Full text of The Merchants' Magazine and Commercial Review : December 1864, Vol. LI, No. VI

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THE

MERCHANTS’ MAGAZINE
AND

COMMERCIAL REVIEW.
DECEMBER, 1864.

TIIE FRANCO-ITALIAN CONVENTION.
T. M. J.

T he uncertainty, which has o f late years hung over the fate o f the
Italian peninsular, seems now about to disappear; and that nation, unit­
ing most of its scattered fragments under the rule of one sovereign, takes^
its stand among the great powers of the world. To be sure every thing'
is not as we would have wished. Regrets may indeed arise when we con­
sider that the Austrians yet hold Venetia, and that, under the provisions
of the Franco-Italian Convention, the Pope is still to reign at Rome. Yet
to the commercial world the now independent existance of Italy is a fact
of great importance, and we will rejoice in what has been done, hoping
that the future will accomplish the rest.
The treat}' agreed upon between France and Italy, concerning the set­
tlement of the Papal States, and the withdrawal of the French from Rome,
has not yet been published ; but enough has been made known through
the semi-official organs to satisfy our curiosity on many important points.
It seems that the Emperor N apoleon has consented to yield to the wish
of the Italians, and to the pressure brought to bear on him in their favor,
so far as to consent to a removal o f the Roman-French army. He seems
now to acknowledge the strength o f the new nation, and the increasing
development o f its popular support, and to acquiesce, therefore, in the
withdrawal of his soldiers, provided Italy will at the same time agree to
respect the independent temporal power of the Pope. He does not, it is
true,— perhaps, as a Catholic sovereign, he cannot— consent openly to aban­
don the Holy Father and leave his temporal dominions to be swallowed up by
the augmented power of the Italian king ; but he can and has refused
any longer to uphold “ the obstinate aggressiveness of the Papal policy.”
In his letter to M. T houvenal in May, 1862, he expressed his conviction
that the Pope’s temporal jurisdiction should be maintained, and that Italy
would certainly act wisely, were she to acknowledge it as a political neV OL. L I.---- NO. V I .
26




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The Franco-Italian Convention.

[December,

cessity. By sucb a course Italy would free herself from the imputation
of maintaining an anti-Catholic resistence to the holy see, “ and the Pope,”
said he, “ brought to a reasonable view of the state of affairs, would under­
stand the necessity of accepting everything which can bind him to Italy.”
A t the time this letter was written there seemed to be no probability that
either party would come to terms. The Pope would not treat with Italy,
and Italy would not respect a sovereign, who refused to acknowledge her
political existence. But now the state of affairs has somewhat changed.
The Italian Government, looking soberly, and we think wisely, at the real
state of the case, appears to have determined to accept matters as they
are, and take what it can get. By the articles of the treaty the French
Emperor, as we have said, engages to withdraw his troops from Rome.
He does not, however, agree to do this at once, but by degrees, in order
that the Pope may fill up his ranks from foreigners of any nation, which
Italy is to allow him to do. He is, however, to evacuate entirely
within two years. Italy, on the other hand, is to acknowdedge the tem­
poral power of the Pope and to respect his frontier, and, as a pledge o f
sincerity, she is to give up all idea of Rome, and to fix her capital elsewhere.
The advantages to be derived by Italy, if she accepts these terms, are
great indeed, and hardly to be over estimated. No country so much as
she needs a long period o f peace, in which to secure herself from domestic
disturbance, to develop her strength, cement her union, and to restore
her finances to a healthy condition. To form a union of different States,
which have been independent for centuries, and not always friendly, is
not to be accomplished in a day. It requires time to consolidate the
various discordant interests, and to overthrow long standing and deep
seated prejudices. This certainly has not yet been more than partially
accomplished. It will require years of constant intercourse among the
people to knit together firmly and securely the broken fragments of dis­
severed Italy. In any great political change, which a nation may undergo,
those are always found who cling with the strongest tenacity to the man­
ners and customs of the past, and it requires much more than mere out­
ward demonstrations of popular enthusiasm to wear off the obtruding
corners o f party opposition. When the noisy hurrah o f popular feeling
gives way to the sober earnestness, which is to carry out the dictates of
patriotism, then the voice of the adherent to the old ideas will be heard,
and it becomes the province o f the statesman to calm rather than subdue
such opposition, and to gain over to his own side the men who were
powerful under the old regim e. A fatal mistake is too often made in this
particular, and this is, we fear, the mistake of Italy. The Piedmontese
are a nariow and stiff-necked people. They love to rule, but do not always
rule the best. Instead o f casting out merely the upholders o f an Austrian
tyranny, and allowing each State to be governed, (as far as possible,) by
its own people, they have superseded those already in power, and have
sought out local eminences, to be enjoyed by the stranger rather than the
native. Thus the men, who were prominent in Naples, Florence, and
Milan, suddenly become o f no importance in Italy, and as they were the
representatives of a powerful party, the opposition has become extreme.
Probably the Italian Government, necessarily turning most of its atten­
tion to foreign deplomaey and a centralization o f its newly acquired powers,




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The Franco-Italian Convention,

419

has been unable to give much attention to the minor concerns of local
interest. In order to accomplish this a long period of perfect peace is
necessary ; a period when the popular mind can look forward to a settled
future, and when the Government, withdrawing its attention from foreign
war, can apply itself to the task of removing the irritation at home.
But Italy, moreover, needs time to develop her resources, to reduce her
expenditure, and to place her finances on a firmer and surer basis. The
miserable petty governments, which formerly held the country, were ill
calculated to render her industry and commerce as productive as they
might have been. Ruling with the iron rod o f tyranny, they destroyed
the productiveness of almost every pursuit. The native energy and in­
dustry of man, if left to itself, even unaided by governmental support, but,
at the same time, untrammeled by governmental opposition, will develop
the hidden resources of a country, increase the revenue, and so maintain
the credit. A man will continue that occupation, which he finds to be to
his pecuniary advantage ; but when, from overtaxation, governmental op­
pression, or any other cause, it ceases to be productive, he will cease to
work, and from that moment he becomes a burden, a source of weakness
to the country— he ceases to work but continues to consume.
Unfortunately the petty princes, who formerly ruled in Italy, pursued
the short sighted policy of weak tyrants. Hated by the people, and main­
tained in power by the bayonets of a foreign potentate, they had but few
interests in common with the country they ruled over. Whether the
wealth of the community increased or not was a matter which seemed to
them of minor concern. As long as they were comfortable, and had
foreign soldiers enough to keep down the people, their ambition was satis­
fied. O f course if they had been wise enough to have studied their sub­
jects interests they would have found them to have been identical with
their own. Had they endeavored to build up an extensive and flourish­
ing trade, and protected agricultural pursuits, they would have obtained
the good will of their people and the respect of the world, and never have
suffered the disgrace o f such a rapid and ignominious flight. Still their
acts are of the past, but the consequences o f those aets must long be felt
by the country.
Every one who has traveled in the peninsular has seen in part the re­
sults of this past policy, in the almost endless multitudes o f beggars one
continually meets there. The stranger is constantly beset by hideous
specimens of deformity asking charity, or by some one whose appearance
would indicate, that he should be far above it. Indeed, begging has be­
come quite a respectable profession in Italy, and a deformed leg, a broken
bone, or a putrifying sore, from which any sensitive man would turn away
in disgust, is regarded as the very height of good fortune, and is used as
so much stock in trade. It has been said, that some of the brilliant lights,
who have adorned this very creditable calling, have actually suffered their
flesh to be lacerated, in order that the artificial wound might be used to
extort money from unwary travelers.
Such are the consequences of a policy, that does not allow labor to be
productive. Then, too, that immense system o f superstition by which
the people have been oppressed, is one o f enormous expense, and re­
markably well calculated to eat out the very vitals of the country. It
has been said, that in Italy every tenth man is a priest; we think we would




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The Franco-Ilalian Convention.

[December,

not be far out o f the way ^-ere we to add that every tenth man is a
soldier. Such an enormous proportion of non-producers must o f neces­
sity soon reduce a nation to beggary. One-fifth of the population can­
not he maintained in almost entire idleness, without the result being felt
by the community at large.
Thus we see how the Italian people have been oppressed and impover­
ished, by the had government o f foreign princes. Now, however, a dif­
ferent lot awaits them, if they will only continue with patience what they
have begun. V ictor E makuel cannot change all this at once, but we
hope much from him. To be sure the government of the Italian king is
not one, which, in our acceptation o f the term, could be called liberal.
The freedom, which the Sardinians and Piedmontese have enjoyed, is not
a freedom which we would be likely to relish. They are free for Italians,
not for us. Their liberty, then, is a relative not an absolute term,— and it
is in this restricted and limited sense that it is used. But to learn what
will be the effect on Italy of his government, we must look at its results
in the past. Sardinia and Piedmont have always presented, even to the
hasty glance of the traveler, unmistakable evidences o f a well-regulated
and liberal-minded government. Turin is, without exception, the most
beautiful and flourishing city in Italy. The modern and comfortable ap­
pearance o f its houses, the beauty and regularity of its well-paved streets,
and the evident activity and energy o f its inhabitants plainly show, that
its government has been one, which studies to promote the interests and
so to develop the industry of its people. In Genoa, moreover, the same
thing is strongly manifested. Alexandria and Asti, also, are important and
prosperous places, and the whole country seems vitalized with the healthy
atmosphere of an active diligence, perhaps not so extensive in its influence
as we might wish, nor so well fostered by the government as it might be,
but still in striking contrast with the squalid penury o f Naples and Rome.
And why cannot we expect these same evidences of prosperity and power
to manifest themselves in every quarter of the peninsular, over which the
same rule shall extend its happy sway ? When the blasting influences of
the dark cloud, which has hung for so long over that beautiful country,
are taken away, why cannot the industry o f its people, no longer trarnelledby a pernicious legislation, build up and maintain a flourishing trade,
which will establish the nation in its proper place, and prove the best
bulwark of its increasing liberties ? And not only is this part of the
kingdom more liheral in its legislative action, but here also, and here only,
is any religious liberty enjoyed. In the city of Turin the traveler is shown
a fine stone church o f modern architecture, with a tappering spire point­
ing heavenwards, in which the few of the reformed faith are permitted to
meet together, and worship according to the dictates o f their own con­
sciences. In this quarter, also, that progressive spirit was manifested,
which impelled the priests themselves to petition for such reformation, as
would have purified, in a very great degree, the entire character o f their
church. These, it is true, are but signs on the surface. Still they are
there, and have a real significance. They are oases in a desert which re­
fresh the heart and encourage us to hope.
But it is absolutely essential, that Italy should enjoy a period o f rest.
Her annual deficit is not far from $50,000,000 ; and it isonly with peace,
that this deficit can be changed into a surplus, and the evils o f oppres­




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The Frcmco-Italian Convention.

421

sive taxation be mitigated. Let the government onee be able to reduce
its army, and with that its annual expenses, devoting its energies to en­
couraging industry, capital will immediately flow in, labor become remu­
nerative, making that sunny land rejoice again in prosperity and abund­
ance.
But what is the feeling in Italy with regard to the Convention? One
%vould naturally expect that the provisions o f the treaty, which do not
guarantee to Italy an absolute and entire unity, would instantly be spurned
as treason by “ the party o f action,” and be maintained, (if maintained at
all,) only by the conservatives. But, strange to say, just the contrary is
the fact. The requirements of the Convention are upheld by the radi­
cals, while the moderates appear to be the first to denounce
them.
“ The wise and noble constraint,” which the former have
placed upon themselves, is certainly deserving of the highest praise,
and appears in striking contrast with the selfish sectionalism o f the old
Piedmontese party. How G aribaldi will act is as yet uncertain, while
M azzini , it is true, has come out against the treaty, and denounced it as
an acknowledgment o f the superiority o f France, and a base surrenderor
the inalienable rights of the nation. But M azzini is an enthusiast, seldom
doing anything sensible. Nor yet has he been able to carry but a small
number of what is called his party along with him. Even in Naples, the
most discontented and radical portion of Italy, the greatest acts of patriotic
self-denial have manifested themselves.
The Baron N icotera , who stands at the very head o f all Italian radi­
calism, has set a most glorious example o f disinterested patriotism. N ot
only did he come out in favor o f the Convention, as the surest way o f ad­
vancing Italian unity, but also, by embracing a favorable opportunity
to utter a few sensible words at a critical moment, be was enabled to turn
the course of Neapolitan feeling and to render the provisions o f the Con­
vention acceptable to a large class of the people. The words spoken by
this patriotic man, not only a Neapolitan and a Garibaldian, but even a
supporter of the Aspromonte blunder, are full of interest, as showing the
moderate views held even by the radical party. Efforts were not want­
ing on the part of the male-contents to stir up in Naples a feeling adverse
to the Convention, and it required just such a man to utter just such words
as those made use of by the Baron N icotera . “ You see here,” said he,
“ men united, who yesterday would not salute one another, and to-day
they have give each other the hand in the holy name o f Italy, because a
subject of the highest interest to Italy is under discussion. Naples by its
plebiscite made Italy, and by its meeting this day gives an example of
concord and union to all Italy. To the moderates I will say, we were not
intractable; and to those o f the party of action, this is good sense and
it must continue. To the Bourbonists and the enemies o f Italy, I will
say : look at our union and abandon your hopes. I will repeat the words
of an illustrious general: 1 When Vesuvius thunders Portici is in danger.’
Citizens let us be united and temperate ; leaving this place let us not
make any demonstrations, nor utter any cries in the streets; let us disperse
with dignity, and while discussing the programme let us confine ourselves
to the question.” The high position occupied by N icotera , and the abso­
lute impossibility of supposing him wanting in patriotism and indifferent
to Italian unity, gave great influence to what he said, and served to turn




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The Franco-Italian Convention.

[December,

the tide of feeling in Naples in favor o f the Convention, even though com­
pelled tosurrender her claim to be selected as the national capital. Naples,
as admitted by most o f the Italians, has a right to such a distinction, superior
to any other city, with the single exception of Rome ; yet is she willing
for the sake of Italy to give up that right to Florence. Such an example
of moderation is seldom witnessed, and those who practice it are worthy
o f the highest praise.
But while this unselfish spirit was manifesting itself in the South, what
was the impression produced at the North ? Some time ago the Gazette
of Turin published an article in favor of the treaty, at the same time con­
doling with the Turinese on account of the consequent loss to their city of
prestige and power. On the 21st September a procession of the people was
formed, intended as a demonstration in opposition to the removal o f the
government. It proceeded to the office of the Gazette, which it mobbed,
breaking the windows and committing other similar acts o f violence.
Some of the rioters were arrested by the police and put in confinement,
and their flag was taken from them. This act o f violence on the part o f
the people, displaying, as it did, their aversion to the Convention, was
disgraceful enough, but it sank into comparative insignificance when com­
pared with the acts o f the municipality. The municipal council imme­
diately ordered the release of the persons arrested, and the restoration
of their flag. This was nothing more than a direct endorsement of
their views, and a display, on the part o f the authorities, of a feeling op­
posed to the treaty and in sympathy with the mob. As a natural conse­
quence the liberated rioters became more noisy than ever, raved about
the streets, got into a fight with the soldiers, and many lives were lost.
It was of course well known, that the demonstration was started by the re­
spectable class of bankers, lawyers, etc., and descended from them to the
lower classes, who did the dirty work in the streets. On the 23d Sep­
tember, only two days after the riot, the municipal council o f Turin showed
still further their sympathy with it, by a formal protest in opposition to
the French Convention. W e do not object that the conservatives should
be opposed to the Convention, if they consider it in opposition to the
highest good of the nation ; but vie do object that they should be opposed
to it on account of the interests of Piedmont.
But the old Piedmontese party have shown their aversion to the treaty
if possible more plainly than the municipality of Turin. R attazzi and
the men, who hold the power in that party, have zealously made use of
that power against the Convention. They have exerted all their influence
among the people, not to persuade them that the requirements of the treaty
are detrimental to Italy, but to stir up a petty jealousy on account of the
loss of the capital. The Marquis R ic c i , one of the ministers under
F arin i ’ s administration, published, in the Gazette del Popolo, a very able
but mischevious letter. He attempted to show, that if the Convention
proved successful, and the capital were moved to Florence, the incorpora­
tion of Piedmont into France was merely a question of time. “ Let us
fancy,” said he, “ a gentle and peaceful government established in Florence.
From Sparta we are gone to Athens. But Piedmont suffers in honor,
interests, and secular traditions. Piedmont will become Poland, Hun­
gary, Ireland. After a time more or less long, it will be evident
to men of tranquil politics, that since it is impossible to pacify Pied­




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The Franco-Italian Convention.

423

mont for damages sustained, the best thing is to rid oneself o f such
a turbulent people, by handing them over to France. In short, the Savoy
business and its ‘ mutual repulsion’ will be repeated, with the difference
that obtains between old reminiscences o f supremacy and the passions
that are fresh, vigorous, and exasperated by hatreds truly Italian.” Such
is the language o f men who call themselves conservatives. It is the langu­
age of the men, who in reality regard the interests of their section or province
as superior to their country’s greatest good. While among the Neapoli­
tan radicals we hear o f nothing but an earnest desire for the good of
Italy, the great question at the north seems to be : W hat will he most con­
ducive to the interests of Piedmont ? On the one side is the comprehen­
sive consideration o f country; on the other the petty jealousy which
arises from sectional ambition. It is the same spirit which manifests itself
in the crisis of every nation. It is the same thing whether it appears in
the narrow sectionalism o f Piedmont, or in the pernicious states rights
doctrine, which led to the rebellion of the South. The principle is to talk
loudly o f country as long as the power is retained ; but to turn when the
good of the nation demands, that the power, so long held, be withdrawn.
But while we give all honor to the “ party o f action,” in that for their
country’s sake they are willing to waive or defer their long cherished hope
o f making Rome the capital of a united Italy, still we cannot but sympa­
thize with the desire. To be sure there are reasons why Rome should not
now he selected. If it were, how could the Papal question be settled ?
The Holy Father could not possibly reside elsewhere ; nor could a spiritual
and a temporal jurisdiction be maintained in peace within the same walls.
Yet, although the giving up of Rome is a present necessity, we trust it
will not always be so, for Italy ought not to be permanently ruled from
any other than the Eternal City. Florence, indeed, possesses very many
o f the requisite qualifications. Its situation is central, its climate salu­
brious, and its very name is surrounded by a halo o f associations upon
which the mind loves to dwell. Yet the associations of Florence are dif­
ferent from those o f Rome. Firenza la Bella presents to every mind a
picture of peaceful, quiet beauty; while the very name o f Rome is for­
ever associated with all the stern realities of a great and powerful govern­
ment. On the gently-sloping banks of the rippling Arno is the proper
place for the poet to muse on days gone by, and to clothe with all the
beauties of immortal verse the hallowed memories of the past; while the
bosterous, tumbling waves o f Father Tiber, as he rushes by the capital,
and under the massive arches of the Ponte St. Angelo, brings before us
the stern eloquence of C icero , and tells o f noble deeds o f patriotic valor.
In Florence we expect to hear the gentle clicking of the sculptor’s chisel,
and to see its every wall adorned with beautiful works of art. Rome pre­
sents at once to the mind the harsh tramping sound o f armed men, and
there we would expect to see all the brilliant paraphernalia o f war, and
to find the center of a powerful nation. It is hard to think o f Italy and
not to think of Rome. Yet if it must be so let us be content to wait and
hope that some future disturbance in European politics will bring about
a time, when the Austrians will be driven from Venetia and the govern­
ment will be placed upon the capitol, and the king of an entirely united
Italy will hold his court in the seven hilled city, and bring back into
modern times some o f the hallowed memories of Imperial Rome.




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Industry and Revenue o f Switzerland.

[December,

INDUSTRY AND REVENUE OF SWITZERLAND.*
I n 1850 a fiscal reform was effected in Switzerland. Previously to that
date each of the cantons levied its own customs duties within its own
circle of territory. In 1850 the Confederation centralised the entire col­
lection of those duties in its own hands ; but by article 29 of the consti­
tution it was at the same time stipulated, that the free purchase and free
sale of cattle and of ordinary wares and merchandise, their free entry,
their free exit, and their free passage from canton to canton, should be
guaranteed through the length and breadth of the Confederation. But
from this freedom the following articles were excepted : The purchase and
sale of salt and of gunpowder ; the duties granted or conceded by the
Diet, and which the Confederation did not suppress ; and the duties on
the consumption of wines and spiritous liquors, levied locally in each can­
ton in the nature of excise. But by article 32 this power o f excising li­
quors is subject to certain restrictions. The levy of these local duties is
not allowed to be interfered with so as to burden transit, by any tax; if
the articles are re-exported from any canton the duties paid on their en­
try into that canton are remitted, nor can any other charge be substituted
in lieu of them. Products o f Swiss origin are less heavily taxed than
foreign products. The existing duties on the consumption of wines or
spirituous liquors o f Swiss origin cannot be increased by the cantons in
which they are imposed, nor can they be levied at all where they were
not levied previously to 1850. Such are the principal points of the federal
constitution bearing upon the cantonal rights to levy excise duties, and
such duties are levied, but with few exceptions, solely upon liquids.
Local fiscality varies in its amount and in its objects in different cantons,
and it would be uninteresting to occupy space with such minute details,
but we shall give a general result. “ Eighteen cantons, numbering a popu­
lation of 1,775,338 souls, raise excise duties amounting to 2,502,387 francs
57 centimes; among these eighteen cantons eight raise in addition, by
the sale of excise licenses, 107,775 francs; four cantons, numbering a
population of 574,725 souls, raise by the sale o f excise licenses (no excise
dues being levied) the sum of 326,044 francs ; and finally, one canton
and two half cantons, with a population of 148,468 souls, enjoy the pri­
vilege of not knowing what an excise officer or an excise license is like.”
In some of the cantous these excise duties form a very important part o f
cantonal revenue. W ine and brandy are chiefly imported from France,
the former article to the annual value of 20,000,000 francs—a very large
sum for so small a country as Switzerland— but numerous tourists in the
summer months contribute greatly to the consumption.
The Swiss are well known as a laborious and frugal people, and among
their industries the manufacture o f cotton has made very respectable pro­
gress ; but there are some circumstances in which it differs from our own,
and these are of sufficient interest to deserve some notice. The Swiss




* See J enny on Switzerland.

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Industry and Revenue o f Switzerland.

425

spinner has no facilities for obtaining his raw material at short notice, and
therefore always holds a considerable stock in his stores, generally suffi­
cient for a year’s consumption. Before our civil war he bought large
quantities directly at New Orleans or other Southern ports, acting as his
- own broker, and thus obtained his supply at a figure lower than the ordi­
nary market rate, which compensated him for loss 6f interest and rent of
warehousing. Another difference between the Swiss and the American
manufacturer is the relation in which the employers and the employed
stand to each other. The Swiss laborer is never regarded as a “ hand,”
and he himself never forgets that he is a man, on whom the principle o f
honor has a very strong hold. “ In Switzerland the operative who leaves
a good master for better wages would be despised by his fellow-workmen
on the other hand, the master who aimed at underselling by cutting down
wages, would be scouted. Thus the millowner and the operative are in­
fluenced by a mutuality of considerate feeling, and selfishness does not
rule in the trade. Since our war there has been a decrease of work o f
40 per cent, but it appears that only one mill has been stopped, and even
in that case the men are paid their wages, and thus receive a retaining
fee which binds them morally to their employers, for whom they will work
again when business is resumed. In Switzerland the operative spinners
and weavers have an advantage many others do not possess; they have
small patches of land to cultivate, and never being detatched wholly from
agricultural pursuits, they are not mere “ specialties ” as in England, unfit
for every occupation but the one to which they have been trained. The
consequence has been that in the recent dearth o f cotton there has been
no distress in Switzerland. The canton of Glarus is eminent in this manu­
facture.
“ It has at present 206,000 spindles, 2,500 power-looms, several bleach­
ing works and dye establishments, besides 4,000 printing presses of vari­
ous kinds. In these establishments from 9,000 to 10,000 workmen are
employed, and the floating and fixed capital may amount to 40,000,000
or 50,000,000 francs.”
Since Switzerland has to compete with the world, and is relatively a
poor country, how does it sustain itself in the unequal struggle? It works
with old machinery, not being rich enough to buy the new inventions
when these are first introduced. The following comparison has been
made : A mill for spinning, in full working order, costs in England 25
francs, in Switzerland 50 francs per spindle ; one for weaving, in the former
country, from 400 to 500 francs, and in the latter from 900 to 1,200 francs
per loom. This difference in fixed capital is enormous, nor is that the
-only disadvantage. In England, on account of the superior machinery,
four or five persons can manage 1,000 spindles; in Switzerland, nine or
ten are required. In England machine making is a separate trade, largely
carried on in every manufacturing town of importance ; this is not the
case in Switzerland, where the smallest cotton-mill must possess its own
mechanical contrivances as an adjunct to itself. England works with steam
power, Switzerland with water power; but the first cost of steam power
does not equal one-third of the cost of water power. How then does
Switzerland stand her ground against such formidable competition ? Be­
cause her operatives work longer hours, and receive lower wages; and
because the habits of her manufacturers are more simple and economical,




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Industry and Revenue o f Switzerland.

[December,

and tbeir personal expenditure is less. It is said that they display more
tact in their mercantile operations.
The history of the silk industry of Bale is very interesting. Its rise
and progress have been carefully studied by Professor K istkblin of the
University of Bale, and we take him as our guide in many curious details.
In former times “ silk ribbons were woven by the gold and silver lacemakers on small one-shuttle weaving looms, and the shuttles were thrown
by hand ” Silk ribbons were then in scanty use. The lace-makers had
a particular guild of their own, in common with other artisans. No one
could be a master unless he had been an apprentice for several years, and
had been employed abroad as a working journeyman for three years. In
the second half of the seventeenth century a great revolution took place
in the trade by an invention, which set the shuttle in motion by mechani­
cal means, and which gradually displaced the hand looms. The lacemakers resisted the owners of the ribbon mills, and, to show the character
of the age, in several places those mills were burnt by the hangman as
works ot the devil. But they could not be suppressed either bv violence
or by superstition, and the lace-makers who, in 1670, worked 359 shuttles
in Bale, foresaw the ruin o f their trade. The ribbon mills were legalised
in 1691 on payment of a tax o f one fourth per cent on the money value
o f the material worked up in a mill during the year. After many con­
tentions between the lace-makers and the ribbon mills, which were appeased
by the intervention of the government, the ribbon manufacture became
firmly established; but it received a check from an edict o f the Germanic
Empire prohibiting the fabrics of Bale, which, however, was removed by
the Diet of Augsburg in 1725. It also sutfered from the thefts o f the
workmen, who stole the silk, but that was suppressed by severe punitive
laws. This was an era of government regulations, when authority inter­
fered in every trade, as though men o f business were incapable of conduct­
ing their own affairs. The following rules were enacted : “ It was ordered
that all manufacturers should inscribe themselves on the books o f the
committee (o f supervision,) and that the non-inscribed should be forbid­
den to manufacture ; that the manufacturers should pay the wages of their
operatives as fixed by the government; that no operatives, wore to be
allowed to work cheaper for a native or foreign manufacturer; that no
operative could work at another manufacturer’s unless he produced a regu­
lar permit or discharge from his former employer.” The law also fixed
the number of ells each sort o f ribbon should contain per piece. No
looms could be made except for the citizens of Bale ; their sale to others
was strictly prohibited. Foreign workmen could not be employed, and
operatives emigrating clandestinely forfeited their civil rights and property.
Whoever attempted to inveigle operatives out of the country was fined
50 thalers. The lace-makers at last became paupers, and in 1783 an or­
dinance was passed for their relief, which imposed a tax on ribbons, that
article having caused their ruin. It was never evaded, for at the French
Revolution the books of all the manufacturers were scrutinised and stood
the test honorably.
These old regulations ceased in 1798, when the revolution subverted all
that was ancient; but now that Europe is gradually relaxing all old re­
strictions this sketch of former systems (for they were not confined to Switzer­
land) may notprove altogether uninteresting to our readers. At present gov-




1864.]

