AN ADDRESS TO THE COIUMSIAN INSTITUTE, ON A MONEYED SYSTEM, The energy which is to carry forward the intellect of 3 people belongs chiefly to private individuals who devote themselves to lonely thought, who worship truth, who originate the views demanded by their age, who help us to throw off the yoke of established pre- judices, who improvejon old modes of education, or invent better. It is true that great men at the head of affairs, may, and often do, contribute much to the growth of a nation’s mind. But it too often happens that their station obstructs rather than aids their usefulness. Their connexion with a party, and the habit of viewing subjects with reference to personal aggraur dizement, too often obscure the noblest intellects, and convert into patrons of narrow views and temporally interests, those, who, in other conditions, would have been the lights of their age, and the propagators of everlasting truth.”— Dr. Charming. By THOMAS LAW. WASHINGTON : JPMNTBD BY GA1E* & SEATIN', 1828 . M ISo. PREFACE. To the President and Directors of the Columbian Institute . Gentlemen : Having considered that my address to you, in 1826, though flattered hy your order for publication, could have but a very limited circulation, and having subsequently witnessed circumstances in corroboration of my arguments in favor of a National Currency, I have for some time medi- tated a re-publication of that address with additional facts ; but having experienced so much sickness during last Autumn and Winter that my nervous system was oppressed by the heats of Summer, I resolved to visit the Virginia Springs, with the hopes of acquiring sufficient health to resume the important subject. Though only partially recovered, I take up the pen, lest I should leave undone what humanity and duty urge me to per- from. On my arrival at Charlottesville, near Monticello, and the University established by Mr. Jefferson, I found an assemblage of the most enlightened, patriotic, renowned statesmen, viz: Mr. Madison, Mr. Monroe, Judge Marshall, and Judge Brook, who had been summoned from every section by the voice of their State, to consider about the most feasible mode to make improvements in the Ancient Dominion : After a luminous statement of its geo- graphical advantages, and of its several rivers which might be rendered useful, alas! the termination was most distressing, by an acknowledgment of a deplorable want of ways and means, and of the necessity to borrow from abroad. A desire to relieve their pecuniary embarrassment was an additional stimulus to exertion, and I could not refrain when I considered that my reasoning was not ohly applicable to every State in the Union, but to every Nation. IV PREFACE. An able author has judiciously observed, that every political edifice, however brilliant and vast, must necessarily be frail, tottering, and temporary, unless rising from the solid basis of a good financial system, without which nothing nationally great or good can either be attempted or achieved. After expatiating upon the advantages of ample resources, for civil and military establishments, the same author says : “ It is not enough that Government bestows on the people nega- tive blessings ; that it be valuable principally by reason of the evils from which it exempts them, one of its chief duties is to create and keep alive a national spirit, a duty of magnitude, and the more important, as local interests have so strong a tendency to overbear those of the Union. A People is a mere herd of men, a sorry aggregate of individuals, unless animated, by a common soul, unless cemented together and dignified by national feeling — but to the very existence of these national objects are requisite. Those who collect materials for the an- nals of the country should always have to record a succession of noble achievements, either of peace or war. The individual self love should never want an opportunity of identifying itself with national honor.” Mr. Burke uses the following emphatic language, in speak- ing of finance: “ The revenue of the State is the State ; in effect, all depends upon it, whether for support or for reformation ; as all great qualities of the mind which operate in public and are not merely suffering and passive, require force for their display, I had al- most said for their unequivocal existence. The revenue, which is the spring of all, becomes, in its administration, the sphere of every active virtue: public virtue being of a nature magni- ficent and splendid, instituted for great things, and conversant about great concerns, requires abundant scope and room, and cannot spread and grow under confinement, and in circumstan- ces narrow and sordid. Through the revenue alone, the body politic can act in its true genius and character ; and therefore it will display just as much of its collective virtue as it is pos- sessed of a just revenue.” PREFACE. T It has been justly said, that enthusiasm is necessary in a cha- racter to make it useful ; I will not, therefore, apologize for ad- ding a few more arguments in favor of a national currency. It is a general complaint, by workmen in America, that they can- not get paid; and that they are often obliged to accept drafts on stores, or to receive things in barter, by which they are losers. Litigation is occasioned by scarcity of money. All foreign- ers express surprise at the number of law suits in the United States. If money could be obtained at five per cent, very few would incur the trouble and expense of legal proceedings, and pay legal interest of 6 per cent, merely for delay. Were the loss of useful labor estimated, by plaintiffs, de- fendants, and witnesses attending courts in the United States, it would amount to millions. It is painful to think how dis- tress makes many persons legally dishonest. Even overt acts of robbery are increasing. Poverty, but not the will, occasions crime. Any one who should examine the court dockets would be shocked at the number of suits. The state of the national finances is rarely considered in Con- gress. Constitutional questions only arouse the orator, such as war, or the treaty-making power, or State rights, and similar topics, which afford opportunities for eloquence. The gorgeous decorations of the Capitol, and the extravagance of the Govern- ment, are also themes for declamation ; but financial subjects are unheeded. Even the present misery, so general, is disre- garded. When a man speaks of millions which might have been saved, and of calamities which might have been averted, his discourse offends ; and when he unfolds accumulating dis- tresses, he is termed a chimerist or a croaker. After a journey of 200 miles, on my way to Louisburgh, I saw a woollen carding machine, being the first on my long journey. In the mountains, there is an abundance of sheep, and waterfalls for mills, to turn machinery, and also plenty of wood for steam engines; but money is wanting to build factories, and to set up machinery, and to pay hands. The peo- ple make coarse homespun, but still those who are able to pur- chase foreign cloth prefer it, as it is neater to the view, and VI PREFACE. distinguishes the gentleman from the laborer. Suppose a manu- facturing company were formed, and they were to apply to Congress for a loan of national currency, at 3 per cent, inter- est, the men and women now employed in making homespun might almost all be spared for agriculture and other occupa- tions, and the consumption of foreign cloth would be saved. The domestic cloth would also be much cheaper, because the expenses of a voyage from Europe, and the duties, and the cost of land carriage of above 200 miles, would be saved, and the interest and profit which must be paid to the merchant on the sums he advances for freight, insurance duties, and charges of merchandise. Wherever I travel, I find the want of money the great obstacle to the setting up of manufactures, and to all kinds of improvements. Under the colonial system, formerly, agriculture and commerce were only adverted to, but, since our independence, machinery has become of importance next to ag- riculture, and takes the precedence of commerce. Napoleon, by giving 300 monasteries to manufacturers, has caused more prosperity to France than all his armies and navies could effect. They silently undermine foreign manufactures ; and we now perceive Manchester complaining of being under- sold. When I read in Las Casas’ Memoirs from St. Helena, ©f this expanded policy of Napoleon, I considered the probable consequence of it. I traced the cotton from America to Liver- pool and thence, to Manchester, from whence it returns, in a manufactured state, to Liverpool, where the goods must be shipped, and pay duties before they can be admitted into the continent. I then traced cotton from America to Havre de Grace, and thence, up the Seine, to Rouen, &c. where factories are now establishing. And I could not refuse the painful conclusion, that the expenses on the former route are much heavier than on the latter. The following lines will illustrate my reasoning. PREFACE. VII America* Liverpool. Manchester. A B A. X The other line is b. Havre. C. Seine -X Interior. Thus Great Britain has twice as many shiftings of a cargo as France. Labor is cheaper in France, but Great Britain has an ad- vantage in the greatness of capitals, so that the cotton received in a factory goes out wove, stamped, and finished; whereas, in fo- reign factories, dying, &c. are separate businesses, and great expenses and losses are incurred in removals. The interest of money, also, is lower in Great Britain. Thus, as Baron Storch observes, a manufacturer who borrows at 4 per cent, can afford to employ a third more capital than he who borrows at 6 per cent. The roads through the passes of the Virginia mountains are very good, and the bridges also ; they were made by the State, but do not pay much more than the annual repairs. Were manufactories established, towns would spring up at proper distances, and the tolls of the roads and bridges would increase. We read of 10,000 and 20,000 houses built in one year in London. The canal now making, and which will join th Washington canal, which runs through the City, ought to make houses spring up rapidly ; but judge by the reports of the Banks in the District, of the capability of individuals to build. Were money not so scarce, 100 houses would be erected, where now we see only ten. If the Congress were to lend 1,000,000 of dollars annually to VIII PREFACE. manufacturers, the nation would have that increase of capital productively employed in making cotton and woollen goods, and the Treasury would receive, on a million, 30,000 dollars in- terest on the loan annually, and laborers at home would he paid, instead of operatives abroad, and the manufacturers would gain a great profit, and all these numerous articles would increase the wealth of the nation ; for every individual’s gain composes the general wealth. Great Britain, after paying the price of the raw material, has an annual profit of g 150,000,000 on cotton alone. The machinery of Great Britain is estimated to be equal to an hundred million of hands. Mr. Stewart, in his speech, states the woollen goods imported here to amount to g 8,000,000, the raw material only costing one-half. Appropri- ations by a Government, to promote canals, roads, railways, and machinery, ought to be put under the head of disbursements , to distinguish them from expenditures on armies, &c. The former produce profits as seed sown produces crops ; but the latter yield no return. The following are a few of the axioms which I wish to sub- stantiate : A paper currency, issued by a Government in full credit is preferable to specie — 1st. Because the former can be regulated so as always to bear a proper proportion to the industry and property of a nation, whereas the latter, being an article of commerce, fluc- tuates in quantity. 2d. Because the precious metals disappear, being hoarded or exported in times of difficulty, when most required, whereas the paper money always remains. 3d. Because, as the value of fixed capitals and the interest of money depends upon the quantity of money, it is requisite to have a sufficient quantity without excess. 4th. Excess of paper money may be prevented by caution in the issues, and by a deposite of 4 per cent, stock, into which any individual holding notes may convert them. In this case the stock operates as a safety valve, by withdrawing any superfluity. 5th. Because paper money is more cheaply and rapidly trans- mitted from one quarter of the country to another than specie. PREFACE. IX 6th. Because, by this facility of remittance, it lowers the rate of internal exchange. 7th. Because paper money permits the exportation of bul- lion and specie for advantageous mercantile transactions, with- out any derangement of home trade, and interchange of labor for money. 8th. Paper money increases manufactures and improve- ments, and exports bring back specie. The rapid advance- ment of nations in modern times is much more owing to paper money than commercial or fiscal regulations. In vain have Governments prohibited the exportation of specie or the im- portation of foreign goods; the cunning of man will, in a great measure, defeat the measures of Government by smug- gling. Until long-rooted prejudices were surmounted, nations la- bored under great inconveniences for want of money, armies mutinied, profitable plans were suspended, ruinous fluctuations in values occurred, and the industrious productive middle class was prevented from augmenting. Modern writers on political economy all recommend a paper money issued by the Government, and disapprove of exclusive reliance on private banks issuing promissory notes, redeemable with specie : for, as the banks issue three, four, or five pound notes for one pound in specie in their vaults, when the banks experience a drain of specie, they call in their notes in the pro- portions abovementioned, and render bankrupt many who fail in their engagements by a proceeding which their own pru- dence could not anticipate. In recommending a National Currency: I have preferred illustrating my positions by questions and answers, as the former were put to me in the course of conver- sations, and were replied to orally and in writing. I rely now upon the embarrassments every where experienced, to obtain attention at this crisis ; and am prompted to repeat my ar- guments by the old Roman axiom — “ Gutta cavat lapidemnon vised ssepe cadendo .** By repetition, truth, at length, we own, As drops of water penetrate the stone. 2 PREFACE. I have, indeed, been encouraged to persevere by persons who have found my former positions verified by events, and who, having surmounted prejudices, are ready to receive any sug- gestions. Could I once have the subject brought before Congress, I am confident that the present jargon about a specie basis would be banished by ridicule. It is called a circulating medium, and is represented as fluctuating, being an epithet taken from wa- ter, which certainly is not a basis. I will conclude this with the termination of one of my for- mer essays, now perhaps forgotten: “ Beware, ye legislators, how you create a moneyed aristo- cracy, as dangerous to Government as Praetorian bands in Rome, or Janissaries in Turkey. Let me repeat, that I behold this country as the asylum of the afflicted, the sanctuary of the op- pressed, on which the eyes of philanthropists are every where fixed with affection and anxiety. Moral feelings, common in- terests, and general principles, unite as a band of brothers. ■Whatever appertains to the general welfare, should emanate from the General Government. 'I bis is the spirit of our Con- stitution ; this is the central axis upon which the Union must revolve, and any important deviation must make all return to chaos. If I am assailed for this interference, I shall reply* < Homo sum et nihil humani a me alienum pnto * 9 99 DIALOGUE, $jc. Question . What produced the Banking System in the United States ? Answer. The want of money which was soon experienced by the North American Colonies. Franklin, in his sagacious and useful writings, gives an account of the paper money first issued, which he observed to be productive of beneficial consequences, by stimulating industry, or, to speak more properly, by ena- bling the enterprising, stimulated by self-interest, to employ workmen, and to set up tanneries and handicrafts of various kinds. This deep researching patriot wrote in favor of State currency, and was rewarded by his State. His work was en- titled, “ On the Nature and Necessity of a Paper Currency After our Revolution, the States experienced a want of money, but found themselves prohibited from the issue of paper money by the Constitution, which, in the 10th section of the first article, says, «No State shall coin money, emit bills of credit, “ or make any thing but gold and silver coin a tender in pay- “ ment of debts.’* Being thus embarrassed, they chartered banks, whereby they not only increased money by bank notes, but received bonuses, to prevent the necessity of taxation. Thus they effected through banks, what they could not do of themselves. There is an old law axiom, “Qui facitper alium , facit per se” — What a man does through another, he himself does. Whether this ingenious expedient is legal or not, I will not pretend to determine. Many State Governments even set up State Banks, the history of which would be very interest- ing. At the commencement, while banks were lending mo- ney, and issuing their notes, they were very popular; but the evils of depreciation, when notes are carried from the State, were soon complained of, and soon also the fluctuations in the value of property by curtailments, were experienced as a great calamity. The history of these would be also very interesting. Question . You have stated from Franklin the advantages of paper money, but were not inconveniences experienced by the colonies, as each one issued a paper currency to supply the drain of specie ? Answer. Certainly there were, as we experienced the same by the paper mints in several States which did not go upon any regular system. In an able work, entitled “ An Account of the European Settlements in America these inconveniences 12 are alluded to ; and the author, supposed to be Mr. Burke, af- ter saying that laws themselves are hardly more the cement of societies than money, and societies flourish or decay accord- ing to the condition of these, adds, “I should imagine that one current coin for the whole Continent might be struck here or there, with such an alloy, which might at once leave it of some real value, and yet so debased as to prevent its currency else- where, and so to keep it within themselves. This expedient has been practised, and with success, in several parts of Eu- rope, but particularly in Holland, a country which undoubted- ly is perfectly acquainted with its commercial interest . 99 This experiment was successfully made by the Bank of England, after the suspension of specie payments. When it was ascer- tained that not only its gold but silver coin was exported, the hank stamped the Spanish dollars, and issued them first at 5s. sterling, and then at 5s. 6d., and gave them currency by offer- ing to receive them at the same rate. The value of the dollar as a bullion article, is from 4s. 2d. to 4s. 3d. Thus a value was given to them of more than 20 per cent, merely by the Bank receiving them at that rate. It was not, therefore, their quantity of silver that made them current, but the credit given by the Bank’s promise to receive them. Question. You have convinced me that the quantity of cur- rency in a nation has a great effect on the industry of a na- tion, and the value of its property — how comes it that so small a sum in currency can carry on the receipts and payments of so many millions of people, with produce and property amount- ing to so many hundred times the amount ? Answer. Consider that money is transferred from A to B? and from B to C, &c., by checks ; so that the sum may occa- sion three hundred payments in a year. Mr. Thornton says that the transactions of the Bank of England amount to four million pounds sterling per diem, or above five hundred mil- lion dollars per annum. Were the currency of Great Britain reduced as low as ours, general distress would immediately ensue. I have shown that it is the great duty of a Govern- ment to have a sufficiency of currency to preserve its credit. And how easy it is to regulate the quantity : when it is scarce, interest is high ; when it is abundant, interest is low. It is stated that the deposites of moneyed men in the Bank of En- gland amount to £ 8,000,000 stg. ; of course, when any proper- ty yielding income is to be sold, or any property likely to rise in value, a seller can always find a purchaser, as there are so many competitors wanting to lay out their money. In this country there are many sellers and few buyers ; consequently the price of land and of labor has fallen, and we daily behold sacrifices and distresses at which humanity weeps. 13 Question. Does not a sufficiency of money enable parents to send their children to school ? and is not education essential to preserve republican institutions ? Answer. Most certainly. A Roman sage has said, “emol- lit mores nec sinit esse feros it softens manners and pre- vents ferocity, and enables man to love truth and hate false- hood, by judging for himself, instead of being the dupe of demagogues. The following is too gratifying a statement to be omitted. The Baron Ferussac thus addresses a Parisian au- dience : “ I present to your notice a map of the kingdom, which represents by shades , more or less deep, the degrees of igno- rance or information that prevail. Those departments whose primary schools contain a tenth of the whole population, are colered with the deep tint of No. 10. Those departments whose schools contain only the twentieth part of the whole population, are colored No. 20. Those whose schools contain only the two hundred and twenty-ninth part of the population, I have colored black , No. 229. What, then, you will say, does France contain departments where there is but one child at school in a population of 229 inhabitants ? Yes, gentlemen, such a state of things does exist; and even still worse. But, it will be ob- served, this must be undoubtedly in some corner of Lower Bri- tany. No, gentlemen. Lower Britany is rather better. It has schools which contain the two hundred and twenty- second part of its population. It must be then on the summit of the Alps or the Pyrenees, where the poor inhabitant has to strug- gle against a rugged climate, in cultivating a contracted ter- ritory. No, gentlemen, among the population of those dis- tricts, popular instruction is the most diffused , because nothing gives so much moral energy to a people as to have to struggle against natural obstacles. That obscure place, where only the two hundred and twenty- ninth part of the human species fre- quent the schools, is in the middle of the kingdom, in a wide valley — under a mild and serene sky — in the region of the vine, the mulberry , and the maize — on the borders of a superb river ; it is called the garden of France : it is Torraine ! Look, on the contrary, at the foot of the Pyrenees, the country of Henry the Great — Bearn ; it contains in its schools, the fifteenth of its population. In drawing the narrow dark line, which you observe, from Geneva to St. Malo, we separate the North from the South of France. On the North are thirty-two De- partments, and thirteen millions of inhabitants ; on the South, fifty-four departments, and eighteen millions of inhabitants. The thirteen millions of the North send to school 740,846 young people ; the eighteen millions of the South send to school but 375, 931 pupils. Let us now observe some of the remarkable consequences resulting from this disproportion. In 14 the North of France, notwithstanding the rigor of the climate, the intelligent industry of the people enables them to obtain from the soil a sufficient revenue, and 127, 634, 765 francs of the national impost for a surface of 18,692,191 hectares ; while the fifty-four departments of the South, for a surface of 34,- 841,235 hectares, pay only 125,412,969 francs of the national impost. Thus, for a million of hectares, the public treasury receives from the enlightened portion of France, 6,820,000 francs ; and from the dark portion , only 3,599,700 francs. The superiority of the public revenue, furnished by the enlightened portion of the kingdom, is also particularly obvious in the pa- tent tax, which is levied at an equal rate throughout the king- dom. The thirty-two departments of the North close a patent account with the public treasury of 15,274,456 francs, and the fifty-four Southern departments only 9,62 3,733. Hence, fa- vored by superior information and industry, a million of Frenchmen on the North side of the line pay for the patents of their arts 1,174,958 francs, and a million on the South only 534,662 francs. I have examined the list of patents from the 1st of July, 1791, to the first of July, 1825, and the following are the results : for the thirty-two Northern departments, 1689 patents ; for the fifty-four Southern departments, 413 patents/* &c. &c. The Baron proceeds in his lecture with similar details as to the higher branches of science in all the universities, colleges, academies, and polytechnic schools, which present similar re- sults. In fine, he and Baron Dupin establish, in a manner sa- tisfactory and conclusive, the vast importance of diffusing the rays of knowledge into every corner of a country, however widely extended. question . You disapprove of the Banks of State Govern- ments : Do you approve of the United States* Bank ? and do you think it a legal establishment ? Answer . I cannot presume to form an opinion, as the Su- preme Court has given a decision. It always appeared to me that Congress legally could establish Bankers ; but that they had no constitutional right to compel States to receive Banks, which issue notes. “ Delegatus non potest delegare," is an old law axiom. The General Government has only the power to issue paper money ; at any rate, if a State be adverse to the Bank, on account of probable political or moneyed consequence, I know not any article in the Constitution which gives author- ity to the General Government. Bankers, or officers to collect and pay the revenue of Government, are requisite appendages to the Treasury ; the place where these bankers receive and pay, is called a Bank ; but could the framers of the Consti- tution have intended that money makers should be given to a 15 chartered company, and that the Government should be a large partner of 7 shares in 35, and receive a bonus besides ? If the State of Maryland had acknowledged the right of the Ge- eral Government to esntablish an Office of Deposite and Dis- count, and confined its refusal to admit Bank notes, which might prove injurious to the State, perhaps they would have acted legally. I must wait for the Judges’ opinion to sanc- tion the right in Congress to authorize a delegate to coin mo- ney, which is a power exclusively vested in the General Go- vernment. Question . What think you of the following letter from Mr. Cobbet to Mr. Dallas, dated “ London, Jan . 