Full text of The Merchants' Magazine and Commercial Review : November 1863, Vol. XLIX, No. V

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TH E

MERCHANTS’ MAGAZINE
AND

COMMERCIAL REVIEW.
NOVEMBER,

1863.

LIABILITY OF THE GOVERNMENT OF GREAT BRITAIN FOR H IE DEPREDA­
TIONS OF REBEL PRIVATEERS ON THE COMMERCE OF THE
UNITED STATES, CONSIDERED.
BY C H A R L E S

P.

KIRKLAND.

*

P ecuniary interests, to the amount o f millions o f dollars, are dependent
on this question ; the subject itself concerns the relations o f two o f the great
powers of the world ; in it may possibly be involved the question o f peace
or war between those powers, and thereby, not improbably, the peace o f
every nation in Christendom, and, by consequence, the highest interests o f
humanity.
A matter which, by possibility, may result in consequences so momentous,
should be approached with the utmost coolness and impartiality; and its
discussion should be marked by a conscientious regard to truth— truth
alike as to facts alleged and the principles o f law applicable to those facts
and furnishing the rule o f decision.
N o citizen o f the United States, who loves his country or his race, can
desire to see a rupture o f the amicable relations which have existed between
his country and Great Britain for upwards o f half a century. On the con­
trary, his ardent desire should and would be, that these relations should be
perpetual; he would regard it as his imperative duty to see to it that,'if
those relations are interrupted, the fault could not be attributed to his coun­
try, but should, in the judgment o f enlightened men everywhere and by the
Great Ruler o f all, be charged upon Great Britain.
It is, undoubtedly, a task o f difficulty for a right-minded American, by
whatever party name he may be called, and whether he is among the sup­
porters or the opponents o f the present administration, and whatever his
views may be o f the origin and causes o f the present rebellion, or o f the
mode in which the war for its suppression has been conducted— it is, I say,
a difficult task for any American citizen, in view of all that has occurred in
England since that war commenced, to enter on the investigation o f the
present qufttion with the calmness so essential to the elucidation o f truth
at all times, and so indispensable on the present occasion. W hen he ad­
verts to the undeniable fact that, without the recognition by the British
Queen o f the Rebel States as “ belligerents,” and the consequent proclamaY O L . X L I X . --- NO. V.
22




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Liability o f the British Government f o r

[November,

tion o f “ neutrality,” and without the constant enormous supplies to them
o f munitions o f war of every variety by the subjects o f the British Crown, the
war could by no physical possibility have continued one year after the firing
o f the first gun at Fort Sumter, on the 12th of April, 1861 ; and when he
remembers that those acts o f that Government and its subjects occurred in
a time o f profound peace and during the existence o f a perfect treaty o f
amity and concord between them and us, and that they occurred, too, Willi­
'S in a few months after the whole American people had exhibited to, an ad­
miring world the sublime and beautiful spectacle o f an universal ovation to
the future K ing of England*— it is, I repeat, a work o f difficulty for him to
free himself from the influence o f all those facts in an endeavor, however
sincere, to arrive at a correct conclusion in reference to the rights of hisown
country and the duties o f Great Britain in the matter now under consider­
ation. Still, that task can be performed, and it will be my earnest effort,
in this investigation, to disregard all extraneous influences and to conduct
it with that candor without which arguments and conclusions would be alike
valueless.
Some grounds for the liability o f the British Government on this occa­
sion have been stated by high American authority, which, in my view, are
untenable. These grounds will, preliminarily, be mentioned :
F ir st, These privateers have been called “ British pirates,” and, as such,
it is urged that the British Government is liable for their acts.
They cannot, on a just construction o f the “ Law o f Nations,” be, in any
legal or “ international” sense, denominated “ pirates.” It is conceded that
they acted under commissions from the Rebel Confederacy : that Confede­
racy was in May, 1861, recognized as a “ belligerent” by the British Gov­
ernment ; it has practically been recognized by7 our own as a “ belligerent”
in the most emphatic and conclusive manner, by the exchange o f prisoners
and otherwise. Bid;, mark ! this recognition was subsequent to that o f the
Biitish Government, and arose from the absolute necessity o f the case— a
necessity caused, in part or mainly, by that very recognition by Great Brit­
ain. If rebel soldiers, who have captured in battle the property o f citizens
o f the United States, are not legally robbers, and if rebel soldiers, who have
killed in battle citizens o f the United States, are not legally murderers, then
the crews of the rebel privateers are not “ pirates,” and the vessels them­
selves are not “ piratical” vessels. I use the terms “ pirates” and “ pirati­
cal ” in a legal sense, and solely in reference to the liability o f the British
Government for their acts ; the character o f these privateers in a practical
and moral sense is a different matter, wh’ch will hereafter be alluded to.
The definition o f piracy, as found in text writers, is, “ the offence o f depre­
dating on the high seas without being authorized by any sovereign State.”
(W heat. In t. L aw , p. 246, Ed. 1863.) The definition is incomplete with­
out this addition : “ or by persons assuming to be a State and recognized
by other States as belligerents.”
So far as this question o f technical, legal piracy is^concerned, a commis­
sion from the Rebel Government is as available for all purposes as if that
Government was a recognized Government. Had the Rebel States not
been recognized as “ belligerents,” then, indeed, those privateers would have
* I t is not to b e forgotten that this m agnificent tribute cam e, in fact, from the 24,000,000 o f pe o ­
ple o f the States now engaged in the sacred w ork o f preventing the destruction o f the R ep u blic.
T h o on ly place visited b y the P rince o f W ales in the States now in rebellion, was R ich m on d, and
there he met with the only insult he received on this side the Atlantic !




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Depredations o f Rebel Privateers Considered.

331

been in every sense “ piratical vessels.” But acting, as we have seen, under
a commission issued by recognized “ belligerents,” that commission, from
the very nature o f the case, protects, so far as the question o f “ piracy ” and
“ pirates ” is concerned, all and each of the crew, whatever the nationality
o f any o f them may be. Consequently, the mere fact that these privateers
were manned, in whole or in part, by British subjects does not render them,
in a legal sense, “ British pirates,” as they have been termed by an eminent
American Senator. So far as the question o f “ p ir a c y " is concerned, tn
reference to the matter now under consideration, those privateers are to be
regarded, in all respects, as would be the privateers o f any nation with whom
we might be at war— Spain, France, Mexico.
It is to be observed, that the formal recognition bv Great Britain
and other nations, and the practical recognition by our own country, o f the
Rebel States as “ belligerents,” in no manner recognizes them as a nation,
and hits no effect whatever on that question.
Second: Nor are they “ British pirates,” or “ pirates ” in any sense, so
far as the present question is concerned, because there is in point o f fa c t no
port to which their prizes can be taken for trial and adjudication. The in­
dependence o f the Rebel States and their existence as a nation being no­
where recognized, they cannot take their prizes into any port o f any other
nation for any purpose; and yet an undoubted rule of National Law, as to
vessels captured by privateers, is, that they must be taken into port for trial
and adjudication. In this case, the difficulty arises from the fact, not that
there are not nominally and theoretically ports, as, for instance, W ilm ing­
ton and Mobile, to which the prizes might be taken, for in the recognition
o f the Rebel States as “ belligerents” the existence o f their ports for the
purposes now mentioned is necessarily involved and implied, but the diffi­
culty arises from the fact that those ports are practically inacccessible, in
consequence o f the blockade. Indeed, one case has occurred, in which a
prize captured by a Rebel privateer was taken into the port o f Charleston
and condemned, though it is proper to add that that condemnation was held
by an eminent Judge o f one o f the United States tribunals (S prague ) to
be wholly invalid. The Rebel privateers cannot, therefore, be deemed “ pi­
rates ” or “ piratical,” because they do not in fact comply with the rule o f
the Law o f Nations in the respect now mentioned, but, instead thereof, con­
temporaneously with the capture, burn and destroy the captured vessels and
cargoes.
It will be kept in mind that in these observations I speak merely o f the
legal and technical character o f these privateers, and in reference only to
the question of the liability o f great Britain for their acts. It is not relevant
to advert now to the barbarism o f those acts, nor to the inhumanity o f any
Government or o f any individual subjects o f any Government who should
in any manner give aid or countenance to such revolting deeds o f incendi­
arism and plunder, so repulsive to the spirit o f the age and so repugnant to
every feeling o f Christian civilization. These considerations are appropriate,
if at all, in another connection.
T h ird: A s the Government o f Great Britain is not liable for the acts o f
these privateers, on the ground o f their alleged piratical character, so it is
not liable to us by reason o f any municipal law o f its own.
It has often been said, very loosely, that in the fitting out and dispatch
o f these vessels the British Legislative Act, commonly called “ The Foreign
Enlistment Act,” has been clearly violated, and that for this reason that




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Liability o f the British Government fo r

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Government is liable. That act has been made the subject o f much com ­
ment, and I subjoin a verbatim copy o f its material provisions, thus ena­
bling all to read and understand it.* Doubtless, this act shows very clear­
ly what the British Parliament deemed the duty o f that nation toward
other nations ; it gives a most decided and important construction on their
part to the “ Law o f Nations,” as applicable to such cases ; but, surely, it
cannot be urged, as a ground for their liability, that they have failed to
execute their own statutes, their own merely municipal law, when it is not
alleged or pretended that any treaty exists requiringjts execution. It nev­
er can be a just ground o f complaint, by one nation against another, that
the latter has omitted or refused to carry into effect its own laws. N o na­
tion can thus intermeddle with another, or thus interfere in what may well
be denominated their “ private affairs.” I deem it quite unnecessary to
dwell farther on a proposition so self eviden t; and I have adverted to this
point only because 1 have seen, in some publications o f respectability, the
violation of this statute o f Great Britain asserted as aground o f her liability
for the acts of these privateers.
Fourth : Nor is she liable on the ground o f national “ comity.” W hat­
ever we might justly have expected o f her on this ground, and how much
soever her own good and comfort and ours may have been promoted by
her exercise on this occasion o f that “ comity,” which, in view o f the rela­
tions existing between us, might so reasonably have been anticipated, yet
* Extract from the “ Foreign Enlistment Act,” 69 Geo. III., chap. 69.—“ Sec. 7.
And be it further enacted, that if any person within any part of the United Kingdom,
or in any part of Ilia Majesty’s dominions beyond the seas, shall, without the leave
and license of His Majesty, for that purpose first had and obtained, as aforesaid, equip,
furnish, fit out or arm, or procure to be equipped, furnished, fitted out or armed, or
shall knowingly aid, assist or be concerned in the equipping, furnishing, fitting out or
arming of any ship or vessel, with intent or in order that such ship or vessel shall be
employed in the service of any foreign prince, state or potentate, or of any foreign
colony, province, or part of any province, or people, as a transport or store-ship, or
wilh intent to cruise or commit hostilities against any prince, state or potentate, or
against the subjects or citizens of any prince, state or potentate, or against the per­
sons exercising or assuming to exercise the powers o f government in any colony, pro­
vince, or part o f any province or country, or against the inhabitants of any foreign
colony, province, or part of any province or country with whom His Majesty shall not
then be at war; or shall within the United Kingdom or any of His Majesty’s domin­
ions, or in any settlement, colony, territory, island or place belonging or subject to
His Majesty, issue or deliver any commission for any ship or vessel to the intent that
such ship or vessel shall be employed as aforesaid, every such person so offending
shall be deemed guilty of a misdemeanor, and shall, upon conviction thereof, upon
any information or indictment, be punished by fine and imprisonment, or either of
them, at the discretion of the Court in which such offender shall be convicted, and
every such ship or vessel, with the tackle, apparel and furniture, together with all
the materials, arms, ammunition aud stores winch may belong to or be on board of
any such ship or vessel, shall be forfeited; and it shall be lawful for any officer o f
His Majesty’s customs or excise, or officer of His Majesty’s navy, who is by law em­
powered to make seizures for any forfeiture incurred under any of the laws of cus­
toms or excise, or the laws o f trade or navigation, to seize such ships and vessels as
aforesaid, and in such places and such manner in which the officers of His Majesty’s

t




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Depredations o f Rebel Privateers Considered.

333

a violation merely o f ‘‘ comity ” can in no case furnish a legal and author­
ized ground for a demand o f indemnity.
F ifth : N or is there any ground o f liability on the part o f the British
Government, or any right or power on our part to treat these privateers as
pirates, or to require that Government so to treat and consider them, arising
out o f the Treaty of Paris o f 1856, by which privateering, as between the
parties to it, was rendered piratical.
W e are not parties to that Treaty.
The matters above stated have, at different times since the breaking out
o f the Rebellion, been put forth as grounds o f liability on the part o f Great
Britain for the acts o f these privateers. I have briefly mentioned them be­
cause, in my judgment, they cannot be sustained, and because this matter
is fraught with consequences o f too much solemnity to justify introducing
into its discussion propositions o f questionable accuracy.
This subject is, indeed, one o f surpassing importance; it affects the pe­
cuniary interests o f our citizens to a vast amount (exceeding thirty millions
o f dollars as is supposed by some), for which, on legal principles, neither
their own Government, nor the Rebel Government, nor the captors are
liable. It involves, as before mentioned, to a greater or less extent, the
amicable relations o f the two countries ; for if that Government is bound to
make compensation and declines fulfilling its obligations, the question of
peace or war may arise.
It is very clear that the Government o f the United States could by no
means be justified in demanding indemnity o f that o f Great Britain, except
on grounds o f fact and law that could not be ju stly controverted. In other
words, our Government, before making demand on Great Britain, must be
customs or excise and the officers of His Majesty’s navy are empowered respectively
to make seizures under the laws of customs and excise or under the laws of trade and
navigation, and that every such ship and vessel, with the tackle, apparel and furni­
ture, together with all the materials, arms, ammunition and stores, which may belong
to or be on board o f such ship or vessel, may be prosecuted and condemned for any
breach of the laws made for the protection of the revenues, customs and excise, or of
the laws of trade and navigation.
“ Sec. 8. And be it further enacted, that if any person in any part of the United
Kingdom o f Great Britain and Ireland, or of any part of His Majesty's dominions be­
yond the seas, without the leave and license of His Majesty first had and obtained, as
aforesaid, shall, by adding to the uumber of guns of such vessel or by changing those
on board for other guns, or by the addition of any equipment for war, increase or
augment, or procure to be increased or augmented, or shall be knowingly concerned
in increasing or augmenting the warlike force o f any ship or vessel of war, or cruiser,
or other armed vessel which, at the time of her arrival in any part o f the United
Kingdom or any of His Majesty’s dominions, was ship of war, cruiser or armed vessel
in the service of any foreign prince, state er potentate, or of any person or persons
exercising or assuming to exercise any powers of government in or over any colony,
province, or part of any province or people, belonging to the subjects o f any such
prince, state or potentate, or to the inhabitants of any colony, province, or part of
any province or country, under the control of any person or persons so exercising or
assuming to exercise the powers of government, every such person so offending shall
be deemed guilty of a misdemeanor, and shall, upon being convicted thereof, upon
any information or indictment, be punished by fine or imprisonment or either of them,
at the discretion of the Court before which such offender shall be convicted.”




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Liability o f the British Government fo r

[November,

“ clearly righ t." However much our Government may sympathize with
its citizens in their calamities, and however keenly it may feel the unkind­
ness o f tlie Government and o f individual subjects o f Great Britain, and
however much the moral sense of mankind may be shocked by the savage
practices o f these privateers, none of these considerations can be taken into
view in determining the present question. Its decision can depend on no
statute law o f England or of this country ; on no treaty to which we are
not a party ; on no express treaty on the subject between us and Great
Britain, as there is n one; on no liability of the Rebel Government to com ­
ply with the Law o f Nations, in reference to the disposition o f prizes ; on
no supposed or real violation o f the “ comity ” due to us from Great Brit­
ain ; on no considerations o f sympathy or hum anity: its determination
must rest solely on the Law of N ations— on that law must the case stand
or fall. That law prescribes the duties and the liabilities o f neutral nations ;
as between us and the Rebel Government England has declared herself, and
is to be taken to be a neutral, and as such she is bound by that law to the
duties ’it prescribes.
I.
The first step is to ascertain and state the fa c ts ; and as to these there
seems to be no room for dispute. For all the purposes of settling the great
principle here involved, it is sufficient to present the facts in a single case,
aud then determine the principles applicable to, and the rule governing,
that case : all others similarly situated would be subject to the same rule.
The case I select for the discussion and determination o f the question, is
that o f the Alabama. The facts in that are undeniable and undenied.
They are in substance as follow s:
( l . ) This vessel, originally the gunboat “ 2901’ (and so called from the
number o f British merchants and other British subjects who contributed to
her fitting out !!), was being fitted out as a vessel o f war, in Liverpool, in
June, 1862.
(2.) Mr. A dams , the Minister o f the United States, on the 22d o f that
month addressed a note to Earl R ussell, expressly calling the attention of
the Government to the fa c t; and in the same note stated that the Oreto,
which was fitted out at the same port, and to which Earl R ussell’ s atten­
tion had been called on the 15th of February, 1862, had sailed from Liv­
erpool on the 22d o f March, and had gone directly to Nassau and was there
completing her armament, provisions and crew, f o r the purpose o f depreda­
ting on the commerce of the United States, notwithstanding it had been
averred by the B ritish officials at Liverpool that her destination was P a ­
lermo, and that B a ri R ussell had so staled to M r. A dams.
To show how explicit, direct, aud emphatic this note o f Mr. A dams’ was,
I give an extract from it.*

* “ This vessel has been built and launched from the dock-yard of persons, one o f
whom is now sitting as a member of the House of Commons, and is fitting out for
the especial and manifest purpose of carrying on hostilities at sea. It is about to be
commanded by one o f the insurgent agents, tlie same who sailed in the Oreto. The
parties engaged in the enterprise are persons well known at Liverpool to be agents
and officers o f the insurgents in the United States, the nature and extent of whose
labors are well explained in the copy o f an intercepted letter which I received from
my Government, and had the honor to place in your Lordship’s hands a few days
ago.”— (Diplom. Cor., 128.)




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Depredations o f Rebel Privateers Considered.

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(3.) Earl R ussell, on the 4tli day o f July, 1862, informed Mr. A dams
that there was no attempt on the part o f the builders to disguise the fact
that the vessel (the “ 290 ” ) was intended as a vessel o f war ; that they did
not deny that she had been built for a foreign Government ; bat that they
did not fe e l disposed to reply to any questions respecting her destination
after she left Liverpool.
(4.) On the 22d o f July, depositions* were sent to Earl R ussell, accom­
panied by the opinion of Mr. C ollier , a reputable English lawyer, that it
was the duty of the Government, on that evidence, to detain the vessel, and
that the Government o f the United States would have good grounds o f
complaint if she were allowed to escape.
(5.) On the 29th o f July, the vessel sailed, without register or clearance.
(6.) On the a 1st o f July, Earl R ussf. ll informed Mr. A dams that a de­
lay in determining on the case o f the “ 290 ” had been caused by the sud­
den sickness o f the Queen’s Advocate, incapacitating him for business ! ! !
that this had rendered it necessary to call in other parties, whose opinions
had at last been given for the detention o f the vessel; but before the order
arrived at Liverpool the vessel was gone.
(7.) On the 16th of October, 1862, Earl R ussell received further evi­
dence from Mr. A dams of the character o f this vessel and the business for
which she was intended. In reply to that information, and the accompa­
nying complaints o f Mr. A dams, Earl R ussell places his justification simply
on the ground that “ the foreig n enlistment act can be evaded by very
'subtle contrivances, but that Her Majesty cannot, on that account, go be­
yond the letter o f the existing laws.”
(8.) Having left Liverpool on the 29th o f July,'the vessel sailed to Terceira, in the Azores, and there anchored. She there received from the
British barque Agrippina, which had sailed fr o m the Thames, the greater
portion o f her guns and stores ; she soon after took on board, from the
British steamer, Bahama, which had cleared fr o m Liverpool on the 12th
o f August, the Rebel Captain S emmes, fifty more men, and additional
stores. S emmes hoisted the Rebel flag, named the vessel the Alabama,
and with a crew, the greater part of which belonged to the English Naval
Reserve, soon afterwards set out on his unhallowed mission.
(9.) All these facts were fully known to the British Government, almost
contemporaneously with their occurrence.
(10 .) Since her departure from Terceira, the Alabama has often cruised
for a week at a time, in the aggregate for months, in the British W est In­
dian waters; she has often been in British W est Indian p orts; she was for
six days at one time in the port o f Kingston, Jamaica. There has not
elapsed any one period ot forty-eight hours, since her departure from Ter-

* To show the character of the testimony furnished to Earl R ussell , I refer to one
il l ia m P assmore , who, in substance, swore that “ he
joined the vessel in L a ir d & Co.’s ship yard at Birkenhead, and remained on her sev
eral days ; that there came on board about thirty old men-of-war’s men, among whom
it was well known that she was going out as a privateer for the Confederate Govern­
ment, to act against the United States under a commission from J efferson D a v i s ;
that he had been shipped by Capt. B utcher to sail on the “ 290,” with the express
understanding that she wa3 going to fight for the Government o f , ’the Confederate
States.”
o f the depositions, that of W




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Liability o f the British Government f o r

[November,

ceira, when it was not in the power o f the British Government to seize and
take possession o f her. N o step for this purpose has ever been taken.
(11.) W ithin a few days after her departure from Terceira, she com ­
menced her depredations on our commerce, and during the thirteen months
o f her career as a privateer, she has destroyed numerous and valuable ves­
sels, with their cargoes, belonging to citizens o f the United States, and she
is still engaged in her infamous work ; all which facts are and were well
known to the Government o f Great Britain and to all the world.
The facts above stated, except those o f public notoriety, have been gath­
ered from official documents.
II.
It has already been stated, that the British Government, if liable at
all for the losses caused by these depredations, is thus liable only under the
Law o f Nations, and under that head o f that law which prescribes the du­
ties and liabilities o f neutrals.
The Law o f Nations is defined by an eminent writer on that subject'* to
be, “ the law which determines the rights and regulates the inter­
course o f independent States, in peace and in war ; is founded on custom
and implied contract; has sprung up from mutual consent, and is the writ­
ten law which the consent o f nations has established.”
B y this all civil­
ized nations are bound. This law is found in the works of various pub­
licists o f admitted authority, and in the decisions o f high tribunals here and
elsewhere. I shall refer to none that are'n ot universally accredited. The
duty o f neutral nations, as between belligerents in time o f war, is very
clearly stated.
W h e a t o n ,! ' n his “ Elements o f International Law,” (page 697, Ed. o f
1863), thus states the law :
“ The neutral is not at liberty to favor one party, to the detriment of the
oth er; it is his duty to be every way careful to do equal and exact justice
to both parties.
P h illim ore (Commentaries on International Law, vol. 3, p. 1 8 1 ,) says,
“ The relation o f neutrality consists in two principal things, (1.) entire ab­
stinence from any participation in the w ar; (2.) impartiality o f conduct to­
ward both belligerents. It is for the neutral perpetually to recollect, and
practically to carry out, the maxim 1that he is an enemy who does that
which pleases the enemyl ”
K ent (Commentaries, vol. 1, p. 113, 5th Ed.), whose authority is equal­
ly respected in Europe and America, says : “ A neutral is not to favor one
belligerent at the expense o f the other.”
It would be a work o f supererogation to accumulate authorities on this
point. All writers on the Law o f Nations concur in relation to the duties
o f neutrals. The rule, as stated above, is found in nearly the same words
in G rotius, Book 3, ch. 27 ; B yrkenhook , Book 1, ch. 9 ; V attf.i., Book
8, ch. 7 ; A zuni, Part II., ch. 1, art. 3. The rule, as thus laid down, will
not be questioned ; its spirit and substance being, that the neutral shall
not do, nor permit any within his jurisdiction to do, any act in behalf o f
one belligerent that would manifestly and naturally tend to the detriment
* 1. W ildman, Int. Law, p. 1.
f The British Solicitor General (Mr. L ayard), in a speech in the House o f Commons
on the 22(1 o f February, 1862, said that “ W heaton, as everybody knows, has written
one of the most valuable treatises on the subject o f international law that was ever
composed.”




1883.]

Depredations o f Rebel Privateers Considered..

337

o f the other, or any act which would enable one to do an injury to the oth­
er which he could not do were it not for the act o f the neutral; the con­
duct o f the neutral must be, not only in form but in reality and effect, ab­
solutely impartial. The rule is, not that the neutral may do acts favoring
the one, and, by way o f compensation, do similar acts in favor o f th e other,
which he (the neutral) may allege are o f equal benefit to the other, for of
this he cannot judge and is not authorized to judge. (V attel , Book 3,
ch. 7, 5, 10, 4.) H e must not do any act o f favor to either which may be
the means o f injuring the other ; and certainiy he cannot do an act o f favor
to the one and then, on the allegation o f equalization, do a similar act to
the other, when the relative circumstances and condition o f the two bellig­
erents are such that by no possibility can the act o f intended equaliza­
tion be o f equal benefit to the latter, or put it in his power to do an equal
detriment to the former.
Such being the rule, do the facts (as above set forth,) in the case o f the
Alabama, show its violation by Great Britain ?
III.
N o one will deny that the fitting out o f the Alabama, for the pur­
poses for which she was intended and to which she was immediately ap­
plied, was a direct and palpable act o f aid and benefit to the Rebel G ov­
ernment and o f equally direct and palpable detriment to the Government
and people o f the United States. It was a manifest and clear departure
from that “ impartiality,” as between the belligerents, which “ neutral”
Great Britain was “ bound to a d o p t i t was the doing that “ which was
well pleasing to the enemy
it was “ favoring one party to the detriment
o f the other.” This proposition would seem to be self-evident. But it is
pertinent to call to mind an undisputed fact, which gives an unwonted
degree o f aggravation to this “ unneutral ” act.
Had the Rebel G ov­
ernment been “ recognized ” as one o f the nations o f the earth ; had
it possessed even a single accessible port ; had they had a national
marine, even if quite insignificant; had they possessed the means and
appliances for building, equipping, supplying, and manning ships, the acts
now complained o f would have been comparatively innocuous, and, though
legally a breach o f neutrality, they would practically have been o f little
detriment. But what was the real stata o f things in the Rebel States ?
They were not “ recognized ” as a nation by a single government on earth ;
they had no port that was not so blockaded as to render it, to say the least,
useless ; they had no navy, not even a single vessel o f war or even o f com ­
m erce; they had no navy-yards for the construction o f such vessels; they
had no armaments for them, and no place for their manufacture ; they had
no sailors ; they had no national credit, for they had no national ^ame or
standing: in fine, they were in a mere “ embryo condition,” and wholly
and absolutely powerless for any offensive, or even defensive, purposes on
the ocean— they were utterly destitute o f all means or ability for ocean
warfare. This is an unexaggerated statement o f the real state o f things at
the time in question ; indeed, the total feebleness and helplessness o f the
Rebels, in the respects just mentioned, cannot be too strongly stated. It
was in this state o f things and under these circumstances, that they were
supplied in England and fr o m English ports with all the means and ap­
pliances, ships, armaments, men, stores, for commencing and carrying on a
ioar on the ocean against the United States and her citizens, and for per­
forming deeds o f practical piracy theretofore unknown in Christendom and
paralleled only by the acts o f the Barbary States in their day o f lawless
license. This was not adding to means already existing— it was creating




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Liability o f the British Government 'for

[November,

the means ab origine ; it was literally bringing into existence a power that
before did not exist.
It is not pretended that any vessel o f war was ever fitted out in, and dis­
patched from, England for the benefit o f the United States; but had such
been the fact, it is already seen that by the Law o f Nations no such act
could take from the acts above stated, in relation to the Alabama, their
unneutral character. Had such assistance been offered to the United States,
and did international law allow a “ neutral” to aid one belligerent and then
compensate for it by equivalent aid to the other, no such equivalent could
by possibility exist in this case ; any such aid would, at the most, have
been but an inappreciable addition to our existing means : thus, even then,
there would have been a most palpable and injurious violation o f neutral
duty. The only possible argument which Great Britain, in that event, could
have urged would have been, that by the acceptance o f such aid, unimpor­
tant as it may have been, the United States must be deemed to have waived
their right to insist on indemnity for such violation by Great Britain. The
circumstances (had such an event occurred) may or may not have been
such as to render that argument available.
I have thus briefly adverted to this particular matter, simply because it
has been repeatedly asserted in England that as much aid has been afford­
ed to the United States as to the Rebels. The fallacy o f such an assertion,
as an excuse or justification for England, is manifest.
IV . If, for the moment, it should be conceded that Great Britain could
not be liable for the fitting out and dispatch o f this privateer, unless her
Government had, preliminarily to her departure, knowledge or reasonable
notice o f her objects and intentions, what unprejudiced mind can resist the
conclusion, that the facts above stated show full and adequate notice, if not
actual knowledge ? It is to be observed, that on this great national ques­
tion, to be judged o f as it is, by the rules and principles o f that overshad­
owing Law, which governs not one nation but all, and which is above all
municipal law, the technical and narrow rules applicable to local, territorial
law, have no place. As was truly and emphatically said by the Supreme
Court o f the United States, in its judgment in a case involving great na­
tional questions, (The Hiawatha, March, 1863,) “ the objections taken here
m ight have had weight on the trial of an indictment in a criminal case ;
but precedents from such sources cannot be received as authoritative in a
tribunal administering public and national law."
W ithout repeating the evidence presented to Earl R ussell in the case'of
the Alabama, as stated above, it is with entire confidence submitted, that it
was superabundant to justify and require her arrest and detention, on the
ground o f full notice and knowledge on his part. Had the case been in a
criminal court in England or America, any impartial Grand Jury in either
country could not, on that evidence, have hesitated to find an indictment,
so far as the point just mentioned is concerned.
V . It is not a little surprising that Earl R ussell, in a letter to Mr. A d ­
ams , o f October 16th, 1862, assumes, and the
Solicitor-General, in the
House o f Commons, on the 22d day o f February, 1862, asserts, that the
only law which enables the British Government to interfere in such cases is
“ The Foreign Enlistment Act.” If, indeed, the acts, or the evidently in­
tended acts, in the case o f the Alabama, were a violation of the Law o f
Nations, and were to be judged o f by tbatx law, then it may truly be said
that there is and can be no nation in Christendom in whose Government




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Depredations o f Rebel Privateers Considered.

339

does not inhere the power and the duty, irrespective o f its municipal law,
o f preventing and punishing such violation. Such power exists ex necessi­
tate rei and springs from, and is involved in, the great law o f nations, as o f
individuals the law o f self-preservation. The distinguished statesman and
the eminent lawyer, who uttered the sentiment just mentioned, must have
done so without deliberation ; for it is impossible to believe that the peace
o f Great Britain and the highest interests o f humanity can be made to de­
pend on the question, whether means to provide against or prevent a viola­
tion by her o f the Law o f Nations depends on the existence or non-exist­
ence o f a statute o f the realm applicable to the case ! As on the one hand,
we have no right to complain o f the non-execution o f a municipal law o f
that country, so, on the other, she cannot excuse herself for a violation of
her duties, as a member o f the family of nations, on the ground that she
has no law on her statute-book affording the appropriate remedy. The
only practical benefit of the statute referred to, in regard to the present
question, is, as already stated, that it is an emphatic assertion by her legis­
lature o f the duties devolved on her by the Law o f Nations. But even if
our rights or her liabilities depended on that statute, it would be an easy
task to show that the case of the Alabama came within its spirit and intent,
if not within its very letter ; but a discussion o f that proposition would be
idle, for the reasons just given. B u rlam aqu i , in his Treatise on Natural
Law, states the rule truly when he says, “ It is presumed that a Sovereign
knows what his subjects openly commit, and his power o f hindering the evil
is likewise always presumed.'”
V I.
Hypothetical cases do not always subserve a useful purpose in ar­
gument, but in this instance a case may be supposed which must, it would
seem, carry conviction to every British mind.
The present rebellion against the Government of the United States is an
effort to dismember the Republic o f the United States ; a similar rebellion
in Ireland against the Government of Great Britain would be an effort to
dismember the Empire of Great Britain : thus, the object (and the end if
successful) o f the two rebellions would be identical. The relative position
o f the Rebel States to the United States and of Ireland to Great Britain are
the same, each is part and parcel of the nation to which it b lo n g s ; the
position o f those States and o f Ireland is, in every “ material” respect, the
sa m e; each of them, compared with the nation o f which it is a part, is
equally- inferior in population, naval and inilit iry power, armaments, and
pecuniary resources; in the incipient period o f her supposed rebellion, Ire­
land would, at the most, be “ recognized ” only as a “ belligerent,” and
thus they would each be alike in having no “ national character.” Ireland
would have no navy, and no available ports (as doubtless they would be
blockaded as are the rebel ports), and so, in these respects, again there
would be a precise similarity; in the case o f the Irish rebellion, we should
have the same right to acknowledge her as a “ belligerent,” and to proclaim
our “ neutrality,” as Great Britain had in reference to the Rebel States.
Suppose, then, this Irish rebellion, under circumstances relatively to Great
Britain so precisely similar to those o f the Rebel States relatively to the
United States, and then suppose that privateers were fitted out and des­
patched from the port o f New York under eommi-sion from the Irish Rebel
Government, manned, provisioned, and armed in New York— suppose that
those Irish rebel privateers should burn and destroy hundreds of British
vessels and their cargoes to the value o f millions o f pounds sterling, what




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Liability o f the British Government f o r

[November,

would all England, from the queen on the throne to the pauper in the workhouse, with one voice exclaim ? W e need not say. W e know that our
language can hardly furnish words in which the indignation (and just it
would be,) o f that people would, in such case be expressed. Y et the ex­
isting case and the supposed case admit not of the slightest essential dis­
tinction. W h o can doubt that, in the supposed case, Great Britain would
months ago have resorted to reprisals, if not to war ?
V II.
In a matter o f this momentous import we can have no better guide
than the repeated and deliberate precedents o f the two Governments. To
begin with that o f the United States.
That there should have been, as there was, in this country in the latter
part o f the last century, immediately after the close o f the W a r o f Inde­
pendence, an almost universal feeling o f grateful affection for France, was
perfectly natural. Notwithstanding the. state o f the public mind, our dutie
as neutrals, (as between France and Great Britain,) springing entirely frort
the Law o f N ations and without any statute on our part, were performed (it
may well be said, under the circumstances,) in a spirit of lofty devotion to
law and duty.
In 1793, President W ashington instructed the proper
officers to prosecute all persons who should violate the Law o f Nations in
respect to France and England.* Immediately after this the British min­
ister expressed his belief that a vessel— the “ Little Sarah ” — was fitting out
as a French privateer. Proceedings were immediately taken for her seizure,
and her armament being found to be such as might be used for a privateer,
she was prevented fr o m sailing. Similar proceedings, on similar grounds,
were taken against the “ Republican.” She was seized and detained, and,
with the persons engaged in fitting her out, was delivered over to the proper
tribunals.)
Numerous other cases o f a similar kind occurred about that period. Mr.
C anning , in a speech in Parliament in 1819, commended in the highest
terms the conduct o f our country at a time when universal popular senti­
ment rendered it so difficult to observe the obligations o f neutrality.!
A t the time o f the war between Spain and her revolted colonies in South
America, great as naturally was our sympathy with the latter, numerous
vessels which were fitted out in New Orleans and its vicinity, with the sus­
pected object o f acting as privateers against Spain, were seized and detained,
and the parties prosecuted and punished, as will be seen by reference to
the history o f that period, in that valuable work “ N iles' Register
During the war between the German Confederation and Denmark (1848),
a war steamer was purchased in New York by the former ; her sailing was
objected to by the latter on account o f that w ar; she was detained for some
time, and was not permitted to sail till a satisfactory bond was given that
she should not be used against Denmark.
This case is fully stated in the
Congressional Documents o f the 1st session of thirty-first Congress.
In the Canadian rebellion o f 1838, it is a matter o f public history that
preventive measures o f the most efficient kind wore adopted by our Gov­
ernment to maintain, in spirit and practical effect, our relations o f amity
with Great Britain. A reference to particular instances would unnecessarily
extend this paper; the official records o f both countries abound in proofs
on the subject.
That rebellion was regarded by Great Britain very much
as this is by the United States.
* American State Papers. Yol. 1, p. 140.
f Works J efferson. Vol. 3, p. 386.




| 4 Canning’ s Speeches, p. 152.