Industry and Revenue o f Switzerland.

427

eminent claims no right o f interference with the private affairs o f the citi­
zens. Protection, as enforced at B&le, had at least this good effect—it se­
cured the reputation o f the local manufactures ; no short lengths, no false
or rapidly perishable dyes— in fact, none of the vile frauds now so com­
mon in England, and which have compelled parliamentry interference,
were then possible. If free trade was then denounced so was free booty.
Workmen were not at that time the serfs of the factory. They had their
own looms, and worked at home, and had their small piece of land, which
their family cultivated, which fostered and perpetuate ! au independent
spirit among the people. This state of things stiil continues to a large
extent. “ Of the 7,250 ribbon looms 5,000 are in the private dwellings
of theoperativesinthecountryorthetown,and2,000 only in manufactories,
independently of the 250 looms upon which the ribbon patterns are woven
under the eyes of the manufacturers.” The silk industry must be carried
on in a light, airy, and dry situation, free from vapors injurious to the
lungs, which deprive cotton operatives of strength, health, and even life.
At BS,le 6,000 looms are still worked by hand, about 500 by water power,
and 750 by steam. The looms belong to manufacturers, and each opera­
tive pays two per cent o f his wages for the use of his loom. Sufficient con­
fidence is reposed in his honesty and faith not to exact from him a deposit
for the value of the machine. The wages o f silk reelers are from Tj- to
2 francs a d a y ; of warpers, from 2 j- to 3 francs; of lace-makers and
weavers, from 4 to 5 francs. Among themselves the workmen contribute
monthly to a sick fund, on which they draw when ill at home ; or if they
enter the hospital the charges are paid out of it.
The Bale ribbon manufacture is famed for excellence. Dyeing has made
considerable progress. The dyers are responsible to the manufacturers
for spoiled or damaged goods. There are eight o f those establishments
at Bale, the largest employing 300 persons. In 1846 the total value o f
ribbon manufactured at Bale was 20,000,000 francs annually, nearly half
of all produced in Switzerland, which was 46,000,000 francs. At present
the total production is put down at 35,000,000 francs. B5,le now com­
petes successfully, even in Paris, against its French rivals, though at a dis­
advantage of from 5 to 7 per cent of import duty. The Balois keep
their own designers in Paris. The French formerly had an advantage in
the excellence of their silk, but now they are rivalled by Bale. The pros­
perity of Bale is mainly attributed to the honesty of her manufacturers
and operatives, all their articles being what they profess to be, in quality
and length of the piece, and to the superior education o f the workmen,
who are admirably schooled. If they are not so quick as the French they
are more solid, and their employers are cleverer merchants than the
French. At Bale there is a Society of Public Industry, which maintains
three industrial schools, where the arts of manufacture, drawing, and
modelling are taught; and also one designated the “ French Repetition
School,” so designated because the pupils, who have been already taught
the French language in early youth, there repeat what they have acquired,
so that they may not forget. The manufacturing school is free to students.
At the drawing and modelling the charge is about one franc per month.
Then there is M. R ichter -L inder ’ s school for girls. He only receives
those who have been badly trained, or have received no training at all,
and out of several hundreds— all o f whom must have remained with him




428

Industry and Revenue o f Switzerland.

[December,

four years before they are discharged— a bad report has not been heard
in a single case. M. R ichter has two establishments— one at Bale, with
200 Protestant girls, the other in the canton of Lucerne for Roman Catho­
lics. They are taught the domestic economies o f the household, to cook,
to mend, to clean, and to preserve from injury. They are also instructed
in the art of twisting, cleaning, and assorting silk. Religious instruction
is imparted. When they leave they receive 300 francs, less the expenses
o f clothing.
Under the governments of the cantons of Bale and Zurich, by which i t
is licensed, is the silk dryers’ establishment. It belongs to a company o f
shareholders, having a capital o f 2*7,500 francs. They weigh the bales
o f silk when moist and when dry, and determine the legal trade weight.
Then there is “ The Young Merchants’ Union,” formed for scientific in­
struction, taught by professors, who deliver lectures on political economy.
Finally, the Bale silk trade (the vital occupation of the town) gives sub­
sistence to one-fourth o f the inhabitants, or 10,000 persons, and indirectly
to 30,000 people, if we include the workpeople constantly coming and
going from and to the adjacent parts o f Switzerland, France, and Belgium,
as well as those in the cantons of the Bale country.
W e now pass to the agriculture o f Switzerland. The Swiss acre
(40,000 square feet) of good arable land in the canton of Berne varies in
price from 1,800 to 2,000 francs. On the shores of Lake Leman, between
Lausanne and Geneva, it has been sold for about 10,000 francs ; and in
the vine-growing district of Lavaux, between Lausanne and Villeneuve,
for as much as 20,000 to 25,000 francs, and even beyond those figures.
“ The arable land in the neighborhood o f Berne lets, on a twelve years’
lease, at from 70 to 95 francs an acre. Deducting cantonal and commu­
nal taxes, an estate there bears interest of about 3^- per cent, rather less
than more. The daily wages of a laboring man is 1 franc to *70 centimes,
ot a woman 1 franc. The average produce per acre for spelt, the kind of
wheat generally grown here, is about 7.740 imperial quarters; for hay
and the aftergrowth, from 2 to 2^- tons of English measure.” A good
Swiss cow yields about a gallon and a half daily. Meadows artificially
irrigated remain so from three to six years, when they are ploughed and
converted into arable. There has been a diminution in the price of cereals
in Geneva of one-third, and in Zurich of one-fourth, since the introduc­
tion of railways ; but none in those cantons which export corn. As Swit­
zerland imports one-third of her consumption, it represents, compared
with former prices, a yearly saving o f from 9,000,000 to 10,000,000 francs.
The import of coal, since the establishment o f railways, has risen from
28,000 quintals, the average between 1852 and 1856, to three millions
and a half of quintals in 1862.
The revenue of the Swiss Confederation in 1802 was 19,911,656 francs
98 centimes; the expenditure, 19,286,039 francs 83 centimes; surplus,
625,617 francs 15 centimes, but the financial future threatens deficits.
Owing to recent treaties of commerce the receipts of customs, the main­
stay of the Confederate treasury, have largely diminished, and an increased
outlay, to a considerable extent, is imperatively required to correct the
waters of the Rhone and the Jura. For those rivers, for the Alpine roads,
and for supplying the troops with a new infantry musket, it is calculated
that 14,400,000 francs will be required, to be distributed over ten years;




1864.]

National Savings and National Taxation.

429

and as this expenditure could not be sustained by the ordinary receipts,
Swiss financiers are fearful that they will be driven to a loan. In com­
mon with all other European States, the Confederation is heavily burdened
by military estimates, and it seems extraordinary, that in so small a popu­
lation 187,292 men of all arms should be maintained.
The foreign trade o f Switzerland does credit to the enterprise of her
merchants, and the goodness of her exportable commodities. She sends
iron material in large quantities to Germany, and silks to Russia, also
cheese. The English treaty o f reciprocity has enabled the Swiss to place
some of their goods on the same footing as the French. A considerable
quantity of their merchandise, destined for China, East and West Indies,
Australia, and South America, is sent to England to be transhipped to the
United States. B&le, Geneva, and Zurich, remit annually to the amount
of 40,000,000 francs. Switzerland has formed a treaty with Japan. Our
civil war has caused a reduction in the cotton fabrics of Zurich to the ex­
tent of only one-sixth ; but though the manufacture has declined to this
extent, M. F i e z , the head of the Exportation Society of that canton, does
not think that any profit has been realised, owing of course to the en­
hanced price of the raw material. This is a common calamity in which
all Europe notoriously shares.

NATIONAL SAVINGS AND NATIONAL TAXATION.
N

um ber

I.

W e have attempted in several articles of late to convey to our readers
some idea of the amount o f our national savings, for the purpose of
reaching correct conclusions as to the tax-paying abilities of the country.
In doing so, we of course pretended to no refined accuracy, for, in examin­
ing such a question, all that can be done is to arrive at certain probabili­
ties by the aids of materials, all of them imperfect and many of them de­
ceptive. Still the inquiry is one of increasing importance, and we pro­
pose to pursue the subject further, hoping in the end to have furnished
our readers with materials for approximating to a correct conclusion re­
specting the matters discussed.
Only two questions are of much importance to the American people at
the present time, to w it: first, W hat is the minimum expense of an effi­
cient war, and how can that desired end in the management of it be
reached ? and, second, In what way can the country’s annual earnings be
best obtained for and applied to the payment of the necessary taxes ?
The great fact that this war is to be continued, be it long or short, until
these States are united again, has been settled by the late election, and it
only remains to consider how it can be done with the least detriment to
the country and to us as individuals. The latter inquiry is the one we
have to deal with ; and, as a first step, it is necessary to examine into the
amount of our resources, or, in other words, our annual savings.
That we may have a clear appreciation of the matter, it is well to state
here what is to be understood by the word “ savings.” It is used to de­
signate the net surplus which remains for employment and investment




430

National Savings and National Taxation.

[December,

after all expenses o f living and of carrying on the public and private
transactions of the country have been met, and after all expenditure ne­
cessary to replace wear and tefr has been provided. For example, a
family living upon weekly wages, lives as frugally as possible, and after
food, rent, clothing, and mediea lbills, etc., have been paid, there remains
a little sum which is put in the savings bank— that sum is annual sav­
ings. Sometimes, out of that savings, new furniture may be bought:
that becomes personal property, which is assessed and taxed by law, and
is part of the savings. When the operations are larger the savings as­
sume many shapes, and the following describes pretty nearly the ways in
which they are employed :—
]. Purchases and improvement of land, drainage, machines, buildings,
etc., necessary to production.
2. Construction, improvement and repairs of dwellings.
8. Construction, improvement, and repairs of factories, workshops,
tools, motive power, etc.
4. Creation o f public works, railroads, docks, bridges, telegraphs,
roads, churches, hospitals, colleges, asylums, and water-works.
5. Trading capital, stocks of goods, ships, etc.
6. Investments in public stocks, insurance, gas, etc.
All these are objects which demand a share of the surplus earnings.
In some cases speculation has been known to run high, as in laud thirty
years since, more than all the surplus earnings being paid or promised tor
lots at high prices, and a frightful revulsion followed.
In New England
the railway mania, at one time, absorbed more than all the savings, and
disaster resulted. A t any time when the investments exceed Ihe earnings,
disaster arises. On the other hand, capital becomes abundant if good
crops or other circumstances cause the earnings to range ahead of the
investments.
Now, it is very evident that nearly all the savings o f a year are in­
vested by the close o f the year.
Whatever shape the investments may take, whether buying land or
building bouses, or creating banks or railroads, or increasing the stock o f
goods, or any other species of property, the property exists either in the
shape of real or personal estate, and continues so to exist year after year.
Hence, if we take account of stock at any time, we find a certain result,
which represents all the accumulation of the annual savings, and all that
has been brought into the country since its first settlement. Now, if we
compare two such statements taken several years apart, the difference
will be the amount saved during those years if the valuation is made on
the same principle.* Turning, then, to the census in illustration, we find
that the assessed valuation was as follows, for 1850 and 1860 :—
* The estimate of the yearly savings of the Northern States from 1850 to 1860
was given, in the October number, at §60,000,000. This result was reached by tak­
ing the census estimate of the personal property of those States in 1S60, and consid­
ering that it had all been saved during the last sixty years, forty millions a year from
1800 to 1850, and sixty millions a year from 1850 to I860, the last ten years. Real
estate was left out of the question for reasons then stated. Of course, we did not
claim that the result was an accurate one. Our purpose was to show the foolishness




1864.]

National Savings and National Taxation.
E E A I j.

PERSO N AE.

431
TOTAL.

1850................................
1860............................

$3,980,121,340
6,973,106,049

$2,029,050,213
5,111,553,956

$0,009,171,557
12,084,660,005

Increase.....................

$2,992,984,709

$3,082,503,743

$6,075,4SS,452

According to these figures the value of the property increased in 10
years as much as it did in the previous 200 years, and the rate of in­
crease for the whole Union was $607,000,000 per annum, including real
estate; while, if we assume that the $6,009,171,553, assessed in 1850,
had accumulated only since 1800 or in 50 years, the average increase per
annum would be only $120,000,000. This valuation, however, includes
real estate, which is to a great extent nominal. A large portion of the
farms and was obtained by squatting and military bounties: a much
larger proportion was purchased at $1,25 per acre.
Its valuation
has gone on to increase in proportion as settlements have become more
dense, without there ever having been capital earned and applied to it.
The assessed value of the lands represents a supposed capital; the real
value is what it annually produces. If it is assessed at its actual cost,
$1.25 per acre, or at its assumed value, $100. per acre, the real value,
which is the profit the farmer gets from it after supporting his family, is
not affected by the valuation ; any amount of taxation which would affect
the annual profits would proportionately diminish the value of the land,
and finally stop the working of it. Hence, the value of redl estate is
only an approximate capitalisation of the annual profits. This does not
apply to buildings, fences, drainage, and fixed improvements, which, like
personal property, are actually a portion of what has been produced by
industry and saved by investment in those iteips. The real estate in
cities, where prices have advanced, year by year, under actual purchases
at higher prices, and where buildings are being constantly erected in place
of others taken down, more nearly represent an earned value and therefore
forms a more accurate estimate of the amount of savings invested in real
estate. Personal property is nearly all an accumulation o f annual savings.
Ships are built from the profits of commerce,and factories from the manufac­
tures, and houses, although real estate, are built from the profits o f all
business, and these multiply at the rate of one for every family of five.
For example, the census of the State of New York gives the number of
buildings as follows
NO.

VALUE.

Stone dwellings.................................. .........................
Brick
“ " ................................ .........................
Framed “
.................................. .........................
Log
“
..................................
.........................

7,536
57,450
897,638
22,240

49,184,819
812,151,135
297,453,492
1,330,168
4,739,398

Total............................................... ..........................

618,956

$664,859,012

o f the popular fallacy that our resources are inexhaustible, believing such an idea
will ruin us if longer indulged in and acted upon. In this and the articles we hope
to give in subsequent numbers our estimates are for the whole country. They will
show larger figures, but there is the Bame irresistible conclusion from those figures,
and that is— that the most rigid economy is necessary to bring us safely through this
struggle.




432

National Savings and National Taxation.

[December,

The number o f families in the States was 693,242. The dwellings
multiply in about the proportion of the families, and this demand for shelter
forms a very heavy tax upon the annual savings apart from re-construc­
tion and repairs.
In considering the amount o f personal property as an evidence o f an­
nual savings, many allowances must be made. For instance, the existing
number of ships may be valued at $200,000,000, but probably within the
last ten years half as much has been constructed, and lost or destroyed.
The same remark, in a greater or less degree, applies to houses and factor­
ies. On the other hand, a good deal of property is duplicated. Thus,
in New York State, there has accumulated in the savings banks a
$100,000,000, due depositors. A part o f this has been loaned on mort­
gages ; another portion has been expended in building or other improve)
ments; also $60,000,000 has been loaned on stocks, and has been
spent by the borrowers. The same sum, therefore, exists as stocks, &c.,
and as debt to depositors. All corporate companies reduplicate debts in
this manner, which shows as personal property twice over. There are
many other considerations which prevent any accurate approximation to the
real annual savings, by means o f valuations of property. The property
itself is no indication of the amount of taxes that can be paid annually.
Thus the area of the Western States, admitted since the original Union, is
781,000,000 acres, with a valuation of $3,300,000,000; if that land
ceases to yield an annual profit to the tillers, its value ceases, and will go
back to the value it possessed when the Indians alone held it.
The question then returns— W hat is the income? Let us illustrate it
by taking the results o f English taxation. There the tax is laid upon the
gross income of all persons. It was formerly limited to those over £150
per annum; it now embraces all over £100. The rate is 9 d. in the
pound, or 3 f per cent. This is applied to gross income and not to sav­
ings only. The following table shows the amount of tax thus collected,
and consequently the annual income under each head:—
AMOUNT OF INCOME.

In £.
Lands, manors, etc...............................
House property..................................... .........
Mines and iron works...........................
Railway, canal, gas, etc.......................
Farms.....................................................
Trades, professions, etc.........................
Dividends, funds,....................................
Public companies..................................
Salaries, etc............................................
Quarries, fines, pensions, etc...............

57,761,745

298,304,937
Tax.......................................................

In $.
275,025,600
288,808,725
27,578,495
69,542,365
82,772,650
437,777,125
125,416,000
30,671,280
100,356,200
3,573,245
1,471,521,685
55,240,740

Under the head of “ lands, manors, etc.,” figure the sum derived by own­
ers of land from rent; under the head “ farms” is the income derived from
the land of the occupiers who pay rent. The total is the amount o f gross
income of the whole nation.
The tax of 3 f per cent, gives $55,240,740. This, it will be remem­
bered, is not all the tax paid from the income. The whole amount was




1864.]

National Savings and National Taxation.

433

1350,000,000. Now, the mode adopted to approximate the annual sav­
ings out of this gross income of $1,445,521,685 is to take the amount of
tax paid in several years and find the average income of capital that
pays duty. Thus the annual increase of incomes for five years was found
to be 5.7, which, computed at 20 years’ purchase, gives a result of
£114,000,000 sterling, per annum, savings. That is, this amount saved and
invested, gives an annual income increased at the rate of 5.7 per annum.
The annual savings of the British nation, with a population of 28,000,000,
is then $570,000,000 per annum. It must be borne in mind that money
is not earned alone in the British islands, but embraces the profits of
British capital operations upon the industry o f 200,000,000 British sub­
jects in all parts of the world.
The population of the British possessions was at the last dates, 1861,
as follows :—•
British India................................................................................ ........................ 173,738,866
Australia an d other colonies................ ............................................................. 9,484,595
Total...............................................................................................................183,223,461
United Kingdom................................................................................................... 28,915,109

The one hundred and eighty-three millions of souls in all parts of the
world are producing wealth mostly by the stimulus of British capital, and
that wealth finds its way to the imperial islands in increasing quantities
year by year. From all quarters raw material produced through the
agency of British capital is sent home, and there, together with the food
and the industry of the manufacturers, is wrought up by the agency o f
steam-driven machines into goods, with a portion o f which, for the most
part, the millions of distant producers are paid for their labor. The
streams of wealth from every quarter of the globe set with swelling vol­
ume toward the imperial islands. The capital which there accumulates
is re-employed in extending the productive powers o f fertile regions
which pour forth material wealth in greater affluence. The amount of
British capital employed in different parts of the world probably sends
home a larger amount of annual interest than that paid upon her whole
public debt. The foreign trade of 1863 showed results as follows :—
1S62.
1863.
Imports.................................................................................. $923,937,535 $1,019,131,615
Exports.................................................................................. 619,961,320
732,448,840
Excess imports.............................................................$313,976,205

$286,682,775

Thus there returns to England an amount of wealth annually very
much in excess of what she pays out. The figures do not include specie,
which was as follows, in addition to the above : —
m
1862.
Im p orts................................................................................. $158,282,340
E x p orts................................................................................. 146,630,955

1863.
$150,153,970
131,220,200

Excess imports................................................................$11,652,435

$18,933,770

The imports of specie are drawn from Australia, $30,000,000; Mex­
ico, $50,000,000 ; United States, $40,000,000. The flow thither of these
metals shows the current of exchange always in favor of England from
VOL. li .— no . vi.
27




434

National Savings and National Taxation.

[December,

those countries where her capital operates. The 173,000,000 Indian
subjects are year by year more industrious and more profitable to Eng­
land. Mr. L a ik g , late Finance Minister to India, in a recent address,
says:—
“ I have seen myself savages of the wild aboriginal tribes of India working stead­
ily under English inspectors on the railways , their women carrying the earth in
baskets on their heads, with their noses, arms, and ankles covered with silver rings,
in which they had invested wages which, to their previous experience, seemed like
fabulous wealth.”

The capital sent out from England to build those railways, precisely as
it was sent to construct some o f our Western works, returns to it with a
high interest. The passion the Indians have for silver is the cause of that
continued drain o f the metal from Europe, where the vacuum it leaves is
filled with the gold o f California and Australia. The wealth drawn from
Asia is immense ; not only the immediate subjects of the Crown, but the
300,000,000 of Chinese, under the same influence, contribute their quota
to the swelling profits of England. They are weaned from the apathetic
indolence of the orientals, and broken into steady labor by tasting of its
advantages. Doubtless the small reward, which seems large to them,
produces important results to the capitalists of the distant islands. Mau ­
ritius has been filled with Coolies, imported from China, and gives Eng­
land an annual value of $10,000,000, getting $2,500,000 in return.
Among 500,000,000 o f the human race, English agencies and influence
are hourly adding to the number of producers o f materials, who work
the current of profits that annually finds its way to Britain.
The growing commerce o f Great Britain employs an immense shipping.
The trade with her own colonies gives England the following average re­
sults :—
Import from colonies......................................................................................... 1350,000,000
Export to colonies..............................................................
250,000,000
Excess imports........................................................................................... $100,000,000

These large profits rolling into the British islands indicate the success
with which the labor and resources of 28,000,000 of people are applied
to the development o f the hitherto dormant wealth of populous, distant
countries, and consequently how firm is the basis on which the English
debt rests.
All these conditions o f foreign commerce and colonial aids help to
swell that annual income of the British people which, as we see, results
in an annual saving of $570,000,000. It is true that the incomes below
£100, are estimated to be equal to half the taxable incomes, but those
small incomes seldom yield any savings, and they would not much alter
the account.
In the United States production has been very large and income con­
siderable, but expenditure has been more profuse. The ultimate savings
in proportion to income are not so large as elsewhere. The amount of
savings it will be easier to estimate after the new income tax shall have
shown its results, for then it can be done in a manner similar to the above,
showing the savings o f the United Kingdom. If, however, we return to
those figures already given o f the personal valuation, we will find that for




435

Interest and Usury.
--------------------------

1864.]

the whole country, according to these figures, there was an average o f
$308,000,000 accumulated per annum during ten years of the most pros­
perous season, arising from the influence o f gold discoveries upon prices
o f all kinds. In that period nearly $300,000,000 o f capital was imported
from abroad for railroad construction. 2,800,000 immigrants arrived,
with more or less property, and located s o il; and the one thousand mil­
lions or one hundred millions per annum was invested in railroad con­
struction. W e shall continue the examination o f the subject further in
our next number.

COMMERCIAL

LAW-NO.

16,

INTEREST AND USURY.
WHAT INTEREST IS, AND WHEN IT IS DUE.
I nterest means a payment o f money for the use o f money. In most
civilized countries the law regulates this 4 that is, it declares how much
money may be paid or received for the use of m oney; and this is called
legal interest; and if more is paid or agreed to be paid than is thus
allowed, it is called usurious interest. By interest is commonly meant
legal interest; and by usury, usurious interest.
Interest may be due, and may be demanded by a creditor, on either of
two grounds. One, a bargain to that effect; the other, by way o f dam­
ages tor withholding money that is due. Indeed, it may be considered as
now the settled rule, that wherever money is withheld which is certainly
due, the debtor is to be regarded as having promised legal interest for
the delay. And upon this implication, as on most others, the usage o f
trade, and the customary course o f dealings between the parties, would
have great influence.
Thus, in New York, A sued B for the transportation o f a quantity of
flour from Rochester to New York, and claimed interest upon the same.
He offered to prove that it was the uniform custom o f all those engaged
in the same business to charge interest upon their accounts; and that the
defendant knew this. This evidence having been rejected in the court
below, it was held by the Supreme Court, on appeal, that, such usage be­
ing proved, the plaintiff was entitled to interest, and that the evidence
should have been received. And in another case in that State, where it
was known to one party that it was the uniform custom o f the other to
charge interest upon articles sold or manufactured by him after a certain
time, the latter was allowed to charge interest accordinglv.
In general, we may say that interest is allowed by law a3 follows : On
a debt due by judgment of court, it is allowed from the rendition of judg­
ment ; and on an account that has been liquidated, or settled, from the
day of the liquidation ; for goods sold, from the time o f the sale, if there
be no credit, and if there be, then from the day when the credit expires ;
for rent, from the time that it is due, and this even if the rent is payable




436

Interest and Usury.

[December,

otherwise than in money, but is not so paid ; for money paid for another
or lent to another, from the payment or loan.
In New York it was held, in an action on acontract to recover damages
for the non-delivery of merchandise, that the plaintiff was entitled to re­
cover the difference between the contract price and the market value o f
the article at the time and place specified for its delivery, with interest
thereon ; and that it was not within the discretion of the jury to allow
interest or n o t; the plaintiff being legally entitled to interest.
Interest is not generally recoverable upon claims for unliquidated dam­
ages, nor in actions founded on tort. By unliquidated damages is meant
damages not agreed on, and of an uncertain amount, and which the jury
must determine. By torts is meant wrongs, or injuries inflicted. But
although interest cannot be given under that name, in actions of this sort,
juries are sometimes at liberty to consider it in estimating the damages.
It sometimes happens that money is due, but not now payable; and
then the interest does not begin until the money is payable. As if a note
be on demand, the money is always due, but it is not payable until de­
mand ; and therefore is not on interest until demand. But a note payable
at a certain time, or after a certain period, carries interest from that time,
whether it be demanded or not.
MONEY.

The law's which regulate interest and prohibit usury are very various,
and are not perhaps precisely the same in any two of our States. Formerly,
usury was looked upon as so great an offence, that the whole debt was
forfeited thereby. The law now, however, is— generally, at least— much
more lenient. The theory that money is like any merchandise, worth
what it will bring and no more, and that its value should be left to fix
itself in a free market, is certainly gaining ground. In many States there
are frequent efforts so to change the statutes of usury that parties may
make any bargain for the use of money which suits them ; but when they
make no bargain, the law shall say what is legal interest. And, generally,
the forfeiture is now much less than the whole debt.
In Maine, the excess above the legal rate of interest, six per cent, is not
recoverable, and, if paid, may be recovered back at any time within a
year. In New Hampshire, the legal rate o f interest being six per cent,
the party taking the usury is subjected to a penalty o f three times the
amount of the usury taken, to be deducted from the debt. In Vermont,
lawful interest only (six per cent) is recoverable, and a party paying more
than legal interest may recover it back. Seven per cent, however, may
be charged upon railway bonds. In Massachusetts, a party receiving
more than legal interest, six per cent, forfeits three times the amount of
the unlawful interest taken. And where a party has paid more than legal
interest, he may recover of the person receiving it three times the amount
of the unlawful interest paid. In Rhode Island, upon an usurious con­
tract, legal interest only is recoverable ; and where more than legal inter­
est (six per cent) has been paid, it may be recovered back. In Connecticut,
upon usurious contracts, the legal rate of interest being six per cent, the
whole interest is forfeited. In New York, all usurious contracts are void,
and where more than the legal rate of interest, seven per cent, has been
paid, it may be recovered back. In New Jersey, the legal rate o f interest




1864.]

Interest and Usury.