13, 18 J 6. “ Sir : I have read with great care and uncommon inte- rest, your proposition to Congress, under date of 6th Decem- ber, 1815, for the establishment of a National Bank; and, as a part of the reasons which you urge in support of that proposi- tion appear to be founded on the experience of a similar insti- tution in England, I cannot refrain from endeavoring to show you what some of those effects really have been, and what is at present the situation of this country, owing, in a great mea- sure, to the existence of a great banking establishment closely connected with the Government. “ It is the evil of a National Bank, as experienced by us, to which I particularly wish to draw your attention. You profess, and I dare say very sincerely, so to frame this estab- lishment in America, that it shall be independent of the Go- vernment. It is next to impossible, indeed, that you, or any of the persons in whose hands the Government is, should have a desire to make a Bank what our Bank has long been; but while there is a possibility of its becoming, in any hands, or at any time, any thing resembling this Bank, it must be a matter of serious dread to every friend of America, that such an esta- blishment is likely to take place. Sir, it is as a Bank of Dis- count that this establishment exercises the most pernicious in- fluence. The Directors, who are a chosen divan, regulate these discounts, and in so doing, decide, in some sort, upon the rise or fall, the making or the ruin, of all men in trade, and, indeed, of most olher men, except such as have no capital at all. The amount of these discounts, at any given time, is sup- posed to be about six millions of pounds. As they are never for more than two months, here is a sum of thirty-six millions lent every year to individuals. 16 “ The bills for discounts are sent in: the Directors consent or not, without any reason assigned. Now, sir, consider the magnitude of the sum discounted. It is a little short of half a million of dollars a day, Sundays excepted. It is perfectly well known to you, that, in such a state of things, almost every man in trade is under the necessity of having a regular supply from discounting. If he be excluded from his fair share here, he cannot trade with the same advantage as other men trade. If he be in the practice of discounting, and if his discounts be cut off, he cannot go on, he stops payment, and is frequently ruined forever, even while he possesses property, which, with the fair chances of time, would not only enable him to pay his debts, but to proceed in prosperity. I beseech you then, sir, to look seriously at the extent of the dangerous power of these Directors. You must $ee that they hold in their hand the pe- cuniary fate of a very large part of the community, and that they have it in their power, every day of their lives, to destroy the credit of many men, and to plunge their families into shame and misery. If I am asked for their motives to acts like these, to pursue such partiality, to make themselves the instruments in committing such detestable injustice and cruelty, need I point out to you that they have been, and must be, constantly actuated by the strongest political prejudices? The fact is, however, that the Bank of Kngland, by means of its power of granting or withholding discounts, has been, and is, one of the most potent instruments of political corruption on the one hand, and of political vengeance on the other. I myself could name twenty men, who stood very high in trade and credit, who have been totally ruined, reduced almost to mere beggary, by the stoppage of their discounts at the Bank, without any other cause than that of their having taken an open part in opposi- tion to the acts of the Government. This is so notorious, that men are not ashamed to avow, when solicited to come forward in petitioning or remonstrating, that it w 7 ould be their ruin with the Bank : men who burn with indignation at the insults offer- ed to the Public— men who talk in their private circles in the same way that I am talking to the Americans, dare not open their lips in public, dare not put their hands to a petition against any act, or intended act, of the Government. And this is so well and so universally understood, their doings are regarded as so certain a cause of ruin, that no man expects them to expose themselves to such calamity. Can your mind picture to itself a more potent, and at the same time a more dis- graceful instrument of political corruption and subjugation Answer. I beg leave to decline giving an opinion upon this letter. If the Bank is to be magnified, and its branches mul- 17 tiplied, it may require a larger capital than the Bank of Eng- land, as our population and property increase. Any one can decide what its present power is, and what it may become. Question. If a national currency were beneficial, surely Con- gress would have introduced one before this time. Answer. That is a non sequitur : for it implies that a public body will not leave any thing undone. Mr. Madison long ago said to Congress in his message, (i It may become necessary “ to ascertain the terms upon which the notes of the Government , *• (no longer necessary as an instrument of credit ,) shall be is - “ sued upon motives of general policy , as a common medium of “ circulation .” A Committee was appointed by Congress, of which Mr. Calhoun was Chairman, who promised to report, but it was left undone. After that, a memorial was presented to Congress, and another Committee appointed, of which Mr. McLane, of Delaware, was Chairman ; he, too, promised to report, but it was left undone. In short, no attention has been paid to the subject, notwithstanding the sufferings of the People. Question . What reason can be assigned for this neglect of so important a subject ? Answer. It will not become me to expatiate upon ignorance, prejudice, timidity, and apathy. It appears, at first sight, a topic which does not afford a field for eloquence, although, in reality, no other can unfold sucli opportunities for it. A na- tional currency will enable Congress to adorn and improve the country with majestic beneficial works. It will enable in- dividuals to cultivate and build, and make many useful private undertakings. It will facilitate matrimonial unions, now re- strained by poverty. It will enable charity to relieve the dis- tressed. In short, it will scatter plenty over a smiling land. Question. Mr. Charles Ganilh is a decided bullionist. He says : “It appears certain that gold and silver are necessary “ to the formation of wealth, and that without them, wealth “ cannot possibly exist. This theory is fully confirmed by “ history. The hordes and tribes of savages discovered in the “ interior of Africa, and in some parts of Asia and America, 4 ‘ that were destitute of gold and silver coins, though they had “ other money, were yet plunged into extreme indigence and 44 misery, and all accounts of travels and voyages afford scarce- ly a single exception to this general fact.” Again he says, “ The increase of the quantity of gold and silver in Europe, 44 and the increase of its manufactures and agriculture, are “ two events which, though they have happened nearly at the 44 same time, yet have arisen from very different causes, and “ have scarcely any natural connexion with one another. The 3 18 “ one has arisen from a mere accident, in which neither pru- dence nor policy either had or could have any share ; the other u from the fall of the feudal system,” &c. Do you coincide with him ? Answer. No. I attribute the fall of the feudal system prin- cipally to money. Workmen, paid for labor, became indepen- dent of their chiefs. Money produced a middle class, civili- zation, and freedom.* Certain causes co-operated, it is true, to accelerate the augmentation of all kinds of industry. I also deny that the precious metals are essential and indispensable for the formation of wealth. Gold and silver are not of much value in use, but are of great value in exchange. Question. Why is it so ? Answer. The monarchs have chosen to make them the coin of their countries, and raise their value by preferring them. When a Government establishes a Bank, and receives its notes, they are equal to the precious metals ; and when even a Bank suspends specie payments, if a Government con- tinues to receive its notes, they retain the par value, unless is- sued beyond the demand. Were the Government to issue its own notes, and insist upon being paid in them, were they scarce, more than five dollars in silver must be paid for a five dollar note. More of them would be required annually, as population, capitals, and interchange increased. Were four or five States to separate from the Union at present, and to es- tablish a currency, they would have an advantage over the General Government ; but if the latter had previously a cur- rency, the State’s notes would be in discredit. The national currency, in addition to its other advantages, would be a ce- menter of the Union. I attribute the stability and rapid ad- vancement of the Russian empire, in a great degree, to its na- tional currency. This will enable it to overwhelm the Turks, who have no good financial system. Question. Does not an increase of money, when it is scarce amongst an enlightened and industrious People, cause their prosperity ?. Answer . Yes— Adam Smith is of opinion, and all writers on political economy agree in this, that even the addition of a de- fective currency is preferable to having a deficiency ; thus Banks have been established and chartered to issue notes, pro- mising to pay in specie, though experience has proved that they are pregnant with numerous evils. Question . Why does a diminution of the necessary quantity cause distress and retardation ? * See Address to the Columbian Institute. 19 Jlnswer. Suppose a million of persons require four millions of dollars for marketing, for shopping, for payment of laborers, commerce, &c. : should two millions be withdrawn from the four millions, must not many persons be unemployed, and must not the value of fixed capitals fall in price, and must not many persons be rendered unable to educate their children at schools, and to aid the distressed, and to subscribe to public improvements, &c. ? Question . Why have all nations used the precious metals for their currency ? Answer. Because they are not in abundance, and cannot be quickly multiplied, and the labor to produce them makes their value very much stationary; whilst other articles, easily produc- ed, soon depreciate by the introduction of machinery and skill. Question . All the mines in the world produce a great deal of specie, which is continually going forth into circulation ; yet there appears very little increase in Europe, or in the United States. How do you account for this ? Answer. I may, in part, satisfy the inquiry, by referring to the able work on Political Economy, by Baron Storch, pub- lished by the authority of the late Emperor of Russia. He states the annual produce of all the mines, as follows : European Mines - - g 4,042,972 Asiatic do. - 1,699,075 American do. .... 59,088,416 — g 64,831,063 Baron Humboldt states the European exports of specie — By the Levant trade - - - g 5,440,000 By the Cape of Good Hope - 23,800,000 By Astrachan and Siberia - - 5,440,000 34,680,000 Remains - g 30,151,063 From this sum must be deducted the consumption caused by gilding, silvering, converting into plate, watches, &c. Such consumption, Baron Humboldt states, In France, to be - - - g5, 661, 250 Mr. Lowe, in Great Britain - 6,660,000 Mr. Lowe, in Geneva - - 311,108 12,632,358 Here is a consumption of gold and silver in three countries only, of g 12,632,358. 17,518,705 But of this balance, there would probably be con- sumed in Russia and the German kingdoms 12,000,000 g 5,518,705 20 So that, upon this reasonable calculation, little more, annu- ally, than five millions and a half would remain to supply every current demand of America and Europe, not to mention losses at sea, &c. which we know frequently occur. Taking such facts and circumstances into consideration, is it not evi- dent that any considerable increase of specie must be slow ? Moreover, the produce of the American mines, during many years past, has gradually diminished ; and, for a few of the last years, those mines have afforded a less quantity of gold and silver than has been consumed and exported. In the year 1817, I made a calculation of the circulands in the United States, estimating them at g 5, 132,000,000 ; and about the same time, several other individuals making the like calculations, I was gratified to find how nearly the results cor- responded. Since that time, nine years having elapsed, the quantity of those circulands has greatly increased ; but not the currency. And, as a proof ot this, the Government of the United States was obliged to take back lands sold to the amount of g 20,000,000, merely because the purchasers proved the impossibility of finding money to pay for them ? Question. What objections are there to metallic money ? Answer. 1st. Being articles of commerce, they are export- ed, whenever a bad season occasions a failure of crops, or when agricultural products will not sell. 2d. They are concealed, whenever difficulties and danger occur to a nation. 3d. They are ponderous, and not easily transmitted from one place to another, and therefore carriage, freight, and insurance, are charged, and delay in remittance is occasioned, and therefore bills of exchange are preferred. Question. Why have not Sovereigns, long ere this, issued their promissory notes ? Answer. Because they were despots, and the People could not confide in them ; even their coins they adulterated, and forced foreign merchants to take them. In Turkey the coins are adulterated 75 per cent. ; therefore all bargains are made payable in foreign coins. The stocks or bonds of despotic Governments are always below par. Public credit is of mo- dern growth, since the establishment of free Governments, in whose punctuality the People have confidence. Revolutionists issue promissory notes, but they depreciate, because they can- not give security for the redemption of them, and because ne- cessity compels an issue of them to an unlimited excess. Question. What gives a current value to coins ? Answer . The receival of them by all Governments. Adam Smith gives an instance of paper money being higher than metallic money, though ot the same nominal value. The Queen of Tuscany insisted upon receiving her revenues half in her coins and half in her paper money ; the latter being rather scarce, was at a premium, as the possessors of coin were oblig- ed to purchase them. In India, the Great Mogul coined every year, and would only after a few months receive the new coin; thus the old coins, though of the same weight and purity, de- preciated greatly, and the sovereign’s mint-master became the purchaser of the old coins to the profit of the Treasury. Question, May not a free Government issue notes not bear- ing interest, and receivable in all payments for land, duties, taxes, &c. ? and will they not be current, at par, as bank notes, or the precious metals ? Answer. If the quantity be limited, they will ; but may there not be an apprehension, that the Government, finding the advantage of this national currency, will sooner or later issue beyond the proper bounds, and cause a depreciation ? Question, Is there no remedy for this ? Answer. I am sure there is. The Government may insert on each note, that stocks bearing 4 per cent, are deposited in the Treasury, and any individual is at liberty to exchange its notes for stocks, which are always locked up by individuals as income-yielding property. Thus, if everthere be a de- preciation below that rate of interest, the notes will be re- turned to Government. This is a kind of safety valve in a steam engine, or a waste in a canal, to prevent excess. Question, Does not money obey the permanent law, that every thing is cheap or dear, according to the demand ; in other words, according to the quantity in market, and the numbers wanting to purchase ? Answer. Yes. Interest falls or rises, according to abun- dance or scarcity of money. Question. May not the power to issue paper money induce the Government to run too rapidly in debt ? Auswer. I have no apprehension of that. First, consider that the Representatives are chosen by the People every two years, and are responsible to them. When, therefore, annu- al reports are made to them, that interest has fallen to five per cent., may they not suspend issues ? Will they not be cau- tious how they cause excess ? for then the notes will return upon them, and taxes must be raised to pay the interest. Secondly. Consider that Congress will only select proper objects for their subscriptions to canals, roads, and railways, and surely they will not be undertaken unless they will yield four per cent. Thirdly. The public lands will rise greatly in value, and thus an increase of revenue will be obtained. 22 Fourth. As some Board must be appointed to issue the notes according to the acts of Congress, Congress may pass a law that the Board shall cease to issue when interest falls be- low five per cent., and they may annex penalties to any devia- tion from this law. Question. Why have you fixed the interest at four per cent. ? Answer. I have fixed four per cent., because it seems not too low nor too high an interest for money. The British three per cents, are at 88, consequently they yield only about three and a third per cent., or £ 3 7s. per cent. If the foreign mer- chant sells goods here, and must take back either specie or stocks, he will calculate that silver, being ten or eleven per cent, lower in Europe than in America, he will lose by tak- ing away dollars, and then consider whether it is his interest to takeaway stocks. Were the stocks offered in exchange by Government for its notes, to bear five per cent, he could afford to run the risque of an agent here, to remit his stock dividends and to pay exchange ; but, at four per cent., he cannot ; for he will lose sixty days interest on the bill and thirty days on the passage. To the wisdom of Congress I leave the fixing the interest of the stocks which are to be exchanged for notes. That Go- vernment’s notes will be current at par, receivable even only in the Land Offices, was proved by the Yazoo Certificates, which were only receivable in the Mississippi and Alabama Land Offices. Now the lands only yield gl, 000, 000 per annum. Then they will yield gs, 000, 000, as I have elsewhere shewn, and increase in value with augmenting population and dimi- nishing quantity of land. Question. Is not the suspension of specie payments often de- sirable ? Answer. Yes. Experience lias demonstrated that landed property must fall, and that the employ of the industrious must be diminished as the quantity of money, if not before excessive, is reduced. Yet, since the time of Hamilton, in 1790, our Secretaries of the Treasury, and our Congress, have paid no attention to finance, unless for the reduction of the national debt, which operates as a reduction of the currency. Since Mr. Hamilton’s time we have witnessed the suspen- sion of specie payments by most of the banks, and the sudden resumption of specie payments, and the establishment of a Na- tional Bank on a larger scale than the old one ; and we are now feeling the effects of the rapid liquidation of a great por- tion of the public debt. The banks, by being paid off, no longer hold stocks as a succedaneum, should their specie be 23 unexpectedly drained ; for these stocks were kept to be sold on an emergency to raise specie. Foreigners, also, who hold our stocks abroad, by being paid off, cause a greater balance of trade against us and withdraw specie. We have read, in the newspapers, what distress has been occasioned in New York and the Eastern States by the expor- tation of three or four millions of dollars, which has caused the Banks to call in notes to three times this amount. A wise and humane Government would investigate whether the currency has increased with the increase of population and of property. Foreign interchange is carried on by bills of exchange ; the exporters from hence of cotton, tobacco, rice, &c., sell drafts upon Europe, which importers of goods pur- chase. The excess of imports must be paid for by Govern- ment’s stocks or by specie. When the former are sent abroad, the effect upon internal interchange is not immediately very perceptible; but when specie is sent away, the effect is almost instantaneous. Purchasers of property are of course dimi- nished, and the merchants find it difficult to meet their engage- ments ; debts must remain unpaid, and law suits must be mul- tiplied. Individuals must reduce their consumption of articles, and the manufacturer must find his sales less, and his dues from customers slowly come in. Want of money, also, must prevent the enterprising from subscribing to canals, roads, and railways, and from setting up manufactories, mills, &c. The tariff is a great experiment. If European capitalists are induced or compelled to come here, internal industry will be promoted ; but if foreign manufacturers, having a stock of goods on hand, can successfully smuggle them into the United States by the St. Lawrence and the Lakes, and by our rivers and bays, our home manufactures will be undersold, and our present embarrassments will be aggravated. In a few months we shall ascertain whether the self-interest and ingenuity of in- dividuals, can counteract the watchfulness of the Government. When the laws of the Government, well administered, pro- tect men in their possession of property, and when there is a sufficiency of money to cause moderate interest, (say from four to five per cent.,) a nation will be industrious, emigrants will resort to it, and manufactures will spring up. The freight to Liverpool, the cost of carriage to Manchester, the cost on re- turning to Liverpool, and the freight back, and duties, and commissions, and charges of merchandise, would, long ago, have made this a manufacturing nation, if scarcity of money and high interest had not prevented them. During the war, manufactories sprung up like mushrooms. The resumption of specie payments, and an inundation of foreign goods, by a 24 double blow, prostrated domestic commencements. Financial foresight ought to have averted this destruction. When men are thrown out of employ by a scarcity of mo- ney, their children cannot be educated, and, in addition to the distresses they suffer, their moral characters are deteriorated, and their healths are impaired: marriages also are checked. That, in this new country, numerous useful undertakings would give employ to laborers, all must acknowledge. When States borrow from abroad to accomplish public improve- ments, the nation must suffer by becoming tributary for annual interest, and the accumulation of capitals must be restrained thereby. If such consequences are occasioned by ignorance in finance, I will not apologise for persevering in my endeavors to obtain attention to this all-important subject. As I decline in years, the more anxious 1 become to see relief afforded to the commu- nity. The following extract, from to-day’s paper, I insert, to show bow Americans emigrate : Texas . — The following information relative to Texas is copied from the New Orleans Halcyon and Literary Reposi- tory, of the 25th of May. It contains information which will, no doubt, be new to many of our readers : “ Although little more than seven years have elapsed since the Austins began their colony near the Rio Grande, it now numbers from 12 to 15,000 souls, mostly emigrants from the United States. Thousands of acres, however, remain with the patentee, and will afford immense wealth to himself and to his descendants. << On the opposite side of Texas, and in a quarter possessing greater advantages, another colony is fast rising into import- ance under the patent of Col. Milam. There are 200 families already settled on the alluvion of Red River, nearly over against Miller county, in Arkansas. The cotton lands yield astonishing crops of the finest cotton, tobacco, and corn — in- numerable herds graze on the elevated prairies — and the moun- tains are known to contain the precious metals. The colonists are to be exempted from taxes, and the merchandise they may import will pay no duties.’’ Question . Will not this increase of cotton make the price fall still lower, and cause a greater balance of trade against the United States ? Answer. This is already experienced ; it is a natural con- sequence to be calculated upon. 25 Question. Great Britain and the United States have both re- presentative governments, and have good laws, well administer- ed— why is there so great a difference in their wealth ? Answer — Great Britain has, in specie, - £ 25,000,000 Stg. In Bank of England notes - - 25,000,000 In country bank notes 25,000,000 Government Funds 800,000,000 Exchequer bills 23,000,000 The United States have, in specie - - $ 15,000,000 Bank notes - - 45,000,000 Funded debt - - 60,000,000 $120,000,000 898,000,000 More than 4,000 millions of dollar';, besides Notes of hand, Bills of Ex- change, &c. The population is 15,000,000. — GreatBritain has a dense population, and machinery equal, as is estimated, to 100 million. Great Britain has interest of 4 per cent. Great Britain can make improve- ments by subscriptions, and raise any sum in a day, for any plan promising per cent. The population is 12,000,000. The United States have interestfrom 6 to 12 per cent. The United States want moneyed capitals. Individuals have not money to set up manufactures, or to make ca- nals, rail-ways, roads, &c. Question. What enabled Great Britain to recover so rapidly from her want of money in 1 797, though carrying on a most expensive war ? Answer. Her paper money.— -[See the address, showing that it increased machinery, industry, and commerce.] Question. Did not the silver evanesce from Great Britain in 1796-7, as well as the gold ; how was the want of crowns, half crowns, and shillings, supplied ? Answer. The Bank stamped dollars, worth, in general, from 4s. and 2d. to 4s. and 3d. and issued the dollar, first, at 5s. and afterwards at 5s. 6d. and promised to receive them on the same terms. The stamp was made by Bolton’s ma- chinery, to prevent forgery. Here was a value of 36 per cent, given, merely by the Bank credit given. Manufacturers sup- plied notes for the smallest coins, and were thanked for the relief thus afforded. During our war, barbers, and all descrip- tions of persons, made 2, 3, 5, 10, and 25 cent notes. Question. May not the interest of money' be too low ? Answer. I think it may. It is becoming too low in Great Britain ; therefore moneyed men are removing with their capi- tals. The monstrous debt is a great evil ; for many persons live on the interest abroad. Question. What enables Great Britain to pay, on her funded debt of 783,301,739 pounds sterling, an interest of 29^892,745 4 26 pounds sterling, and the expense of management, 279,066 pounds sterling; and, on the unfunded debt of 23,743,300 pounds sterling, an interest of 831,207 pounds sterling ; and to support her vast establishment without signs of decay ? Answer. Her well-managed financial system. If she had only our currency, her debt would be destroyed, and her capi- tal would fall nearly to the level of ours, and her industry would be reduced — in short, the Minerva would lose her ener- gy and activity for want of blood. She does not borrow from abroad, but lends to foolish nations who will not rely on their own resources and credit, but only look to foreign loans. Question. Why this aversion to borrowing from abroad ? Is it not advantageous to borrow at 5 per cent, and to obtain from canals and roads higher dividends than the interest to be paid ? Answer . Has not experience proved that the real cost al- ways exceeds the estimates, in respect to time and expense ? Unforeseen delays will occur, and accidents not anticipated will arise. Calculators also omit to insert the interest of at least five or six years before the canal or road becomes produc- tive, and also do not include the loss of compound interest. They are apt, also, to overrate the profits, by taking the esti- mates of Great Britain, where the population is so dense. It would he prudent, therefore, to put the subscription of one hun- dred at the real cost of one hundred and thirty at least. I am averse to borrowing, because, by the Edinburgh Review, 9,000,000 pounds sterling have already been sent to Great Britain, in Government stocks, State stocks, and canal stocks ^ besides the debts due by individuals who receive ironmongery, crockery, and goods, on credit. The important canals, roads, and railways already in contemplation, will require loans to the amount of at least g 100,000,000. Ought we not to pause before we thus involve ourselves ? How can we expect an augmentation of specie, if we are to pay, by exports, seven or eight millions of dollars without receiving any return ? Let us also consider that there is an annual consumption of the pre- cious metals in plate, plating, gilding, watch-making, and trin- ket-making. — [See page 19*] Have not several of our banks already shut up ; and must not more cease, as our mouldering basis diminishes ? By the debts we have made, on which in- terest must be paid, the exportation of specie has been checked ; the present rate of exchange, and the small premium on specie, prove that the efflux has commenced. There is scarce- ly gold enough in the country to make wedding rings ; and al- ready our young men and young women pine in celibacy, be- ing prevented from marriage, by want of money to commence housekeeping. 27 question. Can an estimate be formed approaching to any de- gree of accuracy of the currency required for a given amount of capital and of population ? Answer. That must depend upon the denseness of popula- tion, the activity of business, and the collections and payments of Government. In Great Britain, the fixed capitals are esti- mated at 2,000,000 sterling, and upwards, and the notes in cir- culation are 76,000,000 pounds sterling, exclusive of the thir- ty^millions of the precious metals, viz : Bank of England notes - - £ 25,000,000 Stg. Country bank notes - 25,000,000 Exchequer bills - 26,000,000 £ 76,000,000 Besides 800,000,000 of national debt, which operates as a cir- culating medium in large purchases and sales. Now, let us give a statement of our moneyed situation to a population of 12,000,000 of whites, and capital of §6)000,000. We have § 15,000,000 in specie in bank, and §45,000,000 of notes in circulation. I will exclude the specie of both countries : then, it will appear, that Great Britain has § 365,000,000 for a po- pulation of 15,000,000, and we have §45,000,000 for a popu- lation of 13,000,000. The bullionists state that paper money drives away all the specie ; but Great Britain, after her specie had vanished, in 1797, by increasing paper money, doubled her exports, and brought back raw materials and specie, an article of commerce. The report of her mint proves that she coined, last year, more than our mint has coined since our independence. Knowledge, implements, machine- ry, skill, and industry, constitute the wealth of a country. God has given the unceasing stimulus to production, self-inte- rest ; and the important investigation for statesmen is, what ought to be the circulating medium, which is the heart’s blood of a nation. If man’s blood were an article of commerce, and infusion could give health and strength, how many would be like Hercules, and how many would be pale, feeble, languish- ing. — [See Crawford’s report in 1820.] question. Whence do you take your estimate of our capitals ? Answer. About twelve or fifteen years since, several per- sons, nearly at the same time, came to very nearly the same result, that our capitals amounted to §5,000,000; but, since that, their values have much fallen, by the diminution of our currency ; and, though our population, agriculture, and buildings, &c. have increased, yet such has been the de- preciation of property, that I cannot value our capitals at more 28 than g 4, 000, 000. Thus, our citizens have become tempora- rily poorer g 1,000,000 — See the report of a committee in Pennsylvania, stating the increase of suits, and the depre- ciation of estates, to the amount of three or four hundred mil- lions of dollars, in consequence of the sudden resumption of specie, and the rapid diminution of bank notes. This reduc- tion is very low : for, wherever I have travelled in Virginia, I have ascertained that estates have fallen sixty-six or two- thirds per cent. Question . You have stated that paper money, introduced as a substitute, does not drive money away — does not experience disprove this assertion ? Answer . I admit that, when specie can be advantageous- ly exported to bring back something wanted at home, mer- chants will convey it away : and is not this one advantage pro- duced by a good paper circulation, which can supply the place of specie ? If we gain by the exportation of specie, do we not lose by keeping it at home ? Is not the whole property of the nation a better basis for the currency of a country than notes of banks relying upon a few millions of dollars, which always disappear in times of need. Question. You have shewn that 15,000,000 of subjects, in Great Britain, have 76,000,000 of notes, or 5 T 6 T pounds sterling per head — what additional quantity of national cur- rency do we require ? Answer. As we have now about 45,000,000 of notes for 12,000,000 of whites, were I to allow only half the quantity in circulation in Great Britain, we should require an addition of more than g 200,000,000 : but I will strike off one hundred, and say g 100,000,000. Question . Would you recommend that Congress should issue this sum in notes at once ? Answer. Certainly not. Congress should gradually issue them, and, by the rate of interest, Congress would soon ascer- tain how the notes were absorbed. Should a drought happen In any State, Congress, by laying out notes on a public im- provement in that State, would enable the people to purchase food, and might avert a famine and improve the State. More- over, the notes thrown into circulation will enable individuals to erect mills, barns, &c. and to subscribe to junction canals and roads, and thus the capitals will be increased. Question. How r much do you calculate that the public trea- sury will gain, by the national currency, in twenty years ? Answer. I am of opinion that it will have gained at least g 100,000,000 in dividends and increased sales of land. The State governments will also have gained, by borrowing, 2| or 29 3 per cent. Let it be remembered that, if our white popula- tion be now 12,000,000, in 25 years it will be 24,000,000 ; in 50 years, it will be 48,000,000 ; in 75 years it will be 96,000,000 ; and in 100 years 192,000,000. Let the reader strike off the 92,000,000, or any portion he pleases, still the profit on the’currency must amount to a large sum, annually. Question. Will not the power of making a Currency Board, and of issuing so many notes, give too much influence to the President and his Administration, and render the State go- vernments less independent ? Answer. In my opinion, the currency will operate in every way favorably for the cementation of the Union, k and the pre- servation of the State governments. If the latter borrow mo- ney at 2£ or 3 per cent, will not their applications be present- ed to Congress ? and must not the sanction be granted by Con- gress, which consists of delegates from the counties of States, where they first came into the world, where their parents live, where they have their estates and occupations, and to which they return ? Will not w ealth make them independent, as po- verty now renders them dependent ? Will the representatives conspire against their own States, and be guilty of felo de se ? The danger is, lest scarcity of money should prevent parents from educating their children, and thus? render the sovereign people ignorant and impassioned. Will not the Currency Board be responsible to Congress, who will have monthly and annual reports ? The framers of the Constitution intended that the President and the Heads of Departments should submit their propositions for the general good to the deliberative body ; for, in a multitude of counsellors, there is wisdom. When the citizens of States shall be more wealthy, they will be more anxious to preserve social order. In times of embarrassment, thelow 7 er class will always clamor for a change. When a sufficien- cy of money makes a large middle class of enlightened men, they will not fly to extremes, and merit the epitaph of the valetudi- narian, viz : I was well , wished to be better , and here I lay," — but let me refrain from politics ; and let me add, that, could I see a possibility of a National currency destroying the fe- derated States, I would stump my pen, throw the ink away, and tear my essays. When apprehensions have no definite point, I cannot grasp them— -jealousy, suspicion, and hypocon- driacism are disorders of the brain, not easily removed. Question. When the currency is reduced one-half, does not every thing fall in value, in the same ratio ? this is asserted. Answer . I must dissent to this position, that, “when the currency of a country is reduced one-half, the value of every thing is reduced in the same proportion, and that the community is not affected thereby.” Permit me to ask, if A sells his estate for $ 2,000, which has fallen in value from 8 4,000, will the merchant sell his tea, his sugar, his liquor, his cloth, &c. at half price, because he informs him that the quantity of money being diminished one-half, the remainder has risen double in value ? May not the seller reply, that the price of teas and sugars must soon be raised, as the supply in market is very small ? When A wants to purchase wheat, may not the farmer say the crops have generally failed, and I must demand a higher price ? When, also, A wants to employ a laborer, should he say to the laborer, your usual wages are 50 cents per diem, but money has risen in value twofold, I will therefore pay you only 25 cents ? Will the laborer be per- suaded to consent ? May he not say, I will rather work at home, or migrate : 25 cents per day will not support my fa- mily ? When a manufacturer finds money returning slowly, may he not be compelled to dismiss many of his operatives ? and will not this, whilst the industrious lose their means of subsistence, diminish his profits, and, consequently, those of the nation ? Question. How will the proposed national currency operate upon the Bank of the United States ? Answer. It will give an auxiliary currency in high credit, equal to gold and silver, as a basis for its notes. I must own, however, that it will considerably reduce its profits by pur- chasing domestic bills of exchange. By the late reports of the Bank, their purchases of domestic exchange amounted to the large sum of 22,084,222, on which they gained 451,203. This profit on internal exchange was of course paid by the merchants, and deducted so much from their gains on trade, or aggravated their losses. The merchants, also, by taking bills instead of notes, are obliged to wait till they become due, and thus have their negotiations impeded , ^whereas, if they had Go- vernment’s notes, they would be saved from exchange and delay. Question . Will not the issuing of a national currency be complained of by the Bank ? Answer. They cannot, with justice, complain ; on the con- trary, the public has now to complain of this exchange, for Mr. Dallas induced Congress to charter the Bank by promis- ing to destroy exchange, and the loss on notes of State Banks, to which the public is still liable, as is demonstrated by brokers in every town. Question. The Bank has increased its loans 8,365,884 IT. Is not this beneficial to the community ? 31 Answer. Individuals have become so much more in debt* and have to pay so much more interest, viz : g'501,957 per an- num, and are liable to protests, prosecutions, judgments, and sales. The community, I acknowledge, benefits by the increas- ed circulation of g 7,588, 868 81 ; but, would not the public have been benefitted more, if the Congress, for the nation, had thrown this sum into circulation in the mode proposed — by subscriptions to canal, and railway, and road companies ; for individuals would have avoided the necessity of borrowing so much at six per cent, and a better currency, receivable every where, not liable to diminution by a withdrawal of specie, would have been in circulation. The following statements of 1822 and 1828, are valuable documents : State of the Bank , August 30, 1822. Capital paid in, % 34,992,139 63 The circulation, 5,456,891 90 Deposites— Public, 3,559,792 96 Private, 3,216,699 78 6,776,492 74 Due to sundry Offices and Banks, and to individuals in Europe, 1,964,898 36 Unclaimed Dividends, 129,741 28 Contingent Fund to meet losses, 3,743,699 00 Discount, exchange, and interest, since July, 388,237 01 Profit and Loss, 51,897 07 g 53,504,196 99 DISTRIBUTED. Funded Debt, % 13,020,469 27 Loans, viz : Personal security, 22,072,405 46 Bunded debt, 67,958 13 Domestic bills, 2,713,760 30 Debt of Smith & B. 1,357,457 23 Foreign bills, 21,599 76 Bank Stock, 5,974,725 80 Mortgages, 8,000 00 32,218,876 68 Due by banks, &c. 1,650,869 73 Real estate, 587,102 38 Bonus, premium, &c. 1,180,880 00 Banking houses, 834,922 15 Notes of State banks, 664,642 56 Specie, 3,346,434 22 g 53,504,196 99 State of the Bank, August 1 , 1828. Capital paid, 34,996,269 63 The circulation, 13,045,760 71 Deposites— Public, 7,301,746 43 Private, 6,563,479 06 13,865,225 49 Due to sundry banks and to indi- viduals in Europe, 1,054,361 29 Unclaimed dividends, 456,005 76 Contingent fund to meet losses 4,380,645 53 Discount, exchange, and interest, 378,378 87 Profit and loss, 1,518,298 61 8 69,694,945 89 Funded debt, 16,930,969 51 Personal security, 29,316,745 45 Funded debt, 142,212 73 Domestic bills, 6,013,890 15 Smith & B. 612,760 44 Foreign bills, 340,185 93 Bank stock, 1,850,380 56 Mortgages 79,907 38 Debts chargeable to Contingent fund, 2,223,678 21 Real estate, Bonus, premium, &c. Banking houses, Notes of State banks, Specie, -40,584,760 85 2,292,652 11 755,529 86 1,079,926 43 1,458,099 73 6,593,007 35 8 69,694,94 5 89 Question . Is not the increase of specie a good sign ? Answer . The specie of the Bank has increased since 1 822 above three millions; why 1822 is chosen for a contrast, I know not, the amount is now 6,593,007 35 : the amount of specie in 1826, was 6,616,049 98. Question . Did not Mr. Dallas, the great promoter of the Banks, promise that the Bank would do away exchange and discounts on State Bank paper ? Answer . His words are these : 44 The Bank will possess the mearis and opportunities of supplying a circulating medium of equal use and value in every State , and in every district of every 32 State, and it will aid and lend the State Banks*” This was the great inducement for establishing the Bank. I am sorry to see the debts due to the Bank increased from - 32,218,876 58 to - ' - - 40,584,760 85 increase 8,365,884 27 Question. Is not 6,563,479 06 a small sum for private de- posites in the mother Bank and its twenty branches ? Answer. I must think so, when I consider that by these de- posites, the Bank must be pauHts annual interest on nearly 30 millions of discounted notes, and that purchases must be made of property estimated at 6,000,000,000, say to the amount of 20, 000, 000 only, and that the Government’s revenue of above 20 millions must be paid, and the national lands paid for, and mercantile transactions performed ; it is true, that the State Banks have also some deposites, but they cannot be very large, as the State Banks are checked in their issues by the mam- moth Bank and branches ; this smallness of deposites accounts for the lamentable depreciation of fixed capitals, in lands and houses, &c. : our population and our estates are increasing an- nually, and our currency ought, therefore, to keep pace with it. Question. If money be scarce, as you seem to think, how do you account for the price of our stocks ? by the last accounts, our American funds, New York fives were in London 95 and 96. Answer. The British 3 per cents being at 87 and 88 : the moneyed men in Great Britain purchase 5 per cents here ; and, although there is a loss on exchange, yet they obtain more in- terest from our funds than from the British, and there* is full as much confidence in our public credit and punctuality as in their own nation. Question. Why are not State Bank stocks, and other in- come-yielding property higher ? Answer. The British moneyed individuals are not acquaint- ed with these speculations, and have no knowledge of charac- ters to employ as agents to remit dividends. We, on the spot, would purchase, had we money. Most men find it difficult to pay Bank discounts. In my travels, I found the best estates depreciated three-fourths. I have known of the sale of landed estates at a greater depreciation. Question. You state that the property of the nation is the proper basis of a currency, and not evanescent, precious met- als ! Can you illustrate your position by any diagram, to strike our judgment through the sight ? Answer. I will endeavor to do so. 33 You perceive the national notes are independent of specie, which may increase or decrease without affecting our circula- ting medium- I will now give you the inverted ticklish pyra- mid, which our present system represents : This inverted pyramid represents all the national property and industry, dependant on the small sum, making only a 333d part of the value of the property 5 34 Whenever specie has vanished by hoarding, consumption, and exportation, the pyramid finds its proper base, and prosperity ensues. We have experience for our guide, but many will not, few dare to think, the remainder will not encounter prejudices. The moneyed interest confuses the intellects of common sense, and of men with understandings sound enough in the common concerns of life, who talk of intrinsic value, as if demand did not regulate the value of every thing. Gold and silver are of little value in use, but are artificially made of high value in ex- change, for Governments, imitating each other, have made the precious metals the coin or money which they will only re- ceive. When Great Britain had all her specie exported, the nation took notes based on the property of the nation. Thus the nation rose like Antaeus from his fall : increase of money increased industry, and, consequently, productions ; so that, in a few years, exports were doubled ; and raw materials, and luxuries, and specie, came from abroad. The wealth of a na- tion consists of capitals produced by industry, and of the an- nual products of genius and labor brought into action by a good financial system. Question. You attribute the wealth of countries, and their industry, in a great degree, to the quantity of currency ; how do you explain this ? Answer. I will take Great Britain for my example. Income. Exchequeb. £ s. d . 