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HUNTS
M E R C H A N T S ’ MAGAZINE.
J U N E ,
1840.
A rt . I.— THEORY OF PROFITS.— No. III.
T he sources and functions o f capital having been developed, it may
not be amiss to consider some o f the minor incidents by which this
agent o f national wealth is distinguished.
W hile the other two agents o f production, land and labor, are com
monly fixed, and susceptible o f but slow changes by improvement or
addition, capital is capable o f being suddenly transferred from one coun
try to another, and such transfers are continually taking place from
countries in which capital is abundant to those in which it is much
wanted and comparatively scarce, either by the sale o f merchandise on
credit, or by direct loans o f money on interest.
The United States have always obtained the use o f much English
capital, by means o f debts contracted by their citizens to the merchants
and manufacturers o f Great Britain; but o f late the amount has been
greatly augmented, by means o f loans made on the credit o f the indi
vidual states, or by the sale o f the stock o f chartered companies; the
effects o f which borrowed capital have been very differently estimated
by different classes o f our citizens. According to some, the use o f foreign
capital is neither economically nor politically w ise ; and according to
others, its use in all situations, and under all circumstances, must be ad
vantageous. Neither o f those opinions appear to be well founded, and
I apprehend that truth, as so often happens between conflicting theories,
will be found on inquiry to be between them.
Let us examine these opinions, and begin with the one that would
proscribe the use o f foreign capital.
I. From what has been stated in the preceding number, it seems
that capital is an agent o f production in three ways : which are, by giv
ing employment to those who would otherwise be id le; by giving a more
productive employment to those who were previously em ployed; and
by the use o f labor-saving and labor-aiding machinery. W e have seen
that in these ways capital has a creative power, and adds to the stock o f
national wealth not less directly than a piece o f fertile land well culti
vated, and'that the nett revenue o f the nation would be as much dimin
ished by the abstraction o f the one as the other.
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V O L . I I .-----N O . V I.
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Theory o f Profits.
I f such be the productive powers o f capital, it is obvious that a nation
may be a gainer by paying interest for it, i f the nett gains it affords ex
ceed the interest; and a little reflection will satisfy us that it may be
thus gainful, whether employed in agriculture, commerce, or manufac
tures. Let us, for instance, suppose a threshing machine to be invented,
which, by the saving it effected in labor, would in ten years, besides re
paying the cost and interest, yield an annual profit o f 20 per cent., and
that those machines could he imported from abroad at less cost than
they could be made at home. Under these circumstances, a country
would evidently be a gainer by borrowing the money to pay for these
machines, and that the extent o f its gain, during the ten years, would
be the difference between the interest it paid and the twenty per cent, it
gained. So, in commerce, if any branch o f trade would yield a nett
profit beyond the interest o f money, a community which had not the
requisite capital for carrying it on, must gain by borrowing foreign capi
tal for that purpose, to the amount o f the difference between the interest
paid and the profits o f the trade. In manufactures, too, the rule must
be the same. In a word, i f a farmer may find it more profitable to pay
rent for his farm rather than to buy it, the merchant to freight a ship
rather than to build or buy one, and the manufacturer to pay an annual
rent for his water power rather than to purchase it, and i f many can ob
tain these sources o f profit, for a time, and by means o f renting, who
could not obtain them by purchase, then may a community also draw a
profit from borrowed capital which it could obtain in no other way.
In all these cases o f employing capital profitably, it would be better,
unquestionably, if it could be procured at h om e; but there are few coun
tries which have as much capital as they can employ with advantage;
and where that is the case, they are reduced to the alternative, when
they embark in any new enterprise o f profits, either to withdraw the
requisite capital from some other business, or procure it from abroad.
In this case it may be far more advantageous to pay interest for foreign
capital.
These principles lie so near the surface, and are so familiar to all men
o f business, that they would not have been thus dwelt upon, if the prac
tice o f allowing foreigners to be shareholders in our banks, and other
joint-stock companies, had not occasionally been denounced by some o f
our politicians, as i f there were any material difference between these
modes o f obtaining the use o f foreign capital, and those lately pursued
o f making sale o f state bonds, or directly negotiating a specific loan.
It is true, that where foreigners are permitted to be shareholders, they
are commonly also allowed to vote by p rox y ; but as the persons for whom
they vote must be citizens, as their proxies are residents, and may be
required to be citizens too, and as such foreign proprietors cannot easily
be actuated by any other motive than to advance their pecuniary interest,
which is also the main, or rather sole interest o f the corporation, the
permission seems to afford no ground o f apprehension or objection to
the most sensitive national jealousy. Even in Great Britain, whose laws
breathe a much less liberal spirit than ours towards foreigners, they are
freely permitted to share in the profits o f banking, as well as in those o f
every other branch o f commerce, and the only restriction in the law es
tablishing the bank o f England, relative to this subject, is, that the g o
vernor, deputy governors, and directors, must be natural born or natu
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443
ralized subjects. It may be farther remarked, that as the foreign
shareholders with us always have been, and, in the nature o f things, are
always likely to be, a minority, and relatively a small minority, and as
for greater security they may, by the terms o f the charter, be prevented
from exceeding a certain proportion o f the whole number o f stockhold
ers, we have in these foreign shareholders some additional pledge for the
justice and respect o f their respective, while the whole power possessed
by the corporations is’exclusively exercised by our own citizens. Suppo
sing, then, the objection founded in political jealousy to have no solid
foundation, there remains only that o f drawing an annual tribute, as it
has been invidiously called, from the country by way o f dividend,
and which is essentially the same as that objection which has been
made to loans contracted abroad, and which has already been fully an
swered.
II. But still it must not be forgotten, that the benefits o f foreign capi
tal depend upon the uses to which it is p u t; and that it may be so used
as not only to be o f no national advantage, but even to be a source o f
national loss.
The amount o f capital which any country can advantageously employ
depends on its population ; their industry; their skill in the useful and
mechanical arts; and on the capital it has already acquired. As the
numbers o f a people increase, so must also their capital, or their condi
tion must deteriorate ; and it is according to the natural progres o f so
ciety, for capital to increase much faster than population. W here, in
deed, there are no strong counteractions, it continues to increase after
population is stationary.
But under all circumstances, there must be a certain proportion be
tween the number o f operatives in a country, and the capital which is to
give them em ploym ent; and if, by any means, the capital be so increa
sed as to exceed this proportion, the excess becomes either inactive or
unproductive, and is but too probably wasted and consumed.
Capital can, in no mode o f employment, be productive, without the con
currence o f human labor. In the mode in which labor is least required
— in labor-saving machines, as the steam engine— the supervisive and
concurrent agency o f man is indispensable. N or can those engines be
furnished with the raw materials on which they are to operate, nor can
the articles which they have assisted in manufacturing, be conveyed to
the consumer without a yet greater expense o f human labor. The num
bers, then, o f a community must be taken into account, in our estimate
o f the benefits it is likely to derive from any new accessions o f capital;
and that amount which would impart a healthy activity to the trade o f a
town o f one hundred thousand inhabitants, would, in one o f twenty thou
sand, i f retained, either remain comparatively idle, or find employment
only in stimulating consumption.
The field for the useful employment o f capital, in any community, is also
greatly affected by the industry o f its population. The more active and en
ergetic are the inhabitants o f a country, the greater must be their agricul
ture, their commerce, or their manufactures, according to the particular
direction their industry takes, and consequently the more capital they
can use in the various forms in which their employments severally re
quire it, whether it be in farming stock or provisions, in ships or mer
chandise, in raw materials or machinery. On this account the slavehold
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Theory o f Profits.
ing states cannot use as much productive capital, in proportion to their
gross population, as the free states, inasmuch as a large part o f the pro
prietors o f slaves is comparatively idle, or at least unproductive o f mate
rial wealth. Am ong several reasons why more capital can be used in
England than in Ireland, the greater industry o f the English population
is one. That this difference may be traced to moral causes, there can
he no rational doubt, but the fact itself is equally certain. There is the
same difference between the people o f France and Spain.
Climate seems to have great influence in determining the amount o f
human industry, and as yet the world has afforded no instance o f an in
dustrious community within the torrid zone, where the labor was not
produced by compulsion. The island o f Hayti, when it was a colony o f
France, and cultivated by slaves, exported more sugar than any colonial
possession in the W est Indies, but since its emancipation it does not
make quite enough for its own consumption. The same consequences
will finally result in the British W est Indies ; and judging from all past
experience, we may as soon expect to see an active, intelligent, and in
genious people, in the heart o f Africa, with all the stimulants and aid
they can derive from their civilized instructors, as that the Scotch peo
ple will relapse into the ignorance and barbarism o f the ancient Piets,
their ancestors. In a word, the inhabitant o f a cold country is constitu
tionally active, while that o f a hot one is constitutionally indolent, and
this law o f man’s physiology mainly contributes to determine the amount
o f capital he can acquire or employ. Perhaps no part o f the United
States is within the limits o f this physical incapacity.
The amount o f a nation’s industry is also greatly affected by moral
causes. It is greatly encouraged by good government and good laws,
by which every one is free to use his labor, talents, capital, and credit,
in the way that he deems best, and is permitted to enjoy what he has
earned. It is to the want o f this blessing that the characteristic indo
lence o f the Turks may be attributed. The want o f industry among the
people o f Spain, o f Naples, and some other parts o f Europe, may also be
attributed to the defects o f their government. Nations, too, habitually
industrious, may have their labors suspended or relaxed by temporary
causes. Thus, wars, embargoes, and interdictions o f trade, may, for the
time, throw one half o f a nation out o f profitable employment, and occa
sionally an epidemic frenzy for speculation may divert a large propor
tion o f the community from the pursuits o f productive industry. Pesti
lence may obviously produce the same effect; and whatever lessens
industry, whether the cause be temporary or permanent, must propor
tionally narrow the demand for capital, as an agent o f production.
The skill o f a nation, too, comprehending both practical science and
manual expertness, tends to enlarge the field for the employment o f
capital. B y the discoveries and improvements they make, new wants
are created, ,and new gratifications afforded; but they can be afforded
only by the aid o f capital. It is true, that some employments o f ingenui
ty and skill require a very small amount o f capital, as, for instance, the
arts o f painting, sculpture, engraving, the manufacture o f lace, cutlery,
and indeed all the nicer manufactures o f the metals, but these are cases
o f exception; and it will be found, in general, that every addition to a
nation’s productive skill and ingenuity tends to put in requisition a far
ther amount o f capital. Let us, for example, suppose that the fabrics
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445
now made at Lowell, or in Rhode Island, were imported from England,
and that the operatives there employed in manufactures were employed
in the simpler pursuits o f agriculture and commerce, (supposing them to
receive the same reward for their labor,) they would not employ near
as much capital at present. The additional capital they would then re
quire for agriculture would be for the purchase o f the tools, carriages,
and other farming stock ; and that which would be required for the ad
ditional commerce this created, would be the shipping required for the
transport o f the agricultural produce abroad, and o f the foreign commo
dities received in exchange for them ; but the aggregate amount o f the
capital thus demanded for agriculture and commerce, would be small
compared with the amount which is now expended in the cost o f the nu
merous manufactories o f cotton and woollen goods, and o f its machine
ry, and in the purchase o f the raw materials. W hen we consider that
the fixed capital employed in the two places mentioned was, nine years
ago, about twelve millions o f dollars, and that the cotton manufactured was
more than twenty millions o f pounds, (equal to seventy thousand bales,)
it can scarcely be doubted, that the whole capital which those manufac
tories require, must be from three to five times as much as would be
required by the same number o f hands distributed, in the ordinary pro
portion, between the employments o f agriculture and commerce.
The effect o f thus employing domestic skill and ingenuity instead o f
relying on that o f other countries, may indeed eventually save capital as
well as labor, but it adds very greatly to the first outlay. W e may form
some general notion o f the difference o f capital required to fabricate
those manufactures at home and to procure them from abroad, by the
fact that the tonnage o f our ships employed in foreign commerce is about
S50,000 tons, which, at $50 per ton, is worth $42,500,000, while their
imported cargoes are worth about three times that amount, and that the
establishment o f the manufactories necessary for their production would
necessarily require an outlay o f many times their value.
Without doubt, every country adopts, as it ought to do, that mode o f
procuring the commodities it consumes which is the cheapest, whether
it be to fabricate them for itself or to import them, but it may easily
happen that it could fabricate some things at a yet lower price than it
can import them, i f it possessed the requisite sk ill; but when this was
acquired, many o f the articles could not be fabricated at home without
a large expenditure o f capital in establishing their manufacture.
There is, lastly, one other circumstance which affects the amount o f
additional capital which a community can advantageously employ, and
that is, the amount it has already accumulated. I f its capital has ad
vanced at an equal pace with its population, industry, and skill, it can
receive no farther addition without proportionably lowering its rate o f
profit. If, however, its savings o f capital have not equalled the demands
for it, created by an increase o f numbers, activity, and intelligence, then
a farther supply, equal to the deficiency, may find employment at the
same rate, or nearly the same rate, as that previously employed.
In all infant colonies, and newly settled countries, there must neces
sarily be a deficiency o f capital, not so much because the settlers are not
wealthy, but because that amount o f capital which they require in this
new residence it was physically impossible to carry with them. Tools,
utensils, clothing, and a temporary supply o f provisions, is all that was
446
Theory o f Profits.
capable o f distant transport; but the more costly, and no less desirable
conveniences, o f houses, barns, mills, bridges, roads, orchards, gardens,
fences, they must necessarily leave behind; and they can be obtained
only after a long course o f patient labor, during the progress o f which,
the colonists are required to provide not only food and raiment, but ma
terials for that foreign commerce to which they must yet look for a sup
ply o f such articles as the new settlement does not yet furnish. And,
although with the choice o f the best land, an industry always goaded to
exertion, and a consumption necessarily frugal and plain, capital rapidly
accumulates with them ; yet by the natural increase o f their numbers,
aided commonly too by migration, the demand for fresh capital still keeps
in advance o f the supply, and a long period may elapse before the two
may approach a state o f equilibrium. Such has been the history o f all
the English colonies on this continent. Such is the present condition o f
the settlements in N ew Holland, and such are the circumstances which
characterize our frontier settlements in the west. It may then be laid
down as a general rule, that every newly settled country, and every
rapidly increasing country, has a deficiency o f capital compared with its
field o f profitable employment.
W e have seen, in our former inquiries on this subject, that as the
amount o f capital augments in proportion to the population, its rate o f
profits diminishes. It is, however, clear, that the greater the amount o f
capital accumulated in a country, the greater can be the addition to it,
without materially lessening its profits, and the more the amount can be
diminished without enhancing its value; just as the larger the reservoir,
the less will it be affected by the addition or deduction o f a given
quantity.
Such appear to be the circumstances, moral and statistical, which de
termine whether additional capital could be profitably employed in a
country, and to what extent; and one might as soon expect to fatten an
animal in a shorter time, by giving it more food than it could digest, as
to add to the wealth o f a country by the use o f capital beyond the
amount which its condition, in those particulars, actually requires.
L et us now apply the preceding principles, and see how far they ju s
tify one country in borrowing money or capital o f another on interest.
It is obvious that the answer to this inquiry must depend on the dif
ference between the annual profit derived from the borrowed capital,
and the annual interest paid for it. If, for example, the interest is five
per cent., and the profit is ten per cent., the national gain from the
loan is five per cent. This gain, however, must be exclusive o f all risk;
o f the expense and loss incident to the transfer o f capital from one coun
try to another; and o f all charges o f management.
The profit afforded by the employment o f this additional capital de
pends evidently on the uses to which it is put, as well as those circum
stances which afforded it a field for profitable employment. O f the va
rious purposes to which it may be put, let us, for the purpose o f illustra
tion, consider the five following principal modes, namely: 1. In making
a canal or rail-road. 2. In commerce. 3. In manufactures. 4. In ag
riculture. 5. In banking. There is scarcely a purpose to which foreign
capital can be profitably employed which will not range itself under one
o f the preceding heads.
1. Capital invested in canals and rail-roads. The benefit which these
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447
public works may render to a nation is two fo ld : first, in the excess o f
their dividends over the interest on their cost; and secondly, in the ad
ditional value they give to the lands whose produce they more cheaply
transport to market, and in the additional trade they give to the cities
and towns with which they Communicate. These two sources o f advan
tage are entirely distinct; and it may easily happen that a canal or rail
road yields a nett profit o f but three per cent., or half the ordinary in
terest o f money, to the shareholders, and yet is profitable to the com
munity. Suppose, for instance, the work cost five millions o f dollars,
in which case, estimating money to be worth six per cent., a permanent
dividend o f but three per cent, is equal to a loss o f one half the capital,
or o f two and a half millions. If, however, by facilitating the transpor
tation o f commodities to market, it raise the annual profit o f the lands
thus accommodated five millions, the community is benefitted by the
difference on two and a half millions. This may seem to some a great
addition to the yearly value o f the neighboring lands ; yet, when we
recollect how large a part o f the labor o f every country is expended, not
in the business o f producing, but in that o f transporting what has been
produced to market, and that the public works in question so greatly
reduced the cost o f transportation, we can readily see how large an ad
dition they may make to both the annual and the fee simple value o f the
lands o f the adjoining country. A ga in : they cause the transportation o f
articles which could not previously defray the cost, and thus increase
the materials o f trade in the towns, besides cheapening most articles o f
their consumption. A portion o f these benefits may indeed be at the
expense o f smaller towns and o f the lands in the immediate vicinity,
but the last is commonly but temporary, as the advantages which the
country near a large city derives from its growth, have been found
more than to compensate the loss arising from the competition o f more
distant rivals. Though N ew Y ork now draws from a distance a part o f
the supplies for which, before steam navigation and the Erie canal, she
was dependent on lands near the city, those lands have continued to ad
vance in price.
But the profit afforded to a country by its canals and rail-roads is sub
je ct to great deductions. Besides the first cost, the annual repairs and
expense, especially on rail-roads, are considerable. While they are in
progress they yield little or no return, and in the mean time, they have
withdrawn a part o f the labor o f the country from other productive em
ployments. They sow the seed o f a crop o f which, the harvest is not
likely to be reaped in many years, and which, when reaped, may not repay
the seed, and still less compensate the long interval o f unproductiveness.
B y far the larger part o f the money the states have borrowed in Europe
has been expended in this species o f improvement, and while some o f
them have proved very profitable investments o f capital, there are others
which, it is to be feared, have destroyed more than they have created.
2.
Capital invested in commerce. W henever goods are purchased
abroad on a credit, they constitute so much foreign capital lent to the
country. The debts contracted in this way do not indeed bear interest
until after the time o f payment has elapsed, but the excess o f price
beyond what similar goods may be purchased for in cash, is probably
more than equal to the ordinary interest. English capital to a large
amount is lent to American merchants in this way, and o f course a cor
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Theory o f Profits.
respondent amount o f domestic capital is disengaged, and free to be
employed in any other branch o f commerce, or other profitable under
taking. A part, which is thus crowded out o f the mercantile arena, may
find a suitable field for profit in ships, in steamboats, in warehouses, and
other city improvements, and in manufactures. In general, foreign capi
tal will not be borrowed unless it is profitable to borrow it. W hen there
is a speculating spirit abroad, as is apt to be the case after an unusual
course o f national prosperity, it may extend to those branches o f foreign
trade which are supported by foreign capital as well as any other; and
more foreign capital may be borrowed than is wanted, or is profitable.
The wealth o f the community is consequently diminished, not merely by
the interest paid, but by that part o f the domestic capital which is sunk
with the foreign, in the wide spread wreck o f fortune by bankruptcy.
The mischief may be heightened by a temporary redundancy o f money
in the creditor’s country; and such was the relation between England
and the United States in 1835 and 1836, and which was followed by the
catastrophe o f 1837.
3. Capital invested in manufactures. W ithout doubt foreign capital
thus invested may add as much to the national wealth as in any other
employment, if it establishes no manufactures but such as are suited to
the circumstances o f the country— to its population, its skill, its business
habits, and its facility o f procuring the raw materials— such indeed as
might be expected naturally to spring up in no long time, without such
fostering aid ; but where their growth is forced by the hot-bed process
o f legislation, there they are not likely to afford a profitable employment
even to the borrowers o f foreign capital, to say nothing o f the loss other
wise occasioned to the community. Under the encouragement which
the tariff o f 1824 and o f 1828 gave to manufactures, numerous estab
lishments for the manufacture o f cotton, wool, and iron, shot up like
mushrooms, unsupported by the prudence, or experience, or capital re
quired to insure success, and the consequence was that they soon failed,
besides having injured their well-conducted rivals. This was the history
o f many cotton ami woollen factories in the N ew England states, and o f
iron works in N ew Jersey. A great waste o f capital was occasioned in
this way, but little o f it is believed to have been obtained from abroad.
Indeed, o f all the modes in which the foreign capital we have borrowed
is used, that o f manufactures employs the least.
4. Capital invested in agriculture. It is but to a small extent that ad
ditional capital can be employed in agriculture in the northern or middle
states, except in raising wool, or in the grazier’s business, or occasionally
in cultivating on a large scale, and little or no foreign capital has taken
these directions. In the southwestern states, however, capital can be
used to procure additional labor by the purchase o f slaves from the A t
lantic southern states; and when the price o f their great staple, cotton,
is high, as such an investment o f capital promises extraordinary profits,
and does at first yield them, it holds out the strongest temptations to
borrow it. Those states have fertile unoccupied land in abundance—
their population in no state south o f Tennessee much exceeding five or
six to the square mile— nothing, then, is wanting, but labor, to make it
yield the richest return; and that labor money can readily procure.
Money, therefore, to a large amount, has been borrowed in the cotton
growing states for this purpose.
Theory o f Profits.
449
But two consequences resulted from these investments, which, although
according to the ordinary course o f things, were not foreseen at the time,
and which have not been fully appreciated since. One o f these was,
that the great additional demand for slaves raised their price to more
than double its former amount, even in the states in which they were
bought. The other was, that the great addition that was thus suddenly
made to the quantity o f cotton produced, lowered its price in the general
market o f the world. The quantity raised in the United States had in
creased, in the interval between 1824 and 1835, from five hundred and
sixty thousand bales to one million three hundred sixty thousand seven
hundred and twenty-five bales, when it was supposed to reach one half
the quantity made in the world. It was morally impossible for so large
an addition to the quantity to find a vent, except by reducing its price,
so that it could be applied to new purposes and be more liberally con
sumed. The capital thus vested in slaves increased the cost o f producing
cotton while it lowered its price, and those who had borrowed it were
totally unable to extricate themselves from debt by the cultivation o f
cotton. The price o f open land and improved tracts was greatly aug
mented by the same eagerness to extend the cotton culture, and by rea
son o f the subsequent fall o f price in cotton, slaves, and lands, many
who had confidently expected to acquire fortunes by the aid o f borrowed
capital, not only sunk that capital, but with it all the property they pre
viously possessed.
5.
Capital invested in banking. In those states in which they had a
deficiency o f capital by reason o f their having been recently settled, and
their rapid advancement, they endeavored to remedy the inconvenience
by the establishment o f banks, by the aid o f capital obtained from abroad.
B y this expedient they considered that the money borrowed would be
more efficient; and many, in their inexperience, fondly believed that
their currency would thus be doubled or trebled in amount.
The benefit arising from this use o f borrowed capital would evidently
depend upon the uses which was made o f the money borrowed o f the
banks. O f that which was borrowed by the southwestern states, amount
ing to upwards o f forty millions o f dollars, a large part was expended in
the purchase o f lands and slaves, which, as we have seen, proved gene
rally an unprofitable, and often a ruinous investment.
N or was this all the mischief. W h ile men’s hopes were high o f soon
realizing fortunes, they naturally fell into habits o f expense better suited
to their expected than their real condition; and thus the consumption o f
foreign luxuries in dress, furniture, equipages, was prodigiously increased.
It would often happen, too, that these habits would continue, when the
dreams o f wealth which had given rise to them had passed away, and
in defect o f other means, be kept up on borrowed funds until credit was
exhausted. In this way, no small part o f the capital transferred to the
southwestern states from Europe, or northern capitalists, has been irre
vocably lost.
I f we apply the preceding doctrines, concerning the use o f foreign
capital, to the loans which have been obtained from Europe by the se
veral states, and the amount o f which is far less than the president, in
his last annual message, seems to suppose, it will be found that a part o f
it has been usefully employed in the construction o f rail-roads and canals;
that a part has been o f dubious benefit in the same w ay; and that most
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V O L . I I . --- N O . V I .
W hat are the causes o f unsteadiness ?
450
o f that which has been employed in banking will be found not to have
increased the value produced in the nation, whilst it has greatly increased
its consumption; and we are almost brought to the conclusion, that there
can be no sudden and large transfer o f capital from one country to
another, except by the exchanges o f commerce, without doing mischief,
always to the country from whence it is withdrawn, and not seldom to
the country to which it is sent.
The principles which have been maintained in the preceding remarks
will now, in conclusion, be briefly recapitulated. They are,
That capital may add to the wealth o f the nation as certainly as a
fruitful soil in a benignant climate, by either giving employment to the
idle, or by transferring industry from one employment to another more
productive, or by creating substitutes for human labor. But that unless
it acts in one o f those ways, the use o f it does not add to the wealth o f a
country.
That if it acts in any one o f those ways, it is quite immaterial whether
it be procured abroad or at home. It will be most advantageous for the
nation to use that capital, whether foreign or domestic, which can be pro
cured at the lowest interest. But that even where the use o f capital may
be at first advantageous, the benefit may bear the seeds o f its own
destruction; and it should always be inquired, whether the benefit is per
manent, or may be only temporary— whether its employment is likely
only to enrich some at the expense o f others— or whether it promises a
creation o f new values.
And, lastly, that it is better for every new employment o f industry
and capital to be engaged in by degrees, than b y sudden and violent
changes.
A r t . II.— C A U S E S O F U N S T E A D IN E S S OF T H E C U R R E N C Y ,
AN D TH E R EM E D Y THEREFOR.
N U M B E R I I.
W H A T A R E T H E CAU SES OF U N STE A D IN E SS 1
are dependent upon the relation existing between the amount
o f property o f every description in which the owners o f unemployed
capital may invest it, and the amount o f capital seeking investment, and
constituting currency. The latter may be, as we have shown, dependent
in a great degree upon the will o f individuals, enjoying the pow er o f
raising or depressing prices, as fear, ignorance, or selfishness, may influ
ence them.
W herever power exists there is danger that it will be abused; and
the greater its amount the greater is the danger. Men accustomed to
dictate to their fellow men, learn to regard as just and necessary mea
sures that are calculated to destroy the happiness o f those around them,
when in reality they are uncalled for, except for the gratification o f their
own selfish views and feelings.
Napoleon seems to have persuaded
himself that his measures were dictated by a regard for the interests and
P r ic e s
W hat are the causes o f unsteadiness 1
451
prosperity o f France, whereas almost every man will now agree that
his motives for their adoption were purely selfish. Even where no such
feeling exists— where men are actuated by the purest motives, and have
the strongest desire to do right— there is great danger to be apprehended
from ignorance. N o mistakes, it has been said, are so dangerous as those
o f men o f genius. Such men acquire power to influence the action o f
the community, and i f their views chance to be erroneous, they inflict
injury that years, and perhaps centuries, can scarcely repair; as witness
the vast debt o f Great Britain, the consequence o f an unnecessary and
wasteful war o f more than twenty years.
In nothing, except the single question o f peace or war, is it so dan
gerous to invest individuals with power, as in regard to the currency, and
therefore it is in the highest degree desirable to find the system that is
most nearly self-acting: that which affords the least scope for the exer
cise o f caprice, and is least likely to be affected by panics, whether pro
duced by the apprehension o f political changes, the failure o f crops, or
the desire o f promoting individual interests. W ith a view to ascertain
what is necessary to secure such steadiness, we will now inquire, what
are the causes o f the variations that are observed.
Every exchange o f labor, or o f its products, for money payable on
demand, places at the command o f the laborer, or owner, a certain amount
o f capital for investment, or re-investment, and enables him to appear
in the market as a purchaser o f commodities, or property. His labor,
or his property, has taken the form in which it passes current in all
exchanges.
I f the investment take place at once, no change is produced in the
currency; but if not, the amount thereof will be increased or decreased,
according to the course o f action adopted by the person who receives,
or becomes entitled to receive, money, as we shall now show :
I. A farmer sells his wheat to a storekeeper, and invests the proceeds
in the purchase o f supplies for his family, and machinery for the im
provement o f his cultivation. H e has converted his produce into mo
ney, or a claim to receive money on demand, which he has exchanged for
sugar, coffee, ploughs, and harrows; and the owners o f these commodi
ties have obtained money, drafts, or notes in exchange. The currency
is unchanged in amount.
II. Instead o f investing it in this manner, he purchases with it the
note o f the storekeeper, or that o f his neighbor, or a share o f stock in a
neighboring bank, or a few acres o f land— paying to the owners thereof
the money he has received. The amount o f the currency is, in this case,
also unchanged.
III. Unwilling to invest it in any o f these forms, he claims the amount in
gold or silver, which he deposits in his cellar. H ere a diminution o f the
currency is produced.
IV . Instead o f placing it in his cellar, he takes it to a neighboring
banker, and deposits it with him for safe keeping, while he is seeking
the means o f securely investing it. The banker charges nothing for his
trouble, calculating upon being indemnified by the interest he may de
rive from its use while the owner leaves it unemployed. H e purchases
securities with it. H ere are two persons who have equally the power
and the will to contract for the delivery o f the same money. T o the
extent that this double power is exercised over this and all similar de
452
W hat are the causes o f unsteadiness ?
posits, the currency is doubled. A , the owner, is in the market, acting
as if he had money in his pocket, when it is really in the pocket o f
C, to whom the banker has paid it in exchange for his note or promise
to return it to him at some future time. Both have capital settin g in
vestment.
In the first and second o f these cases, the currency is unchanged, and
no alteration o f prices is produced. In the third, the currency being redu
ced, prices tend to fall. In the last, prices tend to rise, producing a con
stantly increasing difficulty o f investing capital profitably, with an equally
constant tendency to an increase in the amount o f unemployed capital,
for which the owners are seeking investment. That such must be the
case, will be obvious to the reader, when he sees that the banker is ena
bled, by the use o f A ’s money, to purchase the notes o f C and D , the
very securities, perhaps, that A himself would most desire to obtain; or
C and D, having obtained the use o f his money, are enabled to hold
against him the houses or the stocks that he most desires to purchase,
and thus to raise the price. W ere A now to demand a return o f his
deposit, the currency would, b y this act, be reduced to its original
amount. The bank would be compelled to sell the notes which it held,
or to require payment thereof, and to meet this demand, C and D would
be obliged to sell their houses or stocks. In either case, A would be
enabled to obtain the securities or property that he desired, and the
price would be proportioned to the diminished amount o f the cur
rency.
The mode in which a surplus o f uninvested capital placed on deposit
with persons who are permitted temporarily to use it, tends to increase
the currency, has been so little observed, and is generally so little under
stood, that we shall, perhaps, be excused, for devoting a little more space
to its illustration. In doing so, we will assume that both parties through
out make investments, or desire to do so, in the same species o f se
curity.