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Depredations o f Rebel Privateers Considered.

341

During the Crimean war in 1856, the “ Maury,” a vessel belonging to a
citizen o f the United States, was loading in the port o f New York ; on an
affidavit o f a very imperfect character, furnished by the British consul on
his allegation o f suspicion, that she was to be used as a Russian privateer,
she was seised and detained, and her cargo carefully examined.
She
was released, the consul being fully satisfied o f the groundlessness of his
suspicions, and he publicly apologised for his conduct. This vessel was be­
ing fitted out by a merchant (Mr. L ow ,) o f unquestioned standing and in­
tegrity, and whose antecedents were without reproach, whereas, the Ala­
bama was being prepared for sea by parties who had ju s t before been guilty
o f gross falsehood and fraud on the British Government in dispatching the
Oreto.
In every one o f the above instances this Government did precisely what
was requested o f the British Government by our minister in the case o f the
Alabama— namely, it applied the requisite preventive m eans; in no case
was the testimony more persuasive than that presented in the case o f the
Alabama.
Great Britain furnishes her share o f precedents.
It is a well known historical fact, that the aid furnished by the subjects
o f France (not by its Government) to the United States during the war o f
the Revolution, in the way o f fitting out and dispatching vessels and the
like, was the ground of a declaration o f war by Great Britain against
France. The cases are in all respects precisely parallel, in view o f the light
in which the colonies were regarded by Great Britain. That was aid fur­
nished to “ revolted colonies” — this is aid furnished to “ revolted States;”
those “ colonies ” were weak and powerless on the ocean— these “ States ”
are equally s o ; that aid was vital to the “ colonies ” — this is so to the
“ rebel States.” It was the violation o f her duties as a “ neutral ” o f which
Great Britain complained (and justly) of France; it is the violation o f her
duties as a neutral o f which we now (and equally justly) complain o f Great
Britain. There is indeed a difference between the ends sought to be at­
tained in the two cases. The “ colonies ” were struggling to erect a beau­
tiful temple o f civil liberty— the “ rebel States” are striving to destroy that
very temple.
In 1828, Donna M aria was the reconized sovereign o f Portugal. Don
M iguel , her uncle, headed a rebellion against the Government and caused
himself to be declared kiug, and succeeded in getting possession o f a con
siderable part o f the kingdom. Application was made to the British G ov­
ernment to aid the queen— her uncle being a usurper, as was alleged. That
Government refused to interfere, as it was a domestic quarrel in Portugal.
Terceira, one o f the Azores and part o f the dominions o f Portugal, was
then in possession o f the queen. Some Portuguese subjects came to Eng­
land ; it was suspected that they came to tit out an expedition against Don
M iguel . The Government, deeming that this would be a breach o f neu­
trality, forbade it, and the representative o f the queen was notified Riat no
such enterprise could be carried on in England. H e stated that the vessels,
which were fitting out, were going to Brazil. Four vessels, with several
hundred unarmed men on board, sailed from the port o f Plymouth. The
Government suspected that the vessels were going to Terceira and sent a
fleet to watch them and prevent a landing.. The four vessels arrived ofi
Terceira ; they were fired at by the English commodore and stopped. This
matter came up in Parliament, and the Government was sustained on the




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Liability o f the British Government f o r

[November,

ground that the armament was fitted out in a British p o r t; that having
been equipped under the pretence o f going to Brazil it was not stopped be­
fore sailing ; and that the Government was therefore bound by the duty o f
neutrality to prevent by force an armament so equipped from disembarking
even in the dominions o f the Portuguese queen. This case is fully stated
in the third volume of P h i l l i m o r e .
Similar instances on the part o f the United States and o f Great Britain
might be adduced, but the above are sufficient for the present purpose.
V III. It has already been shown, satisfactorily, I trust, that the British
Government, prior to the sailing o f the Alabama, had adequate information
o f her character and o f the object to which she was destined— information
on which any prudent man would have acted in the ordinary affairs of life.
But, even if the British Government had not such nor any notice, still, ac­
cording to the well established rules of national law, that Government is
liable to answer for the unlawful and anti-neutral acts o f her subjects and
of all within her jurisdiction.
From the very necessity o f the case, every nation must be presumed to
have the power to regulate and control the conduct o f all within its terri­
torial jurisdiction, and to prevent a violation o f its obligations as a neutral
and o f any o f its obligations as a member o f the family o f nations. W ith ­
out such rule there would be no safety in international intercourse. Accord­
ingly the Law o f Nations declares that a nation is responsible for acts of hos­
tility on the part o f its subjects towards another nation whose relations with
the former are those o f peace and am ity; and this, necessarily irrespective
o f the question, whether the nation o f which the offending parties are sub­
jects bad or had not knowledge o f the subjects’ acts at the time o f their
occurrence. All accredited writers on international law, English, American,
and Continental, declare this rule, as will be seen by reference to P hillimore ,
K ent, G rotius, P uffendorf , W heaton , and V attel, in their chapters on
the duties o f neutrals. It follows that, if in truth the fitting out o f the Ala­
bama and her departure from an English port were a violation o f British
neutrality, that Government is liable for the consequences o f the unneutral
act, whether done with or without her knowledge.
IX . I f that Government had not notice and knowledge o f the facts prior
to the departure o f the Alabama from the English port on her hostile mis­
sion, and if that ignorance was then an excuse, a brief period only elapsed
before Great Britain and all the world had conclusive evidence o f her cha­
racter, o f the intention in fitting her out, o f the object to which she was
destined, and o f the cruel and barbarous manner in which that object was
being carried out. In a very short space o f time after her departure from
Liverpool, the capture and contemporaneous burning and destruction by her
o f numerous American vessels and their cargoes was a fact o f world-wide
notoriety. The horrors o f those scenes o f vandalism need not be described.
In the investigation o f so grave a matter as the present, no appeal should
be m ^le to imagination or to passion.
Assuming, then, even the absence o f all knowledge on the part o f the
British Government, and o f all notice prior to the departure ot the vessel
from an English port, and assuming— what is not denied— her notorious
acts so soon afterwards, it was the clear duty o f Great Britain to dispatch
a vessel or vessels o f war to .seize the Alabama and arrest her career. The
possession o f adequate means for that purpose by that Government will not
be disputed, and the abundant opportunity to render those means available




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Depredations o f Rebel Privateers Considered.

343

is equally undeniable.
In a very few days that Government coaid have
terminated the inhuman work o f that vessel, and saved millions of the prop­
erty o f citizens o f the United States from the torch.
'Flint her opportunities were manifold, even in her own ports, will not be
disputed, for to those very ports this privateer resorted, and, instead o f being
seized and detained, was received with favor and aided in many ways. The
very fact just mentioned o f her friendly reception in the colonial ports o f
Great Britain, after her repeated and universally known acts o f destruction
o f the property o f our citizens, was in itself a flagrant violation o f British
neutrality. Her resort to and reception in those ports were in every legal
and practical sense identical with a resort to and similar reception at the
port of Plymouth or of L iverpool; and, under the circumstances mentioned,
it would require but a superficial acquaintance with national law to deter­
mine that such a reception would be a grossly anti-neutral act.
But to return to the question o f the course which Great Britain was
bound by the Law o f Nations to have adopted, after full knowledge o f the
course pursued by the Alabama, immediately subsequently to her departure
for Liverpool.
I The law on this subject was fully discussed, and the duty o f Great
Britain dearly shown, in the argument in Parliament (as reported in the
Britbli Annual Register for 1829,) in the Portuguese (Terceira) case above
n <ntioned.
It was then deliberately held to be the duty o f that Governm ni, under the law o f nations to take the steps it then took. Such was
then, as it was in the present case, the manifest duty o f Great Britain, as a
member o f the family o f nations. The two cases differ in no essential par­
ticular.
Such indeed must from the necessity and nature o f the case be
the mle o f the Law o f Nations, for otherwise the duty o f the neutral might
be wholly unperformed.
Her duty in this case, was to prevent the depart­
ure o f the vessel from her ports. She omitted to perform that duty, and
thus flagrantly violated neutrality. It was then, on every principle o f jus­
tice, of reason and common sense as well as o f national law, her duty to
make all amends in her power for that violation.
The effective and easy
mode o f performing that duty and o f exercising a real and an honest neu­
trality, was “ fresh pursuit” and capture o f the offender.
The “ Foreign
Enlistment Act,” indeed, did not apply to this aspect o f the case ; but her
duties and responsibilities arise from the “ higher law.”
So she insisted,
and so we admitted, in the well known case of M c L eod, during the Cana­
dian rebellion. The difficulty arose in that case from the complex character
of our Government— the conflicting jurisdictional claims o f a “ State” and
of the “ United States,” and the inability, under our constitution, o f the
“ United States” judicial tribunals to interfere in limine and provisionally
with those o f a “ State.” This condition o f things led to a long and exciting
correspondence between the two Governments; but in the course of it, it
was on both sides conceded, that inasmuch as the “ United States” — not a
single “ State ” — was alone known among nations, on them rested all the
r^ponsibility o f conducting foreign affairs, and that their want of power,
arising from the cause just stated, in no manner justified or excused an act
done in or by a “ State ” or its citizens in violation o f the Law o f Nations ;
that any nation recognized by others as a nation must be held to possess
power requisite to punish infringements on the rights o f other nations. The
whole history o f this case will be found in the 5th volume of H ill ’ s Repoits o f Cases in the Supreme Court o f New York, and also in the 2d,




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Liability o f the British Government f o r

[November,

5th, 6th, and 7th volumes o f Mr. W ebster’ s W orks. It is scarcely neces­
sary to accumulate authorities in support o f this proposition. The common
reason of mankind declares, as do all writers on the subject, that such is and
must be the rule o f international law. This brief repetition o f this princi­
ple, which I have already once stated, may be excused on the ground o f
the extraordinary position taken, as above mentioned, by Earl R ussel and
Solicitor-General L ayard .
X.
W e must be careful not to confound the present case with that o f
the subjects or citizens o f a neutral state holding ordinary commercial
intercourse with one o f the belligerents and dealing com m ercially with
that belligerent. It is on all hands.adm itted, that the subject o f a neu­
tral may have transactions, on their fa c e and in intent commercial, with
a belligerent; he may buy and sell without a national violation o f neu­
trality, but at the risk o f the capture and consequent loss o f his property,
as many British subjects have learned at the expense o f their financial ruin ;
but never, in the history o f Great Britain or o f the United States, or o f
any other civilized people for the last one hundred years, has it been
doubted that the fitting out and dispatch, from the ports o f a neutral
nation, o f vessels o f war intended to com m it acts o f hostility on one o f
the belligerents, was a palpable violation o f the duty o f the neutral and
a clear infraction o f the Law o f Nations.
The doctrine above stated is
fully sustained by. the judgm ent o f the Supreme Court o f the United
States, in the case o f The United States v. Quincy, 6 Peters’ Reports, 445,
and in the case o f the Gran Para, 7 W heaton Reports, 471.
The deci­
sions o f that court on questions o f national law, especially in the time o f
M arshall , are o f high authority every where. Indeed, these cases only
re-aftirm the law as stated by all writers on the subject. It could, o f
course, make no difference in principle whether the vessel was dispatched,
after being partly or wholly fitted out, from a port o f a neutral, or whether
it was dispatched from one port and fitted out in whole or in part in
another port o f the same neutral. The latter has been the actual fact in
reference to some, if not all, the rebel privateers sent from England. N or
would the rule be different if the vessel intended for hostile purposes was
dispatched from the neutral port and then fitted out partly or wholly
even in the port o f another nation.
Most emphatically would the rule
apply in the present case, where the party aided was utterly weak and
helpless as a naval power, and could have committed no act o f hostility
whatever on the ocean, except through the aid thus furnished by the
neutral.
The case o f the Alexandria was tried a few weeks since in an English
court. The judge who presided on the trial instructed the jury “ that a
neutral had a right to supply ships to one o f the belligerents,” and after
that instruction, added, by way o f salvo, “ that if the ju ry thought the
object was to furnish, fit out, equip, and arm the vessel at Liverpool, that
was a different m atter; but if they thought the object was to build a sfiip
in obedience to an order in compliance with a contract, leaving those \*io
bought it to use it as they saw fit, it was not, in his judgment, a breach
o f the Foreign Enlistment A ct, or o f international law.” In other words,
if the jury were satisfied that it was built for a rebel owner and with the
intent to use it as a rebel privateer, it was no violation o f any law— that
is, it was not such a violation if he (the rebel or his agent) had made a
contract for the building and it was built pursuant to his order ; that then




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Depredations o f Rebel Privateers Considered.

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it could be lawfully delivered to him, though the whole world knew that
“ the use he saw fit to put it to ” was that o f a privateer to depredate on
the com m erce o f a friendly nation. It is no wonder that under such an
instruction, a Liverpool jury found ‘‘ in favor o f the ship and her builders.”
That case, on the evidence, presented a clear violation o f the Law of
Nations, as shown by the authorities and precedents above mentioned,
and it is referred to chiefly for the purpose o f stating another rule o f the
Law o f Nations, namely, that it is no protection or justification to any na­
tion, when its violation o f neutral duties is complained of, that its own
tribunals have decided in its favor. N o proposition can be clearer than
that the Law o f Nations is^superior to and overrides all municipal law,
whether in the form o f statutes or o f the judgm ents o f courts.
X I.
Many more references to elementary writers and to adjudged cases
on the Law o f Nations might be m ade; but sufficient authority, it is b e ­
lieved, has already been adduced and its applicability sufficiently shown,
to satisfy intelligent and impartial minds that Great Britain, in the case
o f the Alabama, has violated her obligations o f neutrality to the United
States. This point being established, it will not be disputed that tli8 Law
o f Nations imposes on her the consequent duty o f reparation. That repa­
ration can be made only by the payment o f the pecuniary losses sustained
by our citizens in consequence o f that violation o f neutrality.
It is the duty o f the Government o f the United States to its injured
citizens to present to the Government o f Great Britain their claims duly
authenticated. Much, if not most, o f the .evidence to establish the cir­
cumstances under which the Alabama was dispatched from England (and
thus to show in that act the alleged violation o f neutrality,) has already
been presented to the British Government. The subsequent conduct o f
that vessel on the ocean is a matter known to a ll; her frequent visits to
British ports and the succor she has there received are facts equally well
k n ow n ; the entire omission of that Government to prevent her original
departure, or to arrest her at her colonial ports, or to pursue her at all,
is admitted. If to all this is added satisfactory evidence, in each individ­
ual instance, o f the loss sustained, the case is fully prepared for presenta­
tion to the British Government and for a contemporaneous application for
indemnity.
The people o f England will then have the opportunity o f
demonstrating to the world that they are, as they have with honorable
pride always claimed to be, a law-loving and a law-abiding p e o p le ; they
will be able practically to illustrate the great precept o f that Christian
faith, which they and we profess: “ A s ye would that men should do unto
you, do ye also to them likewise.”
It is not to be presumed that, on a proper and respectful presentation
o f the case, that Government will falter in the performance o f its duty.
Should such unfortunately be the result, and, should indemnity be refused,
an amicable (and not an unusual) m ode o f adjusting the controversy
would be its submission to the arbitrament o f an impartial and mutually
friendly nation. The United States may decline making such a proposal
on the ground (often taken in private life), that the case is too clear for
submission. I f made, Great Britain may decline it. In that event, and
in the event o f continued refusal to make compensation, the Law o f N a ­
tions points out very clearly the remedy, which our Government would
have the right to' adopt, namely, the issuing o f letters o f marque and re­
prisal, or a declaration o f war. The question o f the actual adoption o f
VOL. x l ix .— n o , v.
23




346

Liability o f the British Government 'for

[November,

any remedy would be considered by our Government with all the delibe­
ration and conscientiousness which its magnitude.requires^
X II.
It cannot be doubted that the acts o f the British Government and
o f many British subjects, since the inauguration o f the rebellion, have
been universally regarded here as, to say the least, exceedingly unfriendly.
It was very naturally supposed that the ties o f a com m on origin, a com ­
m on language, and a common religion bound England and the United
States together in the bonds o f an indissoluble friendship,, and when our
nationality was attacked and our Republic sought to be dismembered and
overthrown, as it was by this rebellion, it was a pervading belief in this
country that we should have at least the sympathy and kind feeling o f
England. H er “ m aterial” aid we never required, and it will never be
solicited. >But greatly have we been disappointed that we have not had
that sympathy and kindness. On the contrary, no man whether friend
or foe o f the States in rebellion can for a moment doubt that without the
countenance given to those States by the Government o f Great Britain,
and the aid furnished to them by her subjects, the rebellion would long
since have tottered to its fall— a shocking waste o f valuable life and an
enormous expenditure o f material means would have been prevented.
Indeed, Great Britain’s recognition o f those States as “ belligerents,” and
her concom itant proclamation o f neutrality, to say nothing o f any subse­
quent acts o f that Government or her people, may with exact truth be
said to have been an indispensable ingredient in the v i t a l i t y o f those
States, without which they would have had an inglorious existence o f but
a few brief months, and then have sunk forever into a dishonored grave.
W hatever may be thought o f the merits or demerits o f slavery, it can­
not be denied that this country has been greatly astonished at the in con ­
sistency and insincerity o f the British Government and many o f the p eo­
ple o f England,* in giving their sympathy, countenance, and (as shown
* The nobility of England, as a class, have decidedly sympathized with and favored
the rebellion. It may be well for those gentlemen to consider whether there is any
truth in the sentiment expressed in a late number of the London Review, that any
one who knew what lies beneath the surface o f European society must be aware that
the spirit of republican liberty is a snake that has been scotched—not killed. In­
deed, no man can doubt that the “ leaven” of the American and the French Revolu­
tions is continually and powerfully, though silently, “ working.”
It would be well
for them also to consider how long, in the present day of intelligent and independent
thought, a system wholly artificial and unnatural, by the fundamental rules of which
the mere accident o f birth, irrespective wholly of mental or o f moral merit, places
forever the few in an exalted social and (so far as an important legislative power is
concerned) political position, and equally places forever the many in a position o f in­
feriority and comparative degradation— they may well, I say, consider how long such
a system is likely to endure. Especially should they so consider, when a large and
influential part o f the “ Home ” Empire of Great Britain is ready for revolt at any
moment, and when multitudes of the people, even of England herself, are restive un­
der the oppressive burden of taxation and those iron rules of social and political ex­
clusiveness. The voice of friendship might well warn those gentlemen to beware
how they lend their aid and countenance and sympathy to an unspeakably wicked
attempt to destroy the only Government on earth (with one or two trifling exceptions,)
where the “ people ” are in form and in fact sovereign—a Government which has had




1863.]

Depredations o f Rebel Privateers Considered.

347

above) their efficient aid to a combination o f persons associated for the
purpose o f establishing a government whose “ corner-stone” is “ slavery,”
as they uniformly declare, and as was distinctly stated on a grave public
occasion by their favorite chief, A lexander H . S tephens .
W h en it is remembered that, ever since the final triumph o f W il b e r f o r c e in 1833,* that Government and the people o f England, individu­
ally and collectively, have been in everyjmssible manner the advocates o f
“ slavery abolition,” and have in fact effected that abolition in nearly the
whole world, excepting in the American States now in revolt against their
country and their Government, it is not unnatural that this astonishment
(if no stronger feeling) should universally prevail. W e entertain it in
com m on with all Continental Europe,] and (happily it can be said,) with
thousands o f England’s worthiest subjects.
I speak not now o f slavery
or anti-slavery— that matter is wholly foreign to this discussion— but
merely o f the surprising and melancholy exhibition England has made in
this regard to the world. The whole American people have been accus­
tomed to look on the Queen o f England with a feeling bordering on af­
fection ; they fully believe in her humane and Christian character, and, so
believing, they doubt not that she will hereafter regret in earnest bitter­

and still has the enthusiastic admiration of multitudes o f poets, orators, statesmen,
and heroes in every country in the civilized world, and which has at this moment
millions of friends, nay, “ lovers,” in England, Scotland, Ireland, and on the Continent.
The American people are not propagandists— they desire not that any other people
should adopt their form of Government— but they themselves adhere to it with a
death-like tenacity. In the event of a war with England, arising from or necessita­
ted by an inimical and unjust interference on her part in any manner in our domestic
affairs, the whole people of the United States would rush as one man, and with an
universal, intense, and, it may with truth be said, a furious enthusiasm to defend the
hallowed flag of their country against f o r e i g n insult or attack. No “ conscription ”
laws would then be necessary— every citizen would be of his own accord a soldier.
In that event, though great would be the calamity to us, we believe, nay, we know,
that our Republic would come out of the contest (as it will out o f this rebellion,)
“ purified as it were by fire,” and fixed “ on foundations that cannot be shaken.”
Whereas, it would not be the strangest of historical events that such a contest, in
connection with her domestic condition, should result in anything but an addition of
strength and power to the British monarchy.
* Thirty years ago, W ilb e r fo r c e said, “ Thank God that I should have lived to
witness a day in which England is willing to give twenty millions sterling for "the
abolition o f slavery? Such was then and such has ever since been (until this rebel­
lion) the professed sentiment of England and her people.
f In view o f all this, the distinguished Frenchman E m ille de G irarbin has re­
cently said, with equal wit and truth, that “ England is a mistake.”
Another equally eminent Frenchman, D e GAsrAaix, in his “ Uprising of a Great
People,” and his “ America before Europe,” has administered to England some of the
most telling rebukes to be found in any language. The Government of that country
could not make a more beneficent expenditure of money than to gratuitously circu­
late tens of thousands of copies of these works among her people.




348

Liability o f the British Government for

[November,

ness that she yielded to the counsels o f her ministers in the issuing the
proclamation o f “ recognition ” and o f “ neutrality,” whose direct knd
undoubted effect has been to prolong this revolting civil war and to add
ten, nay, an hundred, fold to its horrors.
But these matters do not affect the question under consideration, and
they are alluded to only for the purpose o f showing that we have much
cause o f complaint, which, though not a violation o f the Law o f Nations
and not entitling us to reclamation, would naturally render us more tena­
cious in requiring o f Great Britain the performance o f her neutral duties,
and, in the event o f their violation, in asking the indemnity provided by
that Law.
It is perhaps needless to add that the principles and reasonings appli­
cable to the case o f the Alabam a apply alike to all the cases o f rebel
privateers fitted out at and dispatched from any British port, or dispatch­
ed from one British port and fitted out partially or wholly at another or
elsewhere.*
I have endeavored to discuss this question simply on its legal merits,
and without appeals to passion or prejudice. M y object was merely to
demonstrate that the law o f nations entitles us to indemnity. The ear­
nest hope is cherished by every Am erican citizen that a satisfactory ad­
justment o f our claims on this occasion will be m ade; that thereby much
o f the acerbity o f feeling now existing would disappear, and that the
peace o f these two nations would, not only in form but in reality, be con ­
tinued and perpetuated.
N ew Y ork , October 16, 1863.

* I subjoin, by way of appendix to this paper, a list o f our vessels captured by rebel
privateers, prepared by Capt. J. H. Ur-ros, Secretary of the “ American Shipmasters’
Association,” for which be deserves the thanks of his countrymen. The sight of such
a list must cause a thrill of horiov in every American heart, indeed, in every heart,
not lost to all sentiments of honor, humanity, and civilization. I say this, because of
the enormity, in a moral and practical point of view, of the acts of these privateers;
they are in every practical sense worse than piratical. To say nothing of the infa­
mous means so often adopted to lure their victims to destruction, they war solely on
individuals, without even a pretence that their acts in any degree injure the “ United
States ” as a people, or benefit the “ Rebel Confederacy ” as such; and, what is more,
the privateersmen themselves individually are in no manner beneflttcd, for the vessels
and cargoes taken are, contemporaneously with their capture, consigned to the flames.
Thus they have not even the apology of professed “ pirates.” Their work, conse­
quently, is a work of purely wanton destruction, unmitigated in its barbarism, and
must of necessity shock every one whose moral sense has not ceased to be a living
power.




(APPENDIX.)

A L P H A B E T I C A L L I S T OF V E S S E L S C A P T U R E D B Y R E B E L P R I V A T E E R S .
Reported up to October ls (, 1363, with Nam e o f M aster, P o r t o f Clearance, D estination, D ate, P lace o f Capture and Tonnage.

Vessels.

•

Master.

"Where from .

W h ere to.

D ate.

Captured by.

Tons.




349

Steamer Alabama, off the Flores.
200
Admiral Blake,schr ...................................................................................................1862 . . .
Albert Adams, brig. . . .Cousins.................C u b a ................... New Y o r k .......... July 3, 1861 . .Steamer Sumter............................
192
A B. Thompson, ship. . . J. M.S m all.. . . . Savannah . . . . . .New Y o r k ............1861.................Off Port Royal, S. C ......................
800
391
Alert, b a r k ................Church.........................New London.. . .Hurd’s Island.’. .1862.................Steamer Alabama, off theFlores
Altamaha, brig................................................Sippican............. Atlantic Ocean.. 1862..................
“
“
“
“
300
Aldebaran, s c h r .............H an d ......................New Y o r k .......... Maranham.........March, 1863 ..Steam er Florida........................................................
187
Alleghanian, ship............ Barstow..................Baltimore.............London................1862..................Destroyed by Rebels off the Rappahannock.. . . 1,142
Arcade, schr.................... Smith...................... Portland............. G-uadaloupe . . . .January, 1861.Steamer Sumter........................................................ 200
Ariel, steamer................. Jones...................... New Y o r k ......... Aspinwall........... Dec., 1 8 6 2 ... .Steamer Alabama........................................................1,295
Alvarado, bark .............................................. Capetown........... Boston...................June, 1 8 6 1 ... .Steamer Sumter. ................................................... 299
AlfredH. Partridge, schr................................. Gloucester...........Fishing on Banks.June 7, 1863. .Privateer Tacony....................................................... 200
“
“
...................................................... 200
Ada, schr.......................................................... Gloucester...........Fishing on Banks June 23, 1863.
Arabella, brig................. Conover ................Gloucester........... Fishing on Banks.June 7, 1863..
“
........ .............................................
800
Archer, s c h r . .............................................. Gloucester...........Fishing on Banks.June 12, 1863.
“
“
...................................................... 200
Amazonian, barb.............Lorland..................New Y o r k ..........Montevideo.___ June 2, 1863'. .Alabama, lat. 11.15, Ion. 34.30............................... 481
Anglo Saxon, s h ip .........Caverly..................Liverpool.............New Y o r k ........................................................................................................................... 868
Alliance, sch r...................................................Philadelphia ...P o r t R oy a l.................................... Off Rio, (bonded)..........................
190
Anna F. Schmidt, ship....................................St. T h o m a s .... San Francisco.................................Alabama, off Rio, (bon d ed )................................... 784
Atlanta, sh ip .. . . .........Merrill....................Montevideo......... Chincha Islands.............................
“
................................................................. 699
Benj. Dunning, brig........ Farney................................................................................. July 3, 1861 ..Steam er Sumter....................................................... 284
B. F. Martin, brig...........French..................... Philadelphia____Havana............... June 16,1861.
“
“
...................................................... 293
Benj. Tucker, ship...........Childs...................... New Bedford... .W h aling............. 1862.................. Steamer Alabama, off the.Flores........................
800
Brilliant, ship.. .............George H agar.. . .New Y ork .. . . ; .L iv erpool........... October 3, 1862
“
“
lat. 40, Ion. 50.30...................... 839
Betsy Ames^brig .......................................... ............................................................. 1863..................
“
“
.................................................... 265
Bethial Thayer, sh ip .. . .Pendleton............. C allao..................N antes................1862..................
“
“
.................................................... 896

Depredations o f Rebel Privateers Considered.

[PR E PA R E D B Y CAPT. I. H. UPTON , SECRETARY AM ER. SHIPMASTERS 1 ASSOCIATION, FOR H UN T'S MERCHANTS 1 M A G A ZIN E .]

Master.

W herefrom .

W h ereto.

Date.

Captured by

[November,

267
100
800
1,387
299
199
293
200
278
235
962
1,245
699
253
1,098
736
997
300
347
396
200
298
699
1,293
200
92
230
300
200
300
300
1,072
200

Liability o f the British Government f o r




Tous.

;150

Vessels.

Baron de Castine, brig. .C. W . Haskell................................................ ....................1862..................Steamer Alabama, lat. 89 N., Ion. 69 W., (bond)
Boston, t n g ..................... Tibbetts........................................ .. .New Orleans . . .June 9,1868 . .Bebels, at mouth o f Missisippi................................
Byzantium, sh ip ............ Robinson..................L on don ............... New York . . . .June 16,1868 .Privateer Tacony, lat. 41, Ion. 69.10......................
B. F. Hoxie, ship.............................................. Magattan..............Falm outh............June 16,1863 .Florida, lat. 12 N., Ion. SO W ..................................
California, b a rk .............. S. Hawthorne.. . .St. Thomas......... C o r k ....................1861..................Steamer Sumter.......................................................
Cuba, brig....................... J. G .F oster..........New York..............V eraC ruz........... July 1 ,1 8 6 1 ..
“
“
......................................................
Chastelain, brig..............H andy.....................Guadaloupe.........Cienfuegos.......... Jan. 27,1863. .Steamer Sumter, off Altwela R ock......................
Courser, schr.................................................... Provin«etown ...W h a lin g ..............1863..................Steamer A labam a................................................. ..
Crenshaw, schr............... Nelson....................New York............G lasgow ..............Oct. 2 6 ,18 6 2 ..
“
'•
lat. 40 N., Ion. 65 W ...............
Corris, Ann, brig.............Small......................Philadelphia.. . , Cardnas................ Jan. 22, 1863. .Steamer Florida.......................................................
Castine, ship.............. ...S m it h ......................C allao.................. E ngland............. Jan. 2 5 ,18 6 3 ..
“
'■
.......................................................
Commonwealth, ship . . . McLellan...............New York............San Francisco . .1 8 6 3 ..................Steamer Alabama, lat. 30 S., Ion. 30.25 W .........
Charles Hill, ship...........Percival..................L iv erp ool............Montevideo . . . .April, 1863 . . .
“
“
lat. 7.30 N., Ion. 26.20...........
Clarence, brig.................. Phinney................. Bahia.................... Baltimore............ 1863.................Steamer Florida.......................................................
Crown Point, ship...........Sohn N. Geit......... New York............San Francisco . .1863.................Georgia, lat. 7 S., long. 74......................................
City of Bath, ship...........Cooper.................... Callao.................. Antwerp ........... June 28, 1863.
“
lat. 21 S., Ion. 29.10 (bonded)...............
Constitution, ship............Webster.................. Philadelphia.. . .Valparaiso......... June 25, 1863.
“
...................................................................
Commonwealth, b a rk .. .Salsbue................. New Y o r k ......... San Francisco . .A pril 17,1863.Florida, lat. 20 S., Ion. 31 E ..................................
Conrad, bark................... Moloney.......... .. .Montivedo...........New Y o r k .....................................Alabam a....................................................................
D. C. Pierce, bark...........Quisls...................... R em edios............E ngland............. June, 1861___.Privateer Jeff. Davi3..................................................
-Daniel Trowbridge, schr.W. H. M orrow .. . .New Y o rk ..........Demerara............ 1861..................Steamer Sumter........................................................
Dunkirk, brig.................. Johnson...................New York........... Lisbon........... .... .October, 1862.Steamer Alabama, lat. 40.30, Ion. 54.20 .............
Dorcas Prince, ship . . . .M elcher................. New York........... Shanghae............1863..................
“
“
lat. 7.35 S., Ion. 31.85 W . . . .
W .....................
Dictator, s h ip .................Phillips..................L iverpool............ Hong KoDg.......... 1863.................Georgia, lat. 25 N., Ion. 21.40
Elizabeth Ann, sch r.. ..Thomas ................. Cloucester.. . . ; Fishing............... June 22, 18G8.Privateer T acon y.....................................................
Ella, schr......................... W arren ..................T a m pico............. New Y o r k ..........1861..................Privateer Jeff. Davis............................ ....................
Emily Fisher, brig..........S ta p les..................S t.Jago............... Guantanamo.. . .March, 1 8 6 3 ... Retribution................................................................
Eben Dodge, bark.......... H oxie......................New Bedford... . W haling..............1881...................Steamer Sumter.......................................................
Enchantress, schr............ D everau x..............Boston.................. St. Jagode Cuba.July 13, 1861 .Privateer Jeff. D a vis...............................................
Elisha Dunbar, b a rk ... .David R. Gifford. .New Bedford . . .W h a lin g .............1862 ................Steamer Alabama, lat. 89.50, Ion. 35.20 ..............
Estella, b r ig ................... B row n ....................Manzanilla......... Boston..................Jan. 17,1863. .Steamer Florida, lat. 23.60, Ion. 34.17..................
Express, ship.................................................... C allao..................A ntw erp......................................... Alabama, off R io ................................................... ..
Florence, sch r.. .......... Gardner................. Gloucester..........................................1863................... Tacony, (bonded).....................................................