•431

being six per cent, usury avoids the whole contract. However, in the
township of Hoboken and in Jersey City, seven per. cent may be charged.
In Pennsylvania, the party taking the usury forfeits the amount of the
money or other thing lent, one-half to the State, the other to the party
suing for the same. The legal rate of interest is six percent. It lias been
decided under this act, that the contract itself is not void ; and a party is
entitled to recover the sum actually lent, together with lawful interest;
otherwise, the State might be deprived o f its share of the penalty by the
borrower’s refusing to enforce the statute. In Delaware, the party taking
the usury forfeits the amount of the whole debt, one-half to the State, the
other to the informer. The legal rate is six per cent.
In Maryland, the excess paid above the legal rate o f interest, six per
cent, is recoverable back. In Virginia, the party taking more than the
legal rate of interest, six per cent, forfeits the whole debt. In North
Carolina the taking of unlawful interest renders the whole contract void.
The legal rate is six per cent. In South Carolina, the party taking the
usury forfeits the whole interest. The legal rate is six per cent. In Georgia,
where the legal rate of interest is seven per cent, by the taking of usury
the party forfeits the whole interest. In Alabama, the interest only is
forfeited where usury is taken. The legal rate is eight per cent. In
Arkansas, the legal rate is six per cent, and the taking of usury avoids the
contract; but parties may agree in writing for ten per cent interest. In
Florida, usury avoids the contract. The legal rate is six per cent.
In Illinois, in all actions brought upon usurious contracts, the defendant
shall recover his costs, and the plaintiff shall forfeit three times the amount
o f the whole interest. And a party paying more than the legal rate o f
interest, six per cent, may recover of the party receiving the same three
times the amount so paid. But banks may charge seven per cent, and
individuals may make special contracts for ten per cent. In Indiana, the
taking of usury causes a forfeiture of five times the amount of the whole
interest. Six per cent is the legal rate. In Iowa, where the legal rate of
interest is six per cent, the taking o f usury forfeits the whole interest;
but ten per cent is allowed on special contracts. In Kentucky, usury sub­
jects the party to a forfeiture of the whole interest. The legal rate is six
per cent. In Louisiana, the legal rate being five per cent, usury causes the
forfeiture of the whole interest; but eight per cent may be agreed upon
by the parties. In Michigan, seven per cent is the legal rate of interest.
Ten per cent may be charged upon special contracts. There is no penalty
for taking usury. In Mississippi, the legal rate is six per cent, and the
receipt of usury forfeits the whole interest. Eight per cent, however, may
be charged on special contracts. In Missouri, the legal rate is six per
cent, and the receipt of usury forfeits the whole interest. In Ohio, where
the legal rate is six per cent, the receipt o f usury causes a forfeiture o f
the whole interest; but eight per cent is chargeable upon special contracts.
In Tennessee, six per cent is the legal rate, and an excess avoids the whole
interest. In Texas, the taking o f usury avoids the whole interest. The
legal rate is eight per cent, but on special contracts twelve per cent is
chargeable. In Wisconsin, the legal rate is seven per cent, but special
contracts may be made for twelve per cent. In California, the legal rate
is ten per cent, and there is no penalty for taking usury.
There is no especial form or expression necessary to make a bargain




438

Interest and Usury.

[December,

usurious. It is enough for this purpose if there be a substantia! payment,
or promise o f payment, o f more than the law allows, either for the use o f
money lent, or for the forbearance of money due and payable. One thiDg,
however, is certain : there must be a usurious intention, or there is no
usury. That is, if one miscalculates, and so receives a promise for more
than legal interest, the error may be corrected, the excess waived, and the
whole legal interest claimed. But if one makes a bargain for more than
legal interest, believing that he has a right to make such a bargain, or
that the law gives him all that he claims, this is a mistake of law, and
does not save the party from the effect of usury.
Thus, in a case in Massachusetts, where the defendant agreed to pay
the plaintiffs more than the legal rate o f interest, but the excess was owing
to the mode of computation adopted by the plaintiffs, and which was usual
among banks, the court said : “ It is probable that in this case there was
no intentional deviation on the part o f the bank; but a mistake of their
right. An excess o f interest was intentionally taken, upon a mistaken
supposition that banks were privileged in this respect to a certain extent.
This was, therefore, in the sense o f the law, a corrupt agreement; for
ignorance of the law will not excuse.” It may be well to remark, that
the law makes a very wide distinction between a mistake o f fa c t and a
mistake o f law. Generally, it will not permit a party to be hurt by a
mistake of fa ct; but it never suffers any one to excuse himself by a mistake of law, because it holds that everybody should know the law, and
because it would be dangerous to permit ignorance o f the law to operate
for any one’s benefit.
The question has been much discussed, whether the use of the common
tables which are calculated ou the supposition that a year consists of 360
days, is usurious. In New York it is held that it is. But in Massachu­
setts, and some other States, it is held that the use o f such tables does
not render the transaction usurious. W e think this latter the better
opinion.
It is also settled, that only the contract which is itself usurious can be
affected by the usury. If by one contract, or by one completed transac­
tion, as the payment o f a debt for another, a party acquires a valid claim
for a certain amount, and lawful interest, and then by a new contract, as
a new note, for instance, the debtor agrees to pay him usurious interest,
this new note, it has been held, will be affected by the usury, but the
original claim will not be. So, if a borrower promises to pay a certain
sum, and then more than interest as a penalty, if he does not pay the first
sum, this is not usurious ; first, because by paying the first sum he can
escape the penalty ; and secondly, because all penalties will be reduced by
the court to the sum originally due and lawful interest.
So, if a debtor requests time, and promises to pay for the forbearance
legal interest, and as much more as the creditor shall be obliged to pay
for the same money, this is not a usurious contract. And even if usurious
interest be actually taken, this, although strong evidence of an original
usurious bargain and intent, is not conclusive, but may be rebutted by
adequate proof or explanation.
When a statute provides that a usurious contract is wholly void, such a
contract cannot become good afterwards ; and therefore a note which is
usurious, if it be therefore void by law in its inception, is not valid in the




1864.]

Interest and Usury.

439

hands o f an innocent indorsee. But it is otherwise where the statute
does not declare the contract void on account of the usury. If a note, or
any securities for a usurious bargain, be delivered up by the creditor and
cancelled, and the debtor thereupon promises to pay the original debt and
lawful interest, this promise is valid.
New securities for old ones which are tainted with usury, are equally
void with the old ones, or subject to the same defence. Not so, however,
if the usurious part of the original securities be expunged, and not inclu­
ded in the new ; or if the new ones are given to third parties, who were
wholly innocent of the original usurious transaction. And if a debtor
suffers his usurious debt to be sued, and a judgment recovered against him
for the whole amount, it is then too late for him to take any advantage
o f the usury.
So, if lands or goods be mortgaged to secure a usurious debt, and after­
wards conveyed to an innocent party, subject to such mortgage, the latter
cannot set up the defence of usury and thereby defeat an action to enforce
the mortgage. And if A owes B a usurious debt, against which A could
make a complete or partial defence, but pays the debt, usury and all, by
transferring to B a valid note or debt o f 0 , then, when 0 is called upon
to pay this debt to B, C cannot make the defence that A ’s debt to B was
usurious ; for the debt due from C is not affected by the usurious taint of
the original debt from A to B.
Usurers resort to many devices to conceal their usury ; and sometimes
it is very difficult for the law to reach and punish this offence. A com­
mon method is for the lender of money to sell some chattel, or a parcel
o f goods, at a high price, the lender paying this price in part as a pre­
mium for the loan. In England it would seem from the reports to be
quite common for one who discounts a note, to do this nominally at legal
rates, but to furnish a part o f the amount in goods at a very high valua­
tion. In all cases of this kind, or rather in all eases where questions of
this kind arise, the court endeavors to ascertain the real character .of the
transaction. Such a transaction is always suspicious, for the obvious rea­
son that one who wants to borrow money is not very likely to desire at
the same time to buy goods at a high price. But the jury decide alt
questions of this kind ; and it is their duty to judge of the actual inten­
tion of the parties, from all the evidence offered. I f that intention is
substantially that one should loan his money to another, who shall there­
for, in any manner whatever, pay to the lender more than legal interest,
it is a case of usury. “ Where the real truth is a loan of money,” said
Lord M ansfield , “ the wit of man cannot find a shift to take it out of
the statute.” If this great judge meant only that, whenever legal evidence
shows the transaction to be a usurious loan, the law pays no respect what­
ever to any pretence or disguise, this is certainly true. But the wit of
man does undoubtedly contrive some “ shifts,” which the law cannot de­
tect. There seems to be a general rule in these cases in reference to the
burden of proof; the borrower must first show that he took the goods on
compulsion ; and then it is for the lender to prove that no more than their
actual value wTas received or charged for them.
If one should borrow stock at a valuation much above the market rate,
and agree to pay interest on this value for the use of the stock to sell or
pledge, this would be usurious. Whether it would be sufficient to dia-




44 0

British Commerce, Navigation, and Finance.

[December,

charge this character o f usury, for the lender to show that the dividends
on the stock actually were, and were expected to be, as high as the inter­
est on the valuation, so that he makes no gain by the transaction, is not
certain.
So, one may lend his stock, and may, without usury, give the borrower
the option to replace the stock, or to pay for it at even a high value, with
interest. But if he reserves this option to himself, the bargain is usurious,
because it gives the lender the right to claim more than legal interest.
So, the lender may reserve either the dividends or the interest, if he elects
at the time of the loan ; but he cannot reserve the right o f electing at a
future time, when he shall know what the dividends are.
A contract may seem to be two, and yet be but one, if the seeming
two are but parts o f a whole. Thus, if A borrows one thousand dollars,
and gives a note promising to pay legal interest for it, and then gives
another note for (or otherwise promises to pay) a further sum, in fact for
no consideration but the loan, this is all one transaction, and it constitutes
a usurious contract.
But if there be a loan on legal terms, with no promise or obligation on
the part of the borrower to pay any more, this might not be invalidated
by a mere understanding that the borrower should, when the money was
paid by him, make a present to the lender for the accommodation. And
if, after a payment has been made, which discharged all legal obligation,
the payer voluntarily adds a gift, this would not be usurious. But in every
such case the question for a jury is, what was this additional transfer of
money, in fa ct; was it a voluntary gift, or was it the payment of a debt f
A foreign contract, valid and lawful where made, may be enforced in a
State in which such a contract, if made there, would be usurious. But if
usurious where it was made, and, by reason o f that usury, wholly void in
that State, if it is put in suit in another State where the penalty for usury
is less, it cannot be enforced under this mitigated penalty, but it is wholly
void there also.
(To be continued.)

BRITISH COMMERCE, NAVIGATION AND FINANCE, BEFORE AND SINCE THE
ADOPTION OF FREE TRADE AND THE REPEAL OF THE NAVIGATION
LAWS.
W e are indebted to E. M. A rchibald , Esq., H. B. M. consul, o f New
York, for the following statements, intended to exhibit the progress of
British commerce, navigation, and revenue during recent years, and to
illustrate the results o f the adoption by Great Britain o f a system of
commercial freedom and the repeal o f the navigation laws.
W hilst the increase o f productive power and other causes have without
doubt materially operated in effecting the vast development indicated,
these resources must have remained in a great degree unprofitable had
the former restrictions on British trade and navigation been still main­
tained.




1864.]

British Commerce, Navigation, and Finance.

441

The official value of British and foreign and colonial exports and im ­
ports combined were as follows in the years 1842, 1853, and 18 j3 re­
spectively :—
1842..............................................................................£179,095,088
1853 ............................
365,171,537
1863.............................................................................. 485,027,040
O f these amounts the official values of the imports were :—
184 2 ............................................................................. £65,253,288
185 3 ............................................................................... 123,099,313
1 8 6 3 ............................................................................... 171,913,852
During the same years the corresponding values o f the exports of Brit­
ish and Irish and foreign and colonial merchandise were:—
1 8 4 2 ............................................................................. £113,841,802
1853............................................................................. 242,072.224
1863 ............... * ............................................................ 313,113,188
O f these amounts the official value o f the proportion of exports of Brit­
ish and Irish manufactures, etc,, was:—
1842..............................................................................£100.255,380
1853 .............................................................................. 214,327,452
1863............................................................................... 258,198,551
The real value of British imports can only be ascertained since the
year 1854. In that year they amounted to £152,3S9,053, whilst in
1863 they had increased to £248,9S0,942.
The real values of the exports from the United Kingdom in the years
1854 and 1803 were:—
1854............................................................................. £115,821,092
1863............................................................................. 196,902,409
The real values of these exports cannot be given previously to 1854,
as such values of foreign and colonial merchandise were not ascertained
until that year.
The real value of exports of British and Irish manufactures during the
years 1842, 1853, and 1863 respectively w as:—
1842............................................................................. £47,381,023
1853..............................................................................
98,933,781
180 3 ............................................................................... 146,489,768
The immense development o f this branch of our commerce during re­
cent years will be more readily appreciated when it is remembered that
the figures for the year 1842 are but little in excess of the average value
of our exports during the thirty preceding years.
In the years 1854 and 1863 the real values o f our exports o f foreign
and colonial merchandise were :—
1854.............................................................................. £18,636,366
1863 .............................................................................. 49,485,005




442

British Commerce, Navigation, and Finance.

[December,

The quantities o f the various principal articles of food below men­
tioned, and now admitted duty free, were as follows for the three peri­
ods :—
1842.
Horned ca ttle.. . . ...No.
Sheep.....................
Bacon and ham s...
«
Butter.....................
E<?gs..............
...N o .
R ice .......................

|

1853.

18G3.

125,253
259,420
205,667
403,289
123,450,678
1,504,629

prohibited

8,355
175,197
89,548,747
511,414

150,898
430,788
1,877,813
986,708
266,929,680
3,070,292

The quantities retained fo r consumption of the following articles, which
still subject to custom duties, were :—

are

Cocoa.................................... .Lbs.
Coffee.................................... <(
Sugar,raw...........................
Tea........................................ . Lbs.
Tobacco, unmanufactured.. «(
W in e ......................................Galls.

1842.
2,246,569
28,519,646
3,868,437
37,355,911
22,013,146
*4,815,222

1853.
3,997,198
36,983,122
7,272,833
58,834,087
29,348,568
6,813,830

I8G3.
3,712,287
32,762,995
9,202,524
85,183,283
36,751,173
10,422,105

The declared or real values of the more important articles of British
manufacture exported during the same years are as follows:—
Apparel, haberdashery, and m illinery...
Cotton yarn..................................................
“ goods................................................
Earthenware and porcelain.......................
Hardware and cutlery................................
Leather and leather wares........................
Linen yarns.............................. .................
“
manufactures....................................
Machinery.....................................................
Iron and steel..............................................
Tin plates....................................................
Silk, thrown and manufactured................
Woolen yarn................................ .............
“ manufactures..................................

1842.
£1,143,270
7,771,464
13,907,884
555,430
1,398,487
400,927
1,025,551
2,346,749
554,653
2,457,717
663,685
590,189
637,305
5,185,045

1853.
£6,923,190
6,895,653
25,817,249
1,338,370
3,665,051
1,578,595
1,154,977
4,768,432
1,985,536
10,845,422
1,181,069
2,044,361
1,456,786
10,172,182

18G3.
£7,169,975
8,019,954
39,424,010
1,334,276
8,826,784
2,319,763
2,535,728
6,509,970
4,365,023
13,111,477
1,311,850
2,229,591
5,065,432
15,518,842

Notwithstanding the great increase here indicated with regard to
British imports and exports, it must be borne in mind that few countries
have yet comprehensively adopted a liberal commercial policy, and that,
consequently, the measures in that direction which have already been for
some years fully applied by Great Britain cannot be said to enjoy the
conditions necessary to the complete development o f the system.
The tonnage o f British and foreign vessels which entered and cleared
in the United Kingdom with cargoes, in the years 1842, 1853, and 1863,
respectively, w as:—
1842.

1853.

1S63.

Tons.

Tons.

Tons.

British.........................................................
Foreign .....................................................

5,415,821
1,930,983

9,064,705
6,316,456

15,263,047
7,762,116

Total..................................................

7,346,804

15,381,161

23,025,163*

* The importation o f wine in 1842 was unusually small, the average importation
from 1840 to 1848 having been nearly 6,500,000 gallons.




1864.]

British Commerce, Navigation, and Finance.

443

The coasting tonnage of the United Kingdom has likewise increased
greatly, notwithstanding the severe competition o f the inland railway
carrying trade, as is shown, by the accompanying figures o f the tonnage
of British and foreign vessels engaged with cargoes in the coasting trade
o f the United Kingdom :—
1842.
Tons.

1853.
Tons.

1863.
Tons.

British.................
Foreign .............

12,820,745
None

17,465,635
81,897

Total...........

12,820,745

17,547,532

The tonnage o f vessels built and registered in the United Kingdom in
the years 1842, 1853, and 1862 was:—
1842.
Tons.

Sailing-vessels. .

Steam-vessels.
Total...........

1853.
Tons.

1362.
Tons.

154,256
48,215

164,061
77,338

203,171

241,399

In addition to the above, the following amount of foreign tonnage
was registered in the United Kingdom :—
1842.
Tons.

1853.
Tons.

1862.
Tons.

None

30,073

74,629

The total registered tonnage of the United Kingdom (exclusive of the
Channel Islands and Isle of Man) was in the same years :—
1842.......................................................................... Tons 2,990,849
1853........................................................................... “ 3,969,158
1862........................................................................... “ 4,860,191
The revenue produced by the customs has been well sustained, not­
withstanding the great reductions effected in our tariff since 1842. In
that year almost every article imported was liable to a customs duty, and
the list o f tariff denominations amounted to many hundreds, whilst at
present about twelve leading articles alone are taxed on importation.
The gross customs’ revenue amounted in the following years to :—
1842................................................................................£22,771,315
1853................................................................................ 22,506,443
1 8 6 3 -6 4 ......................................................................... 23,232,000
During the same interval the excess o f reduction o f customs’ duties
above the amount imposed was :—
1 8 4 3 -5 3 ......................................................................... £10,166,749
1 8 5 4 -6 3 .........................................................................
4,458,166
Thus during the whole interval the customs’ duties have been reduced
by £14,624,915, whilst the revenue produced, instead of being dimin­
ished, exhibits an annual increase of £460,685.
The gross amount of the duties o f excise in the years 1842, 1853, and
1863 w ere:—




444

British Commerce, Navigation, and Finance.

[December,

1842................................................................................£14,016,083
1853.........................................
16,303.237
1 8 6 3 -6 4 ......................................................................... 18,207,000
The relative additions and diminutions during the sam3
were —

periods

1 8 4 2 -5 3 ........................................................ £2,486,000 Reduced.
1 8 5 4 -6 3 ......................................................... 1,226,000 Imposed.
Excess o f excise duty repealed........... £1,260,000

During the whole period, therefore, the actual increase o f the excise
revenue was £3,590,917, or upwards o f 24^- per cent.
The total net receipts of revenue of the United Kingdom during the
three years were as follows:—
1842................................................................................ £52,763,147
1853................................................................................ 58,962,513
1 8 6 3 -6 4 ......................................................................... 70,721,892
The gross revenue had, therefore, increased during the aggregate pe­
riod from 1842 to 1863-64, £17,958,745, or 34 percent., and that this
increase was not due to augmented taxation is made evident by the fol- •
lowing statement:—
Excess of amount o f taxation repealed over the amount imposed during
the periods 1842-53 and 1854-63 : —
1 8 4 2 -5 3 ........................................................................ £7,175,986
1 8 5 4 -6 3 .........................................................................
4,407,966
Excess of diminution.......................................... £11,583,952
or upwards of 20 per cent, o f the taxes existing in 1842.
The expenditure o f Great Britain, which amounted in 1842 to
£55,223,874, was in 1853 £55,769,252, and in 1863-64 £67,856,286.
In 1842 the amounts of the unredeemed funded and o f the unfunded
debt were respectively:—
Funded......................................
Unfunded................................. ...................................

18,182,100

Total................................. ................................. £791,250,440
In 1853—
Funded..................................... .................................£761,622,701
Unfunded.................................
Total................................. ................................. £779,365,204
In 1863—
Funded.....................................
Unfunded................................. .................................
Total.................................




13,136,000

1864.]

Commercial Chronicle and Review.

445

In consequence of the actual or approaching termination of various
annuilies the amount of the debt has been considerably lessened. The
estimated capital value of these annuities has not been computed previ­
ously to 1855. Since that date, however, they stand as follows :—
1 8 5 4 -5 5 ........................................................................ £26,703,244
1 8 6 2 -6 3 ..................•..................................................... 17,757,183
Difference................................................................£9,00(3,06 1
The whole amount o f the debt stands at present, therefore, almost the
same as in 1853, whilst the actual funded and unfunded debt is now less
than it was in 1842.

COMMERCIAL CHRONICLE AND REVIEW.

EFFECT

OF

E L E C T IO N — W A N T S

OF

T R E A SU R Y — EXPENSES

OF

GOVERN M EN T— G O LD

6 T O C K — P R IC E ®

G O V E R N M E N T S T O C K — C IR C U L A T IO N IN C R E A S I N G — C O N S U M P T IO N OF F O R E I G N G O O D S A N D I N C R E A S E D
C 0 8 T O F S A M E — S P E C I E A N D P R I C E O F G O I D - S P E C I E IN T H E C I T Y — D U T IE S D E C R E A S E D — G O L D H E L D
B Y B A N K S D E C U E A S E D -> E X P O R T 8 OF S P E C IE — R A T E 8 OF E X C H A N G E .

T he general elections, which took place the 8th o f this month, under circum­
stances of extraordinary interest, has to some extent interfered with the course
of business. The supposition that the event of the election might work a change
iu the management of the war checked all disposition to do business and induced
most persons to put off enterprises that would otherwise have been prosecuted.
Some imagined that more definite steps towards peace would, after election, be
taken, and, for this reason, an appreciation of the government money would man­
ifest itself in a fall of gold and prices; consequently, buyers refrained from acting
and holders from selling. Gold did indeed fall heavily from 256 to 210, and as
rapidly rose to 260 on the day preceding the election, but again fell off under
various influences at work. These fluctuations in gold continued to check busi­
ness, and the uncertainty as to the future operations of the Treasury had a de­
pressing effect.
The amount of money to be raised is very large, and the mode of doing it will
have a great influence upon the course of business. There seems to be three
general modes of proceeding. One is to tax for a large proportion of the re­
quired sum; another is, to raise a large proportion by issues of gold stock ;
another, by issuing paper and stock with interest payable in paper. It is obvi­
ous that, ultimately, if specie payments are ever resumed, all the interest on the
public debt must be paid in gold . hence, paper interest and paper issues are
a costly expedient which will make the ultimate burden greater by uselessly
swelling the amount. The past year, the expenses of the government were aa
follows:—




446

Commercial Chronicle and Review.

[December,

Borrowed............................................................................................................. $758,121,000
Duties (G old)............................................................................... $99,181,201 149,781,000
Internal taxes................................................................................................... 100,231,000
Total..........................................................................................................$1,008,133,000

The internal taxes now yield nearly §200,000,000, but the customs have
greatly declined. The taxes cannot be greatly increased by legislation now, so
as to be available this year. There is, therefore, a certainty that a large amount
must be borrowed. The most economical way is to borrow the whole on a
gold stock, at the market value, and require all prices to adjust themselves to
that standard. This would, of course, have a very depressing effect on all busi­
ness, and is not a course likely to be popular. Nevertheless, it appears to be
the only safe course for the administration to pursue. On the 1st December the
Treasury sold §25,000,000 of 5-20 gold interest stock at 105 privately. The
market price being 106-J.
The impression which gained ground, to the effect that no more gold stocks
would be issued, imparted greater firmness to the government stocks, which were
quoted as follows :—
PRICES UNITED STATES PAPER.

January 2 . .
“
9 ..
u
1 6 ..
ti
2 3 ..
“
s o ..
February 6 . .
ii
1 3 ..
44 2 0 ..
44 2 7 ..
5 ..
March
44 1 2 . .
44 1 9 ..
44
2 6 ..
2 ..
April
44
9 ..
«
1 6 ..
M
2 3 ..
it
£0 . .
7 ..
May
<4
1 4 ..
it
21..
ti
2 8 ..
4 ..
June
it
1 1 ..
it
1 8 ..
it
2 5 ..
2 ..
July
it
9 ..
ti
1 6 ..
M
2 3 ..
41
8 0 ..
6 ..
Aug.
44
1 3 ..
fi
2 0 ..
44
2 7 ..

/— 6's, 1831.— v
7 3-10,
Coup. 5’s, 1874. 8 years.
Keg.
1054
96
104#
1064
96
104#
1054
1664
96
1064
104
1054
106
107
97
107
106
100
106#
1074
1074
1074
100
108
109|
1094
100
1094
110
100
111
111 $
1104
111
lili
100
1114
112
112
112
111
112

1074
1054
114
113
114
114
114
109
108
107

111
112
1124
1124
110
112
1124

100
100

108
114
113

109

1144

114
114
1134

1044
104

113
112
112
111
104

1024
1024

1024
1024

107
1064
106|
1084
1094

107
1054
107
1084
1094

1044




10G
100
100
102
102
102
102
102
102
102

102
102
102
102
102
102
102
102
93
99
100
100
100

111
1104
1104
1114

ill
1114
112

109
111

1094
111
111
111

1094
1084
107
106)
105)
105
1034

103)
1074
1074
108
110
1114

1 yearcertit.
Old.
.Nevy.
1014
97£
102
97f
1024
974
103
97
1024
974
1024
98#
103
9S#
103
994
103
994
1034
99|
103
99|
103
994
103
994
...
994
...
994
99
97
...
984
984
984
...
984
984
98
974
...
97
...
96)
...
94
...
94
...
944
924
954
• ..
944
95
944
...
95

Gold.
1514a 1514
152 a 1524
155 a 1554
156 a 158
1564 a 1564
159# a 159#
1594 a 159)
159# a 161
159# a 161
1614 a 161)
1 6 2 ) a 162#
162 a 1624
169# a 179
1 6 6 # a 1674
1694 a 170
173 a 189
1 74#a 179
1794 a179J
173|a 173#
172) a 1724
183 a 1834
1S6 a I 864
190# a 191
1984 a 198#
1954 a 196
212 a 216
236 a 240
266) a 267/
244 a 285
250 a 268
251 a 251)
260 a 260)
256# a 256
2574 a 2574
254 a 256

1864.]
Sept.
U

«(
((
Oct.
u
“
u
Nov.
M

a

Commercial Chronicle and Review.
3 ..
10..

1 7 ..
2 4 ..
1. .
8 ..
1 5 ..
22..
2 9 ..
5 ..
12. .
1 9 ..

107
107
108
108
106
105J
106
106
106£
107*
1074
110 J

107
1074

100
100
100
100

1064

103

1054
lOof

100
100
100
100
100
100
100

1084
1084

1064

1054
1064

1074
1104

111
111
1104
1104
1104

..
..
••

1054
105
105
108
1064

..