A , receives on Monday $100,000 in specie. H e deposits it in a bank,
until he can find a mode o f employing it. Five per cent, state stock is
at par, and he desires to avail himself o f the first opportunity o f purcha
sing. The bank, having $100,000 placed at its command, orders its
broker to invest $80,000 in state five per cents. H ere are two competitors
fo r the first lot that is brought into market, both desiring to use the same
capital; and the consequence is, that the price advances to 101, the pur
chase being made by the bank, which can best afford to give a good price,
as it pays no interest. A has still 100,000 to invest, although $S0,000 o f
it has been paid out to sundry persons in exchange for stocks.
On Tuesday, B receives a similar sum, and the same operation is per
formed. The bank invests $80,000, and stock now rises to 102, because
o f the vigorous competition between the agents o f the owners and o f the
bank. An original capital o f $200,000 has given to sundry persons the
power to contract for the delivery o f $400,000, and they exercise it to
such extent as to produce the same effect upon the market, as if the real
amount o f capital seeking investment, were $360,000; that is, A and B
have 200,000 o f capital which they are anxiously seeking to invest, while
four fifths o f the coin received has been paid out and is now circulating in
the community, the possessors having both the power and the will to ap
ply it to the purchase o f property o f any description.
W hat are the causes o f unsteadiness 1
453
During the rest o f the week, C, D , E , and F , receive similar sums,
and at the close o f it the deposits have been increased 0600,000, o f which
the bank has invested 0480,000 in stocks, in payment for which she has
issued that amount in the silver received from her customers. The ope
rations o f the week have tended to add 01,080,000 to the currency;
whereas, had the parties who received the various remittances, kept the
money in their own hands until their broker purchased stock fo r them, and
then paid it out therefor, the increase could have been only $600,000.
L et us now suppose that the owners claim a return o f the money they
have deposited. A t once the reverse operation has to he performed.
The bank is compelled to exchange stock for silver, to be delivered to its
depositors, who retain it in their own hands. The currency is reduced
to $600,000. Instead o f this, let us suppose that the bank, finding it
somewhat difficult to obtain the specie it had paid out, transfers to the
depositors the $480,000 o f stock it has purchased. The reduction o f the
currency is instantaneous, because 8480,000 o f uninvested capital at once
becomes invested. Prices fall as much as they had previously risen.
A third course would be for the bank to add the $600,000 to its capital,
and create certificates o f stock for the owners. Here the same effect
would be produced. Prices would fall, because o f the increase in the
amount o f investments, and consequent absorption o f the uninvested
capital.
W hat is true o f the six persons, and the single bank, here referred to,
is equally true o f a large community, with numerous banks. The ac
cumulation o f an extra million o f dollars o f unemployed capital in the
banks o f N ew York, enables those institutions to purchase an extra mil
lion o f securities, in opposition to the owners o f the money with which
it is done, who are endeavoring to invest it. M oney is said to be
plenty, because one million is performing the operations o f two millions.
Prices rise, and interest falls. It becomes more difficult to make invest
ments, and the deposits rise to two millions, which now perform the
duty o f four. B y and by, with the constant increase in price o f securi
ties and o f real estate, unattended by a corresponding increase o f in
come, the rate o f interest falls so much that the deposits rise to ten or
twelve millions, nearly all o f which is lent out by the banks, and thus is
produced a currency— or apparent amount o f capital seeking in
vestment— o f more than twenty millions, out o f an original ca
p ita l o f twelve millions. The banks use it, and the owners try to use it.
Both have the power and the will to do so, and both contribute to the
daily augmentation o f prices, until the crisis arrives, when it is discover
ed that the apparent twenty millions are really only twelve, or perhaps
only ten. The capitalist, who has suffered under the constant reduction
o f interest, is now enabled to obtain two or three per cent per month,
and the poor man, who has built or bought houses with borrowed capi
tal, is ruined. Banks no longer make large dividends at the expense o f
the capitalists, and fortunes are no longer accumulated by speculators.
W e think the reader will now be prepared to admit, that,
I. The more perfect the security o f person and property, the smaller
will be the tendency to hoarding money, and the less will be the tenden
cy to variation in the amount o f the currency from diminution that is
liable to be followed by expansion.
II. The more perfect the freedom with which capital may be employ
W hat are the causes o f unsteadiness ?
454
ed, the less will he the tendency to its accumulation in the form o f de
posits with banks and individuals, to be used by them while wholly, or
comparatively, unproductive to the owner, and the less will he the ten
dency to variation in the amount o f the currency from expansions,
that must be followed by contractions.
III. That the most unsteady system must he that which tends to pro
mote the accumulation o f uninvested capital, deposited in strong boxes
or cellars, productive o f no advantage to any portion o f the communi
ty ; or with banks or bankers, yielding little or no return to the owner,
while the person or persons intrusted with its safe keeping are lending
it out for their own benefit.
IV . That the most steady must be that under which uninvested capital
least tends to accumulate, and in which there is the least cost o f ma
nagement— the least friction o f the machinery— between the owner and
the employer o f capital.
It is usual to attribute fluctuations in the value o f the currency to va
riations in the quantity o f the machinery o f exchange employed ; to wit,
in the amount o f specie and bank notes kept in circulation. W e think
our readers may satisfy themselves, and perhaps from their own expe
rience, that it is not usual for any persons to retain about their persons,
or in their houses, a larger quantity o f bank notes at one time than at
another. W henever they own more money than they want to use, they
place it somewhere for safe keeping, and most generally in banks, where
it remains on deposit until wanted.
The circulation that can be maintained is very nearly a constant quan
tity. Thus, in Massachusetts :
The nett amount at the close o f 1836, when excitement
$7,404,000
was at the highest, was . . . - ................................
In October, 1838, when the banks had resumed payment, 7.052.000
In November, 1839, when prices had fallen to their
6.104.000
lowest,
...........................................................................
From December, 1833, to Decem ber, 1836, the highest
circulation o f the Bank o f England w a s ......................£617,361,000
And the lowest
................................................................
16,564,000
From Decem ber, 1833, to September, 1836, the highest
circulation o f the Private and Joint-Stock Banks o f
England w a s ................................................................ £612,202,000
And the lowest
................................................................
10,152,000
The combined circulation o f the Private and Joint-Stock Banks o f
England, in the two last years o f extraordinary fluctuation, has been as
follow s:
1838.
J a n u a ry ,................................................
A pril.........................................................
July..........................................................
October....................................................
28,770,000
29,913,000
30,792,000
31,129,000
W hat are the causes o f unsteadiness ?
1839.
January...................................................
April,
................................................
July..........................................................
O c t o b e r ,................................................
45 5
30,694,000
30,630,000
30,376,000
29,044,000
The greatest variation in these years has, therefore, but little exceed
ed eight per cent.
Great as has been the change o f prices in the United States in the
last two years, the variation in the circulation o f N ew York has been but
about ten per cent.
The reader will now, perhaps, be prepared to agree with us in the
assertion, that the circulation that can be maintained in a community, un
dergoes so little variation in amount, that it would be in vain to look in
that direction for the causes o f the violent changes that are observed.
Cases o f great apparent variation do take place, and the observer may
be deceived, unless he examine carefully all the circumstances attending
their occurrence. Thus, in February, 1826, there was an extraordinary
increase in the circulation o f the Bank o f England, arising out o f the
substitution o f the notes o f that institution for those o f many o f the
country banks which had failed, or were likely to do so, and o f ,iCJ notes
for gold in circulation. Again, in times o f great excitement, similar to
the year 1836, the apparent circulation increases rapidly because o f the
large amount o f notes held by other banks. A s an instance o f this, we
will give the case o f Massachusetts in 1836 and 1838. The gross circu
lation in the former year exceeded that o f the latter by $1,500,000, but
when we come to deduct the notes held by each other, the nett amount is
but $400,000 greater. Changes o f policy on the part o f the states pro
duce a great apparent variation. Banks and bank notes have been pro
hibited at one time, while at another, the former have been freely estab
lished, and the latter have been permitted to supplant the circulation,
whether o f specie or notes, that previously existed. The only safe
course is, to take a community in which there has been no change o f
policy, as in that o f Massachusetts, or that o f England, for the time we
have included above, and examine it carefully, when we shall find that
changes in the amount o f circulation are rather consequences than causes
o f changes in the amount, and in the value, o f the currency.
W e come now to inquire how the variations in its amount and value
produced by the deposit o f unemployed capital, correspond with the
views above submitted, and will commence with the state o f Massachu
setts, in which the freedom o f investment is very great, and more nearly
perfect than in almost any other part o f the world. There are, never
theless, as we shall show on a future occasion, still remaining some re
gulations which tend to produce the unsteadiness which we are now
about to exhibit.
A certain portion o f the deposits is required for daily use, and circu
lates by means o f checks or drafts, passing in the course o f the week
from A to B, C, and D , and perhaps changing owners fifty times in that
period. Like the circulation, this is almost a constant quantity, varying so
little in amount as to exercise scarcely any influence upon prices.
Another portion consists o f the larger masses o f capital, for which the
W hat are the causes o f unsteadiness ?
456
owners desire to obtain securities, real estate, etc. Here we shall find
the principal variation.
The deposits and the specie in the banks o f Massachusetts for four
years, were as follows :*
1835
1836
1837
1838
.....................................
.....................................
.....................................
Deposits.
Specie.
10,921,000
15,262,000
14,059,000
9,621,000
1,136,000
1,455,000
1,517,000
2,394,000
W e may fairly suppose, that the deposits for the daily uses o f mer
chants, traders, farmers, and other persons, would not be less than six
millions, and that to meet any claims on account o f those deposits and the
circulation, they would require to keep not less than a million o f dollars
in specie.
Deducting these sums from those above given, we shall find:
Excess o f deposits.t
1835
1836
1837
1838
...........................................
...........................................
...........................................
Excess o f specie.
4,921,000
9,262,000
8,059,000
3,621,000
136,000
455,000
517,000
1,394,000
Had the banks in 1836 retained in their vaults the excess o f deposits*
instead o f lending them out, they would have had $4,921,000 in specie to
meet them, whereas they had only $136,000, having paid out $4,785,000.
In purchasing securities, they were competitors with the owners o f the
money thus deposited with them to the extent that they employed it, the
consequence o f which was a constantly increasing difficulty o f employing
capital, and a constant increase o f the currency. Prices rose and interest
fell. The difficulty o f finding profitable employment for capital continued
to increase, and the deposits rose to $9,262,000, o f which 8,S07,000 were
loaned out. Excess o f currency produced a reverse. A demand for
specie arose, and the banks were compelled to call in their loans. Prices
fell, and the capitalists were enabled to employ their money in the pur
chase o f those securities, or that property, which had before been held
by those who had been using their capital. The following table shows
the variation in the amount o f currency resulting from this cause.
The excess thereof was precisely equal to the amount o f securities
purchased by the banks with the funds thus acquired, and was as follow s:
1835
1836
.
.
.
,
.
.
$4,7S5,000
8,807,000
1837
1838
.
.
.
.
.
.
$7,542,000
2,203,700
* A very considerable amount o f these deposits belonged to the government, which
was not at liberty to use them until after the passage o f the distribution law, in 1836.
The expansion o f the currency produced by these deposits had no connexion with the
banking system, nor did it arise until the distribution commenced, in 1837.
t A part o f these deposits bore interest, and was only convertible upon short
notice.
The owners were, nevertheless, seeking permanent investment for them.
They contracted for the purchase o f ships, houses, and stocks, payable at the expira
tion o f thirty or sixty days, with the same confidence as if the money had been in their
pockets. The necessity for giving notice has a slight tendency to prevent sudden
changes, but it is very slight indeed.
'W hat are the causes o f unsteadiness1
457
H ere w e find the variations are four to one, whereas, in the circulation,
it was almost nothing. Nine millions o f capital, in 1836, produce an
apparent amount o f capital seeking investment equal to eighteen mil
lions, whereas, in 1838, the owners are using it themselves to the extent
o f six millions, and the duplication falls to two millions.
H ad the owners o f eight millions o f deposits in 1836, claimed pay
ment o f the banks, those institutions would have been compelled to sell
stocks or notes to that amount. Prices would have fallen, and the de
positors would have purchased those securities at the same rate, or per
haps even a lower one, than they could have done in 1834 or 1835. The
currency would have been reduced eight millions b y this simple ex
change o f hank securities for bank liabilities.
H ad they becom e alarmed, and desired to convert their deposits into
gold, with a view to hoard it, the change, could it have been effected,
would have amounted to sixteen millions, attended with universal ruin.
Increase o f deposits causes augmentation o f the currency, attended
with a rise o f prices, and this produces a necessity for a small increase
o f circulation, because more money is required for the performance o f
the same exchanges. It is a consequence o f the depreciation o f the cur
rency that is caused by an excess o f uninvested capital, and that excess
is produced by restrictions upon its employment.
W e will now proceed to a similar examination o f the operations o f
the Bank o f England, with a view to see i f like causes produce similar
results. In this case, we suppose the deposits required for daily use, and
those o f the government, together, to average five millions, and that the
quantity o f specie required to be kept on hand to meet the demands on
account o f those deposits and the circulation to be also five millions, all
above those sums being deemed deposits waiting permanent investment,
and bullion held for the purpose o f meeting them. It will be observed,
that the proportion o f bullion to liabilities here allowed is much greater
than in the case o f Massachusetts, the reason o f which is, that the system
is far less free and less natural, and is o f consequence more costly, as we
shall have occasion to show.
1834, Decem ber, . . .
1835,
“
. . .
1836,
“
. . .
1838, January . . . .
A p r i l , ......................
J u l y . ......................
October, . . . .
1839, January, . . . .
A p r i l ,......................
J u l y , ......................
October....................
Decem ber, . . .
Excess of
Deposits.
.£8,019,000
15,370,000
8,330,000
5,992,000
6,262,000
5,424,000
4,327,000
5,315,000
3,998,000
2,567,000
1,734,000
952,000
Excess of
Bullion.
<£1,978,000
2,710,000
Deficiency of
Bullion.
<£455,000
3,895,000
5,126,000
4,749,000
4,437,000
4,356,000
2,073,000
656,000
2,478,000
2,113,000
A t the close o f 1834, w e find capital uninvested, and not wanted for
daily transactions, amounting to eight millions, all o f which, except
about two millions, is invested in securities held by the bank for its own
profit, while the owners are seeking in vain the means o f making it provol . it.— no. vi.
58
458
W hat are the causes o f unsteadiness ?
ductive. Eight millions here appear in the market as fourteen millions,
the consequence o f which is a great abundance o f money, attended with
a rapid rise o f prices, and a constantly increasing difficulty o f making
investments. W ith every rise in the prices o f securities, there is an in
crease o f the deposits, and as the sums thus deposited are daily invested
by the banks, there is a daily augmentation o f prices, producing a farther
increase o f deposits, and thus we find, at the close o f 1835, an excess o f
fifteen millions, more than twelve and a half millions o f which are lent
out by the bank. Fifteen millions o f capital are here producing twentyseven millions o f currency; that is, twelve and a half millions o f capital
have been paid out to the community, while the owners o f that sum, and
o f two and a half additional millions, are daily endeavoring to find the
means o f investing it, and are making engagements for its delivery with
the same confidence as i f they had the gold in their houses. It is not
extraordinary that the explosion now takes place. It does so, and at
the close o f the following year, we find the deposits reduced to
..£8,330,000, all o f which is invested in securities, together with nearly
half a million out o f the reserve five millions o f gold. Eight millions
would here be performing the duty o f sixteen, i f the owners o f the de
posits had the same dispositionfa r investment that they had at the close o f
the previous year. Such was not the case. The revulsion had been so
great as to shake confidence, and so large a portion o f the owners wanted
the will to invest, that the deposits ceased to act as currency.
A t the commencement o f 1838, the excess o f deposits was less than
six millions, only two millions o f which were invested, and for a time we
find so great a tendency to diminish the amount o f trading upon the
capital o f others, as to ret ain in the form o f bullion nearly the whole excess
o f deposits. Shortly after, expansion again took place. The bank invested
all o f its surplus deposits in securities, paying out for them not only
all its surplus bullion, but a large portion o f the reserve five millions,
and in a short time brought itself to the verge o f bankruptcy.
The excess o f currency produced by this duplicate action o f capital,
in the period we have taken, was as follows :
1834, Decem ber, . . . .
1835,
•«
. . . .
1836,
“
. . . .
1838, January,
. . . .
April,
......................
July................................
O c t o b e r ,......................
1839, January, >......................
April,
......................
J u l y , ...........................
<£6,041,000
12,660,000
0,000,000
2,097,000
1,136,000
675,000
< £ 110,000
959,000
1,925,000
3,323,000
This expansion was voluntary, but the effect being seen, the bank
now desired to limit its operations. It had depreciated the currency, and
compelled the export o f capital which was leaving its vaults in the form
o f bullion, to such an extent as threatened the existence o f the institu
tion. In its anxiety to save itself, every effort was now made to correct
the depreciation it had caused, and to force down the prices o f all com
modities, at the risk o f ruin to all engaged in trade; yet, notwithstanding
W hat are the causes o f unsteadiness ?
459
all its efforts, it is but quite recently that it has placed itself in a condi
tion o f safety.
L et the reader now compare the variations in the currency produced
hy the use o f the deposits with those produced by circulation, and he
will see that the latter sink into insignificance. In the one, from an ex
cess o f twelve millions, w e fall to a deficiency o f three millions, in the
single institution to which we have referred, and if we include the jointstock and private banks, it is highly probable that the variations are not
less than thirty millions, while those o f the circulation are but two or
three millions.
H ad the owners o f unemployed capital kept it in their own hands, in
1833, prices would not have risen in 1834, 5, and 6. Nor would they
have done so, had the bank traded upon its capital and circulation, keep
ing its deposits in bullion, the effect o f which upon the currency would
have been precisely the same. T o return to this state o f things, in 1834,
would have required it to dispose o f six millions o f its securities, which
would have been purchased by its creditors, and all difficulty would have
been prevented. The proprietors o f bank stock would have had smaller
profits ; and the owners o f the deposits, finding it easy to invest their
capital at home, at the usual rate o f interest, would not have been under
the necessity o f sending it to all quarters o f the globe, or embarking in
hazardous enterprises at home, with a view to its employment.
W e will now show, very briefly, the condition o f the currency o f the
United States, that the reader may determine for himself how far it ac
cords with the views we have submitted :
January, 1837, when expansion was at its greatest
amount, the nett circulation, w a s ................................ $112,000,000
January, 1839, it w a s ......................................................
108,000,000
January, 1840, as given by one authority, 86 mil
lions ; by another.............................................................
92,000,000
E ven supposing that o f 1840 to be only eighty-six millions, the differ
ence in the quantity o f notes which, at the two periods, had ceased to
circulate, and yet appeared in the statement o f circulation, being in tran
sit between the banks o f the various parts o f the union, could not have
been less than four or five millions. W e are warranted, therefore, in '
saying, that the diminution o f circulation has not exceeded twenty mil
lions.
January, 1837, the deposits w e r e ................................... $128,000,000
1839 .....................................................................
90,000,000
1840 ....................................................................
76,000,000
A n important portion o f those o f 1837 belonged to the government,
and became currency only as the distribution law took effect. I f we
suppose the amount o f deposits required for daily purposes to be fifty
millions, there was in 1837 an excess o f seventy-eight millions, which
was lent out by the banks, while individuals and states were making
roads and canals, and performing other operations, with a view to the
permanent investment o f the same capital— say . . . .
$78,000,000
In 1839, we find similarly s i t u a t e d ................................
40,000,000
In 1840, the excess o f deposits is reduced to twenty-six
millions, but so entire is the destruction o f confidence,
460
W hat are the causes o f unsteadiness ?
that the owners have not the w ill to employ them, and
they cease to act as currency in their hands, while only
partially employed by the banks. The excess o f cur
rency from this cause is t h e r e f o r e ................................ — nothing.
H ere we find the real causes o f the vast changes that are witnessed,
for which w e should look in vain to variations in the amount o f circu
lation.
The extent o f the change thus produced will be more obvious, on
an examination o f the following statement:
1837.
Circulation,
........................................................................... $112,000,000
Deposits...................................................................
128,000,000
The total amount o f specie in the banks was thirty-seven
millions. I f we permit the whole o f this sum to repre
sent the deposits alone, the balance will constitute the
sum o f depositors’ money loaned out by the banks, while
the owners areseeking the means o f employing it— say 91,000,000
Total currency...................................*$331,000,000
* It will be asked, “ I f currency really represent capital seeking investment, how is
it that three hundred and thirty-one millions o f currency are here represented by only
thirty-seven millions o f specie — o f real capital lying in the bank!” The answer is,
we think, very simple.
Every man who has a claim upon a bank, or an individual, as holder o f a note, or as
owner o f money deposited with either o f them for safe keeping, holds it as the repre
sentative o f some species o f property that he has parted with. H is capital has become
uninvested, and has taken that form in which it will pass current in exchange for such
other description o f property as he may desire to possess, the holder thereof receiving
it as money. It is not indispensable that the representative o f his capital — the ma
chine used for the performance o f his exchanges
should have valuc'in itself. A com
munity might resolve to use inconvertible paper, bank silver-token3, bricks, or any
other article o f merchandise, in the transaction o f their business, and any o f them
would answer the purpose equally well if they could devise a mode o f preventing excess
o f issues and consequent depreciation. They cannot do so, because the temptation is
too great, and therefore it is necessary to maintain the convertibility o f the medium o f
exchange into money, thereby securing steadiness o f value. The dollar is the stand
ard by which the bank note is measured, and so long as it conforms to that standard
the object is obtained. Every portion o f the above three hundred and thirty-one mil
lions was received in exchange as freely as would have been an equal amount o f silver.
The holder valued it because it represented property that he had sold. The man to
whom it was offered valued it because he knew he could exchange it with his neighbors
for such property as he desired to possess. In like manner, the merchant who pur
chases a bill o f exchange on Liverpool, values it because it represents cotton, and he
cannot obtain it except at certain cost, and he knows his correspondent will give him
cloth for it. The latter does so because he knows he can obtain cotton in exchange;
yet the billitself has no intrinsic value. It is no more necessary that the machine in daily
use for the measurement o f values should be o f gold, than that that used in the measure
o f lengths should be so ; but it is as important that the one should measure equal values
as that the other should measure equal lengths; and therefore, it is essential that stand
ards should be preserved, that the community may have constantly the opportunity of
comparing them with those in use, so as to detect variation the moment it occurs. The
right o f conversion gives to every man the power o f ascertaining the existence o f any
depreciation in the value o f any representative o f capital that he may hold, while it tends
to compel all who supply such representative to limit the supply to the quantity actually
wanted for the performance o f exchanges, thus preventing the holders from experiencing
W hat are the causes o f unsteadiness ?
461
1839.
C i r c u l a t i o n ,......................................................................$108,000,000
Deposits,
. ' ......................................................................
90,000,000
The specie on hand being forty-five millions, it follows,
that the amount o f depositors’ money loaned out was
45,000,000
Total c u r r e n c y ,........................................... #243,000,000
1840.
C ircu la tio n ,........................................................................... $92,000,000
Deposits for daily u s e , ......................................................
50,000,000
Surplus deposits, $26,000,000. The owners o f these
having no longer the will to invest them, they cease to
act as currency.
The specie on hand being $33,000,000, it follows that
the amount o f the depositors’ money used by the
banks i s ........................... ...............................................
43,000,000
Total c u r r e n c y , ........................................... $185,000,000
The amount is little more than one half o f what existed in 1837. But
one seventh o f the reduction is to be found in the circulation, and even
that is to be viewed as a consequence o f the diminished value o f proper
ty, resulting from the diminution o f the currency, produced by the ab
sence o f the double application o f capital, to which we have called the
reader’s attention. It cannot be doubted that $92,000,000 o f circulation
bears at this time a much larger proportion to the amount o f property to
be exchanged, than did $112,000,000 in 1S37. W ith every diminution
o f the money value o f commodities, a diminished quantity o f money is
required.
Increase in the quantity o f circulation throughout England and the
United States generally follows the movements o f the Bank o f England,
but time is required to produce the effect. London is the centre o f the
financial world, and the bank is the prime mover at that centre. W h en
that institution begins to expand its operations, by lending freely the
monies deposited with it, thus making money more abundant, there is a
rise in the prices o f securities ; but some time elapses before the country
banks are enabled to follow its example to the extent that is required
to produce the augmentation in the prices o f commodities that gives
rise to the necessity for increased circulation.
A still longer time
is required for it to be felt at N ew Y ork and Philadelphia, and yet
longer for it to reach St. Louis. W hen contraction is required, it begins in
London, and after a short time it takes effect throughout Great Britain. A f
ter that, it is felt in N ew Y ork and Philadelphia, and ultimately at St. Louis
any necessity for exercising it. The more nearly the amount approximates that which
is required for the daily purposes o f life, the smaller will be the proportion of specie re
quired to be kept on hand, the less necessity will there be for resorting to the standard
for the purpose o f comparison— the less expensive and the more steady will be the
currency.
462
W hat are the causes o f unsteadiness!
and Calcutta. The water along the shore is calm and unruffled, while the
centre o f the stream is agitated by the passage o f the steam-boat, but the
wave thus produced is propagated throughout the mass o f waters until
it reaches the shore, which is most agitated when the centre is restored
to perfect tranquillity. In like manner we find the country banks o f
England still expanding after the bank has commenced to contract, and
those o f N ew Y ork and Philadelphia expanding after the contraction
has been established throughout England.
On an examination o f short periods, or o f a portion o f the facts, the
fluctuations in the circulation might not appear to follow those which
occur in the loans upon deposits, and thus, in the year 1838, there was
a diminution in the latter, so fa r as the Bank o f England was concerned,
and an increase in the former. W e hazard little in asserting that there
must have been, during that year, an increase in the amount o f deposits
with the private and joint stock banks, enabling them largely to increase
their loans, to aid the Bank o f England in bringing about the state o f
affairs which led to the explosion o f 1839. Had we all the materials,
this could be shown as clearly in the case o f England as we have been
enabled to do in that o f the United States.
W hen individuals permit their capital to remain unproductive, it may
be safely assumed, either that property is insecure, or that there is a dif
ficulty in finding the means o f profitable investment. In neither E n g
land nor the United States does there exist that state o f feeling which
induces men to hoard gold or silver; on the contrary, the universal ten
dency is to place it in the custody o f banks and bankers, proving that the
first cause does not exist, and that the latter is the only cause to which
an excess o f deposits can be attributed. Such difficulties are the result
o f restrictions, the effect o f which upon the currency we shall now show,
by comparing the operations o f three communities nearly equal in the
amount o f production and o f exchanges to be performed, but differing
somewhat in the freedom with which capital can be employed.
In No. 1, there is perfect freedom. E very man employs his time,
talents, and capital, as he sees fit. The amount o f circulation and de
posits is not greater than is necessary to perform the daily operations o f
the community, and consequently there is no unemployed capital. In
N o. 2, there are various regulations that render it somewhat difficult to
make investments yielding the usual rate o f interest, and there is always
on hand a small amount yielding no return to the owner. In No. 3, there
are superadded many regulations and restrictions, that cause capital to
accumulate for months before the means o f employing it advantageously
can be found. The state o f the currency, in these several communities,
is as follow s:
No. 1.
No. 2.
No. 3.
Circulation, specie, and paper,
$3,000,000 $3,000,000 $3,000,000
Deposits, fo r daily use,
3,000,000
3,000,000
3,000,000
Deposits, unproductive to |
3,000,000
6,000,000
their owners,
Total currency,
$6,000,000
$9,000,000 $12,000,000
It must be obvious to the reader, that no apprehension o f war— no
i
W hat are the causes o f unsteadiness ?
463
panic— no selfishness— can materially affect No. 1. E very man expe
riences a necessity for using every day that portion o f the currency which
falls to his lot, and consequently there can be no material change o f prices
under any circumstances. In N o. 2, on the contrary, the apprehension
o f such an occurrence would at once paralyze the operations o f the
owners o f one third o f the currency, and would produce such a state o f
distress, and such a reduction o f prices, as would throw out o f employ
ment a considerable number o f laborers. In No. 3, the same circum
stances would exist, and on a much larger scale. The currency would
be reduced from twelve to six millions, with universal ruin to the pro
ductive classes, whose property would be transferred to the owners o f
the before unemployed capital. The rich would become richer and the
poor poorer.
The power o f affecting the currency, and o f increasing or diminishing
prices, both o f labor and commodities, exists in precisely the ratio which
unemployed capital bears to the whole currency. The more perfect the
freedom o f trade, the greater will be the productiveness o f labor, and the
smaller will be the proportion which currency will bear to production.
E very restraint upon the application o f capital, tends to diminish production
— to increase the quantity o f capital seeking employment— to increase the
proportion which currency hears to production— to increase the power o f in
dividuals to produce disturbance— and to diminish the possibility o f main
taining a currency o f uniform value.
W ith the growth o f population and p f capital, we find a constant im
provement in the condition o f man, and a constantly increasing disposi
tion to assert his right to freedom o f trade, a necessary consequence o f
which is, a constantly increasing tendency to an equality o f profits and
o f condition. In the early ages o f society the merchant sells his goods
at treble or quadruple the cost, as does the Indian trader o f our day;
the landlord requires as rent two thirds o f what is yielded by the land;
and the usurer demands twenty or thirty per cent, for the use o f his
money. W ith the increase o f capital the share o f the merchant is re
duced to one tenth, and that o f the landlord to one fifth or one fourth ;
the capitalist demands as interest five or six per cent., and all parties in
crease rapidly in wealth, because o f the superior productiveness o f labor,
giving to both laborer and capitalist an increased quantity o f commodities
in return for any given quantity o f labor and capital, and producing a
great increase in the amount o f exchanges to be performed. This ten
dency to equality is greatest where labor is most productive, and la
bor is most productive where freedom most exists. The one is the inva
riable companion o f the others. In the three communities to which we
have before referred, we suppose the following to be the state o f the
trade in money, as usually carried on at banks:
No. 2.
No. 3.
No. 1.
$17,000,000
$ 20 ,000,000
$14,000,000
Bank capital,
Circulation, paper, 1
3.000. 000
3.000.
000
3.000. 000
and specie,
j
6
.
000
.
000
3.000.
000
9.000.
000
Deposits,
$26,000,000
$26,000,000
$26,000,000
464
W hat are the causes o f unsteadiness ?
Loans,
Specie in bank and
in circulation,
)
(
Interest on loans, at )
6 per cent.,
)
Expenses, 1 per cent.,
Dividend,
Surplus,
Rate o f profit to
stockholders,
)
j
$24,500,000
$23,500,000
$22,000,000
1,500,000
2,500,000
4,000,000
$26,000,000
$26,000,000
$26,000,000
$1,470,000
$1,410,000
$1,320,000
$200,000
1,200,000
70,000
$170,000
1,190,000
50,000
$140,000
1,120,000
60,000
$1,470,000
$1,410,000
$1,320,000
6 ,per cent.
7 per cent.
8 per cent.
In the first, there is no unemployed capital. A ll that is not directly
required for the purpose o f effecting exchanges is invested, and all par
ties obtain the usual rate o f interest. H ere is equality.
In the second, the owners o f three millions o f deposits have nothing,
while the owners o f bank stock have seven per cent.
In the third, the owners of' stock have eight per cent., obtained b y
using the capital o f depositors who own six millions, and who receive
nothing. H ere is great inequality, resulting from the fact that a large
amount remains in the form o f currency, because o f restrictions on its
employment Some o f these deposits may be on interest, and not con
stituting immediate currency, but are liable very promptly to become so,
because the rate o f interest allowed on temporary loans o f this kind is
always much below the average. Individuals who would gladly invest
their capital in some species o f stock that would yield them the ordinary
rate o f interest, find themselves obliged to leave it in the hands o f bank
ers, who pay them but two thirds o f that rate, and the consequence is, that
they are always ready, with the approach o f danger, real or supposed,
to convert their deposits into claims payable on demand, and thus aug
ment the difficulty that is produced by political or commercial changes.