*

Master.

W h e re from .

W h e re to.

Date.

Captured by.

351

796
840
287
608
1,273
250
300
130
1,280
436
200
299
200
235
149
800
800
437
300
1,300
1,070
800
295
100
200
275
1,050
237
1,382
800
171
400
387

Depredations o f Rebel Privateers Considered.




Tons.

1863.]

Vessels.

Francis B. Cutting, ship..................................L iverpool........... New Y o r k ..........Aug. 6, 1863. .Florida, lat. 41.10, Ion. 44.20, (bonded)................
F. W. Seaver, bark......... S n ow ......................Boston..................Hong Kong . . . .June 22, 1863.Georgia, (bonded).....................................................
Glen, bark....................... H olm es..................Philadelphia.. . .Tortugas..............July, 1861____Steamer Sumter.......................................................
Golden Rocket, sh ip .. . .Pendleton............Havana................ Cienfuegos . . . . July 16, 1861 .
“
“
.......................................................
Golden Eagle,ship.........S w ift....... ..............Howland’s IslandQueenstown . . . .1863................. Steamer Alabama, lat. 29 N., Ion. 45 W ..............
Golden Rule, bark.......... P. H. Whiteberry.New York............Aspinwall........... Jan. 26,18 6 3 ..
“
“
lat. 1 7 .45................................
Goodspeed, bark.............J. L. Dunton......... Londonderry. . . .New Y o r k ......... June 21, 1863. Privateer T a con y.....................................................
Golden Rod, sclir...........Bishop....................Holmes’ H o le .. .Chesapeake B a y....................... .........................................................................................
Geo. Griswold, ship........Pettengill................Caidiff..................Callao.................. June 18, 1863.Georgia (bon ded ).....................................................
Good Hope, b a rk ...........Gordon....................Boston..................Algoa B a y ......... June 22, 1863.
“
lat, 22.29 S., Ion. 42.39 W ..................... ..
Hanover, schr................Case........................ Boston................. Aux Cayes]...........Jan. 31,1863. -Privateer Retribution.............................................
Harriet Spaulding,bark P ea b od y............... New York........... H av re..................Nov. 18, 1863 .Steamer A labam a...................................................
Herbert, schr...................Martin................................................................................. July 18, 1861 .Privateer Winslow...................................................
Henry Nutt, sch r..........Burnett ................ K ey West........... Philadelphia... August, 1861 .Steamer Sumter........................................................
Hannah Balch, brig........M atthews..............Cardenas..............Boston..................July 6, 1862 ........................................................................................
Hatteras, gunboat...........Blake...................... Galveston.............B lock a d e............Jan. 13,1863. .Steamer Alabama, off Galveston, Texas.............
Harvey Birch, ship.........Nelson....................Havre................... New Y o r k ......... Nov. 19, 1862.Steamer Nashville ...................................................
Henrietta b a rk ..............B row n.................... Baltimore.............Rio Janeiro.. . . 1863...................Steamer A labam a...................................................
Itasca, b r ig .................... Conley....................Nuevitas.............. New Y o r k .......... Aug 4, 1861.. Steamer Winslow.....................................................
Isac Webb, sh ip .............Hutchison..............L iverpool........... New Y o r k ......... June 20, 1863.Tacony, lat. 40.35, Ion. 68.46, (bonded)................
Ibez Snow, sh ip .............Ginn........................New Y o r k ......... Montevideo......... May 25, 1863 .Alabama, lat. 12 S., Ion. 34 W ..............................
Joseph Parks, brig......................................... Pernambuco......... New York . .*.. .Dec. 1861.........Steamer Sumter.......................................................
Joseph Maxwell, bark................................... Philadelphia.........Laguayra............June 16, 1861.
“
“
......................................................
John Adams, schr.......... C. B. A re ra l..........Provincetown___ W haling..............M ay,1 8 6 1 _____Calhoun......................................................................
J. R. Watson, sch r........ E ld ridge................New Y ork..........................................July 13, 1 8 6 1 .......................................................................................
John Welsh, b r ig .......... F ifield.................... Trinidad............. Falmouth, Eng. .July 13, 1861 .Privateer Jeff. D a vis................................................
John A. Park, ship........ Cooper.................... New Y ork........... Buenos A y re s .. .March 2, 1863.Steamer Alabama......................................................
J. P. Ellicott, brig.......... Deveraux................Boston.................. Cienfuegos.......... Jan. 10, 1863. .Retribution................................................................
Jacob Bell, s h ip .............Frisbee.................... F oochow ......... ..N ew Y o r k .......... Feb. 12,1863..Steamer Florida, lat. 24, Ion. 65............................
J. S. Harris, ship............G. W. C ollier____ Cuba.................... New York . ...1 8 6 1 .................. Steamer Sumter........................................................
Joseph, b rig ................... Myers...................... Cardenas........... Philadelphia.. . .June 15, 1861 .Privateer Savannah.......................... .......................
Justina, bark...................Miller...................... Rio Janeiro......... New Y o r k ..........May 25, 1863 .Steamer Alabama, lat. 12 S., Ion. 35.30,(bonded)
Kate Stewart, schr........W. B. W o o d .......... Philadelphia..................................... 1863....................Steamer Florida, lat. 37.10, Ion. 75.04, (bonded).

Yossels.

Master.

Where from.

W h e re to.

Date.

Captured b y .

-

Tons.

[N ovem ber,




L iability o f the B ritish Government f o r

.A n tw erp .. .
Kate Dyer, s h ip ............. A. D y e r.................C allao..........
June 17, 1803.Lapwing (bonded).................................................... 1,278
Kate Oory, b r ig ............. Flanders ............. Westport.......... . Whaling ............. 1863
Steamer Alabam a.. . ............................................... 125
Kingfisher, schr............... L am bert............... Fairhaven......... .W h a lin g ............ 1 8 6 3 ....
“
“
....................................................
125
“
“
..................................................... 300
Lafayette, b a rk ..............Lewis..................... New Bedford . . W haling............ 1 8 6 3 ....
Louisa Hatch, ship. ...G r a n t................... Cardiff.................. Singapore........... 1 8 6 3 ....
“
835
Louisa Kilham, bark ...W h ite ................. Cienfuegos........ Falmouth, E n g..Ju ly 20, 1861 .Steamer Sum ter...................................................... 463
Levi Starbuck, ship . . . .McMellen.............. New Bedford . . . W haling................ Nov. 2, 1862 •Steamer Alabama, lat. 35.30, Ion. 6 6 ................... 376
Lafayette, sh ip ...............Small.................... New York ........... Belfast, I.eland.Oct. 23, 1862
“
lat. 40 N., Ion . 64 W ................. 945
Lamplighter, b a rk ......... H a rd in g ...............New Y ork........... Gibraltar..............Oct. 15, 1862
“
“
lat. 41.80 S., Ion. 59.17 W . . .
279
“
“
lat 39.45 N., Ion. 68 W ............ 284
Lauretta, bark................. Wells...................... New Y ork........... Messina................Oct. 28, 1862
Lydia Frances, brig ....C a m p b e ll .................................................
.June 15, 1862.Off H atteras............................................................. 262
Lapwing, b a rk ................Bolger.................... Boston....................Batavia............... March 27, 1863Steamer Florida, lat. 31, ion. 62...........................
590
Lenox, bark..................... SethCole............... New Y ork........... New Orleans.. . .June 12, 1863. Boston, at mouth of Mississippi............................. 370
L. A. Macomber, sch r.. . P o tte r.................. Noank...................Fishing.................. June 20, 1863.Privateer Tacony.....................................................
200
Marengo, schr......... ...F r e e m a n .............. Gloucester............ Fishing................June 22, 1863.
“
“
.................................................... 200
Manchester, ship............. Landerkin.............. New Y ork........... L iverpool........... Oct. 11, 1862. .Steamer Alabama, lat. 41.25, Ion, 55.50 .............. 1,075
250
Machias, brig................... S h o p p e y ........................ ....................................................July 20, 1862. .Steamer Sumter.......................................................
Monticello. brig . . . . . . ,H 'pkins ...............Rio Janeiro . . . .Baltimore............July 1, 18620. .Privateer St. Nicholas............................................
300
Mary E.Thompson,brig Havener............................................................................. July 9 ,1 8 6 2 .. .Privateer Echo......................................................... 210
Mermaid, schr................. Soper......................Provincetown . . . W haling..............May, 186c. . . .Privateer Calhoun................................................... 200
Mary Pierce, schr........... D >dge........... .Boston.........................Washington . . . .July 1,1862.. .Privateer St. Nicholas............................................. 192
Margaret, s c h r ............... H ansen............................................................................... June, 1 8 6 2 ....
“
“
............................................
206
Mary Goodell, schr . . . .M cGiivery......................................................................... July 9, 1862.. .Privateer Echo......................................................... 200
M. J. Oolcord, bark.........Rufus Harriman. .New Y ork ............Cape Town, CGHVIarch 30, 186SSteamer Florida, lat. 28, Ion. 33 ............................ S74
Morning Star, ship........Burgess................... Calcutta............... London................ April 8, 1863. .Steamer Alabama, lat. 2 N ..................................... 1,105
Mary Alice, schr . . . . .W a ls h ................... Porto R ic o .......... New Y o r k ..........July, 1861........ Steamer Winslow.....................................................
181
Mary Alvina,brig ........ Crobich . . . 1......... B iston...................New Orleans ...1 8 6 3 .................. Steamer Florida, lat. 34.25 N., Ion 7 4 2 3 ............ 266
M. A. Shindler, schr ...W m Ireland.........Port Royal........... Philadelphia.. . .June 12, 1863 .
“
“
lat. 37.18, Ion. 75.4................. 299
Martha Weazell, bark........................... ...A k y a b ................. Falm outh............ ........................Alabama, False Bay, (R eleased.......................... 678
Naiad, b r ig ..................... Chase................................................................................... July, 1 8 6 1 ... .Steamer Sumter.......................................................
800
“
“
....................................................... 822
Neapolitan, bark............. Burdett................... Messina.................Boston..................Feb., 1861 . . . .
N. Chase, sch r.. . . . . . . . D oane................... New York ......... Antigua . . . . . . .Sept., 1 8 6 1 ....
“
“
....................................................... 150
Nora, snip....................... Adams.....................L iverpool........... Calcutta.............. 1863.................. Steamer A la b a m a ...................................................
800

Depredations o f Rebel Privateers Considered.
353




1863.]

Vessels.
Master.
"Where from.
W here to.
Date.
Captured by.
Tons.
Nye, bark ..................... Barker....................New Bedford. ..W h a lin g .............1 8 6 3 ...,
.Steamer A la b a m a .........................
300
Ocmutgee, ship ............Osborne........... . . . Edgartown . . . . W haling........... Feb. 21, 1863
. 300
“
off the Flores.
Ocean Rover, s h ip .........Clark .............. Mattapoisett. . . . W haling................ 81863..................
“
“
. 766
. 300
Olive Jane, bark............Kallock................... Bordeaux.............. New Y o r k ........ Feb. 21, 1863 .
“
“
, 290
Ocean Eagle................... Luce ..................... Rockland............. New Orleans . . .1 8 61 ............. ..Steam er Sumter.
Oneida, s h ip ............ . . . P o t t e r ............ ...S h a n g h a e ...........New .Y o r k ..........1863..................Steamer Alabama, lat. 1.40 S., Ion. 29 W .
, 420
Osceola, b a r k .............................................................................................................. 1862..................
off the Flores.......................... 300
Ocean Cruiser, schr......... ........................................................................................... 1862..................
“
“
.................................................
200
Puujaub, ship.......... ....M d le r .............. ...C a lc u t ta ............. L iverpool............March 14,1863
..............................................................760
Parker Cook, b a rk .........Fulton.............. ...B o s to n ......... .. . A u x Oayes.........Nov. 30, 1862.
lat. 18.30..............................
135
Protector, s c h r .............. J Clark. ...............Cuba ................. Philadelphia___.-June, 1861.
................................................................... 200
Panama, brig...................Cook........................Provincetown. . . Whaling ............ May 29, 1861. .Privateer Calhoun . . . . . . . ................................. 153
Priscilla, s c h r ................. Orowther............... Curacao............... Baltimore.............July, 1 8 6 2 ... .Steamer Winslow.................................................... 144
172
Palmetto, schr ............. O H Lelaud.........New Y ork............ Porto R ic o ..........Feb. 27, 1863 . Steamer A labam a...................................................
Prince of Waie3, ship . . Morse. . . . . .........Callao ................Antwerp..........................................Georgia, (bonded)..................................................... 960
Rufus Choate, schr.........Smith...............
.Gloucester...........Fishing . . . . . .June 22, 1863.Privateer Tacony......................................... ............ 200
Rowena, bark.................Wilson................... L agu ayra.............Puiladelphia. . . . June, 1861 . . .Privateer Jeff Davis................................................. 340
Robert Gilfillan, sch r.. .Sm ith..................... Philadelphia.. . .St. Dom ingo.. . .Feb. 26, 1862 .Steamer Nashville.................................................... 240
Ripple, s c h r ................... Gearing. . . . . . . .Gloucester. . ...F is h in g ................June 22, 1863. Privateer Tacony..................................................... 200
Reiwig. s ch r...................A v e r y .......... Provincetown. . .Fishing ......................... July 7, 1863 . .Florida.......................................................................
95
Red Gauntlet, ship.........H ow es............. .Buena Yista . . . N e w Y o r k .........May 28, 1863 .
“
lat 29.28, Ion. 36 W .................................. 1,038
S. J W aring.schr.........S m i t h . . ................ N ew Y ork ...........Buenos A y re s .. .July 15, 1863 . Privateer Jeff. Davis ................................................ 372
Starlight, schr. ................Whittemore- ....................................................................... 1862.................. Steamer Alabama, off the Flores.......................... 205
Star of Peace, ship. . . . .H m ckley.............. C alcutta..............Boston....................1863.................Steamer Florida.........................
941
Sebasticock, s h ip .............. C h a s e ................ Liverpool............ Charleston.......... 1861..................Steamer Sumter.......................................................
549
Santa Clara, b rig ......... C J o rd e s o n ...........Porto Rico............ B >ston................... 1861.................
*‘
“
189
S. Gildersleeve, ship . . , McOullum,........... Sunderland..........C alcutta........... .1863...................Steamer A la b a m a ....................................................
100
Sea Bird, schr......... . . .Scott . ................. Philadelphia.. . .Newbern.............. 1883.................. By rebels, at the mouth o f Neuse River.............. 200
Sea Witch, sch r............. W Egbert..............Bu-acoa................. N e w Y o r k ..........1861..................
“
“
“
“
...........
95
Sbattemuc, s h ip .............J H. Oxford-......... Liverpool............Boston. .............. June 24, 1863 Privateer Tacony, lat. 43.10, Ion. 68.4.................
200
Sea Lark, s h ip ...............Peck ..................... Boston. . . . . . . .Sail Francisco.. .May 3, 1863 . .Steamer Alabama, lat. 9.35 S., Ion. 31.20 W . . . .
974
Sunrise, s h ip ................... R Luce................... New York............Liverpool............................... . . .Florida, lat. 40 N., Ion. 68 W., (bon d ed )............. 1,174
Southern Cross, ship . . .Lucas................... .Boston.................. H iy Kay..............Jane 3, 1863..
“
lat. 34 S., Ion. 36 W .................................. 938




Depredations o f Rebel Privateers Considered.

S ummary.— 178 vessels, comprising 1 U. S. gunboat ; 1 steamer ; 1 steam-tug ; 54 ships ; 42 barbs ; 32 brigs ; 47 schooners— 80,899 tons.

.154

Master.
Where from.
W h e r e to.
Date.
T on s.
Vessels.
Captured by.
.Parker................... Akyab.................. Falmouth.........................................Conrad, (bonded).........
Santee, ship...........
898
447
Sea Bride, bark. . .
Transit, schr.................... A. Knowles ......... New London...................................... July 15, 1861 .Steamer Winslow.....................................................
195
T. B. Wales, s h ip ...........Lincoln ................. C alcutta..............Boston................. 186S.................. Steamer Alabama, lat. 28'80, Ion. 58 .................... 599
Tonawanda,ship.............T. J u liu s............... Philadelphia.. . .L iv erp ool............Oct. 9, 1 8 6 3 ...
“
“
lat. 40.30, Ion. 54.30, (bond.). 1,300
Tacony, bark................... William G. Mundy.Port R o y a l......... Philadelphia.. . .June 12, 1863.Steamer Florida, lat. 37.18, Ion. 75.04.................. 296
Texana, bark.................. Thomas E. W olfe.N ew Y ork ........... New Orleans . . .June 12, 1863.Privateer Boston, at mouth of Mississippi............ 588
Talisman, ship................. Howard ............... New Y ork ............Shanghae............June 5, 1S63. .Alabama, lat. 14 S., Ion. 34 W .............................. 1,237
Umpire, b rig...................Perry....................... Lagana................Boston..................June 16, 1863. Privateer Tacony, lat. 37, Ion. 69.57^.................... 196
Union Jack, bark.......... C. P. W ea v er____ New Y ork ...........Shanghae............ May 3, 1863 . .Steamer Alabama, lat. 9.40 S., Ion. 32.80 ............ 300
“
lat. 89.10, Ion. 34.20 ............. 300
Virginia, bark................. S. B. Tilton.............New Bedford . . .W h a lin g..............1863..................
Vigilant ship................... Hathaway..............New Bedford . . .AVhaling . . . ___1863..................
“
“
.................................................. 650
Varnum, PI. Hill, schr....................................Provincetown. ..C ru isin g ............. June 27, 1862.Florida, lat. 30 N,, Ion. 48.50, (bonded)................
90
JVest Wind, bark ...........Saunders
.New Y ork ...........New Orleans . . . July 1861......... Steamer Sumter.......................................................
429
W ave Crest, bark...........Harman..................New Y ork ........... Cardiff.................Oct. 7 ,1 8 6 2 .. .Steamer Alabama, lat. 40.25, Ion. 54.25 ..............
409
Weather Gauge, sch r.. .G. Clark, J r........................................................................ 1862 ..................
“
“
o f the Flores.......................... 200
Washington, sh ip ...........W h ite ....................New Y ork ........... L iverpool............Jan. 26, 1863. .Steamer Florida....................................................... 1,655
Windward, b r i g .............Roberts..............M atan zas..............Boston............. '. .Jan. 23, 1863..
“
“
....................................................... 199
W. HcGilvery, b r ig ___ H arrim an............. Cardenas............. Philadelphia.. . .July, 1861____Privateer Jeff.Davis........................., ...................... 198
W . S. Robbins, bark........................................A rro y a ................New Y o r k ......... June, 1 8 6 1 ... .Steamer Sumter........................................................ 200
Whistling Wind, bark. .B u tle r ................... Philadelphia____New Orleans . . .June 6, 1863. .Privateer Coquette, lat. 33.38, Ion. 7 1 .2 9 ............ 349
Wanderer, schr................................................ Gloucester........... Fishing................June 22, 1863. Privateer Tacony..................................................... 200
William B. Nash, brig. .Coffin...................... New Y ork ........... Marseilles............July 8, 1863.. .Florida, lat. 40, Ion. 70............................................. 299

<
a>
B
rr

Textile Fabrics.

1863.]

355

TEXTILE FABRICS:
FLAX,

IIEMP, WOOL, SILK, AND COTTON.

T he cultivation and manufacture of the four great materials, Flax>
W o o l, Silk, and Cotton have ever, been the chief means o f industrial em­
ployment, and their products the principal articles o f traffic among nations.
It is only very recently, however, that the manufacture o f the three last
mentioned have made much progress in Western Europe. In the present
century, the supply o f these three materials has been greatly increased
and the qualities have been greatly improved, while machinery has been
largely employed in their manufacture.
Linen, on the other hand, has
been o f very remote and general use, yet has comparatively defied the
powers o f machinery and the attempts made to im prove its manufacture.
It has therefore been and continues to be m ore dependent upon the
slow and costly process o f hand labor than the other three articles. It is,
however, one of the most general productions o f the European peasant,
and is afforded"at comparatively low cost.
Belgium and Holland have
been the most remarkable for linen industry; the culture aud manufac­
ture o f flax were well developed among the Belgi when the Rom an power
first dominated the Rhine country. A t that remote period the blouse was
already the national costume, and Italy derived a new com m erce in the
importation o f the linen fabrics o f Flanders. The pre-eminence in this
trade then possessed by the Low Countries was held for many centuries.
A s to its origin, many writers trace it back three centuries before C hrist .
It is certain that in the 13th century Belgium had a m onopoly o f the
linen manufacture in Europe. Nivelles was then the seat o f the manufac­
ture, which, however, soon spread to Brabant, Hainau, and Journai. In
the latter part of the 15th century, A lbert and I sabel , on visiting Courtrai, were presented with damask cloths of great delicacy, and in the 16th
century the grow ing India trade had introduced cottons, and silks had
grow n into more general use. The cultivation o f cocoons in Italy had
begun at this time to be quite extensive, and when H enry IV . o f France
displayed the first pair o f silk stockings, which were imported, an impulse
was given to the manufacture which laid the foundation o f the prosperity
o f Rouen, Lyons, etc. The linen manufacture also spread through Ger­
many, England, and Spain. These circumstances caused a decline in the
Belgium trade, and a governm ent commission was ordered to investigate the
matter. A s a result o f this commission the exportation o f flax was pro­
hibited and also the importation o f cottons.
These enactments did not
help the matter much.
The general grow th o f wealth and population,
however, kept up a certain demand for Belgium linen, notwithstanding
the growth o f manufacture elsewhere.
In the beginning o f the 18th
century there were sold annually in the Flemish markets 100,000 pieces
o f linen o f 80 yards each, and this did not comprise the large quantity
made in the cottages o f the peasantry for their household use. The steady
progress o f the trade during the 18th century w ill be gathered from the
statistics contained in public documents o f the quantities sold in the mar­
ket o f Ghent alone. In 1735, there were 65,849 pieces ; in 1775, 79,040 ;




356

[November,

Textile Fabrics.

in 1760, 8 3 ,3 0 5 ; and in 1*764, 86,315.
The other ch ief markets were
Courtrai, Audenarde, Alost, Renaix, Lokeren, and Bruges.
W h en Belgium fell under the rule o f France, in the year I X . o f the
French republic, Flanders alone was estimated to produce 282,793 pieces
of linen— say 22,623,440 yards, valued at $3,675,282. The manufacture
continued to extend in Belgium up to 1838, at which period the com pe­
tition o f Great Britain and Ireland in the European and foreign markets
checked its progress. In 1840, the entire quantity manufactured in Bel­
gium was estimated at 400,000 pieces,- or 32,000,000 yards, valued at

$ 12,0 0 0 ,0 00.
The manufacture of flax had, at this time, progressed in England greatly,
and the growth o f flax in Ireland, under the auspices o f the Royal S oci­
ety, increased in ten years ending 1851, 100,000 acres, and has been an­
nually as follow s:
1 8 6 3 ...........
1862 ..........
1 8 6 1 ..........
1860 ..........
1859 .........

214,092
150 070
147,957
128,595
136,282

1 8 5 8 ..................
1857 ...................
1856 ...................
1855 ...................
1854 ...................

.acres
..........
..........
..........

91,641
07,721
106,311
97,075

The increase o f sowing in 1863 is nearly 45 per cent as compared with
1 8 6 2 ; and, as compared with any o f the years 1855, 1856, 1857, and
1858, the increase is more than 100 per cent.
The quality o f the flax
and its price are all that could be desired.
O f the whole number o f
acres in 1863, 207,345 were in Ulster.
The import o f flax into Great
Britain in forty years to 1860, increased 115,000,000 lbs. In France the
trade had alsobecome well developed.
In all this time, however, linen
had to contend against not only the growth o f the other materials, but
their adaptedness to the same purposes.
The use o f wool throughout Europe, particularly in France and Great
Britain, had been confined to coarse textures, as well from the nature o f
the wool itself as from the want o f proper machinery for its manufacture.
The Spanish breed o f sheep alone furnished the proper material for cloths,
and it was not until the First Consul, at the close o f the 18th century,
caused the transfer o f some 7,000 Spanish rams to France that the breed
began to improve. W hen Spain was occupied, the great conqueror, ever
mindful o f material interests, caused a great importation o f merinos into
France, from which the greatest results were derived ; for when France,
in 1815, was overrun by the allies, the fine rams were carried off to Ger­
many. Fine wools have since been o f more general growth, and have
greatly aided in the spinning o f fine woolen yarns. In England the im ­
proved breed o f sheep produced the long, brilliant com bing wools for
which that country is famous. The export o f these wools was prohibited
until 1828, and since that time, bv the aid o f machinery, wools have
grown to rival cotton and linen in the fineness and brightness o f the fabrics
that may be wrought from them.
The manufacture o f silk, at the same time, has spread wonderfully in
France and England, and the silk industry o f Italy has become one ,of the
most important for the supply o f the raw material, which has not only
contributed the costly fabrics worn by the wealthy, but in its mixture with
the other materials has diversified and extended the use o f all.
All these articles, however, (silk, flax, and wool,) have found in cotton




1863.]

Textile Fabrics.

357

their most powerful com petitor; for, since 1800, cotton has been so develo| ed as to form two-thirds o f the whole material used for modern
clothing. The immense and rapid increase in the culture o f cotton, and
its successful application to purposes o f wearing apparel, com e so obtru­
sively upon the public, that all are aware o f the progress so m a d e; but
it is not generally borne in mind that the aggregates o f the four other
prime raw materials, including hemp, increase nearly as fast in supply as
does cotton, and that the price- o f each is materially influenced by the
supply o f each o f the others. During the first half of the present centuiy, England has been the work-shop o f the world, and although in other
countries the development o f manufactures has, in the last forty years,
very rapidly increased, the production in England has maintained its su­
premacy. H ence, if we take a total of the quantities o f each o f the five
great raw materials imported into England, for the use o f her manufacto­
ries, we shall have results as follow :
IM PO R TS O F R A W M A T E R IA L INTO E N G L A N D .

1790 . . . .
1 8 1 0 ___
1830 ____
1840 ____
1844 ____
1850 ____
1 8 5 1 ____
1860 . . . . ..

Cotton, lbs.
80,574,874
126,018,487
255,426,476
437,099,631
558,015,248
666,223,760
760,762,250
1,225,989,072

Wool, lbs.
3,245,362
10,936,224
32,313,059
52,862,020
69,493,855
72,674,483
83,063,679
148,396,597

Silk, lbs.
1,253,445
1,796,106
4,318,181
4,756,121
6,207,678
4,942,417
4.608,336
9,178,610

Flax, cwt.
257,222
511,970
944,096
1,338,217
1,595,839
1,821,578
1,194,184
1,461,010

Hemp, cwt.
592,306
955,890
506,771
612,515
911,747
1,048,635
1,293,410
1,609,175

It will be observed that England was a large w ool-producing country,
and gradually her trade so increased as to use up all her own produce,
and require annually increasing supplies ; but her trade did not increase
rapidly until in 1827, when the prohibition o f the export o f wool was
removed. The supplies since then have been large.
In 1825 the silk
trade was thrown open, and the quantity o f raw silk required by the man­
ufacturers tripled in twenty years.
If now we regard England as the great work-shop o f the world, and
make a table o'f the imports o f the five great materials, we shall have an
indication o f the relative supply o f each o f the five materials to the whole :
IM P O R T S O F R A W M A T E R IA L S * F O R TE X T IL E F A B R IC S IN T O G R E A T B R IT A IN .

Hemp. lbs.
1 8 3 5 ................
72,352,200
1840 ................
82,971,700
1845 ................... 103,416,400
1850 ................
119,462,100
1855 ................... 136,270,912
1856 ...................
142,613,525
1857 ................... 169,004,562
1858 ................... 184,316,000
1859 ................... 241,917,760
1860 ................... 140,910,600
1861 ................... 150,802,800
1862 ................ 170,720,700

Flax, lbs.

Silk, lbs.

Total four
Wool, lbs. articles, lbs.

81,016,100
4,027,649
41,718,514 360,014,463
139,301,600 3,860,980
50,002,976 276,137,256
159,562,300
4,866,528
76,813,855 344.25S,785
204,928,900
5,411,934 * 74,326,778 404,137,912
145,511,437
7,548,6-i9
99,300,446 388,631,454
189,792,112
8,236,685 116,211,392 456,863,714
209,953,125 12,718,867 129,749,898 521,426,452
144,439,332
6,635,845 127,216,973 462,608,150
160.388,144 12,578,849 133,284,634 548,169,387
128,176,000 10,811,204 148.396,597 428,293,301
116,696,800 10,671.208 164,200,637 442,371,445
157,354,500 13,095,268 192,058,241 533,228,709

Price Upland in Liv
Cotton, lbs. erp'ol.
326,407,692
531,197,817
.721,979,953
714,502,600
891,751,963
1,023,886,304
969,318,896
1,076,519,800
1,225,989,072
1,086,670,900
982,008,670
526,813,700

lO^d
6
4£
4*
5$
6
7*
7*
6713
25$

Thus, each o f all the great raw materials has increased in the quantity
consumed ; and the weight o f the four first, wrought up in England, has
doubled in quantity in the fifteen years up to 1850, or increased in the
same ratio as cotton. The influence o f gold discovery was now apparent




358

Textile Fabrics.

[November,

upon the supplies o f the articles named, and in 1857, the year o f the
panic, the imports o f flax and silk were very large, carrying the aggre­
gate o f the four materials to nearly 60 per cent o f cotton. Since that
year there seems to have been no material increase in their receipts in
the United States. From 1840 to 1850 the cotton culture did not mate­
rially increase, that is, in ten years it only increased 3 per cent per an­
num. The culture o f linen, and its employm ent throughout Europe, has
been vefy large, quite as large, in proportion, as in England. Taking
Europe and England together, therefore, it may well be questioned whether
the actual weight o f the four m inor raw materials had not increased faster
than that of cotton up to 1850. The events o f the last quarter o f a cen­
tury have tended to prom ote supply, more particularly in the last fifteen
years, in which time the Chinese trade has becom e m ore regular in the
supply o f silk for European use, and Australia has becom e the great w ool
country, while the United States cotton power has been immensely de­
veloped. In the same period, also, the industry o f Russia has received a
more intelligent development, causing a greater supply o f hemp and flax
at cheaper rates. A ll these sources enhanced the supply o f raw material
for textile fabrics fifty per cent in ten years to 1850, and perhaps som e­
what faster than the demand for the goods produced would take them up.
The influence o f one material upon the other has been continually made
more effective by the ingenious combinations of the cheapest among them
into the new fabrics.
Thus, fabrics o f silk and wool, wool and cotton,
silk and cotton, silk, cotton and wool, have all assumed different textures,
and different proportions o f each material, according to the relative cheap­
ness o f each. Consequently, the price o f any one has always been checked
b y that o f the others, and the value o f all has been influenced by collat­
eral circumstances.
The above table gives in pounds’ weight the quantities o f raw material
imported into Great Britain from all countries in each year. It does not
include the wool used o f home growth, or the increasing supply o f Irish
flax, but it indicates the demand that England has annually made upon
the countries that produce raw materials for the means of supplying the
large demands made upon her factories for goods. The stimulus every­
where given to the production o f exchangeable values, and the diminished
cost o f transportation, as well as the more liberal policy o f governments,
have left tt> the producer a larger share o f the products o f his own indus­
try, and this has shown itself in a demand for clothing. It is to be o b ­
served in the table that up to 1850 the proportion o f the four other arti­
cles increased faster than cotton.
Those articles, worked more and
more into fabrics, that before had been exclusively o f cotton, the re­
sult was cheaper fabrics that gradually glutted the markets, and the price
o f cotton fell from 10^ cents in 1835, almost year by year, to
cents in
1848, the extreme low price being the effect of the famine.
In that
period o f time, however, the purchases o f cotton had doubled in England,
and o f the other four articles they had tripled. These are the receipts
o f raw materials into the work-shops o f England only.
Those o f the
continent have received similarly increased quantities. Since 1850— that
is to say, since the discovery o f g old — a change has, as we before stated,
taken place.
The supply o f raw materials has increase in magnitude,
but the demand for clothing has apparently increased in a greater degree,
since an aggregate quantity o f raw materials in 1857, 50 per cent greater




1803.]

Textile Fabrics.