108
118

93f
934
934
944
944
944
94|
944
95
954
954
964

447
254 a 2544
234 a 233
2224 a 222 f
2124 a 2124
1944 a 1944
2004 a 2004
2134 a 214
2094 a 210
2164 a 2164
2394 a 240
244 a 245
2164 a 217

Tho rise in the 7.30 grew oat of the claim of the holders that the notes were
receivable, under the law, for customs, and suit was brought in the United States
courts to test that right. Should it be decided in favor of the holders, the notes
would be worth 220. The change caused the rise to 124 at one time.
Money has become exceedingly plenty during the month. The sums paid out
to the army return in the way of trade, swelling the deposits in the banks, bat
there was little business demand for it. The amount of greenbacks now out is
about §450,000,000. The National bank notes have increased their circula­
tion to §64,000,000, and progress at the rate of §2,000,000 per week, as is
noticed under the banking head. The tendency is now to fill up rapidly the
§300,000,000 of bank capital authorized by the existing law. These notes issued by
the National banks are redeemable in the “ greenbacks,” which are at present
of a value of 40 cents per dollar in specie. As the emission of National notes
goes on, the whole circulation of bank notes and greenbacks will approach the
fixed amount of §700,000,000 of paper currency. There are also outstanding
§61,000,000 of 5 per cent, legal tender, on which the coupons are paid December
1, and, being cut off the notes, become currency and will be used as such until
the interest again accumulates, causing them to be hoarded. There are also
$150,000,000 of notes, legal tender for the face, with interest compounded every
six months for three years. This mass of currency approaches $1,000,000,000,
and, if paper stocks are issued, must be increased to float them.
Consumption of foreign goods has been stopped in great measure by the rise
in price. What in the aggregate is the extent of this rise may be seen from the
following estimate.
The customs receipts for the whole Union in the past year were, quarterly, as
follows:
Quarter to
September 30......................... *
December 31...........................
March 31....................................
June ..........................................
Total.............................. ..

Revenue.
$22,562,018
23,411,521
27,439,654
25,681,207

Currency value.
$30,082,690
35,117,281
43,903,446
44,942,113

Average price
of gold,
130
150
160
180

$99,994,400

$153,945,530

155

This currency value is according to the average price of gold each week in
New York, when the duties were paid. Inasmu ;h as the currency value of the
duties is added to the cost of the good3 imported, that value represents what the
consumers of goods pay. The whole amount of dutiable goods imported in 1864




448

Commercial Chronicle and Review.

[December,

was $260,381,101, and the average value of gold, as above, being 155, the ex­
change was 170. The actual cost of the goods was then as follows :
Prime cost........................................................
Freight, etc...............................................................................

$260,381,101
26,088,110

Exchange 60 premium...............
Duties collected in currency...................................................

$286,419,211
161,051,526
159,945,530

Total cost imports in currency......................................

$001,416,267

Thus the amount, of money paid by consumers, exclusive of the profits of im­
porters, jobbers, and retailers, internal transportation, insurance, etc., was
$601,000,600 lor a prime cost of $260,000,000, or 154 per cent average advance
for the whole year ; but the rate w’as much heavier in the last quarter than in
the first. If we take the quantity of goods that paid duties iu October and in
June, and the amount of duties collected, the results are as follows :
Goods paid duty.
$16,744,081
8,058,899

October........................................
J u n e..............................................

Duties.
$6,238,943
3,311,148

Percent
37
42

Thus doubling the duties in the spring only raised the average collected 5 per
A very large proportion of the goods that arrived in June, however, went
into bond, as in April a very large quantity was taken out of bond to avoid the
then expected duties. The currency rate of gold increased the cost paid by con­
sumers, as follows :

cent.

October.

Price gold............................ .........................
147
Cost...................................................
$1,000,000
.............$420,000
Gold duties.................................................... $370,000
Currency duties.............................
543,900'
Exchange premium........................
470,000
T o ta l........................................

$2,013,900

Juno.

200
$1,000,000
...............
840,000
1,000,000
$2,840,000

Thus the rise of 53 percent in goldoperated a rise of 83 percent in the cost
of goods ; of this 5 percentonly was actual advance in the tux by the Govern­
ment. It is manifest that so heavy an advance in the cost of goods must have
produced a serious check in their consumption, and this has manifested itself in
the decline of business for the autumn season.
The slackness of business, which caused a diminished demand for gold for
duties, also checked the demand for remittances abroad, and the movement was
limited up to the approach of November, when the amount due abroad for in­
terest on 5-20’s fell due. The shipments then increased. The whole movement
was as follows:
SPECIE AND PRICE OE GOLD.
4

.---------- 1 8 6 3 . -----------. ,------------------------------ 1 S 6 4 .

deceived.
2
9
16
23
so

. . ...............
. . . . 1,277,788
. . ...............
.. ..
678,841
. . .....................




Exported.
681,448
726,746
1,380,247
780,817
1,331,027

Received.
254,239
279,801
865,608
324,864

Exported. Gold in bank. Prem. ongold
590,262 25,161,935 61* a 52
1,216,204 25,122,002 51* a 62
1,986,067 24,884,264 52* a 66*
1,000,000 24,631,204 66 a 58
668,747 24,203,632 66* a . . .

1 864 •]

Commercial Chronicle and Review.

Feb.

6 . ...
801,800
13 . . . .
859,9S7
............
20 . . . .
27 . . . .
285,394
Marchs . . . . 1,243,551
12 . , , ...........
19 . . . .
249,514
26 . . . .
159,105
Apr. 2 ,___
250,778
9 . .......................
16 . . . .
217,602
23 . . . .
256,604
30 .
May 7 . . . .
205,057
14 ,, , . .
12 . . . .
258,570
......
28 ,. . . .
June 4 ,___
318,066
......
11 . . . .
......
18 ,, . . .
25 ,. . . .
187,082
......
July 2
9 . ...
254,947
.
.
.
16 .
......
23 . . . .
270,182
80 . . .
.
.
.
......
Aug. 6 .
313,612
18 ___
......
20 , , , ,
231,854
27 ___
......
Sept, 3 t r .
10 ___
279,043
193,548
17 ___
24 ___
277,380
.
.
.
.
.....
Oct. 1
*
268,282
8 .___
U
......
15 . . .
it
267,911
22 ___
“
......
29 . , T .
Nov. 5 ___
547,338
“ 12 ___
281,340
“ 19 ___
261,780

1,277,000
1,152,846
520,017
1,377,016
733,643
3,54 0,550
1,201,907
1,050,156
473,385
607,059
158,437
629,855
294,998
451,827
661,996
438,745
279,994
411,483
235,364
522,147
134,432
347,807
401,936
2,190,781
1,725,748
480,374
530,044
1,210,220
238,898
1,379.710
309,799
852,752
535,796
1,411,611
803,583
2,555,656
1,206,950
1,243,273
585,802
646,017
395,798
1,006,907

863,198
407,057
512,358
281,'-04
375,101
273,429
302,344
269,522
282,376
282,276
383,428
271,801
291,208
281,011
301,207
249,095
284,801
571,281
387,281
369,592
231,481
275,131
191,781
279,121
381,310
489,632

662,616
1,219,808
325,632
531,700
629,803
465,920
83,881
273,900
168,912
345,471
1,002,384
3,226,000
1,271,836
1,174,241
2,452,668
1,884,195
580,820
1,425,688
1,643,600
1,886,663
1,296,356
560,677
486,339
301,244
556,464
404,812
90,111
341,883
48,009
206,398
444,503
486,451
669,733
1,288,559
603,604
287,758
239,491
616,456
932,648
2,296,630
1,224,280
1,515,165

449

24,070,191 4 9 i a . . .
23 521,453 95 a . . .
22,523,918 69 a . . .
22,301,687 165 a 61
21,220,653 611 a 66J
20,750,495 62 a 62
21,059,512 62 a 70
20,425,504 691 a 681
19,527,665 6 3 | a 7 l i
20,924,287 67 a 29
21,687,670 71 a 89
24,868,203 721 a 79
24,087,343 77 a 85
23,082,028 71 a 81
22,635,155 61| a 76J
22,091,691 73 a 85
21,973,180 87j a 921
22,461,604 87 a 901
24,041,704 92 a 991
22,916,291 94 a 981
22,000,898 99 a 130
21,206,685 115 a 180
20,084,917 122 a 1761
21,234,354 144 a 185
21,033,912 1501al68|
21,051,896 144 al59
21,159,518 155 al611
21,080,309 152 al59J
20,794,268 155 a!58
19,952,949 145 al57
20,136,547 131 al53
20,603,881 125 al43
20,085,180 114 al30
20,065,180 100 al28
19,671,131 85 alC5
20,066,557 89 al08
20,522,032 99 a!08
21,010,360 110 a lls
21,078,307 109ial20J
21,740,327 i 2 11a. 146
22,491,122 233 a>80
21,438,959 209fa225

$58,879,548 10,963,530 42,499,017

Total.

The Treasurer gave notice in August that the interest on the November cou­
pons would be advanced on application. Few, however, availed themselves of
this offer. Those holding these bonds for investment, and using the interest for
expenses, did not draw the gold until it was quite due, because it was safer ia
the Treasury than elsewhere, while others holding the bonds to sell would not
draw the interest because the bond without the coupon was not saleable. Hence
the amounts drawn before due were not large.
The amount of specie in the city has been reported for four months as follows ;
Banks.

July 1 .......................................
August 1..............................................
September 1........................................
October 1 ..................................
November 1 . .......................................
von. u —

no

. v i.




Treasury.

$21,206,685
$9,860,865
21,051,896
10,846,154
20,036,547
13,171,453
19,671,13110,373,483
21,078,307
12,877,560
28

Total.

$31,051,650
31,898,050
33,207,000
31,044,614
83,955,867

Commercial Chronicle and Review.

450

[December,

This gives the amount of gold in the Treasury at the first of each month.
Now if we take the amount received from customs in each month, and the
amounts paid for interest, we shall have results as follows :
Customs.

J u n e ................................
July....................................................
August....................................................................
September.....................................................
October...................................................................
Total.........................................................

Kind
Interest paid, of stock.

13,348,010
$3,754,659— 6 s ’81
3,641,300
1,790,600— 7 .3 0
6,272,002
1,800,136— 10-40
4,113,2102,355,476— 7.3 0
3,697,335 16,322,707— 5-20
$21,071,857

$25,028,568

Thus the interest paid was more than the customs receipts of this port, aud
probably about equals the receipts at all the ports. But the receipts are now
declining. Those for November give about $3,478,501 for the month, or
$0,000,000 for the two months. The payments will be, for interest $9,300,000,
and for principal of the Texan loan, $2,002,000, making $11,422,000, or tlms
for six months :
Payment o f interest, June to January....................................................
Payment principal......................................................................................

$34,383,563
2 ,062,000

Total payments
New York customs....................................................
Other ports..................................................................

$36,445,563
$27,071,857
5,500,000

$31,571,857
$3,873,711

Deficit

From this it will be seen that if more gold bonds are issued, the Treasury will
probably be required to buy gold, and there is therefore objection in some quarters
to the further issue of such bonds. But when we remember the other alterna­
tive, we think no one can hesitate as to which course should be pursued. The
question is reduced simply this—whether the Treasury shall buy gold or shall
issue more paper 1 Which will increase the price, or more properly depreciate
the currency most ? W e think there can be no doubt on this point.
The course of paper is just now manifesting itself in the working of the na­
tional banking law, so that while the customs receipts are declining, the reser­
voirs of specie are being reduced. Those banks which are making arrangements
to merge their business under the National Bank Law, with a view to escape
the State laws in relation to local taxation and the ultimate payment of thennotes in specie, were steadily selling their specie. On the 20th of October, the
Philadelphia banks concluded to go under the national law. Those of Boston
have, many of them, arrived at the same conclusion. The weekly returns show
the following results of specie in bank :
October 17..................
October 25..................
October 31..................
November 7 ...............
November 14..............
November 21..............

$3,940,341
3,663,670
3,496,143
3,058,994
2,743,641
2,674,037

Total.
$10,301,922
8,971,151
8,721,734
8,026,776
7,530,823
7,103,037

Decrease.............

$1,266,304

$3,198,885

Boston.




Philadelphia.

Price
gold.

222
225
246
260
220
210

1864.]

451

Commercial Chronicle and Review.

Thus those banks have sold 31 per cent of their specie in five weeks since they
determined to go into the national system, which dispenses with specie altogether.
The exports of specie out of the country in excess of all receipts has been for
the same time as follows :
Shipped.
$616,456
932,648
2,296,690
1,224,280
1,650,000

October 2 0 ...
October 2 7 ...
November 5.
November 12.
November 19
Total.............................................................

Price.

Lowest. Highest.
$196 a $217
202 a 222
221 a 246
238 a 260
210 a 230

86,720,074

The difficulties of the market gradually caused the price of foreign exchange
to fix itself in gold, the bankers requiring payment in gold. During the last
four weeks in the following table, therefore, the quotations are for the gold price.
To find the currency price the premium on gold is to be added :
KATES OF EXCHANGE.

London.

Paris.

Amsterdam. Frankfort.

Jan. 2,- 166 a 166* 3 .3 8 i a 3.84*
9,. 166* a 167f 3 .3 8* a 3.40
c< 16,. 169* a 170f 3.30 a 3.32*
“ 23,. 170 a 171 3.31 a 3.33
(« 30, 171 a 172 3 .3 2* a 3.28*
Feb. 6, 174 a 175 3.26* a 3.23*
U 13, 173 a 174* 3 .2 7* a 3.23*
20, 172* a 174 3 27* a 3.23*
27, 173* a 174 2.26* a 3.22
5, 174* a 175* 3.25 a 3.21*
12, 177 a 178 3.15 a 3.18*
19, 176 a 177 3 .2 2* a 3.18|
26, 179* a 182 3.15 a 3.10
April 2, 1774 a 181 3 .1 8 | a 3.12*
“
9, 184 a 185 3.08 a 3.06*
“ 16, 189 a 191 2.97* a 2.95
23, 190 a 192 3.05* a 2.95
«< 80, 195 a 198 2.90 a 2.85
May' 7, 192 a 195 2.96* a 2 . 90
“
192 a 187 2.95 a 3.02
U 14, 196 a 193 2.87* a 2.83*
21,
<( 28, 201 a 203* 2.81* a 2.77*
June 4, 218 a 210 2.72* a 2.68*
a 11, 215 a 218 2.65 a 2.60
“ 18, 216 a 219 2:64 a 2.88
« 25, 235 a 238 2.37* a 2.41*
July 2, 270 a 295 2.15 a 1.92*
9, 292 a 298 1.95 a 1.87*
K’ 16, 268 a 290 Nominal.
it 23, 273 a 282 2.10 a 2.01*
“ 30, 270 a 274* 2 15 a 2.07*
Aug. 6, 279 a 283 2.00* a 2.00
“ 13, 274 a 277 2,05 a 2.07*
<( 20, 278 a 279* 2.06* a 2.02*
<C 27, 275 a 276 2.08* a 2.05
Sept. 3, 260 a 275 2.15 a 2.05
a 10, 253 a 256 2.25 a 2.20
“ 17, 245 a 248* 2.31* a 2.27*
u 24, 230 a 240 1.47* a 2.35




62* a 63
62*■a 63
64 a 64*
64* a 64*
64* a 64*
65* a 66f
65 a 65*
65* a 65*
65* a 65*
65* a 66£
66 a 66*
65* a 66£
67* a 68*
66* a 67
6S* a 69
70 a 71
71* a 71*
73 a 74
72 a 73
71* a 70*
74 a 75*
75*■a 76*
78 a 79
79 a 79*
79Jr ft 80£
86 a 87
93 a 94
. . a ..

Hamburg.

62* a 63* 55| a 56
62* a 63* 55*•a 56*
6 4 * a 64* 66* a 57*
64* a 65 56* a 57
64* a 65 57* a 57*
65* a 66 53 a 58*
65* a 65£ 58* a 58*
65* a 65* 58* a 58*
65* a 68 58* a 58*
66 a 66* 58* a 59
67 a 67* 59 a 59*
66 a 66* 58* a 59
68 a 68* 60* a 61
67 a 67* 59* a 60*
68* a 69* 61* a 62
70* a 71* 02* a 64*
71* a 72 62* a 63£
73* a 74* Go a 66
72* a 73* 63* a 64*
71* a 71 62* a 63
73* a 75 65 a 66
75* a 764 67 a 67*
77* a 74* 68*■a 69
78 a 79 71* a 72
80 a 80* 72 a 73
. . a ..
76 a 77
. . a ..
85 a 95
200 a215 96 a 98

Berlin.

no* a in
110* a i n
112* a 113*
112* a 113*
113* a 114
115 a 116
115* a 116
115* a 116
115* a 116*
116 a 117
117* a 118
116 a 117
120 a 121
118 a 120
121* a 122
127 a 128
124 a 125
130 a 131
128 a 127
124 a 125
130 a 131
134 a 135
135 a 136
143 a 144
145 a 145
154 a 155
185 a 195
184 a 188

a . . 101 a103 90 a 93 182
. . a . . 98 alOO 88* a 90* 178
. . a . . 103 a 105 91 a 93 134
91* a 92* 183
100 a 102* 101 al03 91* a 92* 183
90 a 90* 178
85 a 90* 170
. . a . . 83 a 84 166
93 a 94
80 jSa 81* . .
a ..
83 a 90 76 a 80
..

a 184
a 180
a 185
a 185*
a 184
a 180
a 180
a 167
a
a ..

Journal o f Banking, Currency, and Finance.

452
Oct.
“

i,
8,
15,
tl 22,
“ 29,
Nov • 5,
w 12,
“ 19,

a 210
a 218
a 230
a 1091
a 109
a 1091
a 1091
a 1091

208
210
218
1081
1(81
1091
1091
1091

2.75
2.70
2.55
5.161
5,181
5.171
5,161
5.25

a 2.68J
a 2.60
a 2.45
a 5.20
a 5.22
a 5.25
a 5.25
a 5.16

69
40-§
40
40
401

[December,

671 a 681 ,, a ,.
.. a ..
70 a 72
,. a ,, 72 a 75 138 a 142
a 71
a 41
.. a .. 351 a 36 71 a 72
351 a 361 H i a 72
a 41
401 a 41 351 a 36| 701 a 72
a 41
401 a 411 351 a 361 70 a 721
a 411 41 a 411 351 a 36
72 a 721

The disposition to draw only for gold makes the exchange market more regu­
lar and satisfactory, and throws upon the importers the whole trouble of buying
gold, cost of commissions, etc. The demand then is from importers for duties,
and also for gold to pay for bills drawn. Commercial bills are sold to some ex­
tent for currency.

JOURNAL OF BANKING, CURRENCY, AND FINANCE.

STATE

B A N K S IN

P H IL A D E L P H IA

T U R N S — IN C R E A S E
T IIK
A

R E -O P .G A N I Z IN G

IN C A P I T A L A N D

N A T IO N A L L A W — N A T IO N A L

N A T IO N A L

N A T IO N A L

BANK, AND

ACT— N E W

W IIA T

YORK,

UNDER

N A T IO N A L

C IR C U L A T IO N — B O S T O N

C IR C U L A T IO N , W I I a T
W IL L

BOSTON

B E IT S
AND

AND

L A W — N A T IO N A L

NEW

YORK STATE

IS I T ? — B A N K O F

C IR C U L A T IO N — T H E

P H IL A D E L P H IA

BANK

BANK
BANKS

COM M ERCE TO

RE­
AND

B hi C O M B

P R O F IT S O F B A N K I N G

UNDER

R E T U R N S — ACCO U N TS

FR O M

KNOLAN D M ORE F A V O R A B L E — R E TU R N S OF B A N K OF E N G L A N D A N D B A N K OF FRAN CE, E TC.

The officers of the banks of Philadelphia, and many of those of Boston, have
been constrained to make arrangements for re-organizing their banks under the
National Bank Law, because of the expenses and local taxes that so eat up the
profits of the local banks, that it requires 20 per cent, in earnings to pay 8 per
cent, dividends. The tendency is, therefore, to make a change aud become
National banks. These banks are not taxed directly, but under the State laws
the tax will fall upon the stockholder, which must be in proportion to other
profits. But the advantages held out to the institutions of not paying specie, by
being Treasury depositors, &c., are such as to counteract that tax. Other in­
stitutions will probably soon assume the national character before the limit al­
lowed by the law is taken up by new institutions. The report of the National
Banks, Oct. 1, was as follows. We also give the figures for July :
CONDITION OP THE NATIONAL BANKS ON THE MORNING OF THE FIRST MONDAY OF OOTOBEE AND OF JULY, A. D. 1864, BEFOEE THE COMMENCEMENT OF BUSINES3S ON SAID
DAYS.

Resources.
July l.

Loans and discounts..................... ..
Beal estate, furniture and fixtures
Expense account..............................
Remittances and other cash items.
Hue from National Banks.............




§70,746,513 S3
1,634,049 46
£05,341 SI
6,(67,132 90
15,936,730 18

Oct. 1.
693,233,067
2,202,318
1,021,669
7,640,169
19,936,720

92
20
02
14
47

1884.]

Journal o f Banking, Currency, and Finance.

Due from other bank8.......................................
U. S. Bonds, and other U. S. securities...........
Bills o f other banks............................................
Specie and other lawful money.......................
Other items................................................ . . .
Aggregate

17,337,553
92,839,500
5,344,172
42,288,797
842,017

86
00
39
84
73

$252,278,063 75

453
14,652,393
108,664,496
4,687,727
44,801,497
1,424,648

31
03
28
20
70

$297,108,195 80

Liabilities.
Capital stock paid in. .
Surplus fund...............
Notes in circulation.. .
Deposits .....................
Unpaid dividends........
Due to National Banks
Due to other banks.. .
Profits...........................
Other items...................
Aggregate.

$75,213,945
1,129,910
25,825.665
119,288,453
125,785
17,803,873
10.078,133
3,094,330
213,788

65
22
00
27
It
12
25
It
02

$252,273,803 75

$86,782,802
3,010,286
45,260.504
121,645,820
520.715
20,145,419
14,716,384
5,982.392
43,239

75
10
00
55
10
35
96
22
77

$297,108,195 30

In the quarter to October 1, it appears the capital increased @11,568,857,
and the circulation increased 20 million. Since October 1, the weekly increase
has been as follows :
October 22.....................................................
“
29.....................................................
November 5 ...................................................
“
12.................................................
“
19 ...............................................

Capital.

Circulation.

$98,111,420
104,746,070
105,381.070
108,540,750
108,440,870

$56,853,036
68,734,180
60,450,100
62,350,390
64,529,470

It appears from the above that the weekly increase of circulation has been
nearly @2,000,000 per week, and more than one-third of the authorized capital
is already taken up. To this will be added the Boston capital, and most of that
of New York, a3 soon as the coming legislature shall have passed an enroling
act, which will remove all doubts as to the legal right of the State institu­
tions to merge their rights in the new system. The bank of Commerce with its
capital of @10,000,000, has already announced its intention to organize under
the new law. The direction of this movement is to increase greatly paper
issues, because the new circulation of @300,000,000 will not be based upon specie
real or pretended, but upon @450,400,000 United States legal tender that are now
at40ceDtson the dollar in gold. The National bank notes being a legal tender be­
tween the government and the people, will require but a small amount of legal
tender basis, because there will be no need of demanding payment. If any one
has money to pay the government, except for duties, the bank notes are avail­
able. If be wants specie, the bank notes will buy it on nearly as good terms as
the greenbacks, in which they are redeemable. Thus an institution in the coun­
try issuing @100,000 notes, must have on hand 15 per cent, in lawful money, of
which @9,000 must be in legal teuder ; and @6,000 in balances due to it from
other banks, which means simply nothing. Thus the whole issue of @100,000
circulation is @3,600, if we estimate it at the present value in specie. In case
legal tenders fall, as fall they will, from the mere effect of these bank issues, the
whole obligation becomes nil.




454

Journal o f Banking, Currency, and Finance.

[December,

Besides all this, the re-organization of these old banks enables the most of
them to issue a large amount of additional currency. Take the Bank of Com­
merce of New York as an instance. The capital is, as we have stated,
$10,000,000. One-third of this capital will have to be lodged, in the form of United
States bones, with the Comptroller of the Currency at Washington, and ninety
per cent, of the market value of the bonds deposited will be restored to it in cir­
culating notes. The law gives any bank the option of increasing its deposit to
the full amount of its subscribed capita! and its circulation iu proportion. The
minimum amount of currency placed at its disposal will thus be more than three
millions, and may be about nine millions. Its circulation now is only one
thousand seven hundred and five dollars.
The evils connected with these National Banks are beginning to receive the
attention of the daily press. The Cincinnati Gazelle of the 15th of November,
speaks of them as follows. I f our readers will turn to the back numbers of the
Magazine issued when the National A ct was first passed, much the same ideas
will be found repeatedly expressed, only then few believed us. The Gazelle
“ The country has suffered but little thus far from National Banks, but it is
plain enough to see that the foundations have been laid for a bubble of the most
extraordinary dimensions, and the superstructure is going up rapidly. National
Banks are running into the wildest kind of a wildcat system. There is no doubt
at all about this. We need not say that we do not refer here to the banks
based upon bona fide capital, and organized for legitimate purposes ; but it is
known that the ropes are being arranged for operations that will, so far as re­
gards the inflation of the currency, throw the old, broken-down system of Indi­
ana and Illinois into the shade. What else can be expected ? Never was such
an opportunity for making money presented. Let us look at i t : A bank is or­
ganized with a nominal capital of $300,000. The sum of $100,000 is subscribed
and paid in. This is invested in United States bonds, which are deposited with
the comptroller, and $90,000 in currency issued. This is used indirectly for
purchasing other bonds, and a further instalment of $81,000 is obtained in cur­
rency. This is again used, and another instalment of $73,000 in currency is re­
ceived. Thus the bank has, on a bona Jide capital of $100,000, secured and
deposited bonds to the amount of $271,000, and has in circulation notes to the
amount of $244,000. Put these together, and we have $515,000 standing on
$100,000. This is almost equal to anything the Indiana and Illinois sharpers
ever got up in their palmiest days. Now let us look at the profits :
Interest on bonds, equal in currency to ....................... ................
Interest on circulation at 8 per cent.............................................

$37,940 00
14,640 00

Total interest............................................................................

$52,580 00

W e have deducted from the currency 25 per cent., which banks are required
to keep-on hand. But the managers who go into this kind of business will do
better than that. How this may be done, we need not stop to explain. It is
very easy to make an average, by having large amounts of currency two or three
times iu a month, to swear by. It is thus seen that on a capital of $100,000
a company of gentlemen may realize a profit of $52,580 00 per annum
from the circulation alone. If gold should go higher than 240, the profits would
be still larger. It would be in the direct line of interest with those bankers to
inflate the currency and enhance the price of gold. But about redemptions.
Isn’t a bank required to redeem ? Yes, in greenbacks ; but they are not asked
to redeem in anything. There would be no object in it. If we had specie pay-




1864.]

Journal o f Banking, Currency, and Finance.

455

meuts, there could be no such banking as this we describe : but there being no
payments of any kind, notes are set afloat, and do not return to annoy their
makers.”
We do not believe it will be long before the true tendency of this act will be
seen by every one, but we trust it will be before all its evils have worked out
their full effect upon the country.
The Banks of Philadelphia and Boston, as will be perceived from the follow­
ing tables, began to sell their gold freely as soon as they had determined to or­
ganize under the new law. The sales of the Banks of the two cities amount to
nearly 53,000,000. The weekly returns of the New York Banks give the fol­
lowing results :
NEW

YORK

BANKS.