A million o f deposits on interest may at any moment becom e a cause o f
danger, hut when the owners thereof have accepted from the hank a cer
tificate o f stock in lieu thereof the danger is at an end, because the amount
o f capital seeking permanent investment is diminished. Its assets remain
the same, while its liabilities are reduced a million o f dollars, the amount
o f the new stock created.
Restrictions upon trade tend to cause, or to increase, inequality o f the
rate o f profit, and to prevent the permanent investment o f capital. The
more numerous the restrictions, the greater will be the inequality, the larger
w ill be the amount o f currency, and the greater will be the tendency to sud
den expansions and contractions, attended with unsteadiness in its value.
H istory o f Massachusetts Currency.
465
A rt . III. — HISTORY OF MASSACHUSETTS CURRENCY.
An H istorical Account o f Massachusetts Currency. B y J oseph B. F elt .
Boston : 1839. Perkins & Marvin. 8vo. pp. 248.
T his is a work containing much rare and curious information, upon a
subject in which every member o f society feels an interest. It is writ
ten in a plain, unpretending style, and without entering into speculations,
or chimerical dreamings. Mr. F elt has adhered with praiseworthy
strictness to his professed object, o f spreading upon its pages a faithful
chronicle o f the currency o f Massachusetts, its nature, the various fluctu
ations and changes it has undergone, together with the history o f many
o f the banking institutions o f that colony, from its earliest settlement
down to the present time.
It is not our intention to occupy much space in noticing this hook, al
though the industry and research with which many o f its pages abound,
would richly repay a lengthened examination.
During the early part o f the seventeenth century, we are informed by
Mr. Felt, that gold and silver were scarcely known in the dealings among
the colonists o f Massachusetts, and various other commodities were used
to facilitate their trade with each other, and with the natives, o f whom
they were in the constant habit o f purchasing large quantities o f rich
and costly furs. A s a natural consequence o f this scarcity o f the pre
cious metals, a universal system o f barter and exchange o f one article for
another prevailed. The Indians were ever ready to give their furs in
return for knives, hatchets, beads, blankets, and especially were anxious
to obtain tobacco, guns, powder, shot, and strong w ater; the latter be
ing a powerful instrument in enabling the cunning trader to perpetrate
the grossest frauds in his dealings with them.
Immense quantities o f these furs were shipped to Europe at a great
p rofit; and peltry, as we are informed by Mr. Felt, was received and
passed as cash by the colonists. H e accordingly mentions it as one among
the numerous classes o f currency used by them.
Another species o f currency made by the Indians, called wampum,
introduced into the colony in 1628, from Manhadoes, now N ew York,
was in extensive circulation for a long period o f time, and it appears, from
the description given o f it by Governor Bradford, o f Massachusetts, to have
enriched the tribes by whom it was manufactured, and to have greatly
benefited the colonists. In mentioning it, he says— “ That, which in
time turns most to our advantage, is their now acquainting and entering
us into the trade o f wampum. B y which, and provisions, we quite cut
off the trade both from the fishermen and straggling planters. And
strange it is, to see the great alteration it in a few years makes among
the savages. F or the Massachusetts, and others in these parts, had
scarce any, it being only made and kept among the Pequots and Narragansetts, who grew rich and potent by it, whereas the rest who use it
not are poor andbeggarly.” A nd R oger Williams, in giving an account
o f this singular currency, the result o f Indian ingenuity, observes— “ That
it is o f two sorts ; one white, which is made o f the stem or stalk o f the
periwinkle, when all the shell is broken o ff; and o f this, six small beads,
which are made with holes to string bracelets, are current with the E ngV O L . I I . — n o . vi.
59
466
H istory o f Massachusetts Currency.
lish for a penny. The second is black, inclining to blue, and is made o f
the shell o f a fish, which some English call hens— poquahock— and o f this
sort three is equal to a penny. A nd one fathom o f stringed wampum
is worth five shillings.”
M oney o f this nature was in extensive circulation for many years, and
at one time constituted the principal circulating medium o f the colony—
its value, and mode in which it was to be strung, having been regulated
by an order o f the General Court.
L ike the worthless and irredeemable money o f modern times, it at
length flooded the infant colony, and overflowed the treasury with more
than could be disposed of, which led to its being prohibited in payment
o f taxes, although the inhabitants were compelled to receive it so late as
1650, in satisfaction o f all demands not exceeding forty shillings.
Mr. Felt also states, that com was used as a substitute for money, and
even cattle were made to answer the usual and ordinary purposes o f
currency, and arbitrary prices were fixed upon them, by which they
were taken in payment o f debts and taxes ; the price o f horses o f four
years old and upward, being fixed at seven pounds; and hogs above a
year old, were taken at twenty shillings.
Curious instances are mentioned by Mr. Felt, o f the propensity for
law-making which prevailed in the colony. Provisions were enacted, by
which a fine was inflicted upon the hirers and hired, who should give or
receive more than a certain sum per day for work ; b y which wise regu
lation, the lazy drone received the same wages as were paid to the in
dustrious citizen. This soon led to the enactment o f laws, by which the
price o f imported goods was fixed and determined— all o f which legisla
tion, we conceive, had about the same foundation in justice or common
sense, as that which is now exercised for the prevention o f usury, although
the latter may not be quite so palpably ridiculous and absurd as the
former.
In order to increase the means o f defence, a remarkable currency was
introduced into the colony in 1635, which must have been quite as cum
brous as the iron money o f the ancients, being nothing less than musket
bullets, o f a full bore, which were made to pass for a farthing each; al
th ou g h no person was obliged to take more than twelve at o n c e ; while
at the same time, the payment o f all farthings as money was prohibited,
for the purpose o f effecting the more general circulation o f their strange
substitutes. Many other articles, o f almost equal peculiarity as a cur
rency, were used as such at different periods by the colonists, who for
many years experienced the greatest inconveniences from the want o f a
steady and uniform circulating medium. A s the business relations o f
the colonists with each other increased, and their intercourse abroad be
came more enlarged, it was found impossible to manage their various
dealings, without the aid o f a currency composed o f less discordant ma
terials; and the most active measures were adopted for its establishment
upon a surer and better foundation.
A mint for coining money was accordingly erected in Boston, and as
considerable bullion had been brought to the colony from the W est In
dies, large sums were speedily coined and circulated. This assumption
o f independence on the part o f the colonists, highly displeased the king,
who, in accordance with the opinion o f other sovereigns o f Europe, con
sidered the coining o f money as a royal prerogative, and its infringe-
H istory o f Massachusetts Currency.
467
ment treason against the crown. The most humble petitions were pre
sented by the colonists to Charles the second, for liberty to continue
their mint, and it does not appear that he ever ordered its abolishment ;
although the commissioners o f the royal exchequer, and the lord high
treasurer o f England, exerted their influence to effect this object. P ro
pitiatory offerings were also forwarded to the king, for the purpose o f
ensuring his favor ; two o f which were curious enough, one consisting o f
, “ two very large masts” for his majesty’s navy, and the other being “ ten
barrels o f cranberries, two hogsheads o f special good samp, and three
thousand o f cod fish.”
Owing to the royal disfavor which the mint experienced, and the con
tinued elforts th^t were made in London to cast discredit upon the coin
which it issued, its operations were finally discontinued, although not
until the foundation for the issue o f bank bills had been laid by the colo
nists, upon which has since been built a large portion o f our national
prosperity. In 1G86, when all hopes for the longer successful continu
ance o f the mint were expiring, plans were proposed for the establish
ment o f a colonial bank at Boston, to supply its p la ce; and although
many prejudices existed against paper money, which even in the old
world was o f new invention, yet this institution was created, with liberty,
by its charter, to commence issuing bills on the security o f real and per
sonal estate, and unperishable merchandise. H ow long this bank con
tinued in existence, Mr. Felt does not inform us, although he supposes
it remained in operation until 1689. It would seem, however, that at
the time o f its discontinuance, most o f the aversion which had prevailed
in the colony towards paper money had vanished, for in one year after,
a law was passed authorizing the issue o f seven thousand pounds o f go
vernment bills, in denominations o f from five shillings to five pounds each.
Thus was the foundation laid for issuing a paper currency upon govern
ment credit, and controlled and regulated by its officers, which continu
ed for the period o f sixty years. During this time it underwent many
important changes, in value proportioned always to the1ability which the
colony possessed for its redemption ; and although many individuals suf
fered severe losses, owing to the various fluctuations which it experi
enced, yet it proved o f great public utility and benefit. It afforded fa
cilities by which persons were enabled to deal extensively in mercantile
transactions, and was a powerful instrament in abolishing the use o f the
cumbersome and perishable articles w e have mentioned as a portion o f
the circulating medium. The more extensively these bills o f credit
were circulated, the more anxious did the merchants, and others o f the
colonists, become for the wider diffusion o f paper money ; and as they
could not procure emissions from the government sufficiently large for
the purposes o f trade, efforts were strenuously exerted for the creation
o f a private bank. This was warmly opposed by the governor and his
officers, and an order was made prohibiting the issue o f bills by any private institution, or copartnership o f persons. A nd in order to direct
public attention from any project o f this nature, a new issue o f one
hundred thousand pounds in government bills was made in 1716, and
deposited with the county trustees, in amounts proportioned to the county
taxes. This money they were authorized to loan to individuals in sums
not exceeding five hundred pounds, nor less than twenty-five pounds, for
468
H istory o f Massachusetts Currency,
the period o f ten years, upon mortgaged estates, worth double the amount,
at the yearly interest o f five per cent.
This issue, although it relieved the colonists from the pressure o f im
mediate wants, operated in a great degree to depreciate the bills; and
the value o f silver rose in proportion.
Their real worth in facilitating trade and exchange was continually
deteriorating, and larger issues were in consequence clamorously de
manded ; and as the action o f the colonial government had operated to
defeat the establishment o f a bank for the purpose o f supplying a paper
currency, it became important to devise some measure by which the
expressed value o f these bills could be sustained. A most dangerous,
unjust, and fraudulent enactment, was accordingly made, by which they
were declared a legal tender in payment o f all obligations that had been
entered into between 1705 and 1715, unless gold and silver was spe
cially mentioned and agreed upon, and this law was afterwards continu
ed in force until 1722. This was a species o f high handed, arbitrary
legislation, almost unprecedented, and entirely unwarranted by justice,
necessity, or even expediency. First, to call into existence a large
amount o f bills o f credit, and then, the moment that the period for their
redenqjtion drew near, finding the precious metals were strangers to the
treasury, and slight prospects existing o f its replenishment, to declare
that this almost worthless paper should be received in payment o f debts,
for which nothing short o f gold and silver, or their equivalent, was origi
nally contemplated by either creditor or debtor, furnishes an instance o f
tyranny and oppression, o f which history affords but few precedents or
examples.
Although this legislative measure was calculated to keep the bills in
circulation, yet we are informed by Mr. Felt, that their depreciation was
none the less rapid, and litigation and commercial troubles were multi
plied to an alarming degree ; and in 1718 Governor Shute, in a commu
nication to the legislature, deplores the indifference which was manifest
ed in regard to their ultimate payment, and says that, unless due atten
tion is given in retrieving their credit, it will end in the ultimate destruc
tion o f the colony.
Indeed, the condition o f these bills was little better than that o f those
issued in 1712 by South Carolina, who, in order to pay the cost o f an ex
pedition against the Tuscaroras, issued forty-eight thousand pounds as a
loan, four thousand o f which was to be paid annually; and so fast did this
emission depreciate, that but two thirds o f its nominal value could be
obtained for it at the expiration o f the first year, and at the end o f the
second it was worth but one half, until at length the bills became almost
valueless.
T o add to the financial embarrassments o f the colony, its bills were
directed to be paid in stock, and various kinds o f country produce, so
that those who held them, hoping that they would be ultimately redeem
ed in silver or gold, were disappointed.
The bad faith manifested by the government, raised up a powerful
party against the issuing o f bills o f credit, and the formation o f a private
bank was urged with renewed force. The necessity for a paper circu
lating medium, o f a higher and more uniform value than the one enjoyed,
was seriously and universally experienced throughout the colony, and
particularly among the mercantile classes in the city o f Boston. T o in-
H istory o f Massachusetts Currency.
469
crease the evil, partial legislation had crept in, and while the poor la
borer was compelled to receive these bills for the support o f his family
at their par value, clergymen were obliged to take them only for the
stim which they were really worth. This added powerfully to the many
prejudices already existing against money o f this nature, until influenced
by a desire to increase the public prosperity, and for the purpose o f re
viving a languishing trade, a number o f Boston merchants, and others,
formed an association, and issued one hundred and ten thousand pounds
in bills, redeemable in ten years, which were so eagerly sought after,
and circulated so readily, that they at all times commanded thirty-three
per cent, more than those issued by the authorities o f the province.
Perceiving the readiness with which the colonists received and pass
ed the bills o f this private association, and the increased aversion that
prevailed throughout the community against those issued by the province,
the governor and both branches o f the legislature endeavored to cast
discredit upon the merchant’s notes, as they were called, and their influ
ence was exerted to destroy the source from which they emanated.
Their object utterly failed, however, for these notes for a long time
were freely circulated, from which the public derived many valuable be
nefits ; and this war o f the government upon the association, was with
out doubt a powerful instrument in awakening public attention to the
subject o f creating a currency through the medium o f banks, which even
in this instance, surrounded as it was by every material calculated to
wither its influence and destroy its credit, had triumphantly vindicated
the principle, that an association o f private individuals, amenable to the
laws for every act they commit, and legally accountable to those with
whom they deal for the rectitude and honesty o f their business transac
tions, are infinitely better calculated to create and perpetuate the bless
ings o f a sound and uniform currency, than an irresponsible combination
o f political power.
Notwithstanding every element which the government o f the colony
employed to crush and destroy all schemes by which banking institutions
were sought to be created, two associations were formed in 1740, for the
purpose o f issuing notes to circulate as money.
The plan upon which they were organized, and the principles by
which their operations were controlled, show that the science o f bank
ing was then but little understood, besides presenting a forcible pic
ture o f the financial gloom that prevailed throughout the colony.
One o f these associations was called the specie paying bank, because
its notes were redeemable in silver at twenty shillings an ounce, or gold
pro rata, after fifteen years ; and it was composed o f Edward Hutchin
son and one hundred and six partners, with a capital o f one hundred and
twenty thousand pounds.
The other was called the land bank, and was composed o f John Colman, and three hundred and ninety-five other persons, with liberty to
issue one hundred and fifty thousand pounds, to be lent in notes on land
security, payable in various articles o f merchandise at the expiration o f
twenty years.
A fter these associations were formed, they petitioned the legislature
for its approval and support, and a committee was appointed to examine
into their respective merits.
Upon investigation, the committee reported, that less objection exist-
470
H istory o f Massachusetts Currency.
ed to the specie paying hank than to the land bank, although both were
declared to be inexpedient, and against sound policy and the public
good. N o direct action was had upon this report, on account o f a divi
sion o f opinion between the two bodies composing the legislature ;
the council being desirous o f abolishing the land bank, and a large p or
tion o f the assembly being anxious to have it go into immediate opera
tion.
Under these circumstances, both associations commenced issuing their
notes, and a war was then commenced upon them by the English crown
and the colonial governor and council, which ended only with the anni
hilation o f the former. F or years previous, the prominent policy o f E n g
land towards her American colonies had been to introduce measures most
calculated to withdraw all silver from them, and to deprive them o f every
species o f local currency. H er merchants had always supplied the colo
nists with the foreign merchandise which they consumed, and in payment
were careful to obtain as much specie as possible. The precious metals
were consequently at all times extremely scarce, and as the colony carried
on but a trifling commerce, no opportunities were enjoyed by the inhabi
tants o f increasing the amount in circulation.
The coinage o f money had, as we have before observed, been declared
treason against the crown, and the issue o f bank notes, by the institution
we have mentioned, was considered an offence in its nature almost as
criminal. A policy so ruinous to the best interests o f the infant colony,
was powerfully calculated to crush the spirit o f enterprise that was ra
pidly pervading society, and tended strongly towards the destruction o f
all commercial prosperity.
Mr. Belcher, the governor o f the province, entered warmly into all the
views o f the English crown, and used his influence both publicly and
privately to effect the destruction o f the land bank. H e issued a procla
mation, setting forth in the most extravagant terms the great damage
which must ensue to the interests o f individuals, if the bank was suffered
to continue its operations; and condemned the specie paying bank also,
although with much less severity. Determined to destroy the land bank
at all hazards, every person who held a civil or military commission was
peremptorily forbidden, by the governor, to be in any manner connected
with it, under pain o f being summarily deprived o f the office he en
joyed.
In consequence o f this arbitrary measure, many individuals, holding
civil and military stations in the colony, immediately resigned, and among
these were some o f its most influential inhabitants. Mr. Felt mentions
a letter written by Henry L ee, Esq., o f W orcester, who it seems had fallen
under executive displeasure for his attachment to the bank, in which he
says, “ I am determined to do what I can to encourage it, and think the
privilege o f an Englishman is my sufficient warrant. T o sacrifice my
post for the service o f my country, is infinitely more honorable than to
keep it on such base conditions.” These sentences breathe a spirit o f
patrio.tism and devotion to what their author believed to be the good o f
his country, which are the more meritorious, as their utterance was the
seal o f his political fate, and deprived him o f office, and its attendant emo
luments and honors.
From what Mr. Felt informs us, we are led to suppose that the fear
o f political rulers did not prevail so universally among the colonists as
H istory o f Massachusetts Currency.
471
it has since existed; for we are told by him, that in defiance o f the man
dates o f the governor, the most stern resistance was manifested to every
measure that was introduced, which was in the least calculated to retard
the operations o f the land b a n k ; and individuals occupying the highest
positions in society, in point o f wealth and respectability, eagerly con
nected themselves with its interests, notwithstanding that by so doing they
incurred a forfeiture o f any office o f trust and profit with which they
had been invested by the colonial government. The excitement upon
this subject at length arose to such a height, that serious fears were en
tertained o f an insurrection on the part o f the colonists ; who, driven to
desperation by the policy o f their government, in refusing to allow them
a currency o f any kind, by which their trade had become seriously inju
red, as a last resort had resolved upon vindicating their claims to the rights
and privileges o f freemen, by force, and the governor was informed that
one thousand men were to be raised by the conspirators in Boston, and
twenty thousand in the country, who were to march into the metropolis,
and intimidate those opposed to the bank, and mob all such traders as
refused to pay coin for its bills.
B y using prompt and energetic measures, this rebellion never matured
to acts o f open hostility; the sheriff and his officers having captured the
principal conspirators, before their schemes were fully ripe for execu
tion.
The opposition o f the governor to the bank finally made him so un
popular, that through the representations o f its advocates to the royal
council, he was displaced, and William Shirley was appointed in his stead.
Nearly the same financial policy was pursued by him as had been mark
ed out by his predecessor, until through his influence an act was passed
by the parliament o f Great Britain, by which heavy penalties were in
flicted,upon all persons who should be connected in any manner with the
land and specie companies, as they were called, after the twenty-ninth day
o f September, 1741, which effectually struck them out o f existence, lea
ving the colonists destitute o f every species o f currency save depreciated
government bills. These were daily decreasing in value, and new emis
sions were continually issued, which rapidly caused a still greater depre
ciation, until at length they became almost worthless, and the colonists
suffered the greatest inconvenience and embarrassment from the want o f
a more uniform and less fluctuating medium o f exchange. A t last the
governor, through whose influence the private banks had been abolished,
fully saw the error he had committed, in supposing that government bills
could serve the purpose o f a currency, and in his speech to the legislative
bodies o f the province, used the following language:
“ The general distress o f the province, arising from extraordinary
emissions o f paper money, whereby the value thereof, for all occasions
o f life, is sunk so low, and is still sinking, and thereby the estates o f w i
dows and orphans, and many others, who have no remedy in their power
against this growing evil, are daily diminishing, which must inevitably
bring many good families to poverty : I most earnestly recommend to
you to find some other way to supply the treasury, than by making new
emissions o f paper money. And I am fully persuaded that you will there
by not only give relief to the oppressed, who justly expect it from you,
but also whatever charge may attend any new method to supply it will
be found in the end to save money to the province.”
472
H istory o f Massachusetts Currency.
It would be impossible not to respect and admire the candor and no
bleness evinced in this speech, the more so as it is in direct opposition
to the sentiments which he had previously advocated. But he saw that his
measures were injuring the prosperity o f the colonists, and that his favo
rite bills were producing the most injurious consequences, particularly
to those engaged in mercantile employments; and with an earnest desire
to promote and advance the welfare o f his country, which should be the
ruling principle o f every public officer, he resolved to sacrifice his pri
vate wishes and personal prejudices to the public good.
The same reasons which had influenced the governor to advise that no
more bills be issued upon the credit o f the government, led to the adop
tion o f measures for the speedy payment o f those in circulation, and ap
plication was made to the English crown for silver to effect their redemp
tion. The colony had expended large sums in fitting out an expedition
to assist in the capture o f Louisburg from the French, and it now asked
to be reimbursed those sums in the precious metals.
This request was at length complied with on the part o f the English
government, and specie was accordingly shipped to the colony to be used
in the payment o f its bills. This produced much satisfaction among the
colonists; many o f whom held large amounts o f the bills, which, from the
uncertainty that bad before existed o f their ultimate payment, were con
sidered almost valueless.
A s fast as they were redeemed, the treasurer was directed to burn them;
and the most confident hopes were entertained by the governor and his
friends, that a re-issue would not again be called for. Indeed, an exclu
sive hard money scheme was contemplated, which found many energetic
supporters, numbering, as at the present day, the highest offices in the
government. It was warmly opposed, however, by the poorer classes,
who feared that if gold and silver formed the exclusive currency, it would
be hoarded up by the rich, and the whole o f it be withdrawal from cir
culation.
Influenced by these feelings, large meetings were held in opposition
to the scheme throughout the colony, and so far did the excitement ex
tend, that the redemption o f the government bills was treated with dis
approbation, and its supporters threatened with personal violence, if it
should be persisted in. The excitement produced by these measures
soon subsided, and a calm determination to urge the adoption o f mea
sures for the establishment o f a sound and uniform currency, assumed
its place.
•
Notwithstanding the endeavors which had been made for the redemp
tion o f the bills, it was found impossible to transact the business o f the
colonists, with the small amount o f silver and gold in circulation; and
the colonial government was again compelled to issue paper money,
which was done from time to time, from 1751, when the amount in cir
culation was directed to be redeemed b y the gold and silver obtained
from England, until 1775, at which period the province issued bills, and
made them a legal tender, for the purpose o f placing itself in an attitude
o f defence against the invasion o f its liberties by the English crown.
After the commencement o f hostilities by the mother country against
the colonies, the provincial congress, deeming it a matter o f the deepest
importance that measures should be speedily adopted which would be
most likely to unite them together, passed a resolve, that the bills issued
H istory o f Massachusetts Currency.
473
b y the different colonies, shall pass current throughout all o f them, and
that whoever should refuse to take them, or should demand a discount
upon them, should be deemed an enemy to his country. The spirit o f
patriotism which existed among the colonists, and the determination that
prevailed to resist the unrighteous demands o f the British crown, for
some time exerted an influence in preserving the credit o f this new cur
rency unimpaired ; and in October, 1775, six months after the first issue
o f continental bills, they were readily exchanged for gold and silver.
A s it is perfectly well known to our readers, this paper soon suffered
an alarming depreciation in value ; and when the necessities o f our fore
fathers compelled them, for the purpose o f supporting themselves in their
unequal contest with the mother country, to make issue after issue o f
these bills, they became after the lapse o f two or three years almost
worthless. Mr. Felt has given a full and accurate account o f them, from
the time they were issued, until their ultimate redemption, and has col
lected much that is rare and interesting in relation to the legislative en
actments which were made for the purpose o f preserving them in circu
lation. Resolutions were passed in congress, by which it was rendered
highly criminal to attempt to cast discredit upon them; and in 1776, when
public confidence in them had become greatly impaired, a committee
was appointed by that body, to detect the authors o f a conspiracy which
had been formed for the purpose o f destroying the credit o f this currency,
in order that they might be punished as enemies to their country.
In 1777, still more powerful endeavors were made for its preservation ;
and in January o f that year, congress declared, that whosoever should
pay or receive this currency at a less rate than that originally prescribed,
besides being accounted a foe to the liberties o f his country, should for
feit a pecuniary penalty; and the states were advised by that body, to
make it a legal tender for all debts, and to provide that a refusal to re
ceive it, should operate as an extinguishment o f the claim upon which it
was offered.
A ll these measures, energetic as they were, proved insufficient to pre
vent its rapid and ruinous depreciation, until, in 1781, five hundred pa
per dollars would not command one o f silver, and they finally ceased to
circulate as a currency.
Such unfortunate and disastrous results had flowed from e,very attempt
on the part o f the government to provide a circulating medium, which
should be free from those sudden and oft-recurring fluctuations in value
that are ever so destructive to all public confidence, that when the at
tempt was made in congress to establish the Bank o f North America,
the representatives from Massachusetts voted against it, having lost nearly
all hope that any institution, established for the purpose o f issuing paper
money, would be conducted upon principles calculated to benefit the
community generally. The subsequent action o f this bank, which was
finally chartered, proved how deeply mistaken they were in these views,,
and showed how infinitely superior is a currency which emanates from
private institutions, to that which is the offspring o f a political govern
ment.
So many benefits were conferred upon the public by this institution,
and so powerfully did it operate in removing the financial embar
rassments that had so long and universally prevailed in the colonies,
that the distrust and aversion which had for many years existed tliroughV O L . I I .-----N O . V I.
60
H istory o f Massachusetts Currency.
474
out Massachusetts towards private banks, gradually wore away and finally
disappeared; and in February, 1784, a petition for the Massachusetts
Bank was granted by the legislature, with a capital o f five hundred and
fifty thousand pounds, which was the first institution o f the kind, com
posed and promoted solely by individuals, since the destruction o f the
silver and land banks.
Although much good resulted from the establishment o f this institution,
the bills o f which were freely circulated, and eagerly taken for all the
purposes o f business, yet the deep-seated financial evils, under which the
inhabitants o f Massachusetts had for many years labored, were not easily
destroyed; and in November, 1786, so difficult had it become to procure
money for the payment o f creditors, even by those who were possessed
o f large amounts o f property, that the legislature passed a law, by which
the collection o f private debts was for a period o f time suspended.
The creation o f new banking institutions, which speedily followed the
establishment o f the Massachusetts Bank, added greatly to the prosperity
o f commercial interests, and tended strongly towards removing the p e
cuniary embarrassments which for so long a space o f time had hung over
the province o f Massachusetts. Mr. F elt has furnished us with much
valuable information concerning these institutions, which he has extend
ed down to so recent a period as the last year, giving a history o f the
memorable suspension o f 1837, and o f the events which it led t o ; but as
all these circumstances are still fresh in the recollection o f our readers,
w e have thought it unnecessary to notice them here. W e would recom
mend every one to procure this work and give it an attentive perusal,
for it contains a mass o f highly useful, and to us interesting information;
and unfolding, as it does, a faithful chronicle o f the currency o f this coun
try, from its earliest settlement, and tracing the various mutations and
changes it has undergone, down to the present time, it presents to the
mind many valuable financial principles and monetary laws, which are
the more sure and unvarying, because they are sanctified by time and
long experience.
W e trust that Mr. Felt will pardon us for the liberty w e have taken
in giving a b rief abstract o f such portions o f his work as we have thought
most interesting, instead o f following in the more beaten tracks o f re
viewers, by presenting extracts from it entire.
Our reason for adopting a different mode is, that most o f it is com
posed o f transcripts o f colonial and state legislative records, which are
often lo n g ; and owing to their peculiar phraseology, are frequently dry,
and sometimes uninteresting.
H A V E Y O U R P R O P E R T Y A T A L L T I M E S F U L L Y IN S U R E D .
F r o m a neglect o f this caution, thousands are annually ruined.
Insure
at those offices that have the reputation o f paying claims honorably and
punctually ; even if you give a higher premium. It would be judicious
to show your policies to some experienced and disinterested person well
versed in the subject o f insurance, in order to be sure that all is right.—
H ints f o r M erchants.
Connexion o f Commerce and Agriculture.
475
A rt . IV . — T H E C O N N E X IO N O F C O M M E R C E A N D
A G R IC U L T U R E *
T he first and early settlers o f North America were, evidently, an en
terprising people. W ithout that trait o f character, they would not have
hazarded so much, nor voluntarily suffered so much as they did. And
men o f an enterprising spirit, living near the ocean, are found always to
engage more or less in navigation, and in maritime pursuits. The usual
labor on the land, in their estimation, is rather a dull business. The
employments o f agriculture or o f the mechanic arts, are too tame to
satisfy their active and ardent disposition. They have a desire for ad
ventures : they are ready to encounter dangers and losses in the hope o f
a successful voyage, or from a preference for more active scenes, where
they may meet new and exciting events. T hey axe also o f a brave and
hardy temperament; little daunted by ordinary difficulties, and patient
under toils and sufferings.
Such were the first visitors and inhabitants o f Virginia, under Smith
and others, and with the patronage o f the resolute and enterprising R a
leigh. The spirit o f the leaders was caught by the common adventurers.
T hey expected dangers and impediments; but they were prepared to
meet and to overcome them. Such were the Dutch who first settled
about Hudson’s river, and such were the first people o f Plymouth, Mas
sachusetts, N ew Haven, Maine, L ’Acadie, and Canada. Although o f
different nations in Europe, they were alike in their love o f adventure,
their readiness for enterprise, and their talent for trade. Their descend
ants have lost nothing o f this character; and we may justly add, perhaps,
that they have not improved upon it. For, i f more enterprising, they
are, it is feared, more injudicious and more reckless in their speculations.
N ow , the active and adventurous seaman, especially if intelligent, will
soon be induced to engage in mercantile pursuits. H e who has seen
much o f navigation, will naturally prefer trade and commerce to other
occupations ; for he has seen the profitable nature o f exchanging the
products and commodities o f one country for those o f another. And,
frequently, by the meridian o f life, he becomes a merchant. His per
sonal experience and knowledge have fitted him to be a successful one.
Perhaps, however, there is danger o f his becoming a rover; though this
will, in a great measure, depend on the sort o f early self-government and
discipline he has had. I f well educated, and o f common stability o f
character, he will be willing to exchange the bustle and dangers o f a
seafaring life for that o f the merchant, when he is fifty, or before. A nd
an intelligent ship-master, who has visited distant countries, is not in
danger o f impositions when he'engages in mercantile pursuits, from the
common reports often got up by speculators, and those who obtain
profits by misrepresenting the state o f trade in other countries. Such a
man is able to decide correctly for himself, in most cases, without seek
ing for advice o f others, who may be induced to deceive him. Many o f
* The attentive reader o f the Magazine may detect some views similar to these, con
tained in an article on the comparative benefits o f Agriculture, Commerce, and Manu
factures, in No. VI., Vol. I.
476
Connexion o f Commerce and Agriculture.
those who deserve the name o f merchants in this country, were some
time ship-masters in early life, or supercargoes in voyages to distant
regions.