359

than the large supply o f 1850, sold at a rise o f *75 per cent in price, or
at a rate o f 7 fd . per pound for cotton, against 4 fd .
Such was the progress o f events up to 1861, when political events in
the United States cut off the supply o f Am erican cotton, and reduced by
one entire third the quantity o f materials required by England alone for
clothing.
It may be observed that the progress o f spinning had been
very rapid, and probably far exceeded the regular demand for goods,
causing most markets to be glutted. W h en, therefore, the cotton growth
o f the United States was witheld from the markets, and diminished con ­
sumption was forced upon all manufactures alike, the direct tendency
was to appreciate the value o f all goods, as well linen, woolen, and silk,
in all markets.
A ll those who held stocks o f goods were benefltted—
the operatives alone suffering for want o f work. The effect o f this rise
in prices was, also, to reduce the rate o f consumption, causing the existing
stocks to last longer than they otherwise would have done. That process
has a limit, however, since the quantity o f cotton used by all nations fyeing reduced, they have been com pelled to use more o f other materials,
and as a consequence have been able to spare less o f those materials for
the general markets. H ence the aggregate importation of the four arti­
cles have n&t much increased since cotton has been withheld. The ex­
port o f cotton from the United States has been as follow s:
Pounds.

1857
1858
1859
1860
1861
1862
1863

........................................
........................................
........................................
........................................
........................................
........................................
........................................

1,048,282,475
1,118,624,012
1,386,468,556
1,767,686,338
307,516,099
5,064,564
850,280

Value.

$131,575,859
131,386,661
161,434,923
191,806,555
34,050,483
1,180,113
660,224

P er lb.

124I lf
12f
•1 0 f
11J
23
80

H ad the United States supplied in 1861 and 1862 the same quan­
tity that they supplied in 1859 and 1860, Europe would have had
3,154,154,894 pounds more material— equal to 15,000,000,000 yards of
cloth. Inasmuch as none was derived from the United States, England
exported as fo llo w s:
August, 1860, to December, 1861, 17 m onths____yards
January, 1862, to July, 1863*, 17 months............................

4,239,903,766
2,227,170,173

D ecrease...........v. ...........................................................................
Decrease o f manufacture in Europe.......................................
“
“
“
“ United States..........................

2,012,733,593
3,101,000,000
2,750,000,000

Reduced supply o f cotton c lo th ...............................................

7,863,733,593

This immense reduction in the supply o f clothing is, to some extent,
counteracted by econom y in consumption, but also in the larger use o f
articles from other materials. The effect o f the reduced supply upon
prices has been to double the prices o f cotton goods in England, and p ro­
portionately to raise the value o f other commodities, and, consequently,
by a well known law o f trade, to diminish the use o f all.
The production o f goods in the Northern States, according to the cen­
sus, was, in 1860, as follows :




360

Textile Fabrics.
Pounds used

[November,
Yards.

Value.

C o tto n .......................
W o o l.........................

336,327,120
64,56.3,010

1,285,408,480
35,000,000

T ota l.................

400,892,130

1,320,408,480 _ $175,081,647

$107,873,646
67,208,001

Thus, o f the raw material, 80 per cent was cotton, which was used alor.e
and in mixtures with wool in New England in the proportion o f one-sev­
enth and in the Middle States o f 40 per cent. There were also imported
80.000. 00 0.yards o f linen, and, when the supply o f cotton ceased, many
o f the manufacturers had large stocks and all had considerable supplies o f
cotton goods, the manufacture o f which has now comparatively ceased
for two years. The withdrawal o f so large a quantity o f goods from the
markets w as necessarily a cause o f a great rise in prices, which, in New
Y ork, reached nearly four times the usual price. The rise was doubtless
caused not altogether by the short supply o f cotton, but in some degree,
also, by the state o f the currency’ . Exactly where the one cause ceased
to act and the other com m enced it is difficult to say. The combined ef­
fect was greatly to retard consumption, or to make the same stock of
goods last for a much longer period. The stocks o f goods gradually diclined, but importations have not been much enhanced, for the reason
that all nations have suffered similar difficulties. Each nation being de­
prived o f its usual supply of cotton, has been thrown back upon its .other
materials, and the surplus tobremtairels that could be afforded for the
general markets has been small.
It is no doubt the case that the cotton countries have exerted them­
selves to spare as much cotton as possible at the ruling high prices. The
receipts into England have been as follows :
United States.
1 8 6 0 .. 1,008,882,220
1 8 6 1 ..
823,159,000
1 8 6 2 ..
13,584,600
1 8 6 3 .. 5 mos. 391,460

Brazil.
17,364,700
17,682,101
23,443,290
9,951,100

Egypt.
East Indies.
44,14-8,700 206,048,900
41,084,600 370,562,700
69,275,900 394,407,410
52,881,700 108,283,950

Other places.
Total.
22,144,080 1,397,109,600
10,021,160 1,262,508,670
35,602,750
526,313,700
27,097,425
138,605,625

The high prices o f cotton has drawn larger quantities from the other
cotton grow ing countries, but not in so great a degree as m ight have been
expected. Those countries are, however, deriving large profits from the
trade. Brazil receive last year over $7,000,000 for cotton, when in ordi­
nary years’ she gets but $1,500,000. Egypt sold cotton for $15,000,000,
and the East Indies drew from England $95,000,000 for cotton, instead o f
$12,009,000 for ordinary sales. Those countries w hicl^ profit so largely
byr the present condition o f things are not anxious for its discontinuance.
They cannot, however, furnish the requisite material for the goods wanted.
The cotton required by the trade o f the world is o f three divisions—
the long staple, the medium staple, and the short staple. The long staple
is that long fiber used for making warp, and is indispensable to make a
thread finer than N o. 50. The best o f this description is grow n only on
the coast o f Georgia and South Carolina. A n inferior quality is also
grown, in small quantities, in Australia, and another species is that grown
in Egypt. That o f Brazil is long staple, but harsh and coarse. The quan­
tities o f long staple cotton required are not large.
The medium staple is that used for low numbers o f warp, and for the
weft. The difference between warp and wefi is, that the former requires
strength and length o f fibre ; the latter, softness and fulness. A piece of




1863.]

Textile Fabrics.

361

cloth contains five times as much weft as warp, and the quantity required
is in that proportion. This description o f cotton is obtained in the South­
ern States only.
The short staple cotton is used for wick yarns, and in some cases for
weft. It is dry, harsh, fuzzy, like rough wool. I f used for cloth alone,
after washing, it has a thin, meagre look. This is the East India or Su­
rat cotton. It is incurably bad. A n experience o f fifty years, o f great
expense, have established the fact that no other kind o f cotton can be
grow n in the East Indies. Am erican planters and Am erican “ saw -gins”
have been sent over, and American seed has been planted ; and the re­
sult has been a sensible amelioration in cleanliness and color, and some
slight increase in length o f fiber, but scarcely any change in specific char­
acter. The dry, fuzzy, w oolly characteristics remain. Sometimes the
first year’s samples nearly resemble the Am erican article, but the resem­
blance never becomes permanent. This description o f cotton is that on
which England and the w orld is now dependent, and the distress in the
districts o f France and England is very great. It is not unlike the pota­
to famine o f Ireland in 1 8 4 6 -4 7 . U p to that time, an immense popula­
tion had becom e solely dependent upon the one article of.p ota toes for
life. They planted their little patches, and the produce afforded food for
the year. Suddenly the rot set in, and swept away that sole dependence.
The consequence was the death o f hundreds o f thousands by famine, and
the next census showed a loss o f 1,700,000 population in Ireland. In
Lancashire, the cotton trade em ploys :
28,000,000 spindles.............................................
300,000 loom s..............................
W ork in g ca p ita l....................................................

1126,000,000
36,000,000
100,000,000

Total..................................... ................................
Persons dependent.................................................

$262,000,000
800,000

The sole support o f this business was United States cotton, o f w hich
the crop has failed, and famine has overtaken the crowds o f workers, and
the most fearful distress is apparent in all quarters. The utmost efforts
have been made to remedy this distress, and am ong those efforts has been
the attempt to work India cotton ; to which, however, the operatives have
an unconquerable aversion. A writer states:
“ This feeling appears to be general in all the mills, and arises from the
constant liability o f the India fiber to break during the process o f manu­
facture ; in consequence o f which, it is difficult to work it so evenly as
the American cotton.”
V O L . X L I X .-----N O . V .




24

362

Book-keeping; its Use, Necessity, and Simplest Mode.

[Nov.,

BOOK-KEEPING.
WHAT A C L E R K

S HOULD BE.

[C ontinued fro m page 281.]

I n our last we mentioned and com m ented on the three hooks required
for keeping accounts in the simplest form com patible with correctness.
Under various circumstances m ore books will be found necessary, such as
the Stock B ook, Bill B ook, etc., but they are all subsidiary to the Cash
B ook, Journal, and Ledger, which form the ruling powers in mercantile
domains.
Still, the Stock B ook is especially worthy o f serious consideration. If
this book be properly kept, and the entries duly and correctly made, it
w ill be found to prove one o f the readiest tests o f the honesty o f the
parties entrusted with their em ployer’s g o o d s ; whilst it will, also, be a
ready and safe reference for its owner, as to the nature and results o f his
transactions in the shop and warehouse. Should his suspicions be aroused
as to the conduct o f those to whom the control o f his property is intrusted,
he will not be necessitated to g o through the ordeal o f taking his entire
stock, or striking a profit or loss account, before his jealousies are justified
o r set at rest; but by confining his attention to those articles which he
may consider the m ore readily adapted to the plunderer’s habits or taste,
he may examine them at any time with the entries in the Stock Book,
and ju dge at once, as to the reasonableness o f proceeding to a more search­
ing examination.
In answer to inquiries after goods by customers, he will here find an
almost instantaneous know ledge as to his capability to supply their de­
mands, and see the necessity for increasing his purchases or sales in every
department o f his business.
B y continuous reference to its details, he
w ill be more likely to avoid that “ scylla o f the tradesman,” the over­
stocking himself with goods, and be induced to keep the supplies within
the bounds o f probable and early dem ands; and, at the close o f his mer­
cantile year (or other stated period for balancing his affairs), he will not
require to make out an inventory o f his property, but only to carry out
its d etails; and, bringing the balances together, will be in a position to
check his trading account, by com paring the profit and loss therein with
the actual results o f his goods then on hand, as proved by the book,
known and designated as the Stock Book.
In what we have said we have addressed ourselves particularly to those
who are just beginning business for themselves, and we have seen the ne­
cessity all such are under for accuracy and neatness in keeping up the
records o f private monetary engagements.
Surely, then, their absence
will most materially disqualify the candidate for position in any estab­
lished mercantile house or public company. It may be possible for a
youn g man to conceal his deficiencies in the retirement o f private life ;
but when brought into daily contact with the scrutinizing eye o f his era-




1863.]

Book-keeping; its Use, Necessity, and Simplest Mode.

363

ployer, he will surely suffer from any want, either o f m ethod or o f m an­
ner. Errors will not be allowed to pass unnoticed w’hen they affect the
concerns o f others, and any tampering with books or papers, to conceal
original mistakes, will speedily be found out. H ow ever well versed one
may be in classics or historical lore— however prepossessing may be one’s
personal appearance— these will avail but little in the com petition for
confidence, which must be the great aim o f all clerks if they would seek
success in life. To such, then, we would say generally, that in all entries
which it may be their duty to make in the records com m itted to their
charge, they should think deeply on the whole subject matter, before they
com m it the same to the safe custody o f black and white. Let them r e ­
member that every fact which may be necessary to elucidate the subject
should appear ; but that all useless repetition and unnecessary language
must be omitted. Let them take particular notice that all essentials are
on the record ; but that all useless waste o f time and space are to be
deprecated. They must remember, too, that their duty is to enter reali­
ties— not speculations—-and that their own private opinions and theories
should be kept to their own desks and in their own bosoms. W e have
known many young men who, with the desire to be esteemed cleverer
than their fellows, have commented on what they really have not under­
stood, and mystifisd those things that were clear to all but themselves;
whilst in their proper position, and in the routine o f every-day official
life, they have been far behind the requirements o f their position, and
have eventually realized the fable o f the hare and the tortise in the race
with their companions in the same office.
Let, then, every young clerk recollect th a t'th e eyes o f his employers
are ever upon him, and that his conduct and his habits are undergoing a
severe, although, perhaps, silent scrutiny.
A s in the army, the soldier who unhesitatingly obeys the orders o f his
officer, is in the surest road to prom otion— so the young clerk will find
his best chance o f rising in life to consist in undeviating attention to
neatness and dispatch in Book-keeping, and the retention in his own breast
o f all ideas that may arise from the nature o f the business com m itted to
his charge.
W e would not have him a mere unthinking tool or drudge, working
like a slave at his daily task; but a thinking, honest, intelligent man—
faithful to the charge he is entrusted with, and devoting his energies to
the proper fulfilment o f the duties o f his position. W e would have him
to act when action is requisite, and to reason within himself as to the
causes and modes o f procedure he may have to record or to witness.
W e would have him remember that his own opinions o f fitness or method
may not accord with those o f his employers or superiors, and therefore
to wait the time when he shall have inspired that confidence which must
eventually result from devotion to their interests, and from the industry
displayed in their service.
This may not eventuate till after years o f application and o f t o i l ; or it
may com e speedily.
Some take a longer time than others before thev
bestow their confidence; and we do not know but that the tardier the
same may be in its com ing, the m ore permanent it will be in its endu­
ran ce; but when it shall com e to you as the result o f intelligent, perse­
vering, sustained application to the interests o f your employers, sweet in­
deed will be your reward, and sweeter still will be the continuance o f




364

Book-keeping; its Use, Necessity, and Simplest Mode.

[N ov.,

your labors, from the consciousness that you have begun reaping your
harvest in the fields o f industry.
To the beginner, then, we would say
again, creep before you walk— walk before you run ; but when you have
begun the race, remember the hare ! Slumber not on your path o f rec­
titude and duty, and remember that “ the crown is reserved for those who
endure even unto the end.”
The clerk, then, being thus indoctrinated with the first duties o f his
office, and continually remembering that Punctuality, Correctness, and
Neatness must be his m otto, must now turn his attention undeviatingly
to those matters which may com e under his control in the daily routine
o f his position. And, first, we would say, especially to those who are in
banks or public companies, that civility to all with whom you may com e
in contact, can never lose you a friend. Y ou are not bound to waste your
own or your em ployer’s time in continued discussion ; but you may save
even much o f that, as well as eventually o f temper on both sides, by co n ­
descending to enlighten the ignorant, and being clear and explicit in those
replies you may be called on to give to demands or inquiries for inform a­
tion. An author has said, “ W ords were given to us to conceal our ideas.”
This we deem but a bad specimen o f M acchiavelliism , and the advice
contained therein to be both untrue and im politic. W e would say, a
civil question demands a civil answer, and i f you feel yourself not at lib­
erty to state facts, say so at once, and refer your querist to those from
w hom he may require them ; tell him that the answer does not belong to
your department, and let him repeat his inquiries in the proper-direction.
I f you are at any time ordered to give an unpalatable answer to an ap­
plicant, do not needlessly add to the irritation by appearing to have a '
personal part in the proceeding. Let the disappointed one not have cause
to turn his enmity on you, and think that he has the right to number you
amongst his “ unfriends;” but let him rather suppose that, but for your
official position, he m ight reckon on your sympathy.
Y ou must also remember that no private correspondence should intrude
on your official and business time.
Y ou are em ployed then by others,
and your hours and minutes are not your own.
Eare, indeed, must be
m e exception to this rule, and great the cause which shall tempt you to
break it. N o petty reason should induce you to call your mind away
from the duties o f your office, and the necessary attention to the business
confided to your care. N o call should be then allowed that possibly could
be attended to at another tim e ; and nothing but sickness or death should
be allowed to cause your absence from the appointed post o f duty. A n d
whilst we are on this point o f advice, allow us to add, that the unshaven,
untidy clerk o f to-day, cannot expect to meet the benevolent and sympa­
thizing eye o f the em ployer on the morrow. N o man o f sense can expect
that a night o f dissipation can properly fit him for the day o f labor and
o f th o u g h t; that the hand which was lifting the bowl o f intemperance
to his lips on the previous evening, will be steady to rule off the balance
on the com in g m orn in g ; that the haunts o f vice and o f licentiousness
will tend to sober his intellect and to brace up his nervous system for the
battle o f life and d u ty ; for truth cannot com e out o f falsehood, or life
out o f death.
It^ then, the young clerk should be asked by any o f his
fellows to stray out o f the paths o f sense and sobriety, let him look on
the tempter with distrust; let him remember that the first false step has
occasioned the temporal and eternal ruin o f thousands, and that the paths




1863.]

Russia— Pojmlation o f Moscow, Finances, etc.

365

o f vice can be better avoided than they can be retraced. Circe destroyed
not Ulysses, because he would not listen to her w iles; and destruction
and disgrace are the sure attendants o f those who once deviate from the
ways o f virtue and rectitude.
Let not extravagance in diet or in dress creep on you ; reflect on your
ways and means at all times, and that an eagle is made up o f quarters
and dimes. W h en you have a holiday assigned to you, remember that
it is not to be wasted ; and therefore devote it alike to the benefit o f your
bodily and mental health. Make the most o f your time, and devote the
interval assigned to their proper recreation, that when the period has e x ­
pired you may return with fresh energies and renewed zest to those duties
which Providence has surroundod you with, so that you may enjoy at
once the esteem o f your employers and the respect and applause o f your
circle o f friends and acquaintances.
I think the summary o f these remarks may thus be noted :
1. Rem ember that nights o f intemperance and dissipation must unfit you
for the daily duties o f your position.
2. D o your own duty, and not leave others to do it for you.
3. Take lessons from the experience o f the past, and improve thereon to
the best o f your ability.
4. Never be above asking for proper advice when needed.
5. K eep your own counsel.
6 . Endeavor to preserve the true equilibrium o,f your bodily and mental
health.
7. Never unnecessarily cause irritation in those with whom you may
officially be brought into contact.
8. And, in all things act consistently, conscientiously, and circumspectly.
If you act up tothese suggestions, I think that you will find the profit
to -be derivtd therefrom eventually com e up to every fair expectation you
may have made. But, should you not prove it so, at any event you will
have the satisfaction o f an easy conscience, and the knowledge that you
have done your best to deserve success. On the contrary, should you be
reckless, inattentive, wilful, and debauched, when the end shall come, you
can only reflect on yourself, and allow that the public is quite correct
when it says, “ Served him right.”

RUSSSIA— POPULATION OF MOSCOW, FINANCES, ETC.
W e gave a -great amount o f interesting information respecting Russia, n
our issue o f last month. Since then, we have received the statistical return
recently published by the official police journal o f Moscow, according to
which, the population o f that city on the 1st o f January last was composed
o f 2 1 0 ,7 5 7 males and 1 3 4 ,7 9 9 females, divided as follow s:— Nobility,
20 ,99 1 ; clergy, 4 ,9 2 9 ; burgess class, 9 2 ,4 0 3 ; peasants, 1 8 9 ,9 2 7 ; milita­
ry, 2 2 ,3 4 2 ; foreigners, 4 ,6 5 8 ; individuals not classified, 1 0 ,3 0 6 . A t the
same period, the city o f Moscow contained 878 manufactories, occu pyin g
4 2 ,4 5 6 work-people, and the produce o f which were estimated at 3 0 ,0 0 0 ,0 0 0




366

Russia— Population o f Moscow, Finances, etc. [November,

o f silver roubles (4f. each). There were in t'lie city 34 ordinary and 78
lithographic printing offices, and 128 charitable establishments, giving an
asylum to 4,197 men and 5,097 women. The receipts o f the city for 1862
amounted to 1,522,116 roubles, and the expenses to 1,811,410 roubles.
The deficit was made up from a reserve fund. During the year the police
received declarations o f 946 robberies commited in the streets and in pri­
vate houses, and 20,079 persons were arrested. The number o f fires during
the year was 113, causing damagesjjto the amount o f 705,779 roubles, o f
which 445,300 were covered by insurance.
The state o f the Eussian finances has lately given serious cause for
anxiety.
According to the monthly report o f the Imperial Bank for August last,
six hundred and thirty-six and a half millions o f billets de credit had been
issued, against twenty-four and a half millions o f roubles in hand ; that is,
there is a security o f one rouble cash against twelve roubles o f paper money
issued. The colossal extent of country open to the circulation o f the notes
keeps up a better demand than would otherwise be the case, yet the pro­
ceedings o f the Imperial Bank have not escaped the usual consequences o f
over issue. W ithin the twenty months between the 1st Januarv, 1859,
and 1st December, 1860, 197,000,000 were withdrawn above the amount
o f fresh deposits; and a Berlin correspondent o f the London Telegraph
says that the sum would have been greater if one half o f the remainder,
consisting o f 328,000,000 o f roubles, had not been the property o f corpo­
rations and charities, who had no help for it but to invest their funds ac­
cording to government orders. It has been also proved by the events o f
the last few months that the amount o f billets exchanged necessitated a
suspension o f cash payment, the end o f which it is impossible to foresee.
Under these circumstances, it will be o f considerable interest to compare
the different items o f the following table :
Billets de Credit.
Roubles.

January 1, 1 8 5 8 ..........
January 1, 1 8 5 9 ..........
January 1, 1 8 6 0 ...........
January 1, 1 8 6 1 ..........
January 1, 1 8 6 2 ..........
January 1, 1 8 6 3 ..........
February 1, 1 8 6 3 ..........
March 1, 1 8 6 3 ................
April 1 , 1 8 6 3 ..................
May 1, 1 8 6 3 .............\ .
June 1, 1 8 6 3 ..................
July 1, 1 8 6 3 ..................
August 1, 1 8 6 3 .............
August 12, 1 8 6 3 ..........

7 8 5 ,2 9 7 ,0 0 6
6 4 4 ,6 4 8 ,7 1 9
7 7 9 ,8 7 7 .8 5 3
7 1 4 ,5 8 0 ,2 2 6
7 1 3 ,5 9 6 ,1 7 8
6 9 1 ,1 0 4 ,5 6 2
6 8 7 ,1 6 8 ,3 5 0
6 8 1 ,9 7 3 ,6 1 4
6 3 7 ,3 5 7 ,1 3 7
6 6 1 ,6 8 6 ,0 0 4
6 5 0 ,8 9 5 ,3 6 8
6 4 8 ,5 8 0 ,0 0 5
6 4 1 ,6 2 5 ,3 9 7
6 3 6 ,6 0 7 ,2 7 9

Cash.
Roubles.
1 1 9 ,1 4 0 ,9 2 1
9 9 ,3 3 8 ,7 4 3
8 6 ,8 7 0 ,0 1 4
8 4 ,3 3 5 ,0 0 7
8 4 ,4 0 5 ,6 1 2
8 0 ,8 9 9 ,1 5 9
70,02 9 ,1 7 1
7 5 ,5 9 6 ,7 8 7
7 2 ,4 4 7 ,1 7 5
6 2 ,0 8 1 ,2 8 9
5 7 ,0 6 7 ,9 1 0
6 1 ,0 3 4 ,9 7 4
5 7 ,9 0 8 ,4 6 7
5 4 ,7 0 9 ,3 0 2

Stock.
Roubles.

2 2 ,3 1 9 ,8 5 9
1 1 ,4 7 3 ,7 4 0
9 ,3 7 1 ,6 0 4
8 .5 4 9 ,4 2 4
1 6 ,3 9 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 2 ,0 0 0 ,0 0 0
1 4 ,4 0 0 ,0 0 0

A s is to be gathered from these figures, the proportion 'between cash in
hand and billets issued was hardly ever so unfavorable as it is now. On
the 1st o f January, 1858, when the circulation o f billets had reached the
figure of 735,250,000 roubles, six roubles were covered by one, the propor­
tion now being eleven and seven-tenths to one.




1863.]

The Suez Canal.

THE

SUEZ

367

CANAL.

WHAT HAS BEE.V DONE AND WHAT REMAINS TO BE DONE.
E s p e c ia l interest is felt at the present tim e in the Suez Canal project.
This undertaking was projected by N a p o l e o n . In 1852, M. de L esseps
attempted to form a join t-stock company, and tw o years afterwards ob­
tained a firman from the Pasha o f E gypt confering upon him the exclu­
sive privilege o f carrying out the enterprise.. In 1855, a commission o f
engineers from various countries examined the proposed route, and stated
in their report that there were no extraordinary difficulties in the way.
The company was formed in January, 1859, with a capital o f $40,000,000,
and the work was shortly afterwards commenced, and over $6,000,000
have already been expended.
In speaking o f this work, the London Times says that the undertaking
o f the com pany is two-fold. The first and principal scheme is, o f course,
the Ship Canal itself, to be cut directly across the Dessert, northward from
Suez to P ort Said, on the Mediterranean.
P ort Said is nearly at the
eastern point o f the great Delta o f the Nile, that includes the whole of
the fertile region o f Egypt, the better known port o f Alexandria being at
the extreme western extremity. The seacoast o f the Mediterranean is the
base o f the great triangle, o f which Cairo may be taken as the apex.
Port Said itself is situated on the long narrow spit o f land that shuts
in Lake Menzaleh from the Mediterranean. Through the shallow water
o f this lake the canal has been formed by dredging. This process has
been so far completed that, for nearly one-third o f the whole line proposed,
a channel has been deepened through water “ covering the earth.” It is
only at the southern point o f Lake Ballah that the work o f cutting through
the dry and sandy soil o f the Desert commenced. From this southern
point o f Lake Ballah an excavation, ten miles in length, has, Mr. H a w k e n s h a w states, opened a channel navigable “ for flat-bottomed boats o f .
small draught o f w ater” from the Mediterranean into Lake Timsah. On
summing up, therefore, what has actually been accomplished, we find that
such boats, adapted for very shallow water, can penetrate the isthmus
from north to south for a distance o f 50 miles from the sea, and o f this
distance 30 miles have been obtained by the process o f dredging.
The second scheme undertaken by the com pany is independent o f the
first, and though called a “ fresh water canal,” is, more strictly speaking,
only an aqueduct.
It is not intended to be navigable as the term gene­
rally implies. It is better described as a large trench or cutting, for the
purpose o f conveying the water o f the Nile from Cairo northward, curv­
ing to the east, through a tract of land purchased by the company, to
Lake Timsah, before mentioned, and then southward to Suez. A t present
all the fresh water to be obtained at Suez is brought from Cairo by the
railway. Large trains, conveying iron tanks filled from the river, are
constantly passing along the line that conveys the passengers by the over­
land route, from sea to sea.
The whole line o f the proposed Ship Canal,
t,from Suez to Port Said, runs either through the two salt water lakes on
he Isthmus, the wide expanse of Menzaleh on the seacoast, or the soil o f




368

The Suez Canal.

[November,

the Desert, “ a barren land, where no water is.”
Labor is impossible
without a certain and abundant supply o f this element, for the want o f
which travelers in similar arid regions have often perished. This aque­
duct is, therefore, a work o f necessity, if the larger undertaking is to be
carried on. It will also be employed to irrigate such portions o f the soil
through which it passes as may be worth cultivating ; and o f this second­
ary purpose a beginning seems to have been made.
The portion o f the Ship Canal still to be excavated is the whole o f the
line from Timsah, southward, through another large sheet o f salt water
called the “ Bitter Lakes,” and the Dessert that lies between them and
the northern point o f the Red Sea. This last section o f the line will run
parallel with the ancient canal, and a little to the eastward o f it.
The
course o f the old work can be traced, but no part o f it has been taken
into the modern scheme.
The works o f the new harbor will carry the
canal through the water o f the Red sea, past Suez and terminate near a
point on the eastern or Arabian shore marked as the “ Fountain o f Moses.”
It is scarcely necessary to say that the portion o f the line described as
completed and “ n avigable” is very far from the accomplishment o f the
object in view. W h a t lias to be done exceeds what has been finished in
about the proportion a large heavily-freighted merchant ship bears to a
“ small flat-bottomed boat o f small draught o f water.” In fact, the Suez
Canal at present is a narrow and shallow cutting, marking out what is to
be the course o f an artificial channel that must be navigable for large
ships o f heavy burden, or be useless.
The seas on both sides o f the Isthmus have nearly the same level, and
as the soil along the whole line across it is strewed with shells com m on
to the Red Sea and the Mediterranean, it is evident that at no distant
period, geographically speaking, those seas spread over the desert track
through .which it is proposed to unite their waters again. But by far the
greatest portion o f the work has vet to be done. W ithou t reference to
the plans and sections by which the report is illustrated it is difficult to
convey a clear idea o f the proportions o f what has to be excavated to
what has been marked out by the eutting on land and the dredging
* through shallow w ater; but if the reader will suppose that the furrow
drawn by a subsoil plow marks the course o f what is to be enlarged into
a ditch he will have a rough notion o f the approximation o f what exists
compared with what is proposed. N othing has yet been done between
Suez and the northern end o f Lake Timsah ; and from that point north­
wards to the Mediterranean nearly five times the amount o f w ork co m ­
pleted has yet to be executed.
The earthwork done is estimated at
7,848,000 cubic y a rd s; the amount still to be performed is 34,000,000
yards.
The sudden favor and renewed interest with which this undertaking is
now being received arise from the fact that two obstacles which stood in
the way o f its accomplishment have just been removed. That is to say,
the V iceroy o f Egypt has ratified all the* engagements entered into by
his predecessor with the company, and regulated his account current with
i t ; and, also, in consideration o f the com pany abandoning to him its
concession o f lands on each side o f the fresh water canal fYom Cairo to
Abbasich, he has undertaken the execution o f the said canal, and therebysaved the company 10,000,000f.
A few weeks ago it was announced that the works had com e to a stand-




1863.]

The Suez Canal.

369

A dispatch from the Turkish Minister, published in the M oniteur, stated
that the Sultan, as Suzerain, had refused his sanction to the concessions
granted by the Pasha, unless forced labor were discontinued, the canal
declared neutral, and the sovereign rights o f the Company over certain
lands— a mile broad on each side o f the fresh water canal from Cairo to
Said— were surrendered. As no great work in Egypt has ever been ac­
complished without forced labor— wages not tempting the Egyptian peas­
ant to endure the risks which in such a country must be encountered by
a household without its head— this dispatch seemed fatal to the under­
taking. But M. db L esseps appealed at once to the French Government,
and, as the Suez Canal is a Napoleonic idea, a pressure was applied at
Constantinople, to which the Porte felt himself obliged to succumb. A
compromise was effected, and the Canal Company, on condition o f sur­
rendering its land— with compensation— was permitted to secure its usual
quantity o f labor. As the ruling Egyptian family is deeply interested in
the undertaking, as Egyptian laborers are quite powerless to resist a sys­
tem which has lasted from the time o f the Pharaohs, and as the British
Government will hardly expose itself to the risk o f another defeat, the
needful supply o f labor may be considered as secured. Naturally the
transaction was looked upon as a great triumph, and one great difficulty
was thus removed ; b'ut the old questions— whether the canal could be
made, whether it would cost m ore or less than the specified sum, wheth­
er if made it could be kept open, and whether, if made and kept open, it
would fulfil its purpose— remained still unanswered.
These questions, however, seem now to have been finally settled in fa­
vor o f the work. Said Pasha, the late ruler o f Egypt, and in early life
M. de L esseps ’ pupil, began latterly to feel a degree o f uneasiness about
his very considerable stake in the undertaking. He, therefore, while in
England, requested Mr. H a w k s h a w , the very eminent English engineer,
to visit and report on the works. H e did so, and his conclusion is favor­
able to the enterprise. H e states that he sees no unusual difficulty in the
execution o f the plan, nor does he conceive that any contingencies can
arise which engineering skill could not surm ount; and, if completed, he
thinks the canal could be maintained without any extraordinary yearly •
expenditure. But, considering the possibility o f meeting with rock at
the Red Sea entrance, and that the deep sea dredging at the Mediterra­
nean end may cost more than the first estimate— considering also “ the
money already expended compared with the work d o n e ” — he thinks it
would be prudent for the promoters o f the scheme to calculate on having
to expend 10,000,000f. sterling, and five years o f labor, before they can
expect the work to be finished.
Thus we see that not only has the difficulty o f obtaining labor and fresh
water been overcome, but also that one o f the most eminent o f English
engineers has pronounced in favor o f the feasibility of the work. O f
course, success like this would naturally make the stockholders jubilant.
The annual meeting was held in Paris, the latter part o f July. It pos­
sessed all the importance o f a political- event, or at least o f a political
demonstration. M. F e r d in a n d de L e ss e p s , the Chairman o f the C om pa­
ny, and, so to speak, its life and soul, was, on presenting himself, greeted
with enthusiasm— the accounts presented were sanctioned with enthusi­
asm—-the reports on the state o f the works were enthusiastically applaud-1
ed— and much “ abuse o f perfidious Albion for opposing the canal, and in




Negotiable Paper.

370

[November,

particular o f the most perfidious o f all Albioners, Lord P a lm ersto n ,” which
the said reports contained, was cheered until the ro o f shook. Rarely,
perhaps never before, was a meeting o f shareholders so very joyful and
impassioned, especially when, as was the case with the Suez people, no
dividend had to be announced. The meeting was informed that the cap­
ital disposable, including what is due on calls not yet paid, is not less
than 140,000,000f. ($28,000,000), and that no new call will have to be
made this year. A s regards the works, it was stated that they were pro­
gressing in the most satisfactory manner, and with all possible rapidity,
and that the execution o f the canal, and the opening o f it for navigation
at a com paratively early period; admit o f not the slightest doubt.
Here, then, is a f i e l d for N a p o l e o n to expand. Let him spend his time
and m oney on this canal and com plete it, and he will add more glory to
his administration than he can in meddling with one or a dozen M exicos ;
for his canal may succeed, but his military despotic governm ent on this
side the water, never.

COMMERCIAL L AW .

No. 7.

NEGOTIABLE P A P E R ; OR, NOTES OF HAND AND BILLS OF EXCHANGE.
TH E

C O N S ID E R A T IO N O F N E G O T IA B L E

PAPER.