N ew Y ork B anks. {Capital, Jan., 1864, $ Date.
Loans.
Specie.
Circulation.
2
January
$174,714,465 $25,161,935 $6,103,331
“
9 ,..
173,009,701 25,122,002 6,032,546
“
16,.,
165,991,170 23,884,264 6,008,182
M
2 3 ,..
162,925,880 24,077,513 5,049,807
“
3 0 ,..
162,296,896 24,203,632 5,913,558
February
6 ...
163,076,846 24,070,791 5,974,762
U
13,..
165,090,329 23,521,453 5,916,707
«(
2 0 ,..
168,302,935 22,523,918 5,908,394
U
2 7 ,..
174,928,205 22,301,687 5,907,851
March
5 ,..
182,317,378 21,188,034 5,937,167
U
12,..
189,757,746 20,750,405 5,918,807
U
19,..
198,229,513 21,059,542 5,889,197
it
26 ,..
199,372,437 20,425,504 5,514,139
April
2,. .
20.3,993,131 19,526,665 5,708,908
“
9 ...
204,333,192 20,921,287 5,804,511
it
16,..
198,703,699 21,687,670 5,779,650
«
23 ,..
196,286,723 24,868,003 5,679,947
8 0 ,..
194,157,495 24,087,343 5,626,978
May
7 ,..
192881,246 23,082,028 5,594,832
<(
1 4 ,..
194,178,921 22,635,155 5,482,357
a
2 1 ,..
197,356,939 22,091,691 5,367,355
2 8 ,..
195,813,462 21,973,180 5,240,812
June
196,740,609 22,461,604 5,180,639
4 ...
H
11,..
194,935,822 24,041,704 5,049,457
tl
18,..
195,773,583 22,916,291 4,959,098
“
25,..
197,077,002 22,000,988 4,807,195
July
2 ,..
198,089,016 21,206,635 4,752,917
199,699,742 20,084,917 4,696,107
“
16 ,..
199,043,887 21,234,354 4,724,538
if
190,885,761 21,033,912 4,688,892
2 3 ,..
i<
3 0 ,..
185,838,480 21,051,896 4,553,426
August
6 ,..
185,563,507 21,159,518 4,522,728
“
185,074,244 21,080,309 4,417,804
13,..
2 0 ...
185,998,407 20,794,268 4,346.658
“
188,502,729 19,952,949 4,256,847
2 7 ,..
September 3,..
189,414,631 20,136,547 4,200,950
10...
187,285,127 20,603,881 4,181,616
186,317,519 20,185,315 4,169,513
*■
17,..
185,551,211 20.065,180 4,147,107
“
21,..
October
185,896,837 19,671,131 4,157,823
1,..
8 ,..
185,875,206 20,066,557 4,131,111
185,357,270
1 5 ..
.
20,522,032 4,051,767
185,738,764
21,010,360 3,991,779
22..
.
186,521,351 21,078,307 3,920,290
29,..




Jan., 1863, 5569,494,577.)
Net Deposits. Clearings.
$140,250,856 $300,763,147
134,861,977 387,546,217
130,311,046 416,962,806
130,136,203 460,811,543
130,665,415 427,306,608
133,849,042 425,430,985
140,464,616 467,751,745
148,014,106 514,887,411
154,875,059 575,442,304
158,999,668 518,951,433
168,044,977 688,822,273
169,637,975 618,338,858
168,315,904 576,253.989
171,151,297 670,372,745
170,513,020 658,352,112
168,350,790 646,593,643
161,978,166 672,442,840
164,578,919 446,587,420
168,562,197 410.052,013
174,426,682 413,552,127
173,111,884 486,884,114
171,765,696 410,972,198
174,516,367 477,648,207
172,537,248 445,519,165
169,445,767 431,158,427
158,772,982 442,840,362
154,989,844 452,583,531
153,525,977 336,621,426
151,816,947 466,125,408
147,981,326 403,144,195
152,929,683 399,439,739
153,279,263 415,360,181
155,826,514 422,879,926
156,536,217 382,685,847
156,036,807 406,296,866
151,068,566 436,3S1,918
147,967,942 435,795,830
146,378,542 498,191,745
144,654,935 461,221,702
145,816,097 643,081,474
146,333,022 506,281,897
150,233,084 494,830,434
150,816,884 511,388,091
151,883,092 437,717,893

456
Date,
Nov.
«(
u

Journal o f Banking, Currency, and Finance.
5 ,..
12,..
1 9 ,..

Loans.
187,378,510
188.914,029
190,460,852

Specie.
Circulation.
21,74 0,327 3.850,463
22,491,122 3,735,635
21^438^959 3,700,626

Net Deposits.
153,920,403
153,383,095
158,154,196

[December,
Clearings.
641,833,442
573,145.8SO
578,069,364

The returns show an expansive movement on the part of the Banks since the
last week in September, when the net deposits were reduced to $144,000,000. An
increase of $14,000,000 or 10 per cent in the unemployed money has been at­
tended only by an increase of $5,000,000 in loans. Inasmuch as all paper draw'
ing interest is placed under the head of loans, it appears that the Banks had
$10,000,000 more November 19th than September 24th, which was unemployed.
This is due to the absence of demand at a time of business inactivity.
The Philadelphia institutions continue their returns weekly, and the results
show a disposition to expand while they have sold specie.
PHILADELPHIA BANKS.

P h il a d e l p h i a B a n k s .

Date.
Jan. 4 , . . .
“
1 1 ,...
“
1 8 ,...
“ 2 5 ,...
Feb. 1 , . . .
Feb. 8 , . . .
“
1 5 ,...
“ 2 2 ,...
“ 2 9 ,...
Mar. 7 , . . .
Mar. 1 4 ,...
“
2 1 ,...
“
2 9 ,...
April 4 , . . .
“
1 1 ,...
“
1 8 ,...
“ 2 5 ,...
Maj 2 , . . .
“
9 ,...
“ 1 6 ,...
“ 2 3 ,...
“ SO ,...
June 7 , . . .
“ 1 4 ,...
“ 2 1 ,...
“ 2 7 ,...
July 4 , . . .
“ n ,...
“ 1 8 ,...
“ 2 6 ,...
Aug. 2 , . . .
“
9 ,...
“ 1 6 ,...
“ 2 4 ,...
“ 3 1 ,...
£ept. 7 , . . .
“ 1 4 ,...
“ 2 1 ,...
“ 2 7 ,...
Oct. 3 , . . .

Loans.
$35,698,808
35,458.967
34,896,842
34,849,959
34.345,126
34,146,677
34,590,880
35,059,676
."5,519,704
35,913.334
35,956,678
36,412,923
36,695,415
87,262,220
-37,032,110
39,535,334
39,570.567
39,770,436
39,639,436
89,262,695
39,639,436
39,262,695
39,723,493
40,286,433
40,286,488
42,057,758
40,918,009
40,717,527
40.731,324
42,057,758
39,277.980
39.142,449
39,353,341
39.401,423
39,778,594
40.331,268
40,885,872
42.404.383
41,839,955
41,152,335




(Capital, Jan., 1863, $11,740,080; 1862, $11,970,130.)
Duo
Due
Specie. Circulation. Deposits.
to banks. from banks.
$4,158,585 $2,055,811 $29,878,920 $4,316,763 $2,963,56.3
4,158,235 2,050,891 30,484,227 4,001,473 2,814,183
4,158,125 2,044,427 31,194,851 4,330,120 3,063,148
4,103,065 2,047,846 32,354,253 3,500,693 2,905,921
4,108,109 2,056,532 32,027,147 8,453,431 3,271.306
4,102,671 2,066,069 31.033,030 4,080,059 2,461,873
4,102,748 2,069,061 29,911,704 4.322,609 2.OSO.750
4,102,5S8 2,119,488 30,783,741 4,463,751 2,099,778
4,102,848 2,167,348 31,435,753 4,837,264 2,114,227
4,102,632 2,208,492 31.712,547 6,823,816 2,116,042
4,099,707 2,308,250 32,511,405 5,508.146 2.333,819
4,099,664 2,340,132 32,835,038 6,933,974 2,428.227
4,096,401 2,357,768 33,156,496 5,791,191 2,724,935
4,095,495 2,390,092 34,404,607 5,641,638 8,425,805
4,093,461 2,379.827 35,958,444 5,855,277 3,799,151
4.095.3S7 2,329,590 38,174,046 5,748,257 3,291,176
4.095,475 2,253,386 37,393,247 6,067,966 2,592.4 65
3,972 349 2,241,885 37,758,836 6,374,531 2,730,540
3,967,263 2,152,827 37,466.311 6,636,576 2,7S6,080
3,964,522 2,131,919 37,638,814 6,58n,54S 2,853,894
3,967,263 2,152,827 37,466,311 6,636.576 2,786,080
3,964,522 2,131,919 37,638,814 6,580,54 8 2,858,894
8,694.320 2,100,927 88,249,800 5,993,116 3,186,259
3,964,758 2,077,753 38,367,171 6,930,707 3,007,283
3,934,529 2,074,273 37,583,203 6,403,664 2.998,548
3,963,640 2,092,470 39,122,S65 6,544,663 3,139,132
3,955,836 2,154,258 37,945,305 6,225,952 4,325,450
3,949,105 2,337,651 37,312.423 6,197,570 4,658,667
3,948,440 2,208,063 36,462,271 6,189,843 3,616,992
3.963,640 2,092,470 39,122,865 6,544,668 3,139,132
3,962,385 2,249,226 36,520,768 6,059,048 3,816,165
3,962,367 2,231,394 37,234,433 5,992,712 3,785,896
3,962,313 2,214,929 36,826,674 5,801,231 3,691,201
3,962,154 2,222,401 35,869,084 5,738,141 3,891,137
3,972,413 2,361,745 85,603,148 6,070,333 3,704,273
3.962,395 2,454,060 34,931,231 6,119,371 3,419,624
3,962,353 2,521,015 35.039,636 6,071,768 3,047,313
3,961,342 2,574,571 35,913,425 6,031,204 3,031,281
3,960,464 2,610,809 34,838,109 6,121,101 3,057,381
3,910,436 2,626,884 84,649,193 6,351,204 3,158,271

1864.]
Date.
“ 1 0 ,...
(1 17, . .
20,.. .
«( 27, . .
Nov. 7 , . . .
« 1 4 ,...
2 1 ,...

Journal o f Banking, Currency, and Finance.
Loans.
40,541,371
40,867,864
41,105,615
41,598,194
41.763.747
42,844,878
43,792,297

Specio.
Circulation.
3,940,409 2,603,851
8,940,341 2,581,607
3,683,670 2,554.604
3,496,143 2,519,385
3,058,994 2,455,776
2,743,641 2,406,652
2,674,037 2,355,763

Deposits.
34,968,886
35,559,796
37,102,885
37,423,689
36,943,993
37,705,038
39,227,713

457

Due
Due
to banks. from banks.
6,336,490 3,268,360
6,715,828 8,126.082
6,582.950 3,302,433
6,469,666 3,554,675
6,000.000 3,000.000
6,000,000 8,000,000

The Boston Banks struggles against the tenders to absorption in the new loans*
But the Suffolk Bank finally gave in, and the others also entered upon the paper
flood which knows no outlet. The returns show a pretty sharp contraction in
the last lew weeks :
BOSTON BANKS.

Boston B anks. ( Capital, Jan., 1863, $38,231,700 ; Jan., 1862, $38,231,700.)
Due
Due
Date.
from banks.
Circulation. Deposits.
to banks.
Loans.
Specie.
Jan. 4 ,.. $76,805,343 $7,503,889 $9,625,043 $32,525,679 $12,831,000 $12,351,500
44 11... 77,747,734 7,531,195 10,185,615 31,524,185 12,103,600 11,019,000
M
1 8 ,.. 75,877,427 7,464,511 9,963,389 31,151,210 12,041,000 11,769.000
tt
2 5 ,.. 74,146,000 7,440,000 9,729,000 30,893.000 11,106,700 12,227.000
Feb 1 ... 73,959,175 7,385,413 9,660,163 30,055,782 10,825,000 11,854.500
44 8 ,.. 71,765,122 7,265,104 9,579,020 30,030,292 11,315,000 12,272.000
«* 1 5 ,..
71,088,849 7,224,924 9,741,471 30,412.647 11,615,000 13,418,000
«
2 2 ,.. 71,074,000 7,215,500 9,411,000 31,831,000 11,329,600 14,925,404
2 9 ,.. 72,189,003 7,179,310 9,371,440 33,155,838 12,224,603 16,189,720
Mar 7 ,.. 72,687,363 7,108,519 9,606,318 33,688,017 12,313,829 16,535,992
“ 14,..
72,105,111 7,052,181 9,490,311 33,891,204 12,701,181 17,315,231
a 21 ,..
73,207,121 7,033,721 9,548,211 35,090,181 13,092.531 17,266,741
« 28 ,..
73,485,514 7,016,086 9,210,096 34,859,508 13,352,706 17,071,731
Apr il 4 ,..
71,838,506 6,856,708 9.442.0S2 32,861,609 13,601,005 15.786.092
“ a ,..
72,620,348 6,932,192 10,447,916 33,324.978 15,094,360 17,362,371
M
is ,..
72.328,896 6,S69,726 10,331,806 33,510.054 14,447,997 17,051,244
(« 2 5 ,..
72,538,611 6,952,498 10,938,991 31,810,971 14,715,981 15,790,498
May 2 ,,.
71,270,181 6,642,798 10,127,097 31,461,499 14,206,581 14,206.592
(1 9 ,..
69,471,481 6,746,484 10,5 21,591 31,172,584 12,801,000 16,239,000
“ 1 6 ,..
68,888,581 6.644,493 10,126,473 31,633,071 12,500,671 16,201,083
“ 2 3 ,..
66,683,510 6,573,181 9,899,193 36,605,131 11,871,719 15.733,691
ft
3 0 ,.. 69,201,301 6,541,201 9,681,204 34,391,208 11,101,307 15,925.201
June 7 ,.. 67,093,500 6,509,181 9,160,621 32,771.821 10,875,181 16,13 1,720
44 14,.. 67,942,400 6,524.207 8,771,181 33,305,220 10,710.089 15,057,131
“ 21,.. 68,880,121 6,507,021 8,933,121 32.740,201 11,631,602 14.790,012
tt
2 8 ,.. 69,691,000 6,470,600 9,063,712 30,865,101 12,260,030 12,872,111
July 5 ,.. 66,950,111 6,290,521 9,574,009 29,940,102 11,839,312 13,809,002
t 1 2 ,.. 66,452,107 6,301,101 9,936,491 32,260,004 11,308,002 13,434,523
tt
19,.. 66,079,000 6,246,211 9,890,031 30,584,101 10,003 181 13,9 42,001
tt
9,151,111 13,473,621
2 6 ,.. 59,973,511 5,733,010 9,775,481 27,905,491
8,947,021 13,039537
Aug; 2 ,.. 59,760,398 5,729,431 9,327,101 27,866,201
U 9 ... 60.655,181 5,734,101 9,685,671 27,806,030
9,842,621 13,261,654
tt
16,.. 61,175,211 5,665,9SI 9,538,841 27,773,8 21
9,855,921 12.798,821
it
2 3 ,.. 61,817,002 5,630,911 9,567,921 27,221,731 10,052,871 12,007,481
“ 3 0 ... 61 960,481 5,681,871 9,638,000 26,495,100 1 0 ,1 1 0 ,0 0 0 11,613,931
Sept. 6 ,.. 62,211,931 5,744,893 10,100,400 25,384,487 10,535,000 11,526,011
44 13,.. 61,818,600 5,789,033 10,274,852 25,015,230 10,152,979 11,142,930
44 2 0 ,.. 61,863,582 5,820,671 10,420,810 24,722,891 10,530,000 11,237,030
it
27 ,.. 53,352,671 5.637,921 10,230,4.31 23,532,931 10,958,781 10,197.691
Oct. 4 ,.. 58,391,621 5,539,000 10,316,991 24.384,581
9,664,431 11,476,581
7,784,451 10,017,792
11,.. 57,719.911 5,391,101 10,304,857 23.913,331
u
18,.. 53,734,921 6,351,581 8,993,181 24,018,572
7,827,911
9,879,721




458

Journal o f Banking, Currency, and finance.

“ 2 5 ,..

“ 81,..
Nov. 8 ,..

“

«

16,..

no

56.030.000
53,485,492
50,865,491
60,4S8,921
44.236.000

5,307,481
5,225,591
4,967,781
4,787,182
4,429,700

9,619.682
9,197,471
9,000,000
9,046,931
9,058,381

24,500,689
24,009,531
21,384,001
22,023,478
20,219,421

9,934,311
7,647,421
6,893,910
6,785,521
5,375,581

[December’
7.901.421
8,669,439
8,167.892
8,731,799
8.889.421

The accounts from England and France have been of a more favorable tenure,
inasmuch as the high rate of money produced its natural effect of moderating
business transactions, cansing a fall of prices and promoting accumulations of
money with the Banks. The general causes that had produced the distress were
however still in operation, and there was no surety that a slight relaxation might
not renew the drain. The great fall in prices, particularly cotton, had thrown a
heavy loss upon the Indian shippers of cotton to England, and fears were natu­
rally entertained that those losses might react in London. The Bank therefore,
notwithstanding the impure condition of the accounts, did not see fit to lower the
rate of interest until the 10th November,- when it reduced it to 8 per cent at
Bank, although less outside. The institution had decreased its private securities,
and also sold Government securities to strengthen itself. The public mind was
not entirely settled. On the contrary, most persons dreaded that fresh failures
might be announced before long, in consequence of the very large losses that had
been encountered in the produce markets. The effect of the failures at Bio by
reaction from the North German towns was looked for, and it was feared that
the next new3 from India would be of an unsatisfactory nature. Apart, how­
ever, from the uncertainty necessarily existing with regard to the fate of houses
whose position is known to be critical, the amelioration in the condition of the
money market was daily becoming more marked. Looking at the mass of pro­
duce stored in the various warehouses in the kingdom, and having in view the
large harvest returns throughout Europe and in America, it is evident that the
supplies of all descriptions of food will continue large, and in excess of the ac­
tual wants of the population. Speculation is not, under these circumstances,
likely to be immediately resumed, as it is in consequence of the plentiful harvests
of this year that that previously existing has broken down. With low-priced
food, a large amount of money, and notably the savings of the trading and work­
ing classes, will soon be returned in greater sums than at present to the capital
for investment. In all probability, the movement by which the discount rate
will soon be reduced to a lower figure has already commenced ; and there is every
reason to conclude that, purged by late events, trade will be re-established in a
sonnder and healthier condition than for a long time past.
The Bank returns were as follows :
THE BANK OF ENGLAND RETURNS.

Date
Dec. 2 , . . .
ti
9 ,...
«« 1 6 ,...
2 3 ,...
it
3 0 ,...
Jan. 6 , ’64
M
1 3 ,...
“ 2 0 ,...
44
2 7 ,...

Public
Circulation. Deposits.
21,686,732 7,234,894
20,801,207 8,629,856
20,382,764 9,103,738
20,273,799 10,266,546
20,686.538 10,841,991
21,822,304 10,001,982
21,396,420 5,264,097
21,445,793 5,689,074
20,875,825 6,337,246




Private
Deposits.
12,924,545
12,981,276
13,265,068
12,711,637
13,021,212
13,052,604
11,411,794
13,879,877
13,406,627

Coin and
Rate ot
Discount.
Bullion.
Securities.
31,980,889 13,048,475 8 per ct.
32,622,659 13,008,617 8 “
32,303,049 13,675,474 7 “
82,270,286 14,217,067 7 “
38,438,154 14,362,605 7 “
“
33,486,952 14,196,754 7
31,726,575 11,708,597 7 “
12,974,109
8
“
31,445,860
31,017,449 13,022,220 8 “

1864.]
Feb.

3 ,..
10,..
(( 17,..
U 2 4 ,..
March 2 ...
“
9 ...
44 16...
“
2 3 ,..
(t 30...
April 6 ,..
«
12,..
(( 2 0 ,..
«( 2 7 ,..
May 4 ,..
if 11,..
ft 18,..
M 2 5 ...
June 1 ...
it
8 ,..
t( 15,..
(« 22,.. .
tc 29 ,.. .
July 6 ,.. .
it 13,.. .
if 2 " ,.. .
it 27 ,.. .
Aug. 3 ,..
it 10,..
<C 17,..
it 24... .
tt 81 ,.. .
Sept. 7 ,.. .
tt 14,..
tt 21 ,..
tt 28 ,..
Oct.
5 ,..
tt 12,.. .
tt 19,.. .
44 27, . .
Nov. 2 ,.. .

if

459

Journal o f Banking, Currency, and Finance.
21,162,626
20,708,113
20,696,172
20,207,871
20,840,374
20,563,325
20,333,112
20,366,705
20,908,644
21,528,914
21,785,597
21,672,783
21,484,602
22,046,792
21,478,987
21,313,352
20,868,047
21,246,840
20,766,405
20,597,557
20,628,207
21,153,606
21,890,063
22,161,001
22,302.688
22,158,547
22,489,710
21,881,314
21,554.139
21,047,048
21,289,324
21,367,124
20,960.414
20,842,714
20,751,741
21,915,817
21,774,334
21,828,920
21,525,745
21,596,300

6,748,867 13,372,981
7,254,682 12,882,226
7,079,789 13,306,156
8,153,601 12,426,673
7,893,633 13,541,278
8,863.364 12,434,975
8,570,711 13,105,800
9,841,323 12,480,154
10,280,458 12,658,986
9,818,880 13,348,299
5,929,922 13,586,029
5,787,329 13,684,069
6,217,965 12,620,036
6,981,132 12,278,903
7,299,434 12,901,160
7,568,661 12,962,402
7,971,003 12,882,042
8,286,719 12,493,776
8,748,510 11,966,204
8,512.311 12,790,361
9,287,594 13,051,661
10,213,535 12,890,241
9,489,130 13,471,415
4,683,803 15,082,746
4,462,490 13,408,675
4,961,046 13,719,621
5,155,704 13,519,626
4,963,222 14,419,766
5,145,800 13,950,446
5,288,725 13,714,161
5,815,742 13,073,751
6,022,373 12,904,085
6,702,054 12,723,620
6,815,611 12,390,681
7,083,958 12,588,902
6,877,591 11,731,746
7,023,234 18,206,313
3,273,589 14,098,154
3,723,549 13,897,777
3,777,941 13,848,428

31,436,334
36,923,317
31,078,328
30,504,827
31,980,446
31,769,311
31,929,164
32,112,543
33,472,484
34,223,509
31,385,305
31,596,179
30,961,635
32,070,427
32,239,210
31,855,696
31,297,181
31,329,121
30,711,740
30,884,192
31,948,856
33,297,897
34,286,592
31,637,509
30,471,085
31,346,657
31,909,793
32,202,646
31,594,936
30,861,710
31,058,341
31,202,405
31,381,674
30,795,458
31,298,584
31,530,895
32,192,227
29,447,960
29,274,958
29,181,019

13,303,243
13,472,271
13,583,635
13,819,412
14,034,222
13,884,389
13,946.943
14,499,201
14,163,519
13,616,762
13.080,300
12,743,302
12,567,776
12,454,244
12,705,251
13,267,416
13,713,943
14,052,761
14,043,129
14,304,205
14,319,061
14,197,849
13,930,809
13,701,112
13,171,561
12,996,685
12,877,483
12,609,925
12,725,759
12,831,751
12.980,033
12.970,447
12,905,511
13,171,107
13,121,123
12,998,210
13,606,293
13,002,483
13,l46,0i>9
13,313,441

8
7
7
6
6
6
6
6
6
6
6
7
7
9
9
8
7
7
7
6
6
6
6
6
6
8
8
8
8
8
8
9
9
9
9
9
9
9
9
9

tt
t*
t»
tt
U
*
f
‘«
‘t
“t
tt
tt
tt
tt
ft
“
tt
“
t
“

tt

44
tt

“

tt
tt

44
tt
tt
tt

The considerable improvement in the returns of the Bank of Prance induced
that institution to lower its rate of interest in the first week of November. The
bullion had risen 20,000,000 francs iu three weeks. The return is as follows :
BA N K OF FRANCE.

Loans.

Specie.

Circulation.

Deposits. Interest.

January — fr.751,649,983 fr.169,027,010 fr.813,490,825 fr.159,797,667
160,110,225
February — 705,516,796
182,573,888
775,096.775
— 642,135,993
195,994,738
746,610,375
142,925,719
March
— 643,570,276
759,926,425
219,320,720
133,701,530
April
178,434,305
— 683,332,517
242,824,609
767,443,475
May
— 577,309,524
294,892,295
725,381,925
June
156,685,209
tt
23, 594,563,973
280,511,406
720,243,375
144,559,768
ft
30, 676,605,538
277,544,816
766,609,875
165,668,712
7, 662,197,524
276,522,727
July
772,309,475
170,022,200
ft
14, 667,187,446
266,890,961
792,819,275
152,242,482
ft
269.810,253
21, 639,299,542
788,378,725
135,282,170
ft
28, 642,692,154
276,162,420
791,673,525
144,636,935




7
7
6
6
8
6
6
6

6
6
6

6

460

Journal o f Banking, Currency, and Finance.

August
(1

4, 034.904,899
11, 633,495,575
if
18, 627,110,297
"
25, 615,885.942
September 1, 618,948.683
u
8, 618,030,503
a
15, 633,405,806
u
22, 585,624,962
a
29, 608,645,155
October
6, 606,581.148
(I
13, 619,256.344
it
20, 621,458.240
it
27, 591,882,251
Nov.
5, 619,601,399

276,790,393
272.433,487
276,200.183
280,595.089
279,353.778
281,021,082
273,371,823
276,644,874
279,039,471
267,533,219
250,423,737
254,073.593
272.820,218
274,145,142

786.629,625
777.023,925
739,096,425
767,100,725
767,763,725
752,214.625
761.638,225
732,775,425
739.183A25
751,377.975
754 479,725
761,296,775
740,767,475
749,664,075

[December,

157,810,891
148.866,812
139,746,017
130,431.547
141,075,120
137,349.361
130,975,227
110,529,671
122,373,527
128,769,575
120,525,826
123.847.672
124,872,300
156,717,974

6
6
6
6
6
7
7
7

7
7

8
8
8
7

The heavy failures which had taken place in Rio had caused great alarm in
Paris, both from their direct influence on French commerce, and from the effect
they might be expected to produce in London. Several of the leading bankers
of Paris are stated to have lost more or less heavily by this. The manager of
the Dutch Credit Mobilier at Amsterdam had absconded with a large amount of
the funds of that establishment. The general state of affairs it was thought did
not justify the Banks in so speedy a redaction of the rate of interest.
The Bank of France has increased its commission for advances on deposits of
gold and silver in ingots from 1 to 3 per cent, in order to check certain opera­
tions of bullion dealers. These persons, it appears, finding that they could ex­
port gold and silver coin at a profit of more than 1 per cent, were in the habit
of changing the notes which the Bank gave them for their deposits, and sending
the coin abroad. The measure of the Bank has had the good effect of diminish­
ing the demand on its coin, and has at the same time reduced the premium on
silver.
The financial circles were much occupied with the negotiations which have
taken place between the Italian Government and the Italian Credit Mobilier, for
the sale of the crown lands, and through the latter establishment with the Credit
Mobilier of Paris. Different sums have been named as the price of the sale, but
nothing can be definitively concluded without the sanction of the Italian Parlia­
ment. Negotiations with Messrs R o t h s c h il d for the sale of the State railways
are also understood to have been renewed.




Finances o f the States in, Rebellion.

1864.]

