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

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THE

MER CHA NTS ’ MAGA Z I N E
i

b

AND

COMMERCIAL REVIEW.
O CTO BER,

1863.

MERCANTILE BIOGRAPHY.
JOHN GRIGG,

OF P H I I A D B L P H I A .

[ w it h a p o r tr ait .]

•

•

W e Have never heard any good reason why we should wait until men
are dead before we speak their praises. Yet it too often happens, that
we have those living among us, whom we meet in the street, and do bus­
iness with every day, whose lives have been one long lesson o f active
goodness, industry and force of character, but o f their merits the world
knows little, until death removes the seal o f secresy which propriety is
supposed to place upon their lives. No man, indeed, can lead such a life
without becoming widely known, and securing the love and admiration of
associates. Still, society at large remains unaware o f the treasure it pos­
sesses until it is gone from it forever. The tribute then thrown on the
grave has lost half its fragrance. W hat more appropriate reward to a
life well spent, than fit words of praise, spoken in the ear o f living ex­
cellence ?
It is with the view of doing what we may to correct this wrong cus­
tom, and, at the same time, o f furnishing instructive lessons from the ex­
perience of truly successful and eminent merchants, that we propose to
continue the series of Mercantile Biography given in the pages of the
Merchants' Magazine in years past. This month we add the portrait,
with pen and pencil, of a merchant whose long life of business activity,
and ability, varied experience and uprightness, entitle him to a high place
' among these bright examples. W e shall be fortunate if we succeed in
giving a few of the leading traits of this truly original character as well
as the artist has portrayed the clear eye, and the marked features through
which it speaks from the engraving.
Adapting Bolingbroke’s definition, we may call Biography (which is
individual history) the practical philosophy o f life, taught by examples
VOL. XLIX.— NO. IV.




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To the young, nothing is so striking as fact. Rules and principles they
learn, if at all, when embodied in example, which realizes them. Tell
them that industry and energy are necessary to success in life, and they
will believe you, as they will when told there is such a country as China.
But hold up the life o f such a man as Franklin, Girard or Astor, point to
the living examples of successful enterprise— to M oses T a y l o r , to T h om as
T ilesto n , to P e l a i i a h P e rit — and they “ believe because they see.” Such
lives teach a great lesson, not because these men are rich men— rich men
they are— but they are something more. “ Get money, honestly if you
can, but get money,” is a degrading precept, as foolish as it is wicked,
for it inculcates a spirit which must defeat the very aim it proposes.
That integrity is valuable for its own sake, and that wealth is its natural
result, when combined with other qualities, is the lesson the lives of such
men as we have named impressively teach.
J ohn G r ig g , the well-known, although now retired, Bookseller of Phil­
adelphia, began life an orphan farmer boy. A restless spirit drove him
to the water, and he early exchanged the monotonous life of the farmer
for the excitements of that of a sailor. The activity of the young and
enterprising not unfrequently takes this direction. Amid the perils of
the Bay of Biscay, and the tempests of the W est Indies, he had ample
opportunities, by which he did not fail to profit, to become thoroughly
versed in the whole art of seamanship ; a calling, than which, there is not
one, perhaps, better calculated to bring out the qualities of prompt de­
cision and self-reliance. W e do not know how long his experience in
reefing and steering lasted. In fact, our knowledge of the minute details
o f his life is not so full as we could wish. Some thirteen months o f his
early life were passed at Richmond, Virginia. The quickness and origi­
nal force of his character, the zeal with which he pursued his studies, and
resumed them when broken off, and his devotion to mathematics, in
particular, for which, at this early age, he manifested that taste and ca­
pacity which often accompany the talent for practical life and affairs, at­
tracted the notice of relatives with whom he lived, and led them to antic­
ipate a bright future for the young student. The lady of the house, her­
self very fond of mathematics, assisted him in his studies. But he was
poor, he had his own way to make in the world, and soon leaving Rich­
mond, went to Ohio, eager for the fray of life. There we find him engaged
in the duties of Clerk of the Court of Common Pleas and Chancery of
Warren County, Ohio, with the sole charge o f this responsible office.
These duties he performed to the satisfaction of all, and won for himself
the esteem and friendship of such men as Mr. Justice McLean, who had
not then left the courts of Ohio for the place which he adorned on the
Bench of the Supreme Court of the United States, and of the Hon. Tho­
mas Corwin and others. During the whole of Mr. G r ig g ’ s life in Ohio, Mr.
Corwin and he were intimate friends and “ bosom cronies,” such friends
as young men become who know each other perfectly, and are in some
respects alike in tastes and habits. “ I can say o f him,” (our quotations
are from a letter from Mr. Corwin,) “ with entire confidence in the opin­
ion, that he was from his boyhood up, through every change o f place,
occupation and fortune, an earnest, frank, sincere, honest man. After
entering the Clerk’s office, he very soon made himself master o f every
detail, and became in fact clerk o f the court. I know he often wrote from
fifteen to eighteen hours, every twenty-four, for weeks together.”




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John Grigg, o f Philadelphia.

251

Symptoms of disease were the consequence of such habits o f industry
and intense application, and made change of occupation necessary. But
those habits had won for him a name and character which soon enabled
him to enter on a different and less harrassing pursuit. The late J oel
S cott , Esq., was at this time proprietor o f a manufactory o f woolen cloths,
in Scott County, on the Elkhorn Creek, in Kentucky, a region remarka­
ble for the beauty o f its scenery, the excellence o f its water power, and
the fertility of its soil; the remoteness o f the Atlantic cities, and the war
prevailing at that time with England, operated as the most effectual of
protections, and the woolen manufacture was a highly lucrative business
in Kentucky ; new proprietors commenced the manufacture of all descrip­
tions of woolen cloths, on a large scale, and with much energy and appa­
rent skill. It was early in 1815 that Mr. G r ig g became superintendent
of Mr. S cott ’ s establishment, at Georgetown. His new situation tasked
the best energies o f his mind and character. He was at times placed in
the most trying circumstances, and on one occasion left suddenly with
the sole charge of the whole establishment upon him. But the same
quickness and assiduity which made him an efficient clerk of court, made
him the best of superintendents, also. The greater experience o f the Old
Country might be challenged to produce a wool manufacturer who knew
better how to assort a fleece into five or six different qualities, or had a
quicker and more practiced eye to see when a thing was well done, from
the washing of the wool to the finishing of the cloth.
Subsequently to this, Mr. S cott lived in opulent retirement near Frank­
fort, but died some time since. He and his excellent sons belonged to
that noble order of Kentucky farmers, whose fine farms and rare breeds
o f cattle were the pride and wealth of the State, and whose hearts and
sympathies were as broad and open as their fertile acres. Although, as
we believe, Mr. G r ig g never visited Georgetown after his business con­
nection there ceased, and the two friends seldom if ever met, yet the friend­
ship and regard which his services and character secured for him from
Mr. S cott lasted, unabated, through his life. In a letter which we re­
ceived from Mr. S cott in 1851, and to which we are indebted for some
of these details, he speaks o f his old friend with youthful warmth, of “ his
uncommon industry, activity and efficiency in business,” o f “ his exalted
and honorable feelings and principles.” Mr. G r ig g “ won the entire con­
fidence and most cordial attachment,” says Mr. S cott , “ not only o f my­
self and family, but also of all with whom he had been associated in bus­
iness. This attachment was fully reciprocated by his own warm and
generous heart, and was evinced not only by the manifestation o f feeling,
but also by the bestowal of some memorial to the various members of the
family, when he took leave of us.” And “ still the warmth of his noble
heart is unabated. Not a single year has been allowed to pass without
the receipt of some substantial and cherished memorial of his abiding
friendship, not only to myself, but to my children and grandchildren, all
of whom he seems to embrace in the wide scope of his generous affec­
tions, although he has never seen but a single individual of them.”
The year 1810 brought with it still another change of residence and
occupation. Mr. S cott parted from his assistant with reluctance, but his
restless activity was ambitious for a wider field and higher range. W e
must stop here, however, to say a word in reference to tfiese several
changes of business by Mr. G r ig g , lest our younger readers may be led, on




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Mercantile B iography:

[October,

the slightest pretense, to go and do likewise. When a young man has
deliberately chosen his pursuit in life and entered upon it, there are nine­
ty-nine chances to one that if he makes a change it will be for the worse,
and, of all men in the world, Mr. G r ig g would be the last to encourage
this restless, roving disposition. Many, in commencing life, delude them­
selves with the idea that some occupation can be found, wholly suited to
their whims and'fancies. This philosopher’s stone will never be discov­
ered ; and every one who makes his life a search for it must be ruined.
Much truth is contained in the Irishman’ s remark: “ It is never asy to
work hard.’’ Let, therefore, the fact be always remembered by the young
that no life-work can be found entirely agreeable to a 'man. Success al­
ways lies at the top of a h ill; if we would reach it, we can do so only by
hard, persevering effort, while beset with difficulties o f every kind. Ge­
nius counts for nothing in the battle o f life 1 determined, obstinate, per­
severance in one single channel, is everything. The circumstances that
led Mr. G r ig g to make the changes he did, we will not dwell upon, ex­
cept to say that they were peculiar and such as few men can plead.
Certainly the hope of finding something to do that was easy and agreea­
ble in every way, was not one o f them. Nor did he change because he
did not love his occupation. He knew then, what he teaches now, that
'good, hard, honest effort, steadily persevered in, will make one’s love for
one’s business grow and make the business itself prosper. All should
remember that we are allowed to see and feel the roughnesses in our own
pathway, but not in others ; yet all have them.
But, as we said before, Mr. G r ig g , in making this change in his occu­
pation, sought for a wider field, and concluded to go to the city ; he must
try his fortune as a merchant in Philadelphia. From country to city,
an unbroken current of youthful hope, energy and character is ever set­
ting, which purifies and renews, it is true, but too often leads to the ship­
wreck of weak principles and sanguine hopes. W ere it not for new blood
from the country, cities would grow sickly, just as citizens’ children after
one or two generations become puny and weak. But the city influence
is strong, and it is an even chance whether it will corrupt or the country
influence will purify. Hence the danger of this indiscriminate eagerness
of the young to rush into city life. But if they all brought with them the
same power to resist, and the same ability to act for themselves, which
J ohn G r ig g carried with him to Philadelphia, this tendency would be less
to be regretted. It was his intention to enter a wholesale dry goods
house. But the year 1816 was one o f general embarrassment. No open­
ing presented. Like F r a n k l in , before him, G r ig g found himself in the
city of Philadelphia, comparatively without means, without employment,
with no outward support, but upheld by that sure inward resource of selfreliance, which is the center of moral gravity. However, he was about
giving up his plan, when he made the acquaintance of Mr. B. W a r n e r , a
bookseller of very extensive business. Mr. W a r n e r seems to have been
a man o f quick appreciation of character. He at once conceived a high
opinion of Mr. G r ig g ’ s character and abilities. Mr. W a r n e r was a
Friend, and a friend indeed, in every sense, he proved to his young clerk,
who at once entered his house and justified the nattering opinion o f his
employer by the characteristic energy and clearness o f head which he
brought to bear upon his new pursuit. Versatility is said to be an Amer­
ican characteristic, and few men have possessed it more strongly than Mr.




1863.]

John Grigg, o f Philadelphia.

253

The readiness o f adaptation to new pursuits, situations, and
emergencies, which made him efficient in each of the varied callings with
which within a few years he had already made himself familiar, marked
his career through life. It was his favorite opinion that all difficulties can
be overcome by perseverance— that no man or boy can tell what he can
make of himself until he tries. He made it 4 rule of life when difficulties
appeared, to clap on double energy, and, like Hercules, to rely upon the
strength of his own shoulders to get the wagon out o f the ditch.
He had need of all his own resources of character in the calling which
he had adopted. But it was the last change of pursuit he was to make.
He had found a business whose range of operations suited his abilities
and ambition. The difficulties of the bookselling business are said to be
peculiarly great. This is the consenting opinion o f those familiar with
i t ; and it is obvious how much tact and discrimination, sagacity and
careful study of the public taste, it requires. So connected is it with Lit­
erature, that a mistaken literary judgment may involve the most serious
business consequences. Dazzling projects, which on paper give assurance
o f brilliant results, when put in execution prove worse than failures. It
was not, however, until a few years later, when he had worked his way
up to the higher walks of his business, that these qualities were called out
into most active exercise. But the same energy which was displayed in
the more responsible station to which he soon attained marked his per­
formance of the humbler duties of a clerk. This devotion, this determin­
ation to do “ whatever his hands found to do ” “ with all his might,”
whether as Clerk, or as Principal, as Banker, Manufacturer, Clerk of Court
or Publisher, is the secret of his success— o f all success in business. The
late W il l ia m G r a y , of Boston, in his days of opulence, was tauntingly
reminded that he had once been a drummer. His quick retort contains
volumes of the practical philosophy taught by such lives as his and Mr.
G r ig g ’ s ;— “ Didn’t I drum well, though !”
Mr. G r ig g has always been remarkable for strength of memory. One
of his feats at this time, was to learn the name of every book in the store,
its price, and the place where to find it, so that he was able, at once, to lay
his hand upon it when called for. It was thus he commenced his clerkship.
In a few days this readiness and aptness began to excite the jealousy of an
older clerk, since deceased, who was nominally above the last com er; and
his own spirit was chafed at a superiority in position in the establishment
of those who were inferior to him in fact. To avoid these unpleasant feel­
ings, Mr. W a r n e r proposed a journey to Virginia, for the purpose of set­
tling the affairs of a firm in that State, with which his house was connected,
and which had been dissolved by the death of one of the partners. This
commission Mr. G r ig g gladly undertook. How successfully he performed
this duty, and in fact every duty belonging to the new calling which was to
be the business of his life, is best shown by the testimony left by Mr. W a r ­
n e r , on, his death, a few years after.
A memorandum was found attached
to his will, which contained a legacy more valuable than gold, a legacy o f
golden opinion. Taking into view the possibility of his business being con­
tinued after his death, he thinks “ one or two young men in whom confi­
dence can be reposed ” might be found to take charge of it, and adds, “ I
consider J ohn G r ig g as possessing a peculiar talent for the bookselling
business. Very industrious, and from three years’ observation, (the time
he has been employed in my business,) I have found nothing in his conduct
G r ig g .




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[October,

to raise a doubt in my mind of his possessing correct principles.”
Praise
like this is the noblest o f rewards, the most stirring of incentives.
The executors of Mr. W a r n e r could not do otherwise than confide to
one in whom he expressed such high confidence, and so explicitly pointed
out as his successor, the settlement of the affairs of ttie firm. Nor was this
a slight undertaking. The business of the house had been immense : con­
nected with it were numerous agencies and branches, it had dealings with
various houses at the South and West, and the settlement o f it rendered
frequent journeyings necessary. During one of those journeys an incident
occurred which is too characteristic of the days of stage-coach traveling, and
of the determined energy o f Mr. G r ig g ’ s character, to be omitted. He was
at Charleston. It was the latter part of December, 1825, and by Christ­
mas day he must be in Philadelphia. He pushed forward, traveling day and
night; at Baltimore, the steamboat which usually connected was found to
have left off running, and the travelers were forced to take to the mail coach.
But every seat was full when Mr. G r ig g arrived; there was no alternative
for the determined traveler, weary and excited as he was by incessant jour­
neying for seven long days and sleepless nights, but to ride outside with
the driver. The day, or rather the night, was cold, the air was full of sleet,
the road miry. But to the driver’s seat he mounted and pushed on. At
Havre de Grace another driver took the reins, who was unacquainted with
the road ; it was long after dark, and the “ inside^,” who began to be fear­
ful of their necks as the coach plunged and tossed in the mire, grew clam­
orous for putting back until morning. But Mr. G r ig g was determined that
the stage should go-ahead and be in Philadelphia by Christmas day, and
besides they carried the mails, and a public conveyance must not be delayed !
So he procured a lantern, and going before the coach, piloted the travelers
through the darkness and mire for about two miles. Finally, mounting the
box again, he took the reins into his own hands, and daylight saw the de­
lighted travelers arrived at Elkton, and well on their way. They at once
admitted him to a seat inside, upon their knees. And early on Christmas
morning Mr. G r ig g was in Philadelphia.
On another of these journeys Mr. G r ig g was suddenly taken very sick at
Lexington, Kentucky. He was staying at the house of a friend, on his way
home. He was too sick to stand, but not, as he thought, or was determined
to think, too sick to travel. His will was stronger than disease, and no dis­
suasion could turn him from his fixed purpose o f going forward. So he was
carried from the house to the state coach, at his express request, laid on the
bottom of the coach, and in this rough sort of ambulance, he pushed on to
Philadelphia with soldierly fortitude. There is something too much like
rashness in such zealous devotion to business to make it altogether a safe
example; but it will be appreciated by every merchant whose spirit has been
vexed and patience wearied by the delays and loiterings on the road which
their traveling agents and clerks are fond of making the slightest illness an
excuse for, and in which they are oftentimes ready to indulge without the
decency of any excuse at all.
It is with such energy that Mr. G r ig g has performed the journey o f life.
At the end of the first year a statement of the business of the firm, as con­
ducted by him, was exhibited to H. C. C a r e y , Esq., who had been appointed
by the parties in interest to advise with the executor.
Mr. C a r e y , whose
undoubted ability as a political economist is combined with the practical
ability of the business man, also on examining the balance exhibited by




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John Grigg, o f Philadelphia.

255

the statement, expressed the unqualified opinion that no business had ever
been managed with more tact and skill than this complicated estate. As
early as November, 1 8 2 3 , Mr. G r ig g succeeded in completely settling up
the affairs of the firm.
He was now once more without fixed occupation, but not, as before, with­
out means; above all, not without experience, which is better than money.
He had not only saved something, but had mastered the details of a diffi­
cult branch of business. For an instant, however, Mr. G r ig g seems to have
been undetermined what course to pursue. Conversing at this time with
the late J o se ph C u s h in g , Esq., of Baltimore, he explained his situation, and
laid before him his prospects. “ Rely on yourself,” said his friend, “ you
cannot fail to succeed. You will yet astonish yourself and the book trade
of the whole country.” The next day Mr. G r ig g hired a store, with lodg­
ing apartments back of it, and commenced the business of bookselling on
his own account.
Thus prudently and carefully did he set about the fulfilment of this pro­
phecy. How brilliantly it has been verified, the success of the celebrated
publishing house of J. B. L ippin co tt & Co., of which Mr. G r ig g was the
founder, sufficiently proves, and the entire book trade of the country can
testify. Upon the same spot where he began, Mr. G r ig g conducted his
business with ever increasing success and widening range o f operations.
The genius and enterprise of its head pervaded the house, and all its ope­
rations were conducted with that unity o f aim and purpose which a com­
manding mind knows how to give to the most multifarious details, and to
impress upon all who come within its range. Nor was the influence of this
almost military promptness and efficiency of operation confined to his own
house. Mr. G r ig g became noted among his brethren for his peculiar fac­
ulty. A nervous energy, a rapidity o f calculation and resolution, a prompt­
ness to act marked his entire course.
He possessed, in short, a kind of mercantile intuition. In a letter from
Lebanon, Ohio, where, as we have seen, Mr. G r ig g passed many of his
early years, another of the friends of his youth, whose friendship, like Mr.
C o r w in ’ s , has been life-long, presents in a very striking manner these traits
of his character. “ He comprehends at the first glance,” writes A. H. D un l e v t , Esq., of Lebanon, “ business matters in all their gearings, direct and
remote, and astonishes you with the quickness with which his opinion is
formed, and that, not to be changed. The judgment thus formed almost
always proves correct,” and he is thus enabled to “ dispose o f his affairs as
they come up without their accumulating on his hands, and by this means
has been able through life to dispatch a greater amount o f business than
almost any other man, without any apparent severe labor. Another promi­
nent trait in his character has been his open candor and unwavering integ­
rity. He was ever faithful to himself and to others in avowing his opinions
or fears in relation to their business, and hence he made fewer bad debts,
in his extended business, than almost any one else in like circumstances.”
The change which Mr. G r ig g effected in the book trade o f the country,
has been described as nothing less than a revolution. C onstable , the fa­
mous bookseller of Edinburgh, Sir W a l t e r S cott ’ s publisher and partner,
was fond of calling himself the "Napoleon of the realms o f print,” a com­
pliment hardly justified, except by the boldness, bordering on rashness, of
'his operations. Mr. G r ig g ’ s friends had better reason, in many respects,
for bestowing, as they were sometimes in the habit of doing, the same




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[October,

honor upon him, for to boldness and rapidity he united cool and clear judg­
ment, the quick eye to. look ahead before going ahead.
W e may here
mention as one proof of this wonderful ability o f his to see the end from
the beginning, that he never published a book that did not pay.
Through the financial tempest o f 1836 and 1837, Mr. G r ig g steered his
course safely and successfully, and although engaged in a business of vast
extent during the whole perilous financial period from 1833 to 1840, was
among the few who suffered little by the revulsions of the times. He was
largely interested in stocks and other species of property most liable to be
affected. But he saw from afar the dangers which were threatening the
business of the country, and his quick foresight early anticipated the inevi­
table issue of the unequal contest between the government and the United
States Bank. He promptly took measures to change his investments from
stock to real estate, and became the owner of large properties in Mississip­
pi and Illinois, as well as in Philadelphia. When the shock of the crisis
came, his foot was on the ground, and he stood firm.
Mr. G r ig g has not, we thus see, entirely confined himself to the line of
his peculiar .business. Men of wealth never show a truer public spirit than
when they step forward to aid with hand and purse a great public enterprise
in its infancy. Public works are, for the most part, anything but attractive
investments at the outset, and it is oftener a case of self-sacrifice than of
self-interest to invest money in new projects of this kind. Mr. G r ig g was
an early and prompt friend and large subscriber to the stock of the Penn­
sylvania Railroad, a work of the same interest and importance to Pennsyl­
vania that the Erie Railroad is to the State of New York, and the national
value of all these great works connecting the seaboard with the West, need
not to be enlarged upon. W e have already referred to the circumstances
under which Mr. G r ig g was induced to invest largely in real estate. Phil­
adelphia is indebted to him for numerous elegant dwellings which adorn her
beautiful streets. Besides the real estate investments in Mississippi, in 1836
he entered extensive tracts of the public lands in the Sangamon country,
Illinois, of which he has from time to time sold large portions. In his deal­
ings with the numerous purchasers of his land, Mr. G r ig g ’ s uniform fair­
ness and liberality have made him universally popular— an exception to the
general rule as to non-resident land owners, who are by no means favorites
at the West.
But, in addition to what we have already said, there is another trait in
the character of Mr. G r ig g , which endears him to all who thoroughly know
him, and that is his honest simplicity and freedom from all ostentation.
The well-known author, R. S helton M a c k e n zie , of Philadelphia, in a re­
cent letter to us, speaking on this point, says: “ He is a plain, natural man,
wholly self-educated and self-made, to whom nature gave a clear head, an
honest heart, and a firm will ever to persevere. Those who know him best
feel that when W o rd sw o rth wrote * the boy is father of the man,’ the line
might have been taken as describing Mr. G r ig g , who is the same in heart
now that he was when a poor boy and a struggling young man. My ex­
perience of society in many countries has been very wide; but Mr- G r ig g
seems to me the most unassuming and least ostentatious rich man I ever
knew. Wealth has left him wholly unspoiled, nor do I think that adver­
sity would throw him off his balance, for he values money rather for the
good it can do than for the pleasure it can procure.” To show how unac­
customed he is to display and boast of his own acts, Mr. M a c k e n zie men­




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John Grigg, o f Philadelphia.

■ 257

tions the following, which lately came to his knowledge by the merest ac­
cident: In 1817 Mr. G r ig g traversed the whole State o f Virginia for the
purpose of correcting a very defective map of that State. Few can appre­
ciate the difficulties of his task, but, as usual with him, he manfully faced
them and subdued them. In consequence o f his corrections this became
one of the best State ma]5s published at that period, and the local executive
and members of the State Legislature cordially acknowledged the beneficial
results of his labor o f mind and body. Here, certainly, was a work to boast
of; but probably not twenty people in the last fifty years have heard Mr.
G r ig g refer to it.
Mr. M a c k e n zie says that his knowledge of the fact
arose from seeing in Mr. G r ig g ’ s counting house, hanging on the wall, half
hidden by a door, the very map his labor had corrected, with a few lines
in his own hand-writing upon it, addressed to his children, mentioning to
them what he had done for the map, and expressing a hope that they would
value it for their father’s sake.
The foregoing outline o f this interesting career is all we are able to fur­
nish. For more minute details it would be in vain to apply to the only au­
thentic source from which they could be obtained. W e know less of these
details than of the opinions of life and men which, in the confidence of
friendship, Mr. G r ig g , is fond of throwing out at random. They are the
results of experience, rich in instruction for those whose experience is to
come. A notice of a few of these will appropriately close our sketch.
Of the value of these cardinal rules of thrift— ec o n o m y and industry —
no one, of course, could speak with stronger emphasis. The want of econ­
omy, the waste of time and money in small and useless pleasures and in­
dulgences, which prevail in these degenerate days, is often deplored by Mr.
G r ig g , and he has expressed the half-humorous apprehension, that the vast
volume of knowledge which he and his brethren of the book trade have
contributed to swell, for many years, has been of little avail against the
instincts of the animal man, which seem stronger than his boasted reason.
But he has the comfort of the reflection that if this is the case with man­
kind, it is their own fault, not the booksellers’. If the young can be induced
to begin to save the moment they enter on the path o f life, the way will
ever become easier before them, and they will not fail to attain competency,
and that, without denying themselves any of the real necessaries and com­
forts of life. Mr. G r ig g adds his testimony to that of other successful men,
that the first few thousands were more difficult to acquire than all the rest
of their fortunes.
Entertaining such views of the necessity of economy, Mr. G r ig g could
not think otherwise than favorably of that great institution of the day—
the Savings Bank, one of the noblest, the most characteristic features of the
times. He had rejoiced over the good it has done, and will do for genera­
tions to come; the cheerless hearth made glad, and helpless old age'made
comfortable, and the aid it has enabled thousands of industrious emigrants
to send to their suffering kindred in the Old W orld the savings of their
hard earnings, making heart respond to heart across the broad Atlantic.
If the Protestant Church ever canonized, among the many saints whom it
might enrol upon its calendar, no one would deserve a place better than
P r is c il l a W a k e f ie l d , the founder of the Savings Bank System. It is
one of the great merits of this system, that by accepting the smallest deposit




258

Mercantile Biography:

[October,

it encourages and enables the poorest to make a beginning, a first step in
economy.
This first step is the all-important one, “ the step at the threshold,” ac­
cording to the Italian proverb.
There must be self-control at the start;
but what an inducement to economy is the thought of the good that may
be done with wealth, the wretchedness that can be relieved, the widows and
orphans assisted in their affliction, the sunshine that can be diffused in the
dark chamber of sickness and poverty. Such are the noble and disinter­
ested motives which Mr. G rigg would hold up for the practice of economy,
motives that ought to influence the most confirmed spendthrift.
And while on this subject of economy, it should be remembered that
there is a business economy to be practiced at home as well as at the count­
ing-house. Without joining in the vulgar cry against the reasonable in­
dulgences which wealth procures, and into which none woffld more eagearly
rush than those who declaim against them loudest, we must not deny that
there is a vast deal of sham aristocracy in our country. Aristocracy in the
best sense of an abused word, is the growth of time as well as -money.
Fine furniture and living for appearances are not the thing. Nothing proves
the folly of this painful anxiety about the opinion of others in matters of
living, more than the simple fact that in a country o f such general equality
of condition and fortune as America, the means and mode of life of thou­
sands of families must be, and are almost precisely alike, and yet each thinks
it necessary to keep up an outward seeming and show, which each, in very
many instances, must know to be hollow. Under our laws for the distri­
bution and division of property among next of kin, there can be few per­
manent large fortunes.
Even in England, where the policy of the law
favors, if anything, the most unequal distribution of property, for the pur­
pose of “ keeping up ” families, the permanence of fortune is lesseniug daily.
The army and navy of England, viewed in their most striking present as­
pect, must be considered as a gigantic machinery for providing for the
younger sons of decaying gentility. But we have no such resources here,
and no patriot will ever desire them. What wealthy American parent can
hope that all his children and grandchildren will be as wealthy as himself;
what folly, therefore, to encourage tastes and habits adapted to a style of
life which the simplest rule of arithmetical division might teach him is many
times finer than anything they can expect. But if the folly of such living
is great, its meanness and recklessness are greater. Mr. G r ig g is fond of
drawing his illustrations from the sea-life of his youth. The wind never
blows for a long time, he has observed, the same way, and often when the
times look most prosperous and flattering, a financial white squall covers
the sky in a moment. Now, a good merchant will have his business well
regulated, his assets marshaled, and his means at hand, ready for the hard
times which he must look for every five or seven years. But what merchant
is ready for a crisis, who, without more capital than his business requires,
spends double his income in “ riotous living.” It may do for a while, and
(since death is little more certain than failure,) it may last for his life.
But then— what is to become of the widowed wife and pauper scions of the
Merchant Prince l
Moreover, living beyond one’s means is only smooth language for living
on other people’s means; like “ failure,” which is soft euphony for bank­
ruptcy. Without money a man cannot live well or ill. But if the money
you live on is not yours it must belong to others ; it is the poor, the




1863.]