The recollection o f these facts will prevent any surprise at the large
number o f merchants in the Atlantic cities and towns within the United
States. It is natural that it is s o : it is happy for us that it is s o : for
their enterprises have added incalculably to the wealth and improvement
o f the whole country. It is matter o f gratulation, that the early settlers
o f Virginia, about Hudson’s river, and the puritans in various parts o f
N ew England, were addicted to navigation and trade. They did not de
pend wholly on husbandry, though this was not n eglected; nor upon
mechanical arts, though some o f these received early attention by a por
tion o f the people. They bought vessels in Europe, to be employed here
in trade to and from the parent country, and with different parts o f the
American continent, and the W est India islands. A nd they early built
vessels for the purpose o f extending and facilitating their commercial
intercourse with the rest o f the world. The opinions and views o f the
people in the different colonies were in some respects dissimilar. But
none o f them wished to flee from society, or to discard the social state,
or to forego the comforts o f civilization. T hey were all, perhaps, de
sirous o f a more independent state; and some o f them o f a better, a
more moral condition, than then existed in any part o f Europe.
Their early voyages were for the necessaries o f life ; and the “ Bless
ing,” built by Governor W inthrop, in 1631, was chiefly employed for
this purpose. But within the period o f ten years, several large ships
were built iu Massachusetts, o f three hundred tons, or nearly o f that size;
and trading voyages were then made to England, exchanging fish and
furs for articles most needed by the colonists; and to islands in the W est
Indies, and ports in Spain, France, and Portugal, a few years later. In
deed, within the short time before mentioned, Maverick, Gibbons, and
others, o f Massachusetts, made some voyages to the W est Indies; and
AUerton and W illet o f Plymouth were denominated merchants, as they
traded with the French settlements, at Penobscot, and farther east in
L ’Acadie. Comfort, rather than wealth, was the object o f these enter
prises ; for the lands were not so cultivated within the first five or six
years, as to afford a sufficient supply for their reasonable wants, without
importations o f clothing and some provisions from Europe. A nd hence
the policy o f trade, even with the native Indians, to obtain furs to pay
for debts contracted in the parent country. W e are too apt to consider
the early puritans as ascetics, and willing to retire altogether from the
civilized world. Such was not their character. They wished, indeed,
to avoid the vices and luxuries o f the old world, but they had known too
much o f the comforts and conveniences o f civilization to esteem them
o f no importance, or as not worth some labor and hazard to procure for
their families. And literary and charitable institutions, which are only
to be found where civilization and Christianity have united their benign
influences, they early established and maintained, even in their infant and
almost destitute state. The merchants have always been among the
most liberal supporters o f such institutions.
W hat was the general and usual course o f trade before the revolution,
and while the navigation o f the colonies was regulated and controlled
by the parent state, it would not be very interesting to American mer-
Connexion o f Commerce and Agriculture.
477
chants o f the present day particularly to state; and the principal places
and articles have been already noticed. It is well known, that it was
exceedingly restricted and cramped by acts o f the British parliament,
with a view to the prosperity o f the mother country, i f not for the direct
purpose also o f preventing the growth o f the colonies, and keeping them
dependent on the political authority o f the crown. But for these re
strictions, the commercial enterprise and the general prosperity o f the
colonies would have been far greater in 1770, than facts testify they
were. The natural resources o f the country would have been developed,
and the unrestricted enterprise o f the merchants must have added greatly
to our strength and wealth at that period. The war o f the revolution,
which continued from 1775 to 1783, deprived the United States almost
entirely o f the blessings o f comm erce; and our navigation was necessa
rily employed as the means o f defence. F or seven years after the peace
o f 1783, the American merchants were struggling against the adverse
policy o f other nations, without aid from our government, either state or
continental, but with no little success; so that when the federal government
was established in 1789, commerce was regarded as the chief source o f
a revenue which would revive the public credit, and therefore received
the early attention and encouragement o f our national rulers.
E ven then, indeed, the spirit o f commercial enterprise had sent our
vessels to various places on the shores o f the Baltic, to the more distant
ports in the East Indies, to the islands in the Pacific, and to the north
eastern coasts o f the American continent. A nd these maritime adven
tures, under the untoward circumstances o f the times, are striking proofs
o f the energy o f the American character, as well as o f the preference o f
a portion o f our citizens for commercial pursuits. It would seem that
no discouragements could extinguish that spirit o f enterprise whose ob
ject is foreign trade and commerce, and that no want o f aid from go
vernment will divert man from the business o f navigation.
F or nearly twenty years, our commerce extended and prospered in a
measure almost unexampled. It received a favorable impulse from the
federal government, and its increase called forth the industry o f all
classes o f people, and added to the wealth o f the nation. The adminis
trations o f Washington and Adams, afforded it direct and efficient pro
tection ; and in return received from it all the benefits they expected or
hoped— the means o f supporting the credit and paying the debt o f the
nation. It would have been impossible to collect a revenue by direct
taxes, adequate to the exigencies o f the general government. It was in
the successful pursuits o f commerce chiefly, that ability was found to pay
the debt o f the United States, amounting, in 1790, to $120,000,000.
The interest o f the debt alone, would have proved a grievous burden to
the people, without the means arising from trade and navigation. The
sales o f public lands have, indeed, amounted to an immense sum ; but
the government has realized comparatively little : the expenses o f land
agents, with what has been granted to the new states, has consumed
eighty per cent, o f the lands alienated by the United States.
It is also to be recollected, that on enterprising merchants, more than
on any other class o f men, the mechanics and the laboring portion o f the
community are dependent for profitable employment. In the seaports,
where the mechanics are industrious and frugal, their condition is that
o f comfort and competence, and they are frequently able to give their
478
Connexion o f Commerce and Agriculture.
children a superior education. T o the merchants, the husbandmen are
also indebted, in a great measure, for a market for their surplus produce
in foreign ports, and for thus keeping up the price o f their products at
home also.
But in contending for the benefits o f commerce and navigation, it is
not my purpose to undervalue the importance and the necessity o f agri
culture ; nor in giving a high estimate o f the latter, can we be justly
charged with a design to underrate the advantages o f the former. They
will generally prosper and decline together; and the extent and success
o f one will not fail to promote the interests o f the other. W e therefore
protest against the hasty conclusion, that they who plead for the cause o f
agriculture, are necessarily inimical to commerce, or would place any
impediments to its prosperity. A nd it is believed the wise observers o f
the times must perceive, that the interests o f navigation and commerce
for the future will be closely connected with an extended and improved
state o f agriculture in our country. This is now, indeed, the plain lan
guage o f facts. N ot that there must be a new order o f things, or a very
material change in the course o f trade : but that navigation will be more
supported than formerly, by conveying the products o f our soil to foreign
countries; and the merchants will find much o f their employment in
supplying distant nations with the fruits o f our industrious farmers. In
less than one week, in the month o f February just past, 25,000 barrels
o f flour were shipped for Europe, besides a large amount to the W est
Indies and Brazilian ports, at the city o f N ew Y o r k ; and nearly the
same quantity, at the same time, at Philadelphia. Thus the farmer
furnishes the means o f profitable occupation to the merchant and to the
navigator ; and the merchant is enabled to pay for the foreign goods and
articles which he imports, without draining the country o f its specie to
meet the demands o f his creditors in Europe.
There is nothing new in all this, it may be said ; every one sees and
admits it. But do we conform to the theory in our practice l Has proper
encouragement been given to the interests o f agriculture by either the
general or state governments 1 Is agriculture cherished as the support,
and the permanent support, o f commerce 1 A nd is it not essential to
the prosperity o f commerce, that agriculture be extended and i?nproved
in the United States, i f our immense population, and it is constantly and
rapidly increasing, cannot subsist, or cannot have all their wants suppli
ed, but by a proportionally large commerce. The products o f other
climes, to a vast amount, are annually consumed or sought for among
us. A nd how are these to be procured, except by means o f commerce
and navigation ; and by the transportation o f the surplus products o f our
country in exchange 1 The exjwrts o f cotton from some o f the southern
states are to a great amount, and some other states export tobacco and
rice ; but the middle and western states can only raise grain for exporta
tion. And where they now raise one hundred bushels, they might raise
two or five hundred. There should be encouragement for such a pur
pose, as well for the benefit o f the merchant who exports, as o f the far
mer himself who grows it. Before the revolution, fish, and naval stores,
and tobacco, were the great staples o f which our exportations consisted.
N ow it is cotton and grain * and the latter will probably be o f superior
amount, unless there is some unexpected change in the state o f Europe,
Connexion o f Commerce and Agriculture.
479
or a mistaken indifference o f the importance o f agriculture should pre
vail in the country.
It would certainly be a most mistaken and unfortunate policy, to com
pel the citizens o f the United States to withdraw from the ocean, and
to become exclusively an agricultural people. Commerce is indispen
sable to our growth and power as a nation. Tn this age o f the world, a
people situated as those o f the United States are, would be little ac
counted o f or respected, who were without commerce. And it is, there
fore, worthy o f deep consideration, even with the friends o f commerce,
whether, i f agriculture is not encouraged and carried to a more prosper
ous state, the interests o f foreign trade and navigation will not speedily
and extensively suffer.
It cannot be said that manufactures are as favorable to the interests
o f navigation as agriculture. Their extension is undoubtedly for the
general prosperity o f the country ; but they are not to be cherished for
the salie o f any direct or peculiar advantage to the mercantile! portion o f
the nation. F or many generations, we shall have little o f manufactures
to send to distant countries. Our population is increasing, and will need
all the goods and articles w e can manufacture, unless agricultural pur
suits are unusually neglected. It is true, that we export cotton goods
and shoes, but they are all wanted in the country, and there is still a
great importation,- especially o f the former. A ll trade with foreign na
tions will not, indeed, be at an end, for we cannot manufacture many arti
cles so cheap as they can be imported from old countries, where they are
made with ease and perfection. But generally speaking, as manufac-»
tures increase among us, our navigation will be curtailed, except when
the labors o f our mechanics shall so far exceed those o f other nations,
that the articles here made shall be far superior to those o f a similar kind
in other countries. But the tendency o f agriculture is different; and its
surplus products will never be an evil, for they may always be con
veyed with some profit to other regions o f the globe. Unless the go
vernment should be unfriendly to commerce, and should adopt the nar
row policy o f preventing all intercourse with other nations, the enter
prising spirit o f the people will lead them to engage in trade to other
countries, as their ancestors have done, and the abundance o f our agri
cultural products will constitute their chief motive for it, as well as their
profits from it.
t
I f the subject is correctly considered, and with liberal and patriotic
views, there will be no jealousy in the merchants towards the husband
man, but his success and prosperity will be just cause o f satisfaction.
F or not only will the prosperous farmer furnish articles for transporta
tion to other countries, but will consume a much greater amount o f the
articles imported in exchange from foreign parts, where they are more
naturally or more easily produced.
There is another consideration, which should lead us to appreciate
more highly than many do, at present, the advantages o f agriculture, and
that is, to induce a greater portion o f the rising generation to give their
attention and labors to that important department o f national wealth and
prosperity. It is believed there is less fondness for cultivating the soil
than there should be in such a country as ou rs; far less than would
necessarily conduce to a general supply and competence. A s sincere
patriots, we must desire to witness an increase o f farmers, either great
or small, with five hundred acres or with fifty ; for these are the citi-
480
Connexion o f Commerce and Agriculture.
zens who are truly attached to the welfare o f the country, and who are
too independent to be bribed or influenced by the hollow-hearted dema
gogue. And as friends to commerce, we should like to see a less number
crowding into shops, and engaging in mere traffic for a subsistence. T o be
either respectable or successful, there must be only a due portion o f peo
ple concerned in merchandise and navigation. Especially is it necessa
ry, to be an honorable and prosperous merchant, to have experience and
knowledge o f the course o f trade in other countries. A nd yet many
seek to become merchants, that they may suddenly acquire wrealth, whose
only claim to the honorable distinction is, that they are extravagant and
injudicious speculators. A good merchant must have enterprise, but
he must also have prudence and experience, or his enterprise will only
be another name for recklessness and folly. It is precisely because we
desire to see our merchants honorable and respectable, as they have usu
ally been, and the concerns o f foreign commerce in the hands o f upright
and intelligent men, that we intimate a wish that the profession may not
be crowded by persons eager only for wealth, and destitute o f the edu
cation and probity proper for so elevated a rank in society. A nd all the
present generation need to be admonished, o f the pernicious results o f
that reckless spirit for speculation which now prevails in this country,
beyond that o f all others; and which aims to secure wealth or com pe
tence without steady labor and habits o f industry. It would greatly pro
mote the general prosperity, if a far larger portion o f young men would
becom e practical farm ers; and in most cases, their worldly lot would
thus be far more free from calamitous reverses, than by engaging in
speculation, where the chance is three to one against success; or in trade,
with an expectation o f becom ing rich or independent, without diligent
application to business.
The intelligent merchant him self would not desire to have the pro
fession crowded, nor be ready to recognise every uninformed and petty
trader as a brother in that honorable profession. H e is liberal, indeed,
in his feelings, and therefore will extend the hand o f friendly assistance
to one who is worthy, by his education and habits and integrity, and who
promises to pursue a prudent and honorable course. ITe has no narrow
or jealous views, and therefore is far from obstructing the path o f the
young adventurer, whose enterprise will be guided by judgment and
honesty o f purpose ; and it is only such characters that he is pleased to
see entering on the mercantile career. A nd the young men, too, who
aspire to the honorable profession o f merchants, should be impressed
with a deep sense o f the importance o f aregular preparation for the exer
tions and duties necessary alike to their success and their reputation. In
a word, the business o f a merchant is a profession, an art; and they who
would excel in it, must be trained to it by a proper course o f study and
o f practice. The enterprises and the services o f such men are necessary
to the respectability o f the nation. They afford p roof o f its prosperity
and its civilization ; they are the messengers o f its intelligence and glory
to distant countries. But the merchants o f the United States must re
member, that they are citizens o f a vast empire, and in some measure on
a level with the industrious mechanic, farmer, and manufacturer; that
they are members o f one great body, o f which the others are also essen
tial parts ; nor would they be much in error by recognising the inde
pendent landholders and cultivators o f the soil, as the true lords o f the
realm.
Law s relative to D ebtor and Creditor.
481
A rt . V .— L A W S R E L A T I V E TO D E B T O R A N D C R E D IT O R .
No. III.
TH E M ODE
AND
IN
O P P R O C E E D IN G IN N E W J E R S E Y F O R T H E R E C O V E R Y OP D E B T S )
GENERAL
F O R E N F O R C IN G
PA Y M E N T AND
S A T IS F A C T IO N
OF ANY
C L A IM O R D E M A N D .
I n order to a full understanding o f the laws o f N ew Jersey, relative
to debtor and creditor, and the mode o f proceeding for the recovery o f
any debt or demand, it will be necessary to give a cursory view o f the
several courts, and the subject matter o f their respective jurisdictions.
In this attempt we are, very fortunately, not driven to the unwelcome ne
cessity o f marking step by step the wily progress o f either court in obtain
ing cognizance o f any matters, which originally were or might have been
o f doubtful claim ; nor amid the struggles o f contending jurisdictions,
to point out the cunning fictions which any one court has resorted to, in
order to obtain concurrent jurisdiction, at least, in those actions, o f which
any other has claimed to have the exclusive cognizance.
H appily in N ew Jersey, as to the matter o f jurisdiction, no court need
trespass upon the right o f another, nor in any contest upon this point,
will it be necessary for either to intrench itself behind the “ ac ctiam ” o f
a king’s bench, or the ‘ ‘ quo m inus” o f an exchequer, to defend itself against
any exclusive claim o f the other.
The line o f demarcation is also so clearly drawn around each, by sta
tute and practice, that I apprehend the humiliating picture need never
be presented to the “ good people” o f N ew Jersey, o f a presiding judge
o f the common pleas, and the ch ief justice o f the supreme court, submit
ting to the unsuccessful umpirage o f the chancellor o f the state the ques
tion o f their respective jurisdiction.
The case o f C hief Justice K eelynge and Sir John Vaughan, in the reign
o f Charles the second, has, it is believed, never became a leading one to
settle questions o f usurped jurisdiction ; for all that is taught by that
single and singular case, is that Sir Matthew Hale, who was umpire in
the cause, proved himself to be, as he had always been, a most upright
and impartial ju d g e; for this worthy ch ief baron o f the exchequer, per
ceiving that the declamatory argument o f Sir John Vaughan against the
unwarranted use o f the magical ac ctiam o f the king’s bench, was a sinis
ter aim at the unjustifiable introduction o f the quo minus in the exchequer,
like an honest judge begged to decline the umpirage altogether, and left
the wily justice o f the king’s bench in quiet possession o f all the advan
tages o f the custodia m araschalli.
Courts o f C ivil Jurisdiction, wherein cogn izan ce is had b y W rit or Process.
The courts o f civil jurisdiction in N ew Jersey, which obtain cognizance
by writ or process, are four in number, namely, the justice’s court, or as
it is commonly styled in the writs and records o f the supreme court, the
“ court for the trial o f small causes;” the inferior court o f common pleas
liolden in every county in the state ; the circuit court, also holden in
every county in the state, and the supreme court o f judicature o f the
state o f N ew Jersey. These are all courts o f original, and three o f them
V O L . I I . — n o . vi.
61
482
Law s relative to D ebtor and Creditor.
o f appellate jurisdiction, namely, the common pleas, the circuit court,
and the supreme court, and in what way appeal is made to them will be
shown, when w e come to speak o f the proceedings in each.
Courtf o r the trial o f sm all causes.
This court is created by statute, and by the act passed the twelfth o f
February, 181S, it is enacted, that every suit o f a civil nature, at law,
where the debt, balance, or other matter in dispute, does not exceed,
exclusive o f costs, the sum or value o f one hundred dollars, shall be and
hereby is made cognizable before any justice o f the peace, o f any coun
ty in this state, who is hereby authorized to hold a court within such
county, to hear, try, and determine the same, according to law, although
the cause o f action does not arise in the same cou nty; and farther,
that the said court shall be a court o f record, and vested, for all the pur
poses aforesaid, with all such power as is usual in courts o f record o f
this state. But by a proviso in the same section, it is declared, that the
jurisdiction o f the justice shall not extend to any action o f replevin, slan
der, trespass for assault, battery, or imprisonment, or to any action
wherein the title o f any lands, tenements, or hereditaments, or other
real estate, shall or may in any wise come in question. Accounts for an
unlimited sum may be settled in this court, and a judgment obtained for
the balance, provided it be reduced within the jurisdiction o f the justice
by real bona fide credits.
So, also, whenever any bond, bill, note, or other contract in writing,
for the payment o f any sum above one hundred dollars, shall by bona
fide payments endorsed thereon, or set-off, be reduced to the sum o f one
hundred dollars or under, the balance is considered _as the real debt,
without regard to any penalty expressed therein, and may be recovered
before the justice ; and every sum o f money, or penalty, not exceeding
one hundred dollars, shall be sued for and recovered in this court.
A justice may hold his court any time or place within his county,
and is always open for the issuing and return o f process ; but must name
the time and place when and where his court is to be held, in all pro
cess returnable thereto.
O F A C T IO N S C O G N IZ A B L E B E F O R E A JU S T IC E .
T he following will comprehend the cases usually occurring, v iz .:
1. Debt.
2. Covenant.
3. Trespass with force and arms, (excepting as before mentioned.)
4. Trespass on the case.
It is useless for the purposes o f this article, to speak o f the subject
matter o f all these different actions. L et it suffice to mention those
only which belongs to the action o f d e b t; and because the statute crea
ting this court has made some alteration o f the common law in this par
ticular, and made that a subject matter for the action o f debt, which
strictly belongs to the action o f assumpsit.
A ctions o f D eb t are,
1. On a former judgment.
Laws relative to Debtor and Creditor.
4S3
2. On an act o f the legislature to recover penalties, where no particu
lar action is directed.
3. On a lease for a certain rent.
4. On bond.
5. On a sealed bill, promissory note, or bill o f exchange, whether fo
reign or inland, and between any o f the parties thereto, whether
drawers, acceptors, or endorsers, and checks on banks.
6. On an agreement under seal to pay money.
7. F or money lent and advanced, paid, laid out and expended, for
defendant at his request, and for money received by defendant to
the plaintiff’s use.
8. F or work and labor.
9. F or goods sold and delivered.
10. F or a book account.
11. F or a legacy.
12. And, in general, upon all assumpsits for the payment o f money
only.
Also, against constables, and other officers, for neglect o f duty, etc.,
as is provided in the act, but which need not be mentioned specifically.
The common law rules with regard to the parties, as well as the style
o f the action, must be observed, excepting as above mentioned.
The Process to he made use o f in this Court.
The first process which may be issued against any defendant or d e
fendants from this court, may be a summons, or a warrant in the nature
o f a capias ad respondendum, as the case may require ; but the plaintiff
may, notwithstanding, in any case make use o f the former. But in cases
where the defendant is a freeholder and resident in the county where
such process shall be issued, and in cases wherein the defendant cannot
be holden to bail, the first process shall be a summons. Provided, how
ever, i f any plaintiff, his attorney or agent, shall prove either by his or
her own oath or affirmation, or by the oath or affirmation o f any indif
ferent person, to the satisfaction o f the justice, that if the process be by
summons against such freeholder, the plaintiff will be in danger o f losing
his or her debt or demand, or doth really believe that such freeholder
will abscond, or depart or remove from the county wherein he or she re
sides, before the return day o f the summons, then it shall be the duty o f
the justice to issue a warrant against such freeholder. But by an act
passed two days after the passage o f the above, it was declared, that it
should not be lawful thereafter to confine the person o f any female for
d e b t; therefore no warrant, in debt, under any circumstances, can issue
against a female — a wise provision o f the legislature, clearly evidencing
the gallantry o f the then members, but which would have shone more
conspicuously, had their generosity induced them to have extended the
provision to all civil actions whatever.
In addition to the above modes o f proceeding, parties may agree to
enter, without process, any action before a justice o f the peace, to the
decision o f which he is competent if process had been executed, and
such court may proceed therein to final judgment and execution, in the
same manner as if a summons or a warrant had been issued or served.
Laws relative to D ebtor and Creditor.
484
Either party is also entitled to have his cause tried by a jury upon re
quest.
P roceed in gs a fter the return o f P rocess.
Upontlio return o f process, the plaintiff’ must file a copy o f his account,
or a state o f demand, setting forth his cause o f action or complaint.
Strict technicality is not required in this proceeding. It is sufficient i f
there appear upon the declaration a substantial cause o f action, with the
necessary or usual circumstances o f time, place, and person. The d if
ferent actions must be clearly distinguished, so that what is alleged in
debt, may not seem more properly to belong to covenant, trespass, tres
pass on the case, or other action than d e b t; so vice-versa. The defend
ant, i f he have a legal claim against the plaintiff', must file an oft-set o f the
same on the return o f the summons; or when the process is a warrant,
at the time o f the hearing o f the cause; but i f the warrant shall not have
been executed three days prior to the day o f hearing, then the defend
ant, upon entering into the recognisance prescribed by law, may have
farther time, not exceeding three days; and if he refuse or neglect to
deliver and file the same as aforesaid, he is forever thereafter precluded
from having or maintaining any action therefor. Provided, however, if
the balance found to be due defendant shall exceed the sum o f one
hundred dollars, the defendant shall not be precluded from recovering
his or her account or demand against the plaintiff’, in any other court o f
record having cognizance o f the same.
O f the Judgm ent.
A judgment in this court does not bind the real estate o f the defend
ant or plaintiff; but the execution to be issued on any such judgment,
commands the constables, who are the ministerial and executive officers
o f this court, to levy and make the debt, or damages and costs, o f the
goods and chatties o f the party, and for want o f sufficient goods and chat
ties whereon to levy and make the same, to take the body o f such party,
and convey him to the gaol o f said county.
O f the'proceedings on E xecution a fter Judgm ent obtained.
Under this head will be considered,
1. In what cases execution may issue immediately.
2. In what cases, and for how long a time, there must be stay o f exe
cution, i f judgment be against a freeholder.
3. In what cases a person not a freeholder may obtain a stay.
I. In what cases E xecution m ay issue im m ediately a fter Judgm ent.
1. In all cases where judgment is for costs only, as upon a nonsuit or
discontinuance, execution may issue immediately against the plaintiff.
2. In all cases where plaintiff or defendant recover a sum under five
dollars, execution may issue immediately, whether against a freeholder
or other person.
3. In all cases where judgm ent is against one not a freeholder, execu
tion for any sum may issue immediately, unless the defendant shall ap
pear on the return day o f the summons or warrant, or by consent with-
Laws relative to D ebtor and Creditor.
485
out process, or on the day that judgment is rendered, and procure a good
and sufficient freeholder, resident in the county, to confess judgment
with him, and then such defendant shall be entitled to all the privileges
o f a freeholder.
4.
In all cases where judgment is entered against a freeholder for any
sum, execution may issue immediately, if the party for whom judgment
is given shall make it appear, on oath or affirmation, to the satisfaction o f
the justice, that he is in danger o f losing his debtor damages, if delay o f
execution be allow ed; but if the party against whom execution is pray
ed, shall thereupon give sufficient security to the adverse party for the
payment, he shall be entitled to his privilege.
II. In what cases, and fo r how long a time, there must be a stay o f E x
ecution against afreeholder.
1. When a month is allowed.— W hen any judgment given against a free
holder, shall not be more than fifteen dollars, nor less than five, execution
shall not issue until after one month from the time when such judgment
was rendered.
2. W hen three months.— I f the judgment exceed fifteen dollars, and is
not more than sixty, no execution shall issue until after three months
from the date o f such judgment.
3. When six months.— W hen any judgment is rendered against a free
holder for any sum above sixty dollars, no execution can issue until after
six months from the time o f rendering such judgment.
But when a suit is brought upon a judgment before a justice, and
judgment rendered therein, execution may issue immediately, provided
the time limited for stay o f execution, as above mentioned, have expired
since the first ju d gm en t; or i f not, then such farther time, as with the time
already passed since the date o f the first judgment, will make up the
time allowed for stay.
I f the suit have been commenced by summons, the justice may con
sider the defendant a freeholder, so as to grant a stay o f execution, until
the contrary be shown.
O f proceedings on Appeal.
Under this head will be considered,
I. W h o may appeal, and in what cases.
II. O f the manner o f appealing, and the duty o f the justice thereon.
1. W ho may appeal, and in what cases.
Either party may appeal from the judgment o f a justice to the court
o f common pleas o f the county, to be holden next after the rendering
o f such judgment, whether the judgment be in his favor or against him,
except in the following cases:
1. W hen judgment has been given by default, which does not mean
without evidence, and simply by default, neglecting to appeal, (for evi
dence o f the claim is always required in this court,) but where the de
fendant makes no objection whatever to the claim or the proceedings.
2. W h en judgment has been given in the absence o f the defendant.
3. On a debt, demand, balance, or other matter in dispute, not exceed-
Law s relative to D ebtor and Creditor.
486
ing three dollars, excepting where the judgment is rendered on the ver
dict o f a jury, when an appeal will lie, though the demand be under
three dollars ; so also if the judgment be on a report o f referees.
2. O f the manner o f appealing, and the duty o f the Justicethereon.
I f the judgm ent have been rendered by a justice without a ju ry .— The
party demanding the appeal, must enter into a bond to the other party,
with at least one sufficient surety, being a freeholder in the county, in
double the sum for which judgment was given, conditioned to prosecute
his said appeal with effect, and abide the judgment o f the common
pleas, and pay such farther costs as shall be taxed, if the judgment be
affirmed. And upon tendering this bond to the justice, and demanding
an appeal, he is to grant the said appeal.
I f the judgm ent have been rendered on a verdict, or by a report o f referees.
— The appellant, at the time o f filing the bond with the justice, must also
file an affidavit made by himself, that the appeal is not intended for de
lay, and that he verily believes he hath a just and legal defence to make
upon the merits o f the case.
The duty o f the justice thereon, is to send a transcript o f the proceed
ings and judgment, under his hand and seal, together with the bond and
affidavit, to the clerk o f the common pleas, on or before the first day o f
the next term o f that court. I f he refuse or neglect, the common pleas
proceed against him by rule and attachment.
It will appear that it is on proceedings in the justice’s court, as above
mentioned, that the court o f common pleas becomes a court o f appeal,
as was heretofore mentioned in this article.
In all the cases above excepted from appeal, the party thinking him
self aggrieved by the judgment o f the justice, may remove the judgment
into the circuit court o f the county, or into the supreme court o f the
state, by certiorari, for the correction o f any supposed error therein.
N o attorney’s fees, as such, allowed in this court.
W e have been thus particular in speaking ofthis court, because itis cre
ated by statute, and governed by rules o f proceedings therein prescribed,
which are at variance in many particulars with the common law ; and
because also, the sum o f which it has jurisdiction is unusually large,
more so, perhaps, than the same court in any other state o f the union.
Suitors, therefore, who are often deterred from prosecuting small claims,
by reason o f the large bills o f costs that are often created, are above
shown a mode for the recovery o f a large sum, attaching to itself no such
odious feature as an attorney’s “ fee bill.” The whole taxable costs
amount to a few shillings, and the attorney for his services must depend
upon the liberality o f his client.
M O D E O F P R O C E E D IN G IN T H E H IG H E R C O U R T S IN N E W J E R S E Y .
O f the Court o f Common Pleas.
These courts are courts o f original jurisdiction and o f record, and have
all the power incident to courts o f common law, except in cases o f a crim
inal nature, to institute, hear, try, and determine all personal actions and
causes, to conduct the same, issue subpoenas, render judgment, and award
execution thereon, according to law and righ t; but actions personal, o f
Law s relative to Debtor and Creditor.
487
a local nature, are confined to the proper counties in which such cause
o f action arose, and their territorial jurisdiction is confined to the countyin which they are holden ; and as appellate courts have cognizance o f
all causes which are brought before them on appeal from the “ court for
the trial o f small causes.”
O f the Circuit Courts.
These courts were created by statute, passed the 14th o f February,
1838, and are holden in every county in the state, at the times and places
appointed by law for holding the courts o f common pleas (which are
four times in the year) in such county, except in two counties mentioned
in the a c t; and, in addition to the power and authority there possessed
by said circuit courts, o f trying issues in fact from the supreme court,
they are by said act constituted courts o f original jurisdiction and o f
record, and are vested with, and have all the power and authority inci
dent to courts o f common law, except in cases o f a criminal nature ; and
have power, authority, and jurisdiction in like manner, and to the like
extent as the court o f common pleas and supreme court have, to institute,
hear, try, and determine all actions and causes,real, personal, and m ixed;
to conduct the same, issue subpoenas, render judgment, and award exe
cution thereon, according to law and right. But in actions o f a local na
ture, the same must be confined to the proper counties in which such
cause o f action arose.
These courts have also cognizance o f other matters, which it is need
less to mention.
Their territorial jurisdiction is confined to the county in which they
are respectively held ; and are courts o f appeal upon certiorari from the
justice’s court, and from the common pleas in causes tried there on ap
peal from the justice’s court.
The Supreme Court.
T he civil jurisdiction o f this court embraces all the civil actions, which
are cognizable in the common pleas and circuit courts o f this state; but
no issues in fact are triable in this court, unless the matter or property
in dispute shall be o f the value o f three thousand dollars. The territo
rial jurisdiction o f this court extends over the whole state.