17,894,409 4 1 18,438,707 4 7* 6 , 811,226 8 0 Customs Excise Stamps Total 54,486,687 15 2 Value of imports, £ 37,714,021 sterling; do. of exports, JE51,044,658 ; vessels inward, tons, 2,676,263; do. outward,— In short, look at the statistical account, and you will form a tolerably correct idea how much currency is required to pay and receive, for such products and consumption, as you may judge of the water or steam-power to turn a quantity of wheels. When there is a great amount of notes in circulation, must not every one have more or less of them at command ? Were the Southern States to have a sufficiency of money to set up manufactures and packets, the [number of European emigrants would surprise persons who do not consi- der that the surplus population would flow to where they will be employed. It is a common error to deem money only a® 35 effect of industry, and not a cause. Were the quantity of cur- rency diminished one-half, could the same quantity of raw ma- terials be bought, and the same number of operatives employ- ed? Great Britain coined, in 1826, gold, £5,896,641 ster- ling ; silver, £ 608,605.* The bullion was imported by having a favorable balance of trade, which paper money occasioned. Were a bad harvest to cause an unfavorable balance, the spe- cie would be exported, and the notes must be increased to supply their place, or operatives must be turned off, and pro- duct and consumption diminished. Our imports amount to g 79,484,068, and our exports to g 82,324,827 ; of domestic ar- ticles, g 58,921,691, and of foreign, g 23,403,136. We have more hands employed than in Great Britain, though our popula- tion is nearly the same : for we have fewer troops, a smaller navy, fewer State creditors, a small hierarchy, fewer servants, tax-gatherers, &c. — -fruges consumer e nati, When we had a sufficiency of paper money, during the war, roads were sub- scribed to, and numerous improvements were making every where, but now subscriptions cannot be raised, and Corpora- tions tax proprietors of houses and lots, nolens volens , to make a canal. Were Congress to issue only ten millions of dollars in notes, as an experiment, all eyes would be opened. Question , May not Congress object to the appointment of a Board to make a currency, and may they not deem it a ha- zardous novelty for a Government to authorize the loan of money ? Answer, If you advert to the financial system of Russia, published in the National Journal, you will ascertain that there is a Grand Board of Superintendence, entitled— 1st. “ The Council of the Credit Establishments ” which makes a published report annually. 2d. There is a Board entitled Bank of Assignment , which has issued 595,776,310 roubles.f This circulating medium has caused the rapid advancement of the nation, which saves interest on this sum, and avoids borrowing from abroad, in a great degree. 3d. A Commission of Redemption, This Board attends to the reduction of the public debt, &c. This is not wanted here. 4th. A Loan Bank . The loans amounted to 32,623,683. This Bank receives deposites, and is a loan bank, on securi- ties of the Government. The operations amounted to 198, 772,000 roubles. *The total value of gold, silver, and copper, coined since the establishment of the United States* Mint, to 31st December, 1827, $30,525,138, t Where the rouble is mentioned, it is meant to say 3s. 2d, 36 5th. A Commercial Bank. This is a Government Discount Bank. Its primitive capital was 30,000,000 roubles. This Bank receives deposites. The capital and deposites amounted to 271,208,350 roubles. They loaned to the Empire, at dif- ferent times, on the deposite of copper, 22,000,000 roubles. The total operation of the Bank amounted to 955,008,125 roubles, in paper, and 9,106,686 in specie. There is also a Lombard Bank. The nett profits accruing to the Nation, or Empire, from these Banks, is — Roubles. Cop’s. From Loan Bank, gold - - 971 87 silver - - 1,889 54i paper - - 1,995,785 42§ Commercial Bank, nett profit after deduct- ing expenses, - 1,608,661 28 Question . Do not these several offices cause confusion, and give great influence to the Government ? Answer. I think not. These Boards are checks one upon the other. They are moreover superintended by the se- parate “ Council of Credit Establishments” and by annual publications of detailed statements exposed to public scrutiny. Does not our United States’ Bank attend to twenty branches ? Question. I am surprised to see such numerous useful mo- neyed operations carried on, and so few specie operations ; and that under a despotic Government, paper can be in credit to such enormous amounts. Answer. The appointment of numerous Boards, and the pub- lication of their statements, remove doubts and suspicions from the minds of the people. Credit and confidence are al- ways obtained by candid exposes of Departments. The do- cument referred to is a most important one. The currency of 595,776,310, if in specie, borrowed at six per cent., would cost the Nation 35,746,278 roubles annually, which, in only ten years, would amount to 357,462,780 roubles. Would not the payment abroad of so much interest be an annual drain, to keep the Nation in poverty ? If the Nation had determined not to employ a paper currency, could they have advanced as they have done ? This surely ought to open our eyes. The Russians are not mere imitators of other nations. I deem their Administration, if equalled, not surpassed, by any other in the world. The Nation must be advancing more rapidly than ours. The rapid rise of Russia affords a phenomenon meriting the attention of financiers. For centuries it was in an uncivilized state, for want of a circulating medium. It was not until the 37 year 1420, the first silver money was coined, called copecks ; being worth a little less than a cent. In 1654, roubles were introduced in the form of bars, deeply notched, (rouble,) that as much of the bar might be detached as might be required to make payments ; 100 copecks make a rouble, worth 4s. 2 d. sterling. In 1788, the Empress Catharine had issued 100,000,000 of paper roubles ; and as a proof that they were wanted for in- creased capital and industry, they were 5 percent, above cop- per. In 1817, the Emperor Alexander, during a perilous war, had augmented the issues to 577,000,000 of roubles, and they were much depreciated. In 1819, the Chancellor of the Russian Exchequer states that above a hundred million had been funded, and exults in the high credit of the Government, and in the prosperity of the country. There cannot be a more certain criterion of the ad- vancement of a Nation, than the absorption of more and more of a paper circulating medium, without its depreciating from the abstract or par value at which it is issued. There are five Boards established, under several denominations, in Russia. Modern travellers through the Russian Empire dwell with pleasure on the splendid edifices, the National establishments, the canals, roads, and bridges, and the progress of the arts and sciences. The currency promotes labor in agriculture, ma- nufactures, and commerce. The currency introduces the mid- dle productive classes of society. It is difficult to estimate the quantity of capital created annually by a small addition of currency. Contrast the rapid progress of Russia, notwithstanding a despotic government, with an expensive army and navy, and an extravagant Court, supported by the industrious, with the advancement of the United States, although enjoying a Re- publican, economical government. To what can this be at- tributed, but to a diminution of the circulating medium ? In a country without money, the possessors of large tracts of land have their own vassals, blacksmiths, carpenters, masons, and laborers. Estates cannot be divided, unless by donation, for none can buy them. In a country with augmenting cur- rency, the laborer being paid, is independent, and soon buys tools. The ingenious man borrows money, and sets up ma- chinery. To exhibit in a strong point of view all the advanta- geous operations of a national currency, the adventures of a Note ought to be published: “ ’Twas mine, ’tis his, “ And has been friend to thousands.” 38 Baron Storch, to illustrate the advantages of low interest, observes, that when interest is reduced from 5 to 4 per cent, a borrower can raise 1,250 for trade, as a capital, for the same interest which he before paid for the loan of 1000 ; and thus his business can be increased one-fifth. He also makes the following judicious observations “ as interest falls, produc- tions are amplified, and a number of enterprises are success- “ ively undertaken which one would scarcely think of. Thanks “ to low interest, agriculture is encouraged, productions are “amplified, and manufactures employ greater capitals, and * ( commerce opens new branches, from which it was before ex- “ eluded by high interest ; thus, in Russia, where the interest “ of money is 8 per cent, if the Russian only gains by trade 5 “ per cent, he must leave it off, whilst in Holland, where in- terest is 3 per cent, the Hollander would be a gainer of 2 “ per cent.” I have heard a usurer say that he obtained 24 per cent, per annum in New York. What a great loss to the merchants, and what an injury to commerce. When interest is high, the capitals of a few money lenders only is increased ; but when interest is low, thousands of enterprising, industrious, economical men are increasing their capitals in a compound ratio, and the lowest classes are employed : money is the mainspring to keep all persons occupied. When interest is low, the farmer will lay out more money in purchasing ma- nure and implements of husbandry, and in stocking his estate ; in short, a sufficiency of money is a sine qua non to enrich a country, and to prevent those crimes to which poverty and not the will consents. Freedom, industry, wealth, and security, all depend upon a uniform National Currency. What has given pre-eminence to the little Island, once de- scribed is Et penitus toto divisos orbe Britannos but a good government, good laws, and a paper currency ? Question . Does not the Emperor of Russia gain to the Em- pire the legal per centage on this currency of 595 millions of roubles, or 3,570,000 per annum? Answer. Certainly he does. His country, rapidly increasing in population and civilization, requires more money. Even in Great Britain, where the benefits of paper money have been so fully experienced, Sir John Sinclair expresses his opinion in this forcible language : “ The advantages of paper circulation are hardly to be esti- mated. In every country where commerce flourishes, it is ne- cessary to have a considerable quantity of some common me- 39 dium of traffic. If paper does not exist, gold and silver must be made use of. If the paper circulation of Great Britain is equal to thirty millions sterling, had it not existed, we must have exported goods to that amount, to have brought in specie, and, consequently, we must have been thirty millions poorer than we are at present. It is true we should have had the gold and silver, but even that would have been perpetually dimi- nishing by use; and thirty millions of paper, without any pos- sible loss by wearing or otherwise, and with great convenience as to transportation, &c. answers exactly the same commer- cial uses, and saves the annual interest that would have been lost, which, at five per cent., amounts to one million and a half sterling.” “The circulation of paper has already been carried to a considerable extent by means of exchequer bills, banks, and bankers’ notes ; but a still greater quantity is required, and an addition of either coin or paper would be of real service to the community, as above thirty millions per annum must now be annually paid for the interest of the national debt and for other national expenses. If one-third of that sum were issued, in notes of from one to five pounds each, receivable in payment for taxes, it would be productive of the happiest effects, not only accommodating individuals and promoting the improvement of the country, but also adding, at the rate of half a million ster- ling, to the public resources.” Question. Do you mean that these National notes should ever be paid off and called in ? Answer. Certainly not. If 100,000,000, or any other given sum, were issued in payment for materials and labor, will not the nation be enriched to that amount ? and will not individuals, by receiving of these notes, be constantly making improve- ments ? As the property and population increase, more notes must be issued. Question. How can you imagine that a nation can be enrich- ed by paper notes ? Answer. If a nation agrees to give a value to any thing, by promising to receive it at that given value denominated a dollar, an eagle, a pound, a shilling, or what they please, is it not, to all intents and purposes, as useful for internal concerns as coins of the precious metals ? Do not these precious metals greatly derive their value from the will of different Govern- ments ? Question. You seem to think that a nation could rapidly acquire factories, machinery, and all labor-saving improve- ments, if it had a sufficiency of currency; and that a Govern- ment has a power equal to the possession of the imaginary phi- losopher’s stone. 40 Answer. I do ; and prove my opinion by facts exhibited in Great Britain after 1797. This system is even preferable to the philosopher’s stone ; because, by the latter, excess of gold and silver would make them of little value. View the island of Great Britain ; ponder upon its wonders for a week ; go to its Mint, and ascertain that it has coined more gold and silver in a year or two than we have in 40 years. Industry, set to work by notes, applied to machinery and all kinds of improvements, ob- tained every thing for consumption and exportation ; and, also, brought in the precious metals for use in manufactures and for coins. We are enlightened, enterprising, and industrious. We only want a good financial system. Several who under- stand my propositions, encourage me to persevere, because every year proves the necessity of some succedaneum to the present specie basis, which certainly is not increasing, whilst our population is doubling in twenty-five years. But how irk- some it is to have “ to counteract the ignorance and prejudice “ of mankind, and to endure the delays to which vivid and pe- “ netrating minds are subjected from the tardy co-operations of “ the dull and doubtful.” How painful, also, it is to see ad- vancement retarded, and distress pervading the community, when conscious that these federated States might exhibit unex- ampled prosperity. I had concluded, when the following short notice struck my sight : Welland Canal . — A grant of 50,000£. for the aid of the Wel- land Canal in Upper Canada, has passed the British Parlia- ment, and every share of the stock of the Company, for sale in London, disposed of. A canal of 187 miles is also making from Lake Ontario to Montreal. My position is, that, if we had a sufficiency of money and lowlnterest, manufactures would spring up where the raw ma- terial is produced, and that Northern Nations, not producing cotton, could be undersold ; freight, insurance, and charges on the raw material, and the transportation of it, inland, and the expense of returning in the form of calicoes, &c., and then the expense of shipping, would be a sufficient protection for American manufactures. As it is, the trade will, I fear, be transferred from the Atlantic to the inland seas, and from thence smuggled, perhaps even vi et armis $ for the inhabitants will be induced, by self-interest, to co-operate. Question. Can you give me a contrast ? Tes — National Currency. Bank Notes. 1st. The currency is thrown into 1st. A charter is granted, and a corn- circulation by subscriptions to canals pany is formed by subscriptions. The and roads, and by expenditures on first and second instalment is paid in 41 the numerous public improvements required in this new extensive coun- iry- 2d. The currency thus thrown into circulation gets into the hands of indi- viduals, who deposit some in Banks, or who use it as a circulating medium in loans on mortgage, or in purchases of various denominations. 3d. The Government is, in reality, debtor to individuals, and promises to redeem Us notes with four per cent, stock : but the Government is never applied to, unless it imprudently is- sues a superfluity of notes. 4th. The Government gives value to its notes, by receiving them in all pay- ments of duties, of taxes, and for lands. 5th. As the Government notes, not bearing interest, are unmerchantable abroad, they are never exported, and, consequently, do not fluctuate in quan- tity, by any difference in the balances of trade with foreign nations. 6th. The Government, when it finds industry paralyzed, by a scarci- ty of money, can issue more notes, and relieve the community. 7th. The notes of a Government be- ing equally valuable every where, are not exposed to depreciation, but are 6 specie, and in notes of specie paying banks ; and the stockholders obtain discounts for the remaining instal- ments, by pledging their stock. The Bank of the United States was form- ed by a subscription of $ 5,000,000 in specie, 7,000,000 of 5 per cent, stock by Government, and 23,000,000 of 6 per cent, stock by individuals. 2d. The banks issue notes by dis- counting promissory engagements, payable every sixty days. Thus, every week, the Directors meet and renew the old paper, as it is termed, or cur- tail the discount, or demand the whole sum promised. 3d. The Banks, every week, are draining individuals and protesting notes, at § 1 75 for every failure to re new notes, or to pay curtailments. To know the consequences of this power, see Cobbett’s letter. — page 15. 4th. The Banks promise to redeem their notes with specie, but, as they issued three or four for one dollar in specie, they fail when run upon. 5th. The Banks, when specie is taken from them, call in notes to three or four times the amount of specie withdrawn ; the scarcity of money thus created causes great embarrassments to merchants and others, and occa- sions ruinous sacrifices and bankrupt- cies. Immediately, a run is made on banks ; they cease discounting ; and thus, every week, their notes are paid into them, and their creditors, to pre- vent protests, prosecution, and fail- ures, are compelled to give great se- curity, and to borrow of usurers, at an enormous rate of interest. To check the exportation of specie, the banks sometimes send Government stocks to be sold in Europe, and draw bills, which they sell to Europeans who have sold goods for bank notes, and would otherwise take away specie. 6th. Banks, when drained of a por- tion of their specie, having called in their notes, dare not re-issue them till specie has returned to their vaults, which may not happen for many years; and thus the production of articles is diminished, when it ought to be in- creased. 7th. Bank notes, when conveyed beyond a limited sphere of circulation, are at a discount or depreciated, and 42 sometimes higher than specie, as they are more expeditiously and cheaply conveyed than specie from one place to another. 8th. The Government, by its is- sues, can regulate the rate of interest, which rises when money is scarce, and falls as the quantity of money is in- creased. 9th. The Government can only con- stitutionally issue a currency. They can have stocks, bearing interest, to give in exchange for their notes, whenever offered to them. Thus, indi- viduals can always prevent an excess. 10th. The notes issued are an ac- quisition to individuals, and the com- munity does not pay interest to the Government. 11th. The Government benefits the nation, by issuing notes in subscrip- tion to Canal companies, &c. and the nation receives dividends annually to save itself from taxation. 12th. The basis of the Government's notes is the whole credit and property of the nation. 13th. The Government cannot ra- pidly call in its notes, and prosecute borrowers of them, as Banks do. 14th. The amount of notes that a Government can issue is small, corn- must be sold at a loss to brokers, as shop-keepers will not receive them. Suppose A and B brokers and part- ners ; A resides at Boston, and B at Washington ; the former purchases notes of Washington at a discount, and B purchases notes of Boston at a dis- count ; and thus they both gain, and the community suffers in both ways. 8th. Banks, when specie is abun- dant, often issue notes fearlessly to an excess. When bad harvests happen, or a war, &c. cause excessive expen- ditures abroad, and specie is diminish- ing, the Banks, for self preservation, must press their debtors. Instances of great fluctuations, where manufac- tures and commerce are so much aug- mented, are very frequent in nations where banks exist. 9th. The State governments set up State banks and branches in direct violation of the Constitution, and they charter banks to obtain bonuses. 10th. Banks must have interest from individuals every sixty days, and the community has to support their ex- pensive establishments, and to bear their losses. 11th. The Banks are managed by interested directors, who are mer- chants and shop keepers, and some- times get discounts for customers, who could not otherwise pay them. A his- tory of the Banks would develope much oppression and intrigue. 12th. The basis of all our Bank notes is about $ 15,000,000 in specie — they were wont to have Government fund- ed debt, but that is greatly liquidated. 13th. The Banks demand securi- ties, and have prosecutions of debtors, and sell their property, and buy it in on low terms. Let the court docket be examined every term, and then the magnitude of the evil will be ascer- tained. The mind revolts at a pow- er, having millions of property at their command every sixty days. — Banks of deposite are very useful, and they make fortunes in England. Short- sighted legislators, hoping to increase the circulating medium of the coun- try for increasing population and capi- tals, did not look forward to contem- plate the ruinous consequences. 14th. The bank notes issued are about forty-five million of dollars. 43 The property of\the nation I esti- mate at seven thousand millions of dollars ; but, when the amount of notes is diminished, it affects the value of all fixed capitals. Merchantable property has its value regulated by prices abroad. Foreign articles are not af- fected by scarcity or plenty of money, in any degree, so much as estates, houses, &.c. are. 15th. The notes of the Bank and Branches of the United States are not receivable but at the places whence they are issued ; therefore, a person wanting to make a remittance to any town in the Union where a branch, bank is, must pay, for a bill of ex- change, from a half to two and a half per cent, although he offers specie. This is a great loss to merchants. For instance, a merchant, at New Orleans, sends a cargo of cotton to New York, and a merchant, at New York, sends a cargo to New Orleans ; each must pay two or two and a half per cent, for each transaction, and the bank has a nett profit of five per cent. If the merchants had national notes to send, this exchange would be saved. On a million of dollars, the saving would be twenty or twenty-five thousand dol- lars, which would be an annual in- crease of capital. Question. What is your opinion upon the present dispute About productive and non-productive labor ? Answer. It has been an enlightening discussion amongst writers upon political economy. Man cultivates the soil, or plies the loom, &c. to obtain necessaries, comforts, and enjoyments. If the farmer, who has sold his luxuriant harvests, purchases furniture, or hires a musician for his daughters, or pays a school- master for his son’s education, or goes to a play or an opera, or travels to a watering place, or purchases a library, or builds a house, his money, thrown into circulation, gives employ and comforts to others, and the money is constantly operating to produce industry and happiness, and to prevent vice by idle- ness and poverty. Question. What labor is most productive, agricultural or manufacturing ? Answer. Certainly the latter. I have seen a statement that 14 men and 286 women and children, with the aid of machin- ery, produced g 240,000.^ Agriculture is liable to failure of * In Macclesfield 230 power looms, by 11.5 girls and a few workmen, made 1,865,768 yards of cloth in a year. pared to the circulands or property of the nation. In Great Britain, the notes amount to about sixty millions ster- ling, and the capitals are estimated at above two thousand millions sterling. It is the duty of the legislators and statesmen of a nation to have a suffi- ciency of currency to employ the in- dustrious inhabitants, and to stimulate productive ingenuity, enterprise, and labor. 