
 land never purchase into the public funds; having the most unbounded confidence in the 
 solidity of their own banks, they universally deposit in these establishments all the 
 capital which they can spare * * * * Their general rule is to allow intere>t upon 
 every deposit, however small may be its amount. One of the witnesses examined by 
 the committee, and thoroughly conversant with the subject, states that, in towns li^e 
 Glasgow, a very large proportion of the deposits come from the laboring classes. In 
 country places, like Perth or Aberdeen, it is from servants and fishermen, and just the 
 class of the community who save from their earnings, in mere trifles, small sums, till 
 
43 
 
 they reach a sufficient amount to form a bank deposit. * * * A great part of the 
 depositors are of this description." 
 
 Another witness examined touching the same point, estimates the whole bank de- 
 posits at twenty millions sterling ($100,000,000), and the proportion of the simll de- 
 posits as fully equal to one-half the whole. He then adds : " I have had many oppor- 
 tunities, both professionally and in various situations in which I have been placed, of ob- 
 serving the effects 1 of those deposits ; and I do think that the system of the Scotch . 
 banks, -allowing the rates of interest which they have done, upon these small deposits, 
 has influenced very considerably the mqral character of the people. The deposit is sel- 
 dom drawn out until the depositor has to build a cottage or to buy a house ; or perhaps 
 he himself begin budsess, or set out his eldest son in the world ; or, it may be, furnish 
 a house for his daughter at her marriage. A deposit is often laid up for old age ; and, 
 in many instances, I have no doubt, has likewise been the means of enabling men in the 
 humble class of society to give their children what we in Scotland value above all the 
 advantages of wealth — the benefit of an intellectual and religions education." 
 
 " In truth, nothing can be conceived more admirably adapted.to encou age industry 
 and economy than the system of banking which has been so long in full operation in 
 Scotland;, and we have' no doubt that the saving and persevering disposition, which 
 forms a prominent feature in the character of our Northern neighbors, must be ascribed, 
 in a considerable degree, to the habits instilled into them by these valuable institutions. 
 The industrious laborer finds, at his own door, a safe and profitable receptacle for every 
 shilling he can save. Without trouble, anxiety, or loss of time, he takes his pound to 
 the bank, where it bears interest from the moment in which it is deposited. The banks 
 thus constitute public depositories, in which every shilling that can be spared, 'through- 
 out e\ r £rv district of Scotland, finds its place." " Nor is the disposal of the aggregate 
 capital thus collected less beneficial in its effects, upon the habits and enterprise of the 
 people, than the economy by which it is saved. The bank reservoirs, thus kept con- 
 stantly full, furnish every person of character" and enterprise with a ready, certain, and 
 never failing supply of capital, wherewith to embark in any undertaking which holds 
 out the reasonable probability of success. The managers of the different banks, having 
 collected into one ficus the whole capital of the country, offer every facility to those 
 who wish to borrow this capital, and turn it to profitable account. Their profit is de- 
 rived exclusively from this source. Upon all the capital which may be unemployed in 
 the coffers of these banks a dead loss is sustained : hence they are eager to find out saf«s 
 borrowers as saving depositors." 
 
 The bankers of Scotland are, in fact, dealers in unemployed capital. 
 They form an open and universally known channel of communication be- 
 tween the borrower and the lender in the money market. They acquire a 
 perfect knowledge of both parties. They borrow money of those who have 
 it to lend, and lend money to those who want to borrow, and charge a 
 profit of one per cent, upon all cash transactions for the use of their own 
 credit, labor and skill. Any person, opening an account with the Scotch 
 banks, receives four per cent, (or some other amount less by one per cent, 
 than the average rate of interest) upon the balance left in their hands. 
 He may pay in mobey whatever he chooses. This is carried to the credit 
 of his account, and interest is allowed for it from the day on which it is 
 deposited He may draw his money out when and in what sums he thinks 
 proper, and his loss of interest on the sums so drawn out commences only 
 from the day on which it is received. Their object, however, in borrowing 
 capital, is to make a profit by lending it : hence the facilities which they 
 give to borrowers are as great as they can be consistently with safety. In 
 the first place, they will discount bills and other mercantile securities, 
 which are perfectly regular and good, at all times and to any amount. This 
 is an incalculable advantage to the merchants of Scotland. They know 
 
44 
 
 that they can fail of success only through their own rashness or miscalcu- 
 lation — never from any sudden withdrawal., of that accommodation which 
 had originally stimulated their enterprise. The inconvenience felt by the . 
 merchants of Scotland, during times of panic, arise exclusively from their 
 transactions with England, where the storm, whenever it happens, rages 
 with destructive violence. 
 
 A second mode of lending, practiced by the Scotch bankers, is to grant 
 what is called a cash credit to any industrious person desirous to borrow 
 capital, to be embarked in any species of profitable employment. When a 
 person applies for a cash account, which is not an immediate advance of 
 money on the part of the bank, but a conferring of the power of drawing 
 upon the bank for a certain specified extent, he proposes two or more securi- 
 ties; a bond is made out, and he draws as occasion requires. In this way 
 he has never more from the bank than is absolutely necessary for the pur- 
 poses of his business. The account is never recalled unless, by having been 
 but little operated upon, it has ceased to be beneficial to the banker in the 
 circulation of his notes ; and interest is charged only on the amount of the 
 balance which may be owing to the bank. These credits run from so low 
 as £50 to £1000, and in some instances more. They are granted to persons 
 of every description — to small farmers, who require assistance in stocking 
 their farms, or who carry on a petty trade in cattle ; to shop keepers, prin- 
 cipally on their commencing business : to tradesmen generally; to all sorts 
 of law agents. The beneficial effects of this system are incalculable with 
 regard both to the interests of individuals and the public. * * * * 
 It is on all hands agreed that, for the rapid advances which it has for the 
 last century made in wealth and prosperity, Scotland is very largely, if not 
 mainly, indebted to her banking system. 
 
 I regret that want of space compels me to limit my extracts relative to 
 Scotch banks, for the system has become so identified with the progress, 
 the industry, the commerce and civilization of mankind, that, in consider- 
 ing the question of currency, we should remember that banks and bankers 
 have become an indispensable part of the system of credits — that it is 
 their business to deal in money and in credit, and that, therefore, they are 
 an important agency in the regulation of the value of money. Hence the 
 necessity of a careful examination into the history and nature of banks 
 and banking, that we may 'guard against the defects of existing systems and 
 the errors which have characterised their administration. Thus we see that 
 in Scotland and 'New York banking is free, yet the amount of circulation is 
 comparatively less than in England and some of the other States where it 
 is limited by severe penalties and restrictions. We see, also, that, under 
 the Scotch system, the accommodation given to the public is much greater 
 than in England ; and yet, in the midst of failures and bankruptcies which 
 have characterised the British system, during the panic of 1826, when 
 more than four hundred banks failed in England, there was not a single 
 
 failure in Scotland. 
 
 ■ 
 
 I have referred to the organization of the Bank of the United States, 
 and of the agency of that bank in depleting the other banks of specie, to 
 be remitted to London preparatory of the resumption of specie payment 
 
45 
 
 by the Bank of England. As the ultimate failure of the Bank of the 
 United States was the result of political and financial combinations, a 
 proper explanation of which would, as I believe, furnish forcible arguments 
 in support of the measures I propose, I very briefly refer to them. 
 * It is known that Mr. Clay and John Q. Adams were American commis- 
 sioners at Ghent, and that the tenth article of the treaty of peace bound 
 the United States to co operate with England in preventing the trade m 
 African slaves, which was construed by -Mr. Adams to include the domestic 
 as well as the foreign slave trade. From Ghent Mr. Adams went to Lon- 
 don as the American Minister, where he was in contact with the leading 
 British Abolitionists. In 1816, Mr. Monroe appointed Mr. Cook, of Illi- 
 nois, bearer of dispatches notifying Mr. Adams of his appointment as Sec- 
 retary of State. I then resided in Kentucky. Mr. Cook brought a letter 
 of introduction, and told me that, being in delicate health, his purpose, in 
 going to Europe, was to try the effect of a sea voyage, intending, on his re- 
 turn, to remove to the South. I saw him the next year in Washington, 
 when he told me that Mr. Adams had satisfied him that the migration to 
 the north of the Ohio would be such that the anti slavery party would 
 soon control the political destiny of the United States, and that, under the 
 advice of Mr. Adams, instead of going South to live, he was going back to 
 Illinois with a view to come into Congress and agitate the slavery question. 
 He*said that he had already commenced the agitation, and gave me a 
 pamphlet, containing a series of letters, written b^ him, addressed to Mr. 
 Monroe, under the signature of D. P. C, which had been published in 
 Meade's Register, and contained the text of the slavery agitation in Con- 
 gress and in the press from the time of the Missouri Question until now. 
 He did go to Illinois, was elected Jo Congress, and took a leading part in 
 enacting the Missouri restriction. I removed to Missouri in 1817. John 
 Scott was our delegate in Congress. I was in the army of 1812. I was 
 sick at Vincennes, where his mother nursed me as if I had been her son. 
 I did not forget her kindness, and was the intimate, personal and political 
 friend of her son. Peculiar circumstances gave me a controlling influence 
 in the Western part of the State, I was a member of the Convention 
 which adopted the State Constitution, and then of the House of Represen- 
 tatives and of the Senate. Col. Benton, having been driven from Ten- 
 -nessee by General Jackson, went to St. Louis and established the St. Louis 
 Enquirer. Being, constitutionally, a parasite, he attached himself to Gov- 
 ernor- Clarke. I had been a classmate at school of George Croghan and 
 John 0. Fallon, the Governor's nephews, and was received by him with spe- 
 cial favor, and was his devoted personal and political friend. Party politics 
 were there, as in most new countries, chiefly personal. In the distribution 
 of offices, under the State Government, Mr. Scott was elected to the' 
 House of Representatives and Benton to the Senate. In 1823, Benton, 
 then a partisan of Mr. Clay, came to St. Charles, where the Legislature was 
 in session, and urged a caucus nomination of Mr. Clay for the Presidency. 
 I opposed the nomination, and it was rejected by a nearly unanimous vote. 
 I, immediately after this, purchased the St. Louis Enquirer and removed to 
 St. Louis, and took an active part' in support of the election of General 
 Jackson. Col, Benton returned to Missouri . from Washington, and qan- 
 
vassecl the State actively for Mr. Clay. Wherever he went in the State, her- 
 found the influence of my paper counteracting his efforts.' The vote of the 
 Southern District was cast for the Jackson elector; the other two were 
 given in favor of Mr. Clay by a small majority. Mr. Clay's half brother 
 happened to be the returning officer in' one of the Southern counties, rfnei 
 refused to make returns. Mr. Clay's partisans had taken the ground, in a 
 circular issued by his Kentucky committee, of which John J. Crittenden 
 ' was a member, that if the election devolved upon the House, it would 
 there be carried by "bargain, intrigue and management;" and yet, they- 
 
 , urged that, as Mr. Clay was popular in Congress, if returned as one of 
 three, he would be elected. 
 
 The Legi-lature, acting under the advice of Col. Benton, declared the elec- 
 tion of electors illegal, ami gave to Mr. Clay the threa electoral votes of Mis- 
 souri, hoping to secure his election by Congress. Jackson, Adams and 
 
 ' Crawford, to the exclusion of Mr. Clay, were returned to the House of Repre- 
 sentatives, and Mr. Adams was elected by -the votes of Mr. Clay, Mr. Scott, 
 of Missouri, and Mr. Cook, of Illinois. 
 
 It so happened that, as the attorney for persons having large claims against 
 the Government, I reached Washington a few days after the election of Mr. 
 Adams.' One of my family relative* and J. Q Adams had married sisters. 
 Mr. Cook had married my niece ; and inasmuch as Mr. Clay had been assailed 
 for his vote for Mr. Adams,. it was deemed important to s-ecure the inifnenee 
 of my paper in his support, and my nephew, Mr. Cook, and my^ friend, Mr. 
 Scott, were selected to make the arrangement — Col. Benton having availed 
 himself of the e ection of Mr. Adams to go over to the support of General 
 Jackson as a means of identifying himself with the party which I had or- 
 ganized in- the State. They rolled up the curtain of their future; thev ten- 
 dered me the support of the' Government as a candidate for the United States 
 Senate, in opposition to Mr. Benton, with a controlling influence over the 
 Federal patronage in the State. 
 
 I saw that the purpose of the coalition was to create a sectional partvin 
 the North, for the purpose of governing and controlling the Union. Mr. 
 Adams, relying upon the anti-slavery element, and Mr. Clay, standing astride 
 of the Alleghanies, with one foot on a high tariff to enrich the v ankee 
 manufacturers, and the other upon turnpike roads for the benefit, of the North- 
 west, I saw that the sinking fund of ten millions of dollars then appropriated to 
 "that object would, in a few years, discharge the national debt ; and that, in-tead 
 of a. system which would increase the public revenue, creating a largesurplus to 
 be expended under appropriations to be made by a corrupt sectional majority 
 in Congress, it was indispensable to so modify the tariff as to reduce the cur- 
 rent revenue to the proper expenditures of the Government. Instead of sup- 
 porting the coalition, I purchased the Telegraph, and removed to Washington 
 t i oppose them. 
 
 General Jackson was elected. I had made an arrangement with Amos 
 Kendal to remove to Washington and aid me as an associate editor. I had 
 been a schoolmate of T. P. Moore, of Kentucky. He bad been my active 
 friend, and had gained the soubriquet of "Free Tom " by aiding in the cir- 
 culation of my paper. AfterGen. Jackson had reached Washington, Moore 
 
47 • .: 
 
 requested me to aid in obtaining for him . the appointment of Postmaster 
 General. I refused to do so. A few days afterward, Col. Richard M. John- 
 son told me lhat the partisans of Martin Van Buren had, after consultation, 
 determined to put him in nomination for the Presidency in 1832 ; that the 
 selection of the Cabinet and the important foreign missions had been arranged 
 with a view to aid his election ; and that, in that consultation, Moore had 
 told them that he h .d known me from a boy, and that they could not control 
 me or my press through the public patronage; and advised that, instead of 
 permitting Kendal to be my associate editor, they should make him an 
 Auditor, with the understanding that he would establish a Van Buren paper 
 when it became necessary. 
 
 When Major Lewis brought me the names of the Cabinet, upon reading 
 them, I went to Genera! Jackson and told him what I had heard from. Col. 
 Johnson, and said to him that I was yet a young man — that I had made some 
 reputation as an editor — that I was then the 'Printer to both Houses of Con- 
 gress — t^at my paper had, as I believed, a greater circulation than any other 
 political paper in the United States- — that I had one of the best, if not the 
 ■ most Valuable, printing offices- in the United States — that I could not and 
 would not support Mr. Van Buren for the Presidency — that I was unwilling 
 to come in conflict with my political friends — that I was young '.'enough to 
 return to my pro:ession — that I wanted no office in his gift, but if his pur- 
 pose was as I had been told, then it was my wish that he would select some 
 one else, who could purchase my paper — that I asked no advance upon the 
 actual cost, and no compensation for my services in the past. My objection 
 to Mr. Van Buren was, that L believed that as soon as he believed that, by 
 the influence of the party, organization, aided by the public patronage, he could 
 command the Southern vote, he would then bid against Mr. Clay and Mr. 
 Adams tor the Northern vote, and thus strengthen that sectional organization 
 which it was my desire to defeat. 
 