John Grigg, o f Philadelphia.

259

toiling poor, on whom the brunt o f this mean recklessness falls. And
yet, perhaps, the spendthrift himself, sleepless with the cares, shifts, and
evasions of hopeless indebtedness, sick, body and soul, (for body and soul
suffer together from the same tortures,) and racked by the strain after what
is beyond his means and reach, is the greatest sufferer and the most to be
pitied.
And the root of all his misery is the ruin of the domestic happi­
ness of thousands, who forget that prosperity can only be attained by living
within one’s income.
To economy, the business man must add industry and self-reliance. He
must not take too m uch a d v ic e . Mr. G r ig g has almost always been in
situations where the responsibility o f deciding and acting has fallen on him­
self. Hence a habit of self-reliance, which is not, perhaps, safe to the same
degree in all men.
But of the necessity in general of seeing with one’s
own eyes, of judging for oneself, of looking upon events with calm selfpossession, and of acting npon one’s own conclusions in most cases, there
can be no doubt.
The business man must keep at the helm himself, and
“ steer his own ship.”
To avoid excessive credits is the necessary corollary, the great practical
application of this precept of self-reliance. Credit is one of the great ele­
ments of business, but like some of those o f the natural world, as danger­
ous as it is useful. It is a remarkable fact, that during the whole course of
his business career he never asked a man to endorse a note for him, and,
according to our idea, this is one great secret o f his success. Mr. G r ig g
says there are three elements equally beneficial in their use, equally des­
tructive in their abuse, and these three elements are Fire, Water, and B anks !
The business man must attend to the minutice too: see that the store is
opened early, goods brushed up, twine and nails picked up, and all ready
for action, like the deck of a man-of-war! The necessity of attending to
minutice— things small as well as great— seems to have strongly impressed
itself upon Mr. G r ig g ’ s mind. A young man should consider capital, he
has said, if he have it, or as he may acquire it, merely as tools put into his
hands with which he is to work, not as a substitute for the necessity of labor.
Or, if you please, capital is the flying artillery of business, adapted to the
quick evolutions and rapid operations of trade, and, therefore, always to be
kept ready and at command, but not fit to be made the sole reliance in the
tug of war.
With industry and economy, self-reliance and a well-balanced mind, the
young merchant has the best elements of success.
Let him only follow
Duty as the one safe course to steer by.
Let Truth never strike her top­
sail. And it is with an emphasis lent by his own bitter experience of the
hatefulness of this vice, from which no one was ever freer than himself, that
he warns the young to remember that ingratitude is the basest trait of
man's heart. “ Mr. G r ig g never forgot a favor,” says Mr. D u n levy ; “ grat­
itude seems to be the natural impulse of his bosom.
Even after thirty
years’ absence from Lebanon, he retains the most lively attachments for his
old acquaintances, and remembers with the freshness of yesterday, the acts
o f kindness shown to him ; and not unfrequently has he given striking
tokens of these feelings in the liberal bounties which he has bestowed upon
the needy and unfortunate among his old acquaintances.”
It is not to be supposed that these qualities and requisites of the busi­
ness man are recommended merely as necessary and conducive to success
and to the attainment of wealth ; they are right and good in themselves—




260

Mercantile Biography:

[October,

they are equally necessary to its proper use and enjoyment. “ Until men
have learned the virtues of industry, economy, self-reliance, and self-control,
they cannot be safely entrusted with wealth''
It is a degrading philoso­
phy which teaches only how to get money, not how to use i t ; and whose
single precept, in the language of the Roman satirist, is “ Get money first,
virtue after the coin.”
W e might go on in this way and fill pages with the teachings of this
rich experience. But the result would not be a Biographical Sketch, but a
Manual of Business Ethics, a real Mirror for Merchants. Before passing,
however, to other topics, we must add one other admonition, addressed not
to merchants, but, in their behalf, to “ the rest of mankind,” and one to
which it would be well for all to give heed. “ Go to a man in business
hours, only on business. Transact your business and go about your busi­
ness.” Idlers and loungers often interfere with the promptness and method
of mercantile routine.
For young beginners, Mr. G r ig g has always words of encouragement.
They must never despair so long as they are using all honorable means to
succeed, for if their minds and energies are bent on their business, they
have the best right to hope for success. It is the wea£ and timid who suc­
cumb ; to conquer, they must be determined to conquer. Now and then,
he has in his own experience found himself on the wrong tack, but sleepless
vigilance discovered the shoals, he has tacked ship and made the port in
safety. The increasing difficulties of business in these “ maddening times ”
call for the best powers of the best minds. Everything, however remote,
that has any bearing upon success must be taken advantage of. The slave­
ry of business is terrible ; and Mr. G r ig g has often lamented the entire
unfitness of many who rush into mercantile life, in preference’ to the safer
life of the farmer. Nearly all our schools, in his opinion, should be agri­
cultural ; every facility should be afforded for preparing the young for the
farm, and every inducement to prefer its safer pursuits to those professions
and occupations which a lamentable pride leads many to prefer, but for
which Providence has never fitted them. The leisure and pleasures of city
life are often the theme of half-envious comment on the part of some of the
least wise ot those whose lot has fallen in the country. Ever since the days
of Virgil, the difficulty with the farmer seems to be that he does not “ know
his own advantages.” * Agriculture is not only the most healthful, useful,
and noble employment of man, but the most certain in its results, also.
There is no sense in denying or disguising the fact that it requires hard and
constant toil. But it is equally certain that by judicious and industrious man­
agement, the cultivators of.the soil can always be independent, and at the
same time escapr the wearing excitement of commercial life. It is a wellascertained fact that ninety-seven out of every hundred merchants fail, taking
the average of city, town, and country. W e have no statistics at hand as
to England, "but those who are familiar with the history of business there
for the last thirty years know that the same uncertainty‘ (although not to
the same degree perhaps) exists there also. But seed time and harvest are
more certain than the seasons of trade, and the thermometer is less variable
than the market.
Early Marriage is a favorite theme with Mr. G r ig g in his advice to young
men. All men, he would say, should be married as soon as possible after
twenty-two or twenty-three years of age. A woman of mind will conform
to the necessities of the day o f small beginnings ; and in choosing a wife,




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John Grigg, o f Philadelphia.

261

adds Mr. G r ig g , a man should look at— 1st, the heart; 2d, the mind ; 3d,
the person. A choice made thus soberly and discreetly, can hardly be
wrong. But, alas ! who will look for discretion in a man crazy with love ?
In that sad plight, nobody is capable of judging anything righ t! So strong,
however, wefe Mr. G r ig g ’ s convictions on this point, despite the intrinsic
difficulties of the case, that it became a by-word among his clerks, that if
any one wished a permanent place in his house, all he had to do was to get
married 1 Several of his partners and successors in business were .clerks
whom he had befriended in boyhood and poverty.
He made it a rule,
in fact, to give preference to the sons of poor widows, whom he paid from
the start, and promoted according to their capacity and proficiency. O f
that warm and wise charity which aids the needy, not only by helping them
to help themselves, but by direct bounty, and whieh has followed the de­
serving who had been in his service, after they had left him and lost all
direct claim upon his liberality, instances might be recorded for which this
is not the place.
Even if it were, however, we could not mention a tithe
of them, sinee all such acts of his are done quietly and privately, so that
the left hand knoweth not what the right hand doeth.
Of the discipline of mind as well as character necessary to success in busi­
ness, the preparatory studies which make the enlightened merchant, Mr.
G r ig g is not unmindful. Modesty might forbid further allusion to this point,
for his advice involves something so complimentary to the editorial “ W e ”
of the Merchants' Magazine, that if we go a step further we shall be in
danger of transgressing its rules. So we shall merely add, by way of ex­
planation, solely, that Mr. G r ig g advises every young man intended for
business, who would acquire sound ideas of trade, to read— to study S a t ’ s
Political Economy, and H unt ’ s Merchants' Magazine. Treating subjects
of trade that require deep thought, they will expand the mind, while the
statistics, he is pleased to think, furnish that information respecting internal
improvements, and all the other great commercial and industrial interests
of this great Republic, in which even our public men are sometimes lament­
ably lacking.
W e find no difficulty in agreeing with him that “ every public library in
the country should have a copy of the Merchants' Magazine," and “ that
its contents should be thoroughly read and inwardly digested by all mem­
bers of State Legislatures, and of Congress, to whose charge are intrusted
the great public interests, on which it throws the fullest light.”
There is another opinion of Mr. G r ig g ’ s — a sentiment as well, for it is no
more a conviction of his experience than a warm feeling of the heart, with
which we may appropriately close this sketch. Looking back over his long
life, recalling his varied experience from his boyhood up, he ever bears this
grateful testimony :— “ Our country is the very best poor man’s country in
the world.”




262

Russia and the United States— Future Empires.

[October,

RUSSIA AND THE UNITED STATES— FUTURE EMPIRES.
I n the last three hundred years a great change lias been goingon among
the races which people the Northern Continents of the world, the wonderfu! results of which are now apparently first beginning to manifest them­
selves. The rise of the Roman Empire in remote ages, from small be­
ginnings in the South of Europe, involved, as it increased in power, the
consolidation of the barbarous nations that inhabited the Middle and West
of Europe under the vigorous yoke of the Romans. The decline and fall
of that Empire left the nations of Europe inoculated with civilization,
which, being developed by the lapse of time, carried commerce and the
arts to a great height on the ruins of the feudal system. A t that time,
however, modern civilization was confined to the South and W est of
Europe. The North and Northeast were still sunk in utter barbarism, and
the American continent had not yet attracted the attention o f the world.
W ith the commencement o f the sixteenth century two events laid the
germ of two overshadowing future empires.
In 1492 C olumbus landed in the W est Indies; in 1497 the English
discoveied North America; in 1499 A m ericus V espu o iu s landed on the
Western Continent; in 1607 were made those settlements which have
since grown into the mighty nation that, to-day, has called 1,475,000
men into its armies, a’nd furnished in two years about 11,500,000,000 to
meet the expenses of the present war without any signs' of exhaustion.
The Northwest o f Europe had been inhabited by numberless tribes of
barbarians, who, under their petty princes, had waged continual war, and
ended by being subjected to the Crim Tartars, that fierce race which so
long poured forth successive hosts from the remote regions of Asia to
the conquest of Eastern Europe. W hile C olumbus was seeking aid for
his expeditions o f discovery, the Duke B asiliu s IV. united the petty
princes of Russia, subjected Pleskow, conquered Smolensk from the
Poles and, in 1509, freed his consolidated country from the domination
of the Crim Tartars. Russia now made rapid strides to power. Its only
port was Archangel— Revel, on the Baltic, being in the hands o f the
Livonians. In 1554 it conquered the Nagaian Tartars, including the city
and kingdom of Astrakhan, by which it became master o f both sides of
the Volga to the Caspian Sea, through which it opened commerce to
Persia. Four years later it conquered Narva in Livonia, thus gaining
the shores of the Baltic and opening mutual trade with Europe, commerce
being transferred from Revel to Narva. In 1580 Siberia was reduced,
adding much to the resources of Russia, and subsequently Lamoieda was
conquered, and each person required to pay two sable skins annually, thus
furnishing the basis o f a new trade. A century later, the Czar P eter
conquered Azov, at the mouth o f the Don, and forced his way into the
Black Sea, hitherto monopolized by the Turks. He got shipwrights from
Holland and galleys from Venice, and fortified Taganrock to maintain
himself against the Turk. In 1703 he built Cronstadt and St. Petersburg
and connected the Caspian and Black Seas by a canal. St. Peterburg,
when foreigners were invited to settle, became the seat o f commerce,
which grew rapidly. In 1776 there arrived at St. Petersburg 413 vessels,




1863.]

Russia and the United States— Future Empires.

263

with merchandise valued at 5,288,471 roubles, or $3,966,358. The ex­
ports were 3,270,000 roubles.
In 1780 the Empress C a t h a r in e was
strong enough to lay down a new maritime code, by which the rights of
neutrals should be respected ; the flag to cover the goods, except con­
traband ; and she also defined the law of blockade to mean the actual
presence of enemy’s ships in sufficient force to make entry dangerous.
These principles, although urgently opposed by Great Britain, became
laws, which, to the surprise o f the world, were enforced by the new nation
in the war of 1812-15.
In 1774 the Crim Tartars, by treaty between
Russia and Turkey, became independent of the latter; but in 1784 the
Empress C a t h a r in e , against the opposition o f the great powers, annex­
ed them to Russia.
Having now possession of the Northern Baltic
shore, she held out great inducements for the Greeks to migrate into her
new territories. For this purpose she pretended great veneration for the
ancient Greeks, and altered the old names of places to Greek names. The
capital of the new provice was called Chezson ; that of Crim was changed
to Taurica; Caffa had its ancient name o f Theodoria restored. S t rabo
relates, in ancient" times, that this port was capable of containing a hun­
dred vessels Acht-air became Sebastopolis, a place which has so lately
braved the combined power of Western Europe. These were all declared
free ports, with the same privileges as St. Petersburg. In 1785 a canal
was made between Tuertz and the Mista, opening a passage to the Neva,
and completing a line o f 1,434 miles of navigation between the Caspian
and Baltic Seas. W hile these water fronts were added to the growing
Empire, the land front was pushed down to include Warsaw, by the par­
tition of Poland.*
Mean time, in 1783 the colonists o f America had, while Russia was
passing from Duke B asiliu s to C a t h a r in e , grown to a nation, whose in­
dependence Russia was one of the first to acknowledge by treaty of com­
merce, in 1783, with the new Western Power.
Thus the band of Pil­
grims from Plymouth Rock, in the northeast corner of America, had
overrun the territory of the natives, spreading south and southwest, until
meeting and becoming consolidated with the Dutch and French colonies,
suddenly sprang into existence as a naval power at the moment when
Russia, appearing on the Baltic amidst the belligerents of Europe, laid
down a new maritime code which the new Western Power was destined
to enforce. Since that event, both Russia and the United States have
been growing internally and externally with mutual sympathy.
The
population of each in 1860, was as follows :
UNITED STATES.

Total population. . . .
New York.............
Boston...................
New Orleans........
Cincinnati.............

RUSSIA.

31,279,835 Total population.. . .
St. Petersburg___
805,651
Moscow..................
177,812
168,675
O dessa..................
161,044
R ig a ......................

66,891,493
520,131
345,556
104,167
72,136

The area of Russia in Asia is 270,540 square miles, and the population
8,203,197. The internal development of Russia has been very rapid, but
that of the United States has been more conspicuous because more closely
connected with the wants of foreign nations. The imports and exports
o f Russia were in 1859, as compared with the United States as follow s:




264

jRussia and the United States— Future Empires.

Imports..................................................
E xports................................................

[October,

Russia.

United States.

$122,000,625
124,248,502

$362,163,941
400,122,296

If we compare the leading exports o f the two countries, we have re­
sults as follows:
United States.

C otton ..................................................
F la x ........................ ..............................
Grain......................................................
Animals.................................................
Furs........................................................
Forest.....................................................
Other articles........................................

$161,434,923
....................
24,046,752
15,549,817
1,361,352
14,489,406
61,509,830

Total..............................................
G o l d .....................................................

$278,392,080
57,502,305

Russia.

.
$19,001,875
44,940,795
24,064,863
1,341,396
6,329,000
28,570,568
$124,248,502
....................

The gold exported from -Russia is not officially given, and cannot be
accurately ascertained. As to the other items there is great similarity
in their nature. The flax, hemp, etc., raw materials exported for manu­
facture, answer to the cotton of the United States, also raw material, but
supplying to a much greater extent European manufacturing industry.
The grain of Southern Russia, from Odessa, etc., has become a very im­
portant element in Russian trade with England and Western Europe.
The importations of grain of all kinds into England in 1846, a year of
good harvests, was 38,017,392 bushels. O f this, 3,790,480 bushels was
from Russia and 8,855,120 bushels from the United States.
Year by
year the quantities required by England increase, and in 1862 she im­
ported 152,920,976 bushels, of which Russia sent 15,100,000 bushels
and the United States 55,400,000 bushels. Russia supplies flax, hemp,
etc., for the English operatives, and the United States cotton, and both
supply immense quantities o f food. Both nations take o f England man­
ufactured goods, hardware, and raw materials. The two nations have
thus become necessary to the world in the supply o f materials and food,
and both, as we have seen, have become powerful in numbers and wealth
by the process. The operations of commerce in the two countries have
not been dissimilar. The vast inland seas o f Russia are connected with
the Neva by canals, through which the importations at St. Petersburg
have supplied the growing wants of the interior o f Russia in the same
way that the Erie and other canals connect the Hudson and New York
with the commerce of the West. The mighty Mississippi, flowing south,
has carried American products to New Orleans for export, as the Volga
and the Don have made Taganrog and Astrakhan the export cities of Rus­
sia. The exports of the leading Russian cities compare with those of the
United States as follow s:
UNITED STATES.
Exports.

Boston.........
New Y o r k ..
Baltimore.. .
Mobile..........
Charleston. .
New Orleans




$15,168,015
142,563,t33
9,749,621
38,670,183
21,190,964
108,417,798

Imports.

$39,366,560
233,692,941
9,784,773
1,050,310
1,569,570
22,922,777

1863.]

Russia and the United States— Future Empires.

265

RUSSIA.

Archangel.. ..
St. Petersburg
R iga................
Odessa...........
Narva..............
T aganrog.. . .

Exports.

Imports.

$5,335,520
31,683,590
14,000,000
22,967,911
519,011
5,780,101

$360,181
62,068,120
3,318,110
9,111,210
829,000
1,928,120

As New York is the largest importing city, so is New Orleans the
largest exporter of produce. In Russia, St. Petersburg is the port of entry
for goods that supply the interior, and Odessa, by its large shipments of
grain, shows the highest export figures. The two great nations thus pre­
sent the spectacle o f a rapidly increasing population, improving yearly
in all the arts and means of production, spreading over new soil and
almost daily making new discoveries o f mineral wealth. Their growing
wealth and importance seem, at no very remote future, to be able to over­
shadow Central and Western Europe.
But there is another great similarity, as we have intimated above, in
the productions o f these two countries. Not only do they furnish food
for Europe, but also the precious metals for currency. The quantity of
gold at the disposal of the nations of the world up to the present century
was derived mostly from mines which produced an annual average of
$23,000,000, or less than the estimated wear and tear and consumption.
The increasing wealth and commerce of the world was becoming cramped
for the want of more extensive supplies o f the metals, when, in 1814, at
the moment when peace was about to be proclaimed and the interests of
commerce to be affected more than ever by the limited supply, the aurif­
erous sands of the Ural Mountains were discovered in Russia. The supply
was at once increased. In 1829, discoveries of the same nature were
made in Siberia. In 1834, those of Altai were discovered, and it has now
become known that the Russian gold region extends from the Caucasian
Mountains to Kamschatka. The supply of Russian gold which had been
about 1,155 lbs. or $369,600 per annum, was swollen in 1829 to 8,405
lbs. or $2,689,600 per annum. In 1847, it had reached 61,296 lbs.,
worth $19,605,520 per annum. Thus Russia was able to furnish nearly
as much gold per annum as all the rest of the world had previously done.
But at that moment of her success the United States acquired California,
and at once discovered mines which tripled the production of those of
Russia. The streams o f gold, however, continued to pour down from
Ural Mountains in the East and from Sierra Nevada in the West, both
tending to Western Europe; fostering industry and stimulating com­
merce, while revolutionizing the monetary systems not only of Europe
but the world.
It may be remarked that California has been a cause of a far greater
production of gold in Russia than under the old system she was capable
of. The sands of Siberia, in many regions, contain a great deal of gold
which would not pay to get out by the old methods, and those which did
pay were worked expensively. A Siberian who had been five years in
California returned to Russia with the Californian improvements in wash­
ing, and thus not only doubled the production but caused a profitable
yield of the less valuable sands, particularly at Kirghise, wliare the pr*18
VOL. XL IX . --- S O . IV .




266

[October,

Russia and the United States— Future Empires.

duct is now considerably improved. The discoveries o f gold in Australia
added largely to the supplies of the world; but the receipts from those
regions are on the decline, while those o f both Russia and the United
States seem, according to recent discoveries in the San Francisco Moun­
tains, east of the Colorado River, and the extended researches in Siberia,
to have just commenced their production of gold. This industry in Rus­
sia will doubtless promote and extend the commerce o f the empire to­
wards its Eastern limit, developing in its way the vast resources of the
Amoor River, until Russia, by a sort of paradox, coming from the East,
will spread its power and influence upon the Western shore o f the Pa­
cific ; on the East shore of which the spreading power of the United
States is already dominant.
The United States have the greatest number o f miles o f rail-road of
any nation of the earth. They have expended in their construction
$1,000,000,000, and by means of them a population, doubling every few
years, is enabled to make available the products of the most fertile land
in the world. The same agency, started by American engineers, is now
spreading over Russia and producing results there only inferior to those
mighty creations of wealth which we have seen from their operation here.
Under the influence o f those two mighty agents, steam and rail, aided by
machinery of all descriptions, the two young, active and growing powers
o f the East and the West have but started on their career. The following
figures show how they compare with Europe :
Sq. miles.

Population.

Russia................................
United States...................

302,074
3,250,000

75,148,690 $1,248,900,000
31,445,080 1,500,000,000

Total.........................
Europe and G. Britain..

3,552,074
1,647,125

106,593,770
215,918,008

Debt.

Per
head,

2,748,900,000 $27
8,977,464,000 41

Gold
per annum.

$28,000,000
65,000,000
93,000,000
15,000,000

Thus the two empires have an area o f virgin and prolific soil more than
double that of the whole o f Europe. Their population is nearly one-half
that of Europe, doubling every twenty years, and will, in half a century,
exceed that of Europe. The power o f each country respectively grows in
a ratio much greater than the mere increase of the population, as is man­
ifest in the unhappy struggle now going on in the Union. In 1800,
five millions of exhausted people came out of a struggle for their inde­
pendence. In sixty years, they had overtaken Great Britain in numbers,
and have displayed a military power in two years at which the world
may well wonder. One million and four hundred and ninety-five thousand
men have been called into the field, and $1,500,000,000 of capital poured
into the Federal Treasury to support the war, without apparently disturb­
ing the course of events or checking the supply o f food sent to make good
the short harvests of Western Europe. Russia is developing similar pow­
ers, and it has become apparent that in fifty years,— perhaps in the life­
time of the present sovereigns o f France and England,— the two great
nations will completely have overshadowed the political power and com­
mercial importance of Europe and England. The present importance of
the latter consists in working up the raw materials and food of Russia
and the United States into goods for sale in the general markets. But
Russia and the United States will very soon rival her in ability to manu­
facture. Ip that hour the empire of commerce will prass to the new
powers.




1863.]

The History and Principles o f Money.

26V

THE HISTORY AND PRINCIPLES OF MONEY.
BY RICHARD SULLEY, OF INDIANA.
(Continued from page 203.)

T h e discoveries of gold in California and Australia occurred in 1848
and ’49, and since that period in many other places. These circumstan­
ces have created extraordinary facilities for the increase o f money, and
have developed afresh that peculiar phenomena of the exportation of the
precious metals to the East, which has been the problem of previous ages.
P l in y mentions it in the first century o f the Christian era, and A dam
S m ith speaks o f the East Indies and China as continually taking off a
larger quantity o f silver in the middle of the last century; and this ex­
portation seems to have continued, with now and then an intermission,
up to the present time.
In the six years ending in 1855, twenty-one millions sterling had been
exported from England alone to the East Indies and China, and in the
two yearsending in ’5V the exports from England and France had reached
fifty millions sterling. During the last twenty-five years the exports of silver
to India have been $550,000,000, of which only $90,000,000 have been
re-exported, leaving a balance to India of $450,000,000. For the first
five years of this period the shipments were $45,000,000, or an average
of $9,000,000 per annum ; while for the last five, they were $215,000,000,
or at the rate of $43,000,000 per annum. Thus, as the volume of com­
merce increases the loss to the Western nations by this gratuitous expor­
tation of the metals also increases.
China and the East Indies have always been considered as the grave of
the precious metals— some have even supposed that the natives hoarded
and buried their silver in the ground ; and yet there would seem to be
no difficulty in solving the problem without this absurd supposition.
The Chinese have no fixed standard o f value in their currency. There­
fore, although they may happen to possess much gold and silver in their
vast territory, these metals can only be produced in a proportional ratio
to other commodities, consequently prices can never be affected from their
own production of the metals. Therefore, as long as the metals continue
to be produced in the West, in a sufficient ratio to increase prices, China
will always be ready to receive her share o f them, to bring her prices up
to the common level.
It must also be remembered that the populations of these vast regions
are nearly equal in numbers, if not quite, to the populations of the West­
ern hemisphere, and, therefore, according to the deductions o f economi­
cal science they would be entitled to half the increase of the metals, as
a currency, whe her they obtained them gratuitously or not. Although
this might not be exactly the case, this is the principle which must natu­
rally govern in such circumstances.
Admitting this to be the fact, it
would be impossible that the precious metals should return to Europe in
anything like the quantities in which they had been exported. Like the
returning wave of a flood, they would react only until the true level were
found. But to return to our subject.




268

The History and Principles o f Money.

[October,

As soon as gold began to be produced in California it began to be ex­
ported to Europe in large quantities. In the first eight years, up to 1857,
§300,000,000 bad been exported in excess of the imports. This state of
things, though apparently paradoxical, gave the greatest- possible scope
for the increase of paper money. W e find, therefore, as a consequence,
that the banking capital and the bank loans and discounts had in the
meantime near.y doubled.
A t this time the loans and discounts of the
banks of the United States had increased to about §730,000,000. The
hanks, according to official statement, held 12 per cent of these liabilities
in specie. In ten years we had added more than 60 per cent to our cur­
rency, while the increase o f population had proceeded at the rate of 30.
The events of 1857 are still fresh in the memory, and not likely soon
to be forgotten.
The panic burst over the commercial world quite un­
expectedly, especially in Great Britain. The crops were good, trade was
brisk, and every interest appeared outwardly prosperous, and, to adopt
the language of an English writer upon the subject, “ after ten years of
prosperity, during which great and constant additions had been made to
the amount of metallic currency in circulation, there came to be a panic,
which, in severity and extent, exceeded nearly all that had occurred for
thirty years, and which differed from, them all in its exciting causes.” In
this conclusion, however, the wfiter is mistaken, as he very shortly knocks
down his own argument. The symptoms o f the disease may differ, but
the exciting cause will still be found to be the same. In this case, as
heretofore, it was an undue increase of money and credit. The writer
goes on to state the prices o f ten o f the most necessary articles of con­
sumption in the year 1855, and then compares them with the prices of
like articles in 1857 and ’58. “ The prices of 1855 are taken as the unit
100, and in comparing them with the prices of 1857 and ’58, he finds
that coffee had fallen from 145 to 1 13; sugar, from 230 to 117 ; tea,
from 130 to 11 0 ; oils, from 105 to 8 0 ; cotton, silk, and hemp, taken
together, from 170 to 105 ; wool, from 180 to 110 ; iron, from 90 to 80,
and timber, from 115 to 100. Thus we find a fall o f 33 per cent upon
the average of these prices in one year— at a time, too, when the paper
currency of Great Britain had for fourteen years been decreasing, while
that of gold and silver had increased forty per cent.”
'These statistics are of great importance, as they show the modus operandi of the present monetary system, in the production of commercial
panics. They were produced before the London Statistical Society, by
Mr. N ewmarch of the “ Board o f Trade,” in the year 1858. The same
process, however, may be traced in the prices of ten or eleven articles of
•necessary consumption in the United States.
From 1849, the period o f the discovery o f gold in California, prices
gradually rose until the summer o f 1857; and in 1858 they fell twenty
per cen t; and yet the United Statesbad been exporting gold, while England
had been receiving it. This gradual increase, and 'then sudden revulsion
of prices, may be traced as cause and effect of all the commercial panics
that have occurred since the commencement o f the banking system.
And as like causes must always produce like effects, we hazard nothing in
assuming that as long as the present system, or the superior increase of
money continues, so long will these results, at intervals, be produced, and
o f course with all their attendant evils.
Dr. S m ith held that no trade or calling would be long carried on at less




1863.]

The History and Principles o f Money.

