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STATEMENT OF THE LEADING FEATURES OF THE BANKS IN 16 STATES, JAN., 1843.
Total, Jan., 1840,
These figures show an immense increase in the proportion of specie to circulation. Deducting the notes on hand, the outstanding circulation of these banks in 1839 was $69,075,859, and they held nearly $30,000,000 in specie. At this time the notes outstanding are in the neighborhood of $12,000,000, leaving the specie on hand very nearly equivalent to the paper which it represents. Indeed, at the leading points, as New York, New Orleans, and Maryland, whence capita! is distributed for the purchase of produce, the specie far exceeds the paper outstanding. The deposits for the most part cannot be called currency, because, although they form a means of liquidating debts due the banks, they are not generally available for the purchase of goods. They form, in most cases, but another form of loans, as they
Total, Jan., 1843, $198,392,152 $27,814,178 $47,766,048 $40,390,962 Deduct Illinois and Alabama banks in liquidation,
11,634,432 1,606,359 7,441,869 1,271,089
186,757,720 26,207,819 40,324,179
CIRCULATION, NOTES ON HAND, NETT CIRCULATION, AND SPECIE, OF SEVERAL OF THE STATES, JANUARY, 1840.
are discounts appropriated to the liquidation of former loans. Hence, all the facilities which the public now derive from the issues of sixteen banks, is the fancied convenience of using their paper for currency instead of the specie in the vaults, which is more than counterba lanced by the evils attending it. The nett circulation of all the banks of the United States, in 1839, was $107,798,029, and is now not far from $40,000,000, being a reduction of over $67,000,000; of which $13,000,000 were the issues of broken banks, and are depreciated to an average level with those of the late National Bank 50 per cent., involving a loss of $21,000,000 to the public, in three years, by the use of paper money for a currency. The following will show the nett circulation and specie held by the banks of the leading States :
Notes on hand. Nett Circulation.
$25,824,366 $8,063,175 $17,761,191 $18,546,945
Hence, it appears that the currency at the influential points is now below the specie standard; that is, the distrust occasioned by the continual fall of prices from the high fictitious level of the paper system has, from the natural indisposition of people to operate in falling markets, caused money to accumulate in the banks on deposit until its owners shall have become satisfied that prices are really at their lowest points. This is one of the greatest evils of paper. It promotes overtrading by exciting people to operate in the apparent rapid rise of prices during an expansion, and consequently discourages them from moving when prices and values are falling again back to their natural level. The result is, that in one case they fall as much below their real value as in the other case they rise above it; being once down, returning activity restores them to a sound position gradually but firmly. This result is now being brought about. The moving principle is commercial confidence in the probability of realizing profits from investments at present prices for cash. There is as yet no symptom of a return to large credit operations, because, during the last few years, those great landmarks of commercial confidence which in former years formed the guide and the security of the creditor, have been swept away and perished under the demoralizing consequences of paper speculations. All those moral influences which ensured to the commercial creditor the safety of his claim, have been necessarily subverted by unwise legislation. Legalizing the suspension of the banks as matter of expediency, after the first shock of necessity passed away, sapped the foundation of the moral obligation of contracts. Exonerating associations of men from their immediate liabilities soon paved the way for "stay laws" to protect individuals from the claims of their creditors. When so much was obtained, men in comparatively good standing did not scruple to avail themselves of the usury laws, to evade contracts into which they not only voluntarily but thankfully entered. Party spirit countenancing these proceedings, the principle of the usury laws was applied to the public debts of the States, and repudiation boldly avowed. The prevalence of this disposition to protect debtors at the expense of creditors was seized upon by a bold and un
scrupulous political party, to make the distresses and moral laxity of the people a stepping-stone to power. The bankrupt law offered a relief to individuals, the distribution law to States, and a new inflation of paper, through the medium of a bank, tempted broken speculators. Thus, one by one, all those dependences of the capitalist, legal and moral, for the security of his loans, were removed, and the general result is an utter loss of credit by banks, individuals, States, and Federal Government; which state of things is enhanced by the constant attempts in most of the States to pass what are called "stay laws." The tendency of these is to prevent the sale of property under execution for the benefit of the creditor, unless at rates governed by arbitrary valuations, which place them far above the actual value. Such laws have been passed in Illinois and Missouri, and other States; their effect is to deprive the poor creditor of justice, and drive the rich one into the United States Court at ruinous expense. Consequently, there can be no basis for credit. Those laws are