1.
Exception to the Common Law R u le, in the Case o f Negotiable P a ­
per.— By the common law of England and o f this country, as we have seen,
no promise can be enforced, unless made for a consideration, or unless it be
sealed. But bills and notes payable to order, that is, negotiable, are, to a
certain extent, an exception to this rule. Thus, an indorsee cannot be de­
feated by the promisor showing that he received no consideration for his
promise ; because he made an instrument for circulation as m o n e y ; and it
would be fraudulent to give to paper the credit o f his name, and then re­
fuse to honor it. But as between the maker and the payee, or between
indorser and indorsee, and, in general, between any two immediate parties,
the defendant may rely on the want o f consideration ; that is, if an indorsee
sues the maker, and the maker says he had no consideration for th e , note,
this is no defence; but if the indorsee sues his indorser, and the indorser
shows that the indorsee paid him nothing, this would be a good defence ;
and so it would be if the payee sued the maker. So, if a distant indorsee
has notice or knowledge, when he buys a note, that it was made without
consideration, he cannot recover on it against the maker, unless it was an
accommodation note, or was intended as a gift. Thus, if A , supposing a
balance due from him to B, gives B his negotiable note for the amount, and
afterwards discovers that the balance is the other way, B cannot recover o f
A ; nor can any third or more distant indorsee, who knows these facts be­
fore buying the note. But if A gives B his note wholly without consider­
ation, for the purpose o f lending him his credit, or for the purpose o f making
him a gift to the amount o f the note, and C buys the note with a full knowl­
edge of the facts, he will nevertheless hold A , although B could not. If
the note was bought honestly for a fair price, we believe the buyer should




1863.]

Negotiable Paper.

371

recover its whole amount, although some have said that he could recover
only what he paid. Every promissory note imports a consideration, and
none need be proved unless to rebut evidence o f want o f consideration.
I f an indorser, sued by an indorsee, shows that the note was originally
made in fraud, he may require the holder to prove consideration ; but if
this be proved, he must pay the whole o f the note, unless he was himself
defrauded by the plaintiff. And if an accommodation note be discounted
in violation o f the agreement o f the party accommodated, the holder can
still recover, provided he received the note in good faith, and for valuable
consideration.
2. O f “ Value received."— “ Value received” is usually written, and
therefore should be ; but is not absolutely necessary. I f not, it will be pre­
sumed by the law, or may be supplied by the plaintiff’s proof. If expressed,
it may be denied by the defendant, and disproved. A nd if a special con­
sideration be stated in the note, the defendant may prove that there was
no consideration, or that the consideration was different. If “ value re­
ceived ” be written in a note, it means received by the maker from the
payee; if the note be payable to the bearer, it means received by the maker
from the holder. In a bill, this phrase means that the value was received
from the payee by the drawer. But if the bill be payable to the drawer’s
own order, then it means received by the acceptor from the drawer.
3. W hat the Consideration may be.— A valuable consideration may be
either any gain or advantage to the promisor, or any loss or injury sustained
by the promisee at the promisor’s request. A previous debt, or a fluctua­
ting balance, or a debt due from a third person, might be a valuable con­
sideration. So is a moral consideration, if founded upon a previous legal
consideration ; as, where one promises to pay a debt barred by the statute
o f limitations, or by infancy. But a merely moral consideration, as one
founded upon natural love and affection, or the relation o f parent and child,
is no legal consideration.
N o consideration is sufficient in law if it be illegal in its nature ; and it
may be illegal because, first, it violates some positive law, as, for example,
the Sunday law, or the law against usury. Secondly, because it violates
religion or morality, as an agreement for future illicit cohabitation, or to let
lodgings for purposes o f prostitution, or an indecent wager ; for any bill or
note founded upon either o f these would be void. Thirdly, if distinctly
opposed to public policy ; as an agreement in restraint o f trade, or injurious
to the revenue, or in restraint o f marriage, or for procurement o f marriage,
or suppressing evidence, or withdrawing a prosecution for felony or public
misdemeanor. But one who sells goods, only knowing that an illegal use
is to be made, without any personal aid in the illegal purpose, may, it seems,
recover the price o f them, on a note given for that price.
TH E RIG H T S

AND

DUTIES

OF

TH E

M AKER.

•

The maker o f a note or the acceptor o f a bill is bound to pay the same
at its maturity, and at any time thereafter, unless the action be barred by the
statute o f limitations, or he has some other defence under the general law
o f contracts. As between himself and the payee o f the note or bill, he may
make any defences which he could make on any debt arising from simple
contract; as want or failure o f consideration ; payment, in whole or in p a rt;




372

Negotiable Paper.

[November,

set-off; accord and satisfaction; or the like. The peculiar characteristics
o f negotiable paper do not begin to operate, so to speak, until the paper
has passed into the hands o f third parties. Then, the party liable on the
note or bill can make none o f these defences, unless the time or manner in
which it came into the possession o f the holder lays him open to these d e­
fences. But the law on this subject may better be presented in our next
section.
TH E

RIG H TS

AND

D U T IE S O F TH E

HOLDER

OF

N E G O T IA B L E

PAPER.

1. W hat a H old er may do with a B ill or N ote.— An indorsee has a
right o f action against all whose names are on the bill when he received it.
And if one delivers a bill or note which he ought to indorse and does not,
the holder has an action against him for not indorsing, or may proceed in
a court o f equity to compel him to indorse. I f a bill comes back to a pre­
vious indorser, he may strike out the intermediate indorsements and sue in
his own name, as indorsee; but he has, in general, no remedy against the
intermediate parties, because, if he made them pay as indorsers to him, they
would make him pay as indorser to them. If, however, the circumstances
are such that they, if compelled to pay, would have no right against him as
an indorser to them, as, for example, if he indorsed it “ without recourse,”
then he may have a claim against them. And it seems now to be settled
that an indorser who comes again into possession o f the note or bill is to be
taken, merely on the evidence o f his possession, as the holder and proprie­
tor o f the bill, unless the contrary is made to appear.
The holder o f a bill indorsed and deposited with him for collection, or
only as a trustee, can use it only in conformity with the trust. A nd if the
indorsement express that it is to be collected for the indorser’s use, or use
any equivalent language, this is notice to any one who discounts i t ; and
the party discounting the paper against this notice .will be obliged to deliv­
er the note, or pay its contents, if collected, to the indorser. Thus, Mr.
S i g o u r n e y , a merchant in Boston, remitted to W i l l i a m s , a London bank­
er, for collection, a bill o f exchange indorsed by him, and over his name
was written, “ Pay to W i l l i a m s or order for my use.” W i l l i a m s had the
bill discounted for his benefit by his bankers, and failed ; and the English
court held that the indorsement showed that the bill did not belong to W i l ­
l i a m s , and that the discounters had no right to discount it for him ; and
they were obliged to repay all the proceeds of it to S i g o u r n e y .
2. A Transfer after D ishonor o f N egotiable P a p e r -—So long as a note
remains due, everybody has a right to believe that it has not been paid,
and will be paid at maturity, and may purchase it in that belief. But as
soon as it is overdue, every person must know that it is either paid, and so
extinguished, or that it has not been paid, and therefore dishonored, and
that there may be good reasons why it was not paid, or good defences
against it. H e therefore now takes it at his own peril ;«and therefore a
holder who took the note after it became due is open to many of the d e­
fences which the promisor could have made against the party from whom
the holder took i t ; because, having notice that the bill or note is dishon­
ored, he ought to have ascertained whether any, and, if so, what defence
could be set up.
So, too, if he takes the note or bill before it is due, but with notice or




1 8 6 3 .]

Negotiable Paper.

373

knowledge of fraud or other good defence, that defence may be made against
him. Otherwise, no defence can be made against one who becomes an in­
dorsee for consideration, which does not spring out of the relations between
himself and the defendant. That is, if an indorsee sues his indorser, the
indorser may make any defence which he could make if the suit were not
on a negotiable note. But if an indorsee sues a maker, the maker may
• have a good defence against the indorser which he cannot make against the
indorsee, because the defence may not grow out of anything passing be­
tween the maker and the indorsee. Thus, if A makes a note to B or order,
which B somehow defrauds A out of, B cannot o f course sue A upon it.
But if B indorses the note for value to C, and C to D, and D to E, and 60
on, any one o f these indorsees who does not know the fraud can recover the
amount o f it from A . But no one o f them, who had notice or knowledge
o f the fraud before he bought the note, can sue A upon it any more than
B could.
N or is an indorsee liable to such defences as arise out o f collateral mat­
ters ; but only to those which attach to the note or bill itself. Thus, if A
makes a note to B or order, for one thousand dollars, payable in six months,
and three months after it is due, and unpaid, C buys the note from B, and
sues A upon it, if A proves that B owes him a thousand dollars for goods
sold, or for any other transaction distinct from the note, A cannot make
this defence against C, because it does not grow out o f the note itself; al­
though he could have made this defence if B had sued him. But if A
could prove that he had paid B on this note five hundred or a thousand d ol­
lars, he could make this defence as well against C as against B, if B bought
the note after it was dishonored. Hence, it is said the indorsee o f a dis­
honored note is not liable to a set-ofl between the original payee and the
maker.
In some o f our States it is held that, if a maker o f a note pays money on
it after it is due, he cannot have the benefit o f this payment against one
who purchases the note after it is due without knowledge o f the payment,
unless he caused the payment to be indorsed upon the note ; because it is
his duty to see that this indorsement is made, in order to put purchasers o f
the note on their guard. N or is the mere want o f consideration between
payee and maker one of those defences to which a purchaser for valhe after
dishonor, even with notice, is liable, provided the bill or note was originally
intended to be without consideration, as in the^case o f an accommodation
bill or note, or one intended as a gift. But it seems that, if a bill or note
be delivered as security for a balance on a running account, and, when it
becomes due, the balance is in favor o f the depositor, who does not with­
draw the bill, but leaves it where it was, and afterwards the balance be­
comes against the depositor, the holder may still hold it to secure the bal­
ance, and will not be regarded as the transferee o f an overdue bill. In the
absence o f any evidence on the point, the presumption o f law is, that the
bill was transferred to any present holder before maturity. And a promis­
sory note payable on demand is considered as intended to be a continuing
security, and therefore as not overdue, unless very old indeed, without some
evidence o f demand o f payment and refusal. But it is not so with a check ;
for this should be presented without unreasonable delay, and, although a
taker after one day’s delay may not be affected, nor a taking after six days
be held as conclusive evidence of negligence or fraud, yet the jury may in­
fer this, so that the drawer will not be held if the bank have failed.




374

Negotiable Paper.

[November,

It is most important to the holder o f negotiable paper to know distinctly
what his duties are in relation to presentment for acceptance or payment,
and notice to others interested in case of non-acceptance or non-payment.
3. Presentment f o r A cceptance— It is always prudent for the holder o f a
bill to present it for acceptance without dela y ; for if it be accepted, he has
new security; if not, the former parties are immediately liable ; and it is ,
but just to the drawer to give him as early an opportunity as may be to
withdraw his funds or obtain indemnity from a debtor who will not honor
his bills. And if a bill is payable at sight, or at a certain period after sight,
there is not only no right o f action against anybody until presentment, but,
if this be delayed beyond a reasonable time, the holder loses his remedy
against all previous parties. And although the question o f reasonable time
is generally one only o f law, yet, in this connection, it seems to be treated
as so far a question o f fact, that it is submitted to the ju r y ; there is no cer­
tain rule determining what is reasonable time in this respect. If a bill of
exchange be payable on demand, it is not like a promissory note, but must
be presented within a reasonable time, or the drawer will be discharged. A
holder may put a bill payable after sight into circulation, without presenting
it him self; and in that case, if a subsequent holder presents it, a much
longer delay in presentment would be allowed than if the first holder had
kept it in his own possession.
The presentment should be made during business h ours; but it is said
that in this country they extend through the day and until evening, except­
ing in the case o f banks. But a distinct usage would probably be received
in evidence, and permitted to affect the question.
Ill health, or actual impediment without fault, may excuse delay on the
part of the holder ; but not the request o f the drawer to the drawee not to
accept.
Presentment for acceptance should be made to the drawee himself, or to
his agent authorized to accept. And when it is presented, the drawee may
have a reasonable time to consider whether he will accept, during which
time the holder is justified in leaving the bill with him. And it seems that
this time would be as much as twenty-four hours, unless, perhaps, the mail
goes out before. A nd if the holder gives more than twenty-four hours for
this purpose, he should inform the previous parties o f it. I f the drawee has
changed his residence, the holder should use due diligence to find him ; and
what constitutes due or reasonable diligence is a question o f fact for a jury.
And if he be dead, the holder should ascertain who is his personal repre­
sentative, if he has one, and present the bill to him. I f the bill be drawn
upon the drawee at a particular place, it is regarded as dishonored if the
drawee has absconded, so that the bill cannot be presented for acceptance
at that place.
4. Presentment f o r Dem and o f Paym ent.— The next question relates to
the duty o f demanding paym ent; and here the law is much the same in
respect to notes and bills.
The universal rule of the law-merchant is, that the indorsers o f negotiable
paper are supposed to agree to pay it only if the maker or previous indor­
sers do not, and provided due measures are taken to get it paid by those
who ought, in the first place, to pay it. Therefore every holder of negotia­
ble paper can hold it as long as he likes, and not lose his claim against the
maker o f a note, or the acceptor o f a bill, unless he holds it more than six




1863.]

Negotiable Paper.

375

years, and the Statute o f Limitations bars his claim. The reason is, that
the maker or acceptor promises directly, and not merely to pay if another
does not. But every indorser o f a note or bill, and every drawer o f a bill,
only promises to pay if a maker or acceptor or some previous indorser does
not. If there is a bill o f exchange with six indorsers, the last promises in
law to pay it only if the acceptor, the drawer, and the five previous indor­
sers do not pay. H e has therefore a right that a demand according to law
should be made against every one o f these persons, and that their refusal to
pay should be notified to him, forthwith, so that he may secure himself if
he can. And the law-merchant is very rigorous and precise in defining
what demand should be made by the holder, and when and how demand
should be made on every p rior party, in order to hold any subsequent par­
ty ; and also as to what notice o f the demand and refusal o f the p rior party
should be given to any subsequent party to whom the holder looks for
payment.
A demand is sufficient, if made at the usual residence or place o f business
o f the payer, either o f himself, or of an agent authorized to pa y; and this
authority may be inferred from the habit o f paying, especially in the case
o f a child, a wife, or a servant. The demand should not be made in the
street. W hen made, the bill or note should be exhibited; and if lost, a
copy should be exhibited, although this does not seem absolutely necessary.
And when the payer calls on the holder, and declares to him that he shall
not pay, and desires him to give notice to the indorsers, this c .institutes de­
mand and refusal, provided this declaration be made at the maturity o f the
p a p er; but not if it was made before maturity, because the payer may
change his intention.
Bankruptcy or insolvency o f the payer is no excuse for non-demand ; al­
though the shutting up o f a bank, perhaps, may be regarded as a refusal to
all their creditors to pay their notes. Absconding o f the payer is a sufficient
excuse ; but if the payer has shut up his house, the holder must neverthe­
less inquire after him, and find him, if he can by proper efforts. If the
payer be dead, demand should be made at his house, unless he have per­
sonal representatives, and in that case, o f them. A n d if the holder die,
presentment should be made by his personal representatives ; that is, by his
executor or administrator. It is said that both the death and insolvency o f
the payer do not relieve the holder from the duty o f demanding payment.
But it seems to be held in one case that, where the maker o f a negotiable
note was dead at the time the indorsement was made, the indorser was
chargeable without demand on the maker.
If the drawer has no effects in the hands o f the drawee, and has made
no arrangement equivalent to having effects there, non-presentation for pay­
ment is not a defence which he can make if sued on the bill.
Impossibility o f presenting a bill for payment, without the fault o f the
holder, as the actual loss o f a bill, or the like, will excuse some delay in
making a demand for paym ent; but not more than the circumstances re­
quire. And the mere mistake o f the holder is no excuse, because he has
no right to make mistakes at the expense of other people. Thus, where a
bill o f exchange payable in London was sent by the mistake o f the holder
in Birmingham to Liverpool, for payment, and there the mistake was dis­
covered and the bill was sent to-JLondon, and would have arrived in season,
but the negligence o f the clerks in the post-office at Liverpool delayed it two
d a y s; it was held by the court, that neither the mistake o f the holder nor




376

Negotiable Paper.

[November,

the negligence o f the clerks was excuse enough, and the acceptor having
failed, the indorsers were discharged.
In this country, all negotiable paper payable at a time certain is enti­
tled to grace, which here means three days’ delay o f payment, unless it be
expressly stated and agreed that there shall be no grace ; and a present­
ment for payment before the last day o f grace is premature, the note not
being due until then. If the last day o f grace falls on a Sunday, or on a
legal holiday, the note is due on the Staturday, or other day before the
holiday. But if there be no grace, and the note falls due on a Sunday, or
other holiday, it is not payable until the next day.
Generally, if a bill or note be payable in or after a certain number o f
days from date, sight, or demand, in counting these days, the day o f date,
sight, or demand is excluded, and the day on which it falls due included.
A nd we think the law would supply the word “ fr o m ,” &c., if the word
were not used. Thus, a note dated January 1, and payable in “ twenty
days,” would be held payable in twenty days (and three days’ grace)
after the day of the date; that is, on the 24th. I f a note is made pay­
able in one or more months, this means calendar months, whether
shorter or longer. I f made on the 13th o f December, and payable in two
months, it is payable on the 13th o f February and grace, that is, on the
16th. But if so many days are named, they must be counted, whether
they are more or less than a month. Thus, if the above note were payable
in sixty days, it -would be due on the 11th and grace, or on the 14th o f
February. If dated 13th January, and payable in sixty days, it would be
due on the 14th o f March, with grace, or on the 17th.
Although payment must be demanded promptly, that is, on the day on
which it is due, it need not be done instantly ; a holder has all the business
part o f the day in which the bill or note falls due to make his demand in.
Bills and notes payable on demand should be presented for payment
within a reasonable time. If said to be “ on interest,” this strengthens the
indication that they were intended to remain for a time unpaid and unde­
manded. But to hold indorsers, they should still be presented within what­
ever time circumstances may make a reasonable time ; and this is such a
time as the interests and safety o f all concerned may require; and it may
be a few days, or even one or two weeks. A bill or note in which no time
o f payment is expressed, is held to be payable on demand. A nd evidence
lo prove it otherwise is inadmissible.
The holder of a check should present it at once ; for the drawer has a
right to expect that he w ill; it should, therefore, be presented, or forward­
ed for presentment, in the course o f the day following that in which it was
received, or, upon failure o f the bank, the holder will lose the remedy he
would otherwise have had against the person from whom he receives it. If
the drawer o f the check had no funds, he is liable always.
Every demand o f payment should be made at the proper place, which is
either at the place of residence or o f business o f the payer, and within the
proper hours o f business. I f made at a bank after hours o f business, if the
officers are there, and refuse payment for want o f funds, the demand is suf­
ficient.
A note payable at a particular place should be demanded at that place ;
and a bill drawn payable at a certain place should be demanded there, in
order to charge antecedent parties; an action, however, may be maintained
against the maker or acceptor without such dem and; but the defendant




1863.]

Negotiable Paper.

3

11

may discharge himself o f damages and costs beyond the amount o f the pa­
per, by showing that he was ready at that place with funds. I f a bill drawn
payable generally be accepted payable at a particular place, we think the
holder may and should so far regard this as non-acceptance, that he should
protest and give notice. But if this limited acceptance is assented to and
received, it must be complied with by the holder, and the bill must be pre­
sented for. payment at that place, or the antecedent parties are discharged.
If payable at a banker’s or at the house or counting-room o f any person,
and such banker or person becomes the owner at maturity, this is demand
enough ; and if there are no funds deposited with him for the payment, this
is refusal enough. I f any house be designated, a presentment to any per­
son there, or at the door if the house be shut up, is enough.
I f this direction be not in the body o f the note, but added at the close,
or elsewhere, as # memorandum, it is not part o f the contract, and should
not be attended to.
I f the payer has changed his residence, he should be sought for with due
diligence ; but if he has absconded, this is an entire excuse for non-demand.
W here a bill or note is not presented for payment, or not presented at
the time, or to the person, or in the place, or in the way, required by law,
all parties but the acceptor or maker are discharged, for the reasons before
stated.
5.
Protest and N otice.— If a bill o f exchange be not accepted when prop­
erly presented for that purpose, or if a bill or note, when properly presented
for payment, be not paid, the holder has a further duty to perform to all
who are responsible for payment. But this duty differs somewhat in the
case o f a bill or note. In case o f non-payment o f a foreig n bill, there should
be a regular protest by a public notary ; but this, though frequently prac­
ticed, is not necessary in the case o f an inland bill, or a promissory note,
whether foreign or inland. But notice o f non-payment should be given to
all antecedent parties, equally, and in the same way, in the case o f both
bills and notes.
The demand and protest must be made according to the laws o f the place
where the bill is payable. It should be made by a notary-public, who
should present the bill him self; but i f there be no notary-public in that
place, or within reasonable reach, it may be made by any respectable in­
habitant in the presence o f witnesses.
The protest should be noted on the day o f demand and refusal; and may
be filled up afterwards, even, perhaps, so late as at the trial.
The loss o f a bill is not a sufficient excuse for not protesting it. But a
subsequent promise to pay is held to imply, or be equal to, a previous pro­
test and notice.
The notarial seal is evidence o f the dishonor o f a foreign b i ll; but not,
it would seem, o f an inland bill. A nd no collateral statement in the cer­
tificate is evidence o f the fact therein stated ; thus, the statement by a no­
tary that the drawee refused to accept or pay because he had no funds o f
the drawer, is no evidence o f the absence o f such funds.
W e repeat, that the general, and, indeed, universal duty o f the holder o f
negotiable paper is, to give notice o f any refusal to accept a bill or pay a
bill or note to all antecedent parties. The reasons o f this have been stated.
These previous parties have engaged that the party who should accept or
pay will do so ; and they have further engaged that, if he refuses to do his

von. xlix .— no. v.




25

378

Negotiable Paper.

[November,

duty, they will be liable in bis stead to the persons injured by his refusal.
They have a right to indemnity or compensation from the party for whom
they are liable, and to such immediate notice o f his failure as shall secure
to them an immediate opportunity o f procuring this indemnity or compen­
sation if they can. N or is the question what notice this should be, left to
be judged o f by the circumstances o f each case ; for the law-merchant has
certain fixed rules applicable to all negotiable paper.
Notice must given even to one who has knowledge. N o particular form
is necessary ; it may be in writing, or o r a l; all that is absolutely essential
is, that it should designate the note or bill with sufficient distinctness, and
state that it has been dishonored ; and also that the party notified is looked
to for paym en t; but it has been held that the notiee to the party, when
given by the immediate holder o f the bill, sufficiently implies that he is
looked to. And notice o f protest for non-payment is efficien t notiee o f
demand and refusal. How distinctly the note or bill should be described,
cannot be precisely defined. It is enough if there be no such looseness,
ambiguity, or misdescription as might mislead a man o f ordinary intelli­
gence ; and if the intention was to describe the true note, and the party
notified was not actually misled, this would always be enough. The notice
need not state for whom payment is demanded, nor where the note is ly ­
ing ; and even a misstatement in this respect may not be material, if it do
not actually mislead.
N o copy o f the protest need be se n t; but information o f the protest
should be given.
I f the letter be properly put into the post-office, any miscarriage o f the
mail does not affect the party giving notice. The address should be suffi­
ciently specific. Only the surname— as “ Mr. A mes — especially if sent to
a large city, might not, in general, be enough ; thus, in an English case,
where a letter, directed “ Mr. II aynes , Bristol,” containing notice o f the
dishonor o f a bill, was proved to have been put into the post-office, it was
held that this was not sufficient proof o f notice ; the direction being too
general to raise a presumption that the letter reached the particular indi­
vidual intended. But where a party drew a bill, dating it generally “ Lon­
don,” it was held that proof that a letter containing notice o f the dishonor
o f the bill was put into the post-office addressed to the drawer at “ London,”
was evidence to go to the jury that he had due notice o f dishonor ; because,
if the party chooses to draw a bill, and date it so generally, it implies that
a letter sent to the post-office, and directed in the same way, will find him.
A n d if a letter, however generally directed, can be shown to have reached
the right person at the right time, it is sufficient. The postmarks are strong
evidence that the letter was mailed at the very time these marks indicate ;
but this evidence may beTebutted, that is, contradicted.
A notice not only may, but should, be sent by the public post. It may,
however, be sent by a private messenger; but is not sufficient if it do not
arrive until after the time at which it would have arrived by mail. It may
be sent to the town where the party resides, or to another town, or to a
more distant post-office, if it is clear that he may thereby receive the notice
earlier. And if the notice is sent to what the sender deems, after due dili­
gence, the nearest post-office, this is enough. I f the parties live in the same
town, notice should not be sent by mail. In a case in Massachusetts, the
court said, the general rule certainly is, that, when the indorser resides in
the same place with the party who is to give the notice, the notice must




1863.]

Negotiable Paper.

319

be given to the party personally, or at his domicil or place o f business.
Perhaps a different rule may prevail in London, where a penny post is es­
tablished and regulated by law, by which letters are to be delivered to the
party addressed, or at his domicil or place o f business, on the same day
they are deposited. And perhaps the same rule might not apply where the
party to whom notice is to be given lives in the same town, if it be at a
distant village or settlement where a town is large, and there are several
post-offices in different parts o f it. But in that case, the defendant had his
residence and place o f business in the city o f Bangor, and the only notice
given him was by a letter addressed to him at Bangor, and deposited in the
post-office at that place. And this was insufficient to charge him as in­
dorsee
The notice should be sent either to the place o f business, or to the resi­
dence, o f the party notified. But if one directs a notice to be sent to him
elsewhere than at home, it seems that it may be so sent, and bind not only
him, but prior parties, although time is lost by so sending it.
The notice should be sent within reasonable tim e ; and in respect to ne­
gotiable paper, the law-merchant defines this within very narrow limits. If
the parties live in the same town, notice must be given or sent so that the
party to whom it is sent may receive the notice in the course o f the day
next after that in which the party sending has knowledge o f the fact. If
the parties live in different places, the notice must be sent as soon as by the
first practicable mail o f the next day.
Each party receiving notice has a day, or until the next post after the dav
in which he receives it, before he is obliged to send the notice forward.
Thus, if there be six indorsers, and the note is due on the 10th o f May, in
New York, and is then demanded and unpaid, the holder may send it by
any mail which leaves New York off the 11th o f May, to the last indorser,
wherever he lives ; and that indorser may send it to the indorser immedi­
ately before him, by any mail on the day after he receives i t ; and so may
each of the parties receiving notice; and all the parties receiving notice in
this way will be held. So, too, a banker, with whom the paper is deposit­
ed for collection, is considered a holder, and entitled to a day to give notice
to the depositor, who then has a day for his notice to antecedent parties.
The different branches of one establishment have been held distinct holders
for this purpose, and each to be entitled to a day.
I f notice be sent by ship, it is said that it may be delayed until the next
regular ship ; but this is not quite certain ; or, rather, the rule can hardly
as yet be considered fixed and definite. It should be sent by the first safe
opportunity.
Neither Sunday nor any legal holiday is to be computed in reckoning
the time within which notice must be given.
There, is no presumption o f notice ; and the plaintiff must prove that it
was given, and was sufficient. Thus, proving that it was given in “ two or
three days,” is insufficient, if two would have been right, but three not.
Notice should be given only by a party to the instrument, who is liable
upon it, and not by a stranger; and it has been held that notice could not
be given by a first indorser, who, not having been notified, was not himself
liable. A notice by any party liable will operate to the benefit o f all ante­
cedent or subseqent parties ; that is, will hold them all to the original h old­
er o f the note, if the original holder gave notice properly to the party near­




380

Negotiable Paper.

[November,

est to him. The notice may be given by any authorized agent o f a party
who could himself give notice.
Notice must be given to every antecedent party who is to be held. And
we have seen that this may be given by a holder to the first party liable,
and by him to the next, &c. But the holder may always give notice to all
antecedent parties ; and it is always prudent, and in this country, we be­
lieve, quite usual, to do so. For the holder loses all remedy against all
those who are discharged by the failure o f anyone receiving notice to trans­
mit it properly. But if a holder undertakes to notify all the antecedent
parties, he must notify all as soon as he was obliged to notify the party
nearest to him ; that is, the day after the dishonor o f the note. W e mean
by this, that every party has a day ; so that, if there be six indorsers, if
the first indorser is notified on the seventh day from the dishonor, it is
enough, i f the holder took his day to notify the sixth indorser, and that in­
dorser his day to notify the fifth, and so on. But the holder has n obody’s
day but his o w n ; and if he undertakes to notify all the parties, he must
notify them all on the first day after the non-payment.
Notice may be given personally to a party,, or to his agent authorized to
receive notice, or left in writing at his home or place o f business. I f the
party to be notified is dead, notice should be given to his personal repre­
sentatives. A notice addressed to the “ legal representative of,” &c., and
sent to the town in which the deceased party resided at his death, has been
held sufficient. But a notice addressed to the party himself, when known
to be dead, or to “ the estate of,” <fcc., would not be o f itself sufficient, but
might become so with evidence that the administrator or executor actually
received the notice.
If two or more parties are jointly liable on a bill as partners, notice to
one is enough.
One transferring by delivery without indorsement a note or bill payable
to bearer, is not generally entitled to notice o f non-payment, because, gen­
erally, he is not liable to pay such paper ; but if the circumstances o f the
case are such as to make him liable, then he must have notice, but is enti­
tled not to the exact notice o f an indorser, but only to such t'easonable no­
tice as is due to a guarantor. If, for instance, the paper was transferred as
security, or even in payment o f a pre-existing dibt, this debt revives if the
bill or note be dishonored ; and therefore there must be notice given o f the
dishonor. In general, a guarantor o f a bill or note, or debt, is not entitled
to such strict and exact notice as an indorser is entitled to, but only to such
notice as shall save him from actual injury ; and he cannot make the want
o f notice his defence, unless he can show that the notice was unreasonably
withheld or delayed, and that he has actually sustained injury from such
delay or want of notice. I f an indorser give also a bond, or his own note,
to pay the debt, he is not discharged from his bond or note by want o f
notice.
t
In general, all parties to negotiable paper, who are entitled to notice, are
discharged by want o f notice. The law presumes them to be injured, and
does not put them to proof. It has been held, however, that the drawer o f
a check not notified of non-payment is thereby discharged only to the ex­
tent o f the loss which he actually sustains.
I f one who is discharged by want o f notice nevertheless pays the bill or
note, he may call upon the antecedent parties, if due notice has been given
to them, and if, by taking up the paper, he acquires the rights o f the hold­




1 8 6 3 .]

Negotiable Paper.

381

er ; or if he, having been indorsee, indorsed the paper over ; for he is then
remitted (or restored) to his rights and position as indorsee.
The right to notice may be waived by any agreement to that effect prior
to the maturity of the paper. It is quite common for an indorser to write,
“ I waive notice,” or, “ I waive demand,” or some words to this effect. It
should, however, be remembered, that these rights are Independent, and
one does not imply the other. A waiver o f demand may im ply a waiver
o f notice o f non-paym ent; but a waiver o f notice o f non-payment certainly
does not imply a waiver o f demand ; therefore, if an indorser writes on the
note, “ I waive notice,” still he will be discharged if there be not a due de­
mand on the maker. So if a drawer countermands his order, the bill should
still be presented, but notice o f dishonor need not be given to the drawer.
Or, if a drawer has no funds, and nothing equivalent to funds, in the
drawee’s hands, and would have no remedy against the drawee or any one
else, as the drawer cannot be prejudiced by want o f notice, it is not neces­
sary to give him notice. But the indorser must still be notified ; and a
drawer for the accommodation o f the acceptor is entitled to notice, because
he might have a claim upon the acceptor.
I f a drawer make a bill payable at his own house, or counting-room, this
has been said to be evidence to a jury that the bill was drawn for his ac­
commodation, and that he expects to provide for the payment, and is not
entitled to notice o f dishonor ; but it would be safer to give notice.
Actual ignorance o f a party’s residence justifies the delay necessary to
find it out, and no m o r e ; and after it is discovered, the notifier has the
usual time.
Death, or severe illness, o f the notifier or his agent, is an excuse for de­
lay ; but the death, bankruptcy, or insolvency o f the drawee is no excuse.
As the right to notice may be waived before maturity, so the want of
notice may be cured afterwards by an express promise to pay ; and an ac­
knowledgment o f liability, or a payment in part, is evidence, but not con­
clusive evidence, o f n otice; the jury m ay draw this conclusion from part
payment, but are not bound to, even if the evidence be not rebutted. If
the promise be conditional, and the condition be not complied with, the
promise has been held to be still evidence. Nor is it sufficient to avoid such
promise, that it was made in ignorance o f the la w ; it must be made, how ­
ever, with a full knowledge o f the facts. The following distinction seems
to be drawn ; if the fact o f neglect to notify appears, the party entitled to
notice is not bound by his subsequent promise, unless it was made with a
knowledge o f the n eglect; but if the fact o f neglect does not appear, the
subsequent promise will be taken as evidence that there was no neglect, but
sufficient notice. A nd a promise to pay, made in expectation of the dis­
honor of a bill or note, will be construed as a promise on condition o f usual
demand and notice, and, o f course, does not waive them. A nd, as we have
remarked, no waiver o f any right growing out o f any other previous negli­
gence or omission to perform some duty, can affect any party but him who
makes the waiver.




382

Commercial Chronicle and Review.