269

than an average rate of profit; and yet he was forced to admit that silver
had been decreasing in exchangable value for a period of two hundred
years; but he could not admit that this decrease was still going on.
The principal that Dr. S mith laid down, that the quantity of labor in­
volved in the production of any given commodity is the general criterion
o f its value, was sufficiently correct; but according to that principle the
producer of silver should have sought some other employment long be­
fore the Doctor was born— except, indeed, as the Doctor verily believed,
the mines had been constantly increasing in fertility ever since the con­
quest of Mexico— the only supposition by which he could get rid of the
difficulty. There is no disputing, however, that the precious metals have
been, and are still, decreasing in relative or exchangable value.
They have continued to flow from the West, through England, France,
and Germany, to the East Indies, China, and other countries, as they have
heretofore done from the earliest periods o f history. It may be possible
that the production has slackened at intervals, but it can never be per­
manently checked until the prices o f the whole commercial world are
sufficiently increased to react upon the profits o f the producer, so as to
bring them below the remuneration of other labor. But to return to the
operation of prices and the fixed standard o f value.
W e assume, for arguments sake, that at any given time prices and
wages, including rents, fixed incomes, etc., are at par, that is, that they
agree with a certain number of grains of gold or pennyweights of silver
denominated a dollar— this being the standard by which all things are
valued and all contracts made.
Under these circumstances it is obvious that if any new impetus were
given to the production of the standard metal, its exchangable value
would be diminished. It would become cheaper, and o f course the price
paid in metal for a given quantity o f other commodities would be in­
creased. The change, no doubt, would take place slowly, and perhaps
unequally; it would at first affect those common and necessary articles
of consumption that are constantly in the market. But this inequality,
or lack of uniformity in the increase of price, is really of little conse­
quence, though it has been magnified into an objection. It only proves
that some commodities are in greater abundance or less demand than
others, and therefore do not receive the same impetus from the increase
of money at the same period o f tim e; but the increase of price will
eventually follow when these inequalities are corrected. But while this
operation is going on, debts, wages, interest, and rents remain the same,
and are paid in the depreciated currency, and thus preventing the usual
consumption of necessary articles, until finally the glut is complete, prices
begin to fall, and panic ensues.
Such is the operation o f the present
monetary system, and such it must remain to the end.
The Banks o f Venice, Genoa, and Amsterdam were no doubt indebted,
to a great extent, to the circumstances o f the times for their prosperity ;
but we must not overlook the advantage which each of them possessed,
in the power of monopoly, over the system of the present day. ' There
was no playing at cross purposes, by one bank extending its issues while
others were forced to withdraw their usual accommodation to the public;
and no panics brought on suddenly by the failure o f weaker banks. All
glided smoothly along without a ripple upon the surface, each having the
power to regulate their own issues as best suited their own interests, with­
out the interference o f others to prevent them.




270

The History and Principlts o f Money.

[October,

The Bank of Amsterdam, after it bad become unfaithful to its trust,
by loaning its deposits to the government and others without the consent
of the owners, was forced to adopt some peculiar regulations to prevent
the discovery of the fraud, which might possibly arise from the with­
drawal of the deposits upon any sudden emergency, through the loss of
confidence in the Bank or the pressure o f other circumstances. There­
fore the following system was adopted : Upon the future deposit of money
in the Bank a cash, or bullion receipt was given as well as a certificate of
deposit. The certificate could be paid away as money in the usual trans­
actions of trade, while the receipt secured to the depositor the privilege
of drawing the same sum in coin from the Bank within six months, and
if he did not require it, for his own convenience he could sell his privi­
lege to another depositor, or he could renew it for another six months, by
paying a small bonus or fine. By this regulation the Bank secured the
possession of all the coin ard bullion that had been deposited longer than
the stipulated time. This regulation afterwards gave rise to a considera­
ble amount of jobbing ; receipts and certificates of deposit thenceforth
became distinct articles of commerce. Individuals might transfer or pay
away the certificates in the usual course o f trade and still hold their bull­
ion receipts, which entitled the holder to withdraw the amount in coin.
It is to be presumed, also, that after this regulation was pretty well estab­
lished the Bank was more liberal in its loans.
Under these circumstances considerable fluctuation took place in the
price of coin and foreign exchange, as paid for in Bank money.
The
Bank had, therefore, to save its system from explosion, to adopt another
expedient: they employed agents in the market constantly, to purchase
Bank money whenever it fell to more than one per cent discount.
It follows that a bank managed strictly upon these principles would
necessarily grow rich ; as, besides the usual and legitimate profits, it would
add to its capital all that necessary increase o f money required by the
constant growth of commerce to keep prices at par with the prices of
other countries.
This amount would be so much gained by the bank,
without risk or exertion, entirely through the operation of the fixed stand­
ard of value. This increase under proper regulations ought and would
be made to pay a portion of the taxes o f the State, instead of going into
the pockets of private individuals. And all the increase o f money be­
yond the necessary amount to keep prices at the usual point, is an evil
and a burden to society.
The great mistake which seems to pervade society in general, as well
as the minds of many eminent persons, is, that an increase o f money,
irrespective of other circumstances, is an increase o f capital, than which
no greater nor more injurious mistake can be made.
Mcney is merely a commodity, and commodities are not always capi­
tal ; it must always retain the elements o f value, even when represented
in paper, or it ceases to be money. Money has a certain function to per­
form which saves to society a vast amount o f labor. So far it acts the
part of capital as a saving o f labor and an increase o f capital are synony­
mous operations. But you may increase— you may double it, increase it
indefinitely— and you have no more capital; the extra labor expended is
just so much loss to the community.
Money, then, apart from its con­
venience as a medium o f exchange, is only the representative of capital ;
its exchangable value depends, primarily, upon the cost o f its production,




1863.]

The History and Principles o f Money.

271

and, secondly, upon its relative quantityto the uses and purposes to which
it can be applied. But this proposition applies only to real money— that
is, any commodity of real value used as money.
In the experience o f society, it has been found that intrinsic value in
money can, to a considerable extent, be dispensed with, and by the sub­
stitution of paper a great saving of labor may be made. On the other
hand, it is quite possible, as has been sufficiently shown, society may lose
incalculably by adopting this expedient.
When paper is substituted for real money— such as gold and silver—
there is no natural limit to its increase, and if not limited by law it pro­
gresses, as we have seen, until reaction takes place by the fall of prices.
Banking, therefore, as carried on at present, either upon the issue of
notes or the loaning of deposits, is a profession to which the principles o f
free trade ought not to be applied. The banking system, if it is to con­
tinue, should be a strictly regulated monopoly, with a sufficient compen­
sation to the public for the privileges granted. The English system is
apparently the best, though it is at present by no means perfect, as we
have sufficiently shown. The only system o f a paper currency by which
the public interests can be conserved, is by the issue of inconvertible
Treasury notes, and they should be strictly limited to the requirements of
the community, or depreciation will take place. This currency ought and
would be increased as population and wealth increased, and if properly
managed every addition to the currency would be so much labor saved
to the community, or so much taxation remitted. The banks at present,
as we have intimated, gain this addition without paying any compensa­
tion to the people.
Money, then, is capital only to a certain extent; not by virtue o f any
productive or intrinsic power, but merely by its operations as a medium
of exchange. A dam S m ith had a partial inkling o f the truth, when he
said that money was dead capital— that is, in other words, no profit could
be derived from money per se. Therefore, society is no richer for its
accumulation ; a small quantity will serve its purposes just as well as a
large one. Such an accumulation does not even come within the cate­
gory of wealth.
Few writers, if any, have distinguished between capital and wealth, but
have confounded them together, causing great confusion and many appa­
rent contradictions in the science of political economy.
Wealth may include capital, but, strictly speaking, capital does not
include wealth. Capital is only that part of wealth which can be made
subservient to reproduction. W e may have capital in lands, streams
minerals, houses, e tc.; but not in plate, jewels, carpets, nor parlor furni­
ture. Commodities that do not necessarily conduce to the maintenance
of society are not capital, but merely wealth. It is the comparative de­
crease of capital to population which produces wealth ; therefore, wealth
and poverty are generally found in proximity to each other. The increase
of wealth, then, is not always to be taken as an increase of capital, nor as
a criterion of general prosperity. It is an evidence only of the compar­
ative decrease of capital to population, and it is this decrease, or qualified
limitation, to the increase of capital which gives to it that absolute power
over labor which, in confined localities and ordinary circumstances, it is
known to possess. Money, then, is only the representative o f capital, to
the extent only of its exchangable value ; and this is regulated, as we




272

The History and Principles o f Money.

[October,

have said, by the cost of its production, and all commercial exchanges
are made upon the same principle o f giving value fo r value— that is, the
bartering o f one commodity for another, both being equally desirable and
costing an equal amount o f labor, or difficulty to procure. The inter­
vention of money makes no difference in the transaction, whether it be
o f paper or of the metals. The money itself is not intended to be con­
sumed, it is only desirable because it can be exchanged at pleasure for
any other required commodity. It matters not, therefore, whether money
be a real commodity or not, so long as it retains its real exchangable value,
that is, its regular and due proportion to other commodities, and can,
therefore, be exchanged or held by its possessor, without loss or incon­
venience. But, although it may be a real commodity, it cannot also be
a correct measure o f value, merely because no commodity has yet been
found with the necessary qualities of money— that is, an uniform difficulty
of production. But, supposing this to have been the case, with respect to
gold and silver, the moment they had been made a medium at a fixed
price they would have attained a preference over all other commodities,
and would, therefore, have increased at a greater rate, as the experience
of four thousand years has sufficiently shown.
If commerce had been local or domestic only, instead o f general and
universal, and the precious metals had been more equally distributed over
the face of the earth, then things might, and no doubt would, have been
different. But it is not necessary to trouble ourselves about what might,
or might not, have been ; it is only necessary to reason upon things as
they are, knowing, as we do, that if society are to be happy they must
obey the unerring and almighty law of the Universe. W e must either
obey the principles we find in existence, or take the consequences of our
contumacy.
The fixed standard of value is a remnant of inexperience and barbarism,
having descended, as we have seen, from the remotest ages, and continued
up to the present time, by that indolence, dread of change, and the short­
sighted cupidity of private interests, ever ready to take advantage of the
public ignorance for their own especial benefit,.
W e have seen, in alluding to the history of former times, how Kings
and Governments, from time immemorial, have abused the privilege of
coining and regulating money, for their own supposed interests. W e
say supposed interests, because it is obvious that such a system of taxation
must be most injurious; taxation should be moderate, equal, and certain
in amount, leaving to capital still the power of increase, and the confi­
dence and energies of the people in full play. Any measure of govern­
ment which prevents the regular and moderate increase o f capital, and
renders its profits uncertain and insecure, is something akin to the act of
the man in the fable, who killed the goose that laid the golden eggs that
he might get all his riches at once,— it would cut off the source of future
riches or profits. But if a government be foolish and inexcusable merely
as a matter of policy, to say nothing of the cruelty and immorality of
depreciating the currency, what shall we say o f those governments who
continually allow this privilege to irresponsible corporations and private
individuals ; they must be either ignorant or unfaithful guardians o f the
public weal.
No doubt, every country has in the first place to incur the expense of a
currency, or circulating medium. It is so much capital sunk, like the




1863.]

The History and Principles o f Money.

273

tools of a workman, which save and replenish themselves solely by the
convenience the owner possesses in their use. It is obvious, therefore,
that society should restrict this outlay to the smallest possible amount, as
the convenience is not increased with the increase of the currency. But
when society has once purchased the necessary amount of capital for a
circulating medium, it always remains the property of the whole commu­
nity, without further expense than the necessary increase to keep prices
at par, as other commodities increase, and the wear and tear of the coin,
which is hardly worthy o f consideration. The case is, however, very
different when a community is supplied with a currency of Bank paper.
The advocates of the system assume that such a currency is cheaper than
one of coin ; but that, wo contend, is founded only upon the original fal­
lacy promulgated by A dam S m ith . To those who make it, it is certainly
cheaper than gold is to the digger, because it can be created in any
quantity for the expense of paper and engraving, but to the community
the expense is ever the same, as no banker will give' his note without
value received. But let us argue the question a little further. Let us
suppose that upon a given day the nation has a full currency, which we
assume to be a matter o f course, as all nations must have the rateable
quantity, according to the amount o f capital and wealth which they pos­
sess. In this state of things, then, a number of banks are created and
begin to issue their notes in the usual manner. W hat would be the
consequence? W hy, that these additions to the currency, not being
limited nor checked by the difficulty o f production incident to an ordi­
nary commodity, and being governed only by the personal interests o f
the issuers, will in consequence be continued until the currency is cheap­
ened or depreciated, whether it be wholly or only partially of paper.
By these means prices are advanced, as previously shown, and gold and
silver are forced out o f the country without compensation to the people ;
and the banks obtain possession of the circulating medium, which once
belonged to the community. . The community have to pay the cost in
either case, though the cheapness appears to be immensely in favor of
of the metals, as the wear and tear of coin is but a trifle, and, in my opin­
ion, bears no proportion to the like losses on the part of the public upon
bank paper, to say nothing of the immense profits which the banks ab­
stract from the pockets of the community for its use. And yet, no doubt,
a currency partly of paper would be preferable to one wholly of the pre­
cious metals.
Paper is equally convenient as gold and silver for money, so long as it
will command the commodities which the holder may require and does
not depreciate in exchangable value ; but it has the inconvenience of being
merely a local currency, as it bears no intrinsic value.; therefore, when
foreign balances have to be paid some commodity must be found possess­
ing a real value in universal estimation. Paper money is, therefore, in
its nature and circumstances a subsidiary currency only, and its quantity
must necessarily be limited by that position. The greatest evil of the
present system is the power o f the banks to force into the market unlim­
ited quantities, that being the foundation of all the other evils. The los­
ses arising to society from this source are great and manifold, well worthy
the attention of the Reformer and the Philanthropist.
A currency of the metals would certainly be cheaper, and preferable in
every point of view to one mixed with paper, under the present system,




274

The History and Principles o f Money.

[October,

as it entails the expense of constant additions to its amount beyond what
is sufficient to keep prices at an equable rate, causing a continual pressure
upon wages, and at intervals, as experience has shown, causing involunta­
ry idleness and demoralization to a fearful extent.
It is not the kind, nor quality, nor cheapness, nor dearness, of the
commodity used as money that is of the least consequence to society ;
but that the supply shall he equal, and only equal, to the demand, so that
prices shall always remain the same as far as money is concerned. This
is the great desideratum, the only panacea for our increasing commercial
and social demoralization. W ithout this evil can be corrected, I fear­
lessly assert that all other moral and philanthropic efforts will fail.
W e are not, therefore, for a purely metallic currency, nor could the
present system he amended to suit our views under any circumstances.
W e hold that money is merely a commodity, and therefore all arbitrary
regulations, with respect to its value, are not only useless, but evil. There
is no commodity existing in nature that maintains an equable value at all
times, and, therefore, none that can he a correct standard o f value for
other commodities. W e, therefore, propose to repeal the law relating to
the weight of metal to be contained in a dollar, placing the precious
metals precisely upon the same footing as other commodities. The dollar
would then be merely a nominal unit o f account, having no reference
whatever to a fixed quantity of any commodity, but would measure the
value of all things, the metals included, just as correctly as before, but
without any fluctuation in price from the increase of money. The value
of all commodities, then, would be regulated by the two component ele­
ments— desirability, and difficulty o f attainment or production. The unit
o f account would then merely express the amount of time expended in the
production of a given commodity, and cease to have reference to quanti­
ty. The law of supply and demand would regulate the value o f the met­
als, exactly as it would the value of other commodities, and, of course,
would prevent the further superior increase of the metals, as it would not
be for the interest of the gold producer to reduce the price or exchangahle value of gold in market. This would put an end to the increase of
prices in all countries and consequently to the export of gold and silver
from any but the producing countries, and the W est would cease to supply
the precious metals gratuitously to the Eastern nations.
As gold and silver would still be used as currency, and they might be
a legal tender for debts at the market price unless otherwise stipulated in
the contract, they would have to be coined in weights, as previous to the
clippings and tamperings o f former unprincipled governments— say, in
ounces, half-ounces, etc. W e do not intend to lay down a system, by
which these matters should be regulated, but only the principles upon
which the system must be founded.
W ith the present and ever increasing amount of domestic commerce,
-no currency could be perfect that did not consist largely o f paper; but
that paper must be strictly limited to practical requirements, as its value
must always depend upon two circumstances— its convenience and instant
convertibility into gold or silver, or into any other required commodity,
and, therefore, should never be in excess of the demand. This currency
should, of course, be issued by the government, and ought to be receiva­
ble for all government dues and demands; and a certain percentage might
be required by law in all such payments. This regulation would always
keep the proper quantity rather above, than below, par.




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

215

This currency could be increased, as the volume of commerce increased,
and it would be so much labor saved to the community by the remission
o f taxes, to thr required amount of the increase of currency. It could be
used wholly for domestic exchange, and with agood system ofP ost Office
money orders, we should have but little use for bankers and brokers.
W e should expect, of course, many objections to our system. It may
be said that all governments, up to the present time, have abused the
power of issuing paper money. But on the other hand, we know that
under the present system, and in spite of all possible safeguards against
it, corporate and private banks have hitherto done the same. These are
only reasons, however, for greater vigilance and more safeguards in future
with respect to the new system.
W e entirely object to a fixed standard o f value, as not being in accor­
dance with economical principles, and therefore, as we have seen, productiue o f the greatest evils. If gold and silver only were used, we should
still have, at longer or shorter intervals, commercial fluctuations and
panics, though perhaps not quite so intense, as has been sufficiently de­
monstrated by the crisis of 1857. Great Britain and Germany,— the cur­
rency of each being practically metallic,— suffered quite as much from
general bankruptcy and the cessation in the demand for labor as the
United States in that particular crisis.
W e have only thrown out these hints for the general benefit, hoping
that they may attract the attention and be elaborated by parties having
more time and talent than ourselves ; and we have only further to add,
that a subject of such paramount importance ought to engage the atten­
tion of every statesman and philanthropist, and of every individual who
wishes to promote the happiness and final civilization of the human race.

BOOK-KEEPING;
IT S U S B , N E C E S S I T Y , AND S I M P L E S T M O D E .
W e have received from J. P. W a r d , of London, a series of letters urg­
ing the importance of careful and correct Book-keeping, and giving many
valuable hints on that subject to the rising generation of merchants, and
are indebted to these letters for much that we propose to say at this time.
A certain kind of book-keeping is probably practiced by every one en­
gaged in mercantile business; and yet, were the facts known, we believe
it would be a matter o f great astonishment to learn how many fail of
accuracy and thoroughness in this respect^and how few can at any given
time furnish a statement o f the true condition of their affairs. A balance
sheet they may most likely give you, but it is a mere balance between
their hopes and fears, not facts that would satisfy others or even them­
selves. Book-keeping is, however, the first duty o f a merchant, and we
might almost say that the accuracy with which it is done will be the
measure of his success.
If his affairs are in a prosperous condition, the so doing will be found
the most efficacious method of keeping them so ; and should misfortune
threaten him, either from the falling off of trade, or by the sudden failure




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

o f others, whose stoppage may threaten to bring a similar misfortune on
himself, he will be in a position of at once comprehending the danger and
its remedy; or of understanding the necessity for immediately placing
himself in the hands of his creditors. On the contrary, without books,
or with accounts badly kept, he may be buoyed up with false hopes, and
recklessly keep on the road to destruction, till he eventually finds himself
bankrupt or insolvent, without reputation, or a friend to aid or pity him
in his fall.
To all, then, we would say, and especially to our younger readers, if
you value your own peace of mind, and wish to retain its energies unfet­
tered and unimpaired, take heed that your daily transactions are duly
entered and properly posted. By doing this, you will not overburthen
your memory with data which ought to be always ready, in case of their
being required ; and your faculties will be available to the legitimate de­
mands made on them by the daily contingencies of your commercial
pursuits. Should you require, in the course of your business, to refer to
any past transaction, you can speak or act thereon with a clearness of
comprehension o f the facts, which no unwritten effort o f the memory
would justify ; and should it be necessary to have recourse to legal pro­
ceedings, the correctness o f your proceedings will be properly appreciated.
To carry this out to the proper extent, something more than merp labor
will be required, and the possession o f method will be found of the utmost
importance. Neither will be useful without the other; but their com bi­
nation, when applied to any of the pursuits o f life, will be generally at­
tended with success.
Labor— when alone— may be considered as resembling the continued
evolutions of the driving wheel of a steam engine, which would be utterly
useless but for the science which knows how, when, and where to direct
its energies, and which can apply it successfully, to the boring of a can­
non, or the drilling o f a needle’s eye.
The same axiom will apply to the tradesman and his accounts; for a
man may write, and write, but without a proper knowledge o f book­
keeping, may only confuse himself and those whom circumstances may
compel to refer to his entries. The accountant, having certain laws to
guide him, will, on the contrary, so carry on his work that every record
shall serve, as it were, for a stepping-stone to the actual united result, and
his Ledger will prove, as i t should do, an easy and certain index to his
past and present standing with the world and with himself.
It will not matter how multifarious may be transactions which are to
be brought under his notice— how complex may be their bearings on
each other, or their relations to himself and others. The master o f this
science knows there are certain rules for his guidance in their arrange­
ment, and there must be certain headings under which they must be al­
located.
Practically aware of the evils arising from the wrongful insertion o f a
single item, he will take care that every entry is properly checked at the
time, and not trust to accident for the coming-out of his balanees. By
thus carefully watching his work, as he progresses with it, he is familiar
with all the incidents of the trade ; and a mistake, or culpable statement
on the part of subordinates, is thus liable to instant detection and exposure.
Embezzlement or theft, as well as the probability of making many
losses by overstocking or bad debts, will not form so fearful an. item in




1863.]

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

2 77

his balance-sheet, as it does in many balance-sheets of his less careful and
less instructed competitors in trade. The very knowledge of his corectness in business will have the effect of strengthening his credit; and
should opportunity offer for extending his transactions, capital will ever
be at his command— if not his own, that arising from the confidence so
properly reposed in him by his admiring and trusting friends.
The results of good book-keeping to the merchant or tradesman, even
under the most adverse circumstances of his commercial life, are mani­
fold. Should he be overtaken by the pressure o f calamity, to which he
may be subjected equally with his more careless and thoughtless brother,
he will receive from his previous habits such consolation as will then
prove to be sweet indeed. He will know that he has watched every step
in his commercial career with the most jealous scrutiny, and that he has
not left to the chapter o f accidents any o f even the most trivial o f his
monetary concerns. He will have the abiding satisfaction o f a conscience
at ease with himself and the world ; and if misfortune overtakes him, will
then be fully prepared to justify the continuation o f his business to the
identical period when he eventually suspended his payments, and can
demonstrate to his friendly creditors the prudence and policy of his move­
ments. In pointing out to their notice the amount and nature of the
losses he may have sustained, they will be at once convinced that these
losses were of an unforeseen and unavoidable character, and that no want
of prudence, on the part of the debtor, has hastened on the unavoidable
catastrophe. Should his losses have arisen from the failure of one or more
of his correspondents, such failure will have been of a character that will
convince them that they, too, in the same relative position, would have
been liable to the same contingency ; and should his stock have disap­
peared, he will be able to explain his deficiency. There will be no sur­
mises to his discredit; but he will probably demonstrate the amount and
the whereabouts o f his liability in relation to bis creditors’ goods or cash,
and pass through the severest scrutiny with credit intact and unimpeach­
able. Such, necessarily, must be the result of honest, good book-keeping,
to the man who may suddenly find himself cast down from (perhaps) the
very highest pinnacle of commercial fame and reputation into the trying
depths of doubt and dismay, produced by the suspension o f his payments.
In his case, however, these doubts will prove but like the'smallest clouds
in the horizon, which invariably will disappear as the clear light o f his
moral and commercial worth becomes the more manifest. There may be
a cloud, but the sun will certainly be seen through it, and his credit will
most likely resemble the rising grain, which is the more invigorated by
the summer sun after being watered by the spring showers.
No such reward can be expected in the hour o f adversity by the care­
less and improvident, whose real character may readily be traced in the
disjointed and imperfect accounts which he must necessarily produce. No
renewal of credit can be anticipated from those who will now see him in
his true character, and have ocular demonstration of the care and capacity
of their delinquent debtor. The very nature of his accounts will justly
excite their suspicions, and lead to the presumption that there are some
unrevealed transactions in the background, which require bringing out
into relief. They will conjecture that he may have some secret reserve
o f goods, or of cash, for his future trading, or that there is dishonesty
somewhere, and, as we before said, all hope o f future credit will be lost.




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

Such, then, being the importance of correct book-keeping and some of
the results of disjointed and imperfect accounts, a few hints as to the
nature and purposes of the Books requisite for ordinary business will, we
think, be of value. The simplest system, then, embraces a Cash Book, a
Day Book, and Ledger
all necessary to the proper entering and colla­
ting the accounts o f the parties whose transactions are to be there recorded.
The Day Book stands f i r s t ; as, on the events therein recorded, will
depend the future failure or success of its master. This, to the uninitia­
ted, may, perhaps, appear a most startling proposition ; but it is not the
less true than it may be startling. W e therefore again repeat, that on
the events recorded in the Day Book will depend the future failure or
success of its master 1
In this book should appear every, even the most trivial, circumstance,
connected with his business career,— his purchases, sales, receipts, and
expenditures. The ultimate ruin of many men may be frequently traced
to the continued carelessness attendant on what they may, perhaps, have
considered trifles.
A penny here leads to a shilling there; the shilling progresses to a
larger sum ; until, at last, an omission may affect and imperil the entire
evidence of what \vould otherwise have been unimpeachable.
The expenditure attendant on manufacturing, the commissions paid on
sales effected by the agency of other parties, the discounts allowed for
cash receipts, petty cash disbursements, personal and house expenses, sal­
aries, and wages, must appear,— if not daily, at the rarest, weekly; and
these must be entered from other recorded vouchers of their truth and
exactness. As this book is the foundation on which the entire building
will depend, so the greatest care is needed that every event is not only
entered, but correctlv described. A receipt must not be mistaken for a
payment, nor a purchase for a sale, by the party who may have to arrange
its details in the Ledger. There must be no possibility o f a mistake.
Mind, we do not say probability; but that nothing, save the most reck­
less indifference on the part of the Ledger-keeper, should be able to pre­
vent the Ledger being, as it is intended to be, a true record of the trades­
man’s position with the world and himself. To ensure this, science has
introduced the two terms of Debtor and Creditor, indicated— for the sake
of brevity— by the corresponding signs of Dr. and Cr., and they are thus
applied :— Dr. is the person or thing to which any article (whether cash,
goods, or allowance,) is to be charged ; Cr. on the opposite, or contra
account, denotes that you owe, have received from, or have to charge
yourself with, whatever may be found there entered. So that A., having
purchased goods for you on credit, should be entered in your Day Book,
thus:— Dr. A., to sundries, followed by an enumeration of the articles—
should the transaction have been for cash, then the entry should be Dr.,
cash, or ready money sales, to goods for articles thus sold and paid for by
A. Should A., in the latter case, have claimed and been allowed a discount
on the transaction, then there must be an entry of discount Dr. to Cash
for the deduction thus allowed to him, or else the discount must be de­
ducted from the amount of ready money sales, and the nett balance only
returned for entry in the Ledger.
Should A. be the seller, and you the purchaser, the entries must assume
another and a different form. Then the transaction must be thus record­
ed :— Sundries Goods Dr. to A., for the articles purchased on credit—




1863 .]