461

FINANCES OF THE STATES IN REBELLION.
The finances of tlie Confederate States are sadly out of joint. Having tried
to spend money and keep it too, they have naturally enough failed. To create
debt and call it capital may succeed for a time, but it requires a large mixture
of faith to enable such a debt to circulate. When that faith i3 gone, the pro­
mise to pay must go with it. The laws passed at the last Confederate Congress
failed to work out the cure expected, just for the reason that they took away the
last ray of hope that the government issues would ever be paid : they destroyed
the faith necessary to float their paper money. It was expected by Mr. Memmenoer that by driving out the old treasury note to make room for a new issue,
limited in amount, that prices of commodities would be brought down and the
cost of the war diminished. But this repudiation worked, naturally enough, just
the opposite result. “ Those who had taken the old notes,” says Mr. T renholm,
the present Secretary of the Treasury, “ relying on the good faith of the govern­
ment, on finding them deprived of one-third of their nominal value, became
alarmed, and received the new notes under a strong apprehension of a repetition
of the measure.”
The reduction of value here spoken of consisted in compelling the holders,
under pain of forfeiture, to exchange notes, originally and on their face conver­
tible into six per cent bonds, for bonds bearing interest at only four per cent.
This repudiation by the government of one-third of its past obligations, besides
being a breach of faith, was a confession of insolvency.
Mr. T renholm thus states the present condition of the government finances:
“ The currency demands the immediate and the gravest consideration of Con­
gress. Unless a uniform and stable value can be given to the treasury notes,
the effort to carry on the war through their instrumentality must of necessity be
abandoned. Acquiescence in its deplorable depreciation is to court the ruin to
which it leads. One hundred and thirty five dollars in currency, the price ob­
tained for one hundred dollars in six per cent bonds, is equal to six dollars only
in specie; and to sell the bonds at this rate is in reality to dispose of them at
ninety-four per cent discount; or, in other words, to give a bond for one hundred
dollars in consideration of the loan of six dollars.
There is not a man of property in the country who would not prefer any
fair measure of taxation rather than procure a temporary and treacherous pros­
perity by the sale of mortgages on his estate at this ruinous rate.
“ the depreciation of the currency, proceeding from redundancy, and the want
of confidence in its ultimate redemption, can only be corrected by measures that
shall both diminish its volume and sustain the public confidence. The measures
adopted by Congress to reduce the currency did not combine these essential
elements of success. Those who had taken the old notes, relying on the good
faith of the government on finding them suddenly deprived of one-third of their
nominal value, became alarmed, and received the new notes under strong appre­
hensions of a repetition of the measure. A t the time, too, that the currency act
provided for a circulation exceeding four hundred millions of dollars, it circum­
scribed and reduced the demand for the notes by making the four per cent bonds
receivable in the payment of taxes. By the 1st of August $170,000,01)0 of the
new notes had already been issued, and less than $10,000,000 sufficed for the pay­
ment of the taxes collected at that date. Depreciation commenced at once, and




Finances o f the States in Btbellion.

462

[December,

proceeded at so rapid a rate that by the first day of October gold was selling at
twenty-five dollars for one.
“ '1'he necessity of providing a speedy and efficient remedy for this condition of
things is obvious. The bonds have to be sold for this currency; the taxes must
be collected in it, and hence all the means of the government for the purchase of
supplies will consist of this medium. Admitting that the amount which may be
raised from these sources is nominally equal to the estimated expenditures, there
is yet no security against such a further decline in the value of the notes as will
disappoint present calculations and add enormously to the accumulation of the
public debt. The time, therefore, seems to have arrived when Congress should
take measures to restore and sustain the currency, or make provision for its
honorable redemption, and resort to the use of specie and bank notes. The adop­
tion of the last alternative, it is feared, would produce great embarrassment in
the community, and the impossibility of obtaining an adequate supply of specie
and bank notes for the wants of the government would create the necessity for a
system of universal impressments, followed by incalculable suffering and dis­
tress.”
Mr. T kenholm does not despair, however. In the first place his expedients
with regard to the currency are three. First, he proposes that the Go­
vernment faith be pledged that the notes shall ever remain exempt from
taxation. Second, that Congress shall also pledge the faith of the Go­
vernment, not to exceed the issue of notes already authorized, namely,
$400,000,000; and, Third, that it should pass an act appropriating twenty
- per cent of the taxes each year, until the return of peace, to the reduction
of the currency until its amount is brought down to $150,000,000; and, further,
that a tax in kind be continued after the war, and a certain fixed proportion of
it be annually applied to the redemption of the then outstanding notes. This
scheme, it will be seen, implies faith in the government and faith in the success
of the rebellion ; but, as we stated above, government faith has already been
broken, and the necessities to which it yielded being quite as likely to happen
again, the mere pledge of Congress is of no account. The old issue of notes
might have had a little life infused into it by some such acts as these, but it will
take a stronger body than a Confederate Congress to build up the new.
The nature and extent of the Treasurer’s expectations and wants may be
gathered from his report. F or instance, he states the resources as follows:—
The tax in kind will produce, he says— wheat, twenty-five million bushels; Indian
corn, two hundred million bushels ; and cotton, two million bales. If this wheat,
corn and cotton be sold, the receipts in cash from this source are estimated as
follows:—
Wheat, two million five hundred thousand bushels, at four dollars...
Iudian corn, twenty million bushels, at two dollars...............................
Cotton, two hundred thousand bales, at two hundred dollars per bale.
Total..............................................................................................

140,000,000
40,000,000
40,000,000
$90,000,000

To this he adds the following suggestions:
“ I propose an additional duty of five cents per pound on the exportation of
cottou and tobacco, and the duplication of the duties on imports ; payments to
be made in coupons of the five hundred million loan, sterling exchange and
specie, as now provided by law. 'The price of cotton in Liverpool being
about sixty cents per pound, the deduction of five ceDts for the tax would




1864.]

Finances o f the Stales in Rebellion.

403

hardly have/ an appreciable effect upon its value in currency. The duty
would fall chiefly on the foreign consumer, or be taken from the profits of
the exporter; and an important financial advantage would be obtained at a
moderate expense to the country. The increased duty on imports would be a
small tax on this lucrative trade. If paid by the importer, it would be free from
all objection ; and if by the consumer, his ability to bear it is abundantly proven
by the high price paid for goods. These measures would enhance the value and
enlarge the demand for the five hundred million loan.
The expenditures for the six months, from the 1st January to the 1st of
July, 1865, with an improved currency, may be safely estimated at a
maximum of $300,000,000; and for the twelve months at................... $600,000,000
To this amount must be added for the redemption of notes, as proposed,
the sum o f......................................................
60,000,000
And for the estimated amount of floating debt.......................................... 114,000,000
T otal...................................................................................... $774,000,000

“ To meet these demands upon the Treasury, I propose the following scheme
of taxation and loans, viz. :
1. Taxation, including the tax in kind........................................................... $360,000,000
2. Sale of bonds of the five hundred million loan and certificates of in­
debtedness
.......................................................................................... 409,000,000
3. Import and export dues and miscellaneous receipts.............................
5,000,000
Total.............................................................................................. $774,000,000

“ To raise the amount proposed by taxation I recommend the repeal of so
much of the act amending the act of 17th February, 1864, as will leave the pro­
perty and income tax in full operation, without the abatements now allowed,
viz.: section 1, paragraph 1, of the amendatory act of 14th June, 1864, which
provides that the value of the tax in kind shall be deducted from the ad valorem
tax on agricultural property , and section 8, paragraph 2, of the same act, which
provides that the property tax shall be deducted from the income tax. By this
change the desired amount of revenue will be secured and the prominent iuequlities of taxation, now the subject of complaint, will be redressed.”
This statement is not an encouraging one, nor is it very clear. How the
Treasurer proposes to raise his $360,000,000 by taxation certainly needs some
further explanation. To us it appears a hopeless prospect.
There are, however, financially two resources left the South, both of which she
has already used and may use, so long as her people will submit—these are the
cotton loan and the tax in kind. A revenue may be derived from these sources,
which, together with the little that can be obtained from other taxation, will
enable the government to exist (that is, keep its army in the fields,) but nothing
more. To tall? of redeeming the currency is idle in the extreme.
Judging from President D avis message, and Mr. T kenholm’ s report, we
should suppose that the tax in kind, passed by last Congress, had been pretty
thoroughly collected this year, for it seems that of the appropriations in money
made for the support of the government by last Congress not over one half were
used, and the president says that no new appropriations will be needed. If, then,
we may suppose that it has been and will be collected, the supplies for the army
are secured, just so long as the people can and will pay the tax. To be sure it
is an expensive and oppressive mode of taxation, but yet it is clearly the best the
circumstances will permit. How far a cotton loan may be used to supply the




Bank o f England.— Rale o f Discount.

464

[December,

necessary munitions of war, machinery, &c., we cannot undertake to say.
tainly this resource would be very limited.
The public debt on the 1st of October, 1864, was as follows :—

Cer­

FUNDED DEBT.

Total issue o f bonds and stocks.................................................................
Total issue of call certificates.....................................................................
Total issue o f certificates of indebtedness.................................................
Total issue of produce certificates, act April 21,1862............................
Amount of 7-30 interest notes, which have assumed the character of
permanent bonds..................................................................................
Total..........................................................................................

$363,416,150
197,518,370
19,010,000
3,500,000
99,954,900
$683,459,420

Deduced by amount redeemed, to w it:—
Act May 16, 1861, principal..............................................
Act August ly, 1861, principal........................................
Call ceitificates, act December 24, 1861, six per cen t..
Call certificates, act March 23, 1863, five per cent........
Call certificates, act March 23, 1863, four per cen t.. . .

$297,600
1,267,700
70,729,030
70,(.00,000
1,825,000
-----------------

144,119,330
$589,340,090

Total
UNFUNDED D E B T .

Amount o f 3-65 interest notes outstanding..............................................
Total issue of Treasury notes— old issue........................ $973,281,863
Reduced by amount called in for cancellation............... 649,047,945
-------------------Total issue Treasury notes, new issue......................................................
Total

$516,050
324,203,918
283,880,150
$1,147,970,209

B A M OF ENGLAND.— RATE OF DISCOENT FROM 1844 TO 1EG4.
T he following table shows the several changes in the Bank rate of discount
of the Bank of England from the beginning of the year 1844 to the present
time. It will he seen that in the earlier years of the series the changes were very
lew ; there was, for instance, but one in the year 1846, one in 1849, one in 1850,
none in 1851. Since 1854 the fluctuations have been much more frequent. The
rate of discount was altered seven times in 1855, eight times in 1856, nine times
in 1857, six times in 1858, five times in 1859, eleven times in 1860, eleven times
in 1861, five times in 1862, twelve times in 1863, and eleven times in about nine
months of 1864. The highest rate in the list was 10 per cent, which prevailed
in 1857, from November 9th to the day before Christmas. The lowest rate was
2 per cent, which prevailed during the greater part of the year 1852, and for
three months of the summer and autumn of 1862. During the year 1864 the
average rate has been higher than ever before. In no other year except 1857
has the rate reached 9 per cent.
W e also give in the table the date of the successive changes, and the number
of days each minimum rate was in operation :




1884.]

Bank o f England.— Rate o f Discount.

465

BATE OF DISCOUNT CHARGED BY THE BANK OF ENGLAND FROM 1ST JANUARY, 1844, TO THE
PRESENT TIME.

Date of change.
1844. 1st Jan.........
5th Sept . . .
1845. 16th Oct........
6th N o v .. . .
4846. 27th A n g___
1847. 14th J a n ___
21st Jan.........
8th A p r il.. .
6th A u g .. . .
25th Oct........
22d Nov.........
2d D e c .........
23d D ec.........

Number
of (lays in
force.
Date of change.
249 1857. 2d A p r il.........
406
18th J u n e .........
n
16th July...........
21
3
Sth Oct.............
294
12 th O c t ...........
19th (Jet.............
140
5 th Nov............
9th N ov...........
24th D e c ...........
7
8*
77
6
119 1858. 7th Jan.............
64
81
14th Jan ...........
28 th Jan.............
8
28
4 th Feb............
10
11th Feb............
21
85
9th D ec............

Rate.

1848. 27th Jan ___
15th June . . .
2d Nov. . . . .
1849. 22d Nov . . . .

24

1850. 26th D ec___

3

1852.

1st Jan.........
22d A p r il...

2i
2

1853.

6th Jan . . .
20th Jan . . . .
2 d June........
1st S e p t.. .
15th Sept ..
29th Sept . .

24
81
41
5

1854. 11th May . . .
3d Ang . . .

51

1855.

41
31

1856.

5th A p r il...
14th June...
6th Sept . .
13th Sept....
27th S e p t .. . ...
4th O ct.. . .
18th Oct . . .

41
5
51

2 2 d May . . .
29th M a y .. .

4$
1st O c t .. . .
6th Oct . . .
13th N o v .. .
4th D e c... .
18th Dec. . .

61

Rate.
04
6
H
6
7
8
9
10
8

77

28
84
4
7
17
4
45

14

6
5
4
H
3
24

7
14
7
7
301
140

140 1859. 28th A pril.........
5 th M ay..........
140
385
2d June...........
9th J u n e.........
399
14th July...........

84
44
34
3
24

7
28
7
85
189

S70 1860. 19th J a n ...........
31st Jan..............
112
29th March. . . .
259
12th A pril. . . . .
10 th May...........
14
24 th May...........
138
8th N ov...........
91
13th N ov...........
14
15 th N ov...........
14
29th N ov...........
224
31st D e c ...........

3
4

12
58
14
28
14
168
5
2
14
32
7

84 1861. 7th J a n ...........
245
14th Feb............
21st March . . . .
70
4th A pril.........
84
11th April.........
7
16th May...........
14
1st A u g...........
15 th Aug...........
7
14
29th A u g...........
19th Sept...........
217
7th N ov...........
7
28 1862. 9th J a n ...........
97
5
10th J u l y .........
88
24th July...........
30th O c t ...........
21
14
105 1863. 15th J a n ...........

7
8
7
6
5
6
5
44
4
34
3

38
35
14

24
3

3

133
49
14
98
77

4

13

44
5
44
4
44
5

6
5

6

24

0

* Six per cent for short, and seven per cent for long dated bills.




Number
of days in
force.

7

35
77
14
14
21

49
63

466

Coinage o f Great Britain.

1863. 28th Jan...........
19th Feb..........
23d A pril...........
80th A p ril.........
16th May.........
21st May...........
2d Nov...........
6th Nov.........
2d Dec...........
Sd Dec...........
24th Dec..........

[December,

5

22 1864. 20th J a n ...........

4

63
7
16

H
8
SI
4
5
6
7
8
7

6
165
3
27

1
21
27

11th Feb............
25th Feb...........
16th A pril.........
2d M a y ...........
6th M av...........
20th M a y .. . . . .
27th M ay...........
15th June..........
27t'n July..........
7th Sept...........

8
7
6
7
8
9
8
7
0
8
9

22
14
50
16
8
15
7
19
42
42

COINAGE OP GREAT BRITAIN.
W e have prepared from the official tables the following statement showing, in
detail, the total coinage of the United Kingdom the past two years :

1862.

1863.

7,836,413
None.

5,921,669
4,371,574

7,836,413

10,298,248

Fourpences ................................
Threepences................................
Twopences..................................
Fence ..........................................
Three-halfpenny pieces.............

604.000
954,360
990.000
4,158
1,160,808
4,752
7,920
319,774

938,520
859,320
491,040
4,158
952,889
4,752
7,920

Total silver.........................

3,945,572

3,253,599

Halfpence....................................

50,534,400
51,107,200
14,336,000

28,062,720
25,918,800
1,433,600

Total bronze.......................

115,977,600

55,545,120

Sovereigns...................................
Half sovereigns......................... .

..

Total gold............................
SILVER.

Florins.........................................
Shillings......................................

BRONZE.

There have been coined in the last ten years 47,929,914sovereigns, 12,058,970
half-sovereigns, also 13,069,370 florins, 20,198,393 shillings, 16,737,520 sixpences,
1,837,694 groats, 41,580 fourpeuny pieces, 18,495,795 threepences, 47,520 twopences, 79,200 pence, 479,670 three-halfpenny pieces, together in value £3,002.287,
or $15,011,435 ; and the cost of the silver metal was £2,257,900 or $11,289,000 ;
also, 136,725,120 copper pence, 164,502,685 halfpence, 43,041,152 farthings,
1,591,296 half-farthings, the value of the copper coin being £958,065 or
$4,790,325, and the purchase value of the metal £496,543 or $2,482,715.




1864.]

The Florida.— Its Capture in Brazilian Waters.

467

THE FLORIDA.— ITS CAPTURE IN BRAZILIAN WATERS.
T he announcement of the capture of the Florida at Bahia, has given rise to
serious discussion, and if the facts prove to be as stated in the Journal da Bahia,
we are certainly in the wrong.
Bahia is a maritime city of Brazil, on All Saints’ Bay, about eight hundred
miles north-northeast- of Bio Janeiro. The harbor is one of the best in America,
accessible to vessels of the greatest draught, and is protected by seven forts. It
has been a favorite resort of the privateers, for coal and supplies.
The Florida came in on the 5th from Santa Cruz de Teneriffe, in order to re­
pair her engine and take in water, &c. The United States Consul asked the
President of the province not to let the vessel into port, and to impose some
penalty for her not respecting Brazilian waters in burning an American vessel
near the Island of Fernando de Noronha. The President replied that he had
granted her two days to make the repairs that her engine needed.
There was also in port the United States steamer Wachusett. Fearing some
fight, since a challenge had been given, the President of the province obtained
from the Consul his word of honor (so says the Journal da Bahia) that peace
would be kept, and that no action would take place in the port, or within the
line of neutrality.
The Florida, for better security, was placed under the batteries of the flagship.
On the 6th, its crew being in need of some recreation, half of it was put on
liberty, went on shore, and thirty of the crew and some of the ofBcers slept on
shore on the nights of the 6th and 7th.
Captain Collins, of the Wachusett, having held a consultation with his officers,
determined to sink the Florida in port. Accordingly, at about three o’clock,
the cables were slipped, and the Wachusett steered for the Florida, hitting her
on the quarter, without doing her great injury.
The following statement of the subsequent facts we take from the Journal da
Bahia:
Hardly had the Wachusett struck the Florda, when she fired a shot from a
bow gun. At once a mast of the Florida fell over, and she lost some men; but
the crew returned a feeble fire.
It is asserled that there was great loss of life at all points in the struggle that
took place with revolvers and cold steel, and that it did not last long, for the
complement of the Florida was reduced by nearly fifty men. Among the dead
is said to be the officer of the deck, who received a ball in the breast; and it is
said that an officer named Stone wa3 also killel from a shot in the mouth
Another officer, leaping on board of the Wachusett, struck about him, and fell
dead under the many blows dealt at him.
Four sailors of the fifteen who leaped into the sea escaped, and these were
picked up by vessels lying near. The other eleven were shot in the water bv
the enemy.
After this brief contest there came an interval of silence which was broken by
prolonged cheers from the Wachusett.
The chief of division, Gervasio Mancabo, sent a barge under the command of
Lieutenant Varella, on board of the Wachusett, to tell its captain to anchor at




468

The Flmida.— Ils Capture in Lrczilian Waters. [December,

once, or he would sink him if he tried to continue his provocation. To this the
latter replied, that, on his word of honor, he would do no more, and that he
would go back to his ancorage.
This answer was given to the officer, the commander of the steamer not allow­
ing him to come on board.
But the steamer Wachusett had smartly made fast a cable to the Florida, and
then feigned to return to its anchorage, steering to the south.
She passed about a cable’s length from the bow of the corvette D. Januaria,
which then opened fire, sending eight shots at the steamer, which did not return
the fire, and, on the contrary, forced its speed to put itself out of range of the
fire. The shot nearly all took effect, being delivered by the best gunners.
At this moment, the crews of all the vessels of war being at quarters, the
chief determined that the steamer Paraeuse, which had put up steam from the
outset of the incidents, should take the corvette in tow as soon as it had enough
steam up, sail at the same time being set on the corvette, so that the vessels
might rapidly follow the prize. In this order the division set o u t: steamer
Paraeuse, corvette D. Januaria, and tender Rio de Coutas. Owing to the tow
of the Florida, it was thought that the corvette could gain upon the United
States steamer.
On passing the light house, the chief of the divisions called together his officers
in his cabin, and told them of the insult that had been received, declaring that
he was going to sink the steamer, take the prize and carry it into this port, if it
was possible. He added that it was their duty to show that the honor of a
nation could not with impunity be wounded. These words were received with
enthusiasm by all the officers, who called out for an action with great ardor.
Chase was given to the steamers, which were about five miles ahead, making
all sail and steam to effect their escape.
A t 9 a .m ., the Paraeuse, easting off her tow-rope from the corvette, gained
greatly upon the American vessels. An action appeared certain to every one ;
but the wind began to fail.
The steamer Florida, which up to that time was being towed, began to steam,
and, with the Wachusett, to gain very fast on our vessels.
The latter continued the chase, and the steamers to run, until they finally went
out of sight. Being in shoal water, and losing sight of the fugitive, they gave
up the chase at 1115.
As a matter of interest in this connection, we give the following official mani­
festo of the Brazilian Government, issued in June, 1863. By it we may learn
the nature of the neutrality determined on and practised by Brazil during our
present war:
OFFICIAL CIRCULAR TO THE GOVERNORS OF THE PROVINCES.

Ministry of Foreign Affairs, Rio Janeiro, )
June 23, 1863.
J
UfcMost Illustrious and Excellent Sir.— With the view of giving wider circula­
tion to the directions issued from this bureau on the 1st of August, 1861, in
which are set forth the principles regulating the neutrality which the imperial
government has resolved to assume in view of the struggle in the United States
of North America, as well to explain some of those principles as to indicate in
general the cases in which neutrality shall be considered violated and the manner
of making it effective, his Majesty the Emperor desires to give your Excellency
the following instructions for your information and due execution :—
By the words, “ except in case of compulsory arrival,” mentioned in the eiicular alluded to, it must also be understood,
That the vessel shall not be obliged to leave port within the period of twentyfour hours if she has not been able to effect such preparations as are absolutely
necessary to put to sea without risk or danger of being lost.




1864.]

The Florida.— Its Capture in Brazilian Waters.

469

The same rule will apply in case of bad weather.
And, finally, in case the vessel is pursued by the enemy.
In emergencies of this kind it will be the duty of the Governors at court and
the Presidents of the provinces to determine, in view of the circumstances, the
time at which the vessel should sail.
The privateers, it always being understood that they conduct no prizes, shall
not be admitted into the ports of the empire for more than twenty-four hours,
except in case of compulsory arrival. (Salno o easo de arribada forcaia )
Prizes to which the circular of the 1st of August refers arc vessels captured
by the belligerents or by the' privateers, so that the penalty imposed on those
who may conduct prizes shall not be applicable to those who may only be found
carrying objects from prizes; but iu no case will such objects be allowed to be
disposed of.
In conformity with the above mentioned circular, belligerent vessels cannot
receive in the ports of the empire anything except such food and naval stores as
they may absolutely need, or to take any other measures for the continuation of
their voyage. This disposition presupposes that the vessel is destined for some
given point, and that only on her course and of necessity she has to enter a port
of the empire.
This provision of the circular will not be carried out, however, if the same
vessel shall frequently enter a port, or if, after being provisioned in one port, she
shall immediately enter another on similar pretences, except iu undoubted cases
of superior force.
Such frequency of visits, without sufficient reason to justify it, must authorize
a suspicion that the vessel is not on a lawful voyage, but that she is cruising in
the adjacent waters of the empire to capture hostile vessels.
The aid and assistance which in such a case is given to one of the belligerents
must be qualified as aid or favor given against the other, and, therefore, is a vio­
lation of our declared neutrality.
Consequently it is declared that a vessel which has once entered one of our
ports shall not be received in the same port, or in another shortly after having
entered the first, to receive food, naval stores, or for any other purpose, except
in cases duly proved of superior force, unless after a reasonable space of time, by
which it might be made to appear that the vessel had left the costs of the empire,
and that she only returned after completing the voyage she had undertaken.
For the same motives as are herein expressed it will not be permitted in any
of the ports of this empire that belligerent vessels shall receive goods imported
directly for them in ships of any nation ; for this would show that the belliger­
ents do not seek to use our ports on their voyages and in cases of necessity un­
foreseen, but with the view of remaining in proximity to the costs of the empire,
taking in advance the precautions necessary for the prosecution of their enter­
prises. The toleration of such abuse would be equivalent to permitting the
ports of the empire to be used by the belligerents as a base of operations.
The principles of the circular of the 1st of August being thus explained, it
follows that the ports, bays and harbors of the empire will be open to the belli­
gerents on the following conditions :—
1. Ships-of-war admitted into a port or harbor mast observe the most perfect
tranquility and complete peace with all vessels that may be iu port, whether they
be war vessels or ships owned as such by their enemies.
2. They shall not be permitted to increase their crew or employ sailors of any
nationality whatever, their own countrymen included.
3. They shall not be permitted to increase the number or the calibre of their
artillery ; nor, under any circumstances, to purchase or embark portable arm3 or
munitions of war.
4. They shall not make use of the ports or harbors, or of the cape3 on terri torial seas of the empire, to watch for inimical vessels that may enter or sail
from our ports; nor procure information respecting those that may be expected*




*

470

The Florida.— Its Capture in Brazilian Waters. [December,

or are about to sail; nor shall they be permitted to make sail in chase of any
enemy’s vessel that may be in sight or signalled.
5. They shall not sail immediately after the departure of a vessel belonging to
an inimical or neutral nation. I f the vessel which sails first as well as that
which proposes to follow be both sailing vessels or steamers, twenty-four hours
shall be allowed to elapse between the departure of the one and the other; but if
the vessel that sails first be a sailing ship and the other a steamer, the latter
shall not leave until seventy-two hours afterwards.
6. During their stay in port the belligerents shall not attempt, by force or
stratagem, to retake prisoners made of their fellow citizens who may be found in
the same asylum, or to liberate prisoners of their nation.
7. They shall not be allowed into a neutral port to sell or dispose of prizes
made from their enemy until the lawfulness of the prize shall be decided by the
competent tribunals.
It is to be understood that the infraction of either of these seven conditions
will constitute a violation of the neutrality of the empire, subjecting those who
infract it to the penalties therein declared.
And to make onr neutrality effective, preventing and repressing those abuses
which are being practised, the following means should be employed :—
1. To ascertain, before conceding an asylum, the character of the vessel and
her antecedents in other ports of the empire, so that it may be decided whether
the vessel shall be allowed to enter or remain, and for this purpose all vigilance
should be used.
2. To observe the anchorage where the vessel may be, under the immediate
surveillance of the police, and to watch for suspicious circumstances and places.
3. To keep a proper guard from the entrance to the sailing of the belligerent
over the movements of the vessel, and to ascertain the character of all the articles
that may be embarked.
4. To direct the police not to allow the landing for sale of any goods taken
from prizes.
5. To prevent them from making prizes in the territorial waters of the empire,
using force if necessary ; and if any prizes be taken in these imperial waters they
will be retaken by the forces of the government and restored to their lawful
owners, as no sale of such goods can be considered legitimate.
6. No belligerent will be admitted into our ports which lias once violated the
laws of neutrality.
7. To compel every vessel that attempts to violate neutrality to 'leave the
territorial waters of the empire instantly.
8. Finally to use force, and in default of a sufficiency thereto, to protest
rolemnly and energetically against the belligerent, who, being informed and
warred, does not desist from a violation of neutrality, ordering the forts and war
vessels to fire on the belligerent who attacks bis enemy on our territory, and on
the armed vessel which attempts to sail before the time defined after the sailing
of a vessel belonging to the other belligerent.
And inasmuch as the steamer Alabama, of the Confederate States, has openly
violated the neutrality of our empire, infringing the dispositions of our circular
of the 1st of August, 1861, making the Island of Rita the base of her operations
for the purpose of carrying prizes there, and sailing thence to make others, which
she has caused to be burned after keeping them some days in the anchorage of
the said island, bis Majesty the Emperor lias ordained that the said steamer shall
never again be received into any port of the empire.
I renew' to your Excellency the assurances of my greatest esteem and high
consideration.
THE MARQUIS OF ABRANTES.
To His Excellency the P r e s i d e n t , & c ., & c.




1864.]

Commerce o f Ike Lakes.