O P T H E M O D E OF P R O C E E D IN G IN T H E S E C O U R T S F O R T H E
R E C O V E R Y OF
D E B T S AND DEM AN DS.
A s all the proceedings which it is necessary to mention in this article,
are common to all these courts, they shall be included under one head,
and whatever is hereafter mentioned, must be considered as relating to
each, unless particularly excepted.
The first process to be made use of.
The first process allowed by law in personal actions, in cases where
the plaintiff is not entitled to bail, is a summons, which amounts to no
more than a notice to the defendant o f the action that is brought against
him. A nd in cases where the plaintiff is entitled to bail, the first pro
cess is a capias ad respondendum, a writ commanding the sheriff to arrest
488
Law s relative to D ebtor and Creditor.
the defendant by his body, that he may have him in court upon the re
turn day o f the writ.
A female, however, is privileged from arrest for debt, therefore under
no circumstances can she be arrested for that cause o f action; and we ques
tion very much whether any judge, at this time, would order any woman
to be holden to bail for any other cause o f civil action, wherein as against
a man an allowance o f bail may be granted.
Surely that feature of the law, which authorizes a man to be impri
soned for debt, is odious enough, or, to say the least o f it, is no ornament
to a statute book. But what shall be said o f that judge, who should or
der a female to be imprisoned in a civil action.
That complaint must be o f an exceedingly aggravated character,
amounting almost to a crime, which would justify such a p roceedin g;
yet we shrink back from the contemplation o f such a trespass b y any
woman, and are willing and ready to declare that no female should be
arrested in any civil action whatever.
Proceedings on Arrest.
In order to an arrest, it is necessary that an affidavit be made o f the
cause o f such action, and filed with the clerk o f the court out o f which
the writ is to issue ; which affidavit may be made before the chancellor
o f the state, or any judge o f a court o f record o f this state, or any master
in chancery, or any justice o f the peace o f this state, or any mayor, re
corder, or alderman, o f any city or borough o f this state, or any commis
sioner for taking bail and affidavits in the supreme court o f this state ;
or, i f the plaintiff be out o f this state, before any judge o f any court o f
judicature, or a notary public, o f the state, kingdom, or nation, in which
the plaintiff resides, or happens to be.
The capias, which is issued upon this affidavit, only authorizes the
officer to take the body o f the defendant, so that he may have him in
court upon the return o f the writ.
Upon the arrest, the defendant is allowed to give bail to the sheriff for
his appearance at the time and place mentioned in the writ.
A s against residents, there is no mesne process o f attachment in N ew
Jersey, to compel a defendant’s appearance to answer any action ; and
whatever objectionable features there may be in its proceedings in other
respects, it is certainly relieved from this very exceptionable one.
Thus brought into court by the two methods above mentioned, the
defendant is proceeded against according to the rules o f pleading and the
practice o f the courts, all o f which we pass over as being too tedious, as
well as useless, to mention.
The comparative merits o f the two processes used in commencing an
action, naturally becomes a matter o f some consideration with every
suitor in the courts; and it is almost impossible to say, with any posi
tiveness or certainty, which is the better o f the two.
A man unacquainted with the practice o f the courts in all its details,
readily supposes, that that process which compels his debtor to give
bail, must o f course have the advantage ; yet when he is introduced to
the various modes in which that bail may be discharged, he as quickly
perceives how accidental that advantage becomes. F or instance, if a
creditor hold his debtor to bail, he is sure, at least, o f his appearance at
court, for i f he give bail to the sheriff for that appearance, it rarely hap-
Law s rdative to Debtor and Creditor.
489
pens that he does not appear, either by surrendering himself to the cus
tody o f the officer, after special bail filed, or by putting in special bail,
and not surrendering. I f he surrender himself, what possible advantage
has the plaintiif gained from the bail to the sheriff. They are dischar
ged thereby, as well as the special bail; or i f he do not surrender, but
puts in special bail to the action, then no benefit is derived from the bail
to the sheriff, for they are immediately released.
But he has, under this last case, bail to the action. W hat advantage
accrues to a plaintiff from this 1 In the first place, the bail may surren
der the defendant any how they please before judgment, and any time
after judgment, if it be on or before the return day o f a certain writ,
called a scire facias, which is sued out against them, and which is served
upon them ; or some time during the term to which a summons served
upon them is made returnable. A s these writs against the bail are is
sued and served some days before they can possibly be charged for not
surrendering the defendant in time, how easy is it for the bail to take
their principal, and surrender him to their relief.
W hat is gained, then, by all this proceeding ? Surely the creditor has
his debtor confined in close custody, unless he can be so fortunate as to
procure some friend to becom e his surety, that he will take the benefit
o f the insolvent laws at the next term, or that he will keep within the
bounds o f the limits prescribed by the inferior court o f common pleas o f
the county.
A nd what man in any community, is hardly so fortunate 1 I f the prin
cipal be really insolvent, scarcely will his bail wait upon him so long be
fore a surrender, as to receive a warning from the plaintiff o f his intention
to make him liable i f he can. A nd what man is there, who, because he
is bail for a friend, thinks himself under any greater moral obligations to
pay his debt.
The only hope for a creditor under these circumstances, and it is a
forlorn hope indeed, is that the principal will abscond or secrete himself
so as not to be taken and surrendered by his bail, or as a “ dernier re
sort” to keep hope still alive, that the bail will voluntarily pay the debt
for him. A ll the advantage, therefore, o f this mode o f proceeding, is ac
cidental at the most.
W e proceed now to speak o f the
JU D G M E N T S O P T H E S E V E R A L C O U R T S .
Judgments rendered in the common pleas and circuit courts are o f the
same efficacy, and have a binding force upon the property o f the party
over the same extent o f territory, they being concurrent as to territorial
jurisdiction.
T he effect o f them, is to bind the real estate o f the party, lying and
being in the county wherein the court is held in which the judgment is
rendered.
A ll conveyances, therefore, o f any real estate, made by the party
against whom the judgment is rendered, after the actual entry o f such
judgment on the minutes or records o f the court, are void and o f no effect
as against the judgment creditor.
The personal estate o f the party, however, is not so effected by the en
try o f the ju d gm en t; but in order to secure a lien thereupon, it is neces
sary to issue an execution, and deliver the same to the proper officer for
VOL. I I .---- NO. V I.
62
\
4 90
Law s relative to D ebtor and Creditor.
service ; and then the personal estate o f the party is bound from the time
o f such delivery, which time is readily known by the endorsement o f the
officer upon the writ, which he is obliged to make at the time he receives
the same. Questions o f priority o f lien, whether upon real or personal
property, need never be agitated, (except in cases o f fraud on the part o f
prior execution creditors,) as the endorsement o f the sheriff, or other offi
cer, can immediately settle the point.
The jurisdiction o f the supreme court extending over the whole state,
judgments rendered in it bind the real estate o f the party, at the time
above mentioned, wherever the same is situate in the state. So also in
the other two courts as well as in this, whatever real estate a party ac
quires after the date o f the judgm ent against him, becomes subject to that
judgment, and the lien instantly attaches. They remain, after recording,
in full force and effect, so that actions may be brought thereon any time
within twenty years, or may during that same time be revived by scire
facias; but the time during which any.person entitled to the benefit o f
the judgment, who shall have been under the age o f twenty-one years,
femme covert, or insane, shall not be taken or computed as part o f the
said limited period o f twenty years.
O f the Execution.
There are three kinds o f executions recognised in the above courts,
v iz .: a “ capias ad satisfaciendum,” a “ fieri fa cia s de bonisf and a “ fieri
fa cia s de bonis et tcrris.”
The first, commanding the sheriff to take the body o f the defendant,
and keep him till he make satisfaction o f the debt or damages, may be
used in all cases against residents as well as non-residents.
This writ will detain the defendant in close custody, until he give a
bond to keep within the prison limits, or a bond to apply at the next term
o f the court o f common pleas for the benefit o f the insolvent laws o f the
state, or until he make satisfaction o f the debt or damages.
This is the highest writ known to the laws, and after it no other can
issue on the same judgment, excepting in the two following cases :
First. I f the debtor, after being committed to prison by virtue o f an
excution, shall escape thence, the creditor, at whose suit such prisoner
was charged in execution at the time o f his escape, may retake such
prisoner by any new capias, or capnas ad satisfaciendum, or sue forth any
other kind o f execution on the judgment, as i f the body o f such prisoner
had never been taken in execution.
Second. That i f the party charged in execution for any debt or dam
age recovered, die in execution, then the plaintiff may have a new exe
cution against the goods and chatties, lands and tenements, or any o f
them, o f the person so deceased, in as simple a manner, and to all intents
and purposes, as he might have had, i f the person so deceased had
never been taken and charged in execution. Provided, however, that
no person, at whose suit any such party shall be in execution, and die in
execution, shall have or take any new execution against the lands, tene
ments, or hereditaments, o f such party so dying in execution, which shall
at any time after the judgment against such party so dying as aforesaid,
have been by him sold bona fide for the payment o f any o f his creditors,
and the money given for the lands, paid, or secured to be paid, to any o f
Law s relative to D ebtor and Creditor.
491
liis creditors, with their privity or consent; nor against any lands, tene
ments, &c. o f such party so dying in execution, which shall have been
sold by virtue o f any other judgment and execution against him so dying
as aforesaid.
The second, is a “ fieri fa cia s de bonis,” and as the words import,
is an execution commanding the sheriff to levy and make the debt or
damages o f the goods and chatties o f the party.
The third is a “ fieri fa cia s de bonis et terris,” and commands the officer
to levy and make the debt or damages o f the goods and chatties o f the
party, and for want o f sufficient thereof, to make it on the residue o f the
lands, tenements, and hereditaments o f the defendant.
In the above courts, executions issue immediately after the rendition
o f the judgment, no stay thereof being allowed, either against residents
or non-residents, or whether they be freeholders or not, excepting where
the party wishes to bring a writ o f erro r; then, in order to stay the exe
cution, a recognisance must be filed, as prescribed by the act, within
fifteen days after the rendition o f the judgment.
Complaints are sometimes made by the foreign suitors in the courts
o f N ew Jersey, o f the great delay and tardiness accompanying their
proceedings.
In the collection o f claims above one hundred dollars, six, nine, and
twelve months often intervene between the commencement o f the action
and the final receipt o f the money.
The state o f N ew Jersey being o f an agricultural, rather than o f a
commercial character, the same necessity for a very speedy determina
tion o f a suit, does not prevail, as in those states wherein are large com
mercial cities. It seldom happens that the docket o f any one court, in
this state, becomes so crowded with cases, that they may not be disposed
o f at any one sitting.
In large cities and populous counties, remedies must be speedy to pre
vent an aggregation o f suits upon the calendar, for the final determina
tion o f which, long sessions o f the courts must be had. These are ob
jectionable upon two important grounds. Those plaintiffs whose suits
are placed low on the list, are compelled to be in attendance, with their
witnesses, watching their turn for trial, which may not arrive for weeks,
and are consequently subjected to both delay and a heavy expense. But
perhaps the greatest objection to long sessions, is the detention o f the
jury, who are either farmers, and must necessarily incur a loss b y their
absence from their farms at those seasons o f the year, when a day is o f
all importance to them, or are manufacturers and mechanics, and must
suffer great detriment in business, by reason o f their continued absence
from their factories and work-shops.
F or these reasons, it is to be regretted that, in some parts o f N ew
Jersey, particularly in the county o f Essex, some more speedy way for
the determination o f causes has not been provided by the legislature.
Some satisfaction, however, is derived from the present constitution o f
the courts, and the delay in their proceedings; and that consists in their
certainty and regularity.
There is cause for regret after a hasty and erroneous proceeding.
Amidst the multiplicity o f causes which may be entrusted to any one
attorney, time is given him to look well at his step before it is taken; and
besides, parties are not driven to a hasty trial, before they have time to
M ercantile Law 'Reports.
492
collect their evidence and gather together their witnesses. This delay
favors one party at least, towards whom it has always been the disposi
tion o f the law to extend the greater lenity, i f it do not prejudice the
right o f the other.
Defendants, both in civil and criminal actions, have received the more
indulgence from the la w ; and from the fact, that the presumption o f the
existence o f the plaintiff’s claim in a civil suit is against him, and o f the
wounded “ dignity,” and disturbed “ peace” o f the crown or the state in
criminal cases, is against the king or the people. The delay, then, in the
proceedings at law in N ew Jersey, is consistent at least with the princi
ples o f a sound and wholesome jurisprudence.
A rt . V I.— M E R C A N T IL E L A W R E P O R T S .
C H E A T IN G ----- F R A U D U L E N T E N D O R S E M E N T O F A N O T E .------C O M M IS S IO N
M ER
C H A N T S ----- T H E I R D U T Y T O IN S U R E G OO DS C O N S IG N E D T O T H E M .------E A S T
ERN l a n d s — f r a u d u l e n t s a l e . —
COM M ON
b il l s
and
C A R R I E R S .----- IN S U R A N C E ------ V I O L A T I O N
n o tes
OF
.—
in s u r a n c e
F O R E IG N
.—
REVENUE
L A W S ----- C O N F IS C A T IO N I N , A N D J U R IS D IC T IO N O F , F O R E IG N C O U R T S .
R e p o r t s o f the proceedings in our courts o f justice, often possess an
interest far deeper than the mere legal questions involved would excite.
Judicial tribunals are, in fact, the true tests o f character. F e w business
men but are called into them in some way, either as parties, witnesses,
or jurors ; and few er still but feel a personal interest in the proceedings,
as they may affect, injuriously or otherwise, individuals with whom they
are connected by business or friendship. Many a rogue’s true charac
ter has been exposed for the first time in a court where he has been
called as a party or a witness; and where, in spite o f his exertions, his
cunning, hypocrisy, and knavery, are, for the first time, fully laid bare
to the gaze o f a community, where he has hitherto, perhaps, passed as
an honest man.
Judicial proceedings are among the best sources o f personal history.
T hey are the history o f personal transactions which would otherwise
never see the lig h t; and they are the result o f tribunals erected for the
express purpose o f eliciting the truth.
It behooves business men to becom e familiar with the proceedings o f
the courts o f justice in all our large cities, as far as circumstances will
permit. A nd this, not for the purpose o f becoming their own lawyers—
for no prudent man will be willing to go forward in enterprises involv
ing legal responsibilities, entirely on his own knowledge o f the law —
nor, from a morbid curiosity, to becom e familiar with the details o f crime
and wretchedness with which our courts, and especially those o f inferior
jurisdiction, are attended, but for the purpose o f a knowledge o f those
great and leading principles o f law with which every man should be
fam iliar; and especially for the purpose o f obtaining a knowledge o f
personal character.
It is for these, among other reasons, that we devote a portion o f each
Cheating— Fraudulent Endorsement o f a Note.
493
number o f our magazine to the reports o f legal proceedings ; and where
cases which are here presented at length, involve no legal principles o f
importance, they may be useful in exposing knavery, detecting fraud,
and placing individuals before the mercantile community in the true
light, which a severe judicial examination, by persons entirely impartial,
has thrown upon their characters. I f after they have undergone this
scrutiny, their reputation has received no stain, the world should know
i t ; and if, after being weighed in the balance o f justice, they have been
found wanting, this fact also should be known by all with whom they
have been or may bo connected in business transactions.
These remarks are general. They are not intended to apply in par
ticular to any court reports which have heretofore, or may hereafter, ap
pear in this magazine. W e have no feelings in this matter, except a
desire to render ourselves useful to the p u b lic; and as chroniclers o f
passing events in the legal world, we endeavor to exercise the same
truth and impartiality, that we do in making out statistical tables. Our
duty is with the public, and not with individuals ; and as we shall pub
lish nothing in this department to gratify private feelings, so we shall
keep back nothing which the public ought to know.
C H E A T IN G -----F R A U D U L E N T E N D O R S E M E N T O F A N O T E .
T he Supreme Judicial Court o f Massachusetts, at the last term, in
Boston, were occupied several days in the trial o f the case o f Thomas
J. Lobdell, broker, v. Elvphalet Baher, merchant.
It was an action o f trespass on the case, and the plaintiff’s writ set
forth that the defendant, on the 25th day o f February, 1837, had in his
possession a certain promissory note o f hand, signed by Hicks, Law
rence, & Co., o f N ew York, payable to James J. A. Bruce, o f N ew York,
and by him endorsed, for the sum o f 2,775 dollars and eighty-nine cents,
payable in five months. That the defendant, wishing to dispose o f the
note, and with the intent to defraud any person who might becom e the
purchaser, procured his clerk, a minor under the age o f twenty-one
years, to endorse the n ote; and on the same day the defendant sold the
note to a broker, the same being fraudulently and deceitfully procured
to be endorsed as above mentioned. That the plaintiff afterwards be
came the purchaser o f the note, relying on the said endorsement as
good and effectual.
A nd the plaintiff, in this action, sought to recover o f the defendant the
full amount o f the said note, and interest, together with the cost and ex
penses incurred by the plaintiff in an action against the above mentioned
minor.
The plaintiff contended and attempted to prove, that the defendant
received the note in question, and several others, amounting to about
$7,000, in N ew York. That on his return to Boston, he asked one o f his
clerks i f he was afraid to endorse the notes. The latter said he was
not, and wrote his name as requested, and subsequently they were de
livered by Mr. Baker to Benjamin W inslow, a broker, to be sold. That
W in slow sold the note which was the subject o f this suit, to George B.
Stearns, o f whom the plaintiff received it. That the sirname o f the
clerk being the same as that o f a well known firm in N ew York, although
his Christian name was different, it was the intention o f the defendant to
494
M ercantile Law Reports.
give the impression that the note was, in fact, endorsed b y a member o f
that firm. That Hicks, Lawrence, & Co., and James J. A . Bruce, the
makers and first endorser o f the note, had failed, and when the plaintiff
came to hunt up the second endorser, he found, to his surprise, that he
was a clerk in the employ o f the defendant, and a minor. That the
plaintiff commenced an action against the clerk, and the latter pleaded
infancy, and recovered costs against the plaintiff. That the defendant
procured the notes to be endorsed fraudulently, and with an intent to
deceive and cheat any and all persons who might purchase them. That
the defendant sold the notes to W inslow as N ew Y ork business paper,
and that W inslow so represented them when he sold them.
On the part o f the defendant, it was admitted, that he procured the
note to be endorsed by his clerk, well knowing that he was a m in or;
but it was contended, and attempted to be proved, that the defendant
did not intend to defraud any one. That it was his intention to sell the
notes in N ew Y ork for foreign exchange, or to send them there by the
clerk, and he wished them endorsed for safe remittance. That the de
fendant is a man o f quick and sudden feelings, and acts in all his business
transactions upon the impulse o f the moment. That immediately after
the clerk had written his name upon the notes, the defendant said he
was sorry for it, but added that “ it would do no harm.” That it was
a very common thing for merchants to procure their clerks, although
minors, to endorse p a p er; that though this was not strictly right, it still
was common. That Mr. W inslow came to the defendant’s counting
room, and the defendant instructed a clerk to give him (W inslow) a me
morandum o f these notes ; that the clerk did so, and the defendant took
the memorandum, and seeing the name o f the minor on it, he told the
clerk to make out another, omitting the name o f the second endorser,
(the minor.) That this memorandum was given to Mr. W inslow , to
sell the notes by, who came in subsequently and said he had sold the
notes, and wished for them to deliver to the purchaser. That the notes
were given to him. That he afterwards came in and remarked that the
name o f the second endorser was not on the memorandum originally
given him ; that Mr. Baker then distinctly said to him, “ that name is
nothing.” That the notes w ere sold on the memorandum which did
not contain the name o f the minor, and consequently .that the purchaser
could not have received them on the credit o f the second endorser, and
consequently also, that all presumption o f having put the name on the
notes with a fraudulent intent was repelled. That the plaintiff did in
fact rely wholly on the names o f Hicks, Lawrence, & Co., who were
well known on ’Change to be perfectly responsible at that time.
There were many witnesses examined in the case, and there was con
siderable conflict in the testimony o f some o f them.
T he great point in the argument o f the plaintiff’s counsel appeared to
be, that the defendant must have procured his clerk’s endorsement for
some fraudulent purpose, or he would not have procured it at a ll; and
that the reason assigned for procuring it was o f no substance whatever.
That no evidence had been offered to show that Mr. Baker had any in
tention to send the notes to N e w York.
On the part o f the defendant the great argument appeared to be, that
the notes had been sold on the memorandum .which did not contain the
name o f the minor, and the purchaser could not have been deceived, and
Commission Merchants.
495
that this fact entirely negatived any presumption o f fraud on the part o f
the defendant.
Judge W ilde charged the jury, that the plaintiff must show,
1. That the note was put into circulation fraudulently; and,
2. That he was defrauded, or took the paper relying on the name o f
the second endorser.
The defendant having procured the endorsement, the burthen was on
him to explain that fact.
I f the ju ry were satisfied that W inslow was informed, before the notes
were sold, that the name o f the clerk was not to he relied on, this would
tend strongly to rebut the implication o f fraud; and if he effected the
sale before the name o f the second endorser was known to him, this would
tend to show that no credit was given to the name o f the clerk. But
it was not necessary that they should be satisfied that the plaintiff took
the note solely on the credit o f the second endorser; it was sufficient if
any reliance was placed on his name. Here, again, the burthen o f p roof
was on the defendant, for the presumption was, that a credit was given
to every name on the note.
A fter the ju ry were out several hours, they sent into court the follow
ing inquiry : “ W ou ld the plaintiff be entitled to a verdict, i f the fraudu
lent act was proved to the satisfaction o f the jury. Provided, that there
was a doubt in the mind o f the ju ry whether or not that Lobdell was ap
prised that the name o f the second endorser was not valuable.”
The ju d ge ruled this point in favor o f the defendant, as above stated,
and in a short time the jury came in with a verdict for the defendant.*
C O M M IS S IO N
M E R C H A N T S -----T H E I R
TO
DUTY
TO
IN S U R E
GOODS
C O N SIG N E D
TH EM .
In Decem ber last, at Boston, the case o f Bates and others v. Parher
and others, tried in the Supreme Court, was an action brought by Messrs.
Bates & Co., o f Boston, against Messrs. Parker, Howard, & Co., o f N ew
Y ork, for not insuring against fire certain merchandise consigned to the
latter house, for sale on commission, by Messrs. Bates & Co. It appear
ed that on the second Decem ber, 1835, the plaintiffs, pursuant to a pre
vious agreement, sent to the defendants the invoice and bill o f lading o f
the merchandise which had then just arrived in N ew Y ork, and that it
was received into the store o f the defendants on or about the fourteenth
Decem ber, and was burned in the great fire on the sixteenth December,
not being insured. The plaintiffs produced an account o f sales o f a pre
vious consignment o f property, dated about eighteen months previous to
the consignment in question, in which there was a charge for fire insu
rance, and this account appeared to have been settled, and this charge
allowed without objection. T w o merchants o f Boston testified, that
they had made consignments to the defendants, and that in their ac-
* It is proper to state, thatihe above report is necessarily somewhat meagre in respect
to many nicely balanced points o f evidence, and that it has been the endeavor o f the re
porter rather to present the grounds taken by the parties, than to give any intimation as
to what they made out by evidence. Upon some o f the positions taken no evidence
whatever was offered. They were merely conjectures o f counsel, and are stated in or
der that the position o f the parties, as they understood them, may be seen.
496
M ercantile L aw Reports.
counts a charge for fire insurance was inserted and allowed, and that
they had no recollection o f having given any special orders to have in
surance effected. Evidence tending to prove the existence o f a general
usage among commission merchants in the city o f N ew Y ork to insure
property held for sale on commission, and charged the premium to the
consignor without orders to that effect, and also o f a usage to make such
insurance in all cases where it had been once done and the charge al
low ed without objection.
The defendants denied the existence o f both these usages, and assert
ed that the property had been for so short a time in their possession in
a new fire p roof store, that they were not guilty o f any neglect in failing
to procure insurance thereof. They also argued, that the defendants
were not liable as insurers, as the plaintiffs averred, but only for so much
damages as the plaintiffs would have recovered i f insured, from the in
solvent insurance companies in N ew Y ork, where the defendants had
policies.
The judge directed the jury, that i f the defendants, being bound to
procure insurance, neglected so to do, they became thereby the insurers
o f the property for its full value, and as such were entitled to a reasona
ble premium, to be deducted from the damages. That i f there was a
general usage for commission merchants in N ew Y ork to procure insur
ance on property consigned to them for sale on commission, and charge
the premium to the consignors, or i f there was such a usage in the cases
where they had rendered an account containing such a charge, and had
it allowed without objection, then the law would imply a contract by the
defendants that they would lollow the usage existing when this engage
ment was made. That it would thus be the legal duty o f the defendants
to insure this property with all reasonable diligence after it was recei
ved. That the ju ry must judge whether, under the circumstances o f this
case, the delay to insure for a day or two after the property was received,
the defendants having thirteen days’ notice that it was coming, was or
was not reasonable diligence. That i f they thought it was not, and
either o f the usages relied on by the plaintiffs was proved, they should
find for the plaintiffs. In reference to the liability o f the defendants for
more than the insurance companies where they insured would have
paid, the ju ry were directed to find the fact whether or no the defend
ants intended to cover the property by their general policies.
The ju ry found a general verdict for the plaintiffs. T hey also found
that the defendants did intend to cover the property by their general
policies.
EASTERN
L A N D S ----- F R A U D U L E N T
SALE.
A t the late term o f the Supreme Judicial Court, in Boston, an action
was tried, involving questions o f peculiar interest to all who were en
gaged in the recent speculations in eastern lands.
It was an action brought by P . II. if J. E . Ilazeltin e, now o f Lowell,
Mass., and formerly o f .Bangor, Maine, against *H enry W arren and Au
gustus J. Brown, counsellors at law, o f Bangor.
The plaintiffs sought to recover o f the defendants the sum o f twelve
hundred dollars, on a note o f hand, signed by Nehemiah Kittredge, o f
Bangor, and endorsed by the defendants.
Eastern Lands— Fraudulent Sale.
497
The counsel for the plaintiffs, in opening the case to the jury, said the
note, which was the subject o f this suit, was given, with others, in pay
ment o f three lots o f land in No. 4, Old Indian Purchase, in the state o f
Maine. A t the time o f the land speculations in Maine a year or two
ago, the plaintiffs were the owners o f these three lots, and on request,
gave a bond o f them to Mr. Kittredge, o f Bangor, who formerly owned
a lot in the same township, and had sold it. They gave the bond at three
dollars per acre, but the understanding was, that Kittredge was to have
all he could make over two dollars and fifty cents per acre. Kittredge
assigned the bond for thirty days to Horatio P . Blood, for about five
hundred dollars. Before the bond expired, the land was sold to the de
fendants. A deed was then demanded o f the plaintiffs, but they were
unwilling to give one, as the land had risen in value, but finally, after
taking legal advice, they executed a deed to the defendants, and one
payment was made in money. The other payments were made in pro
missory notes, which were signed by Kittredge, and endorsed by the de
fendants. One o f the notes had been paid at maturity. Another had
been sued in Maine, and the defendants suffered the action to go by de
fault. The defendants refused to pay the present note, on the ground o f
alleged deception in regard to the value o f the land, although they kept
it through the whole period o f the speculation fever, and had sold stumpage on it for two seasons. In this defence the whole burthen o f p roof
was on the defendants, it being necessary for the plaintiffs to make out
a prima facie case only.
The note was then produced and read to the jury.
The defendants’ counsel then contended, and offered evidence to prove,
that Kittredge was the mere agent o f the plaintiffs in selling this land;
that the plaintiffs applied to him, and offered him fifty dollars to sell it at
two dollars and fifty cents per acre,* that Kittredge declined, and it was
finally agreed that he should, in addition to the fifty dollars, have all he
could get over two dollars and fifty cents per a cre; that the plaintiffs, or
one o f them, represented, that they had been on the land, and that it was
heavily timbered with white and Norway pine, and spruce and ash tim
ber ; that the plaintiffs, or one o f them, told one Potter, the surveyor
who went upon the land, that he must make a good report to sell by, and
promised to make him a handsome compensation in case o f a sale. That
the plaintiffs subsequently made the same statements to Blood that they
had made to Kittredge. That they recommended their surveyor to
Blood, and the latter sent him with another surveyor to explore the land.
That Blood followed them, and met them coming home. H e then re
turned with one o f them, not the one recommended by the plaintiffs, and
they were unable to find any ash timber at all, not a tree, but as there
was a violent snow storm, they were unable to make a thorough explora
tion. That Blood informed the plaintiffs o f the result, and they, or one
o f them, said there was a large quantity o f ash timber there, for he had
seen it. That the plaintiffs also represented the land as containing much
good farming land. That all these representations o f the plaintiffs were
false; that the land was worth little or nothing; that there was very little
* From the testimony o f Kittredge, it appeared that the plaintiffs, or one o f them, re
fused to pay him the fifty dollars after the land was sold, alleging that he could not
prove they agreed to pay him that sum, there having been no written agreement!
V O L . I I .-----N O . V I.
63
498
M ercantile L aw Reports.
timber o f any sort on it, and it was literally good for nothing for farming
land. That the plaintiffs had already been paid far more than the ac
tual value o f the land, and had actually got possession o f it under the
mortgage given by the defendants.
That eastern land speculations in
general, and this one in particular, were, so tainted with fraud, deception,
cheating, lying, and swindling, that the very term had become proverbial
for those vices.
Upon these points, the defendants introduced the depositions o f Kittredge, Blood, the surveyor, and others, and the plaintiffs offered rebut
ting testimony.
Judge Putnam charged the jury, that so far as the defendants com
plain o f a hard bargain, the ju ry had no part to take. The substantial
ground o f defence, if any thing, was that there was fraud on the part o f
the plaintiffs. Upon this point, the ju ry need not be satisfied that the
plaintiffs intended to defraud. I f they made false representations, be
lieving them to be true, it was their misfortune, and not the defendants.
I f a man owns a lot o f land, and in going to explore it, goes upon a lot
belonging to his neighbor, and finds a mill site, and thereupon repre
sents that his lot has a mill site, and a person purchases upon this repre
sentation, he cannot be obliged to pay, because the vender really thought
his lot had a mill site, and had no intention o f deceiving.
In this case, the jury must inquire what in fact were the representa
tions o f the plaintiffs. A nd in considering them, the jury must distin
guish between the representation o f facts, and the expression o f opi
nions.
In the next place, were Kittredge and Blood the agents o f the plain
tiffs, or did they act for themselves alone 1 I f they acted in the former
capacity, the plaintiffs were responsible for their acts. I f they were in
no wise the agents o f the plaintiffs, then the plaintiffs were not responsi
ble for their statements, any farther than they were brought home to the
knowledge o f the plaintiffs.
But the representations respecting the land must not only be false,
but they must also have influenced the defendants in making the pur
chase, or their contract to pay is still binding. It was not necessary
that the representations should be proved to have been the sole induce
ments with the defendants. It was sufficient i f they were influenced in
part even by them.
I f Potter, the surveyor, was to be believed, there was evidence o f real
fraud. His testimony was material, and the ju ry must attach what
weight to it they believe was due.
On the whole, his honor considered that the principles o f law contend
ed for by the defendants, were correct; o f the facts and o f the applica
tion o f the law to the facts, the ju ry were the sole judges.
The case was committed to the ju ry on Tuesday afternoon, Decem ber
31. T hey were out all night, and came in the next morning, with a
statement that they were unable to agree. They were then discharged.