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

279

with a note of the time and terms on whieh the credit has been obtained ;
and when the payment has been effected, then A. will be Dr. to Cash for
the amount he has received, and Dr. to Discount for any abatement he
may have allowed. So the entries o f wages paid, house-keeping, personal
expenditure, interest, petty cash, or any other disbursement, will be en­
tered as Dr. Cash to the named source from which such receipt shall have
originated. This exactness is, we again repeat, as essential in the most
simple as in the most complex system of accounts, and the want of this
exactitude, or its posssession, will alone indicate the trustworthiness, or
otherwise, of the incipient merchant.
If the correctly entering of every transaction into the Day Book, or
Journal, be of such vital impor:anc.e, and those entries must be sometimes
made from other sources, surely it cannot be less essential that those
sources should be equally correct. This, then, will naturally take us to
the consideration of the Cash Book, the keeping o f which has been justly
stated by an English Commissioner, as “ the touchstone of the honesty of
intention of its possessor.”
Yet, although the correct entering in the Cash Book is o f the greatest
importance, this book is the one which generally meets with the least
attention. This is perhaps an incredible assertion, and yet it is not more
boldly made than the truth is certainly proved, by the recurring experi­
ence of every practitioner in bankruptcy or insolvency ; whilst the private
practice of the accountant teaches that errors are more generally tracea­
ble to this source than any other. Strange— but true it is— that the man
who will be particular in entering a sale amounting to, perhaps, no more
than sixpence, will omit or neglect to insert the receipts or payment of
sums one hundred times that amount. Hot less strange, that many per­
sons will keep an account of their receipts, and not enter their payments,
whilst others will be found to have recorded their disbursements, and can
show no resources from whence these amounts have been derived. A
large portion of small tradesmen keep no cash account whatever, simply
contenting themselves with receiving with the one hand and paying away
with the other. These good easy souls will tell you they see no use in
wasting their money and time on books they do not want; they know
what they are about, and that is enough for them ! They rest assured
that because they have been hitherto successful they must continue to
succeed, and that they never will have to account to others than them­
selves.
It may be that such may prove the result; but let the time o f adver­
sity come, let friends reproach them with wasted opportunities as the
readiest mode of refusing to lend a helping hand in the reinstatement of
their former position ; let angry creditors call for an explanation of their
present want of power to meet their engagements, and then they will see
the folly and regret the cause of their past heedlessness.
They may
be really honest and well-intentioned, and then their pangs will be the
more bitter at being likened to, and confounded with, the mass of rogues,
who, for sinister purposes, have pursued the same reckless or wilful road
to ruin.
Reader, if this concerns you, pause and ask,— “ Is it too late for me to
alter my course ?” and if you find that yet there is time, alter your con­
duct,— commence your course anew. Take stock of liabilities and assets ;
open a correct cash account, charge yourself with all your receipts from




280

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

whatever source derived, and credit yourself with every disbursement, for
whatever reason, or in whatever manner incurred, and however trivial or
large may be their magnitude and amounts. This done, and d a i l y pur­
sued, you will be on the right road to regaining that self-possession which
these remarks may have helped to disturb.
Having treated of the Day Book and Cash Book, we will now further
proceed with the subject by drawing attention to the Ledger. W e have
noticed the foundation and building up of the edifice, and now will crown
the work by roofing in the structure. In other words, having seen that
every occurrence has been duly entered in the Cash and Day Books, the
tradesman will now proceed to the proper arrangement and classification
o f the materials thus brought together.
In his previous work, he has labored on, from day to day, in amassing
the necessary records o f his commercial career. So far, so good. This
is of the first importance, and will readily establish the correctness of his
proceedings ; but to corroborate any particular reference to his dealings,
he must either remember the day o f its occurrence or have the date re­
called to his recollection. To facilitate this, the Ledger has to be pre­
pared ; and, that its full value may be experienced, it must be so made up
that every transaction shall be duly and relatively therein recorded. For
this purpose, its arrangement must necessarily be of a different character
from either of the books which have preceded it, and to which books the
Ledger is to serve both as a key and a test.
In those the occurrences are entered as they took place; in this they
are to be dissected, and replaced to the account of the parties or transac
tions with which they are connected. By thus carrying out his work,
the tradesman may readily ascertain his relative position with the world,
and his own affairs. He can see whether his profits have a proper pro­
portion to his expenses ; and, in the event o f having either to contract or
extend his trading, will find in this book his ready and infallible guide.
Should a debtor desire to increase the account already owing, his refer­
ences from his Cash Book will enable him to judge of the accuracy and
extent of that man’s previous payments. Should he be urged to purchase
goods, he may readily refresh his memory as to the result of previous
business in the same class, or with the parties from whom he may be thus
solicited to enlarge his trade obligations. The clear profit or loss of any
mercantile ventures can be correctly ascertained, and their nature and
extent definitely known. The manufacturing and first cost of his wares
will be clearly set forth in each department of his trade; and he may, at
a glimpse, see their relative proportions of venture and success. Should
his business decline, and should he find it necessary to retrench his ex­
penditure, by referring to his trade charges, or personal account, he will
at once perceive where and how that retrenchment must take place. He
will see what servants must be discarded,— and what rent can be lopped
off,— what branch o f his trading rejected,— what debtor’s accounts must be
closed ; and should these not suffice to make up the deficiency in his profit
and loss account, lie will be enabled to meet his difficulties with a thor­
ough knowledge o f his position
This very knowledge will give him
calmness in the closing scene— the calmness arising from the conscious­
ness of his own determined rectitude, and his capability of demonstrating
that rectitude to the satisfaction of the world.
Is this position worth the endeavor to be attained f What say you




The Telegraph to India.

1863.]

281

hitherto careless and inattentive tradesman ? W ould such be your posi­
tion should reverses fall to your lot ? If not, pray alter your line of con­
duct ; and, having acted on the previous suggestions, as to the Day Book
and Journal, carry on your good resolutions by posting them correctly
into your Ledger.
Remember, then, the Ledger must contain your accounts with debtors
and creditors,— your property,— trade charges,— interest and discount,—
housekeeping,— personal expenditure,— and profit and loss; as, also, that
every year the summary of their balances ought to correctly indicate your
then state of affairs with yourself and the world.
(To be continued.)

THE TELEGRAPH TO INDIA.
T h e English papers tell us that the cable for the Persian Gulf line,
now being prepared at Mr. H anley ’ s telegraph works, North Woolwich,
is nearly complete, and the vessels o f the expedition which aFe to have
charge of submerging it will leave England before the end of September.
They are expected to arrive on the scene of their operations in January
or February, and the process o f submerging is not likely to continue more
than a month or so, so that by March next London will be placed within
a few hours of Calcutta, Madras, and Bombay.
The cable is coiled in
large iron water-tight tanks— three on board each ship— which will be
kept full of water throughout the voyage to Bombav.
The whole length of the cable is 1,250 nautical miles, of which 900
have been manufactured, and the experience of the failures in laying the
Atlantic and Red Sea telegraph lines has been turned to profit. There
are, in the first place, to be three breaks in the line, avoiding the dangers
o f a long deep-sea route. The first length will be from the head of the
Persian Gulf at Shat-el-Arab to Bushire, a distance o f 170 miles, along
which the cable will be submerged in from 20 to 25 fathoms of water.
The next length will be from Bushire to Mussendom, a bold, desolate,
stony headland on the coast o f Arabia. This section will be 440 miles
long and submerged in from 30 to 35 fathoms o f water.
The third
length will be from Mussendom to Guaddel, a small city on the Mekran
coast, on the frontier o f the Kelat territory.
This portion will be 400
miles long, and laid in from 40 to 50 fathoms o f water. From Guaddel
a short length of land line is now almost complete along the coast, giving
direct communication with Kirrrachee, and thence all over India, to the
very frontiers of Burmah.
The defect in the Red Sea telegraph is stated to have been undoubt­
edly the insufficient wire covering quite unprotected from corroding, and
the want of allowance for slack cable to fall into the irregularity o f the
bottom of the sea, so that it lay strained across the inequalities with a
tension o f several thousand pounds. This was also the cause o f the tem­
porary failure of the Malta and Alexandria line, as well as that laid for
the French Government between Toulon and Algiers. To obviate this
cause of danger, which in the above-mentioned lines probably occasioned

VOL. XLIX.—

no .




iv.

19

282

The Telegraph to India.

[October,

a loss of property to the value of over a million sterling, the Persian
Gulf line is cased in 12 No. 1 gauge hard-drawn iron wires, thickly gal­
vanized, so as effectually to prevent their corrosion. But, in order to
secure more effectually the permanent stability o f the line, the whole fin­
ished cable is thickly coated with two servings of tarred hemp yarn,
overlaid with two coatings of a patent composition invented by Sir
C h a r l e s B r ig h t and Mr. L a tim er C l a r k . The composition consists of
mineral pitch or asphalt, Stockholm tar, and powdered silicia, mixed in
certain proportions, and laid on in a melted state. With the final pro­
tection both from rust and animalculse B r ig h t & C l a r k ’ s compound
affords, there appears to be no reason why this cable, when once laid in
shallow or deep waters, should not remain good for a hundred years to
come. The copper conducting-wire is composed o f four segments, drawn
into a hollow tube in such a manner as to appear like a solid wire. By
this means all the advantages o f a strand wire are combined with the
condensed bulk and small surface of a solid one. The copper from which
the wire is drawn is especially selected by the engineers for its high ca­
pacity for conducting electricity. This wire, which is nearly one-eighth
of an inch in diameter, is then covered by the Gutta Percha Company
with four distinct coats of gutta percha, and four coats of C h a t t er t o n ’ s
compound laid on alternately. This “ core,” as it is termed, is tested in
cold water, at a temperature o f 90 deg., and then under a pressure of
600 lbs. to the square inch. After passing through all these ordeals, the
loss by leakage through the gutta percha covering does not exceed one
hundred-millionth part o f the current of electricity passing through the
conducting wire in every nautical mile. To such minute perfection has
the system o f testing adopted by the engineers been carried, that the loss
of one thousand-millionth part of the current by leakage could be detec­
ted and estimated on the instruments. In the present state of the insu­
lation of the cable, the loss by leakage in working each section o f the
line will not exceed one four-hundredth part of the electric current sent
through the conductor— a condition o f insulation which we believe has
never been equalled by any cable hitherto manufactured. The core being
thus completed, the process of sheathing in the outer covering is com­
menced. The first coating outside the gutta percha is twelve thick
strands of wet hemp, and over these again comes twelve solid No. 7 guage
wires, which have been most carefully galvanized by Mr. H e n r y . The
outer covering o f iron wire is generally the last which a cable receives,
but in this instance, as the line is to be laid in comparatively shallow
water, the wires themselves, though galvanized, are to be still further
protected from their most formidable enemy, rust, which is done by the
covering of B r ig h t & C l a r k ’ s composition.
The India Board have placed the general superintendence and control
of the line under Lieutenant-Colonel P at ric k S t e w a r t , It. E., an officer
as well known for his gallantry during the Indian mutiny as for the great
services he rendered the Government by the construction and mainte­
nance of the telegraph lines through the wildest districts of Central and
East India. For the immediate electrical and engineering superintend­
ence of the line, and also for the arduous task o f submerging it, the Indian
Government have selected Sir C h arles B r ig h t and Mr. L atim er C l a r k .




1863.]

283

Negotiable Paper.

COMMERCIAL L A W .

No. 7.

NEGOTIABLE PAPER ; OR, NOTES OF IIAND AND BILLS OF EXCHANGE.
THE PURPOSE OF, AND PARTIES TO, BILLS AND NOTES.

B y negotiable paper is meant evidence o f debt which may be trans­
ferred by indorsement or delivery, so that the transferee or holder may
sue the same in his own name; or, in other words, it means paper, that
is, bills of exchange or promissory notes, payable to the order of a payee,
or to bearer.
The rules of law on the subject of negotiable paper are more exact and
technical than those o f any other department o f Mercantile Law. They
reach, on many points, an extreme nicety, which makes it difficult to ex­
press them intelligibly to persons who do not already possess some famili­
arity with the subject. All difficulty o f this kind could have been easily
avoided, by omitting any notice o f these nice points. But it was thought
better to mention them, one and all, for these are the things an intelligent
merchant should know; and although the rules stated, especially those
in reference to presentment, notice, and some other subjects, may seem to
be intricate and difficult, they require, it is believed, only careful consid­
eration to be fully understood.
Where and when bills o f exchange were invented is not certainly
known. They were not used by any ancient nations, but have been em­
ployed and recognized by most commercial nations for some centuries.
A still more recent invention is the promissory negotiable note, which,
in this country, for inland and domestic purposes, has taken the place of
the bill of exchange very generally. Besides these two, bills of lading,
and some other documents, have a kind of negotiability, but it is quite
imperfect. The utility o f bills and notes in commerce arises from the fact
■that they represent money, which is the representative of everything else ;
and many of the peculiar rules respecting negotiable paper are derived
from this representation, and intended to make it adequate and effectual.
A negotiable bill of exchange is a written order whereby A orders B
to pay C or his order, or to bearer, a sum o f money, absolutely and at a
certain time. A is the Drawer, B the Drawee, and C the Payee. If the
bill is presented to B, and he agrees to obey the order, which he does in
a mercantile way by writing the word “ Accepted” across the face o f the
bill, and also writing his name below this word, the drawee then becomes
the Acceptor. If 0, the payee, chooses to transfer the paper and all his
rights under it to some other person, he may do this by writing his name
on (usually across) the b a ck ; this is called Indorsement, and C then be­
comes an Indorser. The person to whom C thus transfers the bill is an
Indoisee. The indorsee may again tranfer the bill by writing his name
below that o f the former Indorser, and the Indorsee then becomes the seond Indorser; and this process may go on indefinitely. If the added
names cover all the back of the note, a piece may be wafered on to re­
ceive more. In France, this added piece is called “ allonge," and this
word is used in some law books, but not by our merchants.




284

Negotiable Paper.

[October,

It is quite important to have a clear idea of the difference between the
parties to a note, and the parties to a bill o f exchange. If A makes a
note to B, then A promises to pay, and is the promisor, and B is the pro­
misee or payee. But if it be payable to B or order, B may write his
name across the back, that is, may indorse it, and is an indorser. And if
he directs, over his signature on the back, that the note be paid to any
person in particular, such payee is now an indorsee. But when a bill is
drawn, nobody promises, in words, to pay it. A orders B to pay to C.
If B, when requested, says he will not do as ordered, the law supposes A,
the drawer, to have promised by implication that he would pay if B did
not. If B accepts, which is usually done by writing his name acro.ss the
face of the bill under the word “ Accepted," the law now supposes that B
promises C to pay the bill to him.
Now B, being the acceptor, is held
by the law just as a maker of a note is, beeause he is supposed to have
promised in the same way. A, the drawer, is held just as the first indor­
ser of a note is held, because he is supposed to have promised to pay if
B did not. If the bill was negotiable, that is, payable to C, or his order,
then C may indorse the bill, and although his name is the only one on
the back of the bill, he is treated in law only as a second indorser, be­
cause the drawer is treated in the same way as first indorser. And if D
then puts his name below C’s, he is treated as third indorser, and so on.
The lights, obligations and duties of all these parties, we shall speak of
hereafter.
W e repeat that a negotiable promissory note is a written promise to
pay to a certain person or his order, or to bearer, at a certain time, a cer­
tain sum of money ; and he who signs this is called the Maker or the
Promisor ; the other party is the Promisee or Payee. The payee of such
a note has the same power of indorsement as the payee of a bill o f ex­
change. If the note be not payable to any order, nor to bearer, it is then
not negotiable; but it has been held that, if such a note has been in­
dorsed by the payee, payable to some person or his order, this becomes
negotiable as between the indorser and indorsee, and subsequent parties.
Such an indorsement may in fact be regarded as a bill o f exchange,
drawn by the payee o f the note upon the maker, in favor of the person to
whom it is indorsed. The maker o f a negotiable note holds, as has been
said, the same position as the acceptor of a bill, the drawer the same as
the first indorser of a note ; that is, a party holding a note and seeking
payment of it looks first to the maker, and then to the indorser. One
holding a bill looks first to the drawee or acceptor, and, on his failure, to
the drawer.
Neither indorsement, nor acceptance, nor, indeed, making, is complete
until delivery and reception of the bill, or note, or acceptance; and a de­
fendant may show that there was no legal delivery of the paper.
The law of negotiable paper first defines a bill or note, and determines
what instruments come under these names, and then describes and ascer­
tains the duties and obligations o f all the parties we have named above.
W e shall follow this order.
W HAT IS ESSENTIAL TO A NEGOTIABLE NOTE OR BILL.

A written order or promise may be perfectly valid as a written contract
or promise, but, although made “ to order,” will not be negotiable, un­
less certain requisites of the law-merchant are complied with.




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Negotiable Paper.

'285

The difference between a note that is negotiable and one that is not, is
very important in many respects. One of these is as to the operation of
the trustee process, or foreign attachment, or garnished process, as it is
sometimes called. If A owes B a hundred dollars, C, a creditor of B,
may trustee A , (to use the common phrase,) and A must then pay to C
what he owes to B. And this is so, even if A have given his note to B
for the hundred dollars, if the note be not negotiable, that is, not to B or
order. But if the note be negotiable, A cannot be trusteed. Because if
he is obliged to pay the money to C, and B should indorse the note to D
for value, and D take it honestly, A must pay the note to D, and so
would pay it twice. But if the note is not negotiable, B cannot indorse
it, and A is safe in paying the money over.
1.
The Promise must be absolute and definite.— The promise o f the
note, and the order of the bill, must be absolute. Words expressive of in­
tention, in the first case, or a request, which imports only to ask a favor, in
the second case are insufficient. But no one word, and no set of words,
are absolutely necessary; for if from all the language the distinct promise
or positive order can be inferred, that is sufficient.
The time of payment is usually written in a bill or note’ ; if not, it is pay­
able on demand. The time of payment must not be uncertain; therefore,
the note is not negotiable, if the promise be to pay on one’s marriage, or if
certain terms are complied with, or on the sale of certain goods, or at thirty
days after the arrival of a ship, or out of a certain expected payment when
it should be made. But if it distinctly refers to an event that must happen,
as to one’s death, it has been held negotiable; and this has been extended
tp the paying off of the crew of a public vessel; but we doubt the sound­
ness of this decision. In fact, any contingency apparent on the face of the
instrument prevents it from being a negotiable note ; and the happening of
the contingency does not cure it. And the payment promised or ordered
must be of a definite sum of money ; and, therefore, a promise to pay a
certain sum “ and all fines,” is not a negotiable promissory note. But if
the contingency be wholly in the payee’s power, the note may still be ne­
gotiable; thus, a promise to pay a sum, with interest, in twelve months
after notice, was held a good note.
The promise or order to pay out of a certain fund is not fatal, if this be
merely descriptive or directory; but if it must or should be construed as
making the payment depend upon the fund, however ample and certain that
may seem, it is a fatal contingency. So, an order to pay rents accruing to
a certain time, or to pay over a sum out of money collected by an attorney,
or an order drawn on the treasury by a public officer, is not a bill o f ex­
change. Nor is a bill drawn by one government upon another, for a treaty
payment, subject to the law-merchant as a bill, and incident to protest,
damages, <fcc. An order drawn expressly for the whole of a particular fund
will operate as a transfer of that fund, although not recognizable as a bill of
exchange.
A negotiable bill of exchange or promissory note must be payable in
money only, and not in goods or merchandise or property of any kind, or
by the performance of any act.
If payable in “ current fund-*,” or “ good
bank-notes,” or “ current bank-notes,” this should not be sufficient on general
principles, and according to many authorities; some courts, however, con­
strue this ap meaning notes convertible on demand into money, an ! there­
fore the same thing as money.




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Negotiable Paper.

[October,

A bill or note may be written upon any paper or proper substitute for it,
in any language, in ink or pencil. A name may be signed or indorsed by
a mark ; and, though usually written at the bottom, it may be sufficient if
written in the body o f the note; as, I, A . B., promise,” & c.; unless it can
be shown that the note was incomplete, and was intended to be finished by
signature. If not dated, it will be considered as dated when it was made ;
but a written date is prim e facie evidence (that is, evidence which may be
overcome by opposite and bet’ter evidence, but until so overcome is sufficient)
of the time of making.
The amount is usually written in figures at the
corner or bottom. If the sum is written at length in the body, and also in
figures at the corner, it seems that the written words control the figures,
and evidence is not admisible to show that the figures were right and the
' words inaccurate. Thus, in an American case, a promissory note, expressed
to be for “ thee hundred dollars,” and in figures in the margin, $300, was
held to be a good note for three hundred dollars, if the maker when he
signed it intended “ thee ” for “ three ” ; and whether such was his intention
was a question for the jury. But the omission of such a word as “ dollars,”
or “ pounds,” or “ sterling,” may be supplied, if the meaning o f the instru­
ment is quite clear:
2.
The Payee must be designated.— The payee should be distinctly named,
unless the bill or note be made payable to bearer. If it can be gathered
from the instrument, by a reasonable or necessary construction, who is the
payee, that is enough. Thus, in an English case, an instrument in the fol­
lowing form: “ Received of A. B. £100, which I promise to pay on de­
mand, with lawful interest,” was held to be a promissory note. The note
may be made payable to the promisor or his order; that is, a man may
sav, I promise to pay to my own order: and such note is nothing until tbs
promisor not only signs it, but indorses it.
Any note indorsed in blank is always transferable by delivery, just as if
it were made payable to bearer; because any holder may write over the in­
dorsement an order to pay to himself. Indorsements are either indorse­
ments in blank, by which is meant the name of the indorser and nothing
more, or indorsements in fu ll, which are so called when the name of the
indorsee is written over the name of the indorser. These two kinds of in­
dorsements are fully explained subsequently, in section VI. of this article.
A note to the order o f the promisor, and indorsed by him in blank, is there­
fore much the same thing as a note to bearer. But it is quite commonly
used in our mercantile cities, because the holder can always pass it away
without indorsing it if he chooses, or can put his name on it as second in­
dorser if he likes to. And if he be named, and the note get into the pos­
session of a wrong person of the same name, this person neither has nor
can give a title to it. If the name be spelt wrong, evidence of intention is
receivable. If a father and son have the same name, and the son have pos­
session of the note and indorse it, this would be evidence of his rightful
ownership ; but in the absence of evidence, it has been said that the pre­
sumption of law would give the note to the father; but this must depend
on circumstances.
If neither payable to bearer, nor to the maker’s or drawer’s order, nor to
any other person, it would be an incomplete and invalid instrument. If the
payeee of a bill be fictitious, and the drawer indorse it with the fictitious
name, the acceptor is not liable thereon to the holder, unless at the time of




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Negotiable Paper.

287

the acceptance the acceptor knew the name to be fictitious. In that case,
the bill may be considered as payable to bearer; or the amount may be re­
covered as a general d ebt; as it may if the acceptor did not know the
name to be fictitious, but the money paid by the holder of the bill for it bad
passed into the acceptor’s hands.
A note to a fictitious payee, with the same name endorsed by the maker,
would undoubtedly be held to be the maker’s own- note, eitker payable to
bearer, or to himself or order, by another name, and so indorsed. If a
blank be left in a bill for the payee’s name, a bona fide holder may fill it
with his own, the issuing o f the bill in blank being an authority to a bona
fide holder to insert the name. And if the name o f the payee be not the
name of a person, as if it be the name of a ship, the instrument is payable
to bearer. A note payable to different persons in the alternative, that is,
to one or the other of them, is not a good promissory note. A bill or note
“ to the order o f” the plaintiff, is the same as if to him “ or his order,” and
may be sued by him without indorsement.
3. O f Ambiguous and Irregular Instruments.— The law in relation to
protest and damages makes it sometimes important to distinguish between
a promissory note and a bill of exchange. The rule in general is, that, if
an instrument be so ambiguous in its terms that it cannot certainly be pro­
nounced one of these to the exclusion of the other, the holder may elect
and treat it as either. As if written “ Value received, in three months from
date, pay the order of H . L. $500. (Signed) A. B.” ; and an address or
memorandum at the bottom, “ A t Messrs. E. F. & Co.” It has been held
that an indorsement upon a bond, ordering the contents to be paid to A or
order, for value received, is a good bill.
So also a direction to pay the
j*nount of a promissory note written under the same by the promisor; so
that the person directed, if he accepts, is liable as acceptor o f a bill. So,
where a certificate of a deposit in a bank, payable on a future day to the or­
der of A, was indorsed for value to B by A, it was held that the indorse­
ment constituted a bill of exchange. An agreement in the instrument it­
self to give further security, would prevent it from being a negotiable pro­
missory note or bill; but not, as it seems, a statement that security has
been given.
4. O f Bank-Notes.— Bank-notes or bank-bills are promissory notes o f a
bank, payable to bearer; and, like all notes to bearer, the property in them
passes by delivery. They are intended to be used as money ; and, while a
finder, or one who steals them, has no title himself against the owner, still,
if he passes them away to a bona fide holder, that is, a holder for value
without notice or knowledge, such holder holds them against the original
owner. And if the bank pays them in good faith on regular presentment,
the owner has no claim. They pass by a will bequeathing money. They
are a good tender, unless objected to at the time because not money.
Forged bills, given in payment, are a mere nullity. Bills of a bank which
has failed, but of which the failure is unknown to both parties, are now, gen­
erally, put on the footing of forged or void bills; although there is some
conflict on this subject. But if the receiver of them, by holding them, and
by a delay in returning or giving them up, injures the payer and impairs
his opportunity or means of indeinuity, the receiver must then lose them.
5. O f Checks on Banks.— A cheek on a bank is undoubtedly a bill o f ex­




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Negotiable Paper.

[October,

change; but usage and the nature of the case have introduced some im­
portant qualifications of the general law of bills, as applicable to checks. A
check requires no acceptance, because a banker, after a customary or rea­
sonable time has elapsed since deposit, is bound to pay the checks of the
depositors. The drawer o f a check is not a surety, as is the drawer of a
bill, but a principal debtor, like the maker o f a note.
Nor can a drawer
complain of any delay whatever in the presentment; for it is an absolute
appropriation to the holder of so much money in the banker’s hands ; there
it may lie at the holder’s pleasure.
But delay is at the holder’s risk ; for
if the bank fails after lie could have got his money on the check, the loss is
his, and so it is if the bank before he presents his check pay out all the
money of the drawer on other checks. But he may then look to the draw­
er. An acceptance of the drawer, payable at the bank, and paid by the
bank, if it exhaust the drawer’s funds so that none are left for his check, is
a good defense to an action against the bank for non-payment of the check.
If one who holds a check as payee, or otherwise, transfers it to another,
he has a right to insist that the check should be presented in the course of
the banking hours of that day, or at farthest the next: that is, he is not
responsible for the failure of the bank to pay, unless it is so presented, pro­
vided it would then have been paid. And if the party receiving the check
live elsewhere than where the bank is, it seems that he should send it for
collection the next d a y ; and if to an agent, the agent should present it, at
latest, in the course of the day after he receives it. If the check be drawn
when the drawer has neither funds in the bank, nor has made any arrange­
ment by which he has a right to draw the check, the drawing it is a fraud,
and the holder may bring his action at once against the drawer, without
presentment or notice.
Checks are seldom accepted. But they are often marked by the bank a9»
good ; and it is said that this binds the bank as acceptor.. And from the
nature of a check, and the use to which it is applied, it has been inferred
that, if a cheek be drawn for value against funds, and the drawer after­
wards order the bank to refuse payment of it, and, while the bank has still
the funds of the drawer in its hands, it receives notice of the check and a
demand of its contents, the bank should be bound tq pay it and entitled to
appropriate to the payment the necessary amount from the funds of the
drawer. But this would be contrary to the general law of bills of exchange,
which certainly do not operate as an absolute appropriation of the funds in
the hands of the acceptor, until after his acceptance.
Checks are usually payable to bearer ; but may be and often are drawn
payable to a payee or his order; for this guards against loss or theft, and
gives to the drawee, when the check is paid, the receipt of the payee. Gen­
erally, a check is not payment until it is cashed ; but then it is payment;
to make it so, however, it must be shown that the money was paid to the
creditor, or that the check had passed through his hands. A bank cannot
maintain a claim for money lent and advanced, merely by showing defend­
ant’s check paid by them, because the general presumption is, that the bank
paid the check because drawn by a depositor against funds.
It is said that, while the death of a drawer countermands his check, if
the bank pay it before notice of the death reaches them, they are discharg­
ed. This would seem to be almost a necessary inference from the general
purpose of banks of deposit, and the use which merchants make of them.
If a bank pay a forged check, it is so far its own loss, that the bank can­




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Negotiable Paper.

289

not charge the money to the depositor whose name was forged. But we
think the bank could recover the money back from one who presented a
forged check innocently, and was paid, provided the payee loses no oppor­
tunity of indemnity in the meantime, and can be put in as good a position
as if the bank had refused to pay it. But if somebody must lose, the' bank
should, because it is the duty o f the bank to know the writing of its own
depositors. If it pay a check of which the amount has been falsely and
fraudently increased, it can charge the drawer only with the original
amount. But if the drawer himself caused or facilitated the forgery, as by
carelessly writing it so, or leaving it in such hands, that the forgery or al­
teration was easy, so that it may be called his fault, and the bank is wholly
innocent, then the loss falls on the drawer. If many persons, not partners,
join in a deposit, they must join in a check ; but if one or more abscond, a
court of equity will permit the remainder to draw the money.
6.
O f Accommodation Paper.— An accommodation bill or note is one
for which the acceptor or maker has received no consideration, but has lent
his name and credit to accommodate the drawee, payee, or holder. Of
course he is bound to all other parties, precisely as if there were a good
consideration; for, otherwise, it would not be an effectual loan of credit.
But he is not bound to the party whom he thus accommodates; on the
contrary, that party is bound to take up the paper, or provide the accom­
modation acceptor, or maker, or indorser, with funds for doing it, or indem­
nify him for taking it up. And if, before the bill or note is due, the party
accommodated provides the party lending his credit with the necessary
funds, he cannot recall them ; and if he becomes bankrupt, they remain the
property of the accommodation acceptor, or maker. And if sued on the
bill or note, he can charge the party accommodated with the expense of de­
fending the suit, even if the defense were unsuccessful, if he had any reason­
able ground of defense, because the defense was for the benefit of the party
accommodated; inasmuch as he must repay the accommodation party if he
pays the bill or note.
V. O f Foreign and Inland Bills.— Bills of exchange may be foreign bills,
or inland bills. Foreign bills are those which are drawn or payable in a
foreign country; and for this purpose each of our States are foreign to
the others. Inland bills are drawn and payable at home. Every bill is, on
its face, an inland bill, unless it purports to be a foreign bill. I f foreign
on its face, evidence is admissible to show that it was drawn at home.
If a bill be drawn and accepted here, but afterwards actually signed by
the drawer abroad, it is a foreign bill. If a foreign bill be not accept­
ed, or be not paid at maturity, it should at once be protested by a no­
tary-public.
Inland bills are generally, and promissory notes frequent­
ly, protested ; but it cannot be said that this is required by the law-mer­
chant. The holder of a foreign bill, after protest for non-payment, may
sue the drawer and indorser, and recover the face of the bill, and, in addi­
tion thereto, his costs of protest and notice, his commissions and re-ex­
change, or whatever it may cost him to re-draw, by reason of the current
rate of exchange. But these damages on protest are generally adjusted in
this country by various statutes,— which give greater damages as the dis­
tance is greater; and an established usage would supply the place o f stat­
utes if they were wanting.
8. O f the Law o f Place.— Important questions sometimes arise in the




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Consideration o f the Effect o f National Banks.