the direct consequence of the paper system; because, under the inflation of former years, large quantities of real estate changed hands at enormous money prices; and, to sell that property now, on mortgages or for mercantile debts, will ruin the holder. Without a paper inflation, fluctuations in the value of property so great as to produce such results, could never have taken place. Hence it is that relief laws are most prevalent where banks have flourished most. All these attempts at "relief," as it is called, are working a cure for the evils out of which they sprung, by destroying credit, and therefore preventing the proposed remedies, which are based upon fresh borrowing and credit, from taking effect. The disasters of the late National Bank, and the paper system generally, have made it impossible to fill up subscriptions to a new National Bank. Hence, Daniel Webster declares such an institution “obsolete.” In this state of affairs it is evident that there is but one course to adopt, that is, to go with the current of events. Instead of keeping alive the feeling of distrust, by constantly projecting new issues of paper, in the shape of money, under pretence of relieving the National Treasury, like the recently defeated Exchequer,-or of stock, like the
dead project for "assumption of debts," instead of paying them,-recourse should be had to economy in the first instance to bring down the expenses to the revenue, and then returning to the Sub-Treasury plan of the late administration, the principle of which is to require prompt payment in the constitutional currency for all dues to the government, and as promptly disbursing it to the government creditors. The great features of future trade will be cash payments and prompt activity of all industrial products. The collection and disbursement of $20,000,000 per annum in specie by the Federal Gov
REVENUE AND EXPENDITURES OF UNITED STATES FOR 1842, AND ESTIMATE FOR 1843.
Customs of 1842,
Borrowed Stock and Notes,
The Secretary has here estimated the customs of 1843 at very near those of the last year, derived from the imports of that year. The result is, as we have stated, that the deficiency of means will be near 50 per cent. greater for the coming year, than for the last; and at the close of the year, or after January, 1844, over $5,000,000 of the Government stock falls due and must be paid, or renewed at a higher rate of interest, like the note of a broken speculator in a banking institution. This state of affairs has evidently been mainly brought about by
ernment, will give activity to the precious metals, and infinitely promote the animation of commerce. The finances of the Federal Government are, without doubt, in a most lamentable condition; the current expenditures during the past year having been near $5,000,000 in excess of the current receipts, and the estimates of the Secretary for the year 1843 make the currentexpenditures exceed the receipts by $7,300,000. The following is a table of the actual amounts for 1842, and the estimates of the Secretary for 1843, according to his Report, dated 9th February, 1843:
Estimate for 1843.
Estimate for 1843.
the high tariff, inasmuch
1st quarter. 2d quarter. 3d quarter. 4th quarter.
28,934,302 22,237,180 28,217,025 22,700,330 $102,088,837 32,931,955 26,111,101 17,197,898 11 000,000
chase, in consequence of being deprived of a market for the proceeds of their labor. We may illustrate this view by one article. The production of flour in the United States has been estimated at twenty-two million barrels; the export in 1840, which was a year of the lowest prices for flour, was near two million barrels, valued at $10,000,000; that quantity may be assumed as the surplus production, because, in the following year, the prices ranged $1,50 per barrel higher, showing that the surplus had been removed by export. At the present time, prices range from $2,60 per barrel, in Cincinnati, to $4,50 on the seaboard. At these rates, flour yields no surplus to the producer; $2.60 is equal to 50 cents per bushel for wheat, which in England, is worth $1,12. The cost of production and transport to market make up the whole price, and leave no margin for the purchase of goods. The average price in the United States, under these circumstances, is $4,00 per barrel, making the crop worth $88,000,000.
During the last six months, cash duties were imposed, and at protective rates during the last four. If general causes produced the falling off in imports, why were not those causes in operation in the first six months? The importations for the first six months of 1842, large as they were, were not greater than were paid by the export of produce in return; a fact abundantly proved by the rate of foreign exchange, which in July was already 3 per cent. below par, and has gradually fallen since then, until specie is imported in immense quantities. In that period, the imports of foreign goods exceeded those of the same period in 1840, by $7,800,000, and yet the cash balance was in favor of this country; showing, that, notwithstanding the pecuniary distress in England was then very great, interest being at 6 per cent., and having since fallen to 1 and 2 per cent., that the increased imports into this country were paid for by enhanced purchases of domestic goods and produce. This brings us to the next assertion of the Secretary, which is, that the falling off in imports is not justly "chargeable to the existing tariff, because the prices of imported goods have, in common with others, generally fallen since its passage."