[November,

COMMERCIAL CHRONICLE AND REVIEW.
G E N E R A L BUSINESS— RISE

IN

STOCK8— PRICES

OF

ARTICLES— RESTRICTIONS ON GO LD — STOCKS IN

LONDON— C O M P A R A TIVE VALUES— IMPORTS GOODS— INCREASED COST— G EN ERAL CAUSE— N E W IS ­
SUES— N E W B A N K S — FIV E PER CENT L E G A L TENDER— RISK IN C ERTAIN PR IC E S — COAL— EXPORTS
— LOSSES ON PRODUCE— G ENERAL STATE

OF

TR A D E — MOVEMENT OF SPECIE— DECLIN E IN B A N K

RESERVE— BATES OF E XCH AN G E— MONEY— UN ITED STATES STOCKS.

T h e general activity o f business that we noted as apparent last month
has continued with considerable animation during the one which has now
elapsed, and at the same time speculative tendencies, in many branches
o f merchandise, have been developed. The stock speculations, which had
reached so high a point in August, have to some extent subsided, appa­
rently through the impression that their values were exaggerated above
those o f most commodities. It was certainly the case that the high point
which prices touched in August, at a time specie was at a very low point,
caused a considerable importation o f stocks from London, where they
ruled much lower than could be realized for them in New Y ork in specie.
The same tendency caused an accumulation o f securities in N ew York,
while at the same time an active demand for merchandise sprang up, the
prices for which rose very considerably.
B y referring to our number o f February last, our readers will find a
table of fifty-five articles, o f which the comparative prices are given from
the P rices Current, January 1st, 18C2, and January, 1863, as compared
with the price o f gold. Bringing the table down to the present time, at
different dates, and adding the quantity o f Government paper outstanding,
the results will be as fo llo w s:
G old,

January, 1862..............................
April, 1 8 6 2 .................................
January, 1863..............................
March, 1 8 6 3 .................................
July, 1863.....................................
October, 1863..............................

Par.
l£
32
54
25
50

T otal prices
o f 55 articles,

804
844
1,312
1,524
1,323
1,455

E ise
p ercen t.

5
62
90
65
81

U. S. paper
outstanding.

26,780,110
145,880,000
238,021,315
345,553,500
396,681,056
446,000,000

The prices o f these articles have been governed by the values in paper,
and those which form the exports o f the country have been sold at specie
prices abroad, but the bills drawn against them are sold for the Govern­
ment paper. This business has been perfectly unrestrained, while that
in gold has been subjected to restrictions imposed by Congress as well as
by the State government. Those restrictions were designed to prevent a
speculative holding o f gold, and not to check its free exportation. Inas­
much, however, as the money under the law could not be borrowed on
the gold, it was difficult to hold it. The prices may be supposed, there­
fore (as was the design o f the law), to be less than .it would have been
without those restrictions. It is obvious that where the paper declines in
value, it operates alternately upon com m odities and gold. W h en th e
latter is in active demand the price rises. This rise causes exchange bill
to sell higher, acting as a premium upon the export o f produce, vvhichs




Commercial Chronicle and Review.

18 63 .]

383

being shipped, o f itself checks the export o f gold, and therefore lessens
the demand for it. On the other hand, w h e n ’g old falls in value it op e­
rates as a check upon exports and as a premium upon imports. In illus­
tration, we give a table o f the prices o f stocks in London and N ew Y ork,
at different da tes:
,----------------- L o n d o n .----------------- , ,---------------- --------- N ew Y o r k .----------------------- ,
U. S. 6‘s. 5’s.
E rie. Central. U. S. 6’s. E rie. Central. Exchange. Gold.

March 2 8 ____
June....................
July 4 .................
August 22.........
September 1 2 ..
“
2 6 ..
October 8 .........

70
79
67
77
77
75
75

58
61
68
69
69
68
65

42
60
69
76
85
78
69

65
72
72
86
93
88
87

104
108
105
107
107
106
1081

80
95
99
120
101
106
109

119
122
120
132
130
133
134

170
160
147
135
143
154
172

56
46
25
221
30
40
56

Thus, in March New Y ork Central was 65 in London, at which date
advices there from New Y ork gave gold 72 and exchange 89 ; consequent­
ly the price in New Y ork should have been 121 to be equal to the L on ­
don price o f 65, at the then rate o f exchange; but gold fell to 122^- in
August, giving exchange 135, which was equal to 100 for Central in Lon
don, or a rise o f 35 per cent, through the improvement in the value o f
the paper which constitutes the currency. As a consequence, the London
and other markets were stripped o f stocks to sell in New Y ork.
The follow ing table will show the relative prices of stocks in New Y ork
and London at different rates o f exchange :
Lon don.

>--------------------------------------- N e w Y o r k , w ith exchange a t---------------------------------------,

12a
60 ...........
65...........
7 0 ...........
7 5 ...........
8 0 ...........
85 ...........
90 ...............
95 ...............
100...........

130

133

75
78
81
81} 84}
87}
8 7 } 91
94}
93} 9 7 } 101}
100 104 108
106} 110} 114}
112} 117 131}
118} 123} 128}
125 130 135

140

145

ISO 155

100

165

84
91
98
105
112
119
126
133
140

87
94}
101}
108}
116
123}
130}
187}
145

90
97}
105
112}
120
127}
135
142}
150

96
104
112
120
128
136
144
152
160

99 102
107} 110}
115} 119
123} 127}
132 136
140} 144}
148} 153
156} 161}
165 170

93
100|
108}
116}
124
131}
139}
147}
155

170

175

ISO

105 108
113} 117
122} 126
131} 135
140 144
152} 157
157} 162
166} 171
175 180

Thus, if Erie is selling at 85 in London, the relative price o f the same
in New Y ork, with sterling exchange at 150, would be 1 2 7 £ ; or, if Uni­
ted States 7-30’s, payable in gold, are in New Y ork 107^, with exchange
at 165, the equivalent in London is 65 cents per dollar, which gives an
interest in gold o f over 11 per cent per annum. The rate o f exchange
always follows that o f gold, and is found by adding the premium on gold
to the premium o f the bills in gold. Thus, a shipment o f gold produces
. 110^ as the price o f exchange.
I f g old is 50 per cent premium, 50 per
cent must be added to the premium, which, being 5 5 .1 2 , makes the ex­
change 1 6 5 .37£.
This operation o f the fluctuation o f the paper values applies to all com ­
modities, and, as a consequence, a rapid fall in gold is followed by large
importations and a corresponding export o f gold to pay for them. The
fall in gold in August was, therefore, followed bv increased importations
o f stocks and goods and increased sales from warehouses, while shipments
o f produce, were involved in loss. The im portations at the port o f New
Y ork for the m onth o f September, were as follows :




384

[November,

Commercial Chronicle and Review.
IM PO RTS, P O R T OF N E W YO RK .

•
ISpecie.

F r e e go o d s.

January...................
February.................
March......................
A p r il...* .................
M a y ........................
J u n e ........................
J u l y .......................
August-...................
September..............

$101,906
213,971
123,616
107,061
197,217
109,997
1S2,245
113,877
78,281

$2,413,649
783,561
1,328,806
1,828,216
710,021
780,963
683,880
509,781
786,864

Total 9 months
“ 1 8 6 2 ....

$1,288,121
945,577

a

,----------- E n te re d lo r ------------- ,
C on sum ption. W arehouse.

T o ta l*

$8,741,227 $4,482,794 $15,739,676
7,372,539
3,657,775
12,037,846
11,461,572
3,454,530
16,370,524
9,493,830' 6,456,208
17,385,315
7,980,281
5,437,404 14,324,923
6,328,581
5,377,885 12,597,426
9,080,210
4,227,265 14,173,600
10,004,580
4,409,891 15,038,129
11,203,535
3,431,310
15,499,940

$9,325,831 $81,666,365 $45,327,510 $187,547,817
18,809,755 82,625,172 35,475,891 137,856,395

The quantities taken out o f warehouse in the last sixty days have greatly
exceeded the entries. The quantities put upon the markets have been,
therefore, much greater than the figures for the arrivals. The absorption
o f these goods by the retailers and consumers has been very active, as
well in consequence o f the previous great econom y in consumption, which
left the public bare o f goods, as by reason o f the increasing cost o f labor
and materials, which make the cost o f manufactures higher and the rise
in exchauge and gold, which so rapidly swell the cost o f importation.
The great general cause which underlies this rise, is the increasing abun­
dance of paper. A s seen in the above table, there is on the part o f the
Government now outstanding $446,000,000. Besides this, there will be
emitted in Novem ber $50,000,000 o f five per cent legal tender small
notes, which were sold to the banks last month. The question has been
raised whether these notes will increase the currency or be taken for in­
vestment. It is very probable that they will have both effects. The as­
sociated and other banks hold some $50,000,000 o f “ greenbacks” in
reserve. These will be supplanted by the new notes, because the. latter
bear interest. The $50,000,000 reserves thus released will com e more
actively into circulation. D uring the month the N ew Y ork Court o f A p ­
peals has decided in substance that the banks are not held to payments
in specie under the New Y ork constitution. The consequence o f this is
seen in the bank tables on another page, where the circulation, after a
long period o f contraction, has begun to expand. The new banks, under
the national banking law, now amount to 105 in number, and are about
to receive their circulating notes from the controller. These will be about
$12,000,000, and will rapidly increase. The old country hanks are also
expanding their circulation to meet that demand for currency, which, by
a sort o f paradox, always attends rising prices, caused by redundant cir­
culation.
From these three sources, therefore— new legal tenders, new
banks, and old banks— the circulation is in process o f expansion, and consequenlly all prices are advancing. W e may quote several here :
Coal.

January. 1 8 6 2 ...
April, 1862 .........
January, 1 8 6 3 ...
March, 1863 ___
July, 1863...........
October 20, 1863.




$4
4
7
7
8
10

25
60
00
60
00
00

Sugar,
100 lbs.

$6
6
8
9
10
10

87
87
25
25
25
87

Coffee,

100 lbs.
$17 25
20 50
28 00
29 00
29 00
32 00

Iro n ,
pig-

$21 00
21 00
31 00
35 00
35 50
36 00

Copper.

$22 50
23 00
32 50
33 00
32 00
34 00

P o rk .

Corn. W heat.

$12 00
13 25
14 25
14 00
14 25
16 38 1

63
60
81
90

68
00

$1 26
1 30
1 50
1 62
1 25
1 28

1863]

385

Commercial Chronicle and Review.

Many other articles are now held for an advance. A ll are affected by
different circumstances, but primarily by the same cause. Coal, as an in­
stance :
The quantity mined this year to date, i s . . . .ton s
Last year............ . ..........................................................
Increase..................................................................

7,657,526
6,212,865
1,444,661

Notwithstanding the scarcity o f labor that has caused the cost o f min­
ing to be largely increased, the quantity mined has been swollen, but
not enough to meet the demand, which is mainly from the Government,
and paid for in “ greenbacks.”
One million tons o f coal for iron clads,
that cost the Government last winter §4,500,000, now costs it nearly
§10,000,000. The duties and exchange rise in proportion to the advance
here, as is the case with sugar and other articles o f im port. The general
prospect o f a. further increase o f paper induces holding, to avail o f the ad­
vance. The exports o f produce in the month o f September were, to some
extent, larger than in August as follows :
EX PO R T S, POR T OF N E W YO R K .

S pecie.

January...................
February.................
March......................
A p r il.......................
l l a y ........................
J u n e ........................
J u l y .......................
August....................
Septem ber............

§4,624,574
3,965,664
6,385,442
1,972,884
2,115,679
1,367,774
5,268,881
2,465,361
3,480,385

.--------—F oreign .----------- ,
F re e .
D u tiab le.

$78,111
43,889
213,685
74,949
101,337
49,380
77,232
90,813
65,400

D o m e s tic .

T o ta l.

$668,275 $14,829,398 $19,695,351
610,009
17,780,586
22,400,148
768,266 16,187,689
23,695,082
376,224 11,581,933
14,004,940
602,254 13,183,510
16,002,780
298,067 14,780,072
16,495,293
448,601 15,298,073
21,092,787
231,774 10,666,959
14,454,809
238,972 11,717,761
15,492,518

Total 9 months §32,846,494 $779,798 $4,231,442 $125,475,981 $163,333,175
“ 1 8 6 2 .... 42,843,139 2,520,616
3,829,403 100,837,192 110,487,221

The price o f exchange in September was about ten per cent higher
than in August, which is about the extent to which the value o f the d o ­
mestic exports increased.
On the other hand, there was a decline of
prices in England that involved shippers in loss. The general result o f
business for the nine months has been as follow s :
Imports from January 1 to O ctober 1 .................
Exports o f g o o d s ..........................
§130,486,681
Corrected by exch an ge..............
33,495,560
N et exports..
Excess o f im ports....................................................
Specie exported...........................................................
Adverse balance..............................................

$137,547,817
l
96,991,121
$40,556,696
32,846,494
$7,710,202

W ith the increased imports that followed the fall in g old in August,
the outward movement was resumed as fo llo w s:




Commercial Chronicle and Review,

380

[November,

SP E C IE AX D P R IC E OF GO LD .

January 3.
((
10.
it
17.
tt
24.
tt
31.
February 7 •
“
14.
it
21.
it
28.
March
7.
«
14.
((
21.
It
28.
4.
April
11 .
It
18.
it
25.
May
2.
9.
a
16.
a
23.
tt
30.
6.
June
«<
13.
it
20.
it
27.
4.
July
ti
ii.
it
18.
ti
25.
August i .
8.
“
15.
“
22.
((
29.
5.
Sept.
12.
«(
19.
“
26.
October 3.
“
10.
it
17.
it
24.

,--------- 1 8 G 2 .---------- , ,---------------— --------- 1 8 6 3 .
Exported.
Eeceived.
Eeceived. Exported. Gold in bank. Prem. on gold.
442,147
681,448 35,954,550 84* a 84£
726,746 36,770,746 34 a 39
886,928 1,035,025 1,277,788
547,703
1,380,247 37,581,465 40 a 49
322,918
678,841
780,816 38,549,794 47 a 5 0 f
627,767
310,484
1,331,027 38,894,840 481 a 60J
301,860 1,277,000 38,243,839 6 7 1 a 571
976,235
854,000
614,146 1,156,154
359,978 1,152,846 38,426,460 531 a 531
934,612
520,017 37,981,310 54 a 64
769,247
510,774
741,109
285,394 1,377,016 39,512,256 71 a 72
585,236 1,243,551
679,074
733,643 39,705,089 521 a 53
477,335
677,058
3,540,550 86,110,085 541 a 541
540,968
249,514 1,201,907 33,955,122 53 a 541
779,564
490,368
159,105 1,050,156 34,317,691 41 a 42
673,826
250,778
581,293
473,385 34,257,121 53 a 54
1,505,728
260,728
607,059 35,406,145 46 a 521
693,436
217,602 „ 158,437 36,761.696 52 a 531
617,279
256,604
635,546 1,151,300
629,855 37,175,067 47 a 511
712,275
410,804
294,998 36,846,528 48 a 501
484,019 1,574,166
205,057
451,827 38,102,633 681 a 47
604,682 1,093,031
661,996 88,556,552 49 a 491
938,032
258,570
438,745 38,644,865 4 8 f a 49
501,204
881,452
279,994 37,632,634 4 4 f a 441
224,911
318,066
553,035 1,647,299
411,483 37,241,670 46 a 461
235,364 37,884,128 4 8 a 48§
352,391 1,990,327
522,147 38,314,206 42 a 431
612,461 3,156,988
187,082
134,432 38,271,702 46 a 4 6 J
393,212 3,094,101
2,647,060
347,807 38,302,826 44 a 441
401,936 38,712,397 321 a 321
254,947
641,451 2,424,916
2,190,781 38,254,427 23 a 231
441,179 1,846,023
784,537
1,725,748 35,910,227 26 a 261
748,523
G. Gate lost.
270,182
480,374 33,746,681 281 a 29
964,422
890,552
530,044 33,156,548 261 a 27
700,431
313,612 1,210,230 82,874,913 25 a 251
1,089,111
919,825
238,398 31,520,499 241 a 25
1,137,644
231,854 1,379,710 32,030,055 241 a 241
309,799 31,989,381 321 a 33
807,063
551,097
1,042,S35
279,043
852,752 32,018,107 28 a 29
934,415
490,865
193,584
585,796 31,014,411 321 a 33
758,286
996,892
277,380 1,411,611 30,008,566 39 a 391
713,075
803,583 30,064,614 421 a 421
268,282 2,555,656 29,927,281 461 a 47
807,616 2,255,513
....... 1,714,551
1,206,950 28,382,473 511 a 52
768,121
2,024,380
267,911 1,243,273 28,804,281

Total.. • • • 18,063,938 43,230,075

8,541,978 88,307,427

It will be remembered in this table that, notwithstanding the rise in
gold, the quantity in bank has steadily declined. The Treasury paid out
some $3,000,000 in the first week in O ctober for interest, notwithstand­
in g w hich the banks had lost $10,329,924 since July 11— little more than
three months. This continued drain, no longer replenished from the in­
terior, diminishes the available quantities at the com m and o f shippers
and renders the exchange market very firm.
It was the case, however,
that when exchange was low in August many speculators bought and im ­
porters took options o f exchange for 60 days.
These were realized to­
ward the close o f October, making the market weak.
The rates have
been as fo llo w s:




1863.]

387

Commercial Chronicle and Review.
KATES OF EX CH AN G E.

L on d on .

Jani. 8 ,
“ 10,
(i
17,
u
24,
it
31,
Feb. 7,
“ 14,
(•
21,
((
28,
Mar. 7,
((
14,
it
21,
tl
28,
April 4,
“ 11,
a
18,
u
25,
May 2,
“
9,
((
16,
“
23,
30,
June 0,
u
13,
a
20,
June27,
J u ly ll,
u
18,
u
25,
Aug;• i ,
tl

;«

8,

15,
22,
a
29,
Sept. 5,
“ 12,
“ 19,
a
26,
Oct. 3,
“ 10,
“ 17,
u

146 a 147*
149 a 152
160 a 162
162* a 163
171 a 177
169 a 173
170 a 171
171 a 179*
185 a 188
167 a 169
168 a 171
169 J a 171*
157 a 161
168 a 172
158 a 162
165 a 167*
163 a 165
163 a 165
168 a 170
162* a 164
161 a 163
156* a 158
158* a 160
156 a 161
155 a 157
159 a 160*
143 a 146
138 a 139
138 a 139
140 a 141*
139* a 140*
1374 a 138*
137* a 138*
135* a 136*
141 a 147
142 a 144*
146 a 147*
151 a 152*
154* a 157*
160* a 162
168* a 172

Paris.

3.85 a 3 .80
3.72*r a 3 .67*
3.52* a 3 .45
3.50 a 3 .45
3.32 a 3 .15
3.30 a 3 .25
3.32 a 3 .27
2.20 a 3 .12
3.10 a 3 .00
3.37* a 3 .30
3.35 a 3 .30
3.37* a 3 .27*
3.57 a 3 .47
3.40 a 3 . 25
3.55 a 3 .45
3.37* a 3 .45
3.47* a 3..50
3.47* a 3. 42
3,42* a 3. 32
3.50 a 3 .45
3.52 a 3 45
3.62* a 3 65
3.57* a 3. 52*
3.55 a 8. 47*
3.62 a 3.,57*
3.55 a 3 . 50
3.95 a 3,.85
4.07 a 4. 02
4.10 a 4..05
4 .0 6 * a 4. 00
4.06 a 4. 00
4 .1 2* a 4. 08*
4.12* a 4. 08*
4.10 a 4. 15
4.00 a 3. 90
3 .9 2* a 4. 00
3.87* a 3. 83
3.77 * a 3. 71*
3.65 a 3. 57
3.55 a 8. 48*
3.33* a 8. 27*

A m sterdam .

F ran k fort.

H am burg.

56 a 56*
66 a 58
60* a 61*
61 a 61*
65* a 66*
65 a 65*
65 a 65*
67 a 68*
67* a 71
64 a 64
64 a 64
63* a 63*
61 a 62
62* a 63*
61 a 62
62* a 62*
61 a 61*
61* a 62*
62* a 63
61* a 62
61 a 61*
59* a 60*
59* a 61*
59* a 61
58* a 59
59* a 60*
54 a 54*
51* a 52
51* a 52*
52* a 53
52* a 52*
51* a 52
51* a 52*
51 a 51*
52* a 56*
53 a 53*
54* a 55
56* a 56*
58 a 59
60* a 61
63* a 64

66 a 56*
57* a 58*
61 a 62*
61* a 62
65 a 67
65 a 65*
65 a 65*
68 a 68*
70 a 71
65 a 66
64* a 65*
63* a 64*
61 a 62
62* a 64
61 a 62
62* a 63
61* a 62
61* a 62*
62* a 63*
61* a 62*
61* a 62
6ft a 60*
60 a 60*
60 a 61*
58* a 59*
60 a 60*
54 a 55*
60 a 52*
51f a 52*
52* a 53*
52* a 52*
52 a 52*
52 a 52*
21* a 51*
52* a 52*
53* a 54
54* a 55*
56* a 57
58* a 59*
60* a 61*
64 a 64*

49* a 49*
60* a 51*
54 a 55*
54 a 5 4 f
57 a 5 8 f
57 a 57*
56|•a 57*
59 a 60*
61* a 62*
55 a 55*
55*: a 56*
56 a 67
53 a 54
55* a 67
53* a 54*
54* a 55*
53* a 54*
58* a 54*
55* a 56*
64 a 55
54 a 54*
52* a 53
52* a 53*
52* a 54
51 a 52
52* a 52*
47* a 48*
46* a 46*
45* a 46*
46* a 47*
46* a 47
45* a 46
45* a 45*
45 a 45*
46* a 48
47 a 48
48 a 48*
49* a 50
51* a 52*
53 a 53*
66 a 56*

Berlin.

98 a 98*
99 a 100
108 a n o
107 a 108*
114 a 117
114 a 116
113* a 114*
118* a 119*
123 a 124
111 a 113
112 a 114
113 a 114
167 a 108
111 a 111
106 a 108
108 a 110
107 a 108
107 a 108
110 a 112
107 a 109
107 a 108
104* a 106
105 a 106
104 a 107
103 a 104
106* a 107
94 a 96
92 a 93
91 a 92
92* a 93*
92 a 92*
91* a 92
90* a 91*
90 a 91
95* a 96*
93* a 94*
95* a 97
99 a 100
103 a 104
106* a 107*
111* a 113

The rapid change in the value o f bills operates disastrously up<*p all
business. Many importers, indeed, cover their sales early in the season by
taking options o f the bankers, who, in their turn, covered themselves with
gold or produce bills.
There were also many who were sanguine o f a
further fall, and who suffered in the rise. These interests were all opposed
to a rise in gold, which has becom e the point on which values turn, since,
being no longer a currency, it is only a com m odity.
The activity o f business on a cash basis has been accompanied with a
continued abundance o f money ; the most important demand having been
from stock dealings, and the rate has been 6 @ 7 per cent. The accumu­
lation o f money seeking investment has been large, and the investments
in the Governm ent five-twenties have been greatly increased, since the
fall o f gold made those stocks, as compared with specie, much cheaper.
Thi§ sudden increase o f sales is attributed by many to orders on foreign
account, which would compensate in some degree for a deficiency in exports
in providing exchange. The prices have been as follows :




38S

C om m ercial C h ron icle and R ev iew .

[N ov em b er,

P R IC E S UN ITED STATES P A P E R .

-—6’s,18SI.—4
K eg.

January
“
(C
“
u

3,..
10,..
17,..
24, .
31...
February 7,..
u
14,..
“
21...
((
28,..
March
7,..
“
14,. .
«<
21,...
“
28,...
April
4 ,..
H
11,...
te
18,...
“
25,...
May
2 ...
9,’...
“
16,...
“
23,...
“
30,...
June
6,...
13,...
“
20,...
“
27,...
July
11,...
18,...
“
25,...
August 1,...
“
8,...
15,...
“
22,...
29,...
Sept.
5,...
“
12,,..
<c
19,...
“
26,...
October 3,...
«
10,...
“
17,...

96*
97*
91*
95
92*
92
94
96*
100*
99*
104*
103*
104*
1044
1044
104
105
105*
106
108
108*
108
104
104*
103*
102
104*
104*
105*
104*
105*
1054
106'
106
106
105
106
106*
107
107*
107*

Coup.

98
98
91*
96
94
93*
96
97*
102*
100*
104*
104*
105
105
105
105
105
106*
107
108
108*
108
108*
108*
1084
107*
105
106
106*
105*
106*
105*
107*
107
106
106*
106*
106*
106*
108
109

A u gu st

5’s, 1874.
88*
90
884
90
86
85*
87*
91*
97
94*
98
96
96*
97*
97*
96
96
97*
97
97*
97*
97*
99
99
98*
98
97*
98
97
96*
964
97
97
95
95
95
96
96
95
97
97

7 3-10,
3 voars.

102*
103
101
102
1014
102
102*
103*
105*
105
1064
107
106*
104|
105
105
106
1064
io o ‘
107
107*
107
107
106
106
104
106
106*
106*
1064
106*
106*
107
107
106
106
1064
106*
106*
106*
106*

1 y e a rcevtif.
Old.
N ew .

96*
97
95
96
94
94
96
95
98*
984
ioo '
100
100
99
100*
101
102
102
101*
101*
101*
101*
101*
101*
101
100*
100*
101
100*
101
101
101
101*
101*
100*
101
101*
101*
101*
101*
102*

•

99£
99*
99*
99*
99*
99*
97*
98
98*
97
98*
99
98*
99*
99*
99|
99*
99*
99*
99*
99f
99*
99|
99f
99*

demand
G old.

lutes.

344 a 34*
37* a 38
49 k 46*
47 a 48*
55 a 60*
57* a 57*
5 3 * a 53*
53* a 64
71 a 71*
52* a 53
54* a 54*
54* a 54*
41 a 41*
53 a 53*
46 a 52*
53 a 53*
151* a 151*
150 a 150*
152* a 152*
149 a 149*
148* a 149
144* a 144*
146 a 146*
148 a 148*
142* a 143*
146* a 146*
132* a 132*
125 a 125*
126 a 126*
128* a 127
126* a 127
125 a 125*
1244- a 125
124* a 124
132* a 183
128 a 129
133* a 133*
189* a 189*
142* a 142*
146* a 147
151* a 152

29
35
43
44*
53
55
51
62
71
53
53

The amount actually sold abroad is, however, very small. A s explained
above, the United States stocks can be bought cheaper in London tbafi
in N ew Y ork . The continued large subscriptions by brokers, new banks,
and others, towards the close o f O ctober, caused m oney to becom e dear
and affected the price o f stocks.
The situation was nearly the same as
in June last, when the conversions to 5-20’s caused the rate o f money to
rise to full 7 per cent, and induced a withdrawal o f the five per cent de­
posits with the Treasuryl
On the 25th o f June notice was given that
deposits would be removed, the amount on hand having fallen below the
legal limit o f $100,000,000. The same dearness o f money now shows
itself from the same cause, but the banks hold $25,000,000 o f 5 per cent
certificates, heretofore paid in gold, but which ceased on the 1st N ovem ­
ber. Those certificates may now be paid in “ greenbacks,” and thus ease
the market.




1863.]

Journal o f Banking, Currency, and Finance.

389

JOURNAL OF BANKING, CURRENCY, AND FINANCE.
BANK ITEMS AND BANK RETURNS.
U nited S tates B anks v s . S tate B anks.— W e gave last month an arti­
cle by one o f our bank presidents, on the question whether the banks
organized under the National Currency A ct should be admitted to the
Clearing-house, the publication o f which has elicited much discussion, and
one political paper, we see, has impeached its loyalty ! The article in ques­
tion was handed us for publication, before it was issued in any other form,
with the writer’s name, and it struck us as a very fair, unimpassioned dis­
cussion o f an important financial measure. W e shall gladly publish any
article o f equal ability on either side o f the same subject.
This United States Currency A ct is, however, to us a strange piece o f
legislation. W e can say, with the writer in last month’s Magazine, that if
the success o f this scheme o f banking were necessary to the suppression o f
the rebellion, we could submit to it. But in what respect does it benefit
Government ? The only suggestion in its favor we have heard is, that it fur­
nishes a demand for United States bonds as a basis for the banks. But even
granting it does, what advantage is that, sipce these same bonds are depos­
ited with Government and circulation is issued on them, so that the sale o f
the bonds amounts simply to the issue o f ninety per cent in currency ?
W h y, then, could not Government have issued that currency directly, with­
out the previous sale o f the bonds ? Certainly, the inflation caused is just
as great, whether the Government issued the notes directly, or indirectly
through the banks. W here is the use, then, o f Government selling the
bonds, and paying these banks five per cent interest for the privilege o f is­
suing through them ninety per cent in currency, when it, could have issued
the same currency without the banks and without paying any interest? If
any o f our readers can see how the country is benefited by this operation,
we should be glad to hear from them, for we are sadly in need o f light.
According to our view of the matter, the success o f this banking scheme, as
it now stands, not only will fail to advance, but must be directly opposed
to, the best interests o f the Government.
W e publish this month the Circular o f the Controller o f the Currency,
which has excited so much remark. It will be found valuable, as em brac­
ing the views o f Government at the present time and for future reference.
. N ational B anks up to O ctober 14, 1863.— The follow ing is the offi­
cial statement o f the number, location, and capital o f national banks form ­
ed up to O ctober 14, 1863. It will be seen that the total capital amounts
to less than $ 1 3,00 0,00 0:
C onnecticut —New Haven, Stamford, Norwich..........................................
D istr ic t ok C olu m bia — Washington City..................................................

I llinois— Chicago, Aurora, Cairo, Monmouth............................................
I n d ian a — Indianapolis, Anderson, Blufftown, Cambridge City, Center­
ville, Evansville, Fort Wayne, Franklin (2), Kendallsville, Lafay­
ette, Lawreneeburg, Richmond, Rockville, Terre Haute, Warsaw,
Valparaiso.................................... ...........................................................
I owa— Davenport, Io(wa City, Keokuk, L y o n s ..........................................
K entucky— None.




.$600,000
500,000
250,000
, •
1,621,500
260,000

39
M

0

u a iM & l

a in e

Journal o f Banking, Currency, and Finance.

— B a th .....................................................................................................

M assachusetes — Springfield, Worcester, Barre..........................................
M ic h ig a n — Ann Arbor, Detroit, Fenton.......................................................
M issouri — Columbia, St. Louis................. . ....................................................
M a r y l a n d — None.
N e w H a m p sh ir e — Portsmouth, Nashua.........................................................
N e w Y o r k — New Y o r k City (8 ), Adams, Ellenville, Delhi, Danville,

Fiehkill Landing, Moravia, Rondout, Seneca Falls, S. Worcester,
Syracuse, Watertown................................................................................
N e w J e r se y — Newark .................................................................................................
O h i o — Cincinnati (4), Cleveland (2), Akron (2), Dayton (2), Cadiz, Can­
ton, Findlay, Fremont, Germantown, Greenfield, Hamilton, Ironton,
Lodi, Logan, Portsmouth, Salem, Sandusky, Upper Sandusky, To­
ledo, Troy, Warren, Youngtown.............................................................
P e n n s y l v a n i a — Philadelphia, Carlisle, Erie, Girard, Kittaning, Holliday sburg, Huntingdon, Johnstown, Newville, Pittsburg, Scranton (2),
Strasburg, Towanda, Wilkesbarre (2), Marietta..................................
R hode I sland — None.
T ennessee — None.
V e r m o n t — None.
W isconsin — Milwaukee, Hudson, Janesville.. . . ..........................................
Total, to October 14, 105 banks.

[November,
$100,000
800,000
250,000
200,000
200,000
1,840,000
125,000

4,458,000
1,721,500

375,000

Capital............................................ $12,776,000

On the evening o f the 22d o f O ctober, Mr. M cC ullough , Controller
o f Currency, addressed a m eeting o f gentlemen at the Fifth Avenue H otel.
The object o f the meeting wa£ to take measures for organizing a large
national bank in this city— probably the same one that was contemplated
as the Third. The following was the call issued:
N ew Y ork, October 19, 1863.
S ik— You are respectfully invited to meet the Hon. H ugh McCullough, the Con­
troller of the Currency, at eight o’clock on Wednesday evening, October 21, at the
Fifth Avenue Hotel, for the purpose o f a conference in relation to the establishment
o f a large national bank in this city.
(Signed,)
Pater Cooper, John J. Astor, Jr., Freeman Clark, John J. Phelps, Morris Ketchum,
David Dows, Paul S. Forbes, Joseph Stuart, E. D. Morgan, Jonathan Sturges, George
Opdyke, Isaac N. Phelps, O. De Forest Grant, Isaac Sherman, A. Arnold, Elisha
Riggs, B. H, Hutton.

Besides the gentlemen above named, there were present H on. Samuel
H ooper, o f Massachusetts, Chairman o f the Committee o f W ays and
Means in Congress; Mr. H. B. Hurlbut, President o f the First National
Bank at Cleveland, O h io ; Samuel T. Dana, o f Boston ; Mr. Leonard Je­
rome, General W in . K . Strong, Colonel Vermilyea, Mr, Jaques, V icePresident o f the Metropolitan Bank, Mr. Cisco, Mr. David Iloadley and
others.
After listening to the remarks which Mr. M c C ullough had to
make, the chairman o f the meeting presented the follow ing resolutions,
w h ich were ^ lo p te d :
Resolved, As the sense of this meeting, and after listening to the able exposition
of the necessity which exists for such an institution from Hon. H ugh McCullough,
that it is expedient to organize a national bank in this city, with sufficient capital to
meet the wants of the country, under the system recently inaugurated by CoDgress.
Resolved, That the capital of said bank be $5,000,000, with privilege to increase
the same to $50,000,000, from time to time, as may be fouud expedient.
Resolved, That a committee of three be appointed by this meeting to select seven
suitable persons as commissioners to receive subscriptions to the capital stock of said
hank.
.
Messrs. Hutton, Grant, and Vermilyea were appointed a committee under the last
resolution, and after a vote of thanks to Mr. M cCullough for his interesting and
able address, the meeting adjourned.




1863.]

Journal o f Banking, Currency, and Finance.