B IL L S AN D N O T E S .
In the case o f S?nit7i v. Bythewoocl, recently decided in South Caro
lina, it was held, that on a note payable on demand, the maker is bound
to pay immediately, and is not entitled to days o f grace. The holder
Common Carriers.
499
may sue on the same day the note is made. A ny other demand than
by suit is unnecessary.— 1 P rice's Reports, 245.
IN S U R A N C E .
1. W h ere the master fails to employ a pilot to navigate a vessel in
coming into or leaving a port, where it is customary to do so, (as the
port o f Qh^rleston,) and a loss happens in consequence o f a pilot not
having been employed, the underwriters upon a policy on the cargo
would be discharged. But if the vessel pass uninjured through the
dangers, to avoid which a pilot is usually employed, and the loss hap
pens at a point beyond which the pilot’s service ceases to be necessary,
the assured would be entitled to recover.— M ‘MiUan v. Union Ins. Co.,
1 Rice, 248.
2. It is an error to consider the employment o f a pilot, in coming into
or leaving a port, as a part o f the seaworthiness o f the vessel,; nothing
can enter into that which is not for the whole voyage. The business o f
a pilot is merely temporary. H e is a part o f the crew o f a vessel for
only a few miles, or a few hours. H e navigates her only occasionally.
Under such circumstances, it would be an abuse o f terms to say, that a
competent pilot was necessary to make a vessel seaworthy. The true
principle seems to be, that i f a vessel without a pilot sustain injury in
entering or leaving a harbor where it is customary to have a pilot, such
injury does not come within the perils insured against. It is not a peril
o f the sea. It is a loss from the bad navigation o f the vessel, and is to
be set down to the fault o f the master, and consequently the owners
would be liable, and not the underwriters.— lb.
C O M M O N C A R R IE R S .
The master o f a vessel, as well as the owner, is liable to the merchant
or shipper o f goods, for damages, in case o f injury to the goods, or their
loss. But their liability is several and distinct. The master is liable
precisely to the same extent, and in the same form o f action, as the
ow n er; but he is liable in a different character and on a different ground.
W h ere he has no property in the vessel, and has only the conduct and
management, he is the confidential servant or agent o f the owners. They
are bound by his contracts, by reason o f their employment o f the ship,
and o f the profit which they derive from it, by the receipt o f the freight
money. The master is also liable on his own contract for the transpor
tation o f the goods, and by virtue o f his taking charge o f them for that
purpose. The liability o f the owners is implied by law, from the nature
o f the employment, on the ground o f public policy. The liability o f the
master seems rather to be by express undertaking, and although he is
not owner and receives no part o f the freight, yet, on the same ground o f
public policy and in favor o f commerce, he is made personally respon
sible on his undertaking, even where the owners are known, which is
thus far a departure from the general law o f principal and agent.— P a t
ton v. M'G-ratk, 1 R ice, 162.
500
M ercantile L aw Reports.
IN S U R A N C E .----- V IO L A T IO N O F F O R E IG N R E V E N U E
L A W S ----- C O N F IS C A T IO N
IN ,
A N D J U R IS D IC T IO N O F , F O R E IG N C O U R T S .
T he case o f Sim on B radstreet and others v. T h e N eptune Insurance
Com pany, which was decided at the late term o f the circuit court o f the
United States in Boston, was an action on a policy o f insurance under
written by the defendants, for “ three thousand dollars, on the schooner
Gardiner, o f Gardiner, at sea or in port, for and during the term o f three
years, commencing the risk on the 28th day o f September, 1836, at
noon.” The policy contained the following clause : —
“ It is agreed that the insurers shall not be answerable for any
charge, damage, or loss, which may arise in consequence o f seizure or
detention for or on account o f illicit or prohibited trade, or trade in arti
cles contraband o f war. But the judgment o f a foreign consular or co
lonial court shall not be conclusive upon the parties, as to the fact o f
there having been articles contraband o f war on board, or as to the fact
o f an attempt to trade in violation o f the laws o f nations.”
The vessel was seized by the government o f M exico, within the time
covered by the policy.
The defendants contended, that the seizure and condemnation o f the
schooner was on account o f a violation o f the revenue laws o f M exico,
and to establish this defence they produced an authenticated transcript
o f the proceedings o f the M exican court against the vessel.
The plaintiffs denied the existence o f any such alleged law o f M exico,
or that any breach thereof was committed, or that the court passing the
decree had any jurisdiction ; and they insisted that the vessel was con
fiscated and condemned arbitrarily and unjustly, and without trial, or any
opportunity on the part o f the master to make any defence, or to exa
mine any witnesses.
The questions submitted to the court were, fir s t, whether the record
o f the proceedings was conclusive as to the existence o f the laws o f
M exico, the jurisdiction o f the court, and the cause o f seizure and con
demnation, so that the plaintiffs were estopped from controverting
them, and show that there was no violation o f the revenue laws o f M exi
co. Second, could the plaintiffs traverse the allegations o f the record,
that the master o f the vessel was summoned to appear and defend his
rights, and that the condemnation took place after he had appeared in
court and been heard, and i f he could traverse these allegations, then
was the record sufficiently conclusive to establish that the seizure was
such as would discharge the underwriters 1
On this last point, Judge Story decided, that i f the proceedings before
the Mexican tribunals were unexceptionable in all respects, the allega
tions in those proceedings would be conclusive on the parties; but if the
defence was, that the record was a tissue o f falsehoods, and that the
whole proceedings were a positive fraud, evidence would be admissible
to show that the master was never summoned, never did appear, and
never was heard before the condemnation.
In regard to the first point above mentioned, Judge Story decided
that the sentence in a foreign court o f admiralty and prize in rem , was,
in general, conclusive, not only on the parties in interest, but for collate
ral purposes, and in collateral suits. But tjiis rule proceeded on the
ground that the court had jurisdiction over the case, and that the thing
Insurance. — Violation o f Foreign Revenue Laws.
501
was either positively or constructively in its possession, and submitted to
its jurisdiction. A nd where the sentence o f a foreign court in rem was
sought to be held conclusive as to the title to property, it was essential
that there have been proper judicial proceedings upon which to found
the decree, by which he meant, not that there should be regular pro
ceedings according to the forms o f our law, but that there should be
some certain written allegation o f the offences, or statement o f the
charges, for which the seizure was made, and upon which the forfeiture
was sought to be enforced ; and that there should be some personal or
public notice o f the proceedings, so that the parties in interest may know
what is the offence, and have an opportunity to defend themselves.
W h ere this was not the case, a sentence ought to have no intrinsic cre
dit given to it, either for its justice or its truth, by any foreign tribunal.
N ow , in the present case, although it was quite clear that the tribu
nals o f M exico had jurisdiction over the subject matter, the schooner
being within the limits o f that government, and although it was stated
in the record, that the master o f the vessel appeared and was admitted
to make defence before the court, yet the real difficulty was, the total
leant o f any libel, or allegation in the nature o f a libel, containing specific
charges fo r which the confiscation was sought.
The only documents
which contained any statements on the subject, to serve the place o f a
libel, were, a letter from the commissioner o f the custom house, ad
dressed to the administrator o f the custom house in the department,
containing some general statements respecting two boxes o f medicines
on board the schooner. It was a mere letter from one officer to another.
It made no charge against the vessel. It alluded to no seizure, and pro
posed no proceedings.
The next document was a letter from the administrator o f the custom
house to the district judge o f the department, which was couched in still
more general terms. It contained no accusation, asserted no offence, and
asked for no forfeiture.
These were the only papers upon which the district judge proceeded
to summon the captain to appear before him to defend his rights. H e
(Judge Story) thought it would violate all notions o f the administration
o f public justice, to call them a libel or an accusation on which to found
a decree o f forfeiture against the vessel.
The vessel was confiscated; but upon what pretence or grounds was
not stated in the sentence, although certain facts and grounds were sta
ted by the attorney general and the public administrator, namely, that
the boxes were brought into port without the requisite manifesto. This
might or might not have been the ground o f condemnation. A t any rate,
this court was not bound to fish out a meaning when sentences o f this
sort are brought before it.
On the whole, therefore, for these defects in the proceedings, his ho
nor was o f opinion that the sentence was not conclusive against the
plaintiffs.
But it was not necessary to rest the case on this. There was a clause
in the policy that the insurers shall not be answerable for any loss which
may arise in consequence o f seizures or detention from illicit trade, &c.
N ow the seizure here was clearly made on account o f a supposed illi
cit trade, that is, a trade carried on without the proper .documents requi
red by law. It was not necessary that there should have been any just
The American Merchant.
502
grounds o f condemnation. It was sufficient if there was any just ground
for the supposed illicit trade. The only question was, whether the ac
cusation o f the asserted illicit trade was a mere cover for a wanton tres
pass and aggravated wrong, or was bona fid e, however unfounded in fact.
I f the latter, the insurers were exonerated; i f the former, they were
liable for the loss.
This question must be determined by a jury, and it would probably
be found necessary to have the Mexican laws on the subject, in order to
settle the question properly. The case was therefore continued to the
next term, to take a verdict o f the jury on this point.
In concluding his opinion in this case, Judge Story alluded to a state
ment made by the American consul, that an appeal was not taken from
the decree o f the ju dge who condemned the vessel in M exico, because
it was thought to be o f no u se ; all the tribunals being so corrupt, that
justice was out o f the question.
A rt . V I I .— T H E A M E R IC A N M E R C H A N T .
The Young Merchant.
L . W. R ansom .
Philadelphia: R . W .
P om eroy.
N ew Y o r k :
A l i t t l e work with the above title, published some few months since,
commends itself to attention, for the perspicuity o f its style, the sound
ness o f its principles, and the practical utility o f its precepts. The busi
ness and social virtues and habits, essential to a promptness o f charac
ter, the confidence and respect o f the community, and the approbation
o f conscience, in those for whom the manual is especially intended, are
clearly defined and earnestly impressed ; and the work cannot be pe
rused without the attainment o f much beneficial instruction.
But while it is probably calculated to subserve the object intended by
its author, to be a manual for the merchant, abstractly so considered,
w e are constrained to the declaration, that it is o f too general a charac
ter to answer the requirements o f a young American merchant, more
especially if he be o f N ew York, amidst the peculiar and anomalous
circumstances by which he is surrounded. There is a great and press
ing deficiency still unsupplied. There is yet ample room for a powerful
mind, whose comprehensiveness and independence will enable it clear
ly to elucidate, and boldly to declare, the dangers which surround the
path o f the American merchant, and the responsibleness o f his position,
to confer upon the mercantile community, and society in general, an
enduring and all-pervading benefit. W e propose, without entering
deeply into the subject, to define our estimate o f these dangers and that
position, that the propriety o f our assertion may be appreciated.
It has becom e a matter o f anecdote, that the people o f the United
States are so wedded to the accumulation o f property, that it engrosses
all their thoughts; andthata casual conversation never occurs between any
tw o o f them, without the introduction o f the significant word “ dollar.”
Circumscribing the sweeping nature o f such a declaration within the
limits demanded b y the strictest justice, it must be candidly and honest-
The American Merchant.
503
ly confessed, that the acquiring o f wealth is the one great and notable
trait o f the American character. It is all absorbing in its engrossment
o f the m ind; it recognises no limit, however broad may be the standard dis
played, from the more humble competence, to,the revenues o f a millionaire.
It seems to have been adopted by the mind as its aliment, to be necessary
to its existence. It is not checked in its demands by the contemplation
o f the hoards o f the past; but regarding them with indifference, its vision
is ever directed to the present and the future. It is, in short, its own
sufficient interpreter— “ the acquiring o f wealth,” finding its happiness
and reward in unstinted and unintermitted action. This peculiarity o f
its nature, widely distinguishing it from avarice, which labors only for
the sake o f increasing its gains, redeems it from much o f the odium it
would otherwise deserve, and testifies, that its growth and luxuriance
are referable to the agency o f strikingly peculiar circumstances. Foreign
writers have uniformly attributed it and its consequent evils to the inevi
table influence o f our democratic governm ent; which, by repudiating a
legal aristocracy, has induced the substitution o f the possession o f wealth
as an equivalent for titles and distinctions, the garter and the cross. But
the fallacy o f such an attribution is easily demonstrable and apparent. It
is not to the operation o f our form ofgovernment, which has nothing whateverto do with it, that the universal eagerness for gain in our community is
to be assigned ; it is to the discovery o f anew world, when the discoverers
were able to engraft the attainments o f a high degree o f civilization di
rectly upon the wild luxuriance o f savage nature— to the broad and glo
rious field for energy thus exposed— in fine, to the insatiable spirit o f
enterprise thus developed. It is this enterprise, not the love o f money,
which makes the American a money-getter ; and ithasbecome a portion o f
his very existence— he inhales it with every breath he draws, for its con
tagion pervades the very air— he is brought into the arena o f life and ac
tion, by its irresistible influence— a man in determination o f soul, while
yet a boy in years ; and it is the mentor o f his mind to the moment o f
expiring nature. It is enterprise which inspires him to act for the sake
o f action— which imparts to his character a restless and never-slumbering
activity— which impels him to hazard the accumulations o f years upon a sin
gle stake in the lottery o f speculation— which opens his ears wide to
catch the first whisper o f something new— which teaches him to laugh
at misfortunes that would crush others in the dust— which awakens the
click o f the trowel and the echoing stroke o f the hammer, above the yet
smoking ruins o f the warehouse, and bids the merchant to soar, phcenixlike, from the midst o f the flames that have destroyed his all, with
stronger resolves, bolder determination, and more-enduring energies, to
try with fortune anew !
It is this same enterprise, to cast a glance at darker shades o f the pic
ture, which has tended to a too intense engrossment o f the mind with
the affairs o f business, to the exclusion o f those great uses and aims o f
life— the improvement o f the mind, and the progressive elevation o f the
character; a neglect o f domestic duties; a substitution o f appearances for
realities in social intercourse ; induced a laxity gradually— therefore un
appreciated— o f that lofty incorruptibility o f principle, which is man’s
surest safeguard; and, finally, a devotion o f existence to unreal machines
o f happiness, which bring no true content in its progress, and sheds no
ray o f comfort over its close.
5 04
The American Merchant.
A re we expressing the character o f our merchants 1 A re we putting
forth assertions, groundless and base as they are wanton— base, because
wanton and unprovoked 1 W e earnestly deprecate any such accusation.
W e know that on our seaboard, and more especially in our own city, to
which particular reference is had in the course o f these remarks, the
merchants give tone to society in general, and we shall be among the first
to repel any unjust impeachment o f them. But, at the same time, we
are rendered the more urgent to impress upon the mercantile interests
the social responsibleness resting upon them. W e have drawn our con
clusions after much examination, study, and reflection. I f they be false,
let our excuse and pardon be found in our good intentions. I f true,
when is it demanded that the truth should be spoken with more inde
pendence and earnestness 1 L et us be farther heard then, while we con
sider our points in detail.
It will scarcely be denied, in reference to the first, that the improve
ment o f the mind, and the exaltation o f the character, are sacrificed, in
far too great a degree, to the anxieties and engagements o f business. It
may be said, indeed, with too much truth, o f men, o f whatever pursuits,
that they live on earth as though it were forever to be their abiding
place. But setting aside the great question o f religious accountableness,
and confining ourselves to the point already broached, v iz .: the control
ling influence o f the mercantile interests in our social as well as business
relations, is it not manifest that literature and the improvement o f the
mind are far too little regarded by those who are thus to give tone to
the habits and customs o f so great, so populous a city. Should not a
vivid feeling o f peculiar responsibleness to their fellow-citizens, under
such a consideration, induce our merchants to relinquish something o f
business to their own mental improvement 1 A nd yet more,— what trea
sures o f the truest, heartiest gratification, are neglected, for compara
tively paltry acquirings ! The mind is capable o f enlargement in every
one o f its glorious attributes, saving, indeed, its own immortality; and,
in the process o f that enlargement, imparts to its possessor a thousand
fold return for his investment o f time and labor to procure it. That is
a speculation, the success o f which is certain—-the pursuit most honora
ble— the profits better than silver or gold. W ou ld that many might
embark in it who now fritter away peace, happiness, and content, in the
headlong and never-ending pursuit o f deceiving and useless projects,
seen, alas! by their microscopic vision, to be glorious and full o f re
ward ; but when scanned by the eye o f truth, frail as the spider’s web,
and vanishing at a breath.
W e have often conversed with merchants— we say often, and mean
as we say— some o f them o f age and vast influence, respected as the
foremost in honor, who have acquired fortunes in their business, yet who
are more totally ignorant o f the geographical position o f the various
countries o f the globe, than many a child o f seven years o f age. They
have freighted ships for every clime beneath the su n ; they will tell you
the distances, the length o f voyages, the risk in the chances and freights
to every seaport you may name, but o f the relative positions o f those
ports to each other, and o f geographic knowledge in general, they will
Ire profoundly ignorant. W e write not o f such in reproach or scorn ;
far from it. They began their career in those bygone years, when but
little learning was to be obtained ; and they deserve praise— unstinted
The American Merchant.
505
praise— for their noble advancement, in defiance o f the difficulties and
impediments under which they labored. But we write now, particular
ly, for the eye o f the young merchant; and we adduce these instances o f
their elders to ask, if any o f them are similarly defective 1 I f so, we say
boldly, for it is truth, what is excusable in the former is unpardonable in
them. A nd they should possess, too, a modicum o f information upon all
the primary divisions o f knowledge. W e have instanced geography,
only, as being o f particular necessity— for the advancement o f civiliza
tion has so developed mental improvement, even in a secular point o f
view, to die o f surpassing importance in the fulfilment o f duty and the
acquirement o f happiness, that to neglect it is to confess oneself indif
ferent to the higher attributes o f our nature, and a laggard in the rear
o f the attainments o f the age.
There are those with whom we have conversed, who argue that the
nature o f the business o f the merchant is incompatible with literature —
b ook s; and that all the learning to be expected from him, is such as he
may obtain from his experience. W e are disposed to deny to such shal
low and insulting reasoners more room than to chronicle the argument,
which is the record o f their shame. W hile, at the present day, a want
o f mental cultivation detracts from the elevation o f the mercantile cha
racter, there is none upon the earth more noble and worthy o f respect,
than the educated merchant— the more if he be self-educated— who
combines with his honorable vocation the cultivation o f those powers
which, thus aroused to activity, shed a halo o f never-ending delight
around his path, and aid him both in business and in duty; who assists
the dicta o f experience in the management o f his affairs, by the unfailing
truths o f philosophy, and the keenness o f an invigorated judgm ent—
and who has enlarged his sympathies through the improvement o f his in
tellect. Such are the pillars o f the honor o f commerce.
W e consider it not improper to advert, in this connexion, to the be
nefits dispensed to our city in the great particular we have been consi
dering, by the M e r c a n t i l e L i b r a r y A s s o c i a t i o n . That institution
will ever be a monument to the discernment and philanthropy o f its pro
jectors and founders; heaven smile upon its prosperity! — and may the
establishment o f this magazine, devoted as it is to the interests and im
provement o f the mercantile community, prove a pioneer to that gene
ral literary advancement which we are earnest in desiring, and for which
its success is an impulse to our hope.
W e have said, farther, in reference to the effects o f American enter
prise, that it “ has tended to induce a neglect o f domestic duties, and a
substitution o f appearances for realities in social intercourse.”
The mind o f man, in the freedom o f natural action, finds the intensest
delight in the ties, sympathies, and responsibilities o f “ home.” It is led,
by an irresistible impulse, to contract those ties, that it may experience
this delight. It seems to be endowed with peculiar faculties for such
enjoyment, that find no rest, no gratification, elsewhere ; and which, if
deprived o f aliment, exerts a constant power, calling out aloud for action,
and even in the engrossments o f business, and the excitements o f plea
sure, making its voice to be heard, or paralyzing jo y . There is nothing,
too, which so softens and elevates the mind, as the possession o f a
“ home.” Its endearing relations, its holy duties, its tender sympathies,
twining about the heart closely as the very chords o f existence, wean
VOL. II.— no. vi.
64
506
The American Merchant.
the spirit from debasing appetites; assimilate it more and more to the
better things o f life ; give strength to virtue, soften the asperities o f cha
racter, and make the desert o f passion, by their gently soothing influ
ence, “ to blossom as the rose.”
But what constitutes such a “ home V’ N ot alone to take to oneself
a wife, and to place her in a splendid establishment— not to furnish her
with means for fashionable display— not to be the parent o f children
whom you love, and withal to hurry from your table when a hasty break
fast is o v e r; to enter your door just in season for dinner, to endanger
health in its rapid consumption, and haste away again; to return at
evening, the thoughts loaded with the anxieties o f complicated projects
and designs for the future; to retire within yourself, passing the time
in silent abstraction to the hour o f sleep, and rising in the morning to
the same undeviating round ; — such is not, in our sense, a “ home” — it
may be a home for the body, it is no resting place for the soul.
F or such sympathies, such enjoyments, such a “ home,” that wife must
be knitted to your spirit, to commune with all its action — and then you
will find one o f the strong delights o f your home, in mutual instruction
and mutual correction ; for, if she be knitted to your soul — and where
fore is she your wife if she be not so 1— that correction will be recogni
sed by each as the kind act o f love, and will be a thankful gift. The as
sembling round your table at every meal, should be an occasion for men
tal as well as bodily aliment; and when the labors o f the day are over,
your mind should be free to consecrate the fireside, by a mingling o f
sympathies with those who gather there — to instruct your children— to
sport, it may be, with them— to be, in truth as well as in name, the
“ husband” and the “ father.”
It has been remarked by strangers, especially the English, — for “ the
blessed homes o f England” have been made the theme o f the poets, and
the English have eyes for such defects,— that, in the city o f N ew York,
there is less o f fixedness, solidity, and depth, in the domestic relations
and social intercourse, than in the rest o f our country, or in their own
land. The husband and wife are too much separated, have too little
community o f interests. H e is day after day engrossed by his business
— it may almost be said, from sunrise to sunset; and she is necessarily
left to form her own plans, and seek her own enjoyments. Marryatt
notices, very truly, the peculiarity in our city, that so many families take
lodgings in preference to maintaining an establishment o f their own.
The cause, w e opine, is in many instances to be sought in the too sedu
lous attention o f the male head to business— not to economical motives,
since more will he lavish on appearances, than would suffice for the gen
teel support o f an establishment. And how much excuse is to be found
for the lavish habits in the wife, when she is deprived o f the concert and
companionship o f her husband 1 H ow much for waste o f time in empty
frivolities, for the final concentration o f her thoughts and feelings upon
the nothings o f fashion 1
Finally, and what is o f most importance, we have asserted, that A m e
rican enterprise “ has tended to create a laxity, gradually induced, and
therefore unappreciated, o f that lofty incorruptibility o f principle, which
is man’s surest safeguard.” A s the proper consideration o f this point
demands more attention than can be at present bestowed, it is suggest
ed for the reflection o f our readers, to be taken up hereafter.
M ercantile Biography.
507
A rt . V I I I .— M E R C A N T IL E B IO G R A P H Y .
R IC H A R D
W . DOW.
T he Merchants’ Magazine seems a fit vehicle for recording the worth
o f those called away from the midst o f business life. It is a beautiful
and holy thought, that, in the eagerness o f competition, the anxiety o f
expectation, the haste o f crowded cities— time should be found to re
member the departed. W e endeavor to secure to our own characters
whatever is most precious in those no longer left among us— not mere
ly to weave a wreath o f imperishable flowers for the early tomb, but to
cause the virtues o f the dead, immortal as their souls, to engrave them
selves on our hearts.
Richard W . Dow , o f the firm o f D ow & Co., was bom at Salem, the
14th o f August, 1810. His youth was marked by a thirst for knowledge,
which often kept him away from the sports o f his fellows, with some
old volume o f history in a garret. Though his calling in life did not favor
this decided taste, he never lost his interest in books, nor his desire to
promote the knowledge and use o f them in the community. Many o f
his last evenings were spent in the Brooklyn library; preparing that in
stitution for the high place he trusted it would take in the esteem o f the
community.
But another trait marked his youth even more honorably. His pa
rents say it passed without a stain. Fit portico was it for that temple o f
a holy spirit we have been impelled to describe— that boy was the
mould o f the man— that youth the seed-time o f manly goodness. The
idea o f right and wrong, embodied in his being from the earliest hour,
spoke forth in every tone o f his voice, every line o f his sedate counte
nance. All who knew him, felt that there was a peculiar moral elevation
about him. A ll who have mentioned his name, have at once praised that
quick true conscience which exalted him in the eyes o f man, and with
Him who seeth not as man seeth ! His brief career, just passing, one
might say, the threshold o f business-life, was an eloquent commentary
upon commercial integrity— a trait far nobler in our eyes, and more
worthy o f remembrance, than that capacity for business which was ob
served in him by all. W e may be pardoned for mentioning a single in
stance. Conversing with a gentleman, resident in the western part o f
this state, during one o f the last journeys Mr. D ow made to the East,
(before he found an unexpected grave in that doomed boat, the Lexing
ton,) he remarked, “ that though the great discount on southern funds
would no doubt ruin many, yet that every man, rather than delay or
refuse to pay his debts, should submit to the loss.”
^
Mr. D ow never exaggerated, never indulged himself in vague state
ments, the embellishments o f a wild fancy. This he avoided as wrong
in itself, and fruitful o f evil to society. His every word was sure as the
most solemn oaths. H e would often recall and qualify his statements,
in some points so minute as to escape general notice. It was a syste
matic truthfulness, the united result o f high principle, and a thoroughly
just education, which alone is able to purify society from the countless evils
o f deception. One instance we recall, o f his emphatic directness in the
use o f language. A southern merchant had written to inquire, if it would
508
Mercantile Biography.
be convenient, instead o f paying certain notes at six months, to pay them
at three, six, and nine months. Mr. D o w ’s whole reply was, “ It will.”
Its singular appropriateness induced the gentleman to seek his ac
quaintance, and enter into frequent business correspondence with him.
But his severe views o f duty were blended in beautiful harmony, in
perfect proportions, with other prominent traits. Though firm in the
right, he was ever gentle to the wrong— impregnable in his own princi
ples, he respected the principles o f others. Often and often we have
known him, in the peace-maker’s spirit, check severe criticism, defend
the absent, (one perhaps who had injured himself,) and extenuate con
duct which did not admit o f honest justification. Chivalrous in his de
votion to duty, he was equally remarkable for the modesty o f his self
appreciation, and the generous praise he bestowed on the worth o f
others.
A devoted son, (relieving his father o f burdens which his infirmities
permitted him not to undertake, the hope and support o f his age,) a lo
ving brother, a fast friend. H e showed in this active community, that bu
siness talent and energy are in nowise incompatible with that earnest
solemnity o f spirit, which (by frequent musings on its destiny) works
out in the soul the fire-baptism o f holiness !
Had his life been spared, from his love o f usefulness, and his unusual
pow er o f self-concentration, great might have been his services to soci
ety— important the part he would have borne in the world’s progress!
But, though to die at thirty years o f age was indeed soon for us, it was
not too soon for the ripeness o f his character and the meekness o f his
spirit! Though to be called away without one farewell to those we love,
or one hour o f calm thought, amidst circumstances o f unusual horror,
shocks every sentiment within us— yet no one who knew Mr. D ow can
doubt, that he met his fate calmly, trusting fully in the providence which
stayed his steps, and called him to lay his head on some unknown spot in
the ocean deep— that he laid down this life for a higher and better,
peacefully—
“ A s fades a summer cloud away,
A s sinks the gale when storms are o’er,
A s gently shuts the eye o f day,
A s dies a wave along the shore.”
I S R A E L T H O R N D IK E ,
A distinguished merchant o f Massachusetts, was bom in Beverly, as
one o f his biographers states, in 1757, but we think a year or two before
that period. H e was, for some years o f his youth, an apprentice to the
cooper’s trade ; but his enterprise burst out while he was quite young,
and at the commencement o f the revolutionary war he engaged in pri
vateering, and soon became part owner and commander o f a privateer,
which made many successful cruises. H e was a bold athletic comman
der, possessing the most unquestionable courage, and superior strength
o f body and mind. A fter the close o f the war, he engaged in the fishe
ries and foreign commerce, and grew rich. W hen the old confederation
was found deficient, and a federal constitution was proposed, Mr. Thorn
dike was elected, from his native town, one o f the members o f the state
convention for the adoption o f the constitution, and he was as efficient as
any man in that b o d y ; not that he made long and learned speeches, but
Nathaniel Tracy.
509
that he talked with the yeomanry o f that body in a style o f common
sense which they understood, and his arguments had the desired effect.
F or many years he was elected to the senate o f the state, and always
brought a great share o f practical good sense to the question under dis
cussion. H e aspired to no grace, no ornament, but took up the subject
in a clear, forcible manner, and always said something worth remem
bering.
From Beverly he removed to Boston, and soon took a high stand
among merchants and politicians. His wealth allowed him to live in a
more splendid style than any other man in the city, but there was no
parade about it— all seemed as natural as if he had been to the “ manor
born.”
H e was a careful observer o f the times, and when commerce began to
be taxed with heavy duties, he at once invested a large portion o f his
large capital in manufacturing establishments, which he early saw would
be the true policy o f N ew England. His investments in real estate,
shipping, or factories, were wonderfully judicious, and hundreds watch
ed his movements, believing that his pathway was safe.
In addition to other public acts o f munificence, he purchased, in 1818,
the library o f Professor Ebeling, o f Hamburgh. This library contained
between three and four thousand volumes o f American history, or kin
dred works. The possessor had been one o f those valuable enthusiasts
for the rights o f man and the liberty o f nations, who had caught at
and preserved every thing relating to the history o f this new world,
while those on this side o f the water had too often been unmindful o f
preserving matters o f moment to their posterity. It is probable that
this is the most complete collection o f newspapers, pamphlets, state pa
pers, and books relating to America, that is now extant. Mr. Jefferson
had done much in this way, but Professor Ebeling much more. The
public are under lasting obligations to Mr. Thorndike for bringing this
treasure to the United States.
Mr. Thorndike died May 10, 1832, at Boston. H e was an active bu
siness man to the last o f his life. His fortune was the largest that has
ever been left in N ew England. Many years may pass, before the pub
lic will find another man so entirely the maker o f his own fortune, by
strength o f intellect and nerve, as Mr. Thorndike. It may be said that
he resembled more the Amsterdam than the Florentine merchant; still
his sagacity, foresight, energy, and patriotism, was not surpassed by any
one o f the princes o f traffic that history has brought down to us.
N A T H A N IE L T R A C Y ,
A distinguished merchant previous to, and during the revolutionary
war, was bom at Newbury, afterwards Newburyport, about the year
1749. H e was the son o f Patrick Tracy, who was an opulent merchant
in that place, and having a proper view o f life, gave his sons the best
education the country afforded. Nathaniel graduated at Harvard col
lege, 1769, and commenced business in his native town in company with
Jonathan Jackson, an accomplished gentleman and thorough merchant.
The house was prosperous, and extended its concerns to a wonderful
magnitude for that day. During the war o f 1775, his privateers were
for several years numerous and successful. H e was generous and pa
triotic, and assisted the government with money and articles o f clothing,
M ercantile Literature.