 General Jackson urged me to remain, pledging himself, in the most solemn 
 manner pos-ible, that if any member of his Cabinet should, at any time, use 
 the patronage of his department with a view to promote the election of Mr. 
 Van Buren, the member doing so should resign; and, as an earnest of his 
 sincerity, said that the first official act, after his inauguration, would be to 
 cause the patronage of the State department to be sent to my office, which he 
 did. I have not the time or space, now, to explain the measures or the mo- 
 tives which, if General Jackson was sincere in the pledges then given, induced 
 him afterward to exert Jns whole personal and official influence in aid of the 
 election of Mr. Van Buren as his successor, although it is my purpose, if life 
 and health permit* to do so hereafter. I recur to them now to explain that 
 the purpose of Mr. Adams and Mr. Clay being to organize a sectional .>orth- 
 ern party, predica'ed on the emancipation of our slaves, and a system of high 
 duties for the benefit of Northern manufacturers for making turnpike roads, 
 to be constructed under the patronage of a corrupt sectional Northern Con- 
 gressional majority for the purpose of electing Mr. Clay Presjdent, and Gen. 
 Jackson having become the acknowledged partisan of Mr. Van Buren, the 
 near approach of the payment of the national debt, whilst admitting the full 
 power of Congress to lay and collect duties requisite to pay the debts and 
 -carry on the Government, had made it necessary for those who did not be- 
 
48 
 
 lieve that they had the power to increase the duties for the purpose of creating 
 a laro'e surplus revenue, to be expended under appropriations made by a cor- 
 rupt sectional majority of Congress, to rally all their energies and resources 
 to prevent a «ystein of measures which we foresaw, and foretold must result 
 in sectional conflicts which would, df necessity, alienate the South from the 
 North and, if not arrested, terminate in a dissolution of the Union. Ilence 
 the nullification of South Carolina was a movement for the preservation of the 
 Union by restraining the action of Congress within the powers granted by 
 the Constitution. That, movement was, for a time, successful. The subse- 
 quent action of Van Buren fully justified my opposition to him, and thecrisi- 
 in which We are now placed proves not only the propriety, but the necessity, oa 
 the measures which I have again and again urged upon the people, of the slav 
 holdino- States. How different would have been our present position if, as a peo- 
 ple, the South had adopted, with proper energy, the system of measures which I 
 •have recommended. One purpose of this statement is to show that the oppo- 
 sition to the tariff of 1828, and to Mr. Clay's American system, was not, as 
 many believe, an opposition to domestic manufactures. It was an opposi- 
 tion to the organization of a sectional party upon principles and measures in 
 open violation of the letter and spirit of the Constitution, which, it was fore- 
 seen," must terminate in the dissolution of the Union. 
 
 Another purpose is to refer to the fact that Congress being driven, by the 
 action, of South Carolina and of the State Rights party, to modify the tariff 
 of 1828, arid the payment of the public debt having left a large surplus of 
 public funds in the Bank of the United States, Van Buren induced General 
 Jackson to go through Pennsylvania and New York to Boston, where he was 
 met bv Mi\~Van Burei> and several of his leading political parlizans, who, 
 Mr. Poinsett dissenting, as he assured me he did, induced him to seize upon 
 the public .deposits, which were transferred from the Bank, where they were 
 placed by operation of law, and placed on deposit in local Banks, selected by 
 a partisan Secretary of the Treasury. It was the influence of the public 
 money in these banks, and the corrupt abuse of the public patronage which 
 elected Mi'. Van Buren. This transfer of the public deposits to the pet bank,s 
 led to a vast expansion of the currency, and immense speculations, especially 
 in the public lands, so that, although the average sales for. the ten years pre- 
 ceding General Jackson's election, did not amount to 800,000 acres, 12,564,- 
 218 acres were sold in 1835, and 20,074,870 acres were sold in 1836; and 
 although there were, in 1830, but 33Q banks, with a circulation of $01,323,- 
 898, there were 634 banks, with a circulation of $149,185,890, in 1837* 
 
 * Note. : The following table shows the number of banks that were in the .United States, 
 
 their capital, loans and discounts, specie, circulation, and deposits, from 1830 to 1840 in- 
 clusive: £• :'.;' . 
 
 Date. 
 
 JS'o. of 
 Banks. 
 
 ~ .. . 1 Loans and 
 Capital. j jjiseouuts. 
 
 Specie. 
 
 Circulation. 
 
 Deposits. . 
 
 Jan. 1820 
 
 308 
 
 $137,110,611 
 
 $19,820,240 
 
 $ 44,863,344 
 
 $ 35,950,470 
 
 •• 1830 
 
 330 
 
 145,192,268 
 
 $200,451,214 
 
 22,114,917 
 
 61,323,898 
 
 55,559,828 
 
 " 1834 
 
 5.00 
 
 200,005,944 
 
 324,119,499 
 
 
 94,839,570 
 
 75,666,986 
 
 . " 1835 
 
 558 
 
 231,250,337 
 
 365,163,834 
 
 43.937,625 
 
 103,692.495 
 
 ' ss^i^e* 
 
 " 18.36 
 
 567 
 
 251,875,2.92 
 
 457,506,080 
 
 40,019,594 
 
 140,301,038 
 
 115,104,444 
 
 " 1837 
 
 634 
 
 290,772,041 
 
 525,115,702 
 
 37,915,340 
 
 149,185,890 
 
 127,397,185 
 
 " 1838 
 
 663 
 
 317,636,778 
 
 485,631,687 
 
 35,184,112 
 
 116,138,910 
 
 84,691,184 
 
 " 1839 
 
 662 
 
 327,132,512 
 
 492,27S,015 
 
 45.132,673 
 
 135,170,99p 
 
 90,240,146 
 
 " 1840 
 
 722 
 
 35S,442.692 
 
 462,896,523 
 
 33,105,155 
 
 106,968,572 
 
 75,696,857 
 
49 
 
 These speculations and this expansion of the currency took place cotempo- 
 raneously with like speculations and expansion of the currency in England 
 consequent upon the placing, by the Government, in the Bank of England, of 
 the large sums, paid under the acis emancipating the West India slaves and 
 the abrogation of the East India monopoly, being about 8120,01)0,000, tlia 
 greater part of which, in anticipation of the payments to be made by the 
 bank, was loaned to money dealers, and the consequence was an inflation of 
 the cudfcncy nearly or quite as great as in the United States. The payment 
 by the Bank of England to the proper claimants, as their accounts weie ad- 
 justed, and the transfer from the pet banks of the surplus revenues to the States 
 under an act of Congress, operating in England and the United States at the 
 same time, caused the reaction in both countries, inflicting unexampled pecuniary 
 losses and distress, originating in both countries from the efforts of those who 
 held the control of the currency to increase their power and influence by 
 the, use of a defective svvteni of finance. Had England made her 
 credit in the shape of certificates receivable in public- dues 'and fundable, as I 
 propose, a legal tender, the excess would have been funded, and there would 
 have been no inflation of the currency, and consequently no reactionary de- 
 maud for specie, and no pecuniary losses or bankruptcy. Had the United 
 States issued their credit in the form and fundable as proposed, there would 
 have been no surplus revenue in the banks, no speculation in the public lands, 
 no specie circular, issued by a party President to protect, the pet banks from 
 the demand for specie, the consequenae of the over-issua of their circulation 
 liin aid of the corrupt .speculations of political favorites. 
 
 The pretence for the transfer of the public deposits from the Bank of the 
 United States to the, pet banks was, that the power of that bank would be 
 abused, and hence the pet banks were required, by an order from the Secre- 
 
 I'ho foliowinjj Utbie shows the number of acres of public land offered for side, the acres 
 sold, the amount paid by purchasers, and the average price paid per acre for the severit-l 
 years given: 
 
 Years. 
 
 Acres offered for sale. 
 
 Acres. Sold. 1 
 
 Ai«ount paid by pur- 
 chasers. 
 
 Average priet-\ 
 
 1824 
 
 7,294,186 
 
 7^9,323 
 
 § 953,799 
 
 § 1.27 
 
 1825 
 
 3,418,604 
 
 893,461 
 
 1,205,068 
 
 1.35 
 
 1826 
 
 2,880,703 
 
 848,082 
 
 1,128,617- 
 
 1 oo 
 I.OO 
 
 1827 
 
 3,314,816 
 
 926,727 
 
 1,318,305 
 
 1.42 
 
 1828 
 
 3,268,493 
 
 965,600 . 
 
 1,221,357 
 
 1.26 
 
 1829 
 
 (5,149,962 ' 
 
 1.244,860 
 
 1,572,863 
 
 1.26 
 
 1830 
 
 6,750,798 
 
 1,929,733 
 
 2,433,432 
 
 1.26 
 
 1831 
 
 11,005,561 
 
 2,777,856 
 
 3,557,023 
 
 1.28 
 
 1832 
 
 ■ 4,205,805 
 
 2,462,342 
 
 3,115,376 
 
 1.27 . 
 
 1833 
 
 6,614,596 
 
 3,856,227 
 
 4,972,284 
 
 1.29 
 
 1834 
 
 13,056,865 
 
 4,658,218 
 
 6,099,881 
 
 1.31 
 
 1835 
 
 13,767,268 
 
 12,561,478 
 
 15,999,804 
 
 1.27 
 
 1836 
 
 509,034 
 
 20,074,870 
 
 25,167,833 
 
 1.25 
 
 1837 
 
 
 4,805,462 
 
 6,127,418 
 
 1.28 
 
 Total 
 
 122,512,384 
 
 61,296,411 
 
 $78,340,557 
 
 $1 27£ 1 
 
 — ■ — m 
 
50 
 
 tary of the Treasury, to discount freely, and thus prevent the monetary 
 crisis which, by some it was urged, would be the consequence of the sudden 
 withdrawal of so large a deposit Failing to get a renewal of its charter 
 from Congress, the bank obtained a charter from the Legislature of Pennsyl- 
 vania, and instead of reducing their line of discounts, the Directory availed 
 themselves of the inflation of the currency to sell out their branches, recdvino- 
 the notes of the pet banks in payment; and, instead of making war upon the 
 pet banks by demanding payment in specie, the large sums thus obtained 
 were invested in public securities and in advances upon cotton, intehdi *, by 
 the sale of the cotton and the State securities in Europe, to reinstate the 
 capital which had been invested in the branches; and Biddle and Humphries 
 were sent to Liverpool as the agents of the bank charged with the sale of the 
 cotton, and Mr. Jaudon, the cashier, was sent to London with the State secu- 
 rities. The great tire in New York had deprived many of the merchants of 
 that city of the means of paying the large sums falling! due to their British 
 creditors. The bank, under the advice of Mr. Biddle., relying on the sale of 
 cotton by Biddle and Humphries, and of State securities by Mr. Jaudon, ad- 
 vanced large sums in the shape of bills on London and Paris. Before this 
 time, any American merchant who could get an acceptance by Wilde, Wig- 
 gin or Wilsons, three American houses in London, could purchase British 
 goods upon six and twelve months credit. . Apprehending a monetary crisis, 
 Wiggin wrote to his American correspondents that he could no longer accept 
 as he had done. His having done so came to the knowledge of the Directors 
 of the Bank of England. The Governor of that bank called on Mr. Wiggin 
 and urged him to withdraw his letters, saying that the English warehouses 
 were filled with goods ; and, as the bank wished to encourage the trade with 
 America, although he could not pledge the bank, yet as governor of the bank, 
 he would exert Ids influence to sustain Mr. Wiggin in case of a crisis. Under 
 that pledge Mr. Wiggin recalled his letters, and was under acceptance for 
 more than thirteen millions of dollars, when the bank passed an "order that no 
 bill, predicated on any transactions in American produce, should be discounted 
 in bank. The consequence was that Wilde, Wiggin and Wilsons all failed • 
 that Biddle and Humphries could not sell cotton, nor could Jaudon sell the se- 
 cu rides upon which he relied to protect the cisedit of the Bank of the United 
 States, and he was compelled to make hypothecations and borrow money at rates 
 which was followed by so great a depreciation of the values of the securities, 
 in which the capital of the bank was invested, as ultimately to absorb much 
 the greater part of its assets,, 
 
 I do not charge that the conduct of the Bank of England was purposely 
 intended to inflict the severe suffering and distress which were its consequence; 
 nor do 1 charge that the assurances of aid, given by the Governor of the 
 Bank to Mr. Wiggin, were intended to induce him to make acceptances which 
 he (the Governor) knew he would not be able to meet. But I do charge that 
 the fluctuations in the value of money and property were the inevitable re- 
 sulting consequence of the system of currency and finance which compelled 
 the Bank, to use the words of Samuel Jones Lloyd, to "save herself bv 
 the destruction of all around her." Thus, if we recur to the crisis of 
 1794, we find the directory of the Bank in a forma! protest to the Govern- 
 ment, notifying the Minister " that if any further loan or advance of money 
 
51 
 
 # 
 
 to the Emperor, or to any of the foreign States, should, in the present stale of 
 affairs, take place, it will in all probability prove fatal to the Bank of England . 
 It was indispensably necessary to make the loan, and hence the Bank, in 1797, 
 was forced to suspend specie payment. Again, in 1814 and 1815, the Uans 
 to 4,he allies of England were $9(3,831,539, and there was unexampled'dis- 
 tress. Again, in the eight years, from 1818 to 1825 inclusive, the sums 
 advanced on foreign loans and speculative* schemes was §522,092,500, and 
 the consequence was, that the demand for specie was so severe and the depre- 
 ciation of the value of property so great, as to cause unparalleled loss, bank- 
 ruptcy. and distress. Again, in 1830-37, the Government having placed in 
 the bank of England the funds intended to pay the West India claimants, 
 largfi sums were loaned to the money dealers — this gave birth to speculations, 
 the currency was increased, prices were consequently inflated, to be followed 
 by a reaction, causing, if possible, still'greater reduction of prices, with greater 
 pecuniary losses and distress. And again, in 1853 to 1857, the demand for 
 gold to pay the expenses of the wars in the Crimea, in India and China, 
 created a»reuewed demand for gold and silver, acting upon the values of pro- 
 perty precisely in the same manner. Now, why did these frequent recurring 
 demands for money always cause a ruinous depreciation in the values of pro- 
 perty, enriching the creditor without merit and impoverishing the debtor with- 
 out fault? Was it not because the creditor was enabled to compel the debtor 
 to make payment in gold, under the delusion that gold and silver are more 
 uniform and stable in value than any other medium of purchase or payment, 
 and that therefore nothing but gold and silver should, be recognized as money* 
 
 Is it necessary to adduce.additional facts or arguments to prove that tins is 
 a delusion? We have seen that the average specie in the banks of- the city of 
 New York, from 1833 to October, 1857, was, about eleven and a half millions, 
 whilst the daily average settlements between the banks alone were about 
 thirty millions of dollars, and the daily average settlements between individu- 
 als, which do n'ot appear in the returns of the Clearing House, are estimated 
 at fifty millions of dollars, and Colwell estimates the payments made through 
 the banks in the United States in 1857, by set off, without one dollar in specie, 
 at eighty-Jive thousand millions of dollars, and we are told by Chivalier, 
 that the amount of the Bills of Exchange, at one time in circulation in Great 
 Britain, was £180,000,000, Or $900,000,000. 
 
 These facts prove that property, and noJ, specie, is the true basis of credit,, 
 and that a currency predicated on the entire property of an agricultural and l 
 commercial country, may be made much more, uniform and stable in value 
 lhan. if convertible into gold, for surely it will not be necessary to adduce other" 1 -' 
 proofe-itoj demonstrate that every monetary crisis, every general suspensionV-'df- 1 ;' 1 
 the-b^mksjan.the United States, has been caused by the monetary revulsiotiS 1 '; 
 whiefe'^havenQQCurred in* England, and the demand for specie created ttex'iVgir 1 *- 
 the/J.4aiik r -oi|;-E»gliind. My proposition is to create for the Confederate^tates ' 
 a ewMiiiif (\\m<litiiit&l ©p the entire property of the whole country. tiBb& s f'&W$ ls 
 td befr^gulatgdrby r-ee^iving nothing but the public credit or go ld*'.in ;: payment 10 
 of.v-tam'*? <and $9 bausoifchsLescess, if any there be, to be funded ffltJd.nvertTble--^ 
 bojrd^i hearing a proper -ratef>€tf?; interest. Thus say that the current ^pe'fM?-^ 11 
 rui^i^fieiij^as^jiiKiaiidiagnh'eihttereston the public debt, wiU^^nfcMmdre^-^ 
 millions of dollars, and that the annual taxes be the same, it will require the 
 
h 52 
 
 ■efhole sum of the current issue to pay the taxes, and any deficiency must be 
 paid in gold, or by reconverting' so much of the funded debt as may be requi- 
 site. If the banks are required to redeem their notes in the Confederate cur- 
 rency, and to place the convertible funded debt with the Treasurers of the 
 several States, in trust for that purpose, then the value of the Treasury Cer- 
 tificates will be regulated by the rate of interest paid upon the funded debt, 
 and the value of the bank notes will be regulated by the value of the cer- 
 ' tificates. 
 