15th. A national note being receiv- able at par every where, can be sent by mail from New Orleans to Maine. The Bank of the United States states in its memorial of 17th January, 1821, that from the 1st of April, 1819, to the 30th August, 1819, their curren- cy was reduced from $6,045,428 to 3,838,386; and they say, “no evil can be greater than a decreasing cur- rency ; and to use the expression of a great man — poverty, beggary, and sloth, follow in its train need higher authority be given ? crops. We have more men employed productively than Great Britain, yet how very inferior is the value of our products. The impediment to our setting up manufactures is the want of money ; for it requires a large sum to erect a factory, set up machinery, purchase raw materials, and pay workmen. If money be scarce, merchants and retailers must purchase on long credits, and often disappoint the manufacturer by their inability to collect debts due from consuming customers. Question. Which is the most healthy occupation, the plough- man’s or the operative’s ? Answer. The statistical accounts prove that there are more disorders and deaths in agricultural counties than manufac- turing counties. The former, exposed to changes of climate, are liable to more complaints. Marriages, also, are more promoted by manufactures than by agriculture, because chil- dren are employed by the former. In Great Britain, the number of stamps issued, in 1801* were fifteen thousand, and in 1826. twenty-five [thousand six hundred. How can a nation, which has only mines of silver and Pactolean rivulets, and which has not bills of ex- change or promissory notes, or any kind of paper currency, have a sufficiency of money to buy the luxury of a news- paper, which, while it amuses, instructs ? As the sun, by its rays, enlightens the earth and vivifies all nature, so the press scatters the lights of knowledge collected from all quar- ters of the globe through a reading nation. When money is scarce, the first act of economy in a family is to strike oflf newspapers, Reviews, and Magazines ; and the next is, to take the children from school. Printers, according to the strict definers of the term, are not productive laborers, because they neither supply food, raiment, or fuel. When I read the exul- tation expressed by the discoverers of gold dust in North Ca- rolina, and other places, which rarely pays for the labor, I pity the ignorance of those who have not read Ricardo, Grey, Thornton, Young, Sinclair, and other modern authors, who expose the folly of reliance upon the precious metals, and dis- play the incalculable advantages of a well-regulated paper cur rency equal to the demands of society. The question forces itself upon every well-wisher for his country’s prosperity, happiness, and | independence — Have we not, at least, as good credit as any other nation ? Our po- pulation is nearly equal to that of Great Britain ; we have no belligerent neighbors ; our debt is trifling ; our Army and Navy small; we have few taxes; we have more productive laborers. \Ye have two or three hundred million of acres for sale ; we have iron, copper, lead, and other minerals’; we have a fertile soil, and varieties of climate for numerous products — why, then, are we compelled to borrow, and run in debt to foreigners ? 45 We have an intelligent, enterprising, industrious, energetic population — why have we not more machinery, and a denser population in the Atlantic States ? and why are so many citi- zens emigrating to the back woods, to live with difficulty, and stinted for comforts ? There is but one answer — Congress will not pay attention to finance. Question . You have mentioned the meeting at Charlottes- ville of the first characters in Virginia, and alluded to the pro- position to borrow money from abroad for public improve- ments. We see States advertising for loans, and Corporations also. How much do you think could be immediately applied to useful objects with success ? Answer. At least two hundred millions of dollars in five or six years. The British Government applied 977,000 pounds sterling to the Caledonian Canal. If one Canal costs five millions of dollars, think what canals, roads, and railways, &c., our new world requires. Were money in sufficient quan- tity, individuals would subscribe. Fervet opus would be our motto. Now we meet, publish reports of surveys, calculations, and, except in a few instances , 66 resolve, and re-resolve, and die the same.” We have the experience of the old and young worlds. We have men of genius, knowledge, and enterprise, but, without money, cannot proceed ; and, if we borrow from abroad, we shall labor only for others abroad. Question. Do you calculate that the specie basis, as it is cal- led, has increased since Mr. Crawford’s report ? Answer. I am led to believe that it has decreased. A gen- tleman who has paid great attention to the situation of State Banks for several years, and has been collecting their reports, has given me the following statement : Population, Currency. Specie, 1816 8,000,000 110,000,000 1819 9,000,000 45,000,000 1828 12,000,000 36,000,000 15.000. 000 14.000. 000 In 1816 there were in circulation about g 13 for each per- son; in 1819, about g 5 for each person; and, in 1828, about g 3. Thus have our financiers reversed the proper pro- gression, for our currency has decreased in an inverse ratio with the increase of population. By a reference to the very valuable statistical tables of Messrs. Van Zandt and Watterston, it appears that the ex- ports of bullion and specie since 1821, inclusive, exceed the imports 28,572,718. What further proofs, he asks, is neces- sary to satisfy you that a metallic currency cannot answer for our country under existing circumstances ? A few months ago I read in the newspapers, that 3,000,000 •f dollars had been exported within a few weeks— 5 *' " 46 annual report of the seventeen Boston Banks, the specie, on the 6th of May last, was reduced from 1,193,000 to 650,000. That several Banks in the United States have failed since the resumption of specie payments, has been announced in the news- papers, and that the survi ving banks dare not issue many notes, is demonstrated by the small dividends they make. Thus the Banks suffer, together with the community, by an evanescing specie basis. When a committee of Congress shall investigate this subject, accurate information will be obtained, and not till then. To moneyed institutions in Europe, it must appear laughable when our Banks have only S 10,000, 15,000, ar.d £0,000 and upwards, in their vaults. Heretofore, our Banks had Government stocks to sell for cash whenever they were run upon ; but now they are paid off, the Banks are, of course, be- come more insecure. The merchants, therefore, must be suf- ferers whenever the Banks are alarmed : and to the complaints of merchants, the directors reply, “ We lament the painful al- ternative to which we are reduced, but we must preserve our Uevenue from ? ^ ste . m , t0 s ^e three or In 25 years, 12,000,000 more . $ 120 ,000,000 In 23 years, 12,000,000 more . 120,000,000 In 25 years, 12,000,000 more „ 240,000,000 ‘ ‘ - 480,000,000 In 75 years . — sent^popuhiflon? b ° Ut ^ P 1 * 0 ? 01 ^ 011 which the Russian currency ^astoitspre? tviltm ™enue recommended. But the lands snrinmF J n?* y be ° btained from the sourci treasury, if State Government” ® ^^IttedTvT,: the “«<>"“ paper mints. c permitted to violate the Constitution by tion to the concerns' of^the natiX^durint^he ^ eteirnincc 1 1 ° give serious atten- wise system ol our departed statesmen and fi £ ies * nt calm > and to render the by fulhlhng their expanded concenTons ^ ^ ^ a P ei ™ a "ent blessing, ment Now is the favorable crisis P « There Sf 6 ” , f he S eneral Govern! i here is a tide m the affairs of men” 50 POSTSCRIPT. Or outlines of a plan for emancipation of Slaves. Should Congress adopt a currency system, the Nation will obtain a profit of five millions per annum, in addition to their present surplus revenue, and a constantly increasing profit. I have already proposed that Congress should subscribe, in notes, to canals, rail-wa^s, roads, and other improvements, made by chartered companies ; and now submit to patriots and philanthropists the outline of a plan for the emancipation of slaves in the United States, by the means of this new creation of resources. I propose— 1st. That Congress shall appoint a Board, entitled The Hoard of Emancipation , to consist of five members, lest by sickness a constant quorum should not be obtained ; the de- lays of salaries, 6c c. which must be allowed, I do not advert to. 2d. That this Board shall have power to appoint branches in several States, as business may require them. Sd. That Congress shall appropriate at least one million annually, to be paid in notes, to the Emancipation Board, for the purchase of slaves. 4th. That Congress shall appropriate 500,000 dollars, in notes, for the exportation of freed slaves and other free peisons of color ; and order this sum to be paid to the African Coloni- zation Society. Let me now proceed to describe the duties of the Emancipa- tion Board. They shall hire out these purchased slaves to Govern- ment contractors for public works, to individuals for ser- vants and laborers, and to canal, rail-way, and road con- tractors, and to ship owners, for seamen. It would require many pages, were I to set down the present rates of w ages, of life-insurance, of clothing, medicine, &c. ; suffice it to say, that* by inquiries from Engineers, slave hirers, and others, I am led to conclude that, at the end of eight years, the amount received in wages, and annually invested, will indemnify the Board for the first cost, after deducting every expense, and after making allowances for deaths. If the Board or Boards receive one million a year, in notes from the Treasury, and the slaves cost on an average 300 dol- lars, the Board or Boards will purchase 3,333 the first year ; 51 but more and more every year, as the wages received will be annually added to the annual million. After the service of eight years, when the slaves are to be made free, and given over to the Colonization Society, the Board will have an acquired capital of the original million received, in addition to the annual million ; and the augmentation of funds to purchase slaves, in addition to the annual million, will be as follows : The 9th year $ 1,000,000 2,000,000 3.000. 000 4.000. 000 10th do 11th do 12th do And so on, in the same ratio. Thus the slaves which double only in 25 years, will have an annual appropriation of one million to reduce their numbers annually, and also a sum by wages which will be yearly increasing the power of purchas- ing, at a compound ratio, doubling every eight years. Should this plan be resolved upon, and put in practice, all the apprehensions from the gathering storm, now so justly en- tertained, w T ill be dispersed; and it will soon be found that more slaves will be purchased than can be easily hired out. The expenditures on the purchase of slaves will throw a great sum of money annually into the slave States, to enable land owners to make improvements. This influx of money will promote also manufactures : for it will be most advanta- geous to establish them where the raw material is produced; and loans also may be made by Congress to manufacturers at three per cent, with a condition that the hands employed shall be hired from the Board of Emancipation. This will be a good mode for the appropriation of the surplus of the money gained by the national currency. This, however, is a subject only collaterally affecting the Board of Emancipation ; for the board is only to receive sums from Congress wherewith to purchase slaves, and to hire them out, and to transfer them, after eight or ten years’ service, to the Colonization Society. It may be said that Congress ought not t© appropriate mo- ney, by which the slave States must exclusively benefit ; but to this I reply : Did not Congress expend, in war, an hundred million of dollars, to protect American seamen from impress- ment ? And let me ask, whether the slave States had many sea- men to protect ? and whether the slave States did not greatly suffer by want of commerce to export their agricultural pro- ductions ? Was not wheat given to their hogs ? But let us scorn these local, selfish, partial views, so repugnant to moral brotherly feelings, and so destructive of the general interest. If, then, the general good justifies an appropriation of mo- ney by Congress, who can deny that the safety and prosper!- #2 ty of all of us are involved in the increase or decrease of our slaves. The slaves have increased in the following ratio : 1790. 180®. 1810. 1820. 690,307 896,349 1,191,364 1,543,688; exclusive of colored persons and slaves made free, which in - creased as follows : 59,511 108,413 186,446 236,592 The calculation is, that the slaves double in 25 years. If they now exceed ----- 2,000,000, In 25 years their numbers will be - 4,000,000 In 50 do. do. do. - 8,000,000 In 75 do. do. do. - - - 16,000,000 In 100 do. do. do. - 32,000,000 This progression is inevitable, unless policy and humanity unite to arrest it. Societies formed in almost every State of the Union evince that a general feeling is excited, and a gen- eral attention paid to this most important subject. The Afri- can Colonization Society, of which the Hon. Bushrod Wash- ington is President, and our best and most exalted characters are members, use these emphatic words : * * In our national constitution, young and vigorous as it is, there exists a •' ‘disease, growingwith our growth, and strengthening with our strength, •‘which, unless remedied, will ruin us, possibly by slow decay, probably by “ sudden'violence. Loudly, then, as by an angePs voice, are we called upon to '^awake, and before age has fixed our habits, and the poison become mingled « in the fount of life, make those exertions which may secure perpetual « strength, purchase immortal glory, and save us from terrors, darkening as “ we advance, which invest the future with clouds of mysterious and tremen- dous calamity.” “ If things go on as they are, words more terrible than plots and insurreo *• tions must be familiar in our mouths ; for, notwithstanding all that may be “ done to keep the slaves in ignorance, they are learning, and will continue to « learn, something of their own power, and something of the tenure by which «* they are held in bondage. They are surrounded by the memorials of freedom , ** the air which they breathe is free ; and the soil on which they tread, and «« which they water with their tears, is a land of Mberty.” Must not every part of the Union suffer, should the slaves lay waste the fields, burn the houses, and murder the families of their masters ? Surely the American who contemplates the horrid scenes of destruction which so many thousand negro insurgents must produce, will sanction an annual appropriation to avert the calamity, and will not even hesitate, when he is shown that taxes will not be occasioned thereby. The attention of all civilized nations is given to the existing violation of humanity : happily for the negroes, free States evince that they flourish more than slave States ; and writers on political economy have proved that free labor is cheaper than slave labor. When we look at the statement of exports, we find that th« valuable articles of sugar, cotton, rice, tobacco, &c. are the 53 productions of warm climates. How anxious, then, we ought to be to have them secured in permanency by the gradual ex- tirpation of slaves, and by the introduction of generations of freemen. Such a reformation would render us happy at home, and applauded abroad. But as it is a wise maxim to undertake only one thing at a time, and as this second plan depends upon the adoption of the National Currency System, it were superfluous to enter more at large into an elucidation of the latter suggestion. Should the former be adopted, l will separately expatiate upon the second desideratum. I had laid down my pen, when, in the Intelligencer of the 15th November, eleven letters underwent my perusal, promis- ing to send slaves if their passage would be paid. One offers emancipation to 17; another, of 25 ; a third, of 60; but the writ- er, with sorrow, adds: Si Hundreds of persons, well recommend- ed for their moral and industrious habits, are waiting for an opportunity to emigrate, while the Society is left without the means of affording them a passage. Shall this continue to be so?” Note . — More than 500 free persons of color, and more than 200 slaves, are ready to go to Liberia. A Church meeting is advertised in Georgetown, and another in the City, to raise subscriptions to provide a vessel for them. An ardent desire prevails to give aid, but means are wanting to support the Coloni- zation Society. Each warm philanthropist to Church repairs. And gives, ’tis all he has to give, his prayers. Humanity for suffering brethren, in vain Pours forth the most pathetic sacred strain. To empty pockets ’tis in vain to plead, Congress, alone, can make the plan succeed. V ' . APPENDIX. The following was a kind of Episode to the General System, and I intended to have renewed the subject before Congress, but I found party spirit so predominant, and all other mat- ters, however important, lost sight of or unheeded, that f remained silent. Now the terrible contest is over, the in- terests of our common country will be deemed worthy of regard : Mr. LAW, having submitted a financial plan to Mr. Clay, whose acuteness and discernment, and whose political firmness he admired, and knowing that his multiplication of business would prevent his attention thereto, at Mr. L’s particular desire, three gentlemen were named by Mr. C. to investigate the same, and to give their sentiments. The following is the report of the gentlemen selected : To the Hon. the Sfxretary op State : Sm : Having, in compliance with your request, verbally communicated to us by Thomas Law, Esq., perused, and attentively considered, certain papers put into Our hands by that gentleman, proposing and developing a new and advantageous scheme of public finance, to which he was solicitous of attract- ing your notice and sanction, we have the honor of submitting the following report : Our philanthropic fellow-citizen, the author of this fiscal proposition, seems to have taken it for granted, that, if the means could once be devised, the Na- tional Legislature would not be slow in showing the inclination to patronise and promote, by pecuniary aid, the great work of Internal Improvement ; and, upon this assumption, the whole energies of a mind , not less remarkable for the unabated vigor of its conceptions, than for its persevering devotion to the general service of the human family, have been directed to the discovery of this desideratum — to the invention of a moneyed capacity, which shall be available, without imposing a burthen upon the Treasury, and which may become efficient in promoting the great end in view, without drawing upon the public revenue, or materially diminishing the sources from which it is derived. The first and principal object proposed to be accomplished, seems to be the creation of means for immediately commencing and prosecuting to its com- pletion, the contemplated Canal to unite the waters of the Ohio and the Chesa- peake ; a work which has long engaged the attention, and called forth the active energies, of many of the most scientific, public-spirited, and patriotic of our citizens. But it will be seen, from the nature of the plan, that, if adopt- ed and carried into successful operation, in this our great national undertak- ing, it may be applied with equal facility and success, to the accomplishment of every other scheme of Internal Improvement, which it may be found the interest or pleasure of the United States to encourage and promote. The proposition is of the simplest character, and may be explained in a few words. It is this : That the Government be authorized, by an act of Con- fess, to issue Treasury Notes , not bearing interest, of various convenient de- nominations, from Jive to a thousand dollars, to the amount of Jive millions , yhich is the estimated cost of the Canal ; to be made receivable at the Trea- 56 sury and different Land Offices, in payment for public lands. That the Go- vernment be further authorized to loan these Treasury Notes , or scrip, to any individual or corporation, who shall subscribe for shares in the Canal, to the amount of such loan, at an interest of three per cent, per annum; that the pay- ment of the principal so loaned, as well as of the interest accruing on it, be secured to the United States, in the first place, by the pledge of the shares for which the borrower shall have subscribed ; and, secondly, by some additional and different security, which shall be deemed equivalent in value to one-fourth of the loan ; that, at the expiration of five years from the date of the loan, at which time it is reasonable to suppose the contemplated Canal, or other work undertaken, will have been completed, and that the revenue from it will be already sufficient to divide a considerable profit to its stockholders, the bor- rower be called upon to repay to the U. States, five per cent, of the principal loan, and the same annually thereafter ; or more or less, at the discretion of the Government, until the whole sum borrowed be repaid ; and that, upon the failure of the borrower, at any time, to pay the interest, or any portion of the principal, at the periods when the same shall become due, the shares which shall have been pledged shall be forfeited, and the additional security of one- fourth shall, in like manner, be made available to the use of the United States. But, as it is believed that the sum of a million of dollars will be as much as can be conveniently or advantageously expended, in any one year, it is pro- posed, that no more than that sum of Treasury Notes shall be annually issued, until the whole amount of five millions shall have been demanded. It forms a part of the proposition of Mr. Law, however, though it does not constitute an essential feature of his plan, that the Government itself shall be authorized to subscribe one-third of the notes or scrip issued. The advantages that would be derived to the public from a participation by the Government in the shares of the Canal, or any other public improvement, are so obvious that it Can Scarcely be necessary to recite them. It would communicate a more directly national character to the work, would inspire a general confidence in its ulti- mate success, and would induce moneyed individuals to embark in its prose- cution. It may be observed, too, that the proposition to limit the direct interest of the Government to one-third of the stock, is not without its attendant advan- tages. Were the Government to become concerned to an extent of shares, which, by the established usages of such Companies, would give it a prepon- derating influence in the appointment of Directors, Contractors, and Agents, there is good reason to believe, that less economy, both of time and money, would be observed, and less attention paid to all the great interests at stake, than if the chief management were entrusted to individuals, or Corporations, by allowing them to subscribe a majority of the stock. Having thus presented to you the plan offered by Mr. Law, in its naked and simple character, we might properly, perhaps, consider ourselves absolved from further duty, and here close our Report without further remark. But we should be doing great injustice to the venerable and truly benevolent au- thor of this extensive scheme of National Improvement, and subject ourselves, in his eyes at least, if not in yours, to the reproach of having neglected an im- portant part of the task expected from us, were we to refrain from bringing into view some of the arguments by which both the practicability and expe- diency of the measure proposed may be supported. It is manifest, even upon the most superficial view of the plan, that its success, admitting it to be adopt- ed and encouraged by the whole authority of Congress, and fortified by the most solemn sanctions of law, must depend, not upon its own intrinsic merits, nor upon the power of the Government to enforce its favorable reception, but upon the good will of contractors, laborers, and owners of the various mate- rials that may be required in the prosecution of the work to be undertaken. It will be for them to say, whether the Treasury Notes issued, shall or shall not be a measure of value ; whether they are or are not equivalent to what they are iatended to represent. If all or any one of these several classes ofthe cournu- 57 nity, upon whom the execution of the work must dev olve, shall refuse to re- ceive, in payment for their time, their labor, or their materials, the Treasury Notes which shall be subscribed, in lieu of the common circulating medium, for shares in the proposed Canal or other work so undertaken, then it follows, as a necessary consequence, that the whole scheme falls to the ground. But it is equally evident that the abortion of the scheme can produce no possible evil either to the Government or to the community ; unless, indeed, the loss of time to the officers of the Treasury, in preparing and issuing unavailable promises, should be so considered. Even this partial evil, however, may be avoided, as it will be very easy to ascertain, after the authority is given, and before any steps are taken to act upon it, whether those concerned would or would not be willing to receive the scrip if issued. But experience will authorize us to entertain a more favorable opinion of the credit due to Go- vernment paper. It is within the recollection of most of us, that the scrip