391

T he $50,000,000 L oan to G overnment .— W e gave last month the
history o f the late bank loan to Government. The follow ing have been
the payments on i t :
N e w Y o r k banks.

O ther banks.

5 per cent when loan was taken...........____
10
“
September 2 0 ........................ ____
“
“
2 7 .........................____
10
10
“
October 3 .................................-----“
“ 19 . . .» .......................
10

$1,750,000
3,500,000
3,500,000
3,500,000

$750,000
1,500,000
1 500,000
1,500,000
1,050,000

T ota l...................................................... ____

$15,750,000

$6,750,000

M aking the total p a id ................................................................
A n d leaving still to be p a id ....................................................

$22,500,000
27,500,000

A m ount o f loan......... ........................................................

$50,000,000

But two calls have been made on this loan this month, on account o f
the unusually large receipts at the United States Treasurer’s office from
increased sales o f bonds and custom duties.
The balance with the A s­
sistant Treasurer, October 23d, was $35,745,688 77. The banks receive
interest on the whole amount o f the loan from the time it was taken, irre­
spective o f the dates on which they actually pay the m oney. A s yet the
banks have not been troubled in the least to make their payments to the
Treasury on account o f the loan. It may not be known to all o f readers
that the loan committee was revived to equalize the holding o f the legal
tenders among the banks, as the specie was managed during a late finan­
cial crisis. Then the specie was put into a pool and the banks which ran
below a certain per centage were allowed’ to draw from the banks which
accumulated, by depositing securities with the com m ittee. In this way,
however, there was an inducement for each bank to keep up its line, be­
cause when it ran down, and the bank had to borrow, interest must
be paid, and this interest o f oourse inured to the benefit o f the stronger
bank. In the recent arrangement, the legal tender notes were all to be
held as com m on stock, with this exception, that no provision was made
for com pelling each bank to maintain a certain per centage. Thus, a
bank which foregoes interest to hold a million in legal tenders really
maintains this surplus at its own expense, but for an equal benefit to the
institution that allows its surplus to run out. If the latter were obliged
to borrow o f the former when its balance run down, and pay interest for
such accommodation, the arrangement would conform to that made con­
cerning the coin when the loan com m ittee was constituted.
S emi- annual B ank D ividends of B oston.— The follow ing table from
the Boston Shipping L ist, presents the capital o f each o f the Boston
banks paying dividends at this time, together with the last two semi-an­
nual dividends, and amount paid on Thursday, O ctober 1st. O f the fortythree banks in the table, the dividends average 8 .6 4 per cent. Three
banks divide 5 per cent, two 4£, fourteen 4, fourteen 3$, eight 3 ; the
Massachusetts Bank pays 3]- per cent, or $8 per share, and the Traders’
passes its dividend. The Metropolis is closing up its affairs. Sixteen o f
the banks increase their dividends :




/

392

Journal o f Banking, Currency, and Finance.

B oston banks.

A tlantic................................
A t la s ....................................
Blacbstone............................
Boston, (par $ 5 0 )...............
B oylston ..............................
Broadway..............................
C it y ......................................
Columbian............................
Commerce............................
Continental..........................
Eagle......................................
Eliot......................................
Exchange..............................
Faneuil H a ll.......................
Freeman................................
G lobe....................................
Granite................................
Hamilton..............................
Hide and Leather...............
Howard.................................
Market, (par $70)...............
Massachusetts, (par $250).
Maverick..............................
Mechanics’ ............................
Merchants’ ............................
Mount Vernon.....................
Mutual Redemption...........
National................................
New E ngland.....................
N orth....................................
North A m erica...................
Republic...............................
Revere...................................
Safety Fund.........................
Shawmut...............................
Shoe and Leather...............
State, (par $60)...................
Suffolk..................................
Traders’ ................................
Tremont................................
U nion.....................................
Washington...........................
W ebster................................
Total,
Total,
Total,
Total,

October, 1863..
April, 1863___
October, 1862..
April, 1862___

,----D iv id e n d s . ---- » A in opn t,
Capital. A p ril, ’63. Oct. , ’63. Oct. , ’63.
$500,000
1,000,000
750,000
900,000
400,000
150,000
1,000,000
1,000,000
2,000,000
300,000
1,000,000
600,000
1,000,000
500,000
400,000
1 000,000
900,000
500,000
1,000,000
500,000
560,000
800,000
400,000
250,000
4,000,000
200,000
661,700
750,000
1,000,000
860,000
750,000
1,000,000
1,000.000
1,000,000
750,000
1,000,000
1,800,000
1,000,000
600,000
1,500,000
1,000,000
750,000
1,600,000
$38,431,700
38,631,700
38,631,700
38,631,700

2
8
31
4
41
31
31
3
3
3
34
3
4
4

S
4

si
41
34
31
34

$8*
3
4
3
31
0
3
4
3
3

8
31
3
3
41
31
5
0
4
4
31
4

3
31
4
4
41
4
31
3
34.
3
4
3
4
5
f3
4
4
5
31
31
4
$8

Si
4
3

31

4
3
4
3
31
31
31

Si
31
41
31
5
0
4
4
31
4

15,000
35,000
30,000
36,000
18,000
6,000
35,000
30,000
70,000
9,000
40,000
18,000
40,000
25,000
12,000
40,000
36,000
25,000
35,000
17,500
22,400
25,600
14,000
10,000
120,000
7,000
22,468
22,500
40,000
25,800
26,250
35,000
35,000
35,000
26,250
45,000
63,000
50,000
60,000
40,000
26,250
60,000

[November,
Stock, dividend on.
A p ril, ’ 63. Sep., ’63.

ss

84
103
103
70
116
102
105
111
105
99
110
102
118
116
99
125
112
135
101*
102
74
260
100
114
99
99

103*
107
64
116
104
103*
111
104*
100
112
103*
120
118
100
125
114
140
105
103
75
270
100
114
100
101

95
115
96
105
99
108
102
95
130
72
147
86
115
116
104
105

95
115
99
105
99
108
105
9S
130
69
147
88
115
116
105
107

$1,384,018
1,297,750
1,204,000
1,190,500

B ank of F rance v s . B ank of S avo y — P ower to I ssue N otes.:— A
great com m otion has been excited in com m ercial circles at Paris, by a
singular affair. A t the time Savoy formed part o f the dominions o f K in g
V ictor Emanuel, there existed a Bank o f Savoy with a capital o f only
4,000,000f. ($800,000), but possessed o f the o f issuing notes privileges o f
establishing branches, o f increasing its capital at will, and o f being o f in* The dividend of the Massachusetts Bank is S 1-5 per cent (par $250,) equal to
$8 per share.
f Freeman’s not official.




1863.]

Journal o f Banking, Currency, and Finance.

393

definite duration. In the treaty annexing the province to France, no
special stipulation was made with regard to this bank, and accordingly it
came within the clause by which France guaranteed to all companies and
establishments in that province the maintenance o f the rights and privi­
leges they had enjoyed. After a while the directors o f the Bank o f Sa­
voy fancied that they had no chance o f maintaining their ground against
the Bank of France, and they accordingly proposed to sell purely and
simply their business and their privileges to that establishment. N eg o­
tiations took place and extended over an unreasonably long time. But
at last they were broken off, because the Bank o f France would not co n ­
sent to give the price demanded by the Bank o f Savoy. On the rupture
o f these negotiations, the directors o f the Bank went to Messrs. P ere ir e ,
and these great financiers saw at once that the Bank o f France had com ­
mitted a gross blunder as regarded its own interests, and that the Bank
o f Savoy m ight be turned to account in a manner which it had not the
sagacity to foresee. They entered into a provisional agreement for pur­
chasing the privileges o f the Bank, and about the first o f O ctober that
agreement becam e definitive. The Bank o f Savoy, therefore, is theirs.
W h en their purchase had becom e a f a i t accompli, the great fact that the
Bank o f Savoy can issue notes presented itself, with appalling sternness,
to the directors o f the Bank o f France. This latter Bank, as our readers
are aware, has hitherto had the exclusive privilege o f issuing notes ; and
it has certainly good reason to be troubled at seeing that great privilege
invaded by financiers o f such high authority and vast resources as Messrs.
P ereire . Yet, although the Bank o f France is determined now to make
a vigorous opposition to the Bank o f Savoy, it appears that it not only
peremptorily refused to allow the Bank o f Savoy to amalgamate with it,
as the latter wished, and as the Emperor himself, it is alleged, desired,
but that it would not even consent to buy up its privilege o f issuing notes,
except for a sum absurdly small ($120,000), and except on the condition
that the bank should undergo a com plete transformation, which would
have rendered its other privileges useless, and have made it an abject
dependence o f the French establishment. W h at is still stranger is, that
the Bank o f France strongly recommended the Bank o f Savoy, for its
own sake and for the sake o f the people o f the province, to continue its
operations— that is, to exercise its privileges o f issuing notes, increasing
its capital at will, forming branches, &c. “ The maintenance o f this bank
is useful and necessary,” said the Bank o f France directors, in a “ m em oir’'
(as such things are called there) which they drew up against the projec­
ted am algam ation; “ it is desired by the Bank o f France itself.” “ The
Bank o f Savoy,” they added, “ has been useful; it is still indispensable ;
its suppression would be evidently injurious, and even a political error.”
These facts, as to the action o f the Bank o f France, came out at the meet­
ing o f the directors o f the Bank o f Savoy, held Sunday the fourth o f O c­
tober.
After thus refusing to buy up the Savoy Bank, and after making such
admissions as these, the Bank o f France has clearly no moral right to
raise clam ors against that establishment, because, follow ing the advice
given, it has resolved to continue to exist, and in order to do so effective­
ly has obtained the co-operation o f two distinguished financiers. It must
be evident to everybody that if the Bank o f France thought the main­
tenance o f the Savoy establishment “ useful and necessary ” before Messrs.
VOL. XLIX.---- KO. V.




26

394

Journal o f Banking, Currency, and Finance.

[Novomber,

P ereire had anything to do with it, the contrary opinion cannot with
any decency be expressed now that those gentlemen have taken it in
hand. The Bank o f France has clearly put itself out o f court.
Nevertheless, we are told that this bank pnd its friends— in which term
is included most o f the principal bankers o f Paris— will, on what they
call public grounds, make a vigorous opposition to the Bank o f Savoy.
On this point, we take the follow ing from the Paris correspondent o f the
London Economist, O ctober 10 th :
“ The Bank o f France and principal bankers in Paris have already succeeded in in­
ducing the Government Commissioner who attended the meeting of shareholders of
the Bank o f Savoy at Annecy the other day to declare that a vote which was passed
for increasing the capital from 4,000,000f. to 40,000,000f. (£160,000 to £1,600,000)
must be considered as given “ under reserve
a mere matter o f form, it is true, but
still indicative of a wish to thwart, if possible, the arrangements between Messrs.
P e r e ir e and the Bank. Judging, however, from the reasons the adversaries of that
arrangement have already presented, the opposition is not likely to succeed. The
first objection they raise is that as the Bank of France has the exclusive privilege o f
issuing notes in France, no other establishment can be allowed to create notes. This
objection would have prevailed if France had retained the limits she possessed when
that privilege was granted ; but it is of no weight when applied to a new territory
annexed to France, and the commercial establishments in which were, by the treaty
of annexation, guaranteed the maintenance of all the rights and privileges they had
possessed under the Government to which the territory had previously belonged.
M. D u fa u re , one of the most learned advocates in this country, having been consulted
on the matter, has expressed the opinion that the Bank of Savoy, by French law, un­
doubtedly retains under annexation all the powers it held before. Another objection
vis that two sorts o f bank notes in a country will present inconvenience and even dan­
ger. But when you ask— why ? no answer is forthcoming. Great Britain and Amer­
ica know something of banking matters; and in both there is more than one species
of note in circulation. Moreover, the Bank of Frauce has itself demolished this ob­
jection: in the •Memoir ’ referred to, it proclaims that, though the Government “ is
favorable to the unity of banks and the uniformity of circulating paper,’ it has ‘ not
interdicted itself from coming to a compromise with that principle, and from admit­
ting exceptions.’
“ While these, and other objections equally unfounded, are urged against the great
act which Messrs. P e r e ir e and the Bank of Savoy have accomplished, loud praises of
it are uttered by a large portion of the financial and commercial circles, and— no small
thing— it is almost unanimously approved of by economists. In the first place, a
strong conviction is entertained by these classes that banking—including in that term
the power o f issuing notes—ought to be free ; and they consider that the setting up
o f a bank of issue in the presence of the Bank of France is the first step toward ob­
taining freedom— the introduction of the wedge which is destined to shatter monopoly
to pieces. In the next place, they think that as the Bank of Savoy can issue notes of
oOf and even 20f., whereas the Bank of France refuses to go lower than 100f., it can
give a great impetus to credit. In the third place, the Bank of Savoy will discount
bills with two signatures, whereas the Bank o f France cannot by its charter accept
less than three; and the former will thus relieve the higher class of commerce from
a heavy charge— for the third signature is almost always that o f a banker, and he of
course does not give it for nothing—whilst at the same time it can accept the paper
of a vast number of petty traders, who hitherto have had difficulty in obtaining dis­
count accommodation. Lastly, the Bank of Savoy can discount at four or six month's,
or even longer dates, whereas the Bank of France never accepts bills of more than
three months, though in certain important branches of commerce such a short period
is not adopted.
“ The report presented to the shareholders of the Bank of Savoy, in their meeting
on Sunday, may be considered one of the most remarkable documents in financial
history. It shows, on the one hand, the almost inconceivable blindness o f a great fi­
nancial establishment; on the other, the acuteness of two eminent men. The Bank
of France had the greatest interest in preventing another bank of issue from being
tolerated in France; and yet it obstinately refused to come to an arrangement with
the only establishment which could compete with it in that capacity. Messrs. P e




1 S03.]

Journal o f Banking, Currency, and Finance.

395

, on this point, saw at once that what the bank so disdainfully rejected was
nothing less than the most powerful instrument that existed in the financial world,
apart from the Bank o f France— inasmuch as it would not only enable a powerful
opposition to be raised to that establishment, but would be a sort of revolution in the
financial system of the country.”

r e ir e

C ity B ank R eturns.— The returns o f the Boston and Philadelphia
banks exhibit no marked changes during the month ; but in N ew Y o rk
city there has been a loss o f nearly fourteen m illions in the de'posits,
w h ile the loans have not changed materially, as will be seen by the fol­
low in g statem ent:
October 3 .................
“
10..................
“
17..................
“
24.................

Loans.

Net deposits.

*206,442,874
206,906,902
206,638,749
204,013,870

*182,653,494
180,037,283
178,050,317
172,487,596

Not deposits •

D ecem ber..
“
..
“
..
'
“
..

*3,427,279
2,616,211
1,986,966
5,562,721

Decrease in net deposits since September 26..........................................

*13,593,176

It is said that the N ew Y ork city banks now hold about fifteen m il­
lion in legal tenders. Below w ill be found our usual returns for the three
cities brought down to the latest dates :
N E W YO R K BANKS.

N ew Y ork B anks.
Date.

January

3....... .
“
10.......
((
1 7 ,....
“
24.......
February 7 .......
ii
14,. . .
ii
2 1 ,....
«
2 S „ .. .
March
7.......
“
1 4 ,....
(I
2 1 ,....
(4
2 8 ,....
4 ,___ .
April
ii
i i ............
ii
18.......
u
25.......
2
May
ii
9 „ ...
it
16.......
ii
23.......
“
3 0 ,....
June
6 ,. ...
it
1 3 ,....
“
20......., .
“
2 7 ,...,
Julv
4 .......
“
11.......
it
1 8 ,... . .
it
2 5 ,...,
August
1 ,...,
“
8 ,...
it
1 5 ,..... .
“
22.......
ii
2 9 ,...,. .
Sept.
5 ,..., . .

{Capital, Jan., 1863,169,494,577 ; J im ,1862, *69,493,577.)

Loans.
Specie.
Circulation. Net Deposits.
*173,810,009 !$35,954,550 $9,754,355 !$159,163,246
175,816,010 36,770,746 9,551,563 162,878,249
176,606,558 37,581,465 9,241,670 164,666,003
179,288,266 38,549,794 9,083,419 168,269,228
179,892,161 38,243,839 8,780,154 166,342,777
173,103.592 38,426,460 8,756,817 167,720,880
178,335,880 37,981,310 8,752,536 170,103,758
179,958,842 39,512,256 8,739,969 173,912,695
181,098,322 39,705,089 8,693,175 174,689,212
177,875,949 36,110,085 8,657,016 172,944,034
173,829,479 33,955,122 8,609,723 167,004,466
172,448,526 34,317,691 8,560,602 163,363,846
173,038,019 34,257,121 8,348,094 160,216,418
170,845,283 35,406,145 8,178,091 159,894,731
169,132,822 36,761,696 8,039,558 164,122,146
171,079,322 37,175,067 7,555,549 167,863,99#
177,364,956 36,846,528 7,201,169 167,696,916
180,114,983 38,002,633 7,080,565 163,656,513
180,711,072 38,556,642 6,901,700 168,879,130
181,319,851 38,544,865 6,780,678 167,655,658
181,825,856 37,692,634 6,494,375 166,261,121
182,745,080 37,241,670 6,341,091 162,767,154
180,808,823'• 37,884,128 6,210,404 159,551,150
177,083,295 38,314,206 6,120,252 157,123,301
175,682,421 38,271,202 6,004,177 15S,539,30S
174,337,384 38,302,826 5,998,914 158,642,825
175,087,485 38,712,397 5,927,071 160,733,496
173,126,387 38,254,427 5,880,623 163,319,544
173,036,336 35,910,227 5,775,188 164,133,549
176,208,597 33,746,681 5,700,452 161,173,146
176,559,840 8?,156,548 6,706,024 155,368,116
175,305,471 32,874,913 5,613,177 155,950,043
175,713,139 31,520,499 5,545,970 156,588,095
176,748,618 32,030,055 5,475,964 156,671,695
178,477,037 31,989,881 5,456,016 158,110,687




Clearings.
;$186,861,762
249,796,489
814,471,457
298,861,366
302,352,571
265,139,104
291,242,929
340,574,444
344,484,442
307,370,817
277,881,351
281,326,258
287,347,704
264,468,080
259,417,565
258,654,781
355,557,732
367,560,731
353,346,664
380,304,748
307,680,918
289,757,539
302,377,276
259,483,221
264,819,850
267,785,773
319,945,652
251,168,769
284,684,421
292,211,821
297,384,006
298,936,160
373,755,680
392,404,680
394,814,312

Journal o f Banking, Currency, and Finance.

396

Date.

Loans.

Sept.
* “
“
October
“
“
“

12,.........
19............
26............
8.........
10............
17............
24,............

Specie.

200,028,980 32,018,107
207,679,456 31,014,411
204,501,984 30,008,566
206,412,874 30,064,614
206,906,903 29,927,281
206,638,749 28,382,473
204,013,870 28,804,915

.
B

oston

Circulation. Net Depostis.

[November,
Clearings.

5,457,366 178,538.622
371,510,559
5,414,643 185,576,199 343,263,949
6,377,886 186,080,773 354,208,025
5,375,586 182,653,494 375,932,63*
5,522,178 180,037,283 899,288,092
5,618,764 178,050,317 427,981,203
6,799,097 172,487,596 469,176,465

BOSTOK BANKS.
B

an ks.

{Capital, Jan., 1863, $38,231,700 ; Jan., 1862, $38,231,700.)

Loans.

Date.

Specie.

Jan . 5 ,.. $77,339,046 $7,672,028
(t 12, . .
77,427,173 7,751,000
“ 19,.. 76,624,700 7,710,600
it 2 6 ,.. 76,354,000 7,710,700
Feba 2 ,.. 76,496,800 7,685,000
(1 9 ,.. 78,421,000 7,707,000
(( 1 6 ,.. 78,431,000 7,794,000
2 3 ... 78,782,600 7,624,000
Mar. 2 ,.. 79,127,500 7,653,000
“ 9 ,.. 79,274,700 7,582,000
*< 1 6 ,.. 79,636,134 7,609,238
(( 3 0 ,.. 77,935,000 7,572,600
April 6 ,.. 76,933,600 7,703,800
II 1 3 ,.. 74,551,01* 7,812,895
a 20, . . 73,459,160 7,799,315
« 2 7 ... 73,558,000 7,838,800
73,218,155 7,854,731
M ay 4 ,..
(( 11, . .
73,062,789 7,847,849
it 18,..
73,068,598 7,794,046
(( 2 5 ... 72,874,000 7,777,000
June 1 .. . 73,424,000 7,751,000
K
73,692,000 7,738,557
8 ,. .
n
15,.. 73,237,000 7,730,000
u
22, . . 73,851,000 7,697,000
K 2 9 ,..
73,421,084 7,683,987
July 6 ,. . 73,548,918 7,744,827
18,.. 73,485,675 7,774,991
(( 20, . .
73,421,000 7,684,000
ti 2 7 ,.. 72,850,716 7,811,513
Aug,. 3 ,.. 72,390,364 7,793,916
10, . . 71,997,503 7,798,276
ti 17,.. 71,860,078 7,813,497
it
2 4 ... 71,447,520 7,780,905
it
3 1 ,.. 71,478,116 7,752,516
Sept . 7 ,.. 71,717,995 7,637,402
it
14,.. 75,599,232 7,591,589
it
21, . . 79,595,740 7,595,358
if 28 ,.. 78,358,387 7,707,106
Oct. 5 ,.. 77,798,427 8,042,062
it
12, . . 78,160,899 7,991,999
it
1 9 ... 78,216,435 7,880,832

Due
to banks.

Due
from banks.

$8,190,496 $33,872,648
8,873,000 33,063,800 17,006,000
8,199,600 33,382,000 16,547,800
8,008,500 33,847,000 16,811,700
8,865,000 34,076,800 16,889,000
8,074,000 35,178,600 16,932,000
8,001,000 34,903,000 17,070,700
8,002,000 34,965,500 17,331,000
8,001,980 35,245,500 17,523,500
8,225,000 35,215,000 17,340,400
7,780,062 32,955,149 17,230,300
7,593,800 31,604,500 17,074,400
7,963,600 32,687,060 15.444,000
7,762,915 32,494,822 14,557,000
7,278,506 38,209,742 14,132,000
7,040,000 32,781,500 13,303,000
7,433,496 31,949,762 13,237,700
7,688,283 31,309,985 13,147,000
7,167,327 32,192,770 12,863,500
7,011,700 33,000,000 12,787,000
6,913,000 32,575,000 12,735,000
7,030,286 31,728,285 12,626,700
7,109,000 31,477,600 12,235,500
7,344,500 31,355,800 12,504,600
7,040,624 31,477,596 12,888,000
7,473,800 31,509,263 12,233,000
7,508,442 30,277,502 12,193,000
7,401,600 29,287,000 13,802,000
7,246,797 28,011,671 12,950,000
7,317,402 28,384,096 12,655,000
7,440,212 28,247,266 12,822,673
7,198,917 27,898,073 12,765,527
7,303,757 27,610,154 12,662,321
7,227,704 27,762,955 12,614,000
7,527,036 28,778,498 12,379,000
7,600,556 31,143,588 13,424,000
7,604,161 34,609,214 13,565,000
7,620,371 34,495,540 13,315,000
8.107,720 35,435,811 13,498,000
8,399,769 35,734,989 13,909,500
8,323,451 36,127,597 13,506,500

13,520,000
13,727,700
13,958,000
14,490,000
14,183,000
14,095,500
14,583,800
15,004,000
14,446,500
13,434,500
11,601,300
12,280,600
12,947,800
12,658,000
11,966,700
11,622,600
11,800,000
11,732,000
11,748,000
10,704,500
10,874,700
10,541,000
10,914,700
10,900,000
10,891,000
10,712,000
10,154,600
9,864,800
9,646,000
10,135,180
9,603,257
9,573,673
9,820,500
10,874,700
11,097,000
11,487,500
12,138,000
13,765,500
14,123,700
13,967,000

Circulation

Deposits.

PH ILA D E LP H IA BANKS.
P

h il a d e l p h ia

Date.

Jan. 6 ,.. .
“
1 2 ,...
“
1 9 ,...
“
2 6 ,...

B

an ks.

Loans.

{Capital, Jan., 1863, 111,740,080; 1862, $11,970,130.)
Specie.

Circulation.

Deposits.

Due
to banks,

Due
from banks.

137,679,675 $4,510,750 $4,504,115 $28,429,189 $6,948,785 $1,994,928
37,533,757 4,544,786 4,450,676 28,018,792 6,890,963 1,848,932
37,416,694 4,649,369 4,382.620 27,877,069 7,050,847 2,275,905
37,479,712 4,572,419 4,284,947 28,773,517 6,755,980 2,638,985




1863.]
Date.
Feb 2 , . . .
it
9 ,...
U
1 6 ,...
it
2 3 ,...
Mar. 2 a . .
it
9; : : :
“ 1 6 ,...
it
2 3 ,...
it
3 0 ,...
Apr.. 6 , . . .
t< 1 3 ,...
2 0 ,...
tt
2 7 ,...
May 4 , . . .
1 1 ,...
tt
1 8 ,...
it
2 5 ,...
June 1 , . . .
“
8 ,,..
June! l 5 , . . .
“ 2 2 ,...
tt
2 9 ,...
July' 6 , . . .
“ 1 3 ,..,
tt
2 0 ,...
“ 2 7 ,...
Aug . 3 , . . .
“ 10,. . .
tt
1 7 ,...
“ 3 1 ,...
Sept 7 , . . .
tt
1 4 ,...
“ 2 1 ,...
tt
2 8 ,...
Oct. 5 , . . .
“ 1 2 ,...
“ 1 9 ,...

Journal o f Banicing, Currency, and Finance.
Loans.
37,268,894
37,336,367
87,710,851
87,720,460
37,901,080
38,603,871
39,260,028
39,458,384
38,937,612
37,516,520
36,250,402
36,295,644
36,482,058
36,587,294
36,593,179
36,887,301
37,116,093
37,143,937
87,157,769
37,228,627
37,219,216
37,250,665
35,936,811
34,866,842
34,662,966
34,517,347
34,390,179
34,645,243
35,390,179
35,296,376
85,773,596
39,575,410
40,175,698
39,485,313
38,798,830
39,046,434
38,833,337

Specie.
4,562,680
4,319,706
4,272,347
4,276,761
4,267,626
4,249,035
4,247,817
4,247,688
4,311,704
4,339,252
4,343,242
4,343,988
4,346,877
4,355,324
4,359 865
4,357,119
4,357,169
4,357,021
4,357,076
4,857,025
4,356,744
4,359,543
4,360,745
4,360,003
4,361,999
4,227,448
4,187,056
4,112,013
4,112,542
4,113,309
4,113,162
4,103,115
4,102,701
4,116,683
4,227,265
4,239,551
4,238,677

Circulation.
4,181,503
4,039,918
3,888,185
3,772,781
3,696,097
3,608,870
3,534,880
3,295,862
3,369,194
3,374,417
3,296,685
3,185,042
3,078,921
2,989,428
2,901,600
2,866,121
2,808,109
2,706,953
2,649,283
2,621,098
2,596,116
2,556,855
2,564,558
2,507,253
2,482,986
2,418,463
2,417.739
2,380,720
2,353,396
2,292,607
2,258,306
2,223,533
2,224,632
2,224,374
2,193,000
2,169,314
2,159,688

Deposits.
29,231,753
28,062,164
28,759,049
29,342,696
30,178,518
30,679,259
30,549,587
30,106,135
29,171,283
29,531,559
30,117,527
31,059,644
31,021,79930,859,231
30,949,781
31,892,308
32,455,953
31,888,763
31,549,839
31,648,959
81,293,830
31,466,204
28,504,544
28,701,813
29,931,608
30,448,430
30,799,448
30,513,961
29,959,127
30,195,167
30,654,672
33,626,702
33,039,035
32,402,783
32,258,554
32,536,502
32,684,915

397

Due
Due
to banks. from banks.
2,909,857
6,698,210
6,953,215 2,518,036
7,452,563 2,432,073
7,413,249 2,703,196
7,185,670 2,758,852
7,100,258 2.499,139
7,476,603 1,939,449
7,418,482 1,935,014
6,501,758 2,158,007
5,768,558 2,770,129
5,953,809 3,014,229
5,306,809 3,018,727
5,448,124 2,559,868
5,828,898 2,891,087
4,975,989 2,542,792
4,640,623 2,586,279
4,623,392 2,480,714
4,707,278 2,363,548
4,645,712 2,313,744
4,911,425 2,892,278
4,868,495 2.065,913
5,116,692 1,820,600
5,060,096 1,961,814
4,784,343 2,530,552
4,580,322 2,981,867
4,805,045 3,034,009
4.963,290 2,772,717
4,740,391 2,538,096
5,161,573 2,158,440
4,551,031 2,219,071
4,574,037 1,997,534
4,997,015 1,801,678
5,079,742 1,802,889
4,616,754 1,822,228
4,427,097 1,976,561
4,446,681 2,085,819
4,361,072 1,926,707

The follow ing is a statement o f the amount o f United States legal tender
notes held by the Philadelphia banks at the dates mentioned :
June- 22..................
“ 29...................
July 6...................
“ 13...................
“ 20...................
July 27...................
Aug. 3...................
“ 10...................
Aug. 17...................

.........

6,916,751

.........
.........
.........

8,430,782
7,780,640
7,530,339

tt
31................... .........
Sept., 7................... .........
14................... .........
“ 21.................... .........
“ 28................... .........
Oct. 5................... . . . .
“ 12.................................. .........
tt
19.................... .........

$6,853,540
7,382,810
7,081,480
6,573,404
6,375,334
6,273,091
6,342,746
6,625,827

E uropean F inances — B ank of E ngland R eturns.— The past month,
(O ctober 8,) the Bank o f France raised its rate o f discount to five per
cent, a considerable amount o f specie having been taken from the bank.
W e take the follow ing from the L on don ,Economist, as it represents pretty
fully the alarming condition o f the London and Paris money markets,
together with the cause and future, prospects.
It will be remembered
that the Bank o f France makes its returns not weekly, but m onthly :
The condition o f the Bank of France is not, indeed, very alarming; there is not
enough to excite a panic; but it is impossible not to see that there must have been




398

Journal o f Banking, Currency, and Finance.

[November,

much in it to cause apprehension for some time past. It is only at the moment before
publication that the rate of discount has been raised. It is impossible to imagine a
greater censure on the present managers. They are willing to suffer in silence and
inaction a progressive drain till the moment at which it is known ; and just before it
becomes known, they take in haste the steps which ought to have been taken long
since, and which would have been measures of precaution, if they had been so taken.
The account is this, in comparison with that of last year:
1863,
18G2.
£32,824,076
Notes in circulation o f the Bank and branches........
£31,688,810
Drafts drawn on the Bank by the branches, or by
the Bank on the branches, and payable in Paris or
184,430
the provinces. ...........................................................
226,869
179,438
Acknowledgments for money deposited...................
259,406
2,135,136
Public deposits.............................................................
3,468,368
'7,686,082
Private deposits.............................................................
7,785,349
Total liabilities...............................................................
43,428,862
43,009,162
Against a reserve of bullion o f....................................
13,674,772
10,899,184
— which should have caused caution lately, but which should not cause panic now.
I f we turn to the account o f the Bank of England, we find that it has been affected
by several circumstances, but that, even after allowing for those circumstances, it is
not in a satisfactory state.
The figures relating to the banking department are :
Public deposits........................................................
Private deposits....................
Seven days’ bills.............................................
Total liabilities......................................................................................
against a reserve of £7,737,662.

£9,510,057
12,893,642
777,032
23,180,731

It is true that the reserve is always low at this season of the year ; that the dose
of the quarter always augments the active circulation o f notes and the circulation of
coin; that, on the whole, this period is not favorable to the position of the Bank ; still
the mere figures, after every .explanation and mitigation, are far worse than any to
which we have long been accustomed. The reserve is much less than one-third of its
liabilities, and one-third is the very minimum with which the Bank ought ever to be
content, and of late it has usually been nearer to one-half.
As to the absorption of sovereigns, o f which so much has been^said, we have heard
that there is nothing unusual in it. W e believe that the issue o f sovereigns at the
Bank between the beginning of April and the end o f October was nearly six millions
in 1861, nearly seven millions and a-half in 1862, and that it has been only about six
millions since the beginning o f April to the present time. There is, therefore, no ab­
sorption of sovereigns to be accounted for, and the various recondite speculations on
that head are so much waste paper.
Much more serious matter remains. W e now have :
The stock of bullion in the Bank o f England....................................
£14,836,037
The stock of bullion in the Bank of France........................................
10,899,184
Total.......................................................................................................
Against last y e a r:
Stock of bullion in the Bank of England............................................
Stock of bullion in the Bank of France.................................................

25,735,221
16,548,156
13,674,772-

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

30,222,928

Although the rate of discount, as will be seen by the comparative table in our city
article, is considerably higher now than it was last year, still such a reduction of bul­
lion in the two banks together (which, now that the two money markets are so close­
ly connected together, and practically so very near, should for many purposes be
added together) must necessarily make the money market of both countries sensitive
and delicate.
The liabilities of Europe, and o f England perhaps especially, are Urge. The de­
mand for bullion for India must be considerable:




1863.]

399

Journal o f Banking, Currency, and Finance.

In 1862 we imported up to 81st July, (the last date to which we
have the figures) of cotton from Iu d ia ............................................
In 1868 ___ %.............................................................................................