471

COMMERCE OF TIIE LAKES.
I n the Report of the Chamber of Commerce of Buffalo for 1863 we have the
following review of the commerce of the lakes, showing its rapid development:
The French in 1678 selected sites for the first trading posts; which was the
commencement of the immense fur trade with the natives at the extremities of
these lakes, first carried on by them, and afterwards by the English. In the fol­
lowing year the Chevalier de L a. S alle, on the 7th day of August, set sail in a
small vessel named the “ Griffin,” (which by the permission of the Seneca Indians
had been built at Cayuga Creek, six miles above Niagara Falls,) with a crew of
thirty men, destined for Mackinac, at which place he arrived on the 28th day of
the same month. The “ Griffin ” was laden with a cargo of furs, and with a
crew of six men was ordered to return to Niagara. Encountering a storm she
was lost with all her crew. She was the first vessel moved by sails on the waters
o f these lakes. Then every portion of the Great West was covered with its
ancient forests. The sounds of the echoing axe or “ church going bells ” had
never rung through their solitudes, and the battle for mastery was yet undecided
between the wild beast and his wilder foe, the savage hunter.
Nearly a century later, “ August 28, 1763, the sloop ‘ Beaver’ was lost at
Cat Fish Creek, fourteen miles up Lake Erie.” This vessel, with her consorA,
the “ Gladwin,” left Detroit on the 13th of August to procure troops and sup­
plies for the fort, then beseiged by P ontiac, and arrived at Fort Erie on the 22d
day of the same month. When the “ Beaver ” was wrecked, her guns were lost,
and all her cargo, except 185 barrels of provisions, which were taken by the
“ Gladwin ” to Detroit, where she arrived on the 3d of September, with a cargo
of ICO barrels of pork and 47 barrels of flour, which came to Fort Erie from
New York, by the way of Oswego and Niagara, and was carted around the falls
over a road built by S tedman, and finished June 20th, 1763. When the “ Glad­
win ” arrived in Detroit River she was attacked by 340 Indians, embarked in
canoes, who cut her cable, tried to cut holes in her stern, killed Captain H orsey
and another. These were the only vessels on the lakes at this time, of which
there is any known record. In 1764, there is a record of arrivals and departures
at and from Detroit, of the “ Victory,” “ Boston,” “ Royal Charlotte,” and
“ Gladwin.” During this year the “ Gladwin” made one trip to Mackinac, and
three or four trips each were made between Detroit and Fort Erie. Such was
the commerce of the lakes a hundred years ago. Forty-eight years later, in 1812,
there were only twelve vessels on all the lakes. From a pamphlet published by
J ames L. B arton, Esq., in 1846, the following is taken: “ The steamboat
' Walk-in-the-Water’ was built and first went on Lake Erie in the mouth of
August, 1818.” The Detroit Gazelle of May 14th, 1819, published the follow­
ing, taken from the New York Mercantile Advertiser: “ The swift steamboat
‘ Walk-on-the-Water ’ (her great speed may be judged of when it required ten
days to make her trip to and from Buffalo to Detroit) is intended to make a voy­
age early in the summer from Buffalo, on Lake Erie, to Michilimaekinac, on Lake
Huron, for conveyance of company.” She was the first and only steamboat on
the lakes above Niagara Falls. She made an annual trip to Mackinac to carry
up the American Fur Company’s goods, in the years 1820 and 1821, bat was
wrecked in November, of the latter year. There was a small steamboat called
the “ Ontario,” on Lake Ontario, that was built and launched in 1817. T hese
were the only steamboats at this time on all the lakes. The loss of the “ Walkin-the-Water” was supplied by a new steamer named the “ Superio,” which was
built and launched in 1822. In 1826 or 1827, a pleasure party went to Green
Bay from Buffalo, by a steamboat, which was the first steam vessel that ever en­
tered Lake Michigan. In 1845 there were owned and running on the lakes,




472

Commerce o f the Lakes.

[December,

above Niagara Palls, 52 steamboats, 8 propellers, 50 brigs, 270 schooners, mak­
ing three hundred and eighty vessels of all classes, with an aggregate tonnage of
76,000 tons.
There are now in commission, and engaged in the trade of the lakes, 1,870 ves­
sels of all classes, with an aggregatetonnageof470,034 tons, valued at $16,720,800.
The first vessel registered in the district of Buffalo Creek, was a small schooner
named the “ Hannah,” of 48 73-95 tons, built by Charles T ownsend, G eorge
Coit , and Oliver C oit , the last named as master. The date of register is May
26,1817. There are now registered in the district of Buffalo Creek, 307 vessels
of all classes, with an aggregate tonnage of 96,156 tons.
Prior to the opening of the Erie Canal, in 1825, the trade upon the lakes was
of little moment, and can scarcely be dignified with the name of commerce. N o
record is known to exist of the amount of trade.on the lakes prior to 1815. In
that year the number of arrivals and departures of vessels at and from Buffalo
was 64. In 1863 the number of arrivals and departures at and from Buffalo
was 15,376.
“ In 1835, the following description of property came from the State of Ohio,
being then the only exporting State on these lakes, and passed through Buffalo
via the Erie Canal, to tide water, viz.: 86,233 barrels of flour, 98,071 bushels
of wheat, 2,565,272 pounds of staves, 6,562 barrels of provisions, 4,410 barrels
of ashes, 149,911 pounds of wool.”
“ In 1845 the exports of Ohio and other States around the lakes, sent off by
the same channel, were 717,466 barrels of flour; 1,354,990 bushels of wheat ;
88,296,431 pounds of staves ; 68,000 barrels of provisions ; 34,602 barrels o f
ashes; 2,957,761 pounds of wool.”
In 1856 the receipts at Buffalo were 1,211,189 barrels of flour; 8,465,671
bushels of wheat; 9,632,477 bushels of corn; 2,025,519 bushels of other grains,
making an aggregate, including flour estimated as wheat, allowing five bushels
ior each barrel of flour, of 26,239,791 bushels.
In 1862 the receipts at Buffalo were 2,739,818 barrels of flour; 30,450,255
bushels of wheat; 24,288,623 bushels of corn ; 2,634,730 bushels of oats ; and
1,091,326 bushels of other grain—making an aggregate of 72,164,024 bushels,
including flour.
In 1800, in all the territory west of New York and Pennsylvania and north­
west of the Ohio River, there were no considerable settlements, except in Ohio,
which was then a territory containing a population of only 45,365. There was,
by the census of 1860, in the lake basin, a population of 9,474,358, against
4,100,425 in 1840, and 6,080,609 in 1850.
The cereal product of the lake basin States was, in
1840...................................................................................bush.
1860 ..........................................................................................
1860 ..........................................................................................
1862....................................................................... (estimated)

267,265,877
434,862,661
679,031,559
900,000,000

In 1840 the surplus cereals moved to the seaboard out of the lake basin wa3
about 5,000,000 of bushels, against 145,000,000 bushels in 1862.
The Erie Canal and the Mississippi River were, from 1825 to 1833, the only
avenues of transportation for the products of the West to the seaboard. The
surplus cereal products exported from those States bordering on Lake Erie, in­
cluding flour estimated as wheat, were all included in the receipts at Buffalo,
which receipts in 1836 were only 1,239,351 bushels.
The first grain received at Buffalo from Lake Michigan was in 1836, being a
small cargo of 3,000 bushels of wheat from Grand Haven, Michigan, by the brig
John Kinzie, R. C. B ristol, Master. The first grain received at Buffalo from
Chicago, was a small cargo of 1,678 bushels of wheat,shipped by N ewbury and
D ole of Chicago, October 8, 1839, on the brig Osceola, F rancis P. B illings ,
master, and consigned to K ingman and D urfee, Black Rock, now North
Buffalo.




1864.]

Commerce o f the Lakes.

473

In the year 1862 the surplus cereals exported from Lake Michigan, were from
Chicago.................................................................... bush.

57,676,741

Milwaukee..................................................................................
Other porta (estimated)............................................................

18,723,000
10,000,000

Total...............................................................................

86,399,741

Such are the changes of less than twenty-five years. With such results before
us, what may we reasonably expect will be the increase of the next succeeding
twenty-five years, when all the circumstances are so much more favorable than
were those of twenty-five years ago ? The States bordering and tributary to the
lakes, embracing Ohio, Indiana, Michigan, Wisconsin, Illinois, Minnesota, Iowa,
Missouri, Kansas, Kentucky, Nebraska, and Dakota, have an area of 501,027,260
acres; only 56,221,908 of which were improved lands in 1860, against 26,680,340
acres in 1850. In the single decade from 1850 to 1860 no less than 25,146,341
additional acres were taken from forest and prairie and turned into farms. Dur­
ing this decade the population had increased 3,393,749, being 55 8-10 per cent,
or an annual increase of over 5} per cent.
The annual increase in the population of the whole of the United States, since
1790, has been three per cent and a fraction. By this rule, which has proved
correct through seven decades, applied to the remaining portion of tki3 century,
the population will be upwards of one hundred millions in 1900.
If this fertile region of the country shall continue to increase in population,
at the same rate per cent for the remaining portion of the century, that it has
during the last decade, more than half of the population of the United States in
the year 1900 will be in the valleys of the lakes and the Mississippi.
The progress in internal improvements in these northwestern States, shows stu­
pendous results. There were twenty-eight miles of railway in 1840 ; 1,354 in
1850; 11.782 miles in 1860. In 1830 these States had no artificial canals. In
1860, there were completed and in operation 1,556 miles of canals, besides nearly
one thousand miles of slack-water navigation, answering all the purposes of
canals.
Within the present limits of the United States and Territories there are three
. millions of square miles, which may be geographically divided as follows:
Pacific slope........................................................... square miles
Mississippi and lake valleys......................................................
Atlantic and gulf slopes.............................................................

750,000
1,350,000
900,000

This great middle division of 1,350,000 square miles, embracing nearly onehalf the national domain, is drained by the Mississippi and its tributaries, and
the Great Lakes; the waters of the former finding an outlet in the Gulf of
Mexico, and the latter in the Gulf of St. Lawrence, through the River St. Law­
rence, extending through 20 degrees of latitude and 30 degrees of longitude.
This vast area of country abounds with extensive deposits of iron, coal, cop­
per, lead, gold, silver, and quicksilver; the coal being always near tbe iron de­
posits, and the quicksilver, near those of gold and silver ; the former being ne­
cessary for the manufacture of the iron, and the latter for economizing the gather­
ing of the more precious metals.
The rich alluvial soil of the Lake and Mississippi Valleys will make the richest
and most productive agricultural district in the world. By the year 1900, the
fifty millions of people inhabiting these valleys, dividing their labor between
agriculture, manufactures, and trade, promoted and advanced by the productive
wealth of the gold and silver mines of the Pacific slope, will, from necessity, give
life and vigor to a domestic commerce that will be equal to that of all Europe,
and from which will result a more extended foreign commerce than has ever been
the lot of any nation to enjoy.
There is no country on earth that has so many natural advantages for a large




474

Commerce o f the Lakes.

[December,

and extended internal trade, or can be so easily made available by artificial aid3,
as the great W est and northwest. The Mississippi River and its tributaries, the
Missouri and its tributaries, the Ohio, the Tennessee, the Cumberland, the R ed
Rivgr, the Arkansas, embracing many thousands o f miles o f river navigation,can, by the construction o f a ship canal o f less than a mile, from Big Stone Lake
to Lake Traver, in Minnesota, be navigably connected with the Great Red R iver
o f northwest British Am erica. This river is navigable seven hundred miles to
Lake W innipeg. This lake receives the Saskatchawau, which is navigable seven
hundred miles to a point (Edmonston House) within one hundred and fifty miles
o f the gold mines o f British Columbia.

“ A report to the Hew York Chamber of Commerce made in 1858, announces
that the region of Lake Winnipeg, like the valley of the Mississippi, is distin­
guished for the fertility of its soil, and for the extent and gentle slope of its great
plains, watered by rivers of great length, and admirably adapted to steam navi­
gation.”
“ It will, in all respects, compare favorably with some of the most densely
peopled portions of Europe. In other words, it is admirably fitted to become
the seat of a numerous, hardy, and prosperous community. It has an area equal
to eight or ten first class American States. Its great liver, the Saskatchawan,
carries a navigable water line to the base of the Rocky, Mountains. The navi­
gable waters of this great sub-division interlock with those of the Mississippi.
The Red River of the North, in connection with Lake Winnipeg, is navigable
for eight hundred miles directly north and south, and is one of the best adapted
for steam in the world, and waters one of the finest regions on the continent.
Between its head waters and St. Paul, in Minnesota, a railroad is in process of
construction, which, when completed, will open a half million of square miles of
territory for settlement.”
The commerce of Minnesota, with Selkirk and Saskatchawan, doubled in I860.
The Carriboo is rapidly filling up with a mining population. This will necessi­
tate the prompt organization and settlement of British America, that is, of the
plains of the river basins, converging to Lake Winnipeg, and closely connected
with our northwestern States. What all this vast region is to Minnesota now,
all of the country west of New York and Pennsylvania, east of the Mississippi
and northwest of the Ohio River, was to the Middle States, fifty years ago.
The improvement of the Pox River, which can be done at comparative small
cost, will make a navigable highway from Green Bay to the Mississippi River.
The enlargement of the Illinois Canal, and the improvement of the Illinois River,
will make still another navigable highway between the Great Lakes and the
Father of Waters.
These connecting links in the great internal water highway being completed,the proposed improvement of the Canadian canals will, when accomplished, ex­
tend an arm of the sea from the Gulf St. Lawrence into the heart of the great
West, while from the sunny South comes another arm from the Gulf Mexico.
Between these two great water highways is a projected canal from the Ohio
River, through Virginia to the ocean ; besides the Pennsylvania canals, and the
canal system of New York, with its trunk lines, the Erie and Oswego. New
York need never very much fear this Southern arm of the ocean, but the Northern
arm has power now, and when the plans and purposes of the Canadian Provinces
shall have been carried out, there will be such an augmented power as to sweep
onward to the ocean, via the St. Lawrence, nearly all the vast prospective com­
merce, the infancy of which has been shared by the Empire State.




1864.]

Canadian Confederation.— The Proposed Constitution.

475

CANADIAN CONFEDERATION.— THE PROPOSED CONSTITUTION.
T he papers o f Canada publish the following as the result o f the deliberations
o f the Conference:

1st. That a federal union with the crown of Great Britain at the head is the
arrangement the best fitted to protect the existing interests and to promote in
the future the prosperity of British North Americas provided always that such
union may be effected upon principles of equity towards the different provinces.
2d. That the system of federation for the provinces of British North America
is the best adapted in present circumstances for the protection of the varied in­
terests of the several provinces ; and the most fit to produce efficiency, harmony,
and permanence, in the working of the union, will be a general government and
parliament, which will have the control of affairs common to all the country,
with local legislatures and government for each of the Canadas, Nova Scotia,
New Brunswick, and the Island of Prince Edward. These local governments
and legislatures to have control respectively of local affairs. The admission into
the union on equitable terms of the province of Newfoundland, the Northwest
Territory, Vancouver’s Island, and British Columbia, is to be provided for.
3d. The federal government and parliament are to be formed in so far as cir­
cumstances may permit on the model of the British constitution, the convention
desiring thus to express its desire of perpetuating the ties which unite us to the
mother country, and to serve more efficiently the interests of the populations of
the different provinces.
4th. The executive power will reside in the sovereign of Great Britain, and
will be administered by the sovereign or his representative, according to the
principles of the British constitution.
5th. The sovereign or his representative will be the Commander-in-Chief of
the forces by land and sea.
6th. There shall be for all the confederated provinces one general Parliament
composed of a Legislative Council, and a House of Commons.
7th. In order to form the Legislative Council, the provinces shall be divided
into three parts; the first shall comprise Upper Canada; the second Lower
Canada; and the third Nova Scotia, New Brunswick, and Prince Edward’s
Island. These three parts shall be represented by equal numbers in the Legisla­
tive Council. In this manner Upper Canada will have 24 Councillors ; Lower
Canada 24 ; and the three maritime provinces 24, of whom 10 will be for Nova
Scotia ; 10 for New Brunswick, and 4 for Piince Edward’s Island.
8th. Newfoundland on entering the union, will have the right to four Legisla­
tive Councillors.
9th. The conditions of admission into the union of the Northwest Territory,
British Columbia, and Vancouver’s Island, shall be determined upon by the
Federal Parliament and approved by Her Majesty, and with regard to the ad­
mission and conditions of admission of British Columbia or Vancouver’s Island,
the consent of the local legislatures will be necessary.
10th. Legislative councillors are to be named for life by the crown, under the
great seal of the general government. Legislative Councillors shall lose their
seats by the fact of a continued absence during two years consecutively.
11th. Legislative Councillors must be born or naturalized British subjects, of
thirty years of age, and possessed of and continuing to be possessed of real pro­
perty of the value of $4,000. free from all incumbrances. But with respect to
Newfoundland and Prince Edward’s Island, the property may be real or per­
sonal.
12th. The Legislative Council shall have the decision of all questions relative
to the eligibility or want of eligibility of its members.




476

Canadian Confederation.— The Proposed Constitution.

[Dec.,

13th. The first Legislative Councillors shall be taken from the existing Legis­
lative Councils of the different provinces, except Prince Edward’s Island. If a
sufficient number of Councillors shall not be found eligible or willing to serve,
the complement must necessarily be found elsewhere.
These Councillors are to be named by the crown on the recommendation of
the general government, on the presentation of the respective local governments.
In the nomination regard is to be had to Legislative Councillors representing the
opposition in each province, in order that all political parties should be as much
as possible proportionably and equitably represented in the Federal Legislative
Council.
14th. The President of the Legislative Council, until it shall have been other­
wise decided by the general Parliament, shall be chosen from among the Legisla­
tive Councillors by the crown ; who may remove him at pleasure. He is to have
only a casting vote.
15th. Each of the twenty-four Legislative Councillors who are to represent
Lower Canada in the Legislative Council of the Federal Legislature shall be
named to represent one of the electoral divisions named in schedule A, chap. L
of the consolidated statutes of Canada, and such Councillor must reside or possess
his qualification in the division whose representation is to be assigned to him.
16tb. The representation in the Federal House of Commons shall have for its
basis, the population determined by the official census taken every ten year3 and
the number of representatives shall be at first as follows :
Upper Canada shall have
Lower Canada.................
Nova Scotia..................... .
New Brunswick...............
Newfoundland...................
Prince Edward’s Island..

82
65
19
15

8
5

17th. There shall be no change in the representation of the different provinces
before the census of 1871.
18th. Immediately after the census of 1871, and every subsequent decennial
census, the representation of each of the provinces in the House of Commons,
shall be repartitioned on the basis of population.
19th. Lower Canada shall never have more or less than sixty-five representa­
tives, and the other provinces shall have, after the census, the proportion of re­
presentation to which each shall have the right; taking for basis of calculation,
the total of the representation of Lower Canada.
20th. There shall be no reduction in the number of representatives elected for
any one province, unless the total of its population shall have decreased to the
extent of five per cent or more, in comparison with the total of the population
of the Confederate Provinces.
21st. In computing the number of representatives at each decennial period,
no regard shall be had for fractions except when they exceed half the number
which would give them right to a representative, and then these fractions shall
have a right to a representative.
22d. The legislatures of the different provinces shall divide their provinces
respectively into counties, and shall define the limits thereof.
23d. The Federal Parliament may increase the number of its members when
it shall think proper, but must preserve the proportions then existing.
24th. The local legislatures may from time to time change the electoral dis­
tricts for the purpose of representation in the federal House of Commons, and^
may redistribute, in such manner as may be thought advisable, the representa­
tives to whom they may respectively be entitled in the federal House of Com­
mons.
25th. Until it shall be otherwise decided by the federal Parliament all the
laws on the following subjects which shall be in force in the several provinces at
the date of the proclamation of the union, shall continue to be in force, viz,, the




1864.]

Canadian Confederation.— The Proposed Constitution.

477

laws relative to the qualification or non-qualification of persons to sit and vote
in the Legislative Assemblies of each province, as well as those which regard the
capacity or incapacity of voters, and oaths imposed upon voters ; those relating
to returning officers, their powers and duties; to elections ; to the time which
elections are to last; to contested elections and proceedings incident thereto ; to
the vacating of seats ; to the issuing and execution of new writs in case of va­
cancies arising from causes other than the dissolution of Parliament; all of which
shall be applicable to the elections of members of the federal House of Commons
according to the province for which they may be elected.
2Gth. The duration of Parliament shall be for five years, unless it shall be
previously dissolved by the Governor-General.
27th. There shall never be a greater lapse of time than one year between the
end of one federal session and the beginning of another.
28th. The general Parliament shall have power to make laws for the peace,
welfare, and good government of the Confederated Provinces, but always with­
out prejudice to the sovereignty of Great Britain.
29th. The following subjects shall be placed especially under its control :
The public debt and property.
Trade and commerce.
Duties on imports and exports, except on the export of squared timber, logs,
masts, spars, planks, sawed lumber, coal, and other minerals.
Excise duties.
The raising of money by any other mode or system of taxation.
Loans of money on public credit.
The postal service.
Steamboat or other shipping companies, railroads; canals, and other works
connecting two or more provinces, or which are prolonged beyond the limits of
one of them.
Steamers navigating between the confederated provinces and other countries ;
telegraphic communications, and the incorporation of telegraphic companies.
All other works which; though situated in the province, shall be declared in
their acts of incorporation to be for the general benefit.
The census.
The Militia, defences, and the military and naval services.
Marks, buoys, and lighthouses, navigation and shipping.
Quarantine.
Sea and inland fisheries.
Navigable waters between one province and a foreign country, or between
two provinces.
Coin and coinage of money.
Banks of issue.
Savings banks.
Weights and measures.
,
Bills of exchange and promissory notes.
Interest.
Legal tenders.
Bankruptcy and insolvency.
Patents of invention and discovery.
Copyrights.
Indians and Indian reserves.
Naturalization and aliens.
Marriage and divorce.
The criminal law, (except the constitution of the courts of criminal jurisdic­
tion,) comprising the procedure in criminal cases.
The power of making uniform all the laws relative to property and civil rights
in Upper Canada, Nova Scotia, New Brunswick, Prince Edward’s Island, "and
Newfoundland, as well as the procedure in all the courts of these provinces.
But no statute which the federal Parliament shall pass for this purpose shall have




4V 8

Canadian Confederation.— The Proposed Constitution.

[Dee.,

force or authority in any of these provinces until it shall have received the sanc­
tion of the local Legislature.
The establishment of a general Court of Appeals for all the confederated pro­
vinces.
Emigration.
Agriculture.
And in general all matters of a general character, not especially and exclu­
sively reserved for the control of the local governments and legislatures.
30th. The general government and Parliament shall have all the necessary
powers as a portion of the British Empire, to fulfil towards foreign countries the
obligations arising from treaties, existing, or which may exist between Great
Britain and these countries.
31st. The federal Parliament for the purpose of executing its laws may, when
it shall think fit, create new judicial tribunals, and the federal government may
consequently appoint new judges and officers, if that shall become necessary or
advantageous for the public.
32d. All the courts, judges, and officers of the different provinces are to aid
the general government, and to obey it in the exercise of its rights and powers ;
and lor these purposes there shall be general courts, judges, and officers of govern­
ment.
33d. The general government shall appoint and pay the judges of the Superior
Courts in the different provinces, and the County Courts in Upper Canada. The
Federal Parliament shall fix their salaries.
34th. Until the lands of Upper Canada, New Brunswick, Nova Scotia, New­
foundland, and Prince Edward’s Island shall have been consolidated, the judges
of these provinces, who are to be named by the general government, shall be
taken from their respective bars.
35th. The judges of the courts of Lower Canada shall be selected from the
advocates of the Lower Canada bar.
3(jth. The judges of the Courts of Admiralty, who now receive salaries, shall
be paid by the general government.
37th. The judges of the Superior Courts shall hold their offices during good
behavior, but they may be dismissed only on an address of the two houses of the
Federal Parliament.
38th. Each province shall have an executive officer called a LieutenantGovernor, who shall be named by the Governor-General in Council, under the
great seal of the confederate provinces, and during good pleasure ; but this good
pleasure must not be exercised before the lapse of five years unless for cause,
which cause must be communicated in writing to the Lieutenant-Governor im­
mediately alter his dismissial, and also by a message to the two houses of the
Federal Parliament in the first week of the next following session.
39ih. The Lieutenant-Governors shall be paid by the general government.
40tb. The Convention in thus regulating the salaries of. the LieutenantGovernors does not intend to prejudice the claim of Prince Edward’s Island ou
the imperial Parliament for the salary now paid its Lieutenant-Governor.
41st. The governments and parliaments of the different provinces shall be con­
stituted in the manner in which their existing legislatures shall respectively judge
most fitting.
4'2d. The local legislatures shall have power from time to time to amend or
change their constitution.
43d. The local legislatures shall have power to make laws on the following
8UJj'irec't taxation and the imposition of export duties on square timber, logs,
masts, spars, deals, sawed lumber, coals, and other minerals. This right to levy
e x p o r t duties is reserved to New Brunswick and Nova Scotia.
Coaus of money on the credit of their province.
The creation and tenure of local offices, and the appointment and payment of
,ocal officers.




1864.]

Canadian Confederation.— The Proposed Constitution.

479

Agriculture.
Immigration.
Education (excepting the rights and privileges which the Catholic and Pro­
testant minorities may possess with respect to separate schools in the two Cana­
das at the moment of the union.)
The sale and regulation of public lands other than those belonging to the
general government.
Sea and inland fisheries.
The establishment, maintenance, and regulation of penitentiaries and refor­
matories.
The establishment, maintenance, and management of the hospitals, asylums,
and all kinds of charitable institutions.
Shop, tavern, auctioneers, and other licenses.
Local works.
The incorporation of private or local companies conjointly with the Federal
Government.
Property and civil rights, with the exception of those placed under the Gen­
eral Government.
Punishment by fine3, penalties and imprisonment, for breaches of laws within
their legislative jurisdiction.
The administration of justice, comprehending the constitution, maintenance,
and organization of courts of civil and criminal jurisdiction, as well as the pro­
cedure on civil cases.
And generally all matters of a private or local nature.
44th. The power of pardoning criminals, of reprieving, commuting, or remit­
ting their sentences in whole or part, which power belonging of right to the
crown shall reside in the person of the lieutenant-governors in council; but
these last must obey the instructions which may from time to time be addressed
to them in this respect by the general government as well as the laws passed by
the general parliament.
45th. With respect to all questions in which the federal and local legisla­
tures have a concurrent control, the laws of the general parliament are to be
supreme over those of the local legislatures. Tne laws of the latter will be null
and void when they may conflict with those of the general parliament.
46th. The English and French language may be employed simultaneously
in the deliberations of the Federal Parliament, as well as in the Legislature of
Lower Canada, the Federal courts, and the courts of Lower Canada.
47th. No taxes are to be imposed on public properties belonging to the fed­
eral or local governments.
48th. Every bill, having for its object, the appropriation of any portion of
the public revenue, the creation of new taxes, or imposts, must originate in the
Federal House of Commons or the local Legislative Assembly, as the case may
be.
49th. Every vote, resolution, address, or bill of the Federal House of Com­
mons, or any local Legislative Assembly, having for object the appropriation of
any part whatever of the revenue, or the creation of taxes or imposts, must be
preceded by a message from the Governor General or the Lieutenant Governor,
as the case may be ; and the message must be laid before the house during the
same session in which such vote, resolution, address or bill shall be passed.
50th. Any bill of the general Legislature will be subject to rejection by Her
Majesty during the two years following its passation; and those of the local
governments during the twelve months following their adoption.
51st. Ottawa is to be the seat of the Federal government; but the royal pre­
rogative is saved in respect to the fixing of the general government.
52nd. Toronto is chosen for the seat of the Upper Canadian Government,
and Quebec for that of the government of Lower Canada. There is to be no
change as to the local seats of Government for the other provinces.
5drd. All stocks, cash, the balances in the hands of bankers, and every other




480

Canadian Conjederation.— The Proposed Constitution.