This seems to be the very perversity of blindness. The productions of this country are immense in volume, but command money prices so low as to yield no surplus above the cost of production, for two reasons, viz. the dearness of the currency, and the extent of the surplus. The former reason was correcting itself during the first six months of the year, even when the imports exceeded those of the last half of the year, by $31,000,000, or 110 per cent. The only way by which the surplus may be disposed of, is by taking foreign goods in exchange. Relieving the market of the surplus raises the money prices of the remainder until they afford a profit, which profit is applied to the purchase of goods. If the exportation of that surplus is prevented by the exclusion of foreign goods in exchange, prices are sunk so low, that the producers are disabled from buying at all. The demand for goods so cut off causes their prices to fall. The authors of the whole evil then appeal to the fall in foreign goods, as evidence that they are not wanted, when it only arises from the inability of consumers to pur
If, now, foreign goods are taken in payment for two millions of barrels, thereby raising the money price of the balance $1,50 per barrel, as in 1841, the crop will be worth $120,000,000, instead of $88,000,000; hence there will be a margin of $32,000,000, to appropriate to the purchase of domestic and imported goods, which must consequently rise in price. On the contrary, if, as now, under the present most absurd tariff, foreign goods are prohibited from coming in exchange for the surplus 2,000,000 barrels, the markets on the border continue to be glutted; the price remains so low, that western flour cannot be brought down and pay the expenses. Hence, there is nothing left to buy goods, or even to pay taxes at home; the goods cannot be sold at any price, and taxes cannot be met. The Federal Government closes its revenue, and the States repudiate. These are some of the national evils which grow out of the struggles of a political party to sustain power, by combining small pecuniary interests, through hope of obtaining exclusive privileges at the expense of the people at large.
The Secretary in his estimates puts the land receipts at $2,500,000. This estimate appears greatly too large under the circumstances, being nearly double
that of each of the last two years, although it must be taken into consideration that, owing to the strife about distribution, the lands as a resource for revenue have been greatly neglected SALES OF PUBLIC LAND IN EACH OF THE UNITED STATES, FROM 1833 To 1840, COLLECTIVELY, AND IN EACH OF THE YEARS, 1841 AND 1842.
Sales in 1842, 3 quarters.
Ohio, Indiana, Illinois,
Sales from 1833 to 1840.
and mismanaged in that time. In order to estimate the state of affairs we may look back at the land operations in each state for the last ten years, as follows:
3,963,449 5,032,726 28,023
Sales in 1841.
Acres sold to
It appears that up to 1820 there were sold of public lands 17,213,000 acres, on which was settled a population of 1,246,750 people, or about 16 acres to each inhabitant. During the ten years from 1820 to 1830, there were sold 10,000,000 acres only, and the population increased 1,100,000, or about 10 acres to each person. From 1830 to 1840 the population increased 2.200.000
From this, it appears that the number of acres sold in the last two years, was 1,660,000 only. In 1835-6, the number of acres sold was 32,630,000. If we now take a table of the popula
tion of these States, at three periods, with the aggregate acres sold in ten years, from 1833 to 1842, the quantity of land actually sold to settlers can be estimated as follows:
WESTERN POPULATION AT THREE PERIODS, and no. of acreS SOLD FROM 1833 TO 1842.
53,468 5,552 6,940 3,186 818,067| $1,021,816 859,925 $1,079,366
1,246,750 2,342,478, 4,531,514 17,213.000 10,110,468 51,620,132
1833 to 1842.
persons, and the land sales were 51,000,000 acres, or about 25 acres to each individual. Assuming the number of acres to each person actually settled to have been the same as in the previous ten years, it would give 23,000,000 settled against 59,000,000 acres sold by the Federal government, leaving 36,000,000 acres in the hands of the States and speculators, to be resold in compe