 God, in His Providence, has given to the people of the Confederate States 
 sources of individual independence, wealth and prosperity, such as He has 
 given to no other people on the globe. He has given us a soil and climate 
 peculiarly adapted to the cultivation of cotton and wool; He has filled our 
 mountains with a greater abundance of mineral wealth ; He has given us an 
 abundant supply of living streams, which, in their progress from our moun- 
 tains to the sea, proclaim in a language not to be misunderstood the purpose 
 of their creation ; He has given us a territory so large and so fertile, as to be 
 capable of feeding a population as great as that of Europe ; He has given uk 
 the labor peculiarly adapted to the cultivation of the great staples which con- 
 stitute the chief elements of modern industry and of modern commerce. He 
 has so identified the interests of the governing class with those of the servile 
 race as to secure to us a purer religion, a more refined individual and social 
 morality, and a more enlightened, more independent, and a freer political or- 
 ganization than He has given to any other nation upon earth. He has sepa- 
 rated us from the rest of mankind, as He separated His chosen people under 
 the Mosaic dispensation, and that He has had a special purpose in doing so, 
 no one, who carefully and prayerfully studies the manifestations of His will 
 and the indication of His purposes, can doubt. He lias not so richly endowed 
 us, as a people, by accident. His purpose is forcibly illustrated by the para- 
 ble given in the twenty-fifth chapter of Matthew — we are but trustees, and 
 are responsible to God for the manner in which we execute the trust commit- 
 ted to us. If we would discharge our duty, w : e must so use the abundance 
 which we possess as best to promote His purpose and glory, and this cannot be 
 done unless we become a manufacturing and commercial, as well as an agri- 
 cultural people; and this we cannot do unless we so organize our credit as U> 
 make it available in the development of our abundant resources, and enable 
 us successfully to compete with the most favored nations in all the mechanic 
 arts, the manufactures, and the comiiierce, which characterize the progress of 
 modern society. 
 
 The measures which I propose will simplify the functions of the Confederate 
 Government. It will reduce the action of that Government to the payment of * 
 the current expenses, and collecting the current taxes after funding the existing 
 debt. It will greatly curtail the corrupting influence of Executive patronage. 
 It will give greater stability to, the values of the curreftcy, and consequently 
 to the values of property, and it will give us an abundant and cheap currency, 
 uniform and stable in value, giving life and energy, to the productive industry 
 of the country in all the departments of labor. It will lessen the burden of 
 taxation by substituting the certificates of the Confederate and State Govern- 
 ments ior bank cotes convertible into specie, and save to the Government,, 
 and to the public, and to the banks, the interest oh the mass of specie which,, 
 
53 
 
 under 8 revival of a specie currency, must be held as the basis of credit. It 
 will enable us to organize a system of education, embracing the children of 
 our deceased soldiers, enabling all,- females as well as males, to earn {he com- 
 pensation requisite to" feed, clothe and educate themselves, training them to bfc 
 useful members of society, self-reliant and self-sustaining, inspiring the rising 
 generation with a proper sense of personal independence and of public liberty. 
 The experience of the war demonstrates the necessity of a greatefl»distnbu- 
 tion of labor, and to do this requires an appropriation of the requisite capital 
 in aid of the efforts of individual enterprise. Th^re is a praiseworthy move- 
 ment to organize an ample fund to educate the children of our deceased sol- 
 diers. I would embrace all of the rising generation — the children of the 
 living and of the dead — the rich and the poor; and would so diversify their 
 training and their knowledge as to enable them to relieve us from our depen- 
 dence upon the foreign markets for articles which may be better and cheaper 
 produced at home. The public debt in the shape of convertible interest bear- 
 ing bonds, deposited with the Treasurers of the several States, as the basis of 
 bank issues, will give us an abundant, cheap and stable currency, and banks 
 organized for the purpose of advancing requisite capital to competent persons 
 who will employ male and females in appropriate departments of labor, with 
 the understanding that their compensation shall be such that six, or at most 
 eight, hours labor per day shall be sufficient to pay for their clothing, board 
 and tuition, and also to provide a surplus fund to aid them in the outset of 
 life, will give to the shareholders of such banks a proper profit on the capital' 
 thus invested, and stimulate the energies and industry of the employer, giving 
 to the children from four to six hours for study, with twelve hours per day 
 for refreshment and recreation. 
 
 Such a system can be organized if the Government will make the Treasury 
 certificates a tender, and adopt the system of finance and currency which I 
 propose. It will convert the public debt into a fund ; will build our railroads, 
 establish our manufactures, and educate our children, and make us the most 
 enlightened and prosperous people upon the face of the globe. It will do 
 more. It will achieve our financial independence by elevating us above the 
 controlling influence of that new power in Europe, so forcibly described in 
 the article from the London Spectator, given in the appendix, which will then 
 be no longer able to place us beneath the pressure of the. machinery by which 
 they regulate the value of the property of all those who are subject to its 
 control. 
 
 ♦ 
 The effect of funding at a low. rate of interest is forcibly illus- 
 trated by the history of the public debt of England and the system of 
 finance under which that debt was created. It would seem that our Con- 
 gress and the late Secretary of the Treasury believe that the excellence of 
 human wisdom consists in tracing, as nearly as possible, the example of 
 England. Thus, instead of giving value to our currency by funding the 
 surplus at a rate of interest which will, at the same time, give value to tho 
 currency and the funded debt, they depreciate the currency and the debt, 
 requiring the currency to be funded at a depreciation of thirty-five per cent. 
 for a six per cent. bond. If funded at par, as I propose, the value of tlfe 
 bond would regulate the value of the currency. 
 
54 
 
 McCulloch, in his Dictionary, says that — 
 
 During the reigns of William and Anne, the interest stipulated for loans wa* very va- 
 rious. But in the reign «>f George II, a different practice was adopted; Instead of 
 varying the interest upon the loan according to the state of the money market at the 
 time. the. interest was generally fixed at 8 or 3} per cent, the necessary variation jDeing 
 made in the principal funded. Thus suppose the Government were anxious to borrow; 
 that :hey preferred borrowing in a 3 per 10U stock, and that they could not negotiate a 
 loan fur less than 4o per 100; they effected their object by giving the lender in return 
 for every £100 advanced £150 3 per cent, stock — that is, they bound the country to pay 
 him or Ym assignees £4 10s. a year in all time to come, or otherwise, to extinguish the 
 debt by a payment of £150. In consequence of the prevalence of this practice, the 
 principal of the debt now existing amounts to nearly two-fifths more than the sum ac- 
 tually advanced by the lenders. 
 
 In a note we are referred to the 93d No. of the Edinburgh Review, where we are told 
 that "in 1781, a loan of £12.000,000, or £60,000,000, was negotiated, and for this sum 
 the Government gave £18,000,000 (or £90,000,000) of 3 per cent, stock, a. d £3.000,000 
 (or £15,000,000) of 4 per cent, stock. On the whole, therelore, £*660,000 (or £3 300,000) 
 of interest was paid for this loan, being rather more than 5i per cent; and a fictitious 
 capital was created in favor of the lender of no less than £9,000,000 (or §4&,00n,0t>0)! 
 But it is obvious that, had this loan been negotiated without any increase of capital at 
 6, or even 6 J, per cent , the charge on the account might have been reduced in the course 
 of half a dozen years to 3 or 3 J per cent, on the £ 2,o00,ti00 (or §60,000,000) actually 
 borrowed ; whereas, owing to the mode in which it was contracted, nothing could be de- 
 ducted from the annual charge without being previously prepared to offer the bolder* 
 £'21,000,00'i for the £1-2,000,000 (or $105,0u0,000 for the $60,000,000) they had originally 
 advanced. 
 
 The Review adds : 
 
 Nothing, we are sorry to say, is more easy than to point out innumerable instances of 
 this sort, in which the public interests have been sacrificed, not intentionally, indeed, but 
 through ignorance, or :. desire to grasp at an immediate advantage in the mo,st extraor- 
 dinary manner. The very next loans negotiated by Lord North, in 1782, was for £l:'..5t;0, t 
 000, for which Government gave £ 1^,500,000 of 3 per cents ; and £6,750 000 4 per cent s., 
 exclusive of an annuity of 17s. 6d. for every £100 advanced for seventy ei^ht years. '1 he 
 country was in this way bound to pay an interest of £793,1-5 a year, inclusive of the 
 annuity, being at the rate of £5 16* lod per cent.; and it was rendered impossible to 
 reduce this heavy charge at any future period without previously consenting to sacri- 
 fice £6,750,000. 
 
 But it is unnecessary to go back to the American Avar for proof of the extreme inex- 
 pediency of funding in this manner. Most* of the loans negotiated during the late 
 (French) war were funded in the same way, and some of them on still more ruinous and 
 improvident terms on the part of the public. Thus, according to the terms on which k 
 loan of £18,000,000 sterling was bargained for in 1795, a capital of £21.000,000 3 per 
 cent. s<oc« and £4,600,000 4 per cents., exclusive of a long annuity of £5S,5t)0, were as- 
 signed to the subscribers. But the terms of the loan of £13,000,000, negotiated in 1T9S, 
 were still more extravagant. For every £100 advanced entitled the lender to £175 8 
 per cent stock, £20 4 per cent, stock, and an annuity of 6 shillings for 62-| years ; or, iu 
 dther words, for every £100 advanced to the Government, it bound the country to pay 
 an annual interest of £6 Is, exclusive of the long annuity of 6 shillings 
 
 The Review then adds further: 
 
 The improvidence of this transaction is glaring and obvious. There can be no manner 
 of doubt that an addition of from £ to ^ per cent, would have procured this loin with- 
 out any increase of principal; but, supposing that 1 percent additional interest had been 
 required, instead of being subjected to a constant pa\mcnt in all time to come of £5 
 12s. 4d., for every £l<0 advanced, we should have had £6, or £6 10s. to pay for three or 
 four years, and £3, or at "most £3 10s. ever after. 
 
 By way of illustrating the system in a still more striking light, and bring- 
 ipg the results of the different operations, connected with the fuuding of th« 
 
55 
 
 British national debt during tbe French war, into one point of view, the Re- 
 vieiv gives a statement of loans contracted in each year, from 1793 to 1816, 
 both inclusive; of the amount of all sorts of stock created on account 
 of these loans; of the total interest on dividend payable on them; of 
 the portions of said loans paid to the commissioners of the sinking fund ; of 
 the amount of all sorts of stock purchased by said commissioners; and of the 
 amount "of the dividends on said stock. 
 
 Upon this exhibit, the Review remarks that — 
 
 It appears, then, that the sums borrowed on account of the public service, during tbe 
 late war, really amounted to £390.85 .','-0(3 ; and it also appears that an excess of 8173,- 
 1)28,782 (£569,380,988— £396 852,206), of capital or stock, was created in favor of the 
 lenders, over and above the sums advanced by them, being at the rate of nearly fifty 
 per cent, on the sum lent. And it further appears that, the whole annual charge on ac- 
 count of the money borrowed during the late war, amounted. at its close, to £21,006,631 
 being at the rate of about b\ per cent. 
 
 But it is evident that, had the sums thus borrowed been funded, without any artificial., 
 increase of capita!, id a 5£, a of, or a 6 per cent stock, the charge on account of interest, 
 might now have been reduced from 5£ to 3 or Si per cent., or from twenty-one to twelve 
 or fourteen .millions ! 
 
 It thus appears from this statement that the British public are now paying 
 3 per cent, per annum, on £172,078,782, more than they would pay if the 
 loans had been contracted at par; and McCulloch says that between 1822 and 
 1824, by an application of part of the surplus revenue and the reduction of 
 interest on the 4 and 5 per cent, stocks, existing in 1817, and by that paid on 
 tbe unfunded debt, the total annual saving by the reduction of interest, be- 
 tween 1822 and 1824, has been £2,355,845, or $11,779,225. If to this be 
 added interest, at 3 percent., upon the £173,028,782,. or $865,143,910— the 
 excess created by the erroneous system of funding — it will give an an annuity 
 of $37,633,542, which compounded at 3 per cent., will, in forty-one years, 
 give the sum of $3,089,426,392. 
 
 If the loss to the British Government «and people, bv their system of bor- 
 rowing and funding £396,352.206 (equal to $1,961,761,392), was, in 41 
 years, 83,089,426,392, what will be the loss to the people and Government 
 of the Confederate States by our present system of borrowing and funding 
 the sums required to "carry on the Government of the Confederate States?" 
 
 Whilst I am writing, a morning paper says: " We understand, 
 from an authority which we regard as altogether reliable, that the 
 features of a bill for arming the negroes and placing them in the 
 field, is being canvassed by a circle of politicians, prior to the intro- 
 duction before the Confederate Congress. Tbe bill proposes — 1st, 
 To conscribe all the able-bodied negroes of tbe country, between the 
 ages of IS and 45, respectively. 2d. To organize this force into 
 regiments, brigades and divisions, and to arm and equip them thor- 
 oughly as soldiers. 3d. To officer the- forces thus organized from 
 meritorious soldiers and subalterns now in the field. 4th. To offer 
 fetch negro who serves faithfully to the end of the war his freedom." 
 
 Coupled with the suggestion that we are not fighting for the insti- 
 tution of slavery, this is, indeed, a most startling and alarming 
 proposition — To arm and train our negroes as soldiers, with the 
 
56 
 
 promise of freedom in ease they serve faithfully to the end of tht* 
 war!! What would be the inevitable effect ofjueh-a measure? 
 Would it not, of itself, accomplish all that the North can do by the 
 most successful prosecution of the war ? Would it not substitute 
 the Northern for the Southern social organization and characteris- 
 tics ? Would it not be worse than reconstruction ? Would it not 
 be subjugation ? Would it not deprive us of the labor requisite to 
 produce cotton and tobacco, and thus deprive us of the means of sus- 
 taining our credit and of transferring to the consumers of British 
 goods a large part of the burden of our public debt ? Under such 
 circumstances, I feel it to be my duty to give a brief notice of the 
 rise and progress of Abolition in England and in the United States, 
 and to call upon the people, and especially upon our gallant army, 
 to unite in denouncing a measure so unwise, and to mark with the 
 severest reprobation any public man who dares to give to it the 
 slightest encouragement, countenance or support. 
 
 ENGLAND AND THE SLAVE TRADE. 
 
 By the lGth article of the treaty of Utrecht, England confirmed 
 the contract made by the English Guinea Company Avith the King 
 of Spain, by which that company gave to Spain 200,000 crowns, and 
 to the Kings of Spain and of England each one fourth part of the 
 profits of their trade, lor the privilege of supplying the Spanish 
 American Colonies with African slaves. This was in 1713. It is 
 well known that England compelled Virginia, regardless of her re- 
 monstrance, to receive slaves imported by the Yankees. 
 
 England, then, engaged in the slave trade because it gave employ- 
 ment to British ships and large profits to British trade. . 
 