issu- ed for the payment of the Mississippi lands, not only readily passed current at its par value, but was eagerly sought after by the purchasers of the public lands, as being more safely transmissive than specie, and more easily attainable than bank paper, at a period when the Banking System in this country was in its infancy, and when the public faith in the virtue of a bank note was much stronger than it has since been. It must be observed, too, that this scrip was made receivable only at the Mississippi Land Offices, and that when the amount issued once returned to the Treasury, its further circulation ceased. It was, moreover, issued in large sums, not at all convenient, nor designed as a medium of general exchange, but, on the contrary, as a mere evidence of a debt to certain land claimants ; and it was thus converted into an object of speculation among the wealthy, rather than employed as a moneyed resource to the needy and laboring classes. If, with all these disadvantages, the Yazoo scrip, as it was called, maintained its credit, and effectually served the purpose for which it was issued, it will scarcely admit of doubt, that a paper, established upon so much broader a basis of national faith, issued in convenient sums for ready exchange, receiva- ble wherever the United States have lands for sale, and having for its object the accomplishment of a great scheme of internal improvement, in which the whole nation is interested, and which is to call into operation so vast an amount of labor and materials — it can hardly be doubtful, we say, that such a paper will be received as readily, and will as certainly become a medium of circulation, as the promissory notes put forth by the Bank of the United States, so called. Besides, it is a fact, as notorious as it is to be deplored, that the present cur- rency of a great portion of the Western Country, is of that feeble, unsubstan- tial character, that it loses the power of performing its functions, if, by any accident, it wander beyond the narrow confines within which it was forced into being, and maintains its sickly existence. It is in fact scarcely more than a nominis umbra even within its own particular circuit of motion. Any substitute for a medium of exchange so precarious and uncertain in its value, would most probably be eagerly received and entertained ; and it is chiefly within the same circle, that the proposed notes would be required to circulate. The owners of the stone, the lime, and the various other materials which the work would require, and which, but for the demand created by such a work, would perhaps rest for centuries in the bosom of the earth, a sterile and unproductive mass, would readily exchange them for any thing that pro- mised even a possible conversion into more active property. The labor which would be brought into requisition for the work, it is gen- erally believed, would be principally, if not entirely, performed by slaves, the proprietors of whom, being for the most part landholders, in the habit of laying out their surplus profits in the constant accumulation of acres, will make no difficulty in receiving a Government paper by which they can accomplish their accustomed purchases. If those who furnish the materials and the labor, 8 58 ?.re found willing to receive these Treasury notes, it will follow as a matter of course, that all others in any way required to be connected with the work, will be equally ready to give them currency and circulation, and they would thus soon be invested with all the attributes of money. Even the State Banks, it is believed, would find it their interest to encourage and promote the circu- lation of these notes. It would bring additional facilities within the reach of their debtors ; and, by enabling them to pay their debts, restore to the Banks the means of further accommodation, and put it in their power to enhance the credit of their stock, by supplying the ability to pay the usual dividends to their stockholders. Lastly: It is the prevailing opinion of the best informed political econo- mists, that the present amount of circulating medium in the country, is not sufficient for the exigencies of its rapidly increasing population. If this opin- ion be correct, and it is supported by many able arguments, the most of which are, no doubt, familiar to you, we can have but little hesitation in be- lieving, that an additional amount of currency, the soundness of which shall be guarantied by a pledge of the national faith, will be cordially welcomed by all classes of the community. And now, as to the expediency of the plan. We could, perhaps, scarcely furnish even a brief abstract of the arguments that might be urged in its sup- port, without extending this report much beyond any reasonable limit. All the reasoning which has been used, both in and out of Congress, in favor of the general policy of granting the aid of the Government to works of internal im- provement, may be applied with equal force to show the propriety of prefer- ing such a scheme of giving that aid, rather than by adopting the usual mode of appropriating the public revenue, which is seldom more than sufficient to cover the ordinary expenditures of Government. The objection which has been, on many occasions, and with some show of justice, urged against the policy of making the whole nation tributary to Schemes of improvement, 'wfaicti must, in tUe nature of things, be local and partial in their benefits, is entirely removed by the plan here suggested of creating the means. As the success of the plan must depend upon the voluntary judgment which the public may form of its fitness, none will, of course, contribute, but those who expect to partake of the benefits, and who will have a direct inter- est in the profits of the work contemplated. As an interest of three per cent, will be paid upon all the scrip issued and loaned, the National Treasury, in- stead of being exhausted to give undue support and protection to any parti- cular class of citizens, or to any merely local improvement, will, in reality, be enriched by the very means taken to afford that support and protection. In conclusion, we cannot forbear to remark, that whether the author of the suggestion here made be right or wrong in the ground assumed as to the dis- position of Congress, he must indeed be a fastidious stickler for the bare and rigorous letter of the Constitution, who can find, in any fair construction of that instrument, a valid objection to the adoption of a scheme which promises such extensive benefits to his country at large, without encroaching upon the rights, or curtailing the peculiar advantages of any portion of it ; which prom- ises to ameliorate and improve the general condition of all the great classes of the community, without sacrificing or diminishing the particular interests of any ; which promises, in short, to augment the resources of the nation, without subtracting from those of a single individual. We beg to be understood, however, as making this remark, not upon the presumption that the plan, if adopted, must necessarily accomplish all that it promises, .but upon the consideration that, as its failure could bring with it no serious evil, its application, if successful at all, must be successful to an extent which may well justify the experiment. We have the honor to be, Sir, very respectfully, your obedient servants. T. WATKINS, DANIEL BRENT* WM. BRENT. Washington, 12th February, 1827. 59 Mr. Clay, though pressed by various concerns of State, unwilling to let any , proposal for the general good pass unnoticed, whilst he admitted the philan- thropy and general intelligence of the proposer, made a few remarks upon the plan, which are referred to in the following replies thereto. To the consid- eration of the public it is now submitted by the author. To Messrs. Tobias Watkins , Daniel Brent, and William Brent .* Gentlemen : I am much gratified by your report upon my plan, highly flat- tered by the prompt attention of Mr. Clay to the report, and am truly gratified by your ample development of my sketch, 1 and corroboration of it, with powerful arguments, in a perspicuous style. Mr. Clay has shown a desire of discussion, and a very unusual candor in a Statesman ; indeed, I could not have expected that a Secretary of State, overwhelmed with a multiplicity of business, would have condescended to send his written observations, which, of course, being hastily suggested, might expose him to illiberal criticism : far be from me any disposition but that of thankfulness for the opportunity thus afforded me to answer objections, and, thereby, to render my plan more per- spicuous. If I had been convinced of any defects, I . would cheerfully have corrected them, having laid it down as a rule through life, to acknowledge error — thereby proving myself wiser to-day than I was yesterday. 1 will now, as distinctly and as fully as I can, state every suggestion, and sub- join my replies. If the Secretary should, upon re-consideration, find his doubts removed, it is satisfactory to know that he has liberality to avow it, and political zeal and fortitude to promote that which may benefit his nation. This, therefore, encourages me to persevere. First suggestion. “ The Congress, by subscribing one-third to the Chesapeake and Ohio Canal, as far as Cumberland, and by lending notes not bearing interest, fundable in the Land Offices, runs the whole risk of the capital of the Canal, estimated at 5, 000,000 of dollars.** Reply. The Congress has the application of a Convention, which has twice assembled in the City of Washington ; it has also the able report of Mr. Stew- art, Chairman of a Committee of Congress, wherein the sentiments of General Washington are fully recorded ; it has also numerous other reports. If, there- fore, Congress obtained only four per cent, by the dividends of the Canal, di- rectly into the Treasury, the Canal will have benefitted the nation in a variety of indirect ways, viz : By increased exports, and consequently, by duties on imports ; but it would occupy too much space to enumerate them, and I am conscious fehat too many volumes have been already written upon this subject, for me to expatiate upon it. I proposed that only an additional security of twenty-five per cent, should be taken, because, from the great dividends of the New York Canal, and from the estimates of the Maryland Commissioners, and others, I had no doubt that the Canal would yield dividends to pay the instalments, and I was unwil- ling to lock up too much private property needlessly. I also calculated that the stock would be at a premium. Should Congress require more security, they may determine the quantum and the quality ; whether endorsed notes, or stocks of banks, &c. &c. or deeds of trust on estates. Should the Canal yield principal and interest by dividends, the collateral security will of course be cancelled. If the Canal be finished in five years, and one million be annually applied, individuals will have to pay to Government, three per cent., in the following manner : The 1st year, on $666,666 2-3 $19,999 2d do. on do. 39,998 3d do. on do. 59,997 4th do. on do. 79,996 5th do. on do. 99,995 Let us think how many subscribers there will be to raise these trifling sums. 60 Suppose each to subscribe to the amount of 1,000 dollars, there will be 6,666 subscribers, and each subscriber of 1,000 dollars, paying one-fifth of three The 1st year will only have to pay - $ 6 2d do. - 12 3d do. - - 18 4th do. - - 24 5th do. ... - 30 Even before this period, General Bernard and the Engineer Board say there may be some dividends of considerable amount. After the fifth year, not only three per cent, interest is to be paid, but five per cent, of the principal. Some say that the Canal will yield fifteen per cent. ; others say ten ; but I will suppose only five per cent. ; thus the sub. scribers will have to pay three per cent. , diminishing every year, and at the expiration of twenty years, they will become sole proprietors of 1,000 dollars stock, free of all security. It must be admitted by all, that I have estimated a very small income from the Canal, if they consider how the increasing popula- tion, the transportation of goods, coal, lime, slate, lead, marble, timber, &c. &c. must annually augment the tolls. I have, I trust, answered the objection, that Congress will incur risk from the subscribers to the Canal, to whom they lend their land notes, and, on the contrary, proved that the nation will gain three per cent, upon their issues. It is not urged that subscribers will not be found ; there will, I fear, be too many. I took the hint of the plan I have proposed, from a publication of the Brit- ish Government, offering to loan money at three per cent, for subscribers to Canals in Canada, if the subscribers would secure to the Government the three per cent, interest, and the ultimate liquidation of the principal, in mod- erate instalments. Tbe luudable object of tbc Brltiab Government being to divert the commerce from Lake Erie, from the North River, to the River St. Lawrence. If so experienced and enlightened a nation deems it good policy to lend money to subscribers in a distant colony, for which purpose specie must be sent out of the Kingdom, how much more politic, (I thought to my- self,) it must be, for the United States to lend land notes, whereby the value of the land will be raised, a great improvement made in the interior of the country, and individuals will be enabled to subscribe, who have now much property, but no money. The second suggestion is, “ that the Mississippi stock is not analagous, be- cause there was an obvious and certain mode of its absorption, and that it was much below par for a considerable time.” Reply. The mode of absorption I propose, is precisely the same for these notes, as for the Mississippi stock ; the notes are to be receivable for land at the several offices. I own that the discount on the Mississippi stock was at first considerable, because most of the holders resided at Boston, and because the notes were given in large, inconvenient sums, and because they were receivable only in the Land Offices of one State ; but it was soon found that the persons wanting land purchased with specie, or bank notes, the stock to pay for the land, and such was the demand for land, then saleable partly on a credit, that the purchasers ran in debt to Government $20,000,000, which they could not pay. Government, therefore, was compelled to cancel the debt, and retake their land, and the reason assigned for inability of purchas- ers to pay, was, that the Mississippi $ 5, 000,000 of notes had merged in the Treasury, and no more were issued. I argue that there will be an absorption from the following data : The population of the United States now amounts to 15,000,000, and will be doubled in twenty-three years, at any rate in twenty-five years, which is the time allotted for finishing the Canal accounts, viz : Five years to^complete the Canal, and twenty years to pay in the instalments. 61 Of the 15,000,000 of citizens, four-fifths (according 1 to Mr. Mathew Carey and other writers’ statements) are employed in agriculture, or - - 12,000,000 Of these, I will deduct one-half for purchasers of private lands, 6,000,000 6,000,000 I estimate each family to consist of five; there will, therefore, be families, 1,200,000 If each family requires only 100 acres, the quantity sold, at $1 25, will amount to---- 150,000,000 Let it be considered that there are now about thirty land offices, and that the appalling difficulties of first settlers are surmounted, and that steam boats, roads, and canals, encourage emigration to the new States. It is said that 20,000 persons quitted the United States to go to Texas, last year : poverty drove them there. If notes similar to those 1 propose had been in circulation, this ruinous emigration would have been checked, if not totally prevented. The last objection is, “ That Contractors, &c. will not give credit to the paper. What can contractors do with it if the public will not receive it ?” Reply : You, gentlemen, who reported on my propositions, have antici- pated this objection, and I am almost apprehensive that you may deem your reports so lucid and ample, that I may be accused of unnecessary enlargement, and I can only plead the importance of the subject in my justification. Will not the landholders be glad to exchange bread, corn, poultry, meat, lime, stone, iron, &c. now wanting a market, for these notes } Will not shop- keepers be glad also ? And will not the banks also rejoice ? These distant States are now annually impoverished by the sales of land : for the offices re- mit the specie received to the Bank of the United States. The political econ- omist will view this issue of notes, and the accomplishment of roads and canals, as absolutely requisite to promote prosperity. I rely upon the circulation of these notes, not only to effect the proposed canal, but to prove a stimulus to nUmerOUS private improvcmento. One proposition of mine to give additional credit to these notes, is, to take them in payment of the interest and of the principal, as they become due from the subscribers to the canal. This will cause the notes greater circulation, and as the Government may re-issue the same notes in payment to the Canal Company, there will be a complete flow from the Treasury and back again, as the blood is thrown from the heart to the extremities, and from thence back to the great supplier and receiver. It would occupy many sheets of paper to make my readers comprehend how much this new world is retarded in its progress by a want of money. I should be obliged to begin at the mines of Spanish America, and to pursue the gold and silver ores and coins, and to dilate upon the consequences of scarcity and plenty ; and then to give an account of paper money, from its origin to its pre- sent condition. Two committees of Congress sat upon this momentous sub- ject, and neither of them made a report. This plan, humbly suggested, may cause an experiment productive of unforeseen permanent beneficial conse- quences, extending to all the community. My age, and two severe sicknesses, •which have left me much debilitated, deprive me of the hope of being grati- fied by the cheering sight of the result of my plan, and at the last hour I can- not reap any benefit from it. I trust, therefore, that you will consider this as the concluding effort of one who has perhaps read more, and thought more, upon this subject, than any person now in existence, and that my readers will reject all prejudices, and maturely deliberate upon a mode whereby the ob- jects so much desired by all sensible well-wishers to their country, may be readily attained, and without which, I seriously fear, that they will be long postponed. I will not conceal from view, that the specie now paid into the Land Offices may be diminished by the substitution of Land Notes ; but it must, on the other hand, be acknowledged, that the lands will rise in value, as there will be more capitalists to purchase ; namely, the specie holders, and the note holders. An analogous case occurred in India, which I hope to be excused for citing. The 62 Company had a monopoly of salt about forty years ago : the Company’s bonds, bearing 12 per cent, being at a heavy discount, and the salt sales being con- fined to specie, I went to Marquis Cornwallis, the Governor General, and said to him, “ My Lord, the salt sells low, as there are only a few specie holders : would it not be wise to receive the bonds at par, for salt ?” I explained my reasons: He replied, “But how can we pay the army without specie?” I answered, if those who have now specie, collected for the purchasing of salt, should buy bonds, to gain by the discount, the bonds will soon be at par, and then you can easily sell bonds, and thereby obtain specie. Marquis Cornwallis, a judicious, cautious, energetic man, always ready, “ parnegotiisne que supra” complimented me, by saying, that my measures had been hitherto successful, and, therefore, he would meet me half way : he ordered the salt to be sold for half specie and half bonds — the inevitable result was, the salt sold higher, and the bonds rose to par. What millions have been lost to countries by the im- becility of their Financiers, who depreciated the credit of the nation, by giving a preference to the credit of associations of a few individuals, who had no credit and no resources but those they derived from the Governments of those coun- tries. An interesting and a very useful chapter might be written upon this subject. The great desiderata which I had in contemplation, when I submitted my plan to the Committee whom Mr. Clay desired to report upon it, were : First. To show what a solid basis for promissory notes, three or four hundred millions of acres could be made, which valuable acres were now almost des- pised, and which a member of Congress has proposed to sell for 25 cents per acre. Second. To demonstrate that a limited paper currency, consisting of small notes, of five dollars and upwards, might be founded on that land basis, far more secure than the notes of specie -promising banks, and which would, in some cases, be more valuable than specie, for a remittance. Third. To accomplish, by these Land Notes, the C!an«xl which has claimed so much attention, from the time of the patriotic originator, Washington, who applied so much thought, feeling, and labor to it, down to the present day, when all eyes are opened and all minds occupied about it, that the Union may be cemented, and all the objects unfolded in the report of the Committee upon Internal Improvement be attained. Fourth. To give employment to thousands, who are now unproductive for want of the primum mobile , and suffering distress, and who might, by a proper application of labor, not only make public improvements, but also set up fac- tories and mills ; and, in short, convert a wilderness into a populous, civilized, prosperous, and happy country. Fifth. To increase the price of the Nation’s Land, and to sell a double, if not a quadruple, quantity. Sixth. To create a constantly increasing revenue to the nation, from the dividends upon shares in Canals, and from the payment of interest and princi- pal on loans to subscribers : for, if they paid in the Land Notes, this receipt of them by Government would raise their value, and, when received, they might be re-issued in payments to the Canal Company. Thus, it is evident, that, every year, more of them would be flowing into the Treasury, and, by the ex- perienced benefits arising to the community from their circulation, Congress might be induced to apply the same system to making a Canal across the Isth- mus of Florida, and across the Isthmus in Massachusetts, from Buzzard’s Bay to Barnstable Bay, &c. Seventh. To create a capital, in stock, for subscribers, bearing an annual interest, which would increase with the population and commerce of the in- terior, and which would operate as a circulating medium to purchase estates and make improvements. These Canal Shares would be a permanent benefit to the community, and would, in the hands of prudent men, generate other capitals. All writers upon Political Economy agree, that the accumulation of capital is an evidence of the prosperity of a nation. By these means, society 63 is indebted for a change from barter and concomitant indigence, to the state of affluence which modern civilized nations exhibit. Eighth. To unfold to my fellow-citizens their vast resources, and to the world the efforts of enlightened Republicans, surpassing all that Sovereigns have ever performed. Lastly. To divert the attention of impassioned deraagoguesfromparty-spirit to useful works, and to attach the hearts of individuals to their true friends and real patriots, that the harmony of social intercourse might be enjoyed in peace with all mankind. Having answered all the objections presented, and having assigned all my motives for suggesting my plan, I might here lay down my pen ; but men ac- customed to exclaim against what they term rags, may, perhaps, compare these notes to Assignats, and Continental Money. I, therefore, say to them, “ the assignats and Continental money were issued coercively during a Revolution, when the issuing insurgents had no security to give, and no quid pro quo to of- fer ; but that these land notes are to be desired and not forced, and are to be exchanged for land, which is the great desideratum in the United States. The plan I have submitted to superior judgments, is a simple, feasible one, limited in its extent, and to accomplish a particular purpose of the utmost importance, without borrowing from foreigners, and without withdrawing any of the na- tional funds which may be wanted to liquidate the national debt, or to erect fortifications on an extensive frontier. It is a distinct piece of financial me- chanism, which will proceed without obstructing any of the operating wheels of Government, and will accomplish the aggrandisement of our country by