[October,

case of foreign bills; (as well as in some other cases,) dependent upon what
is called the Law of Place ; the Latin phrase for which, Lex Loci, is often
used. In general, every contract is to be governed by the law of the place
where it is made. Thus, if a bill is drawn in France, and there indorsed in
a way which is sufficient here, but insufficient there, the indorsement would
here be held void. But if a contract entered into in one place is to be per­
formed in another, as in the case of a note dated, or a bill drawn, in one
State, but payable in another, the prevailing rule is, that the law of the
place where the note is payable construes and governs the contract. There­
fore, if a bill be drawn in England, payable in France, the protest and no­
tice of dishonor must be regulated by the law of France.
But one who
makes such a note may, as we think, elect, for many purposes, which law
shall govern it.
Thus, if he makes it in New York, and it is payable in
Boston, he may promise to pay the legal interest of New York, and will be
bound to this payment in Boston, although the legal interest in Boston is
one per cent less ; but if there be no such express promise, the interest pay­
able will be that of the place where the note is payable.
While the law of the place of the contract interprets and construes it, the
law of the place where it is put in suit— the Law of the Forum, or Court—
determines all questions as to remedy; that is, all questions which relate to
the legal means of recovering the debt. Thus, in general, the statutes of
limitation of the place of the court are applied. But if a cause of action re­
lating to any special subject-matter which has a definite location, as a par­
cel of land has, be barred by a statute of limitations where the subject-mat­
ter is situated, it is barred everywhere.
A promisor, not subject to arrest
in the country where the note is made, may be arrested under the laws of
the country where the note is sued.
It will always be presumed, in the absence o f testimony, that the law of
a foreign country is the same with that o f the country in which the suit
is brought. If a difference in this respect is a ground of defense, or of ac­
tion, it must be proved.

CONSIDERATIONS CONCERNING TIIE EFFECT AND PROBABLE CONSEQUENCE
TO RESULT FROM TIIE ESTABLISHMENT OF BANKS UNDER THE
ACT TO PROVIDE A NATIONAL CURRENCY.
SHOULD SUCH BANKS BE ADMITTED TO THE CLEARING-HOUSE ASSOCIATIO N?

N e w Y o r k , Sept. 23, 1863.

To the .Officers and Directors o f the Banks o f the New York Clearing­
house Association :
I t r u s t that the common interest we all have in the subject to which I
am about to call to your consideration will plead my apology for any appa­
rent freedom I may seem to take in addressing you.
One of the most important progressive features of the New York Clearing­
house Association” has been, that a unity of interests has brought the gen­
tlemen managing the various institutions into frequent contact, and thence
developed a mutual feeling of kindness, respect, and confidence between
them, and the recognition of principle is so decided that the smallest
institution feels that its rights will be as thoroughly recognized as those of
the largest. It is, therefore, on the ground of mutual confidence that I pro­




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Consideration o f the Effect o f National Banks.

291

pose to request your consideration of the few suggestions I am about to
make. If, after listening to them, you shall see fit to dismiss them, w ell;
if, on the contrary, they shall arouse and determine you to action, what­
ever that actiou may be, my object is obtained. If it should awaken gen­
tlemen from apparent apathy or discouragement, I shall have achieved my
end. I therefore approach you in perfect simplicity, and with absence of
all pretension. I shall not expect criticism on the disjointed remarks, thrown
together, as not covering the subject. Neither your patience, if such elabo­
ration were necessary, nor my time would allow extended examination of a
system which throws out, like a vine, its tendrils, grasping directly or indi­
rectly every interest within its reach. I propose to call your attention to
the new banking scheme of the Secretary of the Treasury; indeed, I should
not call it new, for it has not even the merit of originality; it is but the
banking law of the State of New York, with mischievous features engrafted
upon it.
This scheme has begun to develop itself in various parts of the country,
not without much bolstering, however, and institutions are forming, or
formed, in this city, which will soon, we have reason to believe, be applying
for admission into the Clearing-house Association ; unhappily, to some ex­
tent, they have an indirect recognition already through banks, members of
that body; a recognition, to my mind, more undesirable than that of direct
membership, the legal difficulties, if no other, at all times hanging over us
in transactions of this character being very great. We have to meet these
applications squarely, firmly, and decidedly, for with their acceptance or re­
jection possibly rests the fate of the banks o f the association; and on your
action the life or death of one o f the two systems may be decided.
It is as well to look back on the last two years and-a-half, and see under
what auspices this wonder of Political Economy has been brought forth—
its propriety and necessity.
W e can recall all of us, our relations with the Secretary of the Treasury
since the opening of the rebellion ; the desperate position of the nation at
the advent of Mr. L in c o l n , stripped of army and navy by the traitors
having the previous administration in their hands, and the utter helplessness
of the government credit, with its Treasury plundered and its funds squan­
dered by the wretches who had had its custody. W e all recollect the ap­
peal made, in vain, to the public for loans; the people stood silent and
aghast, as if in a waking dream; it appeared as if the whole social fabric
was sinking from under them, and that property was but a name, soon to
be a fiction. The fate of the nation was hanging in the balance. The
Secretary of the Treasury appealed to the banks of the three great cities,
and nobly did they respond ; the associated banks of the city of New York,
of course, in greater proportion than the others, as was proper.
Fifty
millions of dollars was advanced to the government, and an army and navy
arose as if by magic. The nation was saved. The financial capital of the
country, aroused from its stupor by the action of the banks, soon followed
in their footsteps, and the credit of the United States was restored.
But not alone fifty millions, but another fifty millions, and another fifty
millions, and still other millions were forthcoming, so that up to this time
the associated banks of this city alone have advanced to the government,
in the way of loans, deposits, and credits, at least two hundred millions of
dollars; and this, not taking into consideration the sums furnished by our
sisters of Philadelphia and Boston.




292

,

Consideration o f the Effect o f National Banks.

[October,

This aid was advanced at fearful risk. No inducement short of the de­
votion of patriotism could have for one instant induced the banks to depart
from their legitimae sphere to afford it. It would seem, then, that these
institutions were entitled to the gratitude “ of him ready to perish
that
the property of the widow, the orphan, and the aged, thrown nobly into
the vortex to aid the government, and thus risked to save it, should have
been held sacred by that government. The salvation of the nation, under
Providence, was through this act of the banks.
Without their generous
action the flag of a conspiracy maturing for a generation would have floated
over its capitol.
But what has been the response to that action ? It has been this, and
the finger of the historian will point to it with amazement, that while the
ink was yet undried the same pen that was drawing from us these millions
was, coldly and deliberately drafting tbe plan for our destruction. It is hard
to believe; it is hard to believe it of human nature, even of political ambi­
tion, but the fact stares us grimly and sternly in the face. The Controller
of tbe Treasury, its exponent, in his recent circular triumphantly asserts it
in plain Saxon ; in bis own language, “ it requires no spirit o f prophecy
to say which class o f the two institutions is bound to fa ll." It is well, at
any rate, that the position is defined. If carried out to the extent wished
by its projectors in its effect upon us, it matters but little whether this
scheme is the work of the politician, or the infatuation of the theorist, the
result of the conflagration destroying our property is the same.
The position being defined, let us examine into its strength and our weak­
ness. Let us inspect closely the scaling ladders with which this new system
proposes to mount and carry our works, and then decide whether, after that
examination, it becomes us to fight for the interests confided sacredly to our
care, or to tamely submit to power unhappily most injudiciously wielded.
The scheme of the “ National Banks” proposes the following features,
in which they will, so far as money-making is concerned, have the advan­
tage of the existing banks in this State, and in most if not all of the other
States.
1st. They are exempt from State taxation.
2d. Their circulation, guaranteed by the government, has a more extend­
ed range.
3d. That circulation is made a legal tender between the government and
the people, but not as between the people.
4th. Virtually abrogating the Subdreasury, they are to be made the de­
positaries of the public funds.
5th. By adroit management, the balances standing to the credit of the
country banks, of similar character, in the cities of New York, Boston, and
Philadelphia, and a few other large cities, are to be recognized to the extent
of their, balances as tbe required reserve to be held by them of twenty-five
per cent in legal tender, thus compelling such banks as may adopt this law
to withdraw their accounts, however unwillingly, from their present friends
and transfer them to the new banks.
Let us suppose that the reasons are sufficient to induce us to avoid the
conflict, to wind up, return our capital to our stockholders, and, after liqui­
dation, renew our existence under the new system, (a plan exceedingly con­
soling, but which, unfortunately, the laws of the State of New York decid­
edly prohibit,) what do we see ?
1st. The sweeping out of existence the institutions created under the




1863.]

Consideration o f the Effect o f National Banks.

293

laws of one of the most powerful and loyal States in the Union, whose
blood and treasure has been poured out like water in the suppression of the
rebellion; the consequent additional taxation thrown upon its citizens, and
the natural indignation at a wanton exhibition of power.
But, here, let me not be misunderstood. I conceive that one of the worst
features of this bill is, that it is unnecessarily throwing a firebrand into the
State, raising the question of State rights. Nevertheless, 1 deem the sov­
ereignty of the nation so vital, that if it were necessary to its life I would
assent to the entire wiping out o f State lines, if that life could be only pur­
chased at so dear a rate.
2d. W e see a circulation, paper money based upon paper ; a time debt
reconverted into a demand debt ; a circulation resting on a conventional
value, which value is subject to continual fluctuations, (as see, for instance,
our New York State stocks in 1857, sinking some forty percent, and the
banks based upon them only prevented from failure by the combined action
of the city banks,) under the endorsement of the government, aided and
nursed by its deposits, sweeping over the face of the whole continent, but
only redeemable— please mark ! only redeemable and protestahle at the
points of issue, whether those points of issue be in California, Texas, Geor­
gia, or South Carolina— a circulation forced upon the people in its trans­
actions with the government, but with which they cannot pay their debts
to each other— a gigantic “ uncurrent m o n e y a n uncurrent money which,
if successful, in lime is to pay us our one hundred millions of seven and
three-tenth notes; failing our disposition to lock up our capital in the long
loans, the alternative.
«
The “ Banking Bill ” limits this circulation to three hundred millions ;
but the same power that forced the bill through Congress can probably
cause an amendment to that law, authorizing three times that amount in
addition. The whole scheme of this circulation is the throwing upon indi­
viduals the responsibility of an additional three hundred millions of a quasi
legal tender, which should have been done, if done at all, fairly and openly
by the Secretary of the Treasury.
The fallacy of making stock the base of circulation is fully demonstrated
in England, where a very limited portion of the government debt is recog­
nized with gold as its basis; but there, periodically, in the contractions o f
the credit system, we see the “ Throne” compelled to come to the rescue
in legalizing that which is unable to comply with the law. Unhappily, at
this moment, we have Mr. R obert J. W a l k e r rendering this country ab­
surd in England, in proclaiming the merits of this bill to the keen political
economists of that country, before whose educated reasoning the whole
scheme will wither like parchment in the fire.
The Secretary of the Treasury could “ not recognize two currencies.”
He has already furnished us with three : Demand notes; Five per cent
legal tender notes, and new “ National B ank” notes— all to be admitted
as money in the settlement of debts with the Government, but two alone
by the people. If the theory of the Secretary o f the Treasury be success­
ful, we shall have a thousand banks spread over the whole Continent,
initiated and managed, in the majority of cases, by inexperienced men,
without saying anything o f unprincipled adventurers, who will flood the
country with a currency essentially irredeemable, banks from whom will
radiate a fearful expansion in the shape o f credits issued on deposits, them­
selves the birth of inflation, and, Protean-like, from which elements still




294

Consideration o f the Effect o f National Banks.

[October,

further inflations will emanate, with frantic speculation and elevation o f
prices, until some political convulsion, or the mere hint of a return to
specie payments, pricking the bubble, the “ system” will collapse, spread­
ing desolation and ruin broad cast over the land, producing such a scene
of financial calamity as shall make all our previous convulsions compare
with it as a child’s rattle to a whirlwind.
One of the worst features of this system is the deception of ignorant and
well-meaning people, who will become depositors with these institutions,
and whose property in that shape the Government will seize in its efforts
to make good the deficiency in their circulation ; for the Government, by
the bill, is made a preferred creditor of all assets of these institutions un­
til the currency is redeemed. Of course, there will be exceptions, cases
where experienced and careful men will invest their capital in them, but
they, with all of us, will be borne away helplessly in the storm which the
inevitable future will prepare for us, if Providence, in its wrath, should
allow this system to have full sway.
The whole scheme is the theory of inexperienced and unpracticed men.
The productive resources of this country are fully competent to carry us
through this war, and to pay the debt, its cost, principal and interest,
within a century ; but were they doubled, they could not avert the calam­
ity to the nation that the success of this project will carry in its train.
Now, why is all this ? What was, what is, the necessity, in a time of
domestic convulsion, when the nation is struggling for life, when the gov­
ernment had, and has, more than all it can do to keep itself from destruc­
tion, that we must have this bold experiment in political economy ? W hy
chill and estrange the friends who have come so nobly to the rescue, to
turn them into enemies, by the endeavor to initiate, in a time of civil war,
a change in the currency of the nation, which wise men would approach
with fear and trembling in a period of profound peace ? The banks, with
the’experience of a century, were becoming more and more stable, more
and more firm, more and more governed by fixed and recognized laws,
more and more a single piece of machinery, through the liquidation of
their debts at the Clearing-houses, in the financial ceuters of the great
cities, subject, of course, to the occasional vicissitudes which must occur
to all that deal in credit, whether nations, corporations, or individuals ;
and of which this scheme will furnish a fearful example, if it is successful
in obtaining an existence, such as its projector sanguinely hopes.
The Secretary of the Treasury has already flooded the country with
legal tender notes to the extent of four hundred millions o f dollars. Three
hundred millions o f this might have been spared, if he had taken the ad­
vice of experienced men, who urged him to obtain from Congress the
passage of an act authorizing the Assistant Treasurer to draw upon the
Associated Banks in the liquidation of transactions between the govern­
ment and the people.
If the New York Clearing-house Association can liquidate, in one day,
ninety millions of dollars of the debt of the community, with a resulting
balance of only one million and a half of dollars, to be paid in notes, is it
not equally true that the banks, which are clearing-houses for the liquid­
ation of debt between individuals, can, by transferring their balances, set­
tle their debt connected with the government with like economy of phys­
ical means ? This was urged, not only strongly on the Secretary of the
Treasury, but on the committees of Congress. That of the House was so




1863.]

Consideration o f the Effect o f National Banks.

295

impressed with the truth o f the position that they inserted a section in
the loan bill, authorizing the Secretary o f the Treasury to make use of
the banks at his discretion. It passed the House, but was thrown out in
the Senate. Is it unfair for us to surmise at whose suggestion ? If the
machinery furnished by the banks had been adopted, ignoring, if you
please, and refusing the bank notes, the issue of legal tender notes required
to pay the soldiers and various mechanics, all that would have been need­
ed, could not, by any possibility, have extended beyond one hundred mil­
lions of dollars. But now the same law that obtains, compelling four
hundred millions of dollars, must act in continued force ; and there is
nothing to prevent the requisition of one thousand millions o f dollars,
with all its direful consequences, to the future.
But I think I hear you say, to what does all this narration and argu­
ment tend ? The evil is upon us. In what is this recapitulation o f the
past, and prognostics as to the future, to the purpose? They should have
been used to prevent the passage of the law. What is your remedy ?
True, they should have been ; and if we had used the proper energy by
remonstrance and explanation at Washington by a suitable committee, it
is probable that the evil would have been averted.
But still we are not without a remedy, and that is, as yet, in our own
hands. It is plain, simple and direct, and if we are true to the positions
we hold, as the guardians o f the property confided to our care, in many
cases the all of women, children, the infirm, o f those who look to us as
their only means of support, nay, if simply influenced by the law o f selfpreservation, are we not bound to adopt it ? As conscientious men, using
the same means we would were our own property in jeopardy ; as men
having some previous knowledge of the tempests o f the currency ; as men
who, with that experience, foresee the desolation and calamity that looms
fearfully in the distance to the welfare of the nation ; as watchmen, if you
please, whose duty it is to sound the alarm ere it is too late ; are we' not
bound to use it ? It is simply this. Let the Associated Banks in the
three great cities o f New York, Philadelphia and Boston, decline all rec­
ognition of these institutions, directly or indirectly, in their exchanges, and
let them at once, at whatever expense, return the notes that they are com­
pelled to receive from the government, to their respective points o f issue
for redemption. In so doing, you will keep the heart of the currency at
the great city centres unscathed and whole. The power o f this system
for mischief will not be entirely removed ; still, it will be so far controlled
as to prevent the ruin to ourselves and the nation, that its entire success
will surely enure.
One word more, and I will trespass no longer on your patience. The
idea exists that it is simply a matter of volition as to whether we will or
will not relinquish our present charters, and renew our institutions under
this law. The banks can wind up whenever they please, but it is a very
different matter when they propose to renew their corporate existence
under the proposed bill, which is in direct defiance o f the Constitution
and laws of the State of New York.
The penalties o f such banking, directly or indirectly, other than under
the prescribed laws of the State, are a fine o f one thousand dollars each
on all parties concerned, Directors, .Stockholders and Officers, and an en­
tire making void o f all contracts by or with them.— [Nre Chapter 20, Laws
0 /1 8 3 7 .]




[October,

Commercial Chronicle and Review.

296

If in what I have said I shall have been so fortunate as to command
your thorough examination o f the subject, whatever your decision, I shall
feel well repaid. I can say for myself, that in this communication I am
impelled solely by a conscientious sense of duty ; but before I lay down
my pen I will also say, that if the success of this scheme of banking were
necessary to the suppression of the rebellion by our Army and Navy, and
the restoration of the flag of the United States over every inch of its ter-^
ritory, that my voice should be the last heard in opposition to it, never
mind how severe the sacrifice to individual interest.
A B a s k S t o c k h o l d e r a n d D ir e c t o r .

C O M M E R C I A L CHRONICLE A N D REVIEW.
I M P R O V E D B U S IN E 8 S — E F F E C T O F P A P E R — A C C U M U L A T IO N

OF

M O N E T — IN C R E A 8B

OF

D E P O S IT 8 — D I ­

M IN IS H E D S T O C K S — M O R E P A P E R LF.SS C A P I T A L — L A R G E R IM P O R T S — W A R E H O U S E — L A R G E I M P O R T A ­
T IO N -G O O D

C R O P S — LE SSE N E D E X P O R T S — SP E C IE — E X P O R T S OF— E X O IIA N G E — 8T O C K S IM P O R T E D —

ST O C K S P E C U L A T IO N -G O V E R N M E N T L O A N — IN T E R E S T -B E A R IN G L E G A L T E N D E R N OTES— E F F E C T OF.

I n the past thirty days there has been a great revival of general busi­
ness at firm prices, and the stocks of goods, as well imported as domestic,
are quite small for the apparent demand, which is now stronger than it
has been since the war began. Thus there is a turn in the tide of invest­
ments, as the necessity for replenishing stocks of goods has become appa­
rent. A great source of strength for the federal government in its hour
of trial was, without doubt, the large amount of capital in the country
when the war broke out. That capital consisted, to a considerable extent,
o f consumable goods, and was contained in the shops and stores that exist
in every town and village. A large portion o f those goods were old and,
in "part, dead stocks, which the owners expected to realize upon, only
with great difficulty. The war and the issues of paper money had the
effect to raise the prices of all goods, and thus the old stocks were got rid
of, while at the same time the high prices served, of course, greatly to
diminish consumption. A great national saving was thus brought about.
The people bought more sparingly, because they had to pay higher pri­
ces ; and for the same reason shopkeepers, while realizing high prices for
old goods, hesitated about purchasing new ones. The result was, that
stocks of goods were greatly reduced in quantity by being turned into
paper money, which money was used for the discharge of debts or kept
on hand or loaned temporarily, giving a continual abundance o f money
that was with difficulty employed, because no one wished to reinvest. The
deposits in Banks therefore increased very rapidly, as follows :
BANK DEPOSITS.
New-York.

Boston.

Philadelphia.

Total.

April 1 2 ,1 8 6 2 ..
Feb., 1863.........

$93,759,063
174,689,212

19,975,018
35,245.500

16,636,538
30,679,259

130,370,619
240,613,961

Increase

$80,830,149

15,270,482

14,042,721

110,243,342

The largest accumulation of deposits is at New-York, where the sur­
plus money of the interior cf the country is sent for employment. The
amount of reduction which has thus taken place in stocks of goods, and




1863.]

Commercial Chronicle and Review.

297

which has produced this surplus of deposits, can be easily estimated by
referring to the books of the Mercantile Agency. For instance, take the
Stores in New York, Boston and Philadelphia, and the results are as
follows :
No. stores.

N ew -Y ork ...
‘ Boston..........
Philadelphia.

Average stock.

17,389 $121,670,000
4,940
55,700,000
8,261
67,510,000
30,590' $344,880,000

Present stock.

Reduction.

$110,000,000 $111,670,000
30,000,000
25,700,000
45,000,000
22,510,000
$185,000,000

$159,880,000

Thus there is, according to. these figures, a reduction o f $159,880,000
in stocks of goods, that amount having been turned into paper money,
which has been glutting the markets. In the whole of the Northern
States there are 178,641 shops doing business, in which the reduction of
stocks will reach very nearly $1,000,000,000, or about the sum that the
government has borrowed. In addition to this, there have been ships,
boats, etc., produce, etc., turned into money, which has also remained
unemployed. The reduction.of stocks has now reached its limit, and
dealers, instead o f having large sums of idle money, desire to get into
stock ; but it requires a great deal more money now to buy the same
quantities than before. Instead of there being a flood of paper from
stores to banks and other reservoirs, there is apparently setting in an ebb.
It will be remarked that the actual quantity of paper afloat may be great­
ly increased, while money— that is, capital— will become scarce and high.
It formerly required $40 to buy a bale o f cotton, and it now requires
$350. Eight times as much paper is required for the operation, and
eight times as much will be required to buy the cloth made from the
cotton. Thus the fall business has opened with great activity, anti at
good profits, while in twenty years stocks have, in quantity, not been so
low. These stocks must be increased, and will require four times as much
money as formerly.
To pay for importations, there is little else than gold available, since
the extraordinary quality and quantity of European crops cuts off to a
considerable extent the exports from the United States. The business at
the port of New York for August, as reported in the official returns, gives
a large increase in imported goods, sold as follow s:
IMPOSTS, POET OP NEW YOEK.

Specie.

January...................
February................
M a r c h ...,..............
A pril.......................
M a y ........................
J u n e.......................
J u l y .......................
A u gu st...................

$101,906
213,971
123,616
107,061
197,217
109,997
182,245
113,877

Total8 months
“ 1 8 6 2 ,...

$1,149,890
824,259

,----------- Entered lor------------*
Free goods. Consumption. Warehouse.

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

Total.

$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

$8,538,967 $70,462,8’ 0 $41,896,200 $122,047,877
17,024,951 70,734,461 31,124,807 119,708,478

The quantity of goods imported in August does not show the extent of
business, but the quantity withdrawn from warehouses shows the change.
VOL. X L IX .---- NO. IV .




20

298

Commercial Chronicle and Review.
For consumption.

1862 ...........................
1863 ..........................

10,289,427
10,004,580

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

From warehouse.

2,386,607
6,420,421
4,042,814

[October,
Total.

12,676,034
16,434,001
3,767,967

The process of selling old goods has effected the clearing out in some,
cases of goods that have been on hand two or three years, and the most
remarkable avidity in buying goods succeeded in September to the long
paralysis which seemed to settle upon the markets. This activity was
deemed preparatory to a large importation late in the autumn ; but the
demand is sudden, and if met abroad, will only be at very high prices.
On the other hand, the harvests of England and Western Europe are
represented to be better than for many years. The value of the English
crop is supposed to be 8150,000,000 more than last year. These circum­
stances usually stimulate a great demand for g ood s; food being cheap.
The effect upon United States exports is, however, adverse. The exports
for August have been comparatively as follows :
EXPORTS, PORT OF NEW YORK.

Specie.

$4,624,674
8,965,664
6,386,442
1,972,884
2,115,679
1,867,774
6,268,881
2,465,361

January...................
February.................
March......................
A p ril.......................
M a y .......................
J u n e .......................
J u l y .......................
August.....................
Total 8 months
“ 1 8 6 2 ....

/----------Foreign.---------- ,
Free.
Dutiable.

$73,111
43,889
213,685
74,949
101,337
49,380
77,232
90,813

$668,275
610,009
758,266
376,224
602,254
298,067
448,601
231,774

Domestic.

$14,829,398
17,780,586
16,187,689
11,581,933
13,183,510
14,780,072
15,298,078
10,666,959

Total.

$19,695,351
22,400,148
23,695,082
14,004,940
16,002,780
16,495,293
21,092,787
14,454,809

829,366,109 $724,398 $3,992,470 S£118,758,220 :$147,841,197
8,256,831
86,102,199 130,968,879
89,757,220 1,852,629

The amount realized from these exports, corrected by the price of gold,
gives a considerable balance against the country, and, in connection with
the fact that freights are very cheap and mostly in foreign bottoms, indi­
cates that the drain may be large in gold to pay for the enhanced exports.
The receipts and exports of gold have been as follow s:
SPECIE AND PRICE OF GOLD.

,---------- 1 8 6 2 . ----------- . ,------------------ 7---------- 1 8 6 3 ___________________

Deceived.
3.
10.
17.
it
2 4 .'
tl
31.
February 7.
14.
«(
21.
“
28.
March
7.
<<
14.
«
21.
((
28.
4.
April
(1
11.
t(
18.
January

885,928
627,767
854,000
614,146
759,247
741,109
679,074
677,058
490,368
581,293
617,279




Exported.
Deceived. Exported. Gold in bank. Prem. on gold.
681,448 35,954,550 34* a 3 4 f
442,147
726,746 36,770,746 34 a 39
1,035,025 1,277,788
1,380,247 37,581,465 40 a 49
547,703
322,918
678,841
780,816 38,549,794 47 a 60f
........
310,484
1,331,027 38,894,840 48| a 60*
301,860 1,277,000 38,243,839 57* a 57*
976,235
359,978 1,152,846 38,426,460 53* a 534
1,156,154
520,017 37,981,310 54 a 64
934,512
285,394 1,377,016 39,512,256 71 a 72
510,774
738,643 39,705,089 623 a-63
585,236 1,243,551
3,540,550 36,110,085 64* a 54*
477,335
249,514
540,968
1,201,907 33,955,122 63 a 54*
159,105 1,050,156 34,317,691 41 a 42
779,564
250,778
473,385 34,257,121 53 a 64
673,826
250,728
607,059 35,406,145 46 a 52*
1,505,728
158,487 36,761,69 6 52 a 68*
217,602
693,436

f

1863.]

Commercial Chronicle and Review.

---------------- 1

862
Received.

April
May
(<

26.
2.

9.
16.
23.
80.

<(
Ct
i<

June

6.

“

13.
20.
27.
4.
11 .
18.
25.

“
«

July
((
«

August

1.

8.
((
U
M

Sept.
“
it

Total .

16.
22.
29.
5.
12.
19.
26.
. . .

299

163 . ---------------------------------------------------- ,
Exported. 'Gold in bank. Prem on gold.

------------------------ 1 s

Exported.

1,151,300
712,275
1,574,166
1,093,031
938,032
881,452
1,647,299
1,990,327
3,156,988
3,094,101
2,647,060
641,451 2,424,916
441,179 1,846,023
784,537
G. Gate lost.
748,523
964,422
890,552
700,431
1,089,111
919,825
1,137,644
807,063
551,097
1,042,835
934,415
490,865
758,286
996,892
635,546
410,804
484,019
604,682
501,204
224,911
553,035
352,391
612,461
893,212

18,063,938 43,230,075

Received.

256,604

629,855 37,175,067
294,998 36,846,528
451,827 38,102,633
205,057
661,996 88,656,652
438,745 38,544,865
258,570
279,994 37,632,634
318,066
411,483 37,241,670
235,364 37,884,128
522,147 38,314,206
187,082
1 34,432 38,271,702
347,807 38,302,826
401,936 38,712,397
254,947
2,190,781 38,254,427
1,725,748 35,910,227
270,182
480,374 33,746,681
530,044 33,156,548
313,612 1,210,230 32,874,913
238,398 31,520,499
231,854 1,379,710 32,030,055
309,799 31,989,381
279,043
852,752 32,018,107
535,796 30,008,566
193,584
277,380 1,411,611 31,014,411

47 a 51*
48 a 50*
68* a 47
49 a 49*
4 8 } a 49
4 4 } a 44*
46 a 46*
48 a 4 8 }
42 a 43*
46 a 46§
44 a 444
32} a 32*
23 a 23*
26 a 26*
28} a 29
26* a 27
25 a 25*
24* a 25
24* a 24*
32* a 33
28 a 29
32* a 33
89 a 39*

8,641,978 82,517,027

The receipts from California certainly diminish, while the exports are
well sustained to cover bankers bills, the rates o f which are regulated by
the price o f gold. This varies so much, however, as to produce the great­
est irregularity.
It frequently varies 3 @ 4 per cent on packet days,
causing as great a variation in bills, much to the surprise of foreign cor­
respondents. The ruling rates of bills on packet days have been as fol­
lows :
RATES OF EXCHANGE.