 In 1817, England gave to Spain two millions of dollars to abolish 
 the slave trade ! ! Why, after having given Spain 200,000 crowns 
 and one fourth part of the profits of the trade, for the privilege of 
 supplying her colonies with slayes, did England give to Spain two 
 millions of dollars to abolish the slave trade ? Wilbcrforce, in his 
 discussion of the treaty in the House of Commons, gave the answer. 
 He says : 
 
 I cannot but think that the grant to Spain will be morn than repaid to Great Britain. 
 in ewnmercial advantages, by the opening of a great continent to British industry — an 
 object which would be entirely defeated if the t-lave trade was to be carried on by the 
 Spanish nation. Our commercial connection with Africa will much more than repay us 
 for any pecuniary sacrifices of this kind. I myself will live to see Great Britain deriv- 
 ing the greatest advantages from its intercourse with Africa. 
 
 That we may the better understand the motives which govern the 
 measures and policy of England, it is proper that we look into her 
 domestic and colonial systems, and first, of 
 
 THE COLONIAL POLICY OF ENGLAND. 
 
 I quote from the Edinburgh Review, of August, 1825 : 
 
 Tlie act of ItioO, passed by the Republican ParHament, laid the foundation of the 
 monopoly system, by confining the import and export trade of the Colonies exclusively 
 to Biitish or Colony built ships. But the famous Navigation Act of 16(50 (12 Charles 
 II., cap. 18) went much farther. It enacted that certain specified articles, the produce 
 
57 
 
 of the Colonies, and since well known in commerce as enumerated articles, should not 
 he exported directly from the Colonies to any foreign country; but that they should 
 first be sent t# Britain, and there unladen (the words are, hid upon the shore), before* 
 they could be forwarded to their final destination. Sugar, molasse?, ginger, fustic, to- 
 bacco, cotton and indigo were originally enumerated; and the list was subsequently 
 
 enlarged by the addition of coffee, h'tdes" and skins, iron, corn, lumber, etc 
 
 But the insatiable rapacity of monopoly was not to be satisfied with compelling the 
 colonists to sell their produce exclusively in the English markets. It was next thought 
 advisable that they should be obliged to buy such foreign articles as they might stand 
 ia need of^xclusively from the merchants and manuf; rcturers of England For this ' 
 purpose it was enacted, in 1663, that no commodity of the growth, production or manu- 
 facture of Europe, shall be imported into the plantations, but such as are laden and put 
 on board iu England, Wales, or Berwick-upon-Tweed, and in English built shipping, 
 
 whereof the master and three fourths of the crew are English It was 
 
 also a leading principle in the system of Colonial policy, adopted as well by England as 
 by the other European nations, to discourage all attempts to manufacture such articles 
 in the Colonies as could be provided for them by the mother country. The history of 
 our Colonial system is full of attempts of this sort; and so essential was the principle 
 deemed to the idea of a Colony, that even Lord Chatham did not hesitate to declare in 
 his place in Parliament, that the British Colonists in North America had no eight to 
 manufacture even a nail for a horse shoe ! And when such, were the pnactmerits made 
 by the Legislature, and such the avowed sentiments of fi great Parliamentary leader 
 and a friend to the Colonies, we need not be surprised at adeclaiation of a late Lord Shef- 
 field, who did no more, 'indeed, than express the decided opinion of almost all the mer- 
 chants and politicians of liis time, when he affirmed thus: The only use of American 
 Colonies or West India Islands is the monopoly of their consumption and the carriage of 
 their produce Were it not for the perverse and most injurious regula- 
 tions to which this system has given rise, we might supply ourselves >viih sugar from 
 the East Indies or South America, for a great deal less than it now costs to buy it from 
 the West India planters. This is a much more serious loss than is generally supposed. 
 Sugar has become a necessary, equally indispensable to the poor and the rich. The 
 quantity of West India sugar, annually consumed in Great Britain, may, we believe, be 
 taken on an average at about 3SO,UOO,000 of pounds weight. And it has been repeat- 
 edly shown, that a reduction of the duties on sugar from the East Indies and South 
 AmeTica, to the same level with those laid on We"st India sugar, would enable us to ob- 
 tain as good sugar for 4->}d. per lb, as now costs 6d. ; but taking the difference at only 
 Id. per lb , it would make on the above-mentioned quantity a, saving of no less than 
 
 £1,583,000 ($7,915,000) a year Net only, however, do we exclude the 
 
 sugars of the Dutch colonies, Brazil and Louisiana, but we actually lay 10s. a cwt. of 
 higher duties on the sugar imported from our own dominions in the Ea-t Indies, than on 
 that which is imported from the West! Not satisfied with giving the West India 
 planters a monopoly of the home market against foreigners, we had given them a mo- 
 nopoly against our own subjects in the East. It is impossible to speak too strongly in 
 condemnation of this arrangement — not that we mean to insinuate that the East In- 
 dians have any right whatever to be more favorably treated than the West Indians; 
 but we contend that they have a clear and undoubted right to be as favorably treated. 
 To attempt to enrich the latter, by preventing the forrher from bringing their produce 
 to our market, or by loading it with higher duties, is not only to prefer the interests of 
 one million, and those — we do not say it disparagingly of the planters — mostly slavers, 
 to the interests of one hundred millions of subjects; but is totally inconsistent with, and 
 subversive of, every principle of impartial justice and sound policy. 
 
 It is said, however, that slavery exists in Hindostan as well as in Jamaica, and that 
 by reducing the duties on East India sugar and facilitating its cultivation, by allowing 
 Europeans to purchase and farm lauds, we should not get rid of the evils of slavery, but 
 would be merely substituting the produce of one species of slave labor for another. 
 How, admitting for a moment that this statement is well founded, still it is certain, frous 
 the cheapness of free labor in Hindostan, no slaves ever have been, or ever can be, im- 
 ported into that country. And hence it is obyious that, by substituting the sugars of 
 the East for those of the West, we should neither add to the number nor deteriorate the 
 condition of the existing slave population in our dominions, while we shou'd save above 
 
58 
 
 a million and a half'm the purchase of one of the principal necessaries of life, at the 
 name time that we subverted a system of monopoly and laid the foundations of ft 'new 
 and extensive intercourse with India — a market which may he enlarged to almost any 
 conceivable extent." 
 
 Here is the key which unlocks the motives, and controls and regulates the 
 measures and policy of England. To encourage and foster the slave trade, she 
 had given to the West Indies a monopoly of the supply of the home markef 
 with tropical produce — the discovery of the power loom, the cotton (gin and the 
 •spinning jenny had so increased her manufactures that it had become necessary 
 to find new markets for the sale of the surplus products of her machinery, and 
 hence she emancipated her West India slaves, and opened the trade of India 
 to British enterprise. The motive is indicated by historical facts as well as by 
 her arguments. Thus, in 1825, the Edinburgh Review assails the West India 
 monopoly upon the ground that its repeal would lay the "foundation of a 
 new and extensive inicrcoxirse with Jadia — a market which may be enlarged 
 to almost any conceivable extent." 
 
 The appeal to the pocket nerve of England, however, prevailed, and as 
 Wilberforce urged, in 18! 7, that the grant of two millions of dollars to in- 
 duce Spain to abolish the slave trade would be more than repaid by opening 
 to England the commerce of the continent of Africa, which could not be done 
 so long as Spain was permitted to carry on the slave trade, so, in 1S33, it 
 was argued that the one hundred millions of dollars paid to the West India 
 proprietors would be more than repaid to England by the increased commerce 
 with India, which "would be entirely defeated," unless the West India mo- 
 nopoly was repealed ; and this could apt be done without first emancipating 
 the West India slaves and indemnifying the West India proprietors. 
 
 The prevailing impression in England then was, that free labor was cheaper 
 than slave labor, and that the effect of opening the trade of India would be 
 to so reduce the price of tropical products that it would be equivalent to the 
 confiscation of the West India estates, and, therefore, the indemnity given 
 was, in faer, a remuneration for the depreciation of West India property, 
 caused by admitting into the British market the cheaper produce of the East 
 Indies; and the emancipation of the West India slaves was but an act of 
 justice to their masters in remuneration for the destruction of, the value of 
 their property, and not an act of mercy or of sympathy for the slaves. 
 
 This is proved not only by the fact admitted by the Edinburgh Review, as 
 quoted above, that slavery existed then in the East Indies, and continues to 
 exist there now, and is enforced by the authority of British law, but by the 
 further fact that, finding that the cheap slave labor of India cannot successfully 
 compete with the slave labor of America, the diplomatic energies of England 
 have been exerted to increase the value of the tropical products of India by 
 the abolition of slavery wherever slave labor elsewhere has come in competi- 
 tion with the labor of India. The war now waged against us is the fruit of 
 the abolition movement of England, and to arm and emancipate our slaves 
 would be the consummation of her efforts to aggrandise her power and influ- 
 tHiee by the destruction of that principle of our social and political organiza- 
 tion which constitutes the basis of our strength ami prosperity. It is admitted 
 that slavery exists in India, but who ever heard a British statesman or a 
 British press denounce the slavey of India ? Why does England send her 
 
59 
 
 sympathies on a voyage of discovery to Africa and America, instead of en- 
 listing them in behalf of her own suffering poor in England, in Ireland and 
 
 'India? 
 
 That there may be no doubt as to the motive of England, I quote from 
 
 iLord Stanley in the House of Commons in 1842. He said that oil sixty-two 
 sugar estates in the British West Indies, the loss from January to December, 
 1841, had been $983,000 on an outlay of Si, 250,000 ; and Sir Robert Peel 
 said, "He roust say he had his doubts if a colony, in which slavery had been 
 abolished by law, could at present enter into successful competition with a'dis- 
 feriet in which the system continues to exist." 
 
 Urged on by these convictions, England has not only continued slavery in 
 India, but, by a system of internal police, she has levied upon the free labor, 
 as well as the slave labor, of India exactions much more onerous than are laid 
 upon our slaves. 
 
 McCull'ich, speaking of the revenue and expenditure of the East India Company, 
 
 i says : "The far greater part of the revenue of India is, at present, and lias always been, 
 derived from the soil. The land has been held by its immediate, cultivators generally 
 in small portions, with a perpetual and transferable title ; but they have been under the 
 obligation of making an annual payment to the Government of a certain portii n of the 
 
 ; prodiiGe of their farms, which might be increased or diminished at the pleasure o the 
 sovereign, and which has, in almost all cases, been so large as seldom to leave the culti- 
 vators more than a bare subsistence Under the Mahomidan Government, the gross 
 produce of the soil was divided, into equal or nearly equal shares, between the ryots 
 or cultivators, and the Government We regret we are livable to say that the Britisli 
 Government has made any material deduction from this enormous assessment. Its op- 
 pressiveness, more than anything else, has prevented our ascendancy in India, and the 
 comparative tranquility and good order we have introduced from having the beneficial 
 effects that might have been anticipated The cultivators throughout Hindostatmre 
 proverbial y poor; and, until the amount of the assessment they are at present subject 
 to ba effectually reduced, they cannot be otherwise than wretched. They are commonly 
 obliged to borrow money to buy their seed and cany on their operations, at a high in- 
 terest, on a species of .mortgage over the ensuing crop. Their only object is to get sub- 
 sistence — to be able to exist in the same obscure poverty as their forefathers,. If they 
 succeed in this they are satisfied. Mr. Colebrook, whose authority on all that relates to 
 India is so deservedly high, mentions that the quantity of land occupied by each ryot 
 or cultivator, in Bengal, is commonly about six acres, and rarely amounts to twfenty- 
 four; and it is obvious that the abstraction of half the produce raised on such patches 
 can leave the occupiers noj hing more than the barest subsistence for themselves and 
 their families. Indeed, Mr. Colebrook tell us that the condition of ryots, subject to this 
 tax, is generally inferior to that of a hired laborer, who receives the miserable pittance 
 of two annas, or about three pence a day wages. Besides the' land revenue, a consid- 
 erable revenue is derived in India from the monopolies of salt and opium, the sale of 
 spirituous liquors, land and sea customs, post office, etc. Of these monopolies, the first 
 is, in all respects, decidedly the most objectionable. Few things, indeed, would do more 
 to promote the improvement of India than tiie total abolition of this monopoly. An 
 open trade in salt, with moderate duties, would, there cm be no doubt, be productive of 
 the greatest advantages to the pubLjc and a large increase of revenue to the government; 
 The opium monopoly, the less objectionable than the last, is, notwithstanding, very oppres- 
 sive It interferes with the industry of the inhabitants — those who are engaged in the 
 eultiration rf opium being obliged t > sell the.%% produce to the Goy&rrimtnt at prices 
 arbitrarily jixed by the G'ompa 1 y's agents" 
 
 Finding that the labor of India^ould not compete with the slave labor of 
 America, England, in 1840, negotiated what she termed her slave trade 
 treaty, which was intended t« be an amendment to the law of nations author- 
 ising her to arrest, on the high seas, any ship suspected of being engaged in 
 
k 
 
 60 
 
 the slave trade, to be carried into British. ports and condemned by British 
 Judges. And such was the tone of the British press, and such the character 
 of British diplomacy, that the President (Mr. Tyler) deemed it expedient "to J' 
 send me as a confidential agent to London, where I spent several months 
 writing- a,series of articles for the Morning Chronicle. From London I went 
 to Paris, and wrote a series for the Journal of Commerce. The ratification of 
 the treaty was before the French Chamber of Deputies. There was then a I ] 
 slaveholding interest in the French West Indies. My arguments were ad- 
 dressed to that interest and to the continental powers of Europe. I en- \ 
 deavored to unmask the purpose of England, and to show that the emancipa- 
 tion of American slaves would enable England to exchange her' manufactures 
 for the tropical products of India, which products she would then sell to con- 
 sumer's on the continent at much higher prices than would otherwise be 
 paid to the American producers. I urged and aided General Cass to 
 write his protest against the ratification of the treaty. My articles were re- 
 produced in the French Chamber of Deputies. They were translated and 
 circulated in Germany, and the ratification of the treaty was defeated. 
 
 Whilst in Paris I had a free and confidential conversation with one of the 
 leading diplomatists of England (Sir Henry Ellis), to whom I urged the ne- 
 cessity of an early and satisfactory adjustment of the issues, then pending 
 with the United States, as the only means of preventing a combination be- 
 tween the United States'and Russia, and other leading powers of Europe, for 
 the purpose of emancipating the British East Indies, and opening the com- 
 merce of India to all the world. He urged me to write out the substance of 
 my remarks for him, saying that he wished to send them to Lord Aberdeen. 
 
 •I found it impossible to p epare a communication sufficiently respectful to 
 be submitted to His Lordship, and, instread, wrote an article giving extracts 
 from the official reports of the poor law commissioners, proving the condition 
 of the. laboring poor of Ireland and Eng'and to be much Yno:e degraded than 
 that of our slave-, and charg ng that the purpose of England was to substi- 
 tute the tropical products of India for thnse of America, and that having by 
 her experiment in the West Indies ascertained that the cheap labor of India 
 could not succe-sfully compete with the slave labor of America, her efforts to 
 abolish the s'ave trad« and to emancipate African slaves were prom. .ted by 
 the hope that if, under the pretence of sympathy for the slave, she could ac- 
 complish this, then she could obtain tropical produce from the East Indies in 
 exchange for her manufactures, and t thus levy tribute on the consumers of 
 East India produce at the same tim°, that by the monopoly of the trade to 
 India she could greatly^' increase her manufactures, her shipping and her navy- 
 That such 'is her purpose, I proceed to quote authorities which place the mat- 
 ter beyond questiou : % 
 
 THE DUKE OF "WELLINGTON. 
 