[Dec.,

value in cash belonging to the various provinces, at the time of the union, shall
belong to the general government.
54th. The public works and properties following, belonging to the different
provinces, shall belong to the general government, viz. :
The canals.
Public harbors.
Light houses, piers and wharfs.
Steamboats, dredges, and other public vessels.
Improvements in rivers and lakes.
Railways and railway shares.
Mortgages and other debts to the province due by the railway companies.
Custom-houses, post-offices, and other public buildings, except those reserved
by the general government for the use of the local legislatures and governments.
Ordnance properly transferred to the Colonies by the imperial government.
Arsenals, drill-rooms, and military clothing, accoutrements, and ammunition.
Lands reserved for public purposes.
55th. All the lands, mines, minerals, and royal prerogatives belonging to Her
Majesty in the provinces of Upper Canada, Lower Canada, New Brunswick,
Nova Scotia, and Prince Edward’s Island, for the use of those provinces, will
belong respectively to the local governments of the territories where they are
situated ; subject nevertheless to the trusts and interests of third parties therein.
56th. All sums of money due by the purchasers or lessees of these lands,
mines, and minerals at the period of the union will also belong to the local gov­
ernments.
57th. The different provinces will remain respectively in possession of all
other public properties which may be found within them ; but the confederation
will have the right to take such lands and public properties as it may require
for the fortification or defence of the country.
58th. All effects relating to the portions of the public debts of the provinces
with which the local governments are charged, will also belong respectively to
the governments.
59th. The general government will assume all the debts and obligations of the
different provinces.
60th. The debt of Canada so far as it is not specially attributed to Upper or
Lower Canada, retpectively, is not at the time of the union to exceed
$62,500,000; that of Nova Scotia $8,000,000; and that of New Brunswick
$7,000,000.
61st. But if Nova Scotia and New Brunswick do not contract obligations
exceeding those to which these provinces are now liable, and if these obligations
shall be respectively less than seven and eight millions at the time of the union,
they shall be entitled annually to 5 per cent, on the difference which may exist
between the total capital of their obligations and the sums of eight and seven
millions respectively. There is a like provision for Newfoundland and Prince
Edward’s Island.
The foregoing is not intended to restrain the powers which the governments
of these provinces possess through their legislatures ; but simply to limit the
debts which they will be allowed to bring into the account against the general
government. But the respective legislatures, after the expiration of five years
irom the date of the union, will have no power to contract the obligations just
spoken of.
62nd. As Newfoundland and the Island of Prince Edward have not contract­
ed debts equal to those of the other provinces, they will have the right to re­
ceive an advance from the general government in semi-annual payments of an
amount equal to the interest at 5 per cent, on the difference between the amount
of their respective debts at the date of the union, and the average of the debt
per head of the population of Canada, Nova Scotia and New Brunswick at the
same date.
63rd. In consideration of the transference of the power of taxation to the




1864.]

Commercial Regulations.

4H

general legislature, the provinces are to have the right respectively to a grant of
80 centimes per head of the population computed on the population of 1861.
The population of Newfoundland is estimated for this purpose at 130,000 souls.
The provinces will not be able to claim more from the general governments for
local objects, and this aid is to be paid them semi-annually and in advance.
04th. As the condition of New Brunswick is such that that province must
expend immediately a considerable amount from her local revenue, that province
is to receive annually during ten years an additional sum of $33,000. But so
long as her obligations shall remain below $7,000,000, there shall be deducted
from this sum of $83,000 an amount equal to the interest of 5 per cent, on the
difference between the capital sum of the provisional debt and $7,000,000.
Goth. Newfoundland tor abandoning her rights on her mines, minerals, and
crown lands, which are not yet sold or occupied, shall receive annually $150,000
in semi-annual payments. But that province reserves the right to open, con­
struct and control her roads and bridges situated on these lands, which, how­
ever, shall be subject to the laws, in that respect, which the general government
shall think ought to be enacted.
66th. The general government is to assume all the engagements which may
have been undertaken before the union with the imperial government, for the de­
fence of the provinces.
67th. The general government is to cause to be completed without delay, the
intercolonial railway between River du Loup and Truro in Nova Scotia, making
it pass through New Brunswick.
68th. The convention attaching the highest importance for the confederate
provinces to the communication with the north-west territories, and to the
ameliorations necessary for the development of the commerce between the great
west and the sea, engages itself to give effect to these as soon as the state of the
finances will permit.
69th. The sanction of the imperial parliament and of the local parliaments is
to be sought for the union of the provinces, on the principles adopted by the
convention.
70th. The choice of the title and of the name of the confederation is left to the
decision of Her Majesty.
71st. The deliberations of the convention shall be signed by the delegates and
submitted by each local delegation to its government; and the president of the
convention is authorized to submit a copy to the G-overnor-G-eneral, iu order that
he may transmit it to the Secretary of State for the Colonies.

COMMERCIAL

REGULATIONS.

DECISIONS OF THE TREASURY DEPARTMENT UNDER THE TARIFF ACTS.
T he following decisions have been made by the Secretary of the Treasury, o f
questions arising upon appeals by importers from the decisions of collectors, re­
lating to the proper classification, under the tariff acts, of certain articles o f
foreign manufacture and production, entered at the ports of New York, Boston,
& C .:—
OLD BULLETS, (MOLTEN L E A D .)

Treasury Department, March 24, 1864.
Sir :

Your appeal is received, dated March 1, 1864, from the decision of the col­
lector at Rouse’s Point, assessing duty at 1£ cents per pound on 101,332 lbs. of
VOL. L I.-----N O . V I .




30

482

Commercial Regulations.

[December,

lead imported by you from Montreal, and transported to the district of Boston
and Charlestown in bond.
You claim “ that the same is not lead in pigs and bars within the commercial
signification of the term, but should pay one cent per pound as old lead, the said
lead being in fact old bullets sold by Candiana military authorities, and molten,
that same may be sent to .United States without violation of British neutrality.”
Under section 1 of act of 5th August, 1861, a duty of l i cents per pound is
imposed on “ lead in pigs or bars.”
By virtue of the 20th section of act of August, 1842, molten lead, in any
shape, not further advanced in manipulation or design than “ lead in bars or
pigs,” should pay duty as of such classification, being entirely of the same char­
acter as if it wrnre in bars or pigs.
The decision of the collector is hereby affirmed.
I am, very respectfully,
S. P. C hase ,
Secretary of the Treasury.
To Samuel B. L ocke, Esq ,
Boston, Mass.

ORCHELLA W EE D , SO STYLED.

Treasury Department, April 22, 1864.
S ir :

J ohn B oyd, Jr., has appealed from your decision assessing duty, at the rate
of 10 per cent ad valorem, on certain (so-styled) “ orchella weed,” imported by
him, and alleges:
"The tariff act, in my opinion, allows this article to entry duty free, and im­
poses a duty of 10 per cent ad valorem on ‘ orchella’ and ‘ cudbear,’ two manulactured articles. Whereas 1orchella weed,’ the article in question, is a crude
article of no use whatever, except to manufacture, by a slow and expensive oper­
ation, into the two articles above-named, viz.: ‘ orchella and cudbear ’—vegetable
dyes. It cannot be the intention of the law to impose the same duty upon a
perfectly crude article, as it does upon the articles manufactured from that crude
material.”
Under the 23d section of the act of March, 1861, “ cudbear, vegetable, and
orchil,” were admitted to entry free ot duty.
Under the 5th section of the act of July, 1862, on “ orchil and cudbear,” a
duty of 10 per centum ad valorem is imposed.
It will be observed that the phraseology in the act of July, 1862, differs from
that in the act of March, 1861, only in the transposition of the words “ orchil
and cudbear,” and in the absence of the word “ vegetable,” which last word it
may be said was superfluous, inasmuch as cudbear, being a distinctly defined
article, needed no qualification.
It is apparent that the attention of Congress was, as is shown by the prepar­
ation of the act of July, 1862, distinctly drawn to the subject; and if it had
been intended that any form ot orchil or archil was to be exempted from the tea
per cent duty, it is reasonable to presume that it would have been specially pro­
vided for.
I am o f the opinion^that the article in question, imported by Mr. J ohn B oyd ,
J r., was properly assessed at 10 per cent ad valorem, and your decision is hereby
affirmed.

I am, very respectfully,
S. P. C hase ,
Secretary of the Treasury.
To H iram B arney, Esq,,
Collector, New York.




1864.]

483

Commercial Regulations.
B R A N D Y .

Treasury Department, May 3. 1864.
Si r :

I have considered the appeal of Messrs. P atterson & B oulton, of Phila­
delphia, from the decision of the collector of New York, assessing duty, at the
rate of 50 per cent ad valorem, on certain brandy imported into the port of New
York by E. W . E ngs & S on. which it is alleged was 46° and 48° proof, and it
is claimed that the legal duty is § 1JtJL. per gallon.
It has been decided by the Department that the proof of spirits shall be ascer­
tained, &c., and the indication of 50 per cent, &c., is to be regarded as first
proof. (See circular December 19, 1861.)
The sixth section of the act of March 2, 1861, levies a duty on “ brandy for
first proof, 81 per gallon,” and further provides that, on “ all spirituous liquors
not enumerated, 33J per centum ad valorem shall be paid.”
The first section of the act of 5th August, 1861. provides that, in lieu of the
existing duty of §1 per gallon, $1
shall be paid on brandy per gallon ; and
the sixth section of same act amends the 6th section of the act of March 2, 1861,
so as to make it read, that no lower rate or amount of duty shall be levied on
brandy &c., than that now fixed by law for first proof, but shall be increased,
&c., &c.
The second section of the act of 14th July, 1862, provides that, in addition to
the duties heretofore imposed on brandy for first proof, 25 cents per gallon shall
be levied ; and on all spirituous liquors not otherwise enumerated, there shall be
levied an addition of 16f- per cent ad valorem.
Thus, it will be seen that, by the existing tariffs above referred to, brandy of
first proof is subject to duty at 81.50 per gallon, and that brandy under first
proof—being a spirituous liquor not otherwise enumerated—is subject to an ad
valorem duty of 50 per cent, unless said ad valorem duty of 50 per cent should
amount to a less sura than Sl-iiL. per gallon, in which case 8 LJJ- shall be ex­
acted ; but if it amounts to more than $ 1
per gallon, then the duty of 50 per
cent, according to its value, shall be assessed and collected.
Without this construction, the provision of the statute that spirits not other­
wise provided for shall pay an ad valorem duty of fifty per cent would be inoper­
ative in its relation to brandy and all other spirits under first proof.
The very provision itself, that it shall not pay less, enacts that it may and
must pay more, if the duty, as realized by the ad valorem rate is more.
It was decided by the Department, 17th September, 1861, upon the appeal of
W m. K. H orton from the decision of the collector of Boston, (a printed copy of
which is herewith transmitted,) that gin under first proof should, under the tariff
of March, 1861, be classified as “ spirituous liquors not enumerated,” subject to
an ad valorem duty.
The decision of the collector at New York is hereby affirmed.
I am, very respectfully,
8. P. Chase,
Secretary of the Treasury.
To Y m. B. T homas, Esq.,
Collector, Philadelphia, Penn.

G A M B I A .

Treasury Department, May 3, 1864.
S ir :

t

The question as to the proper rate of duty to be assessed on gambia, gambir, or gambier, has been presented to this Department by the appraisers at your
port, and the subject was referred to experts and scientific gentlemen for their
views. The result may be briefly stated thu3 : »




484

Commercial Regulations.

[December,

Gambia is nowhere designated in any of the tariff acts by name, but has been
included under the general term of “ terra japonica,'’ of which catechu or cutch
may be considered a variety.
Under 1he act of March, 18G1, (23d section,) “ teara japonica, catechu, or
cutch,'’ were admitted free ; but under the act of July, 1862, (nth section,) cutch
or catechu are made liable to a duty of 10 per cent ad valorem.
It is claimed that, by reason of terra japonica not being provided for in the
act of July by name, it still stands in the 23d section of the act of March, 1861,
and should be admitted to entry free of duty.
In this conclusion I cannot agree with the appraisers. It is more reasonable
to suppose that Congress, having discovered that “ terra japonica ” was a mis­
nomer, excluded it from the act of July, 1862, for that reason only.
Gambia is essentially identical with catechu or cutch. They are alike in their
physical properties, as color, taste, smell, and solubility ; in their chemical pro­
perties, as shown by their analysis ; in their medical properties, both being
powerful astringents: in their technical properties, both being used in the arts
for precisely the same purposes.
I am of the opinion that gambia should be assessed at the same rate of duty
as catechu or cutch, viz.: teu per cent ad valorem, by virtue of the 20th section
of act ot August, 1842.
1 am, very respectfully,
S. P . C h a s e ,
Secretary of the Treasury..
To H irah B arney, E-q.,
Collector, New York.
FORTY CENTS PE R GALLON, UNDER ACT OF MARCH

7, 1804.

Treasury Department, June 13, 1864.
G entlemen :

Your appeal is received, dated April 20, 1864, from the decision of the col­
lector at New Yoik, exacting the payment ot forty cents per gallon, in “ coin or
specie,” under the act of March 7,1864, on six quarter casks of brandy imported
by Messrs. G. D ord & Co., April 4, 1863, per ship “ Libertas,” from Bordeaux,
and transferred by 0. D ord & Co. to you.
The enclosed circular will explain that the additional duty of 40 cents per
gallon was to be regarded as an internal revenue tax on all spirits bonded in
government warehouses prior to March 7, 1864. On spirits imported on and
after that day, the character of the tax changed, and it became that of an im ­
ported duty, and as such payable in funds receivable for duties.
It appears the brandy in question was imported into New York, April 4,
1863, oud was in bond when the additional duty of 40 cents was collected ; and
yuu are, on compliance with the conditions of the enclosed circular, entitled to
ihe relief asked lor, so far as relates to the payment, in " coin or specie,” of the
additional 40 cents, as distinguished from "legal tender notes,” so styled by
you.
I am, very respectfully,
S. P. CnASE,
Secretary of the Treasury.
To Messrs. P. W . E ngs & S on,
New York.
BOOT AND SHOE LACINGS.

Treasury Department, June 15,1864.
G entlem en :

Your appeal (No- 1,560) dated April 20, 1864, has been considered. The
collector at Purtluiid assessed a duty of 35 per cent upon certain merchandise




1864.]

485

Commercial Regulations.

imported by yon per “ Hibernian,” April 4, 1864, which you allege to be cotton
braids, and liable to a duly of only 25 per cent ad valorem.
The goods in question are not in fact, nor as commercially known, “ cotton
braids,” but are “ boot and shoe lacings” manufactured from cotton thread,
Laving ends secured and covered with tin. and were properly classified under the
22d section of the tariff act of March 2, 1861, and section 13 of the act of July
14, 1862. the former imposing 30 per cent and the latter 5 per cent in addition
thereto on “ articles worn by men, women, or children, of whatever material
composed, made up, &c., not otherwise provided for.”
The decision of the collector i£ hereby affirmed.
I am, very respectfully,
S. P. Chase,

To Messrs. S toddard, L overixg

Secretary of the Treasury.
& Co., Boston, Mass.

BRASS PADLOCKS.

Treasury Department, October 3, 1864.
S ir :

I have received the appeal (No. 2,352) of II. & J. W , K ing, dated August
27, 1864, from your decision assessing duty, at the rate of 45 per cent, on cer­
tain brass padlocks imported by them.
The appellants allege : “ These goods we have paid duties upon up to this time
as hardware. The appraiser under the new tariff values them as manufactures
of which steel is a component part, to wi t : the spring which is attached to the
bolt, and therefore to pay 45 per cent instead of 35 per cent”
You have assessed the duty under the 43d subdivision of the 3d section of the
act approved June 30, 1864, which reads as follows :
“ On all manufactures of steel, or of which steel shall be a component part,
not otherwise provided for, forty-live per centum ad valorem : Provided, That all
articles of steel partially manufactured, or of which steel shall be a component
part, not otherwise provided for, shall pay the same rate of duty as if wholly
manufactured.”
It is thus a repeal of the clause of the 22d section of the tariff of March, 1861,
enumerating articles of metal, steel being mentioned, of which either metal is the
component material of chief value,” so far as articles not otherwise provided for,
into the composition of which steel enters, are concerned. No specific provision
tor “ brass padlocks” is made in the act approved June 30, 1864. or in previous
acts ; consequently, they are properly classified under the 43d subdivision of the
June tariff quoted, and are dutfaule at 45 per cent.
1 am aided in arriving at this conclusion by the suggestion that ns the pad­
locks in question might be classified as manufactures of which brass is of chief
value, and as manufactures in which steel enters, the 20th section of the tariff of
1842 would determine the assessment under the latter classification a» paying
the higher rate.
Your decision is hereby affirmed.
I am, very respectfully,
W . P. F essenden,
Secretary of the Treasury.
To S imeon D raper , Esq., Collector, New York.

PETROLEUM INVESTMENTS.
T he capital now being invested for the purpose of developing the petroleum
interest is beyond precedent. Every week new companies are organized, very
many of them giving promise of unusually favorable results. Dividends of from
3 to 5 per cent per mouth are by no means uncommon. Of course if such re­




486

The Book Trade.

[December,

turns could be depended upon, from year to year, the flow of capital towards pe­
troleum investments would be even much more rapidly increased. Comparatively
few, however, anticipate so rich a harvest, and yet so long as the present high
prices are maintained, we cannot see how investments in the good companies
can fail to be extremely remunerative. The cost of working the land is com­
paratively small, and when a good well is struck the returns are enormous, leav­
ing a large balance of profits.
W e have been requested to call attention to the New York and Liverpool
Petroleum Company, (71 Broadway,) as one of unusual promise. Of course we
know little with regard to the actual resources of the land held by that corpo­
ration, not having examined it personally. Yet its list of property, favorably
located, is very large indeed, and the names of its directors are a guarantee of
good faith. For every five dollars subscribed ten dollars in stock is received, so
that if the company is successful the profits must be very large. Were we about
to make investments of that nature, we should certainly be favorably inclined
towards this company, and give it a further examination.

THE

BOOK

TRADE.

Cyclopaedia o f Commercial and Business Anecdotes. Embellished with Portraits and
Illustrative Cuts. 2 vols. By F eazek Kirkland, D. A ppleton & Co., 443 and
445 Broadway. 16 Little Britain, London.
T his work is a collection, original and selected, of the choicest and most striking an­
ecdotes relating to business men and commercial pursuits, from the earliest recorded
trading transactions down to the present time.. No one who is pleased with the lu­
dicrous, the witty, the mirthful in life, will be disappointed in its contents ; while with
most o f the incidents is conveyed, in this pleasant way, a valuable lesson easy to be
understood. In a word, it is a capital work, well arranged, carefully prepared, and
very creditably published, and will undoubtedly secure a prominent place in the libra­
ries o f a large circle o f readers. The fine engravings of some of our leading commer­
cial men add greatly to its value.
The “ Cyclopmdia ” is fast becoming quite an extensive family. How we ever lived
without it is the great wonder. W e have Cyclopaedias of Art, of Literature, of
Science, o f Commerce, etc., etc., and now we can add to the long list this latest born.
They are all invaluable, and in one way and another decendants of the venerable
11 Chambers.” For this class of works American readers and writers are particularly
indebted to the Messrs. A ppleton. The new American Cyclopsedia published by them
is well known and thoroughly appreciated; while their yearly book is always full and
reliable. But every additional publication of this kind will find a welcome. W e
therefore give the Cyclopaedia family a hearty “ God speed ”— may it be fruitful and
multiply.
A n Epitome o f General Ecclesiastical History, from the earliest period ; with a con­
densed account of the Jews, since the destruction of Jerusalem. By John Marsh,
D. D. W. W. D odd, 508 Broadway.
T his history of Dr. Marsh takes up the story o f religion from earliest dates and
brings it down to our own day. The work is divided into three parts or periods ; the
first extending from the creation to the call of Abraham ; the second, from the call of
Abraham to the birth of Christ; the third, from the birth of Christ to the present time •




1864.]

The Book Trade.

487

Such a history cannot fail to meet with favor. To very many, even of the conscien­
tious readers of Scripture, the historical narrative is but little understood, and espe­
cially is this the fact with regard to the events of the period intervening between the
end of the Old and beginning of the New Testament. This book gives us the narrative
complete, and will be found, therefore, a very valuable assistant in the study of the
Bible.
The Correlation and Conservation of Forces. A Series of Expositions, by Professor
Geove, Professor H elenholtz, Dr. Mayer, Dr. Faraday, Professor Liebig, and Dr.
Carpenter ; with an Introduction and brief Biographical Notices of the chief Pro­
moters of the New Views. By E dward L. Y uuma.ns, M. D. D. A ppleton A Co.,
448 and 445 Broadway.
I t seems almost a work of supererogation to say anything in favor of a book, which is
able to boast of so many great men as its authors; and even if its title page were
robbed of these high names, the interesting topics of which it treats would be suffi­
cient to render it acceptable to the scientific world. It consists of a series of essays
one or more by each of the persons named, on the Correlation and Conservation of
Forces, which, said the President of the British Association for the Advancement of
Science, “ constitute the most important discovery of the present century.” It is cause
for congratulation, that Dr. Y oumans has seen fit to introduce us, in this pleasant way,
to these scientific European celebrities.
Essays; Moral, Political, and Aesthetic. By H erbert S pencer. D. A ppleton A Co
This book is a collection of those essays of Mr. Spencer formerly published in vari­
ous English periodicals, and which have not yet been given to the American public.
The great demand for his works in this country, and the difficulty of obtaining them
from England, owing to the high rate of exchange, have led to thisrepublication. As
a moral philosopher Mr. Spencer has taken a very high stand, and the profound study
by which he has mastered the subjects of which he treats, have given him a world
wide and lasting reputation. No production of his pen, therefore, could fail to meet
with general acceptance, and manv of the essays of this collection have an especial
claim upon the American public.
History of the Romans under the Empire. By Charles Merivale, B. D. Vols. V.
and VI. D. A ppleton A Co.
Two additional volumes of Mr. Merivale’s history have now issued from the press of
the Messrs. A ppleton. The fifth commences with the reign of T iberius, and the last
chapter of the sixth gives an account of the seige of Jerusalem, with the capture and
destruction of the city by Titus. These volumes embrace the reign of Nero, and con­
sequently some of the most interesting portions of Roman history. There is but one
volume more to be published to make the set complete. It would be difficult to find
so handsome or interesting a work with which to make a really valuable Christmas
gift.
The Early Dawn ; or Sketches of Christian Life in England in the Olden Time. By
the author of “ Chronicles of the Schomberg Cotta Family,” with an introduction by
Professor H. B. Smith, D. D. New York: M. W. D odd, 12mo. Price $1 75.
No recent publication has been received with greater favor, than that charming book
the “ Chronicles of the Schomberg Cotta Family,” and now we have another volume
from the pen of the same author. Early Dawn is intended to illustrate, by a series
of stories, “ Christian Life in England in the Olden Time.” There are nine of these
stories, illustrating as many different epochs; beginning with the introduction of
Christianity, when the Druids still retained sway over portions of Britain, and closing




. The Book Trade.

488

[December,

with a story of the Lollards. The author has reanimated, these, remote time9 with
graphic conceptions of life and character, clothing with reality and a lively interest
the events pertaining to the early religious history of England. Here we see vividly
portrayed the difficulties, the dangers, and the trials, which beset the paths of our an­
cestors, as they groped their way from darkness into light, while all the pecularities
of those retnot^ periods are faithfully brought out by one, who ha9 an unusual power
o f appreciating them. The book is one which will be, like its predecessor, extensively
read.
Memoir o f frit. Caroline P . Keith, Missionary of the Protestant Episcopal Church to
China. Edited b v her brother, W il l ia m C. T en ney . D . A ppleton tfe Co., 443 and
445 Broadway, W. Y.
W e have seen few books of more real value to one who takes an interest in the ex­
tension o f Christianity throughout the world than this Memoir of Mrs. Caroline P.
K e it ii . Mrs. K eith was one of the most energetic and faithful of those great and
good women, who, at the call of duty, and influenced by a strong desire to make
known to others the blessings and consolation of the Christian faith, have left their
country and friends to labor in the field of missionary effort. The story of her life
and work is told by herself—the book being merely a collection of her letters written
to different friends, and not, of course, intended for the public eye. The account
which some of them contain of the civil disturijmfcps, in China are also of general
interest. She died, it will be rememberetfpectfonQw^.years since.
Thovghts on Personal Religion. By Edward Meyrick Goulburn, D.D., Prebendary
of St. Pauls. Chaplain to the Bishop o f 'Oxford, etc , wifh a prefatory note by
G eorge II. H< ugiiton, D. D , of K tw ‘ Y/)j'k.' D* A ppleton
Co., 443 and 445
Broadway, New York.
'•«
W e are indebted to Dr. Goulburn for a number of the mo^t^Jbseful religious works
that have of late years issued from the press, many of whicl) are no doubt familiar to
our readers. This treatise on the Christian life is>quai, if hot superior to any of his
other writings. It would appear to have been written not for those in retired life, but
more especially for all who are engaged in the ordinary avocations of the world, for
the purpose of teaching such how to sanctify the “ secular all engrossing pursuit and
the daily toil,” so as to be fervent in spirit as well as not slothful in business. The
style is vigorous and agreeable, so that the,book is far from dry to any reader.
The Haunted Tower. By Mrs. H enry W ood, author of “ The Channings,” “ The
Earl’s Heirs,” “ Verner’s Pride,” &c., tfcc. T. B. Peterson & Brothers, Philadel
phin. Pi ice 50 cents.
Mrs. W ood is a marvel in her way. Her ability to write books has no limit. Each
new moon seems to bring with it a new creation of her brain, with a plot so mysteri­
ous and thrilling that it would seem as if her very life were made up of a succession
o f dead secrets, .startling disclosures, and mysterious murders. The Haunted Tower
is, in these respects, not unlike some of its predecessors, and will, therefore, prove a
feast to novel readers. The man that was supposed to be murdered is not murdered
__the dead man i3 found to be alive, and the live man dead— while the poor heroine
is the victim of both.

CONTENTS

OF

DECEMBER

NUMBER.

1. The Frnnco-Ttalian Convention, t . m. j ................................................................................. 417
2. Industry and Revenue of Switzerland.................................................................................... 4*24
3. National Savings and National Taxation. Number 1............................................................ 429
4*. Commcicial Law.—No. 16. Interest and Usury................................................................... 435
5. British Commerce, Navigation, and Finance, before and since the adoption of Free Trade
and the tepeal of the Navigation L aw s............................................................................ * 440
6. Commercial Chroniple and Review......................................................................................... 445
7. Journal of Banking, Currency, and Finance............................................................................452
8. Finances of the States in Rebellion......................................................................................... 461
u! Bank of England.—Kate of Discount from 1844 to 1864........................................................ 464
10* Coinage of Great Briiain.......................................................................................................... 466
11. The Florida.—Its Capture in Brazilian W aters...................................................................... 467
12. Commerce of the Lakes..... ..................................................................................................... 471
13. Canadian Confederation.—The Proposed Constitution........................................................... 475
14.* Commercial Regulations.—Decisions of Treasury Department.............................................. 4S1
15. Petroleum Investments........................................................................................................... 485
16. The Book Trade...................................................................- .................................................4S6