Jan. 3,
a
10,
“ 17,
if
24,
a
31,
Feb,■ 7,
((
14,
(>
21,
M 28,
Mar• 7,
ii
14,
ii
21,
«(
28,
April 4,
u
11,
n
18,
“
25,
May 2,
(i
9,
• It
16,
(C
23,
'i
30,
June 6,
“ 13,
“ 20,

London.
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* 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




Paris
•3 . 85 a 3 .80
3,.72* a 3 .67*
3..52* a 3 .45
3,.50 a 3..45
3,,32 a 3. 15
3..30 a 3. 25
3 .82 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*
S.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 55
3. 57* a 3. 52*
3.,55 a 3..47*
3 .62 a 3 .57*

Amsterdam.
66 a 56*
56 a 58
60* a 61*
61 a 61*
65* a 66*
65 a 65*
65 a 65*
6T a 68*
674 a 71
64 a 64
64 a 64
63* a 634
61 a 62
62* a 63*
61 a 62
62* a 62}
61 a 61*
614 a 62*
62* a 63
61* a 62
61 a 61*
59} a 60*
59} a 61*
59* a 61
58* a 59

Frankfort.
56 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
614 a 62
61* a 62*
62* a 63*
61} a 62*
61* a 62
60 a 60*
60 a 60*
60 a 61*
5SJ•a 59*

Hamburg.
49* a 49*
50* a 51*
54 a 55*
54 a 54}
57 a 5 8 }
57 a 57}
56} a 67*
59 a 60*
6 1 } a 62*
55 a 554
5 5 } a 56}
56 a 57
53 a 54
55* a 57
53* a 54*
54* a 55*
53} a 54}
53* a 54*
55* a 66*
54 a 55
54 a 54*
52* a 53
52} a 53*
52* a 54
51 a 52

Berlin.
98 a 98*
99 a 100
108 a 110
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
107 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

300

Commercial Regulations.
London.

159 a 1604
143 a 146
138 a 139
138 a 139
140 a 141J
1394 a 1404
1374 a 1884
1374 a 1884
1354 a 186f
S e p t . 6, 141 a 147
“ 12, 142 a 1444
“ 19, 146 a 1474

June 27,
J u ly ll,
“ 18,
“ 25,
Aug. 1,
“
8,
“ 15,
“ 22,
“ 29,

Paris.

3.55 a 3.,50
3.95 a 3. 85
4.07 a 4. 02
4.10 a 4. 05
4.064 a 4. 00
4.06 a 4. 00
4.124 a 4. 084
4.124•a 4,.084
4.10 a 4. 15
4.00 a 3. 90
3.924 a 4. 00
3 . 8 7 4 a 3. 83

Amsterdam.

694
54
514
514
524
524

a 604
a 544
a 52
a 624
a 53
a 624
5 1 4 a 52
514 a 524
51 a 514
524 a 564
63 a 534
544 a 55

Frankfort.

[October,
Hamburg.

Berlin.

60 a 60f 524 a 524 1064 a 107
54 a 554 474 a 484 94 a 96
50 a 624 464 a 464 92 a 93
5 1 4 a 524 454 a 464
91 a 92
524 a 534 464 a 474 924 a 934
524 a 524 464 a 47
92 a 9 2 f
52 a 524 454 a 46
914 a 92
52 a 524 45|a 454 904 a 914
214 a 514 45 a 454 90 a 91
524 a .524 464 a 48
954 a 964
934 a 944
634 a 54 47 a 48
544 a 554 48 a 484 95f a 97

An active speculation in gold, carrying up the price, stimulates the ex­
ports of produce, and this frequently occurs upon steamer days. The de­
mand for bills did not keep up to the anticipation caused by the active
sale of foreign goods, for the reason that the demand for goods was un­
expectedly large and fell upon stocks already here and in warehouse and
which had been paid for, since, in the irregularity of the exchange mar­
ket, it had become customary to settle at once to fix the cost of goods.
A demand for bills was, however, caused by the great rise in stocks, which
caused many railroads, etc., to be sent here from London for realization.
The direction of speculation has continued to be in stocks; but these
have reached such high values while accumulating in the hands of a few
large operators, awaiting a more general speculation on the part of the
public, that the latter have been repelled. The holding, however, absorbs
a good deal of money, o f which the price has remained pretty firm at 7
per cent on stocks with large margins. The subscriptions to the United
States five-twenties have also continued to be fair, absorbing a good deal
o f money.
The amount of them outstanding has been reported as fol­
lows at different tim es:
April 1 ......................
July 1 ........................
September 1 .............
“
2 0 .............

Five-twenties.

Other paper.

$36,593,856
185,684,141
256,659,100
264,701,000

$845,952,624
911,590,224
977,780,000
992,100,000

Total debt.

$882,546,480
1,097,274,365
1,244,430,200
1,256,801,000

On the first o f September fell due the army pay, and to meet that the
Secretary of the Treasury borrowed $50,000,000 o f the banks o f the
three cities on $50,000,000 of legal tender notes, redeemable in two years
and bearing five per cent interest— the banks to have six per cent interest
up to the delivery of the notes to them in November, when they will be
printed. The whole proceedings on this loan will be found on another
page. These new notes being a legal tender cannot depreciate, because
they are applicable to the payment of the bank’s debts. They therefore
became to them more desirable, even at five per cent in paper, <han long
stock at six per cent in gold, since the latter incur the risk of depre­
ciation. The effect of these notes upon the market, in relation to their
tendency to make money more or less plenty, was much discussed, many
considered, with the Secretary of the Treasury, that they would be held
for interest; but inasmuch as they may be every six months converted,
principal and interest, into “ greenbacks” they will inevitably cause money
to flow out as fast as they may raise its value in their character o f an in­
vestment. The effect o f the loan may be observed in the returns o f the




1863]

Commercial Chronicle and Review.

301

banks, on another page, when, for the week ending September 12, the
loans were increased $21,000,000, and in the subsequent week $7,000,000
more. The mode of making the return by average on the week causes
the amount to be less than the fact.
Thus in New York $35,000,000
was carried to the credit o f the government on the third day of the week,
and the average for six days makes it appear as $21,000,000. The banks
have paid up three installments on the loan.
The prices o f government stocks have been as follow s:
PRICK S UNITED STATES P A P E R .

.— 6’s 1881.— ,

January

S,..

((

10,..
17,.
“
24, .
it
31,.
February 7,..
a
14,.
2 1 ,.
“
28,.
March
7 ,.
“
14, .
<<
21,..
«
2 8 ,..
April
4 ,..
“
11,..
«
18,...
“
2 5 ,..
2 ,..
May
U
9 ,..
ll
1 6 ,..
il
2 3 ,..
it
3 0 ,..
June
6 ,..
((
1 3 ,..
2 0 ,..
“
a
2 7 ,..
July
11 ,..
1 8 ,..
a
2 5 ,..
August 1 ,..
M

<(

it
it
t'i

Sept.
(i
it

8 ,..

1 5 ,..
2 2 ,..
2 9 ,..
5 ,..
12,...
1 9 ,..
2 6 ,..

Keg.

Coup.

963
97f
913
95
923
92
94
963

98
98
91f
96
' 94

1003

1023
1003
1043

99f
1043
103|
1043
1043
104*
104
105
1053
106
108
108i
108
104
1043
1033
102
1043
1043
1053
104^
1053
1053

106
106
106
105
106
1063

9 3 1

96
973

1043
105
105
105
105
105
1063
107
108
1083
108
1083
108f
1083
1073
105
106
1063
1053
1063
1053
1073
107
106
1063
1063
1063

5’s, 1874.

7 3-10,
8 years.

883

1023

90
883
90
86
853
873

103
101
102
1013

102
1023

1033
97
1053
943
105
1063
98
90
107
963
1063
973
104f
105
973
96
105
106
96
1063
973
106
97
107
973
973 • 1073
973
107
99
107
106
99
106
983
98
104
106
973
98
1063
1063
97
963
1063
963
1063
97
1063
107
97
95
107
106
95
106
95
96
1063
96
1063
913

1 yearcertif.
New.
Old.

963
97
95
96
94
94
96
95
983
983
100
100
100
99

1013
1013
1013
1013
1013
1013
1 01
1003
1003
101
1003
1 01
101
101
1013
1013
1003
1 01
1013
1013

99£
993
993
993
993

993
973

98
983
97
983
99
983
993
993
99f
993
993
993
993
99|
99f

Aug
—
0u
—s tdemand
notes.

a 343
a 38
a 46|
a 483
a 603
a 673
633 a 533
533 a 64
71 a 713
52^ a 53
54J a 543
54; a 543
41 a 413
53 a 533
46 a 523
53 a 533
1513 a 1513
150 a 1603
1523 a 1523
149 a 1493
1483 a 149
144J a 1443
146 a 1463
148 a 1483
1423 a 1433
1463 a 146f
1323 a 1323
125 a 1253
126 a 1263
1283 a 127
1263 a 127
125 a 1253
1243 a 125
1243 a 124
1323 a 133
128 a 129
1333 a 133f
139| a 1393
343
373
49
47
55
573

1003

101
102
102

Gold.

29
35
43
443
53
65
51
62
71
53
53

The adverse news from the army, in connection with the large imports
and diminished exports of produce, complicated with the foreign politi­
cal aspect, caused a continued and active rise in gold in the last week o f
September, carrying the price up to 143— a rise of 20 per cent in thirty
days, and of course measuring a corresponding fall in the specie value of
stocks.




S02

The Pilchard Fishery in Cornwall.

[October,

THE PILCHARD FISHERY IN CORNWALL.
BY WILKIE COLLINS.
I f it so happened that a stranger in Cornwall went out to take his first
walk along the cliffs towards the south of the country, in the month of
August, that stranger could not advance far in any direction without wit­
nessing what would strike him as a very singular and alarming phenomenon.
He would see a man standing on the edge of a precipice, just over the sea,
gesticulating in a very remarkable manner, with a bush in his hand, waving
it to the right and the left, brandishing it over his head, sweeping it past
his feet; in short, apparently acting the part o f a maniac of the most
dangerous description. It would add considerably to.the startling effect of
this sight on the stranger aforesaid, if he were told, while beholding it, that
the insane individual before him was paid for flourishing the bush at the
rate o f a guinea a week. And if he, thereupon, advanced a little to obtain
a nearer view of the madman, and then observed on the sea below (as he
certainly might) a well-manned boat, turning carefully to right and left ex­
actly as the bush turned right and left, his mystification would probably be
complete, and his ideas on the sanity of the inhabitants of the neighbor­
hood would at least be perplexed with grievous doubt.
But a few words of explanation would soon make him alter his opinion.
He would then learn that the man with the bush was an important agent
in the Pilchard Fishery of Cornwall; that he had just discovered a shoal of
pilchards swimming towards the land; and that the men in the boat were
guided by his gesticulations alone, in securing the fish on which they and
all their countrymen on the coast depend for a livelihood.
To begin, however, with the pilchards themselves, as forming one of the
staple commercial commodities of Cornwall. They may be, perhaps, best
described as bearing a very close resemblance to the herring, but as beiug
rather smaller in size and having larger scales. Where they come from
before they visit the Cornish coast— where those that escape the fishermen
go to when they quit it, is unknown; or, at best, only vaguely conjectured.
All that is certain about them is, that they are met with, swimming past
the Seilly Isles, as early as July (when they are caught with a drift-net.)
They then advance inland in August, during which month the principal, or
“ inshore,” fishing begins ; visit different parts of the coast until October or
November; and after that disappear until the next year. They may be
sometimes caught off the south-west part of Devonshire, and are occasion­
ally to be met with near the southernmost coast of Ireland ; but beyond
these two points they are never seen on any other portion of the shores of
Great Britain, either before they approach Cornwall, or after they have left
it.
The first sight from the cliffs o f a shoal of pilchards advancing toward
the land, is not a little interesting. They produce on the sea the appear­
ance of the shadow of a dark cloud. This shadow comes on, and on, until
you can see the fish leaping and playing on the surface by hundreds at a
time, all huddled close together, and all approaching so near to the shore,
that they can be always caught in some fifty or sixty feet of water. Indeed,
on certain occasions, when the shoals are of considerable magnitude, the




1863.]

The Pilchard Fishery in Cornwall.

303

fish behind have been known to force the fish before, literally up to the
beach, so that they could be taken in buckets, or even in the hand with the
greatest ease. It is said that they are thus impelled to approach the land
by precisely the same necessity which impels the fishermen to catch them
as they appear— the necessity o f getting food.
With the discovery of the first shoal, the active duties of the “ look-out”
on the cliffs begin. Each fishing-village places one or more o f these men
on the watch all round the coast. They are called “ huers,” a word said to
be derived from the old French verb, huer, to call out, to give an alarm.
On the vigilance and skill of the “ buer” much depends. Ho is, therefore,
not only paid his guinea a week while he is on the watch, but receives, be­
sides, a perquisite in the shape of a percentage on the produce of all the
fish taken under his auspices. He is placed at his post, where he can com­
mand an uninterrupted view of the sea, some days before the pilchards are
expected to appear; and, at the same time, boats, nets, and men are all ready
for action at a moment’s notice.
The principal boat used is at least fifteen tons in burden, and carries a
large net called the “ seine,” which measures a hundred and ninety fathoms
in length, and costs a hundred and seventy pounds— sometimes more. It
is simply one long strip, from eleven to thirteen fathoms in breadth, com­
posed of very small meshes, and furnished, all along its length, with lead
at one side and corks at the other. The men who cast this net are called
the “ shooters,” and receive, eleven shillings and sixpence a week, and a per­
quisite of one basket, of fish each out of every haul.
As soon as the “ huer ” discerns the first appearance of a shoal, he waves
his bush. The signal is conveyed to the beach immediately by men and
boys watching near him. The “ seine ” boat (accompanied by another small
boat, to assist in casting the net) is rowed out where he can see it. Then
there is a pause, a hush of great expectation on all sides. Meanwhile, the
devoted pilchards press on— a compact mass of thousands on thousands of
fish, swimming to meet their doom. All eyes are fixed on the “ huer
he
stands watchful and still until the shoal is thoroughly embayed, in water
which he knows to be within the depth of the “ seine” net. Then, as the
fish begin to pause in their progress, and gradually crowd closer and closer
together, he gives the signal; the boats come up, and the “ seine” net is
cast, or, in the technical phrase, “ shot” overboard.
The grand object is now to enclose the entire shoal. The leads sink one
end of ihe net perpendicularly to the ground— the corks buoy up the other
to the surface of the water. When it has been taken all round the fish,
the two extremities are made first, and the shoal is then imprisoned within
an oblong barrier of network surrounding it on all sides. The great art is
to let as few of the pilchards escape as possible, while this process is being
completed. Whenever the “ huer” observes from above that they are
startled, and are separating at any particular point, to that point he waves
his bush, thither the boat is steered, and there the net is “ shot” at once.
In whatever direction the fish attempt to get out to sea again, they are
thus immediately met and thwarted with extraordinary readiness and skill.
This labor completed, the silence of intense expectation that has hitherto
prevailed among the spectators on the cliff, is broken. There is a great shout
of joy on all sides— the shoal is secured !
The “ seine ” is now regarded as a great reservoir of fish. It may remain
in the water a week or more. To secure it against being moved from its




304

The Pilchard Fishery in Cornwall.

[October,

position in case a gale should come on, it is warped by two or three ropes
to points of land in the cliff, and is at the same time, contracted in circuit,
by its opposite ends being brought together, and fastened tight over a length
of several feet. While these operations are in course of performance, another
boat, another set of men, and another net (different in form from the “ seine ” )
are approaching the scene of action.
This new net is called the “ t u c k i t is smaller than the “ seine,” inside
which it is now to be let down for the purpose of bringing the fish closely
collected to the surface. The men who manage this net are termed “ reg­
ular seiners.” They receive ten shillings a week, and the same perquisite
as the “ shooters.” Their boat is first of all rowed inside the seine-net, and
laid close to the seine-boat which remains stationary outside, and to the bows
of which one rope at one end of the “ tuck ” net is fastened. The “ tuck ”
boat then slowly makes the inner circuit of the “ seine,” the smaller net
being dropped overboard as she goes, and attached at intervals to the larger.
To prevent the fish from getting between the two nets during this opera­
tion, they are frightened into the middle o f the enclosure by beating the
water at proper places, with oars, and heavy stones fastened to ropes.- When
the “ tuck ” net has at length traveled round the whole circle of the “ seine,”
and is securely fastened to th e ‘‘ seine ” boat, at the end as it was at the
beginning, every thing is ready for the great event of the day— the hauling
of tlie fish to the surface.
Now, the scene on shore and sea rises to a prodigious pitch of excite­
ment. The merchants, to whom the boats and nets belong, and by whom
the, men are employed, join the “ huer” on the cliff;' all their friends follow
them; boys shout, dogs bark madly; every little boat in the place puts off
crammed with idle spectators; old men and women hobble down to the
beach to wait for the news. The noise, the bustle, and the agitation, in­
crease every moment. Soon the shrill cheering of the boys is joined by the
deep voices of the “ seiners.” There they stand, six or eight stalwart, sun­
burnt fellows, ranged in a row in the “ seine” boat, hauling with all their
might at the “ tuck ” net, and roaring the regular nautical “ Yo-heave-ho !”
in chorus! Higher and higher rises the net, louder and louder shout the
boys and the idlers. The merchant forgets his dignity, and joins them ;
the “ huer,” so calm and collected hitherto, loses his self-possession and waves
his cap triumphantly— even you and I, reader, uninitiated spectators though
we are, catch the infection, and cheer away with the rest, as if our bread
depended on the event of the next few minutes. “ H ooray! hooray! Yohoy, hoy, hoy ! Pull away, boys! Up she comes! Here they are !”
The water boils and eddies ; the “ tuck ” net rises to the surface, and one
teeming, convulsed mass of shining, glancing, silvery scales; one compact
crowd of thousands of fish, each one of which is madly endeavoring to es­
cape, appears in an instant!
The noise before, was as nothing compared with the noise now. Boats
as large as barges are pulled up in hot haste all round the net; baskets are
produced by dozens; the fish are dipped up in them, and shot out, like coals
out of a sack, into the boats. Ere long, the men are up to their ankles in
pilchards; they jump upon the rowing benches and work on, until the boats
are filled with fish as full as they can hold, and the gunwales are within two
or three inches of the water. Even yet, the shoal is not exhausted ; the
“ tuck” net must be let down again and left ready for a fresh haul, while
the boats are slowly propelled to the shore, where we must join them with­
out delay.




1863.]

The Pilchard Fishery in Cornwall.

385

As soon as the fish are brought to land, one set of men, bearing capa­
cious wooden shovels, jump in among them; and another set bring large
hand-barrows close to the side of the boat, into which the pilchards are
thrown with amazing rapidity. This operation proceeds without ceasing for
a moment. As soon as one barrow is ready to be carried to the saltinghouse, another is waiting to be filled. When this labor is performed by
night—-which is often the case— the scene becomes doubly picturesque.
The meu with the shovels, standing up to their knees in pilchards, working
energetically ; the crowd stretching down from the salting-house, across the
beach, and hemming in the boat all round ; the uninterrupted succession of
men hurrying backwards and forwards with their barrows, through a nar­
row way, kept clear for them in the throng; the glare o f the lanterns giving
light to the workmen, and throwing ted flashes on the fish as they fly in­
cessantly from the shovels over the side of the boat, all combined together
to produce such a series of striking contrasts, such a moving picture of bus­
tle and animation, as not even the most careless of spectators could ever
forget.
Having watched the progress of affairs on the shore, we next proceed to
the salting-house, a quadrangular structure of granite, well-roofed in all
round the sides, but open to the sky in the middle.
Here, we must pre­
pare ourselves to be bewildered by incessant confusion and noise; for here
.are assembled all the women and girls in the district, piling up the pilchards
on layers of salt, at three-pence an hour; to which remuneration a glass of
brandy and a piece of bread and cheese are hospitably added at every sixth
hour by way of refreshment. It is a service of some littte hazard to enter
this place at all. There are men rushing out with empty barrows, and men
rushing in with full barrows, in almost perpetual succession.
However,
while we are waiting for an opportunity to slip through the doorway, we
may amuse ourselves by watching a very curious ceremony which is con­
stantly in course of performance outside it.
As the filled barrows are going into the salting-house, we observe a little
urchin running by the side of them, and hitting their edges with a long
cane, in a constant succession of smart strokes, until they are fairly carried
through the gate, when he quickly returns to perform the same office for
the next series that arrive. The object of this apparently unaccountable
proceeding is soon practically illustrated by a group of children, hovering
about the entrance of the salting house, who every now and then dash reso­
lutely up to the barrows, and endeavor to seize on as many fish as they can
take away at one snatch. It is understood to be their privilege to keep as
many pilchards as they can get in this way by their dexterity, in spite of a
liberal allowance o f strokes aimed at their hands; and their adroitness
richly deserves its reward. Vainly does the boy officially entrusted with
the administration of the cane, strike the sides of the barrow with malignant
smartness and perseverance— fish are snatched away with lightning rapidity
and pickpocket neatness of hand. The hardest rap over the knuckles fails
to daunt the sturdy little assailants. H >wling with pain, they dash up to
the next barrow that passes them, with unimpaired resolution ; and often
collect their ten or a dozen fish a-piece, in an hour or two. No description
can do justice to the “ Jack-in-Office ” importance o f the boy with the cane,
as he flourishes it about ferociously in the full enjoyment of his vested right
to castigate his companions as often as he can. As an instance of the early
development of the tyrannic tendencies of human nature, it is, in a philo­
sophical point of view, quite unique.




3Qf5

The Pilchard Fishery in Cornwall.

[October,

But now, while we have a chance, while the doorway is accidentally clear
for a few moments, let us enter the salting-house, and approach the noisiest
and most amusing o f all the scenes which the pilchard fishery presents.
First of all, we pass a great heap of fish lying in one recess inside the door,
and an equally great heap of coarse, brownish salt lying in another. Then
we advance farther, get out of the way of everybody, behind a pillar, and
see a whole congregation of the fair s§x screaming, talking, and— to their
honor be it spoken—-working at the same time, round a compact mass of
pilchards which their nimble hands have already built up to a height of
three feet, a breadth of more than four, and a length of twenty. Here we
have every variety of the “ female type” displayed before us, ranged round
an odoriferous heap o f salted fish.
Here we see crones of sixty and girls
of sixteen: the ugly and the lean, the comely and the plump; the sourtempered and the sweet— all squabbling, singing, jesting, lamenting, and
shrieking at the very top of their shrill voices for “ more fish,” and “ more
salt;” both of which are brought from the stores, in small buckets, by a
long train of children running backwards and forwards with unceasing ac­
tivity and in inextricable confusion.
But, universal as the uproar is, the
work never flags ; the hands move as fast as the tongues ; there may be no
silence and no discipline, but there is also no idleness and no delay. Never
was three-pence an hour more joyfully or more fairly earned than it is
here !
The labor is thus performed. After the stone floor has been swept clean,
a thin layer of salt is spread on it, and covered with pilchards laid partly
edgewise, and close together.
Then another layer of salt, smoothed fine
with the palm of the hand, is laid over the pilchards ; and then more pil­
chards are placed upon that; and so on until the heap rises to four feet or
more. Nothing can exceed the ease, quickness, and regularity with which
this is done. Each woman works on her own area, without reference to her
neighbor ; a bucketful of salt and a bucketful o f fish being shot out in two
little piles under her hands, for her own especial use. All proceed in their
labor, however, with such equal diligence and equal skill, that no irregular­
ities appear in the various layers when they are finished— they run as
straight and smooth from one end to the other, as if they were constructed
by machinery. The heap, when completed, looks like a long, solid, neatlymade mass of dirt}r salt; nothing being now seen of the pilchards but the
extreme tips of their noses or tails, just peeping out in rows, up the sides
of the pile.
Having now inspected the progress of the pilchard fishery, from the catch­
ing to the curing, we have seen all that we can personally observe of its
different processes, at one opportunity.
W hat more remains to be done,
will not be completed until after an interval of several weeks.
W e must
be content to hear about this from information given to us by others. Yon­
der, sitting against the outside wall o f the salting-house, is an intelligent
old man, too infirm now to do more than take care of the baby that be
holds in his arms, while the baby’s mother is earning her three-pence an
hour inside. To this ancient we will address all our inquiries; and he is
well qualified to answer us, for the poor old fellow has prematurely worked
away all the pith and marrow o f his life in the pilchard fishery.
The fish— as we learn from our old friend, who is mightily pleased to be
asked for information— will remain in salt, or, as the technical expression
is, “ in bulk,” for five or six weeks. During this period, a quantity of oil,




1863.]

The Pilchard Fishery in Cornwall.

307

salt, and water drips from them into wells cut in the center of the stone
floor on which they are placed. After the oil has been collected and clari­
fied, it will sell for enough to pay off the whole expense of the wages, food,
and 'drink given to the “ seiners” — perhaps for some other incidental charges
besides. The salt and water left behind, and offal of all sorts found with
it, furnish a valuable manure. Nothing in the pilchard itself, or in connec­
tion with it, runs to waste— the precious little fish is a treasure in every
part of him.
After the pilchards have been taken out of “ bulk,” they are washed in
clean salt water, and packed in hogsheads, which are then sent for expor­
tation to some large seapo’ t— Penzance, for instance— in coast traders. The
fish reserved for use in Cornwall are generally cured by those who purchase
them. The export trade is confined to the shores of the Mediterranean—
Italy and Spain providing the two great foreign markets for pilchards. The
home consumption, as regards Great Britain, is nothing, or next to nothing.
Some variation takes place in the prices realized by the foreign trade— their
average wholesale is stated to be about fifty shillings per hogshead.
As an investment for money, on a smjill scale, the pilchard fishery offers
the first great advantage o f security. The only outlay necessary is that for
providing boats and nets, and building salting-houses— an outlay which, it
is calculated, may be covered by a thousand pounds. . The profits resulting
. from the speculation are immediate and large. Transactions are managed
on the ready-money principle, and the markets of Italy and Spain (where,
pilchards are considered a great delicacy) are always open to any supply.
The fluctuation between a good season’s fishing and a bad season’s fishing
is rarely, if ever, seriously great. Accidents happen but seldom ; the cas­
ualty most dreaded being the enclosure of a large fish along with a shoal
of pilchards.
A “ ling,” for instance, if unfortunately imprisoned in the
seine, often bursts through its thin meshes, after luxuriously gorging him­
self with prey, and is of course followed out of the breach by all the pil­
chards. Then, not only is the.shoal lost, but the net is seriously damaged,
and must be tediously and expensively repaired. Such an accident as this,
however, very seldom happens; and when it does, the loss occasioned falls
on those best able to bear it, the merchant speculators.
The work and
wages of the fishermen 'go on as usual.
Some idea of the almost incalculable multitude of pilchards caught on
the shores of Cornwall, may be formed from the following data.
At the
small fishing cove o f Trereen, 600 hogsheads were taken in little more than
one week, during August, 1850. Allowing 2,400 fish only to each hogs­
head— 3,000 would be the highest calculation— we have a result of 1,440,000
pilchards caught by the inhabitants of one little village alone, on the Cor­
nish coast, at the commencement of the season’s fishing!
A t considerable seaport towns, where there is an unusually large supply
of men, boats, and nets, such figures as those quoted above are far below
the mark.
At St. Ives, for example, 1,000 hogsheads were taken in the
-first three seine nets cast into the water. The number of hogsheads ex­
ported annually, averages 22,000. In 1850, 27,000 were secured for the
foreign markets. Incredible as these numbers may appear to some readers,
they may nevertheless be relied o n ; for they are derived from trustworthy
sources— partly from local returns furnished to me ; partly from the very
men who filled the baskets from the boat-side, and who afterwards verified
their calculations by frequent visits to the salting-houses.




308

A Vear’s Railway Work in Great Britain.

[October,

Such is the pilchard fishery of Cornwall— a small unit, indeed, in the
vast aggregate of England’s internal sources of wealth ; but yet, neither
unimportant nor uninteresting, if it be regarded as giving active employ­
ment to hardy and honest race who would starve without i t ; as impartially
extending the advantages of commerce to one of the remotest corners of
our island ; and— more than all— as displaying a wise and beautiful pro­
vision of Nature, by whsch the rich tribute of the great deep is most gen­
erously lavished on the land which most needs a compensation for its own
sterrility.