 In the debate on the Corn Laws in 1842, the Duke of Wellington said : 
 I am sure no man laments more than' I do ttiat commerce of manufactures should b# 
 at all depressed ; but I believe if the Lorn Laws were rep -aled to-morrow, not a yard of 
 cloth or a pound of iron more would be sold in ajhy part of Europe or of the world, over 
 ■which this country does not exercise a control. My Lord*, the greatest number of Euro- 
 pean nations, and of the nations of the globe, have ad<^>ted measures f >r the encourage- 
 ment of home manufactures. These measures were not, as stated by some, taken in 
 consequence of the English Corn Laws. They are attributable to the example of this 
 
 « 
 
61 
 
 ountrv. They had their rise in the spectacle which this country exhibited during the 
 
 iite war, and in the great and noble exertions by which her power and strength were 
 isplayed on every occasion. Those who contemplated these exertions, as well as those 
 idio were relieved and assisted by them, thought they might as well follow the example 
 f our power, of our industry, and our system of commerce. They have followed our 
 
 'sample, and have established among themselves manufactures, and given a stimulus 
 
 jo their commerce. 
 
 LORD PALMER8TON. 
 
 1 In the debate on the state of the country,, on the Oth July, 1842, Lord 
 *almerston having explained that the markets of France and Germany were 
 Josed to British manufactures, said : 
 
 I therefore look to more distant regions for future prosperity. "We must look to the 
 isin"- nation which inhabits the 'North American continent. There we are met by our 
 vorn Laws, and until we alter these Ave will be crippled in our commercial intercourse. 
 iWe must look also to South America. There again we are met by heavy duties on 
 ?ugar, ahd until these are modified we cannot expect to carry on commerce with South 
 America to the extent it is possible. We must look again to Africa, and we must look 
 specially to India and to China. 
 
 MR. COBDEN. 
 
 That the animus which governs the measures and policy of England may 
 oe better understood, I quote from a pamphlet written in 1835 by Mr. Cob- 
 leu. He says : 
 
 We are on the eve of a novel combination of commercial necessities that will al- 
 o<*ether change the relation in which we have hitherto stood with our colonies, tv.e 
 all them necessities; they will be forced on us. not from our conviction of the wisdom 
 if such change-, but by the irresistible march of events. The new world is destined to 
 )ecome the arbiter of the commercial policy of the old. '- * * It is to the indus- 
 try 1 , the economy and peaceful policy of America, and not to the growth of liussia, that 
 >ur statesmen and politicians, of whatever creed, ought to direct their most anxious 
 study; for it is by these and not by the efforts of barbarian force that the power and 
 rreatness of England are in danger of being superceded; yes, by the successful rivalry 
 jf America shall we in all probability be placed second in the rank of nations. •"• * * 
 
 Bearing in mind that the supply of the raw mUerial of nearly one half of our ex- 
 ports is derived from a country that threatens to eclipse us by its rival greatness, we 
 cannot, whilst viewing the' relative position of England and the United States at this 
 mordent, refrain from recurring to the somewhat parallel cases of Midland and Great 
 Britain before the latter became a manufacturing State. 
 
 * * * The latter (England) now see< in America a competitor in every respect 
 calculated to contend with advantage for the sceptre of naval and commercial supre- 
 macy. , 
 
 FRAZER's MAGAZINE RECOMMENDS SERVILE WAIt. 
 
 In 1841 Frazer's Magazine published an article headed " War with America 
 a blessing to mankind," in which, after laboring to enforce the propriety of a 
 declaration of war by England, and the necessity of making a war subservi- 
 ent to the great and permanent object. of freeing our slaves, he says : "Policy 
 mot less than philanthropy prescribes such a course of warfare," and adds: 
 
 In one morning a force of ten thousand men could be raised in Jamaica for the en- 
 franchisement of their brethren in America. Such a force, supported by two battalions 
 of Englishmen and 20,' '00 muskets, would establish themselves in Carolina, never to be 
 removed. In three weeks from their appearance, the entire South would be in one con- 
 flagration. The chains of a million of men would be broken, and by what power could 
 they ever again be nvetted? We say that this course is dictated alike by self-preserva- 
 tion and by philanthropy. 
 
 It will thus be seen that the programme of the invasion of Virginia by 
 
62 
 
 John Brown, and the Federal scheme of a servile war, originated in England. 
 Even now, Earl Russell and Mr. Lindsay both declare that if England'could 
 be satisfied that the purp se of the Federal Government is to emancipate our 
 slaves then the sympathy of England would be with the North. And whv 
 docs England wish to emancipate our slaves? It is because she believes that 
 then the- cost of producing cotton, rice and sugar in, America would be so 
 much increased that her cheap labor in India could drive the American cot- ' 
 ton, sugar and rice out of the market. 
 
 SIR- ROBERT PEEL. 
 
 The debate, in 1842 on the proposition to repeal the tax on Cuban and 
 Brazilian sugar, Sir Robert Peel said : 
 
 To open our markets to the sugars of Cuba and Brazil would detract from the high 
 character this country (England) has acquired hi its efforts and sacrifices to put down the 
 slave trade. * * * What I say is, make' the attempt— try to get concessions ftvm 
 those of whom we get our supply — those countries themselves are in a peculiar position. 
 You may depend upon it that there is a growing conviction among- the people of those 
 countries that slavery is not unaccompanied with great dangers. In Cuba, Brazil, and in 
 the United States, there is a ferment on the subject of slavery which is spreading and 
 will spread. Some from humane and benevolent motives — some on account of interest- 
 ell fears, begin to look at the great example we have set, and begin to look at the conse- 
 ouences which may result from that example nearer home. 
 
 This speech was made in opposition to a proposition to repeal the duty on 
 Cuban and Brazilian sugar, based upon a petition which alleged that the tax 
 on these sugars was $-1 7,085,7 15 per annum. The argument, interpreted, 
 was "i'pay this tax a little longer and I will soon be able to induce Cuba and 
 Brazil to abolish slavery, and then the United States will follow their ex- 
 ample," for, said he in addition: "It is impossible to look to the discussion in 
 the United Stales, and especially to the, conflicts between the Southern and 
 the Northern States without seeing that slavery in that nation stands on a 
 precarious footing." And why should Sir Robert Peel urge the people of 
 England to continue to pay a i.a<c of $47, 085, 7 15 per annum, nnderthe hope 
 that it would aid in the emancipation of our slaves 'i In the same debate he 
 said : 
 
 1 must say that I have my doubts if a colony in which slavery has been abolished by 
 law can, at present, enter into competition with a district in which the system continues 
 to exist. • 
 
 And Lord Stanley, then a member of the Government, said that, Qn .si^ctv- 
 
 two West India sugar estates, from the 1st of January to PeceiiioeK'lSii, ; th/e 
 
 actual loss to the proprietors was 8983,000 on an outlky. oH^MpOO'-doilar-si :' 
 
 ihese extracts prove that . ■ , 
 
 1 -ifi-s'j io.lyoido inwmim&q ban iRQT% otlJ od Jay 
 
 THE CHEAP LABOR OF INDIA ' CANXOT COMPETE. WITH ,£}LA i VE I+ABOB. ,.,. 
 
 The Government and'pedrjfe'of England,. ,ha,y,e. become. .s,a.ti&fiefj. ( tj,tat cjiea-g 
 as the labor of India is, ft c^tir^^^ ihej'shivWlaboivlGti;',"! 
 
 Arper' 
 thSo 
 
 Jv^r 1 ; '■-Vv'ealtft Wnd^isbiiVceV of England. " .^qoia'in^fixlr 
 
 [n proof of this I. quote farther from Sir Robert Peel.,., ilc,,spid,;, 
 ,^he" norrorable'merhber for Montrose announced his wish to maintain our < 
 
 Ij iiiw Jl 
 colonial de- 
 
63 
 
 • 
 
 nmdencies, but said that his object was to see each colony paying for itself. I appre- 
 hend that the proposal of the honorable and learned membei from Hath to admit an 
 unlimited competition with slaves possessing colonies is not the way to insure that ob- 
 ject. The honorable member said that if the weavers of I an-, ashne were asked what 
 benefit they derive from the du'y on foreign sugar, they will assu edly say — "none." 
 But i put it to the honorable member whether that is the lest by which any great ques- 
 tion affecting this country is to be decided '«. if I ask a Lancashire weaver what benefit 
 he derives from Jamaica, and his reply is — "none," ought that to induce me to abandon 
 my measure i Is the honorable gentleman prepared to test the advantages derived from 
 our connexion with India in the same manner? or should we abandon our colonial depen- 
 dencies altogether, upon the assurance of a distressed weaver of Lancashire, that he is 
 not aware that any benefit is conferred upon this country by our dependencies ? If that 
 is the principle of the honorable gentleman, it i< quite clear th t in order to conform to 
 it, we must resolve ourselves into the narrow limits of our own resources and try what 
 England can do against the world, after having abandoned all those dependencies which 
 she has established to her glory. 
 
 Yes, Enoiand, under pretence of benevolence, would pay a tax of forty- 
 seven millions of dollars, under a hope that, by the emancipation of our 
 slaves, she could drive us out of the market, and then she would bind the 
 poor East Indians to the muzzle of her cannon, and shoot them into frag- 
 ments, by way of compelling India to exchange her raw products for British 
 manufactures, because she hopes, by such means, to monopolize the greater 
 part of the trade in tropical produce and thus increase her power and re- 
 sources. Is it not obvious that for this she repealed the duties favoring West 
 India produce, emancipated the West India, slaves, and opened the trade ot 
 India to British subjects? Is it surprising that she refuses to recognize the 
 Confederate States ? • 
 
 BRITISH POOR LAWS. 
 
 Before the act of 1833, any English laborer, whose wages were not suffi- 
 cient to maintain him and his family, was entitled to receive such an allow- 
 ance from the poor rates as would make the sum requisite for their support. 
 This was termed "out door relief, 1 ' and could be claimed only by those who 
 were settled in the parish. To obtain a settlement required- that an applicant 
 should have been born in the parish,. or have been in service twelve months, 
 or the owner of a freehold worth ten pounds per annum. 
 
 The Edinburgh Review for May, 1828, quotes a member of the House of 
 pommons, who said : 
 
 This forced and expensive way of relieving the poor has put many gentlemen and 
 ' parishes upon contriving all possible methods of lessening their number, particularly by 
 discouraging, and sometimes hindering, poor Persons from marrying, when they appear 
 likely to become chargeable, and thereby preventing an increase of useful laborers, by 
 discharging servants in their last quarter, and preventing them from getting a settle- 
 ment, whereby they become vagrants — by pulling down cottages and suffering no places 
 of inhabitation for paupers, whereby estates are flung into a few hands, and several 
 parishes are, in a measure, depopulated. England complains of a want of useful hands 
 for agriculture, manufactures, for the land and sea service ; and, for remedyiug this, a 
 bill for a general naturalization was lately introduced. * * * But no scheme, I be- 
 lieve, will ever succeed so long as parishes are so apprehensive of paupers, and take all 
 manner of precaution to prevent a multiplication of inhabitants. 
 
 Again, from Arthur Young : 
 
 There is no parish but had much ratl«r that its youDg laborers would continue single ; 
 in that state they are not in danger of becoming chargeab'e; but when married the case 
 alters. All obstructions are, therefore, thrown in the way of .their marrying ; and none s 
 
64 
 
 more immediately than that of rendering it as d.fficult as possible for the men, 'when 
 married, to procure a house to live in; and this conduct is found so conducive to easing 
 
 ike rates, that it universally (jives rise to an ojie.n war against cottages 'i he 
 
 Act of 43d Elizabeth, by devolving the proteciion of the poor on the landlords and occu- 
 piers of land, compelled the latter to take all possible precautious to prevent the too 
 rapid increase of the i'ortner. A premium was given to those who lived in a, state of 
 celibacy; early and improvident marriages were discouraged by what could not fail to 
 be considered very severe penalties. 
 
 The Review adds : 
 
 The able-bodied tenant of a workhouse should be made to feel that his situation is 
 decidedly less comfoi table than that of the industrious laborer who supports himself, 
 and that a life of unremitting toil, supported on coarse and scanty fare, is to be his por- 
 tion so long as he continues in this degraded state. 
 
 It adds further : 
 
 Dr Burn, who is one of the very highest authorities as to all that respects the poor, 
 has given the following graphical de iueation of the peculiar business of a parish over- 
 seer: The office of an overseer of the poor seems to be understood to be this: To keep 
 an extraordinary lookout, to prevent persons coming to inhabit without cytificates, and 
 to fly to the Justices to remove them ; and if a man brings a certificate, tlu-n to caution 
 the inhabitants not to let him a farm of £10 a year, and to take care to keep him out of 
 all parish offices. To wain them, if they will hire servants, to hire them by the month, 
 the week, or the day, rather than by any way that can give them a settlement; or. if 
 ihey do hire them for a year, then to endeavor to pick a quarrel with them belore tk« 
 rear's end, and so to get rid of them; to maintain their poor as cheaply as they possi- 
 bly can, and not to lay out two pence in prospect of any future good, but only to serve 
 the present necessity ; (o bargain with some sturdy person to take them by the lump, 
 who is not yet intended to take them, but*) hang over them in lerrora/i, if they shall 
 eoniplain to the justice for want of maintenance; to send them out into the country a 
 begging; to bind out poor children apprentices, no matter to whom or to what trade, 
 but to take special care that the master live in another parish; to move heaven and 
 earth, if any. dispute happens about a settlement; and, in that particular, to invert the 
 general rule and stick at no expense ; to pull down cottages ; to drive out as many £m- 
 Itabitdnts, and admit as few, as they possibly can — that is, to depopulate the parish in, 
 order to lessen the poor rate; to be generous indeed sometimes in giving a portion with 
 the mother of a bastard child to the reputed father, on condition that he will marry her: 
 >V with a poor widow, always prbvided that the husband be settled elsewhere; or, if a 
 poor man, with a large family, happen to be industrious, they will charitably assist him 
 m taking a farm in some neighboring parish, and give him £10 to pay his arst year's 
 rent with, that they may thus for ever get rid of him and his progeny. 
 
 The lleview quotes the Morning Chronicle as saying: 
 
 These restraints which persons of property, interested in putting down poor rates, will 
 infallibly impose, are much more likely efficacious than tho-ejie (the laborer) will im- 
 pose on himself Until lately, no pauper could marry, and no pauper ought to be allowed 
 io marry. If there was no • pening for a married man in his own parish, and if the at- 
 tempt to marry in another led to his removal as a pauper, the laborer found himself 
 governed by circumstanc.es to which his inclinations w ere forced to yield. 
 
 So much for the Edinburgh Review. 
 
 The London Quarterly, of December, 1832, says: ' 
 
 1st. The able-bodied laborer must be discouraged from relying on parish aid. 2d. 
 He must be enabled to maintain himself in independence. The first end is to be attained 
 only by requi ing i'rcnj all parish laboiers fidl icorh for a rale of pay barely sufficient 
 to support the individuals. A mere sul.si.->tence, in return for their utmost exertions, is 
 all i hat, injustice or policy, the parish can or ^night to be compelled to afford them. 
 Harshly as this may sound, ic is absolutely necessary, to prevent our degenerat ; ng into 
 a nation of paupers, that the parish should always have the character of the hardest tat/' 
 ■matters, and the worst pay-master a laborer can apply to. 
 
'65 
 
 * ■ 
 
 It will be seen that the system is so organized as to compel the able-bodied 
 laborer to work, and to reduce the compensation below the point of subsis- 
 tence. The Review gives the following as the pay allowed to infirm poor in a 
 county in the west of England per week : 
 
 To every adult pauper, ------- 3s. Od- 
 
 Infirm paupers under 18 and above 10 years of age, - - - - 2s. Od- 
 
 Children under 10 yearsof age, - - v - - - - Is. 3d- 
 
 PAY OF PARISH LABORERS PER WEEK; 
 
 Single man, - . " • - - - - - - 3s. Od 
 
 Man with a wife, - - - - - . - - - 5s. Od' 
 
 Young men and women under 18 and above 12 years, - - 2s. Od. 
 
 Single women, - - - - - . - - - 2s. 6d, 
 
 For each child incapable of work, - - - - - Is. 3d. 
 