a new power, as it were, not throwing operatives out of employ, but providing ways and means to bring men and materials into use. If any defect can be found in the plan, which has escaped my scrutiny, I shall approve of its rejec- tion ; but if no serious objection can be found, I hope that wisdom, philan- thropy, and patriotism, will unite to make an experiment, without being de- terred. by the o.on (-,; millions to 45 : This reduc- tion exceeds fifty-nine per cent. All intelligent writers upon currency “ agree, that, where it is decreasing in amount, poverty and misery must pre- tail. The correctness of the opinion is too manifest td require proof. The * It was remarked by the above mentioned Society, that handicraft traders suffered less, by a diminution of currency, than manufacturers with machinery. The reason is obvious. The former employ few workmen, and do not require large capitals : the latter employ many hands, have to purchase large quantities of raw materials, and give large credits to retailers, who, by not being punctual, cause embarrassments, 75 ujyht wc not to have foreseen that the banks would have been obliged to suspend specie pay- ments ? The following is an extract from his report : “ The evils which have resulted to the community from that suspension «« have been great ; but it may well be doubted whether others of equal mag- “ nitude would not have been suffered, if that event had not occurred. The “ extent to which the currency must have been reduced, in order to have «* avoided the suspension, could not have failed, at any period, to cause great “ embarrassment and distress to the community. But, in a time of war, when the country was invaded ; when the public safety required that the energies of ** the nation should be fully developed, a sudden and extensive reduction of ** the currency, by any cause whatever, would have been fatal. Under such “ circumstances, the demand for currency would have been too imperious to « be resisted. It would, from necessity, have been supplied by the issue of “ Treasury notes.” Again: “In all great exigencies, which, in the course “ of human events, may be expected to arise in every nation, the suspension of “ payment by banks, where the circulation consists principally of bank notes, “ is one of the evils which ought to be considered as the inevitable consequence “ of their establishment .” The sentiments of this able statesman and financier have completely corro- borated my own. When the banks were ordered to resume specie payments, he foresaw the evils which would result from the sudden diminution of bank notes, and recommended to the Bank of the United States an issue from the Treasury of Government notes not bearing interest, which he said would be equal to gold and silver , and his opinion is, I am sure, unaltered. It is only to be regretted that he sacrified so much to delicac}'. If the present Secretary be applied to on this subject, I have no apprehension of an unfavorable opinion. If Congress, at the commencement of the last war, had issued national notes not bearing interest, previous to their advertisement for loans, they might have 84 borrowed at five per cent, as the British did ; and if the sum borrowed had been 50,000,000, the account, at the end of ten years, would have stood as follows : Principal, - 50,000,000 Interest, 5 per cent, for ten years, ... - 25,000,000 75,000,000 But, by the mode adopted, of giving 100 six per cent, stock for 80 in notes, the principal of 50,000,000 amounted to - 62,500,000 And interest at six per cent, for ten years, to - - 37,500,000 100,000,000 Thus there was a loss of twenty-five millions of dollars, and a depreciation of credit. I have not adverted to the saving of interest which would have been gained by the first issue of national notes, nor to the great loss Government sustained by receiving District and State Bank notes, which were at a great discount be- yond the sphere of their credit. It may be urged that Treasury notes bearing S\ per cent, interest, were at a discount, and, therefore, those not bearing interest would have been still more depreciated. The reason why the former were depreciated is obvious : contractors and others offered these Treasury notes in large sums, and they therefore became saleable circulands, and not a currency. It was in vain to say to a bank, “ you ** have suspended specie payments, and these Treasury notes are intrinsically "more valuable than your notes.” Their reply was, “ as long as Congress " chooses to depreciate their own credit, and to exalt ours by giving 125 six “ per cent, stocks for 100 of our notes, you must also sell Treasury notes at a tf similar ratio. We must avail ourselves of this preference.” ShOUlU Congrcoo in.vootigfn4-o tKIe Impoi+anl- Bllhjort upon wHich I have ath dressed you, gentlemen, they will shudder at the dangers and evils incident tu> a specie basis. 85 ADDRESS OF MR. THOMAS LAW, Jit a meeting held at the City Hall, Washington, on the second Jlpril, 1824, on the subject of a National Currency . Gentlemen . You have been invited here, not to consider our situation par- ticularly, for, perhaps, we suffer less by scarcity of money than any other com- munity on this side the Susquehannah. Indeed, a stranger, on witnessing our gaiety, said, ‘ ‘ Non equidem invideo — miror magis.” Our having winter plays for the first time our lectures on astronomy, elocution, and mineralogy ; our exhibitions of paintings, our crowded streets, and our new houses, evince that our city is rising. This, indeed, is the inevitable consequence of its being the metropolis of the nation : for it must bear a proportion to the nation’s popula- tion, as the axle of a wheel must bear a proportion to its circumference. But* having {received unwelcome tidings from almost every quarter, and we our- selves being sufferers, we felt it our duty to propose a consideration of the subject, and hope to have the co-operation of the best informed to prepare a memorial to Congress. We were also induced to take this step on witnessing a zeal for internal improvements, and remarkable abilities, in this first Congress after the new census. Rut why apologize ? Unfortunately, finance is not an every day topic of conversation ; nor is political economy, as it ought to be, a branch of science, taught in our universities. Nor has any one the advantage which our citizens possess, of having access to a very copious library. It is for you to decide, after receiving the information we have to communicate, whether we have occasioned you useless trouble. A memorial is the best mode whereby we can claim the attention of Congress to finance, which is by many deemed an intricate subject, and has been denominated a modern Eleusinian mystery. Moreover, the old adage, what is every body’s business is nobody’s, has alrea- dy been too long experienced. More than one member of the House of Re- presentatives has given notice of an intended motion to recommend the pecu- niary embarrassments of the nation to the notice of Congress ; but diffidence, dissuasion, or the urgency of some other business, have caused a postpone- ment. Longer postponement threatens evil consequences, and will retard the accomplishment of the Potomac Canal — an object which Washington, the Father of our Country, suggested and patronized, and mentioned in his will : “ Feeling the ruling passion strong in death.” I will now proceed, and briefly submit to you my propositions. If prefera- ble ones are given, I shall rejoice, and the meeting of this day will be immor- talized. Perhaps a brief sketch of the influence of money on society, may not be uninteresting. Money first gave a motive to economize ; for, as money represents all other kinds of riches, to amass money is to possess the means of obtaining every thing. Interest for the use of money, was introduced with money, and this has been another motive to accumulate loans in grain, &c.; before, the introduction of money could not effect the purposes of money, and thus, men of genius and of enterprise were useless, who now by loans, create capitals, and employ the industrious. Mechanic arts were, of course, in the most languid state ; and commerce was, literally, nothing. Civilization, therefore, chiefly arose from money. Credit, in modern times, greatly sup- plies the place of capitals ; and paper, that of specie. As property and pro- 86 Auctions increase more and more, money is wanted. As money iacreases, im- provements of all kinds, and productions of every description, are increased ; and low interest, the soul of commerce, is produced. The mines of America have caused the rapid advancement of Europe. Even the consumption of the precious metals is so increased by the use of plate, watches, gilding, &c. that the supply ought to be constantly augmented in civilized nations. Mr. Storch, an able Russian author, who has published six volumes on political economy, in his chapter on money, terms it the marvellous instrument, to which we, in a great measure, owe our wealth and civilization. The insufficiency of the quantity of specie produced from the mines to sup- ply our wants, having been experienced by all nations, they have introduced substitutes for the precious metals ; but as despotism could not have public confidence, the paper issued was accompanied with coercion, and consequent- ly with depreciation. Great Britain, the only free nation in Europe, with a re- presentative Government, has shewn what paper money can perform. She has given an experiment of infinite importance to mankind. When our States were colonies, the governments of the states were con- stantly having recourse to paper money, and they were always complaining, that the king, by prohibiting it, counteracted their advancement. Franklin, in his own memoirs, gives decided arguments from his own ex- perience, in favor of money ; it is an interesting part of his biography, and will, I hope, be noticed by our printers. I will now confine your attention to measures of a very late date. The following is an extract from Mr. Madison’s message : “ It may become necessary, to ascertain the terms on which the notes of the Government (no longer required as an instrument of credit) shall be issued upon motives of general policy, as a common medium of cir- culation.” In consequence of this, a committee was appointed ; the chairman was a man of pre-eminent abilities, and I cannot assign a reason, why the committee never made a report, but that the bank of the United States was expected to be a panacea for all poonnioiy pmKavi'o co mentis When the Committee was appointed to deliberate about an uniform national currency, I stated, that they had a question to investigate, of more importance, than any one which had been discussed since the formation of the Constitu- tion. At that time, I used my feeble efforts, and uttered my Cassandrian predic- tions. Mr. Crawford has said, that “the ardor ol enterprise has been check- ed, and the productive energies of the nation seriously affected * and that there is no recorded example in the history of nations, of a reduction of the currency so rapid and so extensive, and that but few examples have occurred of distress so general and severe.” Have we recovered from our distresses since his report ? Look at Mr. Adams’s statement of our manufactures ; it is an omnium gatherum enumeration of every trifling article, and yet the whole amount is only $32,000,000 ; in Great Britain it is tenfold : yet there are not more hands there, applicable to labor. Look at the Secretary of the Treasu- ry’s unwelcome statement of the amount of stocks held abroad. Mr. Mathew Carey estimates all our debts, to amount to $ 55, 000,000 : calculate only the annual interest on this. The United States’ Bank sent to Europe our Govern- ment’s 6 per cent, stocks, and purchased gold and silver to the amount of $7,311,750, at an expense of $525,297. Where are they? gone back again beyond the flood. Our population has increased ; does this fluctuating, evanescent, hie et ubi- quae article, specie, increase amongst us? It is called a basis for bank notes, by Bullionists; one would think that some profound statesman, knowing the evils it would produce, had thus nicknamed it in ridicule. Even now, in the nine- teenth century, bank notes, founded on this melting disappearing basis, are called a solid substantial currency so do men in the fever, called a calenture, plunge into the ocean, deeming it a green field. I will now briefly shew ths fallacy of our expectations to have a sufficiency of specie. Our population will increase, in 23 years, ten millions, and, if only three dol- lars per head be requisite, we must import the amount of 30,000,000 There is, in every country, an annual loss of specie, and a con- stant consumption by melting, and also a conversion of it into plate, gilding, &c. Baron Humboldt estimates this, in France, at 7,273,756 of roubles per ann. I will suppose our consumption only to be $2,000,000 ; we must therefore import, in 23 years, to keep up our stock, ...... 46,000,000 If we send to China, Bengal, &c. (which is a most moderate calculation,) only four millions annually, we ought to import, in 23 years ...... 92,000,000 Here is a sum of $ 168,000,000 which, divided by twenty-three, amounts to seven millions, to be annually im- ported, by a favorable balance of trade, over and above our increased demand for consumable articles. Can we expect this ? Is there any reason to justify the slightest hope ? By the Secretary of the Treasury’s report, the balance of trade is against us, and our exports of specie exceed our imports, and I have shown what debts we have to pay. A spirit is excited to make public improvements, and we have meetings, and speeches, and memorials, and sur- veys, and maps, but where is the sine qua non ? I will not dwell on this mor- tifying subject, nor will I arouse your sympathies by a detail of miseries, the contemplation of which has shattered my nerves. I will rush to an elucidation of the remedy, and prove that we may prosper. It is the enviable happy lot of the citizens of the United States, that despot- ism cannot perpetuate error, or suppress truth ; consequently, when expe- rience teaches or wisdom inculcates an improvement, we will adopt it to pro- mote prosperity, to strengthen our independence, and to cement the Union. It is also our pleasure to know, that genius, knowledge, and patriotism, are collected annually fiv>m <*u ^uaaws or me uniuu, in mis city, to further the general interest, and to encourage every exertion for the public welfare. We may therefore have perfect confidence in finding a favorable reception for any proposition that has this for its object. That every one may have a clear comprehension of the system proposed, l will explain its mode of formation, and its operation, from beginning to end. First, the Congress, with the usual sanction of the President, may appoint a board to make national notes. The number of the members of which this board is to be composed, the kind of paper, and the stamping, &c. for the notes, are matters of detail, not to be dwelt upon here. I, however, will merely mention, that forgery can be prevented. The purport of the note will be, that it is receivable for five or ten dollars and upwards, (whatever the denomination of the note may be,) in all payments to Government for duties, taxes, debts, lands, &c. and that stock bearing four per cent, is deposited in the hands of the board, to the full amount of the notes issued, which any hold- er of the notes may receive, at any time, in exchange for notes, and that the interest of the stocks is to be paid in specie, if required. Congress is to pass a law that the board must never issue any notes, without the deposite of an equal amount in four per cent, stocks, and in consequence of orders from Congress. If Congress chooses to take shares in canals, to lend to States, or to give stocks to them, or to make national canals or roads, or to lend or to sell notes to banks, these accounts of issues and of profits must be kept separately. The board is annually to report to Congress, for publication, to give confi- dence to their fellow-citizens, the amount of notes issued by this and that or- der, and the amount of stocks received to correspond with the same, and the amount of notes returned and remaining in circulation. The question is, will these notes, so receivable, be current at par ? I ask, what gives currency to a dollar, but the receipt of it by Government ? Adam 5mith has truly said, that, if a sovereign issued paper money, and insisted 88 upon being paid his revenue in these notes, if they were not in plenty, those having to pay would be obliged to give a premium in gold and silver to obtain them. If there should be any doubt about this. Congress may authorize its land offices to receive them at 101 for 100. This, however, is totally unne- cessary. That this increase of money would augment the sales and raise the value of land, is self-evident, and the great objection is, that this drain of the national money will be apt to occasion a scarcity, unless Congress, by salutary appropriations, occasions an efflux equal to the influx, to diffuse again this vi- vifying circulation. The nation has four hundred millions of acres of land, and our population increases rapidly. Now, the increase amounts to 300,000 per annum, and will soon be 500,000, and will proceed in a compound ratio. Sup- pose half the 500,000 settle on national lands, and that, computing five to a family, every fifth man, or fifty thousand families, purchase 100 acres each, the sums received, at the average of a dollar and a half, will amount to $7,500,000. At first, of course, the receipts will be much less ; but you must all admit that, as Government gives the capability, or wherewithal to purchase, the sales must naturally increase. When purchases of public land were allowed on credit, the purchasers ran in debt 20,000,000, and the Government agreed to take back the lands on the simple true statement of the purchasers, that there was not money in the country to pay for them. Ex nihilo nihil fit, is an old Roman axiom, which all might have foreseen would be exemplified at the land offices. Mississippi stock, although receivable only for Mississippi land, and not in payment of revenue, was at 98 ; bank notes, in Great Britain, were re- ceived at par, and continued so, during a perilous, expensive war. I cannot, therefore, doubt, that these national notes would be, (to use the Secretary of the Treasury’s words,) equal to gold and silver. But, say bullionists, these notes will not be received like gold and silver abroad ; and in that, I reply, consists the great superiority of them for a home circulating medium. Congress may issue the requisite quantity to stimulate industry and to lower the rate of interest to five per cent. Here I would quote the words of Mr. Grey — but I wm nave ms valuable chapter on paper money printed separately — the continuance of this national money at home will prevent variableness and scarcity. Those who have property will be enabled to sell it for its value ; men of enterprise or of ingenuity will be able to borrow ; bonds and mortgages will again be received ; parents will obtain the means to portion out their sons and daughters ; suits will diminish ; and lenders will be sorry to be paid — for, when legal interest is six per cent, and market interest is five, lenders are glad to continue bonds on the punctual payment of legal interest. Again, I say, that the non-receivableness of our national currency abroad is the great desideratum to prevent fluctuation in va- lue, and all the miseries which our most useful citizens now suffer. This is the consummation devoutly to be wished. But, to attack me on the other side, the bullionist exclaims. Congress will issue to excess, and the national notes will depreciate. I answer, that this is an impossibility ; whilst they pay the interest of their stock, the board will state annually the quantity in circu- lation, and the rate of interest — and only when it falls to four per cent, will the notes be exchanged for stock : so that Congress may stop issues to pre- vent applications for stock. It is self-evident the notes cannot exceed the demand for them, because all excess will be changed into stock. If stocks be taken. Government must tax to pay the interest, and Congress will not adopt taxation, at which they shudder, and which is so unpopular ; they, therefore, will stop issuing before the notes fall so low. At any rate, this permission of the note holder to convert his notes into stock, will prevent superfluity. I deem this a mathematical, incontrovertible demonstration, that there can- not be an excess of notes. It were needless to explain here, that notes or money every man desires to get rid of for something more valuable ; but stocks are locked up. To illustrate my position by occular demonstration, as it were : Imagine, gentlemen, a long large tube, with an orifice about the centre, or half way. If I pour a liquid into this tube, will not the liquid rise 89 till it flows out at the orifice ? and is it possible for me to make the liquid rise higher, and up to the top, and to overflow the brim ? In like manner, is it not equally impossible to make notes fall below four per cent, if the owners can convert them into four per cent, stock? The notes issued by the Govern- ment from the board will thus be returned to them, to be locked up as ex- cessive, until, when restored to the board, an increasing demand causes their being re-issued to supply the wants of a people increasing in numbers and in capitals, and requiring a proportional augmentation of the circulating me- dium. I am anxious to be clearly understood on this simple point : for, by this mode, it is evident to me, there may be always a sufficiency, without the possibility of a superfluity of any consequence, and, consequently, an invaria- ble standard of value may be obtained to prevent the embarrassments and de- preciations of property, to which a young country is exposed by the fluctua- tions in the quantity of gold and silver. All allow that the banks must sus- pend specie payments in war. Is not peace, then, the time to try a safe ex- periment to prevent this evil ? Had I the option of having 20,000,000 of specie dollars to be showered from the clouds, or the same amount to be issued from the board, from order of Congress, I should prefer the latter, because they would not, like an influx of specie, cause the commencement of profitable undertakings, and then dis- appear, and produce distress. The quantity of money required is very tri- vial, compared with the amount of circulands. The Bank of England could never keep out more than thirty millions to about ten thousand millions of cir- culands. Our property, belonging to individuals, has been estimated at half this sum. The Government might, gradually, with great benefit, throw into circulation as many dollars as the Bank of England did pounds sterling. But, to proceed with the probable objections to the national notes. A third man will rise and say that a national currency will have an unfavora- ble effect on exchange with other nations. This is impossible. It may, how- ever, cause a favorable exchange, by augmenting our exports, in consequence of increased m^K; n and inrliictrv- WTptv*. Atrain. I must flip lumi- nous author. Grey, who is most satisfactory on this head. Great Britain, by paper money, increased her exports from £23,000,000 sterling, in 1797, to £44,000,000 sterling, in 1815. Thus it took a century to produce a given amount, which ''was nearly doubled in 18 years by paper money. Amongst articles received in return, such as raw materials, the precious metals also came annually, till they became superfluous, and only fit to lend to foreign nations, to make them tributary. Hear the words of Lord Castlereagh : “ A war for existence was then pending ; the 3 per cents, had fallen from «« 98 to 48, and all the property of the nation had declined in the same pro- “ portion, so that individuals possessing property, in 1793, worth 20,000,000 “dollars, had their fortunes reduced, in 1797, more than one half. The na- “ tion found immediate relief from this measure .” Mr. Percival, the Chancel- lor of the Exchequer, afterwards said, ‘ It is equally consolatory and flatter- “ ing to the English nation, and not less true, that we have overcome those “ alarming dangers which the predictions of certain persons announced in « 1797, on account of suspension of payment in specie. The nation has ob- “ tained, since 1797, a greater degree of internal prosperity and external “ force, than at any preceding period.’ Lord Castlereagh, subsequently to this, observed, * In this war, whilst our exertions by land and sea have, in “ extent, surpassed all former efforts, the country has risen in manufactures, “ internal improvement, revenue, and commerce, with a velocity which has “ never been experienced in a period of profound peace. In the American ‘‘war, its inevitable termination might be calculated from the decline of our “resources ; in this war, we feel that our resources are augmenting, and that “there is no necessary limit to our exertions, in point of time, so long as the 4 ‘ injustice of the enemy shall leave us no other rational choice but perse ve- “ ranee i* the contest. What is this owing to ? Principally to the Bank being “ able to doits duty by the country, instead of ruinously (I mean as far as con- 12 90 ** cerns the ;nterests of the public,) at every moment of temporary pressure “ or alarm contracting its issues, to protect the establishment itself from being “ drained of gold ; they are enabled to support public credit with a steady “ hand|; the productive labor of the country, which is its true and only wealth* ** is not only kept up, but enabled to extend itself ; the taxes are collected “ with facility, the loans are raised on moderate terms, and the whole machine “ proceeds without betraying a symptom of decline.” Why do her manufactures exceed ours ten fold, but because she has more of the primum mobile ? A fourth person will hazard an opinion, that the Banks will be adverse to the National circulating medium. This, I reply, they cannot be, if they have common sense ; and, I add, that they, on the contrary, unanimously desire it * for they know the National circulating medium will not evanesce to be melted* or hoarded, or carried abroad. 'No. A voyage to China, or an unfavorable balance of trade, cannot affect them ; their profit is in keeping notes out, and they lament, as stockholders and as individuals, the necessity to curtail — to re- duce the number of notes out — to prosecute, and to sell property for half its value ; which depreciation is created by their reducing the quantum of cur- rency in consequence of a little specie being exported, whereby the means of purchasing are of course reduced. The Patriotic Bank, which I established as an experiment, set an example which ought to have been of service. Its capital was 250,000 dollars, and the whole was subscribed in Government 6 per cent, stock. This Bank would not falsely promise to pay in specie, but it bound itself to redeem its notes with stock, at the price of the day. It discounted at 5 per cent. Its capital gave 6 per cent., on $ 250,000, .... $ 15,000 And interest at 5 per cent, on the same sum discounted, was 12,500 So it received 11 per cent., or - - $ 20,500 The i-^»" >iroKf> nf /»rmrsf* tn he deducted. ( will not here show how it has been necessitated to sell its stock, and recall its notes, out, since the order to pay in specie, but I will mention one fact to corroborate my reasoning : Not one person applied for an exchange of notes for stocks — they all knew the basis of our notes were Government stocks, and the basis of the Government stocks was the property of the nation, amounting to 5,000,000,000 dollars, and which would soon double. Excuse this allusion to a particular case : it was so apropos I could not reject it. Lastly, some person who avoids the trouble of thinking, will say, “ I ob- ject to a National circulating medium, because I remember Continental money, and have heard of French assignats. Such a man resembles the one who can- not read, and who, seing a poem, a history, an account, a bond, a will, a novel, or a treatise on finance, should call all the leaves assignats, because written on paper. If there be blunderheads, who cannot make a distinction between co- ercive and voluntary, revolutionary force and regular government, it were waste of time to reason with them. The man who is under the icfluence of hydrophobia, startles alike at wine or water. And thus he who will not, or cannot, discriminate between a National note now, and a Continental one then, I cannot argue with, and I can almost envy him his exemption from thought. “ For oft unhappy is the man, whose mind “ Leads him to think and act beyond mankind.” It may be asked, why the Government stocks, which are to be deposited, are not to bear an interest of 5 per cent. ? The answer is, that interest is so low in Great Britain, that, with national notes, received for goods, the mer- chants, by exchanging them for stocks, would take away 5 per cent, stock, and thus occasion an augmentation of our foreign debt, already too large. Now, they will not take away 4 per cents., purchased at par, because there must be commission and expenses deducted from the 4 per cent. It may be asked. How will this National circulating medium be thrown into circulation ? 91 It is a pleasing and a new embarrassment to be at a loss to appropriate sur- plus funds. I answer — Let the Government make canals and roads, and lend to each State, at 2^ percent., or give to each State a certain sum, according to its popu- lation or extent of territory. Let Congress, also, subscribe to canals and roads, See. undertaken by companies, to obtain an income, without taxation. Con- gress will readily discover, in its wisdom, the best means of employing this su- perfluity. That all these objects may be judiciously pursued, there ought to be a Home Department formed, to receive applications ; to collect and arrange materials, and to prepare reports for Congress. This Home Department is our great want. Without it, there must be imperfect information, with regard to inter- nal improvements. When a Home Department shall be formed, our views will expand, our improvements will be systematised, and a career will be open- ed for public advancement which few have contemplated. The plan I have proposed is a novelty. So was the planetary system ; and Galileo was imprisoned for asserting that the earth circumvolved. The circu- lation of the blood I may call a modern discovery, by Harvey. The introduction of steam engines, and their application to boats, and Ark- wright’s machinery, are of our days ; the Constitution of which we boast, and which unites, already, twenty-four States, by a General Government, like so many planets revolving round the Sun, is the invention of our fathers — shall their descendants make no improvements in the mechanism of society ? Great Britain, it is said, has resumed specie payments, but the Bank, after it repre- sented itself ready to do so, was long prohibited by judicious statesmen ; and it is now ordered in a qualified manner, when specie is not wanted, and paper is preferred to it. Were we in a similar predicament, we should not now be assembled. There is no analogy between the two cases. Mr. Grey, after expatiating upon the instantaneous enriching influence of paper money, an d after corroborating his reasoning with numerous exhilarating facts, concludes : Our Government, our Legislature, and merchants, should rise above thejprejudices of poor and unenlightened times, despise the declama- tions of the ignorant or ill-designing, and examine facts for themselves. Britain has long led the way, in all the improvements of commerce ; they ought to make her lead the way in this important one, and show other nations that she first knew the true nature of home money , and first adopted measures that na- turally spring from such a knowledge ; she will no longer clog her commercial transactions by a connexion between paper and metal money, which can only tend to counteract the enriching and improving effects of the former, but leave it to be regulated, as it ought to be, entirely by the demand. The re- striction (of specie payments) prevents this impoverishing connexion ; it ©ught, therefore, to be continued, and not as a temporary regulation, extend from time to time, unless, perhaps, to enforce what, however, does not seem to be wanted, an attention to prudence. The regulating power of the demand is, indeed, sufficient ; and, in order to promote the issue of paper money, to the full amount of the home exchanging circuland, exclusive of that called change, it ought to be left to the National Banks to sell gold by weight, for their notes, only when it suited their conveniency. This should be a standing law, in money, with us, as long as we are a nation.” Can there be more decisive, emphatic expressions ? I wish every member of Congress had extracts from this luminous author, ©n the happiness of na- tions, laid on his table. Were patriotic individuals to subscribe only 25 cents each, the chapter on paper money could be printed for general perusal. I rejoice that I entertained the opinions of Mr. Grey, long before I perused his valuable work ; nor shall I ever regret my exertions, for several years, to call the attention of the public to this important subject. Our exportation of Government stocks, of United States* Bank stock, of State stocks, of Bank stocks, and of specie, and the low state of our manufac- tures, the depreciation of property, and our inability to make improvements, all proclaim that our financial measures are injurieus. Wc have relied upon 02 the precious metals for several years, and our expectations have been disap- pointed. Shall we not make an experiment of another medium ? In the de- cline of life, I make this last effort for the benefit of the United States, and by the example which it will afford of prosperity and happiness for the benefit of every nation. If we have any latent enemies abroad, which I hope we have not, and which I am sure we ought not to have, the development of our vast, and al- most inexhaustible resources, will make them hesitate about entering into hostilities with us, and thus, according to the President’s excellent message, we shall prevent war by being provided for it ; and this, to all the enlightened and philanthropic freemen, whose feelings are in unison with ours, will be a source of heart-felt consolation. Were I not awfully impressed with the conviction that our prosperity, nay, I must add, our Union, depends upon a cementing paper currency, to bind us by public improvements, and by prosperous employments, and by the com- mand of adequate resources, I would not have solicited your attention ; nor would I thus expose myself to criticism, if I believed that my reasoning were refutable. Discussion will elicit light, and the crisis is most favorable ; I will not say that I was unprepared, but I regret that I had only two or three days to collect these suggestions ; that they may be deemed useful, is my great de- sire, not for myself, but for these United States. On the first introduction of the system, I would limit the amount of the national currency to twelve or fifteen millions ; there were 19,700.000 treasury notes in circulation during the war. Time will soon put to the test the fallacy or correctness of the sys- tem ; and, in proportion as the benefits derived from it are felt, further issues maybe made. In the first instance, it is of importance that the experiment — (but why should I call it an experiment ? since it has been confirmed by ex- perience,) should be limited to a small sum, lest the apprehensions of the timid should be violently excited by too bold a commencement. The sum I have proposed, being a^uai to tbo fvfnbnKia pop'datinn nf tbs TTniff'd states at the present time, gives one dollar a head for each person, and renders it easy to make a distribution of the sum among the States, upon the equitable principle of their respective numbers. In addition to this general apportionment among the States, I would recom- mend that loans should be made to Road and Canal Companies, and particu- larly to the Potomac Canal Company, as the early accomplishment of this connecting line of communication between the East and West, is not so much of local as of national importance. I cannot say with precision what amount of national currency will ultimately be found necessary for the necessities of the community, nor what quantity of specie is required for a given population. In Great Britain, to a population of about 15,000,000, there were, in 1793, about twenty millions, and in France, according to Mr. Neckar, from accurate data, 2,200,000,000 of livres, or 407 millions of dollars, to a population of 25 millions. This would give 16 dollars per head. But, as the operations of industry, in an advancing state of society, become more active, substitutes for specie are introduced from necessity by society itself, without the intervention of Government, in the shape of bonds, bills of exchange, checks on banks, &c. The addition thus made to the cur- rency of the nation, admits of no precise calculation. If the tariff now under discussion before Congress should be established, an augmentation of money will be still more requisite. Baron Storch states, that the accession of Russia to the continental system maintained by France, and the prohibition to import manufactures, by forcing the Russians to manufac- ture for their own consumption, caused speculations in a quantity of new en- terprises, whereby the interest of money was made to rise : for the capitals which were before employed in old enterprises were drawn to the new. The same writer shews that, by lowering the rate of interest from 5 to 4 per cent, a borrower can raise 1,250 for trade as a capital for the same interest which he before paid for the loan of 1,000, and thus his business can be in- V 93 creased one-fifth. He also makes the following judicious observations : “As interest falls, productions are amplified, and a number of enterprises are suc- cessively undertaken, which one would scarcely think of. Thanks to low in- terest, agriculture is encouraged, and manufactures employ greater capitals, and commerce opens new branches, from which it was before excluded by high interests ; and thus the industrious gain employ by a government mea- sure, although not by expenditures for which they would otherwise be taxed.” Tie illustrates this by stating that, in Russia, where the interest of money is 8 per cent, if a Russian only gains, by a trade, 5 per cent, he must leave it off, whilst, in Holland, where interest is 3 per cent, the Dutchman would be a gainer of 2 per cent. If we had a sufficiency of money capital, thousands and tens of thousands, now idle, or only temporarily employed, would be augmenting productions by constant work, and the compound ratio with which capitals would increase by an economical people, would surprise the world. This national currency will be preferable to gold and silver in all cases where payments or purchases are to be made by a person residing at a dis- tance from another. Suppose, for instance, A, at New York, wants to pur- chase sugar at New Orleans ; by sending this national currency to B, it soon comes to hand at the latter place, with only a little expense of postage ; where- as A would otherwise be obliged to employ a carriage or a vessel, and there- by lose time and incur expense. Merchants will derive great advantages from this. The Government also may, by this national currency, greatly aid the operations of the United States’ Bank by facilitating distant disbursements. A small diminution in the quantity of the circulating medium of a nation has a great effect on the price of estates, houses, and fixed property, because, if 100.000. 000 be sufficient for the interchange of 5,000,000,000 of circulands, a diminution of 10,000,000 will reduce the value of the latter more than a tenth : for, as Lord Lauderdale has well observed, a small scarcity makes a great rise in price, and vice versa, when Great Britain had exported about 25.000. 000 in specie, the circulands in the nation, estimated to be worth about §10,000,000 in 1793, were reduced to half their value in 1797. Thus, we find complaints amongst ourselves of depreciation of value ; and in an es- timate from the Senate of Pennsylvania, we find that real estates, assessed in 1815 at 316,633,889, were depreciated one-third in two or three years by a reduction of the circulating medium. Can there be a stronger proof of the importance of our subject ? Although I fear that I have too long trespassed on your patience, I cannot forbear recapitulating, before I conclude, all the advantages which will flow to the nation from the adoption of this or a similar measure. Property of every kind will rise in value. Industry, now drooping, will be revived and stimulated. Manufactories will be established. Canals and Roads will be constructed. Our stocks will rise to a par equality with those of England, whose 3 per cents, are now 93, and ours are but 75. Exchange will thus be improved. From the ready reception of national notes in the transaction of business, banks will not fear demands for specie ; will consequently cease cur- tailing, and thus credit will become extended. By the ample resources which it will afford to the Government, it will cease to be influenced by the fear of appropriating money for national objects of improvement. In short, our po- pulation, almost equal to that of Great Britain, will present the same scene of wealth and power which she now exhibits, and which is attributable to the successful operation of the system which is now recommended. Can I, then, suppose that Congress will treat with indifference our memo- rial, and neglect the opportunity of entering upon the investigation of a sub- ject of such vital importance ! It is true that the Session is now drawing to a close, hut the principle of the system is simple, and its details far from intricate. A short week’s attention to it would be sufficient to produce a con- viction of its correctness, and afford time enough to mature the best means for its establishment. It does not, as in the case of the tariff, which has occupied 94 s® much time, require a minuteness of inquiry, and a reconciliation of conflict- ing interests. We may, therefore, confidently hope that the first session of the 18th Congress will be associated in the minds of every one with the hap- piness and glory of the nation, by the establishment of a National Currency. The following is the Memorial of the Committee. To the Honorable the Senate and House of Representatives of the United States , in Congress assembled. The undersigned, a committee appointed in behalf of sundry citizens of the United States, assembled at Washington, most respectfully represent : That it is the enviable lot of the citizens of the United States to live under a Constitution which allows to all the free expression of their opinions upon every subject of national interest. When no despotism interferes to suppress truth, error can never be perpetuated. When, therefore, experience has taught, or reason points out, any improvements in the great science of legisla- tion, by which our prosperity may be promoted, our independence strength- ened, and our union more firmly cemented, we look with confidence to its adoption by a liberal and enlightened Government. It has been generally admitted, that, since the peace in Europe, the United States have not advanced in wealth and prosperity, with a rapidity in any de- gree proportioned to the vast advantages which they enjoy in soil, climate, population, and laws. Your memorialists respectfully suggest their belief that the cause of this slow progress is to be found in the undue proportion which the property of the nation bears to the amount of its circulating medium, or money ; and in tne sudden diminuduu oftke amount of that circulating medium. It is one of the first principles of political economy, that the prosperity of a nation depends upon preserving a just equilibrium between the whole of its property and the medium by which that value is exchanged. Whenever this is suffered to fall below its due proportion of the whole property of the nation, in the same degree is its industry checked, are its public improvements aban- doned, and its prosperity suffered to decline; and the evil is infinitely aggra- vated if, from any cause, the sum of money-capital with which a nation has been accustomed to operate, be materially diminished. Upon a full investigation of this important subject, your memorialists have been brought to the conviction that this requisite equilibrium can never sub- sist in any nation, for any certain period, while gold and silver, or any other article of trade and commerce, are used as the sole materials of money. The quantity of the circulating medium, or money, of any nation, which is formed of such material, must always depend upon the demand for that material by other nations. No nation, therefore, can be properly said to be independent, so long as it uses a circulating medium, or instrument of exchange, which, at any time, may be withdrawn from it at the will and caprice of a foreign nation, or by the complex and irresistible operations of trade. Your memorialists, there- fore, regard it as no less essential to the permanent independence than the con- tinued prosperity of a nation, that its money should be so constituted as to afford no inducement to the commercial cupidity of other nations ; that it should be, in other words, a home money, confined to home circulation. The establish- ment of this sort of money, adapted to the purposes of home circulation, upon an undoubted basis of credit, in addition to the more diffusive and permanent effects it would produce upon the happiness and prosperity of the nation, would immediately relieve the specie-paying banks from the pressure that cramps their operations, and would enable them, in some degree, to fulfil the original object of their institution. This beneficial result was expressly con- templated in the letter of the Secretary of the Treasury to the Bank of the United States ; whose recommendation we are happy to be able to cite, among other encouraging instances of the approbation of the system on the part of il- lustrious and practical statesmen. Mr. Madison, conscious that some circulating medium was requisite to stimu- late industry, as water is required to cause the wheels of machinery to circum- volve, recommended, in his message to Congress, the consideration whether a paper currency, founded on national faith, might not be successfully introduced. A committee for this purpose was accordingly appointed. The Secretary of the Treasury, about the same time, in the letter above alluded to, urged the necessity of issuing a national currency to prevent the evils which he truly anticipated would low from too sudden a reduction of specie payments, and, in cogent arguments, proved that the national currency would possess all the credit and value of gold and silver. In a subsequent report, after the resump- tion of specie payments had begun to produce the deplorable effects which the Secretary of the Treasury had predicted, he remarked that the nation was suf- fering under great distress ; that the reduction of the currency had checked the ardor of enterprize and paralyzed the energies of the nation. Notwithstanding this high and united official recommendation, no remedial measures were, in consequence, adopted, although the pecuniary embarrass- ments of the nation have been increasing from year to year, to a degree that leaves no hope of relief, if the present specie-based paper system be perse- vered in. In this painful and desponding predicament, a numerous and respectable meeting of our fellow-citizens have appointed the undersigned a committee to solicit the attention of your honorable bodies to the pecuniary embarrassments of the nation at large, and to suggest for your consideration the expediency and necessity of introducing a home money in aid of specie, on a more truly solid basis, which will be less liable to fluctuation, and constitute the nearest approximation to the great national desideratum; a permanent, invariable stand- ard of value, not capable of being affected by the balance of trade. Being impressed with tKc oonwiion tw il;» object Is attainable, the undersigned have been instructed to present this memorial to the enlight- ened Representatives of the nation, with a full confidence that an expanded view will be taken of this important branch of political economy, and that the investigation will lead to the exhibition of a successful experiment, which wilt fiirnish a beneficial example to all nations, and, by prosperity, form an impor- tant era in the history of their own country. All which is respectfully submitted. THOMAS LAW, ) WALTER JONES, >Committte. ELIAS B. CALDWELL, 3 Note.— Mr. Watterston and Van Zandt’s accurate tables shew, that the value of the gold de- posited at the Mint, from 1818 to 1827, inclusive, amounted to g 2,403,186; value of silver coin, jg 10,797,268. This memorial was referred to a committee, bft no report was made. So much apathy almost produces despondency, but humanity and philanthropy have enforced from me the last effort. “ My heart still dictates, and my hand obeys.” Note . — In the National Intelligencer of this day, November 18, the follow- ing is the statement of forty-seven Banks in Rhode Island : Capitals, Deposits, - Notes in circulation, Debts due to the Banks, Stocks and Notes of the Banks, Real Estate, - Specie, 6,151,912 1,000,595 887.642 7,508,993 422,306 227,551 357.642 I hope there is an error in this report, for the average of «•«•*» x> ~' UNIVERSITY OF ILLINOIS