A YEAR’ S RAILWAY WORK IS GREAT BRITAIN.
In the year 1862, the enormous number o f 180,429,071 passengers
traveled on the railways of the United Kingdom, besides 56,656 seasonticket holders, who, o f course, traveled very many tim es; and besides,
also, 262,334 horses, 386,864 dogs, 3,094,183 cattle, 7,800,928 sheep,
and 1,989,892 pigs.
The passengers were more than in 1861 by about
7,000,000. They paid £12,295,273 for their fares. The first-class pas­
sengers paid £3,332,380; the second-class, £4,018,221 ; the third-class,
£4,639,250. 12.80 in every hundred went first-class, 2 8 .7 5 second-class,
58 .4 5 third-class. The proportion of third-class passengers is rather in­
creasing, and of second-class rather diminishing. Thirty-five passengers
were killed (nine of them owing to their own misconduct or want of cau­
tion), and 536 were injured. This is less than half the number who lost
their lives in 1861 by railway accidents. The passenger trains traveled
57,542,831 miles, and the goods trains nearly as many more. The pas­
senger traffic supplied 4 7 .7 6 per cent of the total receipts of the compa­
nies, and the goods traffic the larger half, 5 2 .2 4 per cent. The receipts
from all the traffic amounted to £29,128,558, being nearly £3,000,000
more than the interest of the national debt, and an increase o f £563,000
over the receipts of 1861 ; but the length o f line open increased from
10,865 miles at the end of 1861, to 11,551 miles at the end o f 1862.
The working expenditure amounted to 49 per cent, and left the net re­
ceipts £14,820,691, nearly £130,000 more than in 1861. In the year
1862 the companies paid £220,970 for law and parliamentary expenses,
£158,169 as compensation for personal injuries, £68,540 for damage and
loss of goods, £375,057 for government duty, and £596,410 for rates
and taxes. It took £2,708,638 to maintain the way and works, and
£1,242,714 to maintain the carriages aud wagons, £3,966,005 to provide
locomotive power, and £3,987,637 to conduct the traffic, The total sum
raised by shares and loans reached £385,218,438 at the close of the year
1862.




/

1863.]

Journal o f Banking, Currency, and Finance.

309

J O U R N A L OF BANKING, C U R R E N C Y , A N D FINANCE.
•
--------------B A M ITEMS AND BANK RETURNS.
T he main feature in the bank movement the past month has been the

$60,000,000 loan to the Government. A meeting of New York bank
officers was held in regard to this loan, at the American Exchange Bank,
at 1 o’clock p. m., September 3d, in pursuance of the following notice:
A merican E xchange B ank,
)
N ew Y ork, September 3d, 1863. )
D ear S ir : I am requested to ask the Bank Officers to convene at this Bank to-day,
(Thursday,) at one o’clock, to consider a communication from J. J. Cisco, Esq., As­
sistant Treasurer of the United States.
•
Very respectfully,
GEORGE S. COE, P resid en t.

The following banks were represented, viz :
Bank of New York,
Mechanics’ Bank,
Union Bank,
Bank of America,
Phenix Bank,
City Bank,
Tradesmen’s Bank,
Fulton Bank,
Chemical Bank,
Merchants’ Exchange Baqk,
National Bank,
Butchers’ and Drovers’ Bank,
Greenwich Bank,
Leather Manufactures’ Bank,

Seventh Ward Bank,
Bank of the State of New
York,
American Exchange Bank,
Bank of Commerce,
Broadway Bank,
Pacific Bank,
Bank of the Republic,
Peoples’ Bank,
Hanover Bank.
Irving Bank,
Metropolitan Bank,
Citizen’s Bank,
Nassau Bank,

Market Bank,
St. Nicholas Bank,
Corn Exchange Bank,
Continental Bank,
Bank of the Commonwealth,
Marine Bank,
Atlantic Bank,
Importers’ & Traders’ Bank,
Park Bank,
Mechanics’ Banking Associ­
ation,
East River Bank,
And the Mercantile Bank by
B. F. Wheelwright, Esq.

The meeting was called to order by G e o r g e S. C o e , Esq., who stated
that J ohn J. Cisco, Esq., Assistant Treasurer of the United States, who
desired to make a proposal to the banks for a loan to the United States,
had requested him to invite the banks to attend a meeting for that pur­
pose. He had therefore taken the liberty o f inviting the banks to meet
Mr. Cisco, and he moved that the meeting be organized by the appoint­
ment of T h om as T ileston , Esq., as Chairman.
The meeting was then organized by the appointment of Thomas Tiles­
ton, Esq., as Chairman, and George I). Lyman, as Secretary. Mr. Cisco,
upon invitation of the Chairman, then read the following letter addressed
to him by the Hon. S. P. Chase, Secretary of the Treasury o f the United
States, v iz :
T reasury D epartment, A ugust 31 st, 1863.
D ear S ir : The pay of the army for the current six months will require an addi­

tion to the ordinary receipts for bonds, of about $28,000,000; and must be provided
for immediately.
The best mode of doing, so as to guard against all contingencies, is to obtain sub­
scriptions from the banks and bankers for fifty millions of Treasury Notes, by which
name, as you know, Legal Tender Interest Bearing Notes are described in the A ct of
Congress.
The plates for these notes are now being engraved, and the issues of them will be
ready during the month of September.
They will be in denomination of $10, $20, $50, $100, $500, and $1,000, and will
be payable one year from date, with interest at five per cent.




310

Journal o f Banking, Currency, and Finance.

[October.

Being legal tender for their face, excluding interest, they cannot fall below the
legal tender par. Bearing interest, they cannot materially affect the circulation with
reference to gold.
I will receive subscriptions for these notes, and will authorize the Assistant Treas­
urer to issue Certificates, on deposit of five per cent of the amount subscribdS, to the
Assistant Treasurer, in New York, Philadelphia, or Boston, and placing ninety-five
per cent to the credit o f the Treasurer o f the United States, on the books of the
banks or bankers subscribing.
Subscribers will be entitled to six per cent interest on the whole amount subscribed,
from date o f Certificate of five per cent of subscriptions until delivery of the Treas­
ury Notes.
The amount placed to the credit of the Treasurer will be drawn only as wanted,
by checks in favor of the Treasurer or Assistant Treasurer, during the months of Sep­
tember and October, say half in each month.
Please see the best men immediately, and ascertain whether thirty-five millions of
this subscription will be made in New York.
Yours, very truly,
J ohn J. Cisco, Esq.
S. P. CHASE.

Mr. Cisco, after responding to inquiries proposed to him by Messrs J. Q.
Jones, J. L. Everett, 0. Barstow, and other gentlemen, retired.
The proposition was then discussed by Messrs. Moses Taylor, J. E.
Williams, James Gallatin, R. Berry, R. Withers, and other gentlemen,
after which the following resolutions, upon motion of George S. Coe, Esq.,
were unanimously adopted, viz. :
Resolved, That this meeting consider it expedient (with the approbation of our
several boards o f direction) to make the loan of $35,000,000 as proposed, but only
by a combination of the banks, as in former loans made to the Secretary of the Uni­
ted States Treasury.
Resolved, That if the loan be taken by the banks, that it is necessary that an ar­
rangement be made, by which the certificates received for payments on account o f
the loan, may be used as a medium for the settlement of balances at the Clearing­
house.

Motions to refer the proposition to a committee, and to stipulate that
the Treasury Notes should bear interest at the rate of six per cent per
annum, were lost.
The Chairman then read the following communication, viz.:
U nited S tates T reasury,
)
N e w Y ork , September 3d, 1863. [
D ear S i r : I have this moment received a telegram from the Secretary of the
Treasury, by which he consents that the time be extended so as to include the month
o f November.
Yours respectfully,
JOHN J. CISCO.
T homas T ileston, Esq., Chairmau,

After considerable discussion the following resolution, offered by Geo.
S. Coe, Esq., was laid upon the table for further consideration, viz.:
Resolved, That if the loan be made as proposed, the banks agree to hold the Treas­
ury Notes as an investment, and they will not part with them unless compelled to do
so, and not until they have been offered to the Loan Committee as security for a loan,
nor will they make the loan except with the understanding that all future issues of
such five per cent interest bearing legal tender treasury notes shall first be offered to
the banks.

The meeting then adjourned, to meet the next day, 4th instant, at the
American Exchange Bank, at two o ’clock, p. si.
On the following day (September 4th, 1863), the adjourned meeting
was held at the American Exchange Bank, at 2 p. m . Thomas Tileston,
Esq., in the chair.




1863.]

Journal o f Banking, Currency, and Finance.

311

The following banks were represented, viz- :
Bank of New York,
Manhattan Company,
Union Bank,
Bank of America,
Phenix Bank,
City Bank,
Tradesmen’s Bank,
Fulton Bank,
Chemical Bank,
National Bank,
Butchers’ and Drovers’ Bank,
Mechanics’ <t Traders’ Bank,
Leather Manufactur’rs’ Bank,

Greenwich Bank,
American Exchange Bank,
Bank of Commerce,
Broadway Bank,
Pacific Bank,
Bank of the Republic,
Chatham Bank,
Peoples’ Bank,
Hanover Bank,
Irving Bank,
Metropolitan Bank,
Citizens’ Bank,
Nassau Bank,
Market Bank,

Saint Nicholas Bank,
Shoe and Leather Bank,
Corn Exchange Bank,
Continental Bank,
Bank of the Commonwealth,
Oriental Bank,
Atlantic Bank,
Park Bank,
Mechanics’ Banking Associ
ation,
East River Bank,
And Manufacturer's & Mer­
chants’ Bank.

The minutes of the meeting o f the 3d instant were read and approved.
On motion of George S. Coe, Esq., a call of the banks was made for
the purpose of ascertaining those who were willing to take their propor­
tion of the proposed loan of $35,000,000, on the terms offered by the
Secretary of the Treasury.
The following banks signified their assent, viz. :
Bank of New York,
Union Bank,
Bank of America,
Phenix Bank,
City Bank,
Tradesmen’s Bank,
National Bank,
Butchers’, and Drovers’ Bank.
Mechanics’ & Traders’'Bank,
Greenwich Bank,
Leather Manufactures’ Bank,
American Exchange Bank,

Bank of Commerce,
Pacific Bank,
Bank o f the Republic,
Chatham Bank,
Peoples’ Bank, '
Hanover Bank,
Metropolitan Bank,
Citizens’ Bank,
Nassau Bank,
Market Bank,
Saint Nicholas Bank,

Shoe and Leather Bank,
Corn Exchange Bank,
Continental Bank,
Bank of the Commonwealth,
Oriental Bank,
Atlantic Bank,
Park Bank,
Mechanic’s Banking Associ­
ation,
East River Bank,
And Manufacturer’s & Mer­
chant’ Bank.

Several of the banks made their assent subject to the approval o f their
board of direction. The American Exchange Bank upon condition that
the Treasury Notes are made payable at expiration of two or three years.
The Oriental Bank upon condition that the option be given to the banks
of taking future issues of the Treasury Notes, and that no other issue than
that to the banks be made until the contract with them has been fulfilled.
Caleb Barstow, Esq., then moved that when this meeting adjourn that
it adjourns to meet on Tuesday next, in order that the bank officers may
consult with their boards of directors. The motion was lost.
On motion of John A . Stevens, Esq., it was unanimously voted that a
committee of five bank officers be appointed, with Moses Taylor, Esq., as
chairman, with power to select his associates, to whom the necessary de­
tails and arrangements of the loan shall be referred. Mr. Taylor declined
to serve as chairman, and, upon his nomination, C. P . Leverich, Esq., was
unanimously elected chairman, with power to appoint his associates. M r.
Leverich then appointed Messrs. Moses Taylor, George S. Coe, J. D. Vermilye, and J. L. Everett as his associates.
After some discussion participated in by Messrs. George S. Coe, J. E.
Williams, James Gallatin, John A. Stevens, and Joseph M. Price, the fol­
lowing resolution was adopted unanimously, viz.:
Resolved, That we will accede to the proposition of the Secretary o f the Treasury
provided that he will make the notes payable at the expiration of two or three years,




312

Journal of M ining, Manufactures, and A rt.

[October,

(instead of one ye»r as proposed,) with interest payable semi-annually, and provided
that no issue of such notes shall be made, until the contract with us shall have been
fulfilled ; and that the Associated Banks shall have the option of taking any future
issue of such notes.

On motion of JohnE. Williams,Esq., the Chairman, (Thomas Tileston,
Esq.,) with Messrs. John A. Stevens and George S. Coe, were appointed a
committee to communicate to John J. Cisco, Esq., Assistant Treasurer of
the United States, the resolution adopted bv the meeting.
The meeting then adjourned to meet on Saturday, the 5th instant at
the American Exchange Bank, at one o’clock, p. m.
On the 5th of September, 1863, the adjourned meeting of bank officers
was held at the American Exchange Bank, at 1 o’clock, p. m ., Thomas
Tileston, Esq., in the chair.
The following banks were represented, v iz .:
Bank of New York,
Mechanics’ Bank,
Phenix Bank,
City'Bank,
Tradesmen’s Bank,
Fulton Bank,
Merchants’ Exchange Bank,,
National Bank,
Butchers’ and Drovers’ Bant:,

Seventh Ward Bank,
Amercan Exchange Bank,
Bank of Commerce.
Broadway Bank,
Bank of the Republic,
Chatham Bank,
Peoples’ Bank,
Hanover Bank,
Irving Bank,

Metropolitan Bank,
St. Nicholas Bank,
Atlantic Bank,
Importers’ & Traders’ Bank,
rk Bank,
chanics’ Banking Associ­
ation,
And Manufacturers’ & Mer­
chants’ Bank.

The minutes of the meeting of the 4th inst. were read and approved. The Chairman reported that the action o f the last meeting had been
communicated to Mr. Cisco, the Assistant Treasurer, who had telegraphed
the resolution adopted by the meeting to' the Secretary of the Treasury,
and had also sent it to him by mail, with the request that he should reply
to the resolution by telegraph, but up to the hour o f meeting Mr. Cisco
had not received a reply.
Mr. Cisco, however, thought that he might
hear from Mr. Chase while the meeting was in session, and, if so, would
communicate his decision to the meeting.
The Secretary reported that the resolution adopted at the last meeting
had been sent by telegraph to the chairman o f the Clearing-house Asso­
ciations of Boston and Philadelphia.
After some discussion it was decided to proceed as if the negotiation
for the loan had been concluded.
The President of the Mechanics’ Bank then offered the following reso­
lutions, viz.:
Resolved, That the Loan Committee have custody of the orginal and duplicate re­
ceipts, for payments on account o f the Loan, and that they shall receive and appor­
tion the Treasury Notes among the Associated Banks.

The resolution was unanimously adopted.
On motion of the same gentleman, it was also
Resolved, That the amount of Loan certificates held by each bank, shall be sepa­
rately reported in the daily statement made to the Clearing-house.

On motion of the president of the National Bank, it was
Resolved, That until the 1st day of December next, the Loan Committee shall be

authorized to issue Loan Certificates, bearing interest at the rate of six per cent per
annum, payable monthly, and which may be used in the settlement of balances at
the Clearing-house, until said 1st day of December next, upon deposit with the Loan
Committee o f any of the Stock, Bonds, or other Security of the United States, or




1863.]

Journal o f Banking, Currency, and Finance.

313

the receipts for payments, on account of the §35,000,000 United States Legal Tender
five per cent interest Treasury Notes, or of the Stock or Bonds o f the State of New
York, with a margin of ten per cent over and above the amount of Loan Certificates
issued, provided, that the total amount of Loan Certificates issued shall not exceed
Twenty-five million dollars.

On motion of the President o f the City Bank, it was
jResolved, That the Loan Committee be instructed to enter into a contract or agree­
ment with the Secretary of the Treasury, in which the terms and conditions upon
which the loan o f $35,000,000 is made to the government, shall be fully and clearly
stated in proper legal form, and subscribed by all the parties thereto.

On motion of the President of the Chatham Bank, it was
Resolved, That the Loan Committee be instructed to wait upon the banks not repre­

sented at this meeting and request their assent to the action of the banks attending

On motion o f the President o f the Bank of New York, it was
Resolved, That the United States Legal Tender Notes held by the banks shall be

considered and used as a common fund, and that the amount of such notes, held on
the morning o f each day before the commencement of business, shall be reported to
the Loan Committee, who shall apportion and equalize such notes between the banks
in the same manner as the coin of the banks was equalized in the former loans made
to the United States Government.

The meeting then adjourned.
On the 7th o f September, another meeting of B jank Officers was held at
the American Exchange Bank, at one o’clock, P. M., T h o m as T ile s to n ,
Esq., in thechair.
The following Banks were represented, viz.:
Bank of New-York,
Leather M’nufact’r’rs’ Bank,
Manhattan Company,
American Exchange Bank,
Merchants’ Bank,
Bank o f Commerce,
Mechanics’ Bank,
Pacific Bank,
Bank of the Republic,
Bank o f America,
Chatham Bank,
Phenix Bank,
People’s Bank,
City Bank,
Bank o f North America,
Tradesmen’s Bank,
Hanover Bank,
Fulton Bank,
Irving Bank,
Chemical Bank, *
Merchants’ Exchange Bank, Metropolitan Bank,
National Bank,
Citizens’ Bank,
Butchers’ and Drovers’ Bank, Shoe and Leather Bank,
Mechanics’ <k Traders’ Bank,

Corn Exchange Bank,
Continental Bank,
Bank of the Comm’nwealth,
Oriental Bank,
Atlantic Bank,
Importers’ & Traders’ Bank,
Park Bank,
Mechanics’ Banking Asso­
ciation,
Grocers’ Bank,
East River Bank,
Manufacturers’ and Mer­
chants’ Bank.

The minutes of the meeting of the 5th instant were read and approved.
The chairman stated that John J. Cisco, Esq., Assistant Treasurer of
the United States, was present, and that he would read a letter which he
had received from the Secretary of the Treasury in reply to the resolu­
tion adopted on the 4th instant. Mr. Cisco then addressed the meeting
and said that the Resolution adopted by the Banks on Friday had been
telegraphed by him to Hon. S. P. Chase, Secretary of the Treasury o f the
United States, who had replied immediately thereto by telegraph, but for
some unexplained reason the telegram had not reached him, nor had he,
until this morning, been advised of the response o f the Secretary. Mr.
Cisco then read the following extract from a letter received by him this
morning from the Secretary of the Treasury, viz.:
“ T reasury D epartment , September 6th, 1863.
“ M y D e a r S i r : I r e c e i v e d y o u r t e l e g r a m y e s t e r d a y , a n d i m m e d i a t e l y r e p lie d
th e fo llo w in g .
V O L . X L 1 X .— N O . IV .




21

by

314

Journal o f Banicing, Currency, and Finance.

[October,

“ Will make notes payable two or three years, with semi-annual interest, in denom­
inations not less than fifty dollars : will make no additional issues unless to takers of
present loan, till after October; future issue of such notes will be as small as possi­
ble, hut cannot be restricted to present takers by the option proposed.
“ Boston and Philadelphia have subscribed their proportion without asking any
modification of terms, which I intended should bejust and fair to the takers of the
Loan. In my reply to your telegram, I went as far towards meeting the wishes of
the takers in New-York as my views of public duty permit. The same terms will be
extended to the takers at Boston and Philadelphia, and I trust will prove satisfactory
to all.
“ The whole effect of the transaction is, as I have already stated in my letter of the
8d, simply a temporary loan at six per cent., to be paid at any time after the first of
October, in legal tender notes bearing five per cent.
“ The interest on Legal Tender Notes, beginning to run from the date of payment,
or from a prior date if preferred, the difference between six and five being settled on
payment.
“ The making the notes payable at two or three years, with semi-annual interest,
will increase the cost of the notes and may cause some little delay, as the notes now
being engraved are for one year. I hope not to make any additional issues this year
at all, but do not think it right to make an absolute pledge, that no such issues will
be made until after the entire fulfilment of the contract with the Banks, and capital­
ists taking the present loan, though perhaps I might safely do so.
“ The ODly modification of my proposition, therefore, suggested by the Resolution
of the takers to which I do not find myself able substantially to agree, is that which
requires the option to take all future issues o f such notes to be restricted to the ta­
kers o f the first loan. Such a stipulation would almost certainly be disapproved by
the Country and by Congress, and would be of no real advantage to anybody.”

Mr. Cisco replied to several inquiries relating to the present and pros­
pective condition of the Treasury, and expressed the opinion that if it
should become necessary for the Banks to withdraw the Treasury Notes
(or any of them) now deposited in the Treasury at five per cent interest,
payable in gold, (if left undrawn for six months,) before the third day o f
November next, at which date six months interest would become due in
coin, that the Secretary would then consent to pay the accrued interest
in coin to the date of payment.
Mr. Cisco then retired, whereupon the President o f the City Bank
moved, that we accept the proposition o f the Secretary of the Treasury of
the United States, as it now stands.
The motion was discussed by Messrs. Williams, Coe, Stevens, Silliiuan,
Punnett, Knapp, Moses Taylor, Price, and other gentlemen, resulting in a
call of the Banks to express their opinion as to the time for which the
Treasury Notes should be issued.
The following Banks preferred an issue payable three years after date,
v iz.:
Manhattan Company,
Merchants’ Bank,
Bank o f America,
Tradesmen’s Bank,

National Bank,
Chatham Bank,
Mechanics A Traders’ Bank, Hanover Bank,
Leather M’ nufact’r’rs’ Bank, Shoe and Leather Bank.
American Exchange Bank,

The following Banks preferred notes payable two years after date, viz.:
Bank of New-York,
Mechanics’ Bank,
Chemical Bank,
Butchers’ A Drovers’ Bank,
Pacific Bank,
Bank o f the Republic,

People’s Bank,
Metropolitan Bank,
Citizens’ Bank,
Saint Nicholas Bank,
Continental Bank,
Oriental Bank,

Atlantic Bank,
Importers’ A Traders’ Bank,
Park Bank,
East River Bank,
Manufacturers’ and Merchants’ Bank.

The following Banks expressed a preference for Notes payable one year
after date, viz.:




1863.]

Journal o f Banking, Currency, arid Finance.

Phenix Bank,
Bank of Commerce,
City Bank,
Bank o f North America,
Fulton Bank,
Irving Bank,
Merchants’ Exchange Bank,

315

Corn Exchange Bank,
Bank of the Comm’nwealth,
Grocers’ Bank.

On motion it was then voted unanimously, that the Treasury Notes
should be payable at the expiration of two years, with interest payable
semi-annually.
The motion of the President of the City Bank, as amended, was then
adopted. Thirty-four Banks voting in the affirmative, and one in the
negative.
The President o f the Merchants’ Bank offered the following resolution,
which was seconded by the President of the Bank o f America, v iz.:
Resolved, That the Loan be paid for, only out of the proceeds of the five per cent
Certificates of Deposits, now held by the Banks, and provided that the Government
pay' the interest on the Gold interest Certificates in coin to the time of payment, and
also provided, that Ten million dollars of the said notes shall be delivered on or be­
fore the first day of October, Ten millions on or before the fifteenth day of October,
and the balance on or before the first day of November next. The exchange o f the
deposits for Notes to be made only on the delivery of the Notes, after the first Ten
million dollars in September.

On motion o f the President o f the City Bank, the Resolution was laid
on the table.
On motion of the President o f the American Exchange Bank, it was
then unanimously
Resolved, That in taking the Thirty-five million dollar loan, we do so with the un­
derstanding on our part that the Treasury Notes first prepared after payment of the
equivalent be delivered to the Associated Banks, before the delivery of any such
Notes to the public. That any other course would only embarrass the Banks in car­
rying out their contract. That a copy of this Resolution be furnished to the Secretary
of the Treasury, with our assent to the agreement.

The meeting then adjourned.
For the purpose of consummating this loan, the following circulars
have been addressed to the different Banks:
N ew Y ork C learing -H ouse, Tuesday, Sept. 8th, 1863.
D ear S ir : Referring to the enclosed proceedings of the meetings of Bank Officers,

held on the 3d, 4th, 5th, and 1th instants, I beg leave to advise you that the propor­
tion of the Loan of Thirty-five million dollars awarded to your Bank, is $ .................
This amount should be placed to the credit o f the Treasurer o f the United States, as
o f the date o f September 8th, and the Secretary of the Treasury informed by letter,
transmitted through John J. Cisco, Esq., Assistant Treasurer, U. S., dated this day,
that such credit has been made, in compliance with the terms and conditions of the
Loan of Thirty-five million dollars to the Treasury of the United States, made on the
8th o f September, 1863, by the Associated Banks o f New-York,
The payment o f the first instalment o f f i v e per cent., on aocount o f the Loan, will
be due and payable to the Assistant Treasurer this day.
The amount to be paid by your Bank is $ . ..................... for which payment you
will receive from Mr. Cisco a receipt in original and duplicate, both o f which in ac­
cordance with a resolution adopted on the 5th instant, should be deposited with C. P,
Leverich, Esq-, Chairman of the Loan Committee, and. the amount of the payment
debited to the account of the Treasurer of the United States.
I am authorized by Mr. Cisco to say that he will, if desired, receive (temporarily)
your Cashier’s check, for the amount of the five per cent instalment to be paid to-day.
It is particularly requested that the original and duplicate receipts for the payment
of this day, be deposited with the Chairman of the Loan Committee, at or before
three o’clock, P. M.
Respectfully yours,




G eorge D. L yman , Secretary.

316

Journal o f Banking, Currency, and Finance.
N

ew -Y o rk ,

[October,

Tuesday, September 8th, 1863.

D ear S ir : In order to carry out the contract with the Secretary of the Treasury
of the United States for Thirty-five million dollars of Legal Tender Treasury Notes,
payable at the expiration of two years, bearing interest at the rate of five per cent
per annum, payable semi annually, it is im portant to the Loan Committee that all of
the Associated Banks should report in their daily statements and send to the Clear­
ing-House, daily, with their exchanges, on and after Wednesday, the 9th instant, in
addition to the items heretofore reported in the Daily Statement, a report o f the
amount o f the following securities held on the morning of each day before the com­
mencement of business, viz :
Amount of U. S. Legal Tender Demand Notes.
Amount of IT. S. five per cent Currency Certificates of Deposit.
Amount of Loan Certificates.
A blank form of the statement desired is enclosed. A supply o f such blanks will
be furnished at the Clearing-House to-day.
N. B.— Care should be taken that the U. S. five per cent Currency Certificates of
Deposit are not included in the amount o f the U. S. five per cent Clearing-House
Certificates o f Deposit.
Respectfully yours,
C. P. L e v e r ic h , Chairman o f Loan Committee.

The effects of this Loan and the calls upon it has been, in a measure,
to tighten the money market. One payment of five per cent was made
when the Loan was taken, and another payment o f ten per cent was
made Friday, the 18th o f September. The New-York Banks held, Sep­
tember 16th, $21,900,000 of legal tender notes, so that they have been
able to meet the second demand o f the Treasurer and still retain as many
of these issues as they held when the Loan was first taken. It is under­
stood that the best o f feeling exists between Mr. Cisco and these institu­
tions, and that the calls will not at any time be made burdensome, if he
can avoid it.
The $5,000,000 National Bank which was some time since announced as
the Third National Bank o f New York, does not seem to prosper; at least,.
it has lost its place and name, for it is now announced that the certificate of
organization of the Third National Bank of New York was issued September
21st, by the United States Controller to an organization with only $500,000, with privilege of increasing to $1,000,000. This Bank No. 3, is to
occupy the building, 19 Nassau street; C. V . C u lver is the President, and
J ohn R . P e n n , Cashier. Wall street says that the $5,000,000 Bank has
been frightened out o f existence. W e cannot vouch for this, not being in
the secrets.
W e publish a communication this month from one of our leading Bank
Presidents, addressed' to the officers and directors of the banks o f the New
York Clearing-House Association, in which is discussed the question, wheth­
er these new organizations should be admitted to the Clearing-Houses. The
subject is well handled, and the antagonistic position of the State and Na­
tional institutions clearly shown. This question must necessarily soon come
up for discussion.
Mr. J ohn P. Y el ve r t o n , long and favorably known in W all street as a
skillful banker and courteous gentleman, was, at an election held Saturday,
September 19th, promoted from the cashiership of the Bank o f North
America to fill the President’s chair, made vacant by the death o f I s a a c




1863.]

Journal o f Banking, Currency, and Finance.

Seym our.

Mr. J. A.

B

eard sley,

317

the First Teller, was appointed acting

Cashier.
W e publish below our usual Bank Beturns for New York, Philadelphia,
and Boston, bringing the returns down to the latest dates. Government
loans are, however, so mixed up with those o f the commercial community
that it is impossible to arrive at any correct conclusions, or obtain much
information from the figures given. It would certainly be well for outsiders
if these loans— private and public— were-stated separately, and the amount
o f legal tender notes were also reported.
NEW YORK BANKS.

N ew Y ork B anks .
Date.

January
it

{C apital, Jan., 1863, $69,494,577 ; /an.,1862, 869,493,677.).
Loans.

3 ..........

10.........
17.........
24.........
February 7.........
it
14.........
“
21,.........
«(
28.........
March
7,........
“
14,........
<(
21,........
«
28,........
April
4,........
“
11,........
((
18.........
<<
25.........
May
2,........
(<
9,........
«
16,........
23.........
“
so.........
June
6,........
U
13.........
if
20.........
“
27.........
July
4,........
“
i
i ..........
it
18,........
U
25.........
August
1,........
U
8,........
it
15,........
ti
22.........
U
29,........
Sept.
5,........
“
12.........
it
19,........
“
“

Specie.

Circulation.

Net Deposits.

CleaVings.