 Boys and girls under 12 years of age, - - - - - Is. 6d ; 
 
 The Edinburgh Review says that it has been "affirmed, and truly, that- 
 there was no considerable increase of population in England from the period 
 when the poor laws were first established (1601) up to the middle of the last 
 century ; and it is alleged that its recent increase has been wholly owing to 
 the prodigious extension of manufactures and commerce;" and the London 
 Quarterly, of March, 1826, says: 
 
 / We are inclined to suspect that in all agricultural districts the population suffered a 
 diminution by no means inconsiderable during this interval (from 1550 to 1750). For 
 the purpose of investigating this point, we have consulted a variety of parish registers, 
 considering these as the most certain sources of authentic data for forming an opinion 
 on the subject. The register book of the parish in which we are now writing com- 
 mences about 1550. On an average of fifty years, the number of baptisms annually en- 
 tered in it stands thus : . 
 
 From 1550 to 1600, 50 per annum. 
 
 From 1600 to 1650, 53 per annum. . 
 
 From 1650 to 1700, 34 per annum. 
 
 .From 1700 to 1750, 19 per annum. 
 
 From 1750 to 1800, 19 per annum. . • 
 
 From 180(J to 1824, 34 per annum. 
 
 There is nothing peculiar either in tbe situation or circumstances of this parish. It is 
 situated in a country purely agricultural, near one of the main public roads, and at no 
 great distance from the Metropolis. The land is divided into -iarnis of very moderate 
 dimensions, and a considerable portion of it Is copyhold, a circumstance forming, at all 
 times, a powerful impediment to the demolition of houses of husbandry and the consoli- 
 dation of farms. 
 
 • ■* 
 
 The laboring poor, under the regulation of the wages of labor, in England, 
 
 have not increased in these agricultural districts for more than two hundred 
 years; whilst, under our system of slave labor, the four hundred thousand Afri- 
 can slaves brought to this country by the Yankees have increased to more than 
 four millions in less than one hundred years. Could there be a stronger or 
 more satisfactory test of the two systems ? 
 5 
 
66 
 
 APPENDIX r A. 
 
 It -will be seen by what I have written, that I am enabled to trace the 
 Abolition movement of the North to the purpose of organizing the North 
 as a sectional political party, upon tie basis of emancipating our slaves, 
 digested by Mr. Adams, as far back as 1815, in concert with British Aboli- 
 tionists. I refer to this fact now, and to the efforts which I have hereto- 
 fore made to arouse the people of the slaveholding States to the necessity 
 of counteracting the Northern sectional organization,, and that up to the 
 election of Mr. Lincoln, I did not despair of preserving the Union by re- 
 straining the action of .the Federal Government within the limits of the 
 powers granted by the Federal Constitution, In proof of this, I refer to, 
 the explanation which I have given of the Nullification of South Carolina, 
 to which I would add an appeal which I made to the people of the slavehold- 
 ing States, in 1850, given in this appendix below. ' I would refer now to 
 tb,e fact that the Federal Government was organized by the States as States, 
 and that that Government has no powers but those granted by the Consti- 
 tution, and that the question of slavery was expressly reserved to the States. 
 The. purpose of the North is dominion, power. If it were possible for 
 them to subjugate the South, then, instead of independent, or co-equal 
 States, we will be subjugated colonies, and the fate of Ireland, and of India, 
 and of the pauper population of England, should admonish us of what our 
 condition will then be. 
 
 The following address was published in 1 850. It will be seen that it 
 contemplated th0 possibility of preserving the Union. He who desires a 
 reconstruction must be deaf to all the teachings of history. 
 
 TO THE PEOPLE OF THE SLAVEHOLDING STATES. 
 
 The Jews were a peculiar people, chosen of God, and under Hit- 
 guidance and protection, until, as a punishment for their sins, He 
 permitted Samuel to anoint Saul to be their King. As in His good- 
 ness and mercy, under the Mosaic dispensation, God committed the 
 Ark of the Covenant to their keeping, so has "He, in like manner, 
 committed to the slaveholding race of this favored country, the 
 maintenance and preservation of our Republican institutions: How 
 is this to be done ? God requires that ma,n should labor. "Idleness 
 is Sinful, and will surely be punished. Neither health, strength. 
 
• ft 
 
 power, intelligence, wealth, or influence, can be preserved without 
 labor. We must, therefore, meet the issues involved in the present 
 crisis, investigate their origin and progress, and prepare with a 
 united energy for the defence of ourrights and interests. 
 
 We are told that What was written aforetime was. " written fbr 
 our learning, that we, through patience and comfort of the Scrip- 
 tures might have hope." Christ Himself said, " Search the Scrip- 
 tures, for in them ye think, ye have eternal life, and they are they 
 which testify of me." He wrought miracles because it was 'part ©f 
 His divine, mission to convince his immediate disciples and the world, 
 that He was the Son of God, having power to save sinners ; but He 
 Himself appealed to the Prophets, because/ their words, verified by 
 their fulfillment in subsequent ages, are so many living witnesses', 
 appealing to the judgments and consciences of men, confirming the 
 truth of Eevelation. Indeed, the prophecies concerning the destruc- 
 tion of Jerusalem — the character, dispersion, persecution, and pre- 
 servation of the Jews — the desolation to 'befall Judea, Amnion, 
 Moab, Idumea, Philistia, Ninevah, Babylon and Tyre, testify unto' 
 us, who live in this enlightened age, that the Scriptures are true, 
 With' even greater force than the miracles wrought in the presence 
 of His immediate followers by our Saviour himself ; for our know- 
 ledge of those miracles depends upon the testimony of those who 
 bore witness of them, whereas the literal fulfilment of the prophe- 
 cies are constantly proclaiming, in language which no one can deny, 
 that the Scriptures are true. We then turn to the Scriptures and 
 find that God said unto Adam, " Because* thou hast hearkened unto 
 the voice of thy wife, and hast eaten of the tree of which I com- 
 manded thee, saying, thou shalt not eat of it ; cursed is the ground 
 for thy sake, in sorrow shalt thou eat of it all the days of thy life ; 
 thorns and thistles shall it bring forth to thee, and thou shalt eat of 
 the herb of the field ; in the sweat of thy face shalt thou eat bread, 
 until thou return unto the ground, for out of it thou wast taken ; for 
 dust thou art and unto dust shalt thou return." 
 
 We thus see that God's decree is, tba's man must labor, and that 
 no one is exempt therefrom. He, therefore, who complains that the 
 African is made to work, arraigns the wisdom, goodness, and justice 
 of God himself. • Are we told that the complaint is .not that the Afri- 
 can is made to work, but that he is a slave ? We find, that the first 
 prophecy after the-flood was by Noah, in these words : " Cursed be 
 Canaan, a serv/irit of servants shall he be unto hi3 brethren. Blessed 
 be the Lord God of Shem, and Canaan shall be his servant. God 
 shall enlarge Japheth, and he shall dwell in the' tents of Shem, and 
 Canaan shall be his servant." 
 
 God is not controlled by accidents. He has a wise and beneficent 
 purpose in all that He does. He made the earth, the fowls of the 
 air, the beasts of the field, the fish of the "sea, and the man " to have 
 dominion over them." He made the climates and the seasons, and 
 intended that each should act its part in the great purpose of crea- 
 tion. He madp the lands within the tropics produce, in great abun- 
 
• 6S . 
 
 dance, articles indispensable to the comfort and happiness of man- 
 He gave to the descendants of Ham a physical organization and 
 constitution which enable them to endure the exposure and fatigue, 
 "without which, the rich' lands of that climate cannot be brought 
 under "the dominion of man;''' and yet, although no one who be- 
 lieves the Scriptures can deny, that the purpose of God was, that man 
 should subdue the earth, all must admit, that, without the aid, the 
 guidance, and control of the Christian white man, who, for want of 
 a like physical organization "and constitution, cannot labor under a 
 tropical sun, the savage African, endowed as he is, and otherwise 
 qualified for the task, never would put the fairest and most produc- 
 tive part of the habitable globe under cultivation. And the fact that 
 the most powerful combination ever witnessed in the civilized world, 
 acting in the name Of religion and humanity, cannot suppress the 
 slave trade, should admonish us that God has a purpose to accom- 
 plish through African slavery. And who can now doubt what that 
 purpose is ? Look upon Africa, and what do we see ? A vast conti- 
 nent teeming with an idolatrous population, unable to subdue the 
 earth, or otherwise fulfill the great end of their creation. God works 
 by means that He may accomplish His purpose. What has He clone 
 through African slavery? Has he not brought millions of.benighted 
 savages to dwell under the droppings of His sanctuary? Has He 
 not given them the blessings of the Gospel, and greatly improved the 
 condition, physical, temporal and spiritual,' of the savage African ? 
 .Compare His way with the ways of man. He arrests the savage in 
 the midst of superstitious idolatry, and, by force, places him under 
 the protection of Christian laws, and within the infiuenee of the 
 Christian religion, and has thus brought millions to a knowledge of 
 the truth. Now, how doth man work ? Where are the fruits of his 
 labor? Where are the African souls whorn he hath saved? How 
 many heathen have those who denounce African slavery converted 
 to God ? Verily, by their works will they be judged. ' 
 
 Who that looks over the habitable globe, and reflects upon the 
 purposes of God, as indicated by the wants, necessities, habits, con- 
 dition and history of men, can believe that the lands within the 
 tropics are to be occupied by savages, beasts of prey and venomous 
 reptiles ? And who that is not mialed by a false philanthropy, can 
 believe that these lands can ever be brought under man's dominion, 
 so as to contribute their due share to man's comfort and happiness, 
 in any otherwise than that by the labor of Africans, regulated and di- 
 rected by the intelligence and perseverance of white men ? 
 
 It will thus be seen that African slavery was intended by an all- 
 wise Providence to promote our happiness and prosperity ;. and that 
 He had this end in view when He placed the black race under the 
 control of the greater intelligence of the white, and made it the duty j 
 and interest of the Christian master to protect, educate, civilize and 'a 
 Christianize the slave. This institution has been assailed — a combi- ] 
 nation more powerful than any other formed upon earth is arrayed 
 against it, and we alone are left to defend it. 
 
69 
 
 The press and the pulpit are the great elements of modern power. 
 We are assailed through the press and the pulpit, and through the 
 press and the pulpit we must be defended; we must convince our 
 own judgments and relieve our own consciences, that we may unite 
 in support of African slavery as a permanent institution. We have 
 no alternative. We must protect our rights as masters, or we become 
 worse than slaves. We must go into our own mountains ; we must 
 educate our own daughters ; we must qualify them to become gov- 
 ernesses and teachers, that they may educate our children, and 
 themselves become the mothers of sons worthy to inherit and quali- 
 fied to defend our property and our institutions. We must encour- 
 age our own merchants; we must employ our own mechanics, law- 
 yers, doctors, teachers, professors, and ministers of the Gospel ; and, 
 above all, we must employ our own editors.* We must, make rail- 
 roads, c6nnecting our seaports with the great West, and open a 
 direct trade with Europe. We must revise our monetary system, so 
 as to employ our own capital in maintaining' our own credit, instead 
 of handing over the products of our industry to the agents of foreign 
 bankers, subject to the fluctuations of the foreign market, which 
 those bankers can regulate. at pleasure. We must print our own 
 books, and especially our own school books. We must create a 
 Southern sentiment, and unite our own people. We must educate 
 our sons to command our armies, and prepare to maintain our rights, 
 peaceably, if we can, forcibly, if we must. 
 
 That the South may act in concert and with efficiency, a Southern 
 Education Society has been organized and chartered by the State of 
 Georgia. The charter and the .constitution of the Society are hereto 
 annexed. The Legislature have also incorporated a female college 
 and a university, to be located at Dalton, in this State. They have 
 also incorporated a city company, who, as the proprietors of the 
 city property, have agreed to give twenty thousand dollars from the 
 proceeds of the sale of lots, if a like sum is contribiited by other per- 
 sons. The Society will send agents throughout all the Southern 
 ' States, for the purpose of soliciting contributions to its funds, and as 
 ; soon as a sufficient sum is obtained, they will commence the publica- 
 tion of books, and put their schools into operation. 
 
 They have issued the prospectus of the Southern Statesman, and, as 
 ,' the paper will be the property of the Society, and the profits derived 
 I ' from it applied in aid of the Female College, it is hoped that the en- 
 tire Southern public, and especially the ministers of the Gospel and 
 I .the ladies of the South, will exert themselves to obtain subscriptions 
 ^-and donations to place the publication on a permanent and efficient 
 
 . basis. The prospectus explains its purpose and objects. 
 jr. It will be seen that the managers of this Society must be Baptists, 
 •'(jiand that the University and College will be under their control. 
 I).. We are prepared for objections. It has been said, and will be again 
 iflj! repeated, that such institutions should not be under sectarian influ- 
 ence. We place these institutions under Baptist control, because, 
 
 ' • 
 
70 
 
 while we invite the co-operation and solicit the aid of persons be- 
 longing to all other religious denominations, and also of those who 
 are not members of any church, we rely chiefly upon members of 
 the Baptist society for the means of building them up and giving 
 them efficiency ; hoping that our success, as pioneers in a field which 
 requires so many laborers, will stimulate other churches to follow 
 our example. It will further be seen that the Society wish to edu- 
 cate Baptist missionaries, who shall go from our schools into the 
 non-slaveholding States for the purpose of establishing Baptist 
 churches in those States in fellowship and communion with the 
 Baptist churches in the Southern States, and thus bring the com- 
 bined influence of religion and patriotism in aid of the Federal 
 Union, aijd that this proceeding must necessarily be of a denomina- 
 tional character. In further vindication, we add, that other Chris- 
 tian churches have established sectarian schools and colleges, and . 
 that it will be fortunate for them and for the country if our example 
 should induce them to be more careful in the selection of teachers. 
 
 We are aware that, as our newspaper will treat of political su 
 jects, it will be ,said that our purpose is to blend religion and pol 
 tics. The greatest of temporal blessings is a good government 
 We admit that Christ's kingdom is not of this world, but we, as 
 men, have our relations to temporal as well as spiritual matters; 
 and it is no less the duty of Christian men to resist Satan's influence 
 in affairs of .State than to resist it in the government of the Church. 
 • P. S. — It may he well to add a few Words in further illustration of the 
 plans and purposes of the Southern Education Society. 
 
 No one, who will carefully read the history of the past, can doubt that 
 the infidelity which preceded the French Revolution led to the, massacres 
 which marked that period, nor can any one who carefully examines • the 
 Scriptures fail to see that "the false philanthropy and the false religion 
 which have arrayed the Abolitionists of the North against the. peace and 
 perpetuity of this Union, is the legitimate offspring of that false philoso- 
 phy which, in the name of reason and humanity, deluged the world in 
 blood. 
 
 It iS the purpose of the Southern Education Society, through its publi- 
 cation, to examine into the history of the past, to employ able writers to 
 prepare a series of school books and other publications suited to the times 
 in which we live, and free from the morbid and sickly sentiment which is 
 the. peculiar characteristic of most of the books now in use. 
 
 An estimate has been made, showing that the profits- on the Northern 
 books and publications used in the South, would feed, clothe, and educate 
 several thousand females. The Southern planters must necessarily occupy 
 large tracts of land, and are compelled to send their children from home or 
 employ private teachers. John Q. Adams was one of the most active 
 Abolitionists. It was under his advice that Daniel P. Cook moved the 
 Missouri restriction in Congress, and under his advice Governor Slade, of 
 Vermont, organized an Education Society, who are sending into the South 
 and West hundreds of Abolition Missioners, in the shape of beautiful 
 
I • - " * 71 
 
 • 
 
 women, who, trained for the purpose, go in search of husbands, and, as 
 teachers and governesses, are introduced into our families, train up our 
 daughters, and marry our sons, thus building up in our midst a morbid 
 feeling on the subject of slavery, which saps the foundation of our pros- 
 perity. It was thus that Adam was driven from Paradise. 
 