510
and other necessaries for carrying on the war. H e lived in a most mag
nificent style, having several country seats, or large farms, with elegant
summer houses and fine fish ponds, and all those matters o f convenience
and taste that a British nobleman might think necessary to his ranis and
happiness. His horses were o f the choicest kind, and his coaches o f
the most splendid make. H e expended as if fortune would be always
propitious, and the thought o f straitened circumstances never came
across his mind. But in the last years o f the war, the enemy had grown
wise, and sent a large proportion o f small frigates and heavy gun brigs,
and swept the American privateers from the ocean. The government
failed to pay h im ; his debtors, who were numerous, had encountered
similar difficulties, and, in 1786, he was minus some millions o f dollars.
H is splendid estates sold for a small portion o f their value, and he gave
up business, retiring to a large farm which had been secured to his
children. Fortunately, his debts were o f such a magnitude, that he was
not pestered by a swarm o f little creditors, who rejoice in having a mo
mentary power over a man once so conspicuous in society. These little
vampires love to suck the blood o f fallen greatness, and to show their
lips red with a drop o f the current from the noble veins o f one who has
moved in a region beyond them. Tracy was too sensitive to bear his
misfortunes as a philosopher or a subdued Christian. H e sunk under
them, and found a premature grave. H e left a widow and several chil
dren ; she was an elegant woman, and supported her dignity to the last
hour o f her life. H e had, when fortune smiled, built up hundreds o f
little men, who made sage sayings, and quoted wise saws, upon his pro
fusion in the days o f his glory, a portion o f which had been lavished
upon themselves. H e was a gentleman o f polished manners and fine
taste. In looking upon his houses and works o f amusement at the pre
sent time, when most o f them are in a state o f decay, you still see the
hand o f taste in every thing he did. D oes not some o f the surplus reve
nue o f our country belong to those who brought their property to the
shrine o f their country in the hour o f darkness and peril, and threw it
down at the altar, as a free will offering, to secure our liberty and inde
pendence 1 The history o f those times is glanced at, and makes up the
theme o f the political declaimer, at every touch and turn in his pathway,
but no serious examination has ever been gone into, nor will there ever
be a true history o f those times written. Such men saved the nation,—
must they be forgotten 1
A rt . I X .— M E R C A N T IL E L I T E R A T U R E .
H ints to Tradesmen, and, M axim s f o r Merchants.
Marvin. 24mo. pp. 96.
Boston : Perkins &
T his little volume commends itself to the attention o f young trades
men and merchants, as embracing within its comprehensive pages, max
ims and sentiments which, i f carried into practice, must generally insure
success in mercantile life. The maxims are expressed with force and
H ints to Tradesmen.
511
piquancy, and, on the whole, we can cordially recommend it to our mer
cantile readers as a useful book.
W e give an extract or two from the introduction, as furnishing some
idea o f the author’s style and views, touching the subjects discussed.
“ ‘ H ow to get money,’ is now the order o f the day— ‘ the one thing
needful,’ so far as worldly matters are concerned. It is, I admit, an awk
ward thing to begin the world without a dollar; and yet hundreds o f in
dividuals have raised large fortunes from a single shilling. I know a
builder, now worth two hundred thousand dollars, who was a bricklay
er’s laborer forty years ago, at eight shillings per day. H e became rich
by acting upon principle. He assured me that even when he was in this
employment he contrived to save a few shillings a day out o f his earnings,
and thus laid by $100 per annum. From this moment his fortune was
made. Like a hound upon the right scent, the game, sooner or later,
was sure to be his. H e possessed an indomitable spirit o f industry, per
severance, and frugality, and the first $100 he realized became the foun
dation for thousands.
“ The world at large would call this man fortunate, and ascribe his
prosperity to good lu ck ; but the world would be very wrong in doing
so. I f there was any luck at all in the matter, it was the luck o f possess
ing a clear head and active hands, by means o f which multitudes o f
others have carved out their own fortunes, as well as the person to whom
I allude. Franklin and Girard may be mentioned as instances :— they
adapted the means to the e n d ; a process which commands a never fail
ing success. In brief, they were men o f business !
“ But to be frugal is not o f itself sufficient,— the young man who would
insure his success must be industrious too :— what is saved by thrift
must be improved by diligence, for the last doubles the first, as the
earth, by reflection, renders the sunbeams hot, which would, otherwise,
seem but warm.
“ W hat cannot be done by one stroke may be effected by m any; and
application and perseverance have often succeeded when all other
means have failed. Nothing can be more ridiculous than that, because
we cannot suit our means to our ends, we will not suit our ends to our
m eans; or because we cannot do what we will, we will not do what w e
may, depriving ourselves o f what is in our power, because we cannot at
tain things beyond i t ; whereas, the way to enlarge our ability, is to dou
ble our industry, because, by often repeated efforts, wre may accomplish,
in the end, what in the beginning we despaired of.
“ The fool who promises himself success without endeavors, or despairs
at the sight o f difficulties, is always disappointed ; but, on the contrary,
he who is indefatigable succeeds even beyond his expectations.
“ There is not a more certain sign o f a craven spirit, than to have the
edge o f one’s activity soon turned by opposition; on the contrary, there
is no disputing his fortitude who contends with obstacles, and never gives
over the pursuit till he has reached the end he aimed at. Indeed, to
tempers o f this kind, few things are impossible.
“ It argues a weak and pusillanimous spirit to sink beneath perplexities
and calamities, and rather sit down and lament one’s misfortunes than
attempt to remove them. If, therefore, young reader, you ever appre
hend yourself to be, in a manner, overwhelmed with adversities, bear
up boldly against them a ll; you have this advantage, at least, it will be
512
Mercantile Literature.
the longer before you sink, and perhaps allow time for some friendly hand
to interfere for your preservation.
“ The force o f example is the greatest force in the world, because it is
the force o f habit— which has been truly and appropriately called, a se
cond nature. Its overwhelming influence is so great, that honest men
becom e rogues by contact. D o you imagine yourself exempt from the con
tagion 1 I f strong-minded men have frequently fallen victims to evil ex
amples, how shall the weak escape? V ery easily ! D o not submit your
self to it. The preliminaries o f temptation are easily to be avoided,
however difficult the subsequent coils may be to unwind. I f you mean
to make your way in the world, look about you, and ensure your well
doing by copying the habits, and following the example o f those only
whose conduct, experience, and success, entitle them to the character o f
models.
“ Nothing is more deceptive, or pernicious, than the idea which is en
tertained by some, that the rich obtain their wealth without exertion —
merely by what is termed ‘ good luck.’ There is rso sure way o f get
ting money but by industry ; and no way o f keeping it, so as to grow
rich, but by economy. The foundation o f great fortunes are all to be
traced to small beginnings, small profits, and frugal expenditures. The
man who desires to grow rich, must never wait to acquire large sums
before he begins to save. The economy o f small expenses lays the cor
ner-stone o f wealth. Large amounts take care o f themselves ; it is the
small dribbles that waste the substance, and keep men poor, if they are
not careful to restrain their outgoings. One o f the most opulent merchants
now living, made his fortune by gaining and saving sixpences ! •
“ The philosopher’s stone is no fiction. H e who labors with industry,
and lives with economy, will find it at the bottom o f the crucible o f life,
to reward his toil, and compensate him for his virtue. It was a favorite
theme with Girard, when he grew rich, that he commenced life with a
sixpen ce; and that a man’s best capital was industry. H e died worth
$10,000,000 !”
A g r e e m e n t s .— The time has been, when a verbal contract between
two parties would be considered binding. The world since then has
changed, and in order to be perfectly safe from loss or injury, I advise
my readers to deal with every man and woman, so far as business is con
cerned, as if they were rogues. They may start, but I state no more than
what is necessary to be done. A s for friends — with them, still greater
precautions are needful. Let nothing o f any moment whatever be un
dertaken without its being first penned down in black and white, and
signed in the presence o f a witness. Y ou have then some data to go
upon, and can right yourself, in case o f necessity, in a court o f law. A
want o f attention to these points in early life, cost me some thousands. I
paid dearly for my experience, but if I may yet be serviceable to my
fellow-tradesmen, the money will not have been altogether thrown
away.
Statistics o f Coinage.
STATISTICS
513
OF C O I N A G E ,
A N N U A L R E P O R T OF T H E D IR E C T O R O F T H E M IN T OF T H E U N IT E D S T A T E S .
Philadelphia, January 30, 1840.
The coinage executed at this mint, in 1839, amounted to $3,021,170 11, comprising
$1,040,747 50 in gold, $1,949,136 in silver, and $31,286 61 in copper, and composed of
9,260,345 pieces.
The deposits o f gold within the year amounted to $1,042,500, o f which $138,500 was
derived from the mines o f the United States.
The deposits o f silver amounted to $1,851,500, and consisted principally of Mexican
dollars.
Statement o f the Coinage o f the Mint o f the United States, Philadelphia, in 1839.
D E N O M IN A T IO N S .
Gold.
Eagles......................................
H alf eagles.............................
Quarter eagles........................
Total number
o f 'pieces.
Pieces.
....
....
38,248
118,143
27,021
Value.
Total Value.
$382,480 00
590.715 00
67,552 50
....
183,412
Silver.
Dollars.....................................
H alf dollars............ ..... .........
Quarter dollars......................
D im es......................................
H alf Dim es.............................
$1,040,747 50
300
1,667,280
122,786
105,311
53,457
300
3,331,561
491,146
1,053,115
1,069,150
00
50
50
50
50
5,948,272
Copper.
C ents................. - . ...................
1,949,136 00
3,128,661
31,286 61
9,260,345
$3,021,170 11
Years.
.Statement o f the annual amount o f Gold deposited at the United States Mint, Philadel
phia, from the mines in the United States.
1824
1825
1826
1627
1828
1829
1830
1831
1832
1833
1834
1835
1835
1837
1838
1839
Virginia.
North
Carolina.
South
Carolina.
Georgia.
2,500
24,000
26,000
34,000
104,000
62,000
60,400
62,000
52,100
55,000
57,600
5,000
17,000
20,000
21.000
46,000
134,000
204,000
294,000
458,00!)
475,000
380,000
263,500
148,100
116,900
66,000
53,500
3,500
26,000
22,000
45,000
66.000
38,000
42,400
55,200
29,400
13,000
6,300
212,000
176,000
140.000
216,000
415,000
319,900
201,400
83,600
36,000
20,300
539,600
2,702,000
346,800
1,820,000
....
....
V O L . I I . -----N O . V I.
Tennessee.
Various
sources.
1.500
300
200
500
5.000
17.000
20,01)0
21,000
46,000
140,000
466,000
520,000
678,000
858,000
893.000
693,500
467,000
282,000
171,700
138,500
14,200
13,900
5,436,700
....
....
65
Total at
U. S. Mint.
1,000
1,000
7.000
3,000
100
300
1,000
12,200
Statistics o f Coinage.
514
There was also deposited for coinage in 1839, as follow s:
Coins o f the United States, old standard.......................................... $7,000
Foreign bullion..................................................................................... 167,000
Foreign coins.........................................................................................730,000
$901,000
Statement o f deposits o f Silver fo r coinage, at the V. S. M int, Philadelphia, in 1839.
The deposits o f silver, for coinage, amount to ....................... $1,851,500
O f which, there was in—
Mexican dollars.............................................................$1,406,000
180,000
Five-franc pieces of France.........................................
Other coins.....................................................................
100,000
Bullion and plate...........................................................
164,000
Parted from gold ...........................................................
1,500
Statement o f deposits o f Gold and Silver, fo r coinage, at the Branch Mints o f the Uni
ted States, in 1839.
Deposited at the Charlotte branch m int......................................... $126,836
Deposited at the Dahlonega branch mint ..................................... 113,035
Deposited at the New Orleans branch m int.................................. 259,060
$498,931
Recapitulation o f deposits and coinage at the U. S. M int and branches, in 1839.
D EPO SITS.
GOLD.
Foreign
Gold.
Total o f
Gold.
Silver.
Total.
138,500
126,836
113,035
6,869
904,000
1,851,500
78,290
1,042,500
126,836
113'0:i5
85^159
173,901
2,894.000
126,836
113,035
259^060
385,240
982,290
1,367,530
2,025,401
3,392,931
M IN T S .
U. S. Gold.
C O IN A G E .
GOLD.
Pieces.
Value.
COPPER.
S IL V E R .
Pieces.
Value.
Pieces.
Value.
TOTAL.
Pieces.
Value.
183,412 1,040,747 50 5,948,272 1,919,136 3,128,661 31,286 61
41,640 162,767 50
32,613 128,880 00
2,401,600 227,160
9,260,345 3,021,170 11
41,640 162,767 50
32,613 128,880 00
2,401,600 227,150 00
257,665 1,332,395 00 8,349,872 2,176,296:3,128,661 31,28661
11,736,198 3,539,977 61
ST A T E OF TH E
B R IT IS H M IN T .
A document has been recently printed by order o f the house o f commons relating to
the mint, and giving an account o f all the supplies now remaining there, o f the sums
advanced out o f the consolidated fund for purchasing bullion for coinage, o f cash re
ceived in payment for coin delivered, and o f the sums paid into the exchequer in pay
ment o f the advances from January 1, to December 31, 1839. T h s document shows,
that the total assets remaining in the mint on the 31st o f January, 1839, were £68,589
Is. 8d., o f which £25,742 6s. 9d. was in uncoined silver bullion, £3,284 Is. in uncoined
copper, £11,571 3s., in unsold silver coin, £1,376 9s. 9d. in unsold copper coin. The
Statistics o f Insurance.
515
remainder was cash in hand, cash due from the commissariat, and balance on the ex
chequer and cash accounts. The whole assets are given as payable into the exchequer
for the use o f the consolidated fund. The total amount issued out o f that fund for the
purchase o f bullion in the year 1839 was £382.107 2s. Id. The value o f the silver bul
lion and dollars purchased for coinage within the same year, at a rate varying from 58\d.
to 60jd. per ounce, is stated at£360,762 8s. 8d., which by an addition of £1,887 16s. 9dfor “ gold contained in silver ingots,” is increased to £362,640 5s. 5d. The mint value
for the whole, at 66s. per pound troy, is given at £395,067 15s. The seignorage is sta
ted at £34,313 16s. 2d., from which £ 8 9s. 10d. being deducted for “ dumb coin,” leaves
£34,305 6s. id., the difference between the purchase and mint values.
The purchase value o f copper bullion is £2,435 9s. 3d., the mint value £5,582 12s. 9d.,
and the difference gives a seignorage o f £3,217 3s. 6d. The loss in exchanging old
silver coin sent in for recoinage, or the difference between the nominal and the standing
value, is £216 18s. entirely for worn out sixpences received from the bank o f England.
The coin account, or account o f “ coined monies delivered into the mint office,” gives
£379,170 for silver, and £5,935 for copper.— The cash account, or account o f “ cash
received for coin,” gives £363,653 4s., cash received for gold contained in silver ingots
being £1,887 16s. 9d. The repayment into the exchequer o f advances out o f the con
solidated fund gives £330,000, which, with £37,140 0s. 9d. on account o f seignorage,,
and £1,887 16s. 9d. paid for gold and silver ingots, gives a total o f £369,027 17s. 6d.
paid into the exchequer. The debtor and creditor account o f the whole is balanced by
an exchequer credit o f £16,021 6s. 11d. Silver bullion remains uncoined to the amount
o f £43,423 3s. 9d., copper to the amount o f £3,030 13s. 9d. The balance remaining to
be paid into the exchequer is £7,954 2s. id.
STATISTICS
OF I N S U R A N C E .
M A S S A C H U S E T T S IN S U R A N C E C O M P A N IE S .
After looking over the “ abstract o f the returns o f insurance companies, incorporated
with specified capital, exhibiting the condition o f those institutions on the first day of
December, 1839, prepared by the secretary o f the commonwealth,” Dr. Jesse Chickering,
o f Boston, one of the most acute mathematicians in the country, and the author o f the
very lucid and ingenious article on the “ Massachusetts banks” which appeared in the
Feburary number o f our magazine, prepared, and has politely furnished us for publica
tion, the following table.
The first column o f this table contains the names and localities; the second, the capi
tal; the third, the average annual dividends for five preceding years, or since these
companies were incorporated; and the fourth, the average amount o f the dividends per
annum, according to the above average annual dividends. It appears from this table
that there are twenty-three o f these insurance companies located in Boston, whose ave
rage annual dividends for the five preceding years, have amounted to 9.48 per cent, on
the capital; and eighteen companies out o f Boston, whose average annual dividends
have been 9.54 per cent, on the capital. The average annual dividends o f the forty-one
companies, have been for the five years, 9.49\ per cent, on the whole capital of 7,935,000.
According to the returns by order o f the house o f representatives o f the fourth o f
February, 1835, there were twenty-seven offices in Boston, and eighteen out o f Boston,
— total forty-six offices; with an aggregate capital o f $9,225,000. The average annu
al dividends were 9 3-5 per cent.
Statistics o f Insurance.
516
According to the returns on the first o f December. 1837, there were twenty-nine offices in Boston, and nineteen out o f Boston,— total, forty-eight offices; with a capital o f
$9,415,000.
According to the returns on the first o f December, 1838, there were twenty-four offices
in Boston, and nineteen out o f Boston,— total, forty-three offices; with a capital o f
$8,316,000.
N A M E S A N D L O C A T IO N S .
American, Boston....................................
Atlantic,
do..........................................
Atlas,
do.......................................
Boston,
do..........................................
Boylston Fire and Marine, Boston........
Columbian, Boston........... ......................
Firemen’s
do.......................................
Fishing,
do.....................................
Franklin,
do.......................................
Hope,
do.......................................
Manufacturers’ , Boston..........................
Massachusetts F. and M., Boston.........
Mercantile Marine, Boston.....................
Merchants’, Boston..................................
National,
do.......................................
Neptune,
do........................................
New England Marine, Boston...............
Ocean, Boston..........................................
Suffolk, do...............................................
Tremont, do...............................................
United States, Boston..............................
Warren,
do..................................
Washington,
do..................................
Capital.
$300,000
250.000 •
300,000
300,000
300,000
300,000
300,000
100,000
300,000
200,000
300,000
300,000
300,000
500.000
500,000
200,000
300,000
200,000
300,000
200,000
200,000
100,000
200,000
Twenty-three offices in Boston........
6,250,000
Gloucester, Gloucester..............................
Lynn Mechanics’, F. and M., Lynn__
Union F. and M., L ynn. . *.....................
Marblehead M., Marblehead...................
Essex Marine, Newburyport..................
Essex, Salem..............................................
Oriental, Salem.........................................
Salem Commercial, Salem.......................
Union Marine, Salem..............................
Springfield Fire, Springfield...................
Fairhaven, Fairhaven..............................
Bedford Commercial. New Bedford....
Mechanics’, New Bedford......................
Merchants’,
do.
......................
Pacific,
do.
......................
Old Colony, Plymouth....................... . . .
Fishing, Provincetown............................
Commercial, Nantucket...........................
50,000
50.000
50.000
100,000
50,000
100,000
200,000
200,000
100,000
100,000
100,000
150,000
100,000
100,000
100,000
50,000
40,000
75,000
Eighteen offices out o f Boston.........
T o ta l..............................................
Av’g e annual div
Av’ge annual
idends, fo r 5 pre
amount o f
ceding years, 01
dividends.
since incorp'ied.
10 8-10 per ct.
6 2-5
6 4-5
..
12
7 1 -5
..
6 35
3 3-5
..
4 4-5
10 4-5
6 4-100 ..
12 4-5
6 35
3 1-5
25 46-100 ..
9 4-10 ..
6 1-5
6
16 4 5
8 1-5
..
10
6 1-4
2 34
10 1-5
9.48
592,630
5 4-5
18
9
6
9
8
7
12
12
18
14
18
$32,400
16.000
20,400
36.000
21,600
19,800
10,800
4,800
32,400
12,080
38,400
19,800
9,000
127,300
47.000
12,400
18,000
33,600
24,600
20.000
12,500
2,750
20,000
.
4-5
4-5
4-5
2-5
6-10
6 23
4 3-4
5
..
2,900
9,000
..
9,000
..
6,000
18,000
16,000
7,000
12,800
12,800
28,200
14,400
18,600
..
..
..
..
..
3,333*
1,900
3,750
1.715.000
6.250.000
9.54
163,683*
592,630
7,965,000 1
9.49 1-2
756,313*
.
Statistics o f Navigation
P R E M IU M
517
C R E D IT S IN B O S T O N , ON M A R IN E R IS K S , F R O M A N D A F T E R T H E
N IN T H D A Y O F M A R C H ,
1840.
A ll credits shall commence at the date o f the policy.
A ll premium notes shall be considered due on the expiration of the credit expressed
in the note, and if noi then paid, interest shall be exacted from that time till paid.
To.
From.
To <?■
from .
months months months
14
16
Or two months after the termination o f the risk, the election )
to be made by the assured at the date o f the policy.
$
T o east coast o f South America, between the equator and Cape
Horn, or west coast o f Africa to Cape o f Good Hope, inclusive,
6
6
4
4
8
8
4
3
3
3
6
4
T o West Indies, Gulf o f Mexico, or ports between Gulf o f MexiT o ports in the United States, northeast o f Cape Florida............
T o the W est Indies, Europe, and back to the United States........
From the W est Indies to Europe, and back to the United States..
T o Brazil, Europe, and back to the United States........................
From Brazil to Europe, and back to the United States................................... 8 months
T o W est Coast o f America, China, and back,.......... 16 months'
T o North W est Coast o f America, China, and back, 16 months |or two months after
T o North West Coast o f America and China........... 14 months }■ the termination o f
In the Whale Fishery to the Pacific............................ 18 months I the risk.
In the Whale Fishery to the Atlantic.......................... 14 months
On time, two months after the termination o f the risk.
Open policies for vessel or vessels, two months after the termination o f the risk.
Cases not provided for, as parties may agree, the above credits to form the basis o f cal
culation.
Premiums, o f twenty dollars and under, cash, without discount o f interest.
STATISTICS
OF N A V I G A T I O N .
L A K E N A V IG A T IO N .
Statement showing the number o f Ships, B rigs, and Schooners, on Lakes E rie, Michi
gan, and Superior, together with their amount o f tonnage and value.
VESSELS.
No. .Tons.
1
260
2
261
51 4,207
3
685
3
677
1
245
52 4,368
652
9
5
356
3
559
80 4,730
15
792
Value.
$8,000
12,000
150.000
36000
27,000 Buffalo.
8 000 Buffalo.
168,000
38.000 Presque Isle.
10,400
23.000 Detroit.
120,000 Detroit.
58.000 Sandusky.
Total Ships, Brigs, Schooners, and Sloops......... 225 17,988
658,400
61 17,324 $1,741,200
Total Steamboats.....................................................
To what Port
belonging.
Miscellaneous Statistics
,513
C A N A D IA N N A V IG A T IO N .
Statement o f Arrivals in Quebec, from 1833 to 1839, both inclusive, specifying the
amount o f Tonnage, number o f Seamen employed, and number o f Immigrants; also,
the number o f Vessels built in Quebec, the Tonnage, and number o f Men employed in
building the same.
1833.
Arrivals.................
T o n n a g e ................
Seamen....................
Immigrants............
Ships built..............
T on nage................
Men employed___
1834.
1,122
1,095
271,148 325,863
13,546
12,384
22,062
30,217
13
11
3,952
4,601
715
608
1836.
1835.
1.132
323,305
13,756
30,217
18
8,482
990
1,185
353.505
14,400
27,513
3
749
165
1837.
1838.
1,032
326.186
12.844
21,855
18
9,220
990
1.125
343,782
13,443
2,950
16
8,448
880
1839.
1,175
383,844
15,727
7,413
17
9,312
935
1840.— There are now in progress o f building, 33 vessels; averaging 19,800 tons,
and 2,090 men employed.
MISCELLANEOUS
STATISTICS.
P U B L IC D E B T O F S P A IN .
A t the present moment, the following detail respecting the liabilities o f the Spanish
Government may be acceptable to a large portion o f our readers :—
Domestic debt, bearinginterest up to 1834...................................£9,130,000
Without interest, samedate.......................................................... 38,430,000
Together.......................................................................................... 47,500,000
Foreign debt.................................................................................... 25,440,000
Cortes loans.................................................................................... 16,600,000
Together.......................................................................................... 42,040,000
In 1834, the unliquidated claims on the Spanish Government amounted to 277,000,000/.
The arrears o f interest in 1834 on 14,000,000/ Cortes Bonds, since November, 1823,
are about 7,000,000/.
In 1834, the estimated amount required to discharge the interest on the acknowleged
debt was 3.400,000/. annually, while the expenditure, including the amount due for
interest on the debt, exceeded 9,000,000/. annually.
The Spanish securities which have been introduced into the London market are as
under:—
Spanish Consolidated F ive per Cents. {A ctiv e)— In 1834, a loan o f 4,000,000/. was
raised in London and Paris for the Spanish Government, at 60 per cent., and at the
same time the old Cortes loans o f 1821 and 1823 were recognised, two thirds being
converted into active debt, and consolidated with this loan. The dividends are
payable on the 1st o f M ay and the 1st o f November, in London, Paris, and Madrid.
The Bonds are for sums o f 42/. 105., 85/., 170/., 255/., 340/., 510/., 1,020/. respectively.
No dividends have been paid on these for some time.
Deferred Debt.— At the period o f the conversion o f the Cortes Bonds in 1831, the
arrears o f interest amounted to 55 per cent., no dividend having been received for
eleven years. In exchange for the Coupons the holder received Deferred Bonds
which were to be gradually converted into Active Debt, commencing on the 2d o f
May, 1838, when one twelfth of the Deferred Debt was converted into A ctive; the
bonds to be determined by lo t ; to be continued on the same day in each successive
year until the 2d o f May, 1849. No interest has, we are informed, ever been paid on
these bonds.
Passive.—This arose from the conversion o f the Cortes Bonds in 1834, when two
thirds became Active, and one third Passive. It was arranged that sufficient Passive
Debt should be converted annually to replace the amount o f Active cancelled by the
Sinking Fund, to commence on the 2d o f M ay, 1836 ; but no con version has yet taken
place, nor have any dividends been paid.
Commercial Regulations.
519
Three Per Cents.— Originated in 1831, by the conversion o f about £4,000,000 Cor
tes Bonds. The dividends were payable on the 1st o f April and the 1st of October,
but there are several now unpaid.
Indemnity Bonds, Five Per Cents.— These bonds were issued in 1828, to liquidate
certain claims made upon Spain by British merchants and others. The amount is
about £600,000, and the loan is liable to redemption, at 60 per cent., at the pleasure o f
the Spanish Government. The dividends are payable on the 1st March and the 1st
September. Since 1837 no dividends have been paid.
W e are indebted for some o f these particulars to a little work published sometime
since by a member o f the Stock Exchange, to which we have added the result o f our
own inquiries.
C O M M E R C E OF G R E A T B R IT A IN .
In the course o f a speech in Parliament, by Sir T . Cochrane, he said: In 1790,
Great Britain employed 15,015 vessels with a tonnage o f 1,460,000. The value o f the
exports amounted to £18,544,205, and the value of the imports was equal to £17,783,572.
On the 3lst December, 1837, the country employed 26,037 vessels, with a tonnage equal
to 2,791,018 tons, while their crews amounted to 173,506 men. The number o f ves
sels employed in foreign trade, exclusively o f those in ballast or engaged in the coast
ing trade, was, inwards, 12,252, with a tonnage of 2,346,360, and outwards, 10,614 ves
sels, with a tonnage o f 1,861,121. The official value o f the exports in 1838, amounted
to £105,170,549, and the imports to £61,268,320. The number o f vessels employed be
tween Great Britain and Ireland was 16,347, with a tonnage o f 1,585,624; and in carry
ing on the rest o f our coasting trade, 122,443 vessels were engaged, with a tonnage o f
9,315,563.
C O M M E R C E OF S T . P E T E R S B U R G .
The Commercial Gazette o f St. Petersburg!! publishes tables o f the exports and im
ports o f that capital during 1839, o f which the following are the results. The total
value of imports was 198,061,386 rouble sassignats; exports, 122,018,295 roubles ass.
Abstracting 2,504,445 roubles, the value o f the merchandise shipped on account o f cap
tains, and what they received for passengers, the whole o f this trade has been carried on
by 170 houses, o f which the dealings o f 94 have been under, and 76 above, one million
o f roubles.
“ Several owners o f estates in the neighborhood o f Tiflis,” says a St. Petersburgh
letter, “ have for several years been growing sugar canes, which have at last produced
crops beyond their hopes. Three merchants ofT iflis have established a refinery for
the produce, and in three months have sent out o f it 120,000 lbs. o f loaf-sugar.”
T H E SU G A R C R O P OF L O U IS IA N A .
From a memorial upon this subject, we learn that the average annual crop is estimated
at 70,000 hhds. or 70,000,000 o f pound of sugar, and 250,000 gallons of molasses. At 6
cents for sugar, and 29 cents for molasses, the product o f the crop would be $4,900.000;
expenses reckoned at $2,000,000, the nett balance would be $2,900,000, or about
5£ per cent, on the capital invested. A t 5 cents for sugar and 17 for molasses, the nett,
product would yield 4 per cent on the capital; at 4 cents and 16 cents, the nett pro
duce would yield 2 8-10 per cent.
COMMERCIAL
REGULATIONS.
C O N S U L A R C E R T IF IC A T E S .
P a r is , March 7th, 1840.
Ministry o f Foreign Relations.
S ir:— The ministerial instructions directed to your consulate general, in the month o f
September, 1824, had in view to make known that, in accordance with the regulations
adopted in France, for the execution of the convention o f the twenty-fourth of June,
1822, with the United States of America, the merchandise coming from that country
could not be admitted at the reduced duties, except, amongst other conditions, they
Commercial Regulations.
520
should be accompanied by a special manifest or certificate o f origin, issued by the col
lectors o f the American customs, and legalized by the consul o f France, attesting that
they are the product o f the soil or the manufactures o f the Union.
It appears, nevertheless, from the reports made to the minister o f finance, that, since
some time, many American vessels have arrived in our harbors without being provided
with their documents, or at least, that thfe captains have generally neglected to have it
legalized by the consul o f France, and in consequence its authenticity was not suffi
ciently proved.
However, sir, the administration o f the French customs, not wishing to act too rigor
ously, consented that the cargoes thus imported should be admitted with the privilege
o f the convention o f 1822, if there was no ground to suspect the truth o f the declaration ;
but such an admission was permitted only as provisional, and in imposing on the in
terested parties the obligation o f bonds, to produce within a given time the regular cer
tificate o f origin.
I must therefore, sir, request you to give public notice to the commerce o f the United
States, that nothing has been changed, in France, in the regulations relative to the ope
rations o f the treaty o f 1822, and that in consequence, all captains o f vessels, who may
not be provided with a special manifest legalized by the consul o f France, at the port
o f clearance, will not obtain for his cargo the benefit stipulated in the said treaty.
I request you to inform me o f the means you may have taken for the publication oi
the present notice.
Receive, sir, the assurance o f my most distinguished consideration.
(Signed)
A . T H IE R S.
Mr. De L a Forrest, Consul General o f France, New York.
L A W R E L A T IV E
T O V E S S E L S E N G A G E D IN T H E W H A L E F IS H E R Y .
The following law, to cancel the bonds given to receive duties upon vessels and their
cargoes, employed in the whale fishery, and to make registers lawful papers for such
vessels, was passed by the present congress o f the United States, and approved by the
President, April 4th, 1840.