£4,883,899
11,950,999

And from “ other countries,” which are really barbarous countries, and therefore ab ­
sorb bullion more or less, we imported—
Of raw cotton in 1862..............................................................................
£991,858
O f raw cotton in 1868..............................................................................
3,678,347
and all this must be paid for.
The number of continental schemes and engagements (for solvent individuals have
subscribed to them) is very large, and they will undoubtedly pull heavily on our
store of actual cash. Many of them are banks or loan societies in rude countries,
and whenever cash is lent in or taken to such communities, it is long before more civ­
ilized nations see it again. The greater part of the companies which have been start­
ed have not absorbed much capital, and have taken abroad little money, and we have
good reason to believe that the public have shown lately a discretion in their invest­
ments far surpassing that of any previous period. But, nevertheles, we have been
gradually engaging ourselves in many foreign undertakings which will cause a very
important demand On our bullion.
On the other hand, the effect of our good harvest— at least, of the expectation of
it—is already written in the Board o f Trade tables. W e imported up to July 81st:
W h e a t........................
Wheatmeal and flour
Total..........................................................................

\m .

1S63.

£11,380,516
3,198,310

£6,864,080
1,944,517

£14,578,826

£8,308,597

showing a reduction of about £6,000)000. Too much credit however must not be taken for this circumstance in face of the
general liabilities we have enumerated. It will especially be for the Bank of Eng­
land not to delay too long to raise the value of money in the face of large immediate
demands, and of a higher rate offered for money by its principal competitor.
BANK

OF

ENGLAN D.

The following comparative table will be o f interest, affording as it does a
view o f the bank returns, the bank rate o f discount, and the price o f wheat
in London during a period o f three years corresponding with the date o f
our last returns, O ctober 7 th :
A t corresp onding dates w ith the w e e k en din g
O ctober 7, 1803.

1861.

1862.

1863.

Circulation, including bank post b ills ...
Public deposits.........................................
Other deposits..................... ............
Government securities............................
Other securities..........................................
Reserve o f notes and c o in ......................
Coin and bullion........................................
Bank rate of discount.............................
Average price of wheat...........................

£21,674,563
4,893,914
12,028,835
10,788,123
17,440,363'
7,859,634
14,141,519
8J per cent.
57s. Od.

£22,137,670
8,333,779
13,530,122
11,252,666
19,751,704
9,828,331
16,548,156
2 p. cent.
51s. Id.

£22,545,407
9,510,057
12,893,642
11,141,227
22,591,537
7,737,662
14,856,037
4 per cent.
42s. 2d.

Subjoined is our usual table with the returns b rou gh t dow n to O ctober 7th, 1 8 6 3 :
W E E K L Y STATEMENT.

Public
Date.

C ircu lation .

D e p o sits.

P r iv a te

Deposits.

Securities.

Coin and
Bullion.

Dec. 1 7 .. . £19,932,360 £8,507,144 £14,033,994 £30,539,363 £15,031,658
“
2 4 .. . 20,150,398 §,654,499 14,306,497 31,346,731 14,870,795
“
3 1 .. . 20,516,435 8,338,717 15,469,254 32,488,020 14,956,421
Jan. 7 . . . 20,927,993 8,782,808 14,393,308 32,620,233 14,635,555
“
1 4 .. . 21,018,849 4,280,730 16,772,782 31,165,075 14,102,169
“
2 1 .. . 20,893,931 4,965,798 14,993,225 30,227,086 13,855,849




-Rate of
Discount.

3 pr. ct.
3
“
3
“
S
“
4
“
4
“

400

Journal o f Banking, Currency, and Finance.

Date.
2 8 ...
Feb. 4 . . .
If
1 1 ...
((
1 8 ...
if
2 5 ...
Mar. 4 . . .
ft
1 1 .. .
it
1 7 ...
tf
2 4 ...
Apr. 1 . . .
8 ...
1 5 ...
99
“
if

2 9 ...
6 .. .
1 3 ...
if
2 0 ...
“
2 7 ...
June 3 . . .
“ 10. . .
“
1 7 ...
“
2 4 .. .

Hay

Jrdy

1 . . .
8 . . .

1 5 .. .
2 2 ...
A ug 5 . . .
ii
12 . .
“ 19...
26...
Sept. 2 . . .
“
9...
it
16...
“ 23...
“ 30 . .
Oct. 7 . . .
“

“

Circulation.
20,771,236
20,709,154
20,444.454
19,916,496
19,715,828
20,322,055
19,801,665
20,012,331
20,136,276
20,965,228
21,279,339
21,326,S20
21,413,226
21,452,800
21,376,999
21,252,916
21,268,315
20,909,819
21,009,892
21,080,460
20,655,473
20,525,655
21,738,756
22,088,478
22,194,996
22,230,612
22,340,809
21,937,198
22,003,176
21,699,696
21,920,722
21,646,811
21,487,105
21,515,731
22,312,747
22,545,407

Public
Deposits.
6,416,863
6,351,617
6,952,808
7,413,275
7,901,658
8,036,003
8,673,899
9,343,499
10,364,471
10,107,041
6,714,109
5,769,276
6,816,413
7,178,312
7,241,739
6,735,137
7,610,278
8,002,346
8,779,387
9,782,830
9,882,135
10,279,053
10,856,373
5,593,834
4,948,458
5,386,948
5,577,268
5,754,863
6,126,668
6,713,801
6,818,182
6,997,402
7,371 510
8,291,491
9,270,486
9,510,057

Private
Deposits.
14,414,763
13,352,287
13,596,356
13,769,276
13,367,153
13,368,086
13,282,605
13,003,088
12,742,282
13,172,090
14,829,832
15,013,391
14,739,897
13,606,939
13,122,087
13,727,556
13,983,654
13,842,718
13,896,460
13,783,263
13,904,506
13,809,996
16,274,739
18,595,718
16,381,914
14,675,625
13,790,855
13,578,358
13,005,322
12,806,568
13,261,512
12,909,484
13,484,939
12,859,580
18.717,460
12,893,642

Securities.
30,238,865
29,997,233
30,288,406
29,890,503
29,709,079
30,880,805
31,096,327
31,482,170
31,896,338
32,775,752
80,946,784
29,974,677
30,182,533
29,994,849
29,718,602
30,201,120
31,484,815
31,412,190
82,389,044
33,240,192
82,750,953
32,756,459
36,490,515
34,647,836
32,052,521
30,975,774
30,2S9,227
29,657,833
29,603,127
29,322,757
30,180,384
29,919,543
80,601,940
80,960,809
33,751,403
33,829,764

[November,

Coin and
Bullion.
13,611,823
13,692,136
14,070,661
14,589,222
14,614,096
14,504,517
14,328,178
14,547,812
15,025,274
15,141,755
14,963,835
15,229,237
15,387,151
15,848,492
15,141,760
14,653,141
14,529,451
14,500,019
14,425,553
14,556,121
14,850,156
15,026,118
15,080,271
14,824,969
14,749,876
14,620,872
14,843,185
15,040,819
15,081,152
15,309,384
15,494,219
15,345,488
15,461,566
15,532,838
15,277,885
14,856,037

Rate of
Discout.
5
tl
5
*
5
if
4
“
4
ii
4
ii
4
if
4
ii
4
“
4
“
4
4
if
3
H “
3
ii
3
if
4
“
4
ii
4
“
4
ii
4
•i
4
“
4
Ii
4
ii
4
4
ii
4
ii
4
ii
4
*
4
“
4
ii
4
ii
4
If
4
.{
4
it
4

R e t u r n s o f t h e C a n a d a B a n k s . — W e give below the A uditor’s state­
ment o f the banks o f Canada for January, May, August, and September,
1863:
January.

Capital authorized...................
Capital paid u p .......................

M ay.

August.

Septem ber.

$35,266,666 $35,266,666 $35,266,666 $35,266,666
26,455,298 26/739,878 26,781,194 26,807,642
LIABILITIES.

Notes in circulation...................
Balance due to other banks.. .
Deposits not bearing interest..
Deposits bearing interest.........
Total liabilities...................

$9,940,423
1,249,808
9,580,143
9,662,483

$9,024,240
1,836,314
10,119,578
9,940,333

$9,097,116
1,218,069
10,499,900
10,827,585

$ 10,121,221
648,306
11,216,590
10,904,879

$30,382,357 $30,920,465 $31,642,670 $32,890,996
ASSETS.

Coin and bullion.........................
Landed or other p ro p erty ___
Government securities..............
Notes or bills of other banks..
Balances due from other banks.
Notes and bills discounted___
Other debts not before includ’d
Total




$5,615,519
1,974,786
5,027,739
1,132,788
2,143,238
42,458,413
2,629,681

$5,394,927
2,017,810
4,990,334
1,087,414
1,050,523
44,605,11 1
2,768,772

$6,913,042
2,058,953
4,802,248
1,424,161
1,683,838
42,048,243
2,908,427

$7,247,381
2,068,676
4,808,250
1,405,385
1,856,699
42,818,444
2,921,563

$60,982,218 $61,904,891 $61,838,932 $63,126,398

1863.]

Journal o f Banking, Currency, and Finance.

401

OFFICIAL L E TTE R OF CONTROLLER MtCDLLOUBII.
ANSWERS OF THE CONTROLLER OF THE CURRENCY TO QUESTIONS IN RE­
LATION TO THE NATIONAL CURRENCY ACT.

W e publish the following important Government document, as it forms a
prominent feature in the financial history o f the times, and should be pre­
served.
O ffice

of

T reasury D epartment ,
)
C ontroller of the C urrency , V
W ashington , J u ly 14, 1863.
)

Most o f the questions presented to the Controller, in regard to the Na­
tional Currency Act, have been answered in the forms and instructions which
have been sent from this office, and by letters to the interrogators. There
are a few, however, that can be more conveniently and satisfactorily an­
swered in this form than in any other.
1st Question. Is there any “ reasonable dou bt” o f the constitutionality
o f this A ct ?
Answer. The constitutionality o f the A ct o f Congress establishing, in time
o f peace, a United States Bank, with power to locate in the States branch­
es thereof, having been affirmatively decided by the Supreme Court o f the
United States, the constitutionality o f the National Currency A c t is hot
considered to be an open question.
In ordinary times the constitutionality o f this A ct would hardly be ques­
tioned ; but in the existing emergency o f the Government, engaged, as it
is, in a war o f gigantic proportions— with specie no longer a circulating
medium— with a large internal revenue to be collected in the States and
Territories, such a currency as is provided for in this A ct is an absolute ne­
cessity. To deny to the Government, through such agencies as Congress
might create, the power to provide a currency based upon its own resources,
would be not only to deny its sovereignty, but its authority to perform prop­
erly and safely its acknowledged functions.
2d Question. W hat are stockholders o f State Banks to gain by discon­
tinuing their present organizations, and organizing under the national law •
Answer. The chief gain will .be in a circulation o f notes, which cannot
long be secured through the agency o f State institutions. Legal tender
notes have created a taste and prepared the way for a national bank note
circulation. These notes, in all sections o f the country, have a better credit
and are in greater demand than the notes o f the strongest banks. Country
bankers, notwithstanding the largeness o f the issue, find it difficult to sup­
ply the Call for them, and are frequently under the necessity o f ordering
them, at considerable expense, from commercial points, to meet the demand
that will not be satisfied with anything else. The preference for these notes
is not chiefly to be attributed to the fact that they are a “ legal tender,” but
to the fact that they are Government money, and must be good, if the
Government is good. I do not say that their general credit is not, in a
measure, owing to the fact that thev are declared to be “ lawful money,” or
that it was not necessary to make them so, to place them beyond the in­
fluences that might, at the time, have been combined to depreciate them ;
but I do say, that the people, who control the currency, as they do the
legislation o f the country, prefer legal tenders to bank notes, because they




402

Journal o f Banking, Currency, and Finance.

[November,

are Government issues, are receivable for Government dues, and must, eve­
ry dollar o f them, be redeemed, if the Government is maintained.
The National Bank Note circulation is intended gradually to take the
place o f the direct issues o f the Government. It is not expected that it will,
at once, have the credit that has been attained by the “ legal tenders,” nor
that the notes o f the National Associations, scattered from Maine to Cali­
fornia, will be o f absolutely uniform value throughout the Union ; but it is
expected that these notes, sustained by the credit and secured by the re­
sources of the nation, receivable for all public dues, except duties upon im ­
ports, and in payment o f all claims against the Government, and, in case of
the failure o f the banks, to be redeemed at the Treasury o f the United
States, will challenge, to a greater degree, the public confidence, and pos­
sess more uniformity o f value than can be attained by the issues of the best
managed State institutions. I will go further than this: through the in­
strumentality o f Clearing-Houses, or lledeeming Agencies, which, in due
time, may become a necessary feature o f the system, the notes o f the N a­
tional Banks, wherever situated, will be as nearly o f uniform value through­
out the Union as the commercial interests of the country will require.
There will not be, in my judgment, for any considerable time, two sys­
tems o f corporate banking (one State and the other National) in the United
States ; not that there is a necessary antagonism between the two systems,
but because both will not be equally acceptable to the people and equally
profitable to the banker. One or the other will fully occupy the field ; and.
aside from the manner in which the National system is being regarded by
the people, and the rapidity with which National Associations are being
formed, it requires no spirit o f prophecy to predict which o f tire two is des­
tined to give way. The losses which the people have sustained by bank
failures ; the inadequate protection which State legislation, with rare ex­
ceptions, has given to the bill-holders; the fact that the good credit o f the
issues o f the strongest and best conducted State Banks, outside o f the States
or the section where they exist, is not the result o f public confidence in their
solvency, but o f the influence o f bankers and money dealers, who can as
easily depress that credit as they can sustain it, and who do not unfrequently depress or sustain it, as suits their own interests or convenience alone ;
that all the credit that State Banks have at a distance from home is arti­
ficial and unreliable : all these things have given rise to a wide-spread dis­
satisfaction with the existing bank note circulation, and created a popular
desire for a circulation, o f whose solvency there can be no question, and
whose credit will not be at the mercy of bank note brokers.
The Government o f the United States is not to be overthrown by the
attempted secession o f the Southern States, and the war in which it is en­
gaged. On the contrary, it will be vastly strengthened by the severe or­
deal to which it is being subjected— strengthened by the evidence, which
is every day being exhibited, of its inherent power, and the conviction that
is constantly spreading and deepening in the minds o f the people, that their
personal destinies are identified with it— strengthened by the very debt it
is contracting, and the evidences of value that are to based upon this debt.
Banks whose issues are secured by the Government, and which are to
become the financial agents o f the Government, will, in m y opinion, ere
long, be the only ones that will be tolerated by the p eop le; and if the
banks o f the older and richer States continue, as they have done, and are
now to a large extent doing, to furnish the newer and less wealthy States




1863.]

Journal o f Banking, Currency, and Finance.

403

with a bank note circulation, they will have to do it through the agency o f
National Banks. In availing themselves o f the National Currency Act, for
loaning their capital and credit to the people o f the new States, they will
have the satisfaction of knowing that while adding to their own wealth, they
are strengthening the Government, and creating a powerful influence against
repudiation, by aiding in furnishing to the people a circulation secured by
the stocks, and representing the unity o f the nation.
Aside from the matter o f circulation, the National Currency A ct is as
favorable to bankers as the banking laws o f most o f the States. Should it
prove to be too stringent, it is safe to expect that such amendments will be
made to it as will accommodate it to the reasonable requirements o f capi­
talists, and the want o f a great and growing nation.
Question. W ill State Banks be furnished with the national circulation,
according to the provisions o f the 63d section o f the A ct ?
Answer. This section is a part o f the law, and must be obeyed. I have
hoped, however, that very few banks would claim the advantages o f it. The
engrafting upon a national system o f banking o f a provision that, to some
extent, denationalizes it, was, in my opinion, a great mistake. Nor can I
understand how State Banks, without the aid of State legislation, can avail
themselves o f the provisions o f this section without violating their charters,
or the laws under which they are incorporated. But if enabling acts, au­
thorizing State Banks to circulate the National Currency, have been or
should be passed by the Legislatures o f the proper States, I should still re­
gret being compelled to furnish this currency to institutions over which the
Government can exercise no supervision or control. I trust that few banks
will deposit bonds and claim circulation, under the 6 ‘2d section, but that
the stockholders o f solvent banks, who desire to connect themselves with the
system, will do so, by availing themselves o f the priviliges of the 61st sec­
tion, or, what would be better still, by winding up their present State insti­
tutions, and organizing new associations, independent o f the old ones. The
intention o f the law was to provide a national circulation through the agen­
cy o f National Banks, which should be subject to Government supervision
and control. Nothing would be more sure to destroy the symmetry o f the
system, or be more likely to bring it into disrepute, than a distribution
among the banking institutions o f the States, (“ good, bad and indifferent,” )
o f the national currency. I must, however, obey the law, and unless pre­
vented from doing so, by a judicial decision or an authoritative opinion, I
shall furnish circulation under the section referred to as soon as it can be
provided. As notes will be first supplied to Associations, organized under
the Act, it is not likely that State Banks can be supplied, to any consider­
able extent, before the early part o f the next year.
Question. Is it expected that State Banks that may become National
Associations under the 61st section o f the A ct will give up their present
corporate names ?
Answer. Before I entered upon the discharge o f my duties as Controller
o f the Currency, the Secretary o f the Treasury, after much consideration,
had come to the conclusion, as a National Currency was to be provided
through the instrumentality o f National Banking Associations, that all such
associations should have a common name. Persons forming associations
under the act have, therefore, been advised to take the names o f First, Sec­
ond, Third, &c., National Banks o f the places in which they are established,
according to the order o f organization. This rule is expected to be o b ­




404

Statistics o f Trade and Commerce.

|November,

served by State Banks that may be converted into National Banks, under
the 61st section o f the Act, as well as by original associations.
If, in their new organizations, they desire to retain, in some way, their
former corporate names, it must be done in such manner as will not inter­
fere with the symmetry o f the circulation which is to be furnished to them,
nor render illegal their acts as National Associations. All who connect
themselves with this system have a common interest in making it symmet­
rical and harmonious, as well as national. The retention by State Banks
o f their present corporate names, some o f them long, and differing from
others only in locality, would prevent this, and interfere with the uniformity
which it is desirable to maintain in the national circulation.
I know with what tenacity and pride the managers o f old and well con­
ducted banks cling to the names which their ability and integrity have done
so much to make honorable ; but I would suggest to them that it will be
an easy matter for them to transfer to National Institutions the credit which
they and their predecessors have given to State Institutions ; that it is not
the name o f a Bank, but the character o f the men who conduct its affairs,
and the character o f its securities, that give to it the confidence o f the
public.
The Merchants’ Bank o f Boston will not lose a particle o f credit by be­
coming the First National Bank o f Boston ; on the contrary, its credit will
be improved by it. Nor would the stock o f the Chemical Bank o f New
York be a whit the less valuable, nor would its reputation be in the slight­
est degree lessened, by its becoming the tenth or the fiftieth National Bank
o f New York.
II. M c C u l l o c h , Controller.

STATISTICS OF TRADE AND COMMERCE.
BREADSTUFFS— EXPORTS TO GREAT BRITALY AKD IRELAND— CROPS FOR 18G3.
I t will be seen by the tables which we give below, that there has been
a great falling o ff in the export o f breadstuffs the past year compared with
the two previous years. Prices, too, have been lower, so that there is a
much greater decrease in the value exported. For instance, the price o f
wheat at London, August 19, 1863, was 45s. l i d . p r quarter, or $1 38
per bu sh el; but at the same time in 1862 it was o U . 4d., or $1 82 per
bushel. The whole amount exported tp Europe for the year from Septem ­
ber 1, 1862 to September 1, 1863, is as fo llo w s:
Flour, bbls.

Wheat, bush.

Corn, bush.

Estimated value in
U. &. currency.

1,692,992

25,510,504

10,403,313

$53,81 9,11 0

The com ing year still less will be needed in Europe from the United
States. The excellent harvests in England and France will supply their
wants in a great measure. The latest accounts from Great Britain, how ­
ever, are not as favorable as those previously received— recent rains hav­
ing done much injury. Y et our advices are, that the surplus yield o f
wheat,, contrasted with ordinary years, will be 1,500,000 quarters, and that
the weight will exceed the standard weight (usually 61^ lbs.) by about 3
or 4 lbs. In view o f these facts, and the reports from the Continent, we
must o f course expect a great falling off in the demand for our breadstuffs




1863.]

405

Statistics o f Trade and Commerce.

in th e c o m in g y e a r , u n le s s s o m e u n e x p e c te d e v e n t s h o u ld h a p e n , lik e , fo r
in s ta n c e , a w a r b e tw e e n E n g la n d , F r a n c e , a n d R u s s i a . *In t h a t c a s e , th e
o r d in a r y s u p p ly fro m R u s s ia w o u ld b e c u t o ff, a n d w e s h o u ld b e c a lle d
u p o n to fu r n ish h e r q u o ta .
E X P O R T O F B R E A D S T U F F S TO G R E A T B R IT A IN A N D IR E L A N D , F R O M SE PT.

1862,
F rom

to

F lo u r, bbls.

New Y o r k ..........
Philadelphia.. . .
Baltim ore...........
Boston.................
Other p o r t s .. . .

1,164,119
121,927
46,553
46,123
100,691
F lou r, bbls.

1 8 6 2 -6 3 .................
1 8 6 1 -6 2 ................
1 8 6 0 -6 1 ................
1 8 5 9 -6 0 .................
1 8 5 8 -5 9 .................
1 8 5 7 -5 8 ................
1 8 5 6 -5 7 .................
1 8 5 5 -5 6 .................
1 8 5 4 -5 5 .................
1 8 5 3 -5 4 .................
1 8 5 2 -5 3 ................
1 8 5 1 -5 2 .................
1 8 5 0 -5 1 .................
1 8 4 9 -5 0 .................
1 8 4 8 -4 9 ................
1 8 4 7 -4 8 .................
1 8 4 6 -4 7 ................
Total for 17 years.

1,479,413
2,672,515
2,561,661
717,156
106,457
1,295,430
849,600
1,641,2^5
175,209
1,846,920
1,600,449
1,427,442
1,559,584
574,757
1,137,556
182,583
3,155,845
22,983,842

sept.

1ST,

1 st , 1 8 6 3.

Corn meal, bbls.

1,064
33
..
50

"Wheat, bush.

Corn, bu sh .'

20,471,480
1,134,318
306,105

9,836,826
201,368
270,074
16,088
10,000

1,255,307
Corn meal, bbls. , W heat, bush.

1,147
1,124
4,416
944
58
143
685
6,816
4,768
41,726
100
1,780
5,620
6,411
82,900
108,534
844,188

23,167,190
25,754,709
25,553,370
4,938,714
439,010
6,555,643
7,479,401
7,956,406
324,427
6,038,003
• 4,823,519
2,728,4-12
1,496,355
461,276
1,140,194
241,300
4,000,359

1,111,260

:123,098,318

Corn, bush.

10,334,356
14,084,168
11,705,034
2,221,857
342,013
3,317,802
4,746,278
6,731,161
6,679,138
6,049,371
1,425,278
1,487,398.
2,205,601
4,753,358
12,685,260
4,390,226
17,157,659
110,315,958

TO TH E C O N T IN E N T , FR O M N E W Y O R K AN D O TH E R P O R T S.

1 8 6 2 -6 3 .................
1 8 6 1 -6 2 .................
1 8 6 0 -6 1 .................
1 8 5 9 -6 0 .................
1 8 5 8 -5 9 ................
1 8 5 7 -5 8 .................
1 8 5 6 -5 7 ................
1 8 5 5 -5 6 ................
1 8 5 4 -5 5 .................

T o t a l fo r

9 years..

F lou r, bbls.

W heat, bush.

Corn, bush.

213,579
626,672
142,129
49,243
51,388
303,100
483,344
748,408
7,763

2,343,314
7,617,472
3,452,496
178,031
57,845
390,428
2,875,653
2,610,079
4,972

68,957
322,074
101,145
19,358
25,519
16,848
543,590
282,083
308,428

435,205
1,612,926
347,258

2,625,626

19,530,290

1,688,002

4,635,398

R y e , bush.

13,100
216,162
1,975,178
35,569

In connection with the above, the follow ing statement o f the crops for
1862 and 1863, as returned to and estimated by the agricultural depart­
ment at W ashington, will be found o f interest:
The answers returned to the circulars for September, of the Agricultural Depart­
ment, asking information of the condition of the crops, are given in tenths, above or
below the crop of 1862. During the summer the department made an estimate of




/

40'6

Statistics o f Trade and Commerce.

[November,

the amount of the props of 1862. This estimate was based on the census returns of
1860. As th& crop of 1859, which was taken by the census, was below the average,
and that of 1862 much above, allowance was made for this difference, varying in its
amount according as the agriculture of each State required. The general per cent
increase o f each State was added. One fourth of the amount given in the census was
struck off from the returns for Missouri and Kentucky on account of the war. Thus
calculated, the crops of 1862 were made the basis for estimating those of 1863, accor­
ding to the tenths, increase or decrease, of each State, as reported by the correspon­
dents of the department.
The summer crops, wheat, rye, barley, and oats, for 1862 and 1863, were as follows :
Total 1 8 6 3 ...bush.
Total 1862.............

W h eat.

E ye.

191,068,289
189,993,500

20,798,287
21,254,956

Barley.

16,760,59'?
17,781,464

Oats.

174,858,167
172,520,997

*1,074,739
|456,669
f l , 020,867
*2,327,170
The fall crops of corn, buckwheat,andpotatoes,for 1862 and 1863, were as follows:
Corn.

Total 1862................................bush.
586,704,474
Total 1863...........................
449,163,894
Decrease...........................

137,540,580

Buckw heat.

Potatoes.

17,822,995
17,193,233

113,533,118
97,870,035

1,529,762

15,663,083

The monthly report of the department for September shows that the amount of
wheat and flour exported to all countries for the year ending September 1, 1863, is
40,686,308 bushels, and of corn 11,680,343 bushels. The domestic consumption, then,
is as follows:
Wheat crop for 1862.bush. 189,998,500 Corn crop for 1862.. .bush. 586,704,474
11,680,342
40,686,308 Exported..............................
E xported..............................
Domestic consumption..

Domestic consumption..

149,307,192

575,024,132

These exports and domestic consumption exhibit the relative magnitude of the for­
eign and domestic markets.
The report examines the probable foreign demand for breadstuffs during 1864, and
shows that the principal portion of our exports of breadstuffs are purchased in the
English markets; that the average annual importations of all grains with Great
Britain and Ireland are 94,278,949 American bushels; but in 1860 the importation
was 135,3S6,434 bushels, and in 1861, 142,529,106 bushels ; that it was as great in
1862, but not so large in 1863; that from the present condition of the crops in Eng­
land, the demand for 1864 would return to the general average, rather than to the
great amount since 1860 ; that the home demand for 1864 would be at least equal to
that for 1863, and that the condition of the currency would remain as favorable as it
now is; that hence the amounts of wheat and corn for 1864 would be as follow s:
Wheat crop for 1863.bush.
Domestic consumption___

191,068,289 I Corn crop for 1 863.. .bush.
149,307,192 Domestic consumption___

j

449,163,894
575,024,132

Leaving for export.........
41,761,047 [ Leaving a deficiency of.. 125,860,238
— which must be provided for by greater economy in feeding, and a greater propor­
tional consumption of wheat.
The number of stock hogs is about the same as in 1862, and about five per cent
below a general average in condition. These were early turned on the frosted corn.
The buckwheat crop is not as much injured as was generally supposed, because
most of it is produced in the States of New York, New Jersey, and Pennsylvania,
where the frosts of August 36, and September 18, did not injure the crops materially.
The tobacco crop of 1863 is larger than that of last year by nearly 50,000,000 lbs.,
although the frosts in the Western States were very injurious to it. But about onehalf of the crop there had been gathered before the frost of September 18, and seven­
ty-five per cent more ground had been planted than in 1862.
The hay crop o f 1862 is estimated at 21,603,645 tons, that of 1863 at 19.980,482
tons— a decrease of 1,623,163 tons. Its quality is good.




* Increase,

f Decrease.

1868.]

Valuation o f the State o f New York.

407

VALUATION OF REAL AAID PERSONAL PROPERTY OF THE STATE OF NEW YORK,

A t a meeting o f the Board o f Equalization, held at the office o f the
Secretary o f State, on the 23d September, a majority being present, the
follow ing resolution, on m otion o f Controller R o b i n s o n , was adopted:
Resolved, That the valuation, as now fixed by the Board o f Equalization,
and hereto annexed, and amounting in the aggregate to the sum of
$1,454,454,817, be and the same are hereby adopted, approved, and cer­
tified, as the equalized aggregate valuation o f the real and personal prop­
erty o f each o f the several counties o f this State, and that the same duly
certified by the chairman and secretary o f this board, be deposited in the
office o f the Controller as the assessed amount upon which the said Con­
troller is to compute the State tax for the year 1863, and that the said
equalization, as made upon each separate county, be entered in the book
o f minutes o f the proceedings o f this board.

A lb a n y . . . . . . . .
A l le g h a n y . .
B ro o m e. . . .
C a t t a r a u g u s ..
C a y u g a ........
C h a u t a u q u a .,
C h e m u n g .. .
C h e n a n g o .. .
C lin to n . . . .
C o lu m b ia .. . ,
C o r t la n d . . . .
D e la w a r e .. . .
D u tc h e ss. . .
E r ie ............
• E s s e x .........
F r a n k lin ... .
F u lt o n .........
G en esee. . . .
G r e e n e .......
H a m ilto n ...
H e r k i m e r ...
Je ffe r so n . . .
K in g s .........
L e w is .........
L iv i n g s t o n ..
M a d is o n .. . .
M o n r o e .. . .
M o n tg o m e r y
N e w Y o r k ..
N ia g a r a ... .
O n e id a .......

$39,640,693
9,148,321
9,021,100
8,548,366
22,292,079
14,316,820
7,210,263
9,812,797
5,662,707
21,915,177
6,237,819
8,194,252
33,871,584
47,086,595
3,355,377
4,227,845
4,154,490
15,931,530
7,759,662
605,010
10,404,468
16,458,826
98,147,604
5,391,577
17,041,338
13,380,495
30,174,825
9,659,631
547,416,030
15,285,475
24,709,962

O n o n d a g a .. ,
O n t a r io ........
O r a n g e .......
O r le a n s ........
O s w e g o .......
O t s e g o .......
P u t n a m ......
Q u e e n s.......
B e n s s e la e r ...
R ic h m o n d . . .
R o c k l a n d ....
S arato g a. . . .
S ch e n e ctad y
S c h o h a r ie . . .
S c h u y le r . . .
S e n e c a ........
S t. L aw ren ce
S te u b e n . . .
S u ffo lk .......
S u lliv a n .
T i o g a .........
T o m p k i n s ..
U l s t e r ........
W arren . . . .
W a s h in g t o n
W a y n e .......
W e s tc h e s te r .
W y o m in g ..
Y a t e s .........

$26,676,600
19,181,263
26,350,113
10,893,252
13,032,095
12,322,037
5,457,976
21,345,318
30,153,490
5,694,715
5,966,243
12,345,237
7,305,794
7,146,713
5,507,289
10,523,440
15,771,727
12,919,912
8,452,188
4,760,548
6,942,397
8,715,849
14,883,049
2,143,469
16,503,401
16,036,115
41,685,997
9,729,568
8,503,276
,454,454,817

State o f N ew Y ork, s s : W e d o h e r e b y c e r tify th e fo r e g o in g to b e a
c o rre c t tr a n s c r ip t o f th e o r ig in a l r e so lu tio n th is- d a y a d o p te d b y th e B o a r d
o f E q u a liz a tio n .
D . R . F l o y d J o n e s , L t. Gov. and Pres, o f Board.
E benezer B la k ely,




Secretary.

TH E

MERCHANTS’ MAGAZINE

COMMERCIAL

C O N T E N T S
VOLUM E X L 1 X .

OF

No.

REVIEW.

V.,

V O L .

NOVEMBER, 1863.

X L I X .
NUM BER V .

A rt.
pack
I. L I A B I L I T Y O F T H E G O V E R N M E N T O F G R E A T B R I T A I N F O R T H E D E P ­
R E D A T IO N S O F R E B E L P R I V A T E E R S ON T H E CO M M E R C E O F T H E U N I ­
T E D S T A T E S , C O N S ID E R E D . B y C h arles P. K i r k l a n d ...........................................329
I I . T E X T I L E F A B R IC S .

F l a x , H e m p , W oo l , 8 i l k , a n d C otton ......................................... 355

I I I . B O O K -K E E P I N G ; W h a t a C l e r k S ho uld B e......................................................................... 362
I V . R U S S IA — P O P U L A T IO N O F M OSCO W , F IN A N C E S , E t c ................................................... 365
V. TH E SU EZ CA N AL.
V I . C O M M E R C IA L L A W .

W h a t H as B een D one a n d W h a t R em ain s to B e D o n e . . 367
N o . 7.

N E G O T IA B L E P A P E R ; or , N otes o r H a n d a n d

B il l s of E x c h a n g e .............................................................................................................................

370

V I I . C O M M E R C IA L C H R O N IC L E A N D R E V I E W ......................................................................... 382

JOURNAL

OF B A N K I N G ,

CURRENCY,

AND F I N A N C E .

U nited States Banks us. State B a nks..............................................................................................................
N ational Banks up to O ctober 14, 1863............................................................................................................
T h e $50,000,000 L oa n to G overn m en t..............................................................................................................
Sem i-annual Bank D ividen ds o f B o sto n ........................................................................................................

389
389
391

Bank o f F ran ce rs . Bank o f S a v o y ................................................................................................................
C ity Bank R etu rn s.................................................................................................................................................
E uropean F inan ces— Bank o f England R e tu r n s .......................................................................................
R eturns o f the Canada B a nks............................................................................................................................

392
395
397
400

391

Official L etter o f C ontroller M cC ullough—A nsw ers o f the C ontroller o f the C urrenoy to Ques­
tion s in R elation to the N ational C u rren cy A c t .................................................................................. 401

STATISTICS

OF T R A D E

AND

COMMERCE.

Breadstuffs— E x p orts to G reat Britain and Irelan— Crops in U. S. for 1863..................................... 4 0 4
Valuation o f Real and Personal P ro p e rty o f the State o f N e w Y o r k ................................................. 407