 We must counteract these proceedings by educating our own daughters 
 to be teachers and governesses ; and this we can do if the people of the 
 ' South will unite in aid of the efforts of this Society. 
 
 THE FOLLOWING IS THE CONSTITUTION OP " THE SOUTHERN EDUCATION 
 
 SOCIETY." 
 
 Whereas, The Baptist churches in the non-slaveholding States, heretofore 
 in fellowship and communion with the Baptist churches in the slavehold- 
 ing States, have instituted new rules of faith and practice, which deny to 
 slaveholders their equal rights of conscience and equal religious privileges,- 
 and which rules of faith and practice have a direct tendency to create sec- 
 tional prejudices, operating upon the religious and political opinions of the 
 people of the non-slaveholding States, in such manner as to endanger the peace 
 and harmony of the people of the United States, and by inducing strife and 
 animosities, greatly to prejudice the cause of civil and religious liberty, which 
 all men should promote by all proper means; therefore, the undersigned, 
 having this end in view, do hereby organize themselves into a Society, to 
 be called " The Southern Education Society," and do ordain and establish 
 for its basis and government the following Constitution : 
 
 Article 1. The objects of this Society shall be to promote the cause of 
 ,, Education generally, and especially in all the slaveholding States — to qualify 
 females to become teachers in common schools, in public and private acade- 
 mies, and in private 'families, and also to qualify all who in the Southern 
 States are to exercise an influence over public opinion, and especially the 
 rising generation, the graduates of our colleges, and all men who are here- 
 after to fill public stations, whether in the pulpit, at the bar, or in the 
 Legislature or in Congress, to assert, vindicate, and maintain all the rights 
 which belong to us as citizens of the United States, and especially, 
 
 1st. Our rights of conscience and equal religious privileges ; 
 
 2d. Our rights as citizens and equal political privileges ; 
 
 3d. Our right to hold slaves as property ; and that it is illegal and a 
 gross. violation of propriety and of good ffaith, for the people of any non- 
 uaveholding State of this Union, and especially for the Legislature of any 
 ^uch State to do any act whatever, which may in any wise diminish the 
 value of our slaves, or endanger, or disturb our peaceful enjoyment of such 
 property. 
 ' Article 2. The means by which this Society proposes to act, are : * 
 
 1st. The endowment and support of Female Seminaries, in which fe* 
 males may be qualified to become teachers in public arid private schools, 
 and in private families, and thus economize the cost of education, by bring- 
 ing into requisition the character, talents and influence of woman, and per- 
 mitting her to do her part in aid of the great cause of civil and religious 
 
 2d. The endowment and support of Common Schools and Colleges, in 
 
72 
 
 which the teachers and professors shall be persons whose opinions on these 
 fundamental questions are known and approved. 
 
 3d. To create a literature for the South, by the publication in the South, 
 of school books, bibles, hymn books, periodicals and newspapers, and, as far 
 as practicable, all other books and publications suited to or required by the 
 public ; and, with this view, to establish Bible Societies, Sunday School 
 Societies, Tract Societies, and Auxiliary Education Societies, auxiliary to 
 the Southern Education Society. 
 
 4th. To qualify Ministers of the Gospel, who, holding the Constitution 
 of the United States in one hand and the Holy Bible in the other, shall go 
 forth from our Colleges as missionaries to the non-slaveholding States, re- 
 buking the sinful proceedings in those States, and especially the Phari- 
 saical pretensions to greater holiness ; teaching their churches Christian 
 charity and brotherly love, and planting churches in those States, wherever 
 two or more can be found who will stand forth as witnesses of the truth, 
 and willing to become members of a church in fellowship and union with 
 the churches of the South. 
 
 - 
 
 
73 
 
 APPENDIX B 
 
 The following are extracts from the article referred to on, page 60, whicli 
 I. published in London : • 
 
 OF ,THE UNITED STATES, THEIE FORM OF GOVERNMENT, AND THEIR RELATION TO SLAVERY 
 
 AND THE SLAVE TRADE. 
 • ■ , 
 
 In explaining their relation -which the United States bear to the subject of slavery 
 •we must look to the organization, the powers, and purposes of the Federal Governmeiit- 
 
 The United States were originally colonies, settled under the authority and subject to 
 the crown «>f Great Britain. One of the grievances of which they complained before the 
 Revolution, was, that the mother-country compelled them to receive African slaves, im- 
 ported by authority of British law. 
 
 The immediate cause of the Revolution was, the attempt of the British parliament to 
 tax the colonies. 'I his led them to sciutinize the principle of taxation. They saw that 
 no representation in parliament would protect them against oppression ; that the right 
 of taxatfon was in fact a right of conversion, and " that- to permit parliament to levy 
 taxes, was to surrender their property to the destruction of that body. This principle 
 Was carried into the struggle of the Revolution. The colonies dispersed over so large 
 an extent of tenitory, saw clearly that their Congress, composed as it was of 
 delegates representing different sectional interests, would sympathize with the interests 
 which they represented, and that they, too, might abuse the power of -taxation. Hence 
 the Congress of the Revolution had no power to levy taxes. They wer* but an advi- 
 sory council. Men and money were furnished by the States. Each State was a dis- 
 tinct and separate independent government. Each State had a distinct organization; 
 its governor, its legislature, its judiciary, its civil aud military officers. Upon declaring 
 themselves independent of the mother-country, ench State organized their respective 
 governments for themselves. The people of slave holding States were compelled to 
 take into consideration the state of their society as it then existed. 
 
 The question was not whether they would institute slavery; it had already been insti- 
 tuted by the British Government. The black man was already the property of the 
 white, by the law of England. 
 
 Is it matter of surprise that, under such circumstances, the master believed that his 
 slave was not qualified by habits, education, or intelligence, to exercise political rights ? — 
 that the black man was not the equal with the white, and that legislation could not 
 make him so ? — that to emancipate the slave, without giving him equal political rights, 
 would have created a degraded caste, which, so far from contributing to ttteir moral or 
 physical improvement, would have led to their still further degradation ? and that, to 
 have given them equal pilitical rights, constituting them a part of the Government it- 
 self, would have inoculated the Government with a moral disease, which must have 
 caused its premature decay ? Is it surprising that they should have believed that the 
 public safety forbade to engraft the blacks upon the body-politic, and that they had no 
 alterHative but to recognize and continue the pre-existing system of slavery ? Having 
 
74 
 
 resolved to do this, they passed laws to ameliorate the condition of the slave, and placed 
 him under their protection. They identified the interest of the master and the slave, 
 and compelled the master to provide him sufficient food and raiment. Instead of living 
 &n dry. potatoes, as is the case with the Irish laborer, the American slave has an abun- 
 dance of wholesome diet, and to spare Instead of sleeping upon wet straw, with a 
 single poverty blanket for a whole family, as in Ireland, the American slave has good 
 bedding and au abundance to spare of bed-clothes. Instead of one suit in seven years, 
 as in Ireland, he has his three new suits — one for winter and two for- summer*, and good 
 shoes and stockings. Instead of killing them by unmitigated toil long before they be- 
 come burthensome, through age or infirmity, as charged by the Edinburgh Review ; and 
 .instead of permitting ihem to perish by exposure to hunger and cold, as in Ireland, the 
 American slave is nursed in sickness, and comfortably provided for in his old age. 
 
 We have said that the colonies, in declaring themselves independent, refused to or- 
 ganize a Central Government with the power of taxation ; that the Congress of the 
 Revolution was but an advisory council, and that the States were separate sovereign* 
 ties. As such, on the 4th of July. 1 776, they declared themselves independent, which 
 independence, as separate sovereign States, was recognized by England herself in the 
 treaty of pea<je. 
 
 These separate sovereign States thus became a part of the society of nations, who 
 recognised their right to establish their own form of Government, and, in doing i o, recog- 
 nised the institution of slavery as by them established. After they had thus been ad- 
 mitted into the family of nations — after their forms of Government, including the insti- 
 tution of slavery, had been recognized and adopted, they determined to form a mora 
 perfect union, and for this purpose the States selected delegates, who met in convention 
 and proposed for their adoption the present Federal Constitution. In that convention 
 each State had the same voice, and the constitution thus prepared had no binding force 
 until it was adopted by nine States, and then only as between the States so adopting it. 
 It will thus be seen that the Federal Constitution is a compact between sovereign and 
 independent States. . 
 
 These States carried into the convention great diversity of opinion. Some of the dele- 
 gates were in favor of a monarchy; some preferred a President and Senate for life; 
 many desired to create a strong Central Government ; but the conflict between the colo- 
 nies andthe mother country had begotten a repugnance to monarchy ; and an apprehen- 
 sion that a strong Central Government would end in the despotism of an absolute ma- 
 jority, in which, the interest of the weaker sections would be sacrificed by combinations 
 of the stronger, induced the weaker States to insist upon reserving an equal voice mtbe 
 Senate, and to resist every attempt to give the Federal Government any further domes- 
 tic control than was indispensable to union among themselves, aud to a successful ad- 
 ministration of their foreign relations. The Federal Constitution, therefore, while it 
 constitutes them one distinct nation as to all the rest of the world, is but a compact be- 
 tween sovereign States, regulating their intercourse with each other, which compact was 
 not intended to interfere with the Constitution or form of Government pre existing in 
 the several States, who, in adopting it, considered and treated each other as separate 
 Governments. 
 
 Slavery had been established by Great B;itain,.and continued by the States in which 
 it had been thus established, because the people of those States, in declaring themselves 
 independent of the mother country, did not believe that they could, consistently with 
 their own safetv, or the happiness of the blacks themselves, change the relation which 
 the British Government had forced upon them ; and the other American States, in form- 
 ing the Federal Constitution, had no more right to insist that the slaveholding States 
 should abolish slavery, and to make that a condition of their becoming parties to the 
 Federal Government, than France or England had to require it as a condition to the 
 treaty of peace, by which their independence was established. In fact, the question of 
 slavery never has been submitted to the American people as such. The question before 
 them was not whether slavery should, be abolished, but whether they should become 
 parties to the Federal Constitution. In doing i o, the several States became members of 
 the Federal Government, reserving to themselves the exclusive control over their do- 
 mestic institutions. And hence, as domestic slavery was a domestic institution, and 
 
. 75 • 
 
 under the exclusive jurisdiction of the respective States, the Federal Government being 
 charged with the foreign relations of all the States, is alike bound to protect the inter- • 
 pst and property of all ; and hence, so long as any State shall recognize the property of § 
 the master in his slave, the Federal Government is as much bound to protect that right 
 of property as it is to protect the right of property of the merchant in Jus ships. This 
 brings us to the case of the Creole, where slaves, the property of an American citizen-, 
 on board an American ship, passing from one American port to another, prompted by 
 assurances that if they could reach a British port, they would be liberated, rose upon 
 the crew, murdered part of them, and compelled the others to navigate the ship to 
 Nassau (New Providence), where they were set at liberty by the British authorities. 
 The case cannot be strengthened by argument. The Federal Government was consti- 
 tuted to protect the rights of property of the slaveholder in all questions arising be- 
 tween him and Joreign Goverrfments.. We know that very high authority have de- 
 clared that there is no law in England which will authorize the' delivery of these slaves. 
 "We hold that slaves by the law of nations, are admitted to be property ; that while on 
 board an American snip, they are slaves ; and that a vessel carried by mutiny into a 
 neutral port is not subject to the municipal regulations of that port ; and that the seizure 
 or these slaves was an illegal confiscation. 
 
 Can any one suppose that the American Government would permit any other Gov- 
 ernment to confiscate an American ship carried intb a neutral port under such circum- 
 stances ? And if they would not permit the confiscation of the ship, how can they, 
 without dishonor, permit the confiscation of the slaves \ > ■ 
 
 They .are as much bound to protect the property of the Southern planter as of the 
 Northern merchant. 
 
 Thus, in the working of this complex system, the institution of slavery counteracts the 
 influence of universal suffrage, and prevents the ascendancy of that absolute majority of 
 the evils of which M. De Toqueville was apprehensive; and, therefore, the American 
 statesman places a much higher estimate upon it than the mere right of property ; and 
 ' the intelligent European will see that it constitutes a distinct element in American so- 
 ciety, acting upon the machinery of government, which is not applicable to the States of 
 Europe. 
 
 The London Times tells us ttiat "the British Government has, with great exertions, 
 managed to conclude treaties, by which the slave trade is to be punished as piracy ; that 
 the right of searching American ships is indispensable to its execution, and that the 
 British Government is determined to enforce it." Following upon the heels of this, even 
 before these treaties are ratified, we have an order in council authorizing the transpor- 
 tation of East India emigrants to the island of Mauritius, and we are told that extensive 
 arrangements have been made to 'transport emigrants from Africa to Jamaica, Trinidad 
 and Guiana. The 20th article of this order in council, which bears date January 14th, 
 1842, is in the following words: "No emigrant, arriving from India at Mauritius, shall, 
 in Mauritius, be capable of entering into any contract for service except for the period, 
 in the manner, and under th'e superintendence, which, by a law in force there, is re- 
 quired in case of contracts for service by other laborers in agriculture or manufactures 
 within the said island." 
 
 This order provides for the emigration of free labor, and requires that such laborer 
 shall be incapable of making a contract, except by a law made by the party giving him 
 employment Now hear what the Edinburgh Review says in relation to free labor in 
 Jamaica, and the means used by the law-makers in Jamaica, to reduce the price of free 
 labor below that of slave labor. " It has been attempted," says the Review; ''to make 
 the dwelling and provision-ground of the negroes the instrument of compelling them to 
 work for the landholder, on whose plantation they reside, or reducing their wages !" 
 The language used has beerl, if you do not work for me, you must immediately quit 
 your house and land (to the latter of which its tenant has given its principle value) ; if 
 you demand so much a week for wages, 1 demand so much a week for rent, or rather so 
 much fur each member of your family, without reference to the actual value of the ten- 
 ement and its appurtenances, and the one demand and the other shall be simultaneously 
 adjusted ; the strong arm of the law has been liberally invoked to carry on the contest 
 commenced on such grounds; in some instances the administrators of the laws, enact- 
 
76 
 
 merits of the most heterogeneous description have been bi ought to bear upon the unfor- 
 tunate laborers ; there are the contract act, the poundage act, the fishery act, the huxtcr 
 act and pedlar act, the police act, and the vagrant acts. 
 
 When we come hereafter t« speak of the suffering poor of Ireland, the reader will 
 understand the pAcess by which free lab'-r is reduced below the cost of slave labor. 
 But here again we recur to the Edinburgh Review. It says : " When slavery is tem- 
 pered with ordinary humanity, what Mr. Gurney calls the 'dead weight,' the mainte- 
 nance of the old, the infirm, the sick, the shammers of sickness, the mothers of young 
 infants,, and the numerous children, make the aggregate expense ruinous." 
 
 \Such is the theory of British philanthropy; and, therefore, in order "to beat Cuba 
 and Brazil out of the market," they substitute free labor for slave, labor, and leave the 
 old, the infirm, the sick, the widow and orphan, to perish. of hunger and nakedness! But 
 this is not enough. The same Review tells us "<that the proposition for declaring the 
 slave trade piracy, assumes that the right of search and seizure should be exercised, and 
 that the culprit should be prosecuted in the courts of this (Great Britain), and not of the 
 culprit's, country." - 
 
 But hear the Reviewer. He says : "The poverty of India must be cured by the at- 
 traction of British capital to the fields of production. United as it happily is with 
 England, it never can become a manufacturing country, ***** being hap- 
 pily disabled, by their relative position, from levying contributions upon each other, by 
 domestic industry-protecting tariffs, the people of India may emplo r themselves profita- 
 bly for a period, to which it is impossible to fix a limit, in raising raw produce to ex- 
 change for the manufactures of Great Britain." Both the capital and ihe intelligence 
 necessary even for this purpose must come from England." 
 