1. That all vessels which have cleared, or hereafter may clear, with registers, for the
purpose o f engaging in the whale fishery, shall be deemed to have lawful and sufficient
papers for such voyage, securing the privileges and rights o f registered vessels, and the
privileges and exemptions o f vessels enrolled and licensed for like voyages, shall have
the same privileges and measure o f protection as if they had sailed with registers, if
such voyages are completed, or until they are completed.
2. That all the provisions o f the first section o f the act, entitled, “ An act supplemen
tary to the act concerning consuls and vice consuls, and for the farther protection of
American seamen,” Dassed on the 28th day o f Feburary, Anno Domini eighteen hun
dred and three, shall hereafter apply and be in full force as to vessels enrolled and licen
sed for the fisheries, and all vessels which have been engaged in the whale fishery, in
the same manner and to the same extent as the same is now in force and applies to
vessels bound on a foreign voyage.
3. That all forfeitures, fees, duties, and charges o f every description, required o f the
crews o f such vessels, or assessed upon the vessels or cargoes, being the produce o f such
fishery, because o f a supposed insufficiency o f a register to exempt them from such claims,
are hereby remitted; and all bonds given for such cause are hereby cancelled, and the
secretary o f the treasury is hereby required to refund all such monies as have been, or
which may be paid into the treasury, to the rightful claimant, out o f the revenues in his
hands.
IN F O R M A T IO N T O M A S T E R S O F V E S S E L S .
Intelligence having been received at the department o f state, that upon all the vessels
o f the United States, whether fishing or trading, passing the strait or gut o f Canso, a
light duty o f six and two thirds cents per ton register o f shipping is demanded by the
British custom house officers, it is thought proper that public notice be given o f the fact,
in order that the masters o f vessels on trading voyages, requiring their passage through
the Strait o f Canso, may. to avoid difficulties and delays, provide themselves with the
means o f paying the duty referred to; and that vessels engaged in fishing or other pur
suits not requiring their passage through said strait, may not from ignorance unneces
sarily subject themselves to the payment o f it. A s the right o f the British authorities
to levy the duty on fishing vessels is disputed, it is recommended that masters o f ves
sels be prepared, in order to avoid injury from delay,—to pay the duty, but to do so
under protest.
Mercantile Miscellanies.
MERCANTILE
521
MISCELLANIES.
CANTON,
One o f the greatest emporiums in the East, ranking, as a port o f trade, either before,
or immediately after Calcutta, situated in the province o f Q,uantong, in China; be
ing the only place in that empire frequented by European traders : lat. 23° 7 10// N.,
Ion. 113° 14' E.
Canton stands on the eastern bank o f the Pekiang River, which flows from the inte
rior in a navigable stream o f three hundred miles to this city, where it is rather broad
er than the Thames at London Bridge; falling, after an additional course o f eighty
miles, into the southern sea o f China. Near its junction with the sea, it is called by
foreigners Bocca Tigris. The town is surrounded by a thick wall, built partly o f
stone and partly o f brick, and is divided into two parts by another wall running east
and west. The northern division is called the Old, and the southern part the New City.
In the old city is the Mantchou or Tartar general, with a garrison of Mantchou troops
under his command. The lieutenant governor, or Fooyuen’s, office is also in the old
city, but the governor and Hoppo (principal customs officer) reside in the new city,
not far from the river.
All foreign commerce is conducted in the south-west suburb, where the foreign fac
tories are situated, and which, with the other suburbs, is probably not less populous
than the city itself. The residence of Europeans is confined to a very small space, on
the banks o f the river; which might, however, be as pleasant as a crowded mercantile
place can well be, were it not for the great number o f small dwelling boats, which cover
the face^ o f the river. The people who occupy the larger portion o f these boats are said
to have come originally from the south; and being a foreign and despised race, were
not. at first, allowed to d'well on shore; but most o f the distinctions between them and
the rest o f the people have been abolished.
Although Canton is situated nearly in the same parallel of latitude as Calcutta, there
is a considerable difference in their temperature; the former being much the coolest,
and requiring fires during the winter months. The streets of Canton are very nar
row, paved with little round stones, and flagged close to the sides o f the houses. The
front o f every house is a shop, and those o f particular streets are laid out for the sup
ply o f strangers; China street is appropriated to Europeans; and here the productions
o f almost every part o f the globe are to be found. One o f the shopkeepers is always
to be found sitting on the counter, writing with a camel’s hair brush, or calculating
with his swanpan, on which instrument a Chinese will perform operations in numbers
with as much celerity as the most expert European arithmetician. This part o f Can
ton being much frequented by the seamen, every artifice is used by the Chinese retail
ers to attract their attention; each o f them having an English name for himself painted
on the outside o f his shop, besides a number o f advertisements composed for them by
the sailors in their own peculiar idiom. The latter, it may be supposed, are often
duped by their Chinese friends, who have, in general, picked up a few sea phrases, by
which the seamen are induced to enter their shops ; but they suit each other extremely
well; as the Chinese dealers possess an imperturbable command o f temper, laugh
heartily at their jokes without understanding them, and humor the seamen in all their
sallies.
Ships only ascend the river as far as "Whampoa, about fifteen miles below Canton ;
loading and unloading by means o f native boats.
The Chinese, considered as traders, are eminently active, persevering, and intelli
gent. They are, in fact, a highly commercial people; and the notion that was onee
very generally entertained, o f their being peculiarly characterized by a contempt of
commerce and o f strangers, is as utterly unfounded as any notion can possibly be.
Business is transacted at Canton with great despatch; and it is affirmed, by Mr. Milburn, and by most o f the witnesses examined before the late parliamentary committees,
that there is no port in the world, where cargoes maybe sold and bought, unloaded and
loaded, with more business-like speed and activity.
The fears, whether real or pretendedfof disturbances arising from a want o f disci
pline in the crews o f private ships, have been proved to be in a great degree futile; the
Americans, and other private traders, having rarely experienced the slightest inconve
nience from any tumults between their sailors and the natives.
Provisions and refreshments o f all sorts are abundant at Canton, and, in general, of
an excellent quality ; nor is the price exorbitant. Every description o f them, dead or
vo l
. n .— n o *
vi.
66
522
Mercantile Miscellanies.
alive, is sold by weight. It is a curious fact, that the Chinese make no use o f milk,
either in its liquid state, or in the shape o f curds, butter, or cheese. Among the delica
cies o f a Chinese market are to be seen horse flesh, dogs, cats, hawks, and owls. The
country is well supplied with fish from the numerous canals and rivers by which it is
intersected.
Foreign Factories.— These extend for a considerable way along the banks o f the
river, at the distance o f about one hundred yards. They are named, by the Chinese,
hongs, and resemble long courts, or closes, without a thoroughfare, which generally
contain four or five separate houses. They are built on a broad quay, and have a pa
rade in front. This promenade is railed in, and is generally called Respondentia
W a lk ; and here the European merchants, commanders, and officers of ships, meet
after dinner and enjoy the cool o f the evening. The English hong, or factory, far sur
passes the others in elegance and extent. This, with the American and Dutch hongs,
are the only ones that keep their national flags flying. The neighborhood o f the facto
ries is occupied with warehouses for the reception o f European goods, or o f Chinese
productions, until they are shipped. In 18*2*2, during a dreadful conflagration that
took place at Canton, the British factories, and above ten thousand other houses, were
destroyed; on which occasion the East India Company’s loss was estimated at five
hundred thousand pounds sterling, three fifths in woollens.
For the space o f four or five miles opposite to Canton, the river resembles an exten
sive floating city, consisting o f boats and vessels ranged parallel to each other, leaving
a narrow passage for others to pass and repass. In these the owners reside with their
families; the latter rarely visiting the shore.
All the business at Canton with Europeans is transacted in a jargon of the English
language. The sounds o f such letters as B, D, R, and X , are utterly unknown in
China. Instead o f these they substitue some other letter, such as L for R, which occa
sions a Chinese dealer in rice to offer in sale in English a rather unmarketable commodity.
The name mandarin is unknown among the Chinese; the word used by them to de
note a person in authority being quan. Mandarin is a Portuguese word, derived from
the verb mandar, to command.— Hamilton's East India Gazetteer ; Milburn's Orient.
Commerce ; Companion to Anglo-Chinese Calendar, Macao, 183*2, &c.
Conduct o f Chinese Government.— The only difficulty in trading with China origi
nates in the despotism, pride, and jealousy o f the government, and in the general corrup
tion of its officers. The former affects to treat all foreigners with contempt, and is al
ways exposing them to insult; while the latter endeavor to multiply and enforce vexa
tious regulations and demands, that they may profit by the douceurs given for their
evasion. Hitherto we have submitted with exemplary forbearance to every annoyance
the Chinese authorities have chosen to inflict; but it is questioned by some whether this
be the most politic course. The imbecility and powerlessness o f the government is at
least equal to its pride and presumption ; and in the event o f its attempting to stop the
trade, or to subject those engaged in it to unmerited ill treatment, it is contended that
we ought, in the event o f redress being refused on the presentation o f a remonstrance, to
vindicate our rights by force. W e are rather disposed to concur in this opinion. W e
believe that little more than a demonstration would be necessary; and that the appear
ance o f a single ship o f the line in the Chinese seas would have more influence over the
court o f Pekin than a dozen ambassadors. But it is essential, before employing this
sort o f negociators, that we be well assured that we have justice on our side, and that
our own misconduct has not occasioned the interruptions and annoyances complain
ed of. The superintendents about to be sent to Canton should be vested with
full powers to prevent, if possible, and, at all events, suitably to punish, any British
subject who may act so as to give just cause o f offence to the Chinese. W e have a
right to claim fair treatment from them, as we have a right to claim it from the Ame
ricans, or any other people; but we have no right to expect that our claim should be
regarded, unless we respect the prejudices o f the people, and the equitable rules and re
gulations o f the government.
Trade to the North o f China.— At present, all foreign trade with China is confined
to the port o f Canton ; but this was not the case for along time after China was visited
by British ships, and it appears highly probable that it will be again extended towards
the north. The interesting details given in the account o f the voyage o f the ship Am
herst along the Chinese coast, shows that the people are every where most anxious for
an intercourse with foreigners, and that the law is the only obstacle to its being carried
on to a very great extent. But, where the people are so well disposed to trade, the offi
cers so corrupt, and the government so imbecile, it may, we think, be fairly anticipated,
that the unalterable laws o f the “ Cejestial Empire” will not prove a very serious ob
stacle to such private individuals as may choose to engage in a clandestine trade with
the northern provinces. The smuggler is even more omnipotent in China than in
M ercantile Miscellanies.
52 3
Spain. The extent and perfect regularity with which the trade in opium is carried
on, in defiance o f all the efforts o f government for its suppression, shows how unable it
is to contend against the inclinations o f its subjects, which, fortunately, are all in favor
o f a free and liberal intercourse with foreigners.
C U R R E N C Y O F CU B A .
In the following letter, addressed to the editor o f the New Orleans Commercial Bul
letin, our readers will find an able and lucid treatise on the financial system o f Cuba.
The writer resided many years on the island, and is well versed in all that relates to
its manners and customs, its statistics, mode o f conducting business, and particularly
its affairs, commercial and financial. Much o f new and valuable information may
be gathered from his remarks. The style o f the letter indicates the man of business,
whose opinions have been formed after close, accurate, and extensive observation and
experience. They are, therefore, entitled to high credit.
“ Havana, Nov. 20, 1839.
“ You ask o f me to give you some information on the state o f our currency, empha
tically a ‘ hard money’ one— and o f the mode of doing business here, where the aux
iliary to the credit system, a bank, does not exist. Also my opinion as to the effect
which would follow the introduction o f banks in Cuba, and whether it is likely to
occur.
“ 1st. The currency is o f gold and silver only, and composed o f royal doubloons at
seventeen dollars each— whilst the rebels pass for only sixteen dollars—and o f all de
scriptions o f silver coin, which pass for one sixteenth, one eighth, one quarter, and one
half dollar, according to their weight! no—but according to their size; thus we are gra
dually acquiring a stock o f your old dimes and half dimes. Years ago, God knows
how long, for none can recollect, it became the custom to pay and receive pistareens at
.. two rials or twenty-five cents each, and the coins o f Spain of the value o f ten and five
cents passed in like manner for one eighth and one sixteenth o f a dollar— no matter
what be the weight of, or the impression on the coin—indeed if worn or beaten perfect
ly plain, it is all the same thing, so that it be 1big’ enough for a rial (twelve and a-half
cents) and it passes—nay, to show you how utterly ignorant are the mass o f petty
traders in regard to the real nature o f coin—whilst the old worn and defaced dimes of
Spain pass freely for a rial, your new dimes are occasionally objected to because they
are not 1big5enough! It follows, inevitably, that the ordinary channels o f circulation
are filled with a base currency; for the term will, I presume, equally apply to an una
dulterated coin and to one to which a fictitious value has been given by arbitrary cus
tom. Almost every one who visits the island with a previous knowledge o f this fact,
will provide himself with so profitable an ‘ exchange,’ and the utter futility o f the laws
enacted against its further introduction, is shown in the circumstance that a very large
portion o f the pistareens in circulation are o f the coinage o f our present ‘ Royal M is
tress,’ who, bless her little heart, was not born when the law was made!
“ Not only is the entire circulating medium o f the every-day traffic, marketing, &c.
composed o f these various silver coins, especially the pistareens, but so great has been
their increase o f late years that they now enter into every transaction amongjnerchants
and others, who handle large sums, occasioning very often disputes and altercations
as to the ‘ proportion’ to be paid or received, and to make the evil still worse, every one
tries to get rid of them ; every payer offers first his ‘ pecetas,’ and thus flooded as we
are with them, the quantity is apparently interminable, from the mere eagerness o f every
one to pass them upon his neighbor; this is done in rouleaux o f sixty-eight, answering
to the royal doubloon o f seventeen dollars, and in a majority o f cases, these are not
counted. Thus opening the door, by deficient or base pieces, to a wide system o f fraud,
which would tempt the cupidity o f any populace upon earth.
“ It is equally uncertain, as far as I can ascertain it, when the royal doubloon was
made to pass for seventeen dollars; but I presume it was done under the erroneous im
pression that it would prevent its leaving the country; but it is long since such ideas
have proved their own fallacy, and that the great regulator, ‘ exchange,’ has settled all
those things in its own way. Hence, when the public convenience made it absolutely
necessary to fix a standard value upon the South American gold coins, that they might
enter into the currency of the island, the sagacity o f the Intendente (his excellency the
Conde Villanuera) was applied to preventing the further extension o f the existing evil,
by fixing the value o f such doubloons at sixteen dollars: and even this is more than
524
M ercantile Miscellanies.
their intrinsic worth according to the British standard. Thus we have two descrip
tions of gold coins, which causes some little annoyance in paying and receiving; but
there is scarcely any risk o f loss at present, except from base pieces, which an expe
rienced eye will readily detect.
“ So much for the present ‘ currency,’ than which, probably, a more extraordinary
one does not exist in any country. Hundreds o f thousands o f dollars weekly paid in
coins at twenty-five cents, which were issued at twenty cents, and which, frequently,
are not intrinsically worth eighteen cents! and enormous amounts o f gold coin passing
at sixteen and seventeen dollars, which are not worth but fifteen dollars and fifty cents.
“ No one troubles himself about the matter— it comes as it goes; we receive as we p a y ;
and for those who look out beyond the hour, or the expediency o f the time, it does not
signify a rush. If we come here with foreign products to sell, and we are told that the
price is twenty dollars, or fifty dollars for a barrel of flour, we pause to calculate what
will be the nett proceeds, and how much exchange it will buy, before deciding whether
the nominal price be a good or bad one; and thus it is with every business and trading
transaction ; provided we can pay away the money for as much as we have received
it, we are content; so suffer all the evils o f an arbitrary currency to be fastened upon
us, taking no heed o f the silent workings o f a system (or rather the want o f one) which
sooner or later must end in an explosion, that will not only involve the holders o f the
coin in immediate loss, but inevitably create discontent, if not commotion, among a
populace but ill-prepared to appreciate so violent a change in their circulating medium.
“ 2d. The mode o f doing business. It is, I find, an opinion frequently expressed,
that business in Havana is entirely transacted with money. Nothing can be more er
roneous. The credit system, with few exceptions, is practised at this moment almost
to as great an extent as in the United States. Perhaps this may be because there is an
immense amount o f capital always waiting employment — the one cause may have
produced the other. But 1 have nothing to do with that. I wish only to communi
cate facts as they exist.
“ The credit system commences at the custom-house, where one, two, three, and four
months time is allowed upon the heavy duties upon flour; and the same upon all dry
goods, hardware, and crockery, provided the said duties amount to a thousand dollars.
On jerked beef the duty is paid on the last day o f discharging. A ll other duties are
payable in cash. But it is not exacted on making the entry; you merely hand in a note
o f your goods, with your signature, and the permit is granted immediately — the de
mand for the duties being made in regular course, varying from two weeks or two
months from the date o f entry.
“ The produce o f the island, like your own agricultural products, is generally sold
for cash. But even here there are exceptions, for in many instances the sugar crops are
bought at short, sometimes at long credits, (by monthly payments.) with or without
interest, according to agreement. But I am not aware o f credit being given on any
other article o f produce, unless in rare instances.
“ Our provision sales on the wharf are heavy, and the greater number o f the articles,
cash; but the heaviest in amount, for credit — for instance, flour, almost invariably on
a credit, varying from one to five months, according to the amount. Next in import
ance, jerked beef, o f which the annual sales average one and a half million o f dollars.
A cargo usually requires for its sale and discharge, one day for every one hundred
quintals ; and the payments are made, one half on the day o f discharge, and the other
half in as many days more — or, in other words, a cargo o f six thousand quintals is
sold at two and four months: and lumber is very often sold either for direct notes, or
in barter for molasses, deliverable at a future day.
“ But the heaviest and most uniform credits are given on dry goods, hardware, and
crockery; these are never sold for cash, although often paid for on delivery, with a de
duction o f interest on the time agreed for; the credit varies from three to six, and is often
extended to seven and eight months; more especially during the time when exchange
is at the highest, when the dry goods houses are, in the end, the gainers by giving cre
dits running into the time when exchange on England is at its lowest. If to the im
mense amount o f credits thus raised, you add a not unfrequent practice o f buying ex
change either for direct notes, or for those which may exist in one’s ‘ porte feuille,’ you
will perceive that we have the credit system engrafted upon us in its full force.
“ But this is not all. I have mentioned only the credits arising from imports and ex
change. The system enters into many, if not all, the every-day transactions of the peo
ple. The planters obtain credit, as well from their factors as from their iron-mongers, their
grocers, their clothiers, and the whole catalogue o f traders who minister to their wants.
The country store-keepers all keep open accounts with the large dealers in Havana,
Matanzas, & c.; and it is fair to presume that the ramifications o f the ‘ system’ are
through them still farther extended. I f we leave the importers and wholesale dealers,
M ercantile Miscellanies.
525
and descend to the ordinary retail traffic — the markets, the petty grocers, (the bodegas,)
the mechanics, laborers, &c. — we find the cash system more generally in use, and long
may it continue so; but even here, the ‘ credit system’ is gradually acquiring the sanc
tion o f custom. Every one can perceive that the credit upon the flour duties extends
through all the ramifications o f the trade — to the consumers o f the bread, who keep
weekly, monthly, or even longer accounts with their bakers. It is unnecessary to give
farther details — suffice it to say, that the example o f the baker is insensibly working
an influence over other tradesmen, and credit will sooner or later become the practice
here, as it is in many other countries.
“ I have thus endeavored to explain to you what appeared to you the anomalies o f
your hard money currency, and to correct the impression you seem to have entertained,
that we were a cash-dealing people. In doing so, I have scarcely ventured to give
opinions, but have stated fa d s, that cannot be without interest to any one acquainted
with the island o f Cuba, and its vast trade and commerce — the latter fully equalling
one fifth o f the United States in the time o f its greatest expansion of business.
“ But as it regards banks, I could but give you opinions, which would be of interest
to no one; and would, perhaps, be judged o f in the United States according to the po
litical bias o f the reader. A s to the probability o f such institutions being established
here, I ana unprepared to answer you: some English capitalists have long talked of doing,
something in that way, but their applications to the government o f Spain for authori
ty, have invariably been met with such onerous terms, that the projects have been aban
doned. W hy, then, you will ask, do not the great capitalists of the place combine, and
form one o f their own 1 Simply, because people, in a state o f colonial vassalage, never
will enter into schemes which deprive them o f the immediate control o f their own funds j
and although an immense amount o f capital is employed in private discounting through
brokers, there are those who will not even do this, but keep enormous sums lying idle,
because they themselves have no use for it.
“ A t the close o f the year I will furnish you with some statistics of the island; mean
while, I am, with regard,
Yours, &c.
--------“ P. S. Nov. 23d.— The explosion in regard to the currency is likely to occur speedily.
Very recently, a merchant tendered to another a large sum of money, with thirty per
cent, in pistareens; it was refused — came before the ‘ consulado,’ which sanctioned the
refusal — an appeal taken to the ‘ real audiencia,’ which reversed this decision, and the
‘ pecetas’ were received. Now, to-day, the officers of the government, holding the ac
ceptance o f one o f the most respectable houses in the place for thirty thousand dollars,
call for payment — the money was tendered, (one fourth in pecetas,) but refused, and
the bill protested, under a counter-protest from the acceptors! The crisis is approaching
— the explosion is at hand, and, since it must come, the sooner the better.”
A N C IE N T CO IN S .
In removing some old wooden buildings recently in Charleston, S. C., the following
coins were disinterred from the repose o f more than a century.
1. A coin about the size o f a half dollar, one side a crowned head in the centre, and
“ Gulielmus III. Dei Gra.” and on the other side, a vignette or compound coat of arms,
representing, we believe, the three Lions Rampant of England, the Thistle o f Scotland,
the Harp of Green Erin, and a defaced emblem, which probably designated the Prince
dom ofWales, or the Kingdom ofFrance— the (Quadruple Crown—and along the circu
lar border, 1690, Mag. Britain: et Hib. Rex.
2. A coin, so clipped as to form an irregular figure, which may be termed a catecornered square, and yet not a diamond, with two angles, also clipped, so as to make an ir
regular hexagon. It was originally a dollar, from the Spanish mint, with figured work
on the upper and lower faces, instead of the present well known devices, and struck in
1733, during the reign o f “ Philip Y . Hispan. et Indiarum Rex.”
A D V IC E T O M E N IN D E B T .
Ascertain the whole state o f your affairs. Learn exactly how much you owe. Be
not guilty o f deceiving yourself. You may thus awaken suspicions of dishonesty,
when your intentions were far otherwise.
Deliberately and fully make up your mind, that come what will, you will practice no
concealment, or trick, which might have the appearance o f fraud. Openness and can
dor command respect among all good men.
Remember that no man is completely ruined among men, until his character is gone.
Never consent to hold as your own, one farthing which rightfully belongs to others.
526
.Mercantile Miscellanies..
A s you are at present in circumstances o f great trial, and as many eyes are upon you,
do nothing rashly. If you need advice, consult only a few. Let them be disinterested
persons o f the most established reputation.
Beware o f feelings o f despondency. Give not place for an hour to useless and ener
vating melancholy. Be a man.
Reduce your expenditures to the lowest amount. Care not to figure as others around
you.
Industriously pursue such lawful and honest arts o f industry as are left to you. A n
hour’s industry will do more to beget cheerfulness, suppress evil rumors, and retrieve
your affairs, than a month’s moaning.
If you must stop business, do it soon enough to avoid the just charge o f an attempt
to involve your unsuspecting friends.
Learn from your present difficulties the utter vanity o f all earthly things.
IN S U R A N C E O N L IV E S F O R T H E B E N E F IT OF M A R R IE D W O M E N .
'
The people o f the state o f New York, represented in senate and assembly, do enact
as follows:
.
.
1. It shall be lawful for any married woman, by herself and in her name, or in the
name o f any third person, with his assent, as her trustee, to cause to be insured, for her
sole use, the life o f her husband for any definite period, or for the term o f his natural
life ; and in case o f her surviving her husband, the sum or nett amount o f the insurance
becoming due and payable, by the terms o f the insurance, shall be payable to her, to
and for her own use, free from the claims o f the representatives of her husband, or o f
any o f his creditors: but such exemption shall not apply where the amount o f premium
annually paid shall exceed three hundred dollars.
2. In case o f the death o f the wife, before the decease o f her husband, the amount of
the insurance may be made payable, after her death, to her children, for their use, and to
their guardian, if under age.
This act passed on the first day o f April, 1840, and signed by the governor, became a
law on that day.
TRADE
OF M A S S A C H U S E T T S I N IC E .
Last year, the quantity o f ice shipped for distant ports, at the wharves in Charlestown,
on board one hundred and forty vessels, was upwards o f thirty thousand tons; all o f
which, with the exception o f about six thousand tons, was brought from Fresh Pond,
Roxbury. And it is stated that if greater facilities for transporting it were offered by a
railroad, the quantity would be increased. The Lowell Railroad has, therefore, obtained
a grant from the legislature for an extension o f the road to the Pond.
T H E B R A Z IL IA N S L A V E T R A D E .
From official returns of the vessels engaged in the slave trade to the coast o f Brazil, un
der the Portuguese flag, for the several months o f the year 1838, it appears, that, during
that year, eighty-four vessels entered the port o f Rio de Janeiro, and that by them
36,974 slaves were imported ; and farther, that an apparent reduction in the number,
compared with 1837, is accounted for, not by any falling off in this infamous traffic,
but by the fact, that several o f the traders have ordered their vessels to discharge at
other ports o f Brazil, and fit out from thence.
A F R IC A N H E M P .
,
The African Repository states that there is in the Colonization rooms at W ashing
ton, a specimen of African hemp, a small bale o f which Gov. Buchanan sent to the
Board by the Saluda, in June last; This hemp is prepared from an indigenous plant
which abounds in Liberia. It resembles the Man ila in colour, and is pronounced by
good judges to be equal in strength and fibre to the best American hemp.
V A L U A B L E IN V E N T IO N .
Messrs. Coutures Brothers, o f Bordeaux, glass blowers, have just introduced an im
portant improvement into the art o f blowing black or bottle-glass, by using a flexible
i
M ercantile L ibrary Association.
527
tube, worked by machinery, for injecting air into the parcels o f fluid metal, instead o f
letting their men continue to blow them by mouth. An ingeniously contrived cock al
lows them to consume just as much or as" little air as is wanted. These gentlemen have
declined taking out a patent for their invention, and in a spirited manner have made it
public.
M E R C A N T IL E L I B R A R Y A S S O C IA T IO N OF N E W Y O R K .
W e cannot mention in terms o f too high commendation, the energetic and laudable
efforts which the officers o f this institution are making for promoting its usefulness, and
securing to its members the enjoyment of almost unrivalled literary advantages.
They now have in contemplation the establishment o f a gallery o f paintings, and
we trust that our native artists will be as distinguished for their liberality in contributing
to its creation, and ultimate success, as they are eminent in the profession which they
have chosen.
Whatever is bestowed upon this institution, whether in the literary department, or
in that o f the fine arts, is well calculated to confer upon its present and future members
lasting benefits, while at the same time the name o f the donor is gratefully preserved
— a record o f his beneficence and liberality.
In glancing over the donations which have been recently received, we were particu
larly struck with the appearance o f a beautifully bound volume, containing the illustra
tions o f Shakspeare’s dramatic works, designed by eminent English Artists, and pre
sented by A. E. Silliman, Esq., the talented and liberal president o f the institution.
.
The engravings it contains are conceived with the greatest truth and clearness, while
their execution evinces the utmost elegance, combined with an appearance o f eminent
strength and beauty. The thrilling scenes that are so powerfully portrayed by the
great poet, are thrown by the genius o f the artists into living shapes, breathing forth the
soul o f the master-mind by which they were created ; and every illustration contained
in the richly bound volume we have mentioned, is distinguished for the great force, and
vivid beauty, with which the text o f the author is presented to the mind o f the be
holder.
C O N C L U SIO N O F T H E F I R S T Y E A R .
"With the present number is terminated the first year o f the existence
o f the “ M erchants’ M agazine and Commercial R eview.” The occasion
suggests a few remarks, in which, we trust, we may indulge, without
trespassing upon the patience o f our readers.
Although the plan o f our Magazine was novel, we were aware, in the
outset, that its success would depend wholly upon the manner in which
it should be conducted. Our aim has been to make the Magazine en
tertaining and useful to merchants; and that w e have not failed in mea
surably carrying out our intentions, the countenance and support o f a
large and rapidly increasing list o f subscribers assure us. The novelty
o f the undertaking, and the want o f that experience which is necessary
to the complete and satisfactory management o f such a work, have been
our greatest stumbling b lock s; but time, it is thought, will soon conquer
every difficulty, and we are sanguine enough to believe, that the future
volumes o f this periodical will increase in value and interest.
628
Conclusion o f the first year.
The suggestions o f friends and subscribers have already been o f great
service, and unquestionably will so continue. ' Superadded, the hints:
which arise from month to month in our own minds, are by no means:
few in number or unimportant; and as it is our determination to spare
no pains or expense to improve the work, and to make it the merchant’s
vade mecum, these suggestions will be gradually acted upon with advan
tage. Encouraged as we have been, we feel more and more inclined
to add to the interest o f our pages, and we can assure our supporters
that we have arrangements in train, which will materially contribute to
our success, identified as it must be with the permanent usefulness o f
the periodical.
The various departments o f maritime and commercial law, the politi
cal economy o f nations, navigation, commerce, and manufactures, mer
cantile biography, currency, banking, and those miscellaneous subjects
which possess ah interest to the merchant and man o f business, and are
o f standard value to society and the community at large, we pledge our
selves to have filled by sound and able writers.
Although we have been more handsomely treated by those whom it
was our hope to please, than was anticipated in the beginning, yet the
promotion o f the work depends decidedly upon the extent o f patronage
which we may receive. T o the merchants we look for aid, but only so
far as our merits seem to entitle us. W e are anxious that they should
make the periodical known among themselves, and moreover are strenu
ous in our efforts to gain their confidence and respect. So far as we
have gone, we have endeavored to identify our interests with theirs, and
need we say, that our exertions will in no wise be relaxed to continue
in the same course.
T o those who have contributed to the pages o f the work since its com
mencement, we beg to express our hearty and unfeigned thanks, at the
same time that we bespeak their aid for the future. N o slight encou
ragement has been their assistance and co-operation, and in bringing
our work favorably before the public, we are certain that their efforts
have been exceedingly instrumental—-indeed, so much so, that our own
unaided efforts must have proved unavailing.
Hereafter, we shall present the productions o f several new contribu
tors, whose names are intimately assg^atg^gwijj^the truths o f commerce,
literature, and science, and whose tllqUgBhsf w e tilits no doubt, will be
examined with delight by our.riga&efs.
f>“ lb
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Notwithstanding we publisheo^tilacge pration o f the first volume,
commencing with July, and ending Decb'MlOi.y-Iritifi, it has becom e ex
hausted, so that we are unable to answer the orders we have received for
complete sets o f the work. It is, however, our intention to reprint the
first volume, so that we can hereafter furnish our subscribers, at all times,
with the Magazine from its commencement. The statistical depart
ment, to which we shall pay particular attention, will give to the past
volumes a standard value, as books o f reference to the statesman, the
merchant, and the public generally. A t present, we are only prepared
to furnish subscribers with the volume commencing January, 1840.
@FedFRASER