 But it may be well also to look to the comparative resources of the two 
 countries. America has no debt; she has all the materials of war within 
 herselft She has men, provisions, arms, and all the munitions of war; and 
 all these she cau command at home,'hj means of her power of taxation and 
 her credit. She will not be compelled to come to Europe for a dollar. She 
 has the material for navies, also, and these she can produce and equip with 
 the facility of magic. She has six hundred steamboats on a single river, 
 aud> these can be converted into a fleet,. bearing men and provisions, that 
 will drive the piratical fleets of England and the West Indies. But would 
 she be content with this ? Would she not declare the emancipation of the 
 British colohies ? Would not France, and Russia, and Holland, unite with 
 America in breaking the chains which bind down the independence of Ire- 
 land and of India? 'Instead of compelling all the world to come to pur- 
 chase India cotton, and India sugar, will not all the world unite with Ame- 
 rica in declaring the servitude of Ireland and India to be at an end? And 
 would not this be accomplished ? Is this the just retribution which an all- 
 wise Providence has decreed as the punishment for the sins of England ? 
 and is the struggle of the British land-owner, to maintain his position in) 
 society, to end in this? What, then, is to become of British power? 
 Who, then, will pay British rents and British taxes ? 
 
 We will not attempt to probe the subject further. If Great Britain} 
 would avoid the consequences, she must retrace her steps; if, indeed, thq 
 day of retribution has arrived, she will persevere. * 
 
 
77 
 
 APPENDIX C 
 
 The traditionary policy of Russia, from the time of Catherine, has been to 
 seize upon Constantinople as the gate to the commerce of India; and hence 
 England, jealous of the progress of Russia, has sustained the power and do- 
 minion of the Turk against the encroachment of Russia. Preliminary to a 
 renewal of the war with the Sultan, Russia created a large fleet at Sebasfopol 
 As a means of perpetuating his dynasty, and hoping to secure the co-opera, 
 tion of England, Napoleon the Third became a party 'to the war in the Crimea , 
 and not only destroyed the Russian fleet, and not only prevented a control 
 of the Black sea, but closed the Dardanelles to Russia. Shut out frx>m the 
 commerce of India by way'of the more direct route, the emissaries of Russia 
 were soon found in the north of China and the Japanese s.eas, and proposals were 
 issued for a loan to be applied to the construction of a railroad from St. Peters- 
 burg on the north of China, to the mouth of the Amoor river. Seeing that 
 such a railroad would, unless otherwise prevented, give to Russia a prepon- 
 derating influence in China, and endanger the British supremacy in 
 India, England induced France to unite with her in* the war' upon 
 China, by which the monopoly of the trade Of China by Russia was pre-, 
 vented. With this introduction, I give in the appendix an article from the 
 London Spectator, of April 11, 1S57, which, as was intended, defeated tire 
 Russian loan, and has delayed, for how long remains to be seen, the construc- 
 tion of the contemplated railway. 
 
 The power thus described by the Spectator acts in concert, and lives and 
 moves, and had its being, in the delusion that nothing but gold or silver is' 
 money. Its profits depend upon its control over the exchanges, which are 
 regulated by the movement of money and of commodities. 
 
 THE NEW POWER IN EUROPE. 
 [From the London Spectator, April 11, 1857.] 
 The present state of affairs on the Continent suggests the existence of some influence 
 which is not generally recognized, though its power mtist be overruling and its opera- 
 tion universal. 'It is not seen, yet it reverses the councils of governments which appear 
 to be supreme ; it disregards equally public opinion and the interests of the Statte in 
 which it has its agents. The monetary condition of France and of Northern Europe 
 draws attention once more to the irregular and dangerous speculation whioh the most 
 powerful man in Europe tries in vain to curb; it would seem that there is some greater 
 power than he, irresponsible and absolute ; and when we turn to ascertain the fact, we 
 are not long in discovering at least enough to create uneasiness and to demand scrutiny. 
 We perceive some corroborative proof that such an influence does exist— -that its power 
 is b,ecoming supreme — that it is now doing mischief, and that it may become dangerous 
 alffie : to the material condition, the political independence, and the domestic order of 
 
States. Nor are we speaking of any imaginary or mere " moral " influence ; we speak 
 of a powerful combination more than political, more personal than a Congress of diplo- 
 matists or prince -i. 
 
 The Emperor Napoleon has long been engaged in the endeavor to draw out the enter- 
 prise of hi* subjects, and the effect throughout France is great. Any traveller in the 
 
 , most outlying provinces perceives a remarkable change in the aspect, action, and condi- 
 tion of the people. The trading class, as well as the industrial classes, are animated by 
 a spirit of energy hitherto unknown to the Celtic population. jThey have learned not 
 only to employ their time with more vigor, but employ their savings — to venture that 
 which they once hoarded. In that economical sense France was almost a virgin soil, and 
 the effect is described by the traveller as marvellous. Thus far a blessed change. But 
 look beyond. The very capitalists who fostered if they did not implant the idea in the 
 Imperial mind, have seized the same opportunity to project movements for the further 
 development of capital, its power and productivity. The great speculator in this sense 
 differs in some degree from the ordinary trader. The money merchant obtains his profit 
 entirely from the simple act of exchange, and he does, so equally whether the original 
 holders are profiting in the transaction or not. He may be the broker between two 
 communities who are ruining each other, and build his fortunes upon their downfall. 
 And the individual trader in this merchandise will be instigated principally by the de- 
 sire to grasp large and prompt profits. He is not a safe councilor for those who have in 
 charge the permanent interests of States. For the welfare of %, community, immensely 
 accumulated wealth, hoards of gold, are not so essentiaFjis' well diffused supplies of the 
 necessaries of life and its enjoyments. But the same movement which gave an impulse 
 to the commercial spirit in France made the largest opening that the world has ever 
 seen for a forward movement or' great capitalists ; and they have snatched it. Alarmed 
 at the vast proportions which these joint-stock combinations have attained in France, the 
 Emperor and his political ministers have issued their protest against excesses in that 
 
 * direction : they have followed up protests with restrictive'imposts ; but still the move - 
 ment goes on 
 
 The commercial activity directed to the development of real trade would, with as 
 much steadiness as rapidity, inc/ease the available means of the French people — would 
 make, them more independent of the casualties of the seasons— would make them more 
 comfortable, more orderly, more capable of supporting their ruler, more obedient to his 
 
 i decrees. It is easily to be understood why the Emperor Napoleon desires to add that 
 
 ' element of English order to the military capabilities and energy of the French. He has 
 in great part succeeded. But the excess of speculation invoked by those who have stood 
 ready to take advantage of the impulse has, again in the present moment as it did in 
 the autumn of last year, threatened to defeat the improvement by ovei--doing it ; and 
 we in England are under the same commercial pressure which visited us in the autumn. 
 At the same time there appears to be no suspense in developing, extending and multi- 
 plying the immense joint stock combinations which the French Emperor has endeavored 
 t > restrain, though at such a time such operations ought to be entirely suspended. We 
 see on the stocks the new International Society of Commercial Credit, whose founders 
 are connected with the great money corporations in every capital of Europe — the banks 
 of France, England, Amsterdam, etc. The list of the Council of Administration of the 
 grand company lies before us. Of the great Russian Railway Company, half of the 
 members short of one are Russians, and the great number in that half are Councillors* 
 of State and officers in the service of the Erri^eror Alexander. In that Russian half, 
 however, we see the name of " Thomas Baring, banker, in London." The other half con- 
 sists of men whose names are well known in every capital : S. Gwyer, member of the 
 Council of Commerce; Earnest Sillem, a partner in the house of Hopetfc Co.,«at Ams- 
 terdam ; Cuillaume Borski, banker in Amsterdam ; Frantis Baring, banker in London ; 
 Henri Hottinguer, banker in Paris ; Isaac Pereire, administrator of the Paris and Lyons 
 Railway ; Baron Seillere, banker in Paris ; M. Auguste Thurneyssen, administrator of 
 the West of France Railway ; and M e Louis Fould, brother of the well-known State 
 financier. Some of those are the names we so constantly encounter in that compara- 
 tively small list of men who are administering the greatest financial operations in Paris, 
 Vienna, St. Petersburg, Amsterdam and London. The object of this company is to take 
 forty-five millions of capital, a sutn which could easily be raised for reproductive pur- 
 poses, but which they intend to sink in railways through the Russian deserts ; while the 
 
79 
 
 actual state of the whole world—of Europe, England, America, and the far East— 
 proves that we cannot spare that forty-five millions, nor even the first instalment of it 
 Yet these few gentlemen, Who rule the world at present, have determined that it shall/ 
 be taken, despite the Emperor of the French, the Bank of England, or the commei^ial 
 public of this country. 
 
 It is said that the position of M. de Morny is not satisfactory either to the Emperor of 
 all the Russias or to the Emperor of the French ; but M. de Morny is fulfilling a career 
 which. has become independent of Emperors. He has attached himself to the Grand 
 Council of the International Finance, and it ' is that Grand Council at present which 
 arranges the affairs of the world by the power of the purse, let potentates and parlia- 
 ments think what they may. The Emperor of the French is at present engaged in at- 
 tempting .to restrain the use of fictitious titles — counties, vis-counties and baronies — ■ 
 baubles at which the aristocracy of wealth may laugh The power of that order, which 
 is the more powerful because its members are comparatively limited, proceeds in its ac- 
 tions independently of those ordinary political movements, and shows itself pursuing 
 its course uninterrupted, undiverted, whatever may be the state of the commercial 
 world, whatever may be the mood of the Imperial mind, Whatev* r may be the action of 
 ordinary statesmen. 
 
 W$ are not considering the diversion of capital, the dangers that may .arise from over 
 speculations, the ruin that may visit shareholders in these huge joint stock companies, 
 from which the directors always withdraw before the crash. We are not considering. 
 the commercial disturbance created by the necessity, which is forced upon Europe just 
 at present, of .undergoing a high rate of interest for ordinary comuiercialtaccommoda- 
 tion, while millions are lavished upon the fancies or the schemes of those millionaire 
 statesmen. We are simply considering the magnitude and the independence of that 
 power of combined millions. It is a new order— ra new administration in the world. 
 The names most conspicuous in it are remarkable for certain characteristics. • Read them 
 agaia — Rothschild, Baring, Steiglitz, Pereire, Hottinguer and Fould; with a second 
 order, comprising the Weguelihs, the > Hopes, and the Seillieres. They form a grand 
 council of small numbers that could all be assembled in a dining room. They are re- 
 markable for being closely connected with the Governments of all the principal States 
 in the world, while, at the same time, they are not closely connected with tne States 
 under those Governments' You would pot accept a Baring as being peculiarly repre- 
 sentative of England; you mUst choose many other names before it— the Russels, the 
 Stanleys, the Salts, the C^awshays, Cobdens and Tyrells. • France would certainly not 
 be represented by Pereire, no country by a 'Rothschild ; a Steiglitz is by no means ex- 
 clusively Russian, any more than Fould is French. The class is alien to any particular 
 country, and yet is deeply rooted in the administration of each country.' It can com- 
 mand not only a mass of capital enough to determine the financial operations of a Gov- 
 ernment, the success or failure of a State loan, but it ean influence, beneficially or fa- 
 ' tally, the course of trade, by turning upon any one branch "the combined mass of capi- 
 tals from States elsewhere, just as the five potentates of Europe can muster an army 
 which would crush the people of any one empire mutinying against any one of the five. 
 But this grand council of millionaires has proved that it is superior to the political ad- 
 ministration of the separate countries. It is at once alien to the aristocracy of any 
 country, and yet becoming more powerful, and therefore more respected, than any on« 
 aristocracy. Unlike any order which we have yet seen, it has its'home equally in t-'aris, 
 Berlin, Vienna, Amstersdam, St. Petersburg or London. It is republican, but of the 
 aristocratic republic, more close than the Grand Council of Venice, infinitely more arbi- 
 trary. Like that commercial republic, kings bow down to it ; bat the kings that now 
 bend are the giant emperors of our day, not the brawling leaders of the middle ages. 
 The debates of this council are not reported ; its constitution is as yet unascertained 
 and undetermined. We feel its power before we can define it. It is independent of 
 political councils, higher than political responsibilities, ignorant or* constitutional checks. 
 It stands confessed in the actual events of the present week; and in its independence, 
 perhaps disregard of the interests which it overrides, it extorts from us the question 
 whether any account has yet been taken Of the immense institution that has sprung up 
 while Emperors and common politicians were thinking to settle the world with ' armies 
 and treaties. 
 
The aggregation of capital and credit and financial influence, thus de- 
 scribed,. was the fruit of the system of funding and finance adopted by the 
 British Government acting through the Bank of England, and represents 
 the profits created by dopling the public credit of European and other Gov- 
 ernments, and which, having concentrated into so small a circle so great a 
 control over public credit, frdm time to time so acts upon the commerce and 
 exchanges of the commercial world as to regulate the value of money and 
 of property, regardless of pecuniary losses which they inflict on those who 
 may be the victims of their remorseless speculations. Thus, as I have 
 stated : 
 
 AMERICAN CREDIT IN 'ENGLAND. 
 Prior to 1838, any American merchant, ■who could obtain an acceptance of either 
 Wilde, Wiggins or Wilsons, three American houses established in London in connection 
 with the American trade, could purchase British goods upon a credit of six and twelve 
 months, and as our commercial system was then organized, he could, by giving his Cus- 
 tom House bond, get time to pay the duties. He was thus enabled, by the use of his 
 credit, to command British capital in the shape of merchandise, and having made sales, 
 he could with thte proceeds purchase American produce, which, being remitted to the 
 credit of the London House, was sold, providing funds to meet his payments. 
 
 THE FINANCIAL SYSTEM OF ENGLAND HOSTILE TO TIIE CONFEDERATE 
 # • STATES. 
 
 Corresponding to the emancipation of the West India slaves, and the opening of the 
 East India Xrade, the capitalists and financiers of England opened a bitter and relentless 
 warfare on American credit, which resulted in the prostration of American credit in 
 England, and a new organization of the American trade; under which, instead of their 
 giving us their capital upon our credit, we gave them our capital upon their credit. The 
 ■modus operandi was thus: An agent of a British'banker or manufacturer bought cotton 
 or other exports in a Southern port, and made payment in a billjjayable sixty or ninety 
 • days after date, in New York, which bill was discounted by our banks, because nor 
 merchants, no longer able to buy goods in Manchester, bought them in New York, and 
 therefore, funds in New York were worth more than funds in the Southern banks. The 
 bill upon New York, when due, was paid by a second bill upon London, which was dis- 
 counted by the banks of New York, because the New York merchants dealt in Europe, 
 and money in London was worth more than money in New York. When this second 
 bill became due, the cotton had reached Liverpool and had been sold to the manufac- 
 turer, whose note at ninetj r days had been discounted, and the proceeds placed to the 
 credit, not of the Southern planter or of the Southern merchant, but of the British 
 agent, who was thus enabled to fix the price in oui market, and of course took into con- 
 sideration all the cost, and charges, and the contingencies affecting the price in Liver- 
 pool, and especidly the fact that he would be compelled to sell the cotton in Liverpool 
 in time to meet the payment on the second bill. Consequently the price thus fixed was 
 the lowest at which the combination of English cotton spinners (the cotton supply asso- 
 ciation acting in concert with their agents), could purchase in our market. The mer- 
 chants antl the banks, of New York were also deeply interested in this new system, be- 
 cause it made New York the port of entry for the South, and gave to New York mer- 
 chants and New York banks the profits which have built their marble palaces, and 
 multiplied their wealth and resources. 
 
 The effect of this re-organization of the American trade was to reduce 
 the price of cotton from seqenteeM cents to three, and the effect of reinstating 
 the control of this "new power" in Europe over the values of the money, 
 the property, ana the credit of this county, by resuming specie payments, 
 will be to reduce us to a condition equally, or even more, oppressive than 
 the Egyptian bondage of the Israelites. 
 
 DUFF GREEN. 
 

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