8173,810,009 135,964,550 $9,754,355 $159,163,246 $186,861,762
175,816,010 36,770,746 9,551,563 162,878,249 249,796,489
176,606,558 37,581,465 9,241,670 164,666,003 314,471,457
179,288,266 38,549,794 9,083,419 168,269,228 298,861,366
179,892,161 38,243,839 8,780,154 166,342,777 302,352,571
173,103.592 38,426,460 8,756,317 167,720,880 265,139,104
178,335,880 37,981,310 8,752,536 170,103,758 291,242,929
179,958,842 39,512,456 8,739,969 173,912,695 840,574,444
181,098,322 39,705,089 8,693,175 174,689,212 344,484,442
177,875,949 36,110,085 8,657,016 172,944,034 307,370,817
173,829,479 33,955,122 8,609,723 167,004,466 277,831,351
172,448,526 34,317,691 8,560,602 163,363,846 281,326,258
173,038,019 34,267,121 8,348,094 160,216,418 287,347,704
170,845,283 35,406,145 8,178,091 159,894,731 264,468,080
169,132,822 36,761,696 8,039,558 164,122,146 259,417,565
171,079,322 37,175,067 7,555,549 167,863,999 258,654,781
177,364,956 36,846,528 7,201,169 167,696,916 355,557,732
180,114,983 38,002,633 7,080,565 163,656,513 367,560,731
180,711,072 38,556,642 6,901,700 168,879,180 353,346,664
181,319,851 38,544,865 6,780,678 167,655,658 380,304,748
181,825,856 37,692,634 6,494,375 166,261,121 307,680,918
182,745,080 37,241,670 6,341,091 162.767,154 289,757,639
180,808,823 37,884,128 6,210,404 159,551,150 302,377,276
177,083,295 38,314,206 6,120,252 157,128,301 259,483,221
175,682,421 38,271,202 6,004,177 158,539,308 264,819,856
174,337,384 38,302,826 6,998,914 158,642,825 267,785,773
175,087,485 38,712,397 5,927,071 160,733,496 319,945,652
173,126,387 88,254,427 5,880,623 168,319,544 251,168,769
173,036,336 35,910,227 5,775,188 164,133,549 284,6S4,421
176,208,597 33,746,681 5,700,452 161,173,146 292,211,821
176,559,840 33,156,548 5,706,024 155,368,116 297,384,006
175,305,471 32,874,913 5,613,177 155,950,043 298,936,160
175,713,139 31,620,499 5,545,970 156,588,095 373,755,630
176,748,618 32,030,055 5,475,964 156,671,695 392,404,680
178,477,037 31,989,381 6,456,016 158,110,687 394,814,312
200,028,980 32,018,107 5,457,366 178,538,622 371,510,559
207,679,456 31,014,411 5,414,643 185,576,199 343,263,949
BOSTON BANKS.

B oston B anks .
Date.

Jan.
“
“
“

Loans.

( C apital , Jan., 1863, $38,231,700 ; Jan., 1862, $38,231,700.)
Specie.

Circulation.

5 ,.. 877,339,046 87,672,028 88,190,496
1 2 ,.. 77,427,173 7,751,000 8,373,000
1 9 ,.. 76,624,700 7,710,600 8,199,600
2 6 ,.. 76,354,000 7,710,700 8,008,500




Deposits.

833,372.648
33,063,800
33,382,000
33,847,000

Due
to banks.

Due
from banks.

........................................
17,006,000 13,520,000
16,547,800 13,727,700
16,811,700 13,958,000

318
Date.

Feb. 2
“
9 ;.'!
« 16,..
u
2 3 ,..
Mar,. 2 ,..
tt
9 ,..
M 16 ,..
“ 30,..
April 6 ,..
(1
13,..
« 20,..
“ 2 7 ,..
May 4 ,..
11,..
• tt
18,..
(< 25,..
June 1 ,..
M
8 ...
« 15,..
U
22 ,..
M 29 ,..
July 6 ,..
“ 13,..
U
2 0 ,..
« 2 7 ...
Aug, , 3 ,..
« 10,.'.
(( 1 7 ...
“ 24,..
3 1 ,..
Sept;. 7 ,..
14,..
<C
21,..

Journal o f Banking, Currency, and Finance.
Loans.

Specie.

76,496,800 7,685,0U0
78,421,000 7,707,000
78,431,000 7,794,000
78,782,600 7,624,000
79,127,500 7,553,000
79,274,700 7,682,000
79,636,134 7,609,238
77,935,000 7,572,600
76,933,600 7,703,800
74,551,013 7,812,895
73,459,160 7,799,315
73,558,000 7,838,800
73,218,155 7,854,731
73,062,789 7,847,849
73,068,598 7,794,046
72,874,000 7,777,000
73,424,000 7,751,000
73,592,000 7,738,557
73,237,000 7,730,000
73,351,000 7,697,000
73,421,084 7,683,987
73,548,918 7,744,827
73,485,675 7,774,991
73,421,000 7,684,000
72,850,716 7,811,513
72,390,364 7,793,916
71,997,503 7,798,276
71,860,078 7,813,497
71,447,520 7,780,905
71,478,116 7,752,516
71,717,995 7,637,402
75,599,232 7,591,589
79,595,740 7,595,358

Circulation.

Deposits.

8,865,000 34,076,800
8,074,000 35,178,600
8,001,000 34,903,000
8,002,000 34,965,500
8,001,980 85,245,500
8,225,000 35,215,000
7,780,062 32,956,149
7,593,800 31,604,500
7,963,500 32,687,000
7,762,915 32,494,822
7,278,506 33,209,742
7,040,000 32,781,500
7,433,496 31,949,762
7,688,238 31,309,985
7,167,327 82,192,770
7,011,700 33,000,000
6,913,000 32,575,000
7,030,286 31,728,285
7,109,000 31,477,600
7,844,500 31,355,800
7,040,624 31,477,596
7,473,800 31,509,263
7,608,442 30,277,502
7,401,500 29,287,000
7,240,797 28,011,571
7,317,4112 28,384,096
7,440,212 28,247,266
7,198,917 27,898,073
7,303,757 27,510,154
7,227,704 27,762,955
7,527,036 28,778,498
7,600,556 31,143,588
7,604,161 34,609,214

Due
to banks.

16,889,000
16,932,000
17,070,700
17,331,000
17,523,500
17,340,400
17,230,300
17,074,400
15.444,000
14,557,000
14,132,000
13,803,000
13,237,700
13,147,000
12,863,500
12,787,000
12,735,000
12,626,700
12,235,500
12,504,600
12.388,000
12,233,000
12,193,000
13,802,000
12,950,000
12,655,000
12,822,673
12,765,527
12,662,321
12,614,000
12,379,000
13,424,000
13,565,000

[October,
Due.
from bank

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
12.653,000
11,966,700
11,622,600
11,800,000
11,732,000
11,748,000
10,704,500
10,874,700
10,541,009
10,914,700
10,900,000
10,891,000
10,712,000
10,154,600
9,864,300
9,646,000
10,185,180
9,603,257
9,573,673
9,820,500
10,874,700
11,097,000
11,487,600

PHILADELPHIA BANKS.
P h il a d e l p h ia B a n k s.

Date.
Jan . 5 , . . .
«
i2 ,..,
((
1 9 ,...
<(
2 6 ,..,
F eb
2 ,...
(t
9 ,...
«
1 6 ,...
“
2 3 ,...
M ar. 2
“
9,’ . . . '
u
1 6 ,...
<( 2 3 , . . .
«
3 0 ,. . .
A p r. 6 , . . .
1 3 ,...
C(
2 0 ,...
<(
2 7 ,...
M ay 4 , . . .
11, . . .
(< 1 8 , . . .
“ 2 5 ,...
June: 1 , . . .
“
8, . . .

{C a pital, Jan., 1863, ^11,'740,C'80; 1862, $11,970,180.)

Due
Due
Circulation.
Specie.
D eposits.
to banks. from banks.
Loans.
$
1
,994,92S
$
4
,5
04
,1
1
5
$6,9
48
,7
8
5
$28 ,42 9 ,1 8 9
$ 37 ,679,675 $ 4,5 1 0 ,7 5 0
1 ,848,932
6 ,890,963
28,0 18 ,7 9 2
3 7,533,757 4 ,5 4 4,78 6 4 ,4 5 0 ,6 7 6
2,275,905
4
,5
4
9
,3
6
9
4
,3
8
2.52
0
27,8 77 ,0 6 9
3 7,4 1 6 ,6 9 4
7,0 5 0,84 7
2,638,985
4,2 8 4,94 7
2 8,7 73 ,5 1 7
6 ,755,980
3 7,4 79 ,7 1 2 4,5 7 2,41 9
2,909,857
2 9 ,2 31 ,7 5 3
6,6 9 8,21 0
3 7,268,894 4 ,5 6 2,58 0 4,1 8 1,50 3
2 8 ,0 6 2 ,1 6 4
2 ,518,036
4 ,3 1 9,70 6 4 ,0 3 9,91 8
37,336,367
6,9 5 3,21 5
2,432,073
2 8 ,7 59 ,0 4 9
7,4 5 2,56 3
4 ,2 7 2,34 7
3 ,888,185
37,710,851
2,7 p 3,1 96
3,772,781
2 9,3 42 ,5 9 6 7,4 1 3,24 9
37,7 20 ,4 6 0 4,276,761
2 ,758,852
30,1 78 ,5 1 8
4 ,2 6 7,62 6
3 ,696,097
7,1 8 5,67 0
37,9 01 ,0 8 0
2 .499,139
3 0 ,6 79 ,2 5 9
4,2 4 9,03 5
3 ,6 0 8,87 0
7,1 0 0,25 8
3 8,608,871
1,939,449
3 0 ,5 49 ,5 8 7
4,2 4 7,81 7
3 ,5 3 4 ,8 8 0
7,4 7 6,60 3
39,2 60 ,0 2 8
30,1 06 ,1 3 5
7 ,4 1 8,48 2
1,9 3 5,01 4
3,2 9 5,86 2
3 9,4 5 8 ,3 8 4 4 ,2 4 7 ,6 8 8
6,5 0 4,75 8
2 ,158,007
8 ,3 6 9,19 4
2 9 ,1 71 ,2 8 3
3 8 ,9 3 7 ,6 1 2 4 ,3 1 1 ,7 0 4
2,7 7 0,12 9
5,7 6 8,55 8
2 9 ,5 3 1 ,5 5 9
3 7 ,5 16 ,5 2 0 4 ,3 3 9,25 2
3 ,3 7 4,41 7
3 ,296,685
5 ,9 5 3,80 9
3 ,0 1 4,22 9
30,1 17 ,5 2 7
3 6,2 5 0 ,4 0 2 4 ,3 4 3 ,2 4 2
3 1,0 5 9 ,6 4 4
3,0 1 8,72 7
3 ,185,042
5,3 0 6,80 9
3 6,2 9 5 ,6 4 4 4 ,3 4 3.98 8
2 ,5 5 9,86 8
5 ,4 4 8,12 4
3,078,921
3 1,0 21 ,7 9 9
36,4 82 ,0 5 8
4 ,3 4 6,37 7
2 ,891,087
3 0,859,231
5 ,328,898
2,989,428
3 6 ,5 8 7 ,2 9 4 4 ,8 5 5,32 4
2,5 4 2,79 2
4,975,939
2 ,901,600
4 ,3 5 9 865
3 0 ,9 49 ,7 8 1
3 6,5 93 ,1 7 9
2,866,121 3 1,892,308 4 ,6 4 0,62 3 2,5 3 6,27 9
4,3 5 7,11 9
36,887,301
2 ,4 8 0 ,7 1 4
2,808,109
82,4 55 ,9 5 3
4,6 2 3,39 2
4 ,357,169
37,1 16 ,0 9 3
2,3 6 3,54 8
3 1,888,763
4,7 0 7,27 8
4,357,021
2,706,953
37,1 43 ,9 3 7
2 ,3 1 3,74 4
4 ,6 4 5,71 2
2 ,649,283
31,5 49 ,3 3 9
4 ,357,076
87,1 57 ,7 6 9




1863.]

Journal o f Banking , Currency, and Finance.

Date.

June 15,. a•
“ 22,.
“ 29,. . ,
July 6,. . .
13,. . ,
“ 20,. . .
“ 27,.
Aug. 3,. . .
“ 10,.
“ 17,. . .
“ 81,. . .
Sept 7,. . .
“ 14,. , .
“ 21,. . •

Loans.

Specie.

87,228,627
87,219,216
87,250,665
85,936,811
84,866,842
84,662,966
34,517,347
34,390,179
34,645,243
35,390,179
35,296,376
35,773,596
39,575,410
40,175,688

4,357,025
4,356,744
4,359,543
4,860,745
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

Circulation.

2,621,098
2,596,115
2,556,855
2,564,558
2,507,258
2,482,986
2,418,463
2,417,739
2,380,720
2,353,396
2,292,607
2,258,306
2,223,533
2,224,682

319

Deposits.

Due
to banks.

Due
from banks.

81,648,959
31,298,830
31,466,204
28,504,544
28,701,818
29,931,608
30,448,430
30,799,448
30,518,961
29,959,127
30,195,167
30,654,672
33,626,702
83,039,035

4,914,425
4,868,495
6,116,692
6,060,096
4,784,343
4,580,322
4,805,045
4,963,290
4,740,391
5,161,573
4,551,031
4,574,037
4,997,015
5,079,742

2,892,278
2,065,913
1,820,600
1,961,814
2,580,652
2,981,867
8,084,009
2,772,717
2,538,096
2,158,440
2,219,071
1,997,534
1,801,678
1,802,889

The following is a statement of the amount of United States legal tender
notes held by the Philadelphia banks at the dates mentioned :
June 22..................
“

Aug. 10................... .........
“ 17...................
“ 31...................
Sept. 7...................
“ 14................... .........
“ 21...................

2 9 ......................

July 6...................
“ 13...................
“

2 0 ......................

July 27...................
Aug. 3...................

$7,780,640

7,081,480

BANK OF ENGLAND.

The following comparative table will be of interest, affording as it does a
view of the bank returns, the bank rate of discount, and the price of wheat
in London during a period of three years corresponding with the date of
our last returns, September 9 th :
At corresponding dates with the week ending
September 9, 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...........................

1561.
£20,555,788
4,868,009
12,357,680
10,450,800
17,372.545
8,446,572
13,649,402
4 per cent.
538. Id.

1862.
£21,895,385
8,768,329
13,809,643
11,111,067
19,296,460
11,225,978
17,611,538
2 p. cent.
58s. 4d.

186S.
£21,646,811
6,997,402
12,909,484
11,091,284
18,731,259
9,069,188
15,345,488
4 per cent.
44s. 2d.

Subjoined is our usual table with the returns brought down to Septemh e r 9 th , 1 8 6 3 :
WEEKLY STATEMENT.

Circulation.
Date.
D ec. 1 7 . . . £ 1 9 ,9 3 2 ,3 6 0
a
2 4 . .. .
2 0,150,398
<c
2 0,516,435
3 1 . .. .
J an .
20,9 27 ,9 9 3
7 ....
It
2 1,018,849
14. ..
a
20,893,931
21. ..
u
28. ..
20,7 71 ,2 3 6
F eb. 4 .,. .
2 0,7 09 ,1 5 4
ti
1 1 . ., .
20,4 44 ,4 5 4
“
1 8 . .. .
1 9,916,496
tc
2 5 ... .
19,7 15 ,8 2 8
M ar. 4 . . . .
20,3 22 ,0 5 5
tt
19,801,665
1 1 . ,. .




Private
Public
Coin and
Deposits.
Deposits.
Securities.
Bullion.
£ 8 ,5 0 7 ,1 4 4 £ 1 4 ,0 3 3 ,9 9 4 £ 3 0 ,5 3 9 ,3 6 3 £ 1 5 ,0 3 1 ,6 5 8
8 ,654,499
14,306,497
31,346,731
14,870,795
1 5,469,254 32,4 88 ,0 2 0
8 ,338,717
14,956,421
8 ,782,808
14,393,308
3 2,620,233
14,635,555
16,772,782
4 ,2 8 0,73 0
3 1,165,075
14,102,169
4 ,9 6 5,79 8
14,993,225
3 0,227,086
13,855,849
14,414,763
5,4 1 6,86 3
30,2 38 ,8 6 5
13,611,823
6,351,617
29,9 97 ,2 3 3
13,692,136
13,352,287
6,952,808
1 3,596,356
30,2 88 ,4 0 6
14,070,651
1 3,769,276
7,4 1 3,27 5
29,8 90 ,5 0 3
14,589,222
13,3 67 ,1 5 3
7 ,901,658
14,614,096
2 9,709,079
8,0 3 6,00 3
18,368,086
30,8 80 ,8 0 5
14,504,517
8,6 7 3,89 9
13,282,605
14,3 28 ,1 7 8
31,096,327

Kate o f
Discount.
3 p r. ct.
3
u
3
tc
3
“
4
“
4
5
5
5
4
4
4
4

cc

(4
(4
CC
CC

“
tc

320
Date.
“
1 1 ..
“
2 4 ..
A p r. 1 . .
“
8 ..
“
1 5 ..
“
2 2 ..
“
2 9 .. .
M ay 6 . . .
“ 1 3 ..
“
2 0 ..
“
21 ..
June 3 . .
“
1 0 ..
“
1 7 ..
“
2 4 ..
J u ly 1 . .
“
8 ..
“
1 5 ...
“
2 2 ..
A ug. 5 ..
“
12 .
“
19..
“
26..
S ep t. 2 . .
“
9 ..

Journal o f Banking, Currency, and Finance.
Circulation.
20,012,331
20,136,276
2 0,965,228
21,279,339
21,3 26 ,8 2 0
21,413,226
2 1,452,800
21,376,999
21,2 52 ,9 1 6
2 1,268,815
20,9 09 ,8 1 9
21,009,392
21,080,460
20,655,473
20,525,655
21,738,756
2 2,038,478
22,194,996
22,230,612
22,340,809
2 1,937.198
2 2,003,176
21,699,696
21,920,722
21,646,811

Public
Deposits.
9,343,499
10,364,471
10,107,041
6 ,714,109
5,769,276
6,316,413
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
10,356,373
5,593,834
4,948.458
5,386,948
5,577,268
5,754,863
6,126,66S»
6,713,801
6,818,182
6 ,997,402

Private
. Deposits.
13,003,088
1 2,742,282
1 3,1 7 2 ,0 9 0
1 4,829,832
15,013,391
14,739,897
13,606,939
13,122,087
1 3,727,556
1 3,983,654
13,8 42 ,7 1 8
1 3,896,450
1 3,783,263
18,904,506
13,809,996
1 6,274,739
1 8 ,5 9 5 ,7 1 8
16,381,914
14,675,625
1 8,790,855
13,578,358
1 3,005.322
1 2,806,568
13,261,512
12,9 09 ,4 8 4

Securities.
3 1,4 82 ,1 7 0
31,896,338
32,775,752
30,9 46 ,7 8 4
29,974,677
3 0,182,533
29,994,349
29,718,602
30,2 01 ,1 2 0
3 1,484,815
31,4 12 ,1 9 0
32,389,044
3 3,2 40 ,1 9 2
32,7 50 ,9 5 3
32,756,459
36,490,515
34,647,836
32,052,521
30,975,774
3 0,289,227
29,6 57 ,8 3 3
29,503,127
29,3 22 ,7 5 7
3 0,180,384
29,919,543

Coin and
Bullion.
14,547,812
1 5,025,274
15,141,755
14,963,835
1 6,229,237
15,387,151
15,848,492
15,141,760
14,653,141
14,529,451
14,500,019
14,425,553
14,656,121
14,850,156
1 5,026,118
15,080,271
14,824,969
14,749,876
14,6 20 ,8 7 2
14,843,185
1 5,040,819
15,0 81 ,1 5 2
1 5,309,384
15,4 94 ,2 1 9
15,3 45 ,4 8 8

[October,
Rate o f
Discout.
tt
4
(C
4
it
4
tt
4
It
4
It
3
tt
Si
tt
3
it
3
u
4
4
tt
4
ti
4
tt
4
u
4
tt
4
tt
4
tt
4
it
4
tt
4
«
4
tt
4
it
4
n
4
«
4

FINANCES OF THE CONFEDERATE STATES,
A LETTER FROM SECRETARY MEMMINGER.

*

T r e a s u r y D e p ar t m e n t , C. S. A. )
R ic h m o n d , Aug. 24, 1S63.
[

Hon. R. M. T. H unter, Lloyds, Va. :
S ir : In reply to your inquiries about the finances I send you a con­
densed statement o f the issue of Treasury notes, and of the funding opera­
tions of the Treasury. You will see from this statement that the funding
has been eminently successful ; and you will learn, also, that the amount
of outstanding Treasury notes is still within the limits of the depreciation
which I reported to Congress at the last session. My report then esti­
mated the amount of circulation which the country could probably bear,
at 8150,000,000.
The statement now made shows that the outstanding Treasury notes
used as a general currency amount almost exactly to three times this
amount. But when it is considered that a very large portion o f these
notes are across the Mississippi, it will be apparent that in the Atlantic
States the estimate of three to one is rather over than under the mark.
Two absorbents are now added, which will keep down the excess from
new issues, namely, the tax'es and the sale o f cotton bonds, and when the
tax in kind begins to contribute its portion to the support o f the army,
■ there is every reason to believe that the currency can be well sustained.
It is obvious, from this statement, that the popular notion o f estimating
the value o f the currency by a comparison with gold, is altogether fa lla ­
cious ; for, while the actual currency has only been increased three-fold,
its proportion to gold rates at more than double that amount. The fact
is, as you well know, that, situated as we are, gold is as much a commer­
cial commodity as platina or tin, and its price is governed by the law o f




1803.]

321

Journal o f Banking, Currency, and Finance.

demand and supply. As I have already shown, in the report referred to,
wheat and corn afford much more reliable standards of value, when their
price is not controlled by some local obstruction ; and, by referring to
these, it will be seen that the currency has maintained itself at the ratio
which the outstanding issues indicate. You will perceive by the state­
ment, that, uniting all the various appliances for funding, there has been
funded in bonds, §232,404,670 ; to which, according to estimate, there is
yet to be added about §70,000,000 more, which are yet in the hands of
the Treasury officers to be funded, making, in all, about §302,000,000 ;
add to this §15,442,000, deposited in the five per cent call loan, and we
have an aggregate of nearly $318,000,000 withdrawn from the currency.
The result is certainly very favorable, and shows that the measures
adopied by Congress have been quite as successful as any o f us had an­
ticipated. It is somewhat remarkable that the Yankee Government should
have adopted exactly the same measures for withdrawing their circula­
tion, and according to a statement published in Hunt's Merchants' M ag­
azine, for July, they have funded, in call loans and bonds, not more than
$ 200 , 000 , 000' .
These figures show that there is no reason for distrust as to our curren­
cy ; and if, when Congress meets, you will address yourselves vigorously to
measures which will all restrain its further increase, we shall be fu lly able
to maintain our cause. I would suggest to you two matters for conside­
ration : One is, the export duty, which I proposed; and the other is, a
renewal of the call loan for all Treasurv notes, upon the same principle
with^the six per cent loan, which was reported at the last session.
It is worth experiment to try whether, bv allowing a deposit in the
Treasury, on interest, we may not be able to attract and retain there all
the Treasury notes not actually required for circulation.
Very truly, yours,
C. G. M emminger , Secretary o f the Treasury.
STATEMENT OF OUTSTANDING TREASURY NOTES, AUG. 8, 1863.

Total of all kinds o f General Currency Notes...............
Estimated on hand for cancellation.................................

$523,114,406
70,134,600

Total..............................................................................
And probable beyond the Mississippi.............................

$452,979,806
150 ,0 0 0 ,0 0 0

B alance........................................................................

$302,979,806

• STATEMENT OF BONDS INTO WHICH CURRENCY HAS BEEN FUNDED, INCLUDING
AVAILS OF THE PRODUCE LOAN.

Total of 100 million loan..................................................
Funded since Feb. 20, 1863..............................................
Funded of notes, May 16, 1861.......................................

$100,000,000
124,318,370
8,086,300

Total..............................................................................
On hand, to be funded by estimate.................................

$232,404,670
70,000,000

Total funded................................................................
Five per cent call, partly funded.....................................

$302,404,670
15,442,000

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

$317,846,670




322

Commercial Regulations.

C O M M E R C I A L

[October,

REGULATIONS.

CIRCULAR RELATING TO SMALL PARCELS OR PRESENTS NOT INTENDED FOR
SALE.
T he following extract o f a letter from tlie Secretary o f the Treasury to
the Secretary o f State, dated August 19th, has been sent us for publica­
tion by the Treasury Department, and is directed to the collectors of cus­
toms for their guidance and government:
Treasury Department, August 19, 1863.
*
*
*
I have determined that, in cases where small
parcels shall be sent from Germany, Ireland, or elsewhere, of inherited
objects of affection, or presents, not intended fo r sale, and not exceeding
two hundred dollars in value, the triplicate invoice shall be dispensed
with, inasmuch as such parcels so forwarded, are not to be regarded as
goods, wares, or merchandise, in the contemplation of the 1st section of
the Act of 3d March, 1863, “ to prevent and punish frauds on the rev­
enue;” and the production of an invoice will be regarded by the officers
o f the customs as impracticable within the meaning o f the law and such
parcels shall be entered upon the payment of duty, if dutiable by law.
O f this decision collectors o f customs will be duly advised.
W ith great respect,
S. P . C h a s e , Sec. o f the Treasury.
Hon. W m . H. S e w a r d , Secretary o f State.
Si r :

CIRCULAR TO COLLECTORS OF CUSTOMS AMENDING CIRCULAR OF MAY 23, 1862.
The Secretary o f the Treasury has transmitted to collectors o f customs,
for their information, the following copy o f his letter to the Secretary
o f State, dated August 22, 1863.
In the same circular he directs the
collectors of customs to insert near the end of the second paragraph of
his circular of 23d May, 1862, after the word “ control,” these words,
with or by the consent, permission, or connivance of the owners, ship­
pers, carriers, or consignees t h e r e o f a n d take the security required by
you accordingly.
Treasury Department, August 22, 1863.
S ir : I have the honor to return to you the letter of Lord L y o n s , cov­
ing the complaint of Messrs. T o o t a l , B ro ad h u rst & L e e , transmitted

with your letter of the 7tli inst.
This correspondence was sent to the Collector at New York for his re­
port, of which I send a copy.
The question at issue is the expediency and propriety of the Treasury
instructions to Collector B a r n e y of 23d May, 1862, of which I send you
a copy.
It is difficult to perceive upon what grounds British merchants can claim,
in American ports, any rights not conceded to American merchants. It
may be, however, that some merchants, of every nation, may hesitate to
give the bond required, on the supposition that the last clause of the
second paragraph of the Treasury Circular may impose responsibility for




1863.]

Commercial Regulations.

323

acts of parties not employed by them, and not in any way under their
control.
Such is not the construction given to the requirement in this Depart­
ment; and to remove all pretext of complaint, the Collector o f New York,
and other ports, will be instructed to require only substantial security that
such goods, wares, and merchandise shall not be transported to any place
under insurrectionary control, and shall not, in any way, be used to give
aid or comfort to such insurgents, with or by the consent, permission, or
connivance of the owners, shippers, carriers, or consignees thereof.
This will exonerate exporters, after the goods have arrived at the port
of destination, and have been disposed of, in good faith, otherwise than
in aid o f the rebellion, by the consignees, from all responsibility for the
acts of persons who do not derive their control over the goods directly
from the exporter.
With great respect,
S. P . C h a s e , Sec. o f the Treasury.
Hon. W m. H. Sevakd , Sec. o f State.

CIRCULAR RELATIVE TO INVOICES PRIOR TO JULY 1, 1863.
The following copy o f the letter of the Secretary o f the Treasury to
the Collector at New York, relative to invoices o f goods, wares, and mer­
chandise imported from foreign countries prior to July 1, 1863, is fur­
nished collectors for their guidance and government:
Treasury Department, August 20, 1863.
S i r : I have received your report o f the 12th inst. in reference to the
importation from Brazil in the schoner “ Jessie,” and the question arises,
whether the provisions of the Act of 3d March last requiring triplicate
invoices are applicable to the merchandise exported from Brazil to the
United States prior to the 2d o f July, 1863.
The first section of the A ct provides, that “ from and after the first day
o f July, 1863, all invoices of goods, wares, and merchandise imported
from any foreign country into the United States shall be made in tripli­
cate,” etc. It is further provided in the same .section, “ and no goods,
wares, or merchandise imported into the United States” (as above stated)
“ shall be admitted to an entry unless the invoice presented shall conform
in all respects to the requirements hereinbefore mentioned.” It seems to
me that the first section of the act requires the invoices to be made in
.the form therein prescribed, from and after the first day of July, 1863,
and the invoices must of course be made in the foreign country of ex­
portation previously to shipments. The subsequent provision to which
you refer, though standing by itself, would bear the construction you give
it, yet, taken in connection with the first section, must, it seems to me,
be held to refer to the importation as the act of bringing merchandise
from*the foreign country into the United States, commencing in the for­
eign country and terminating in the United States; and not the mere
bringing within the port o f entry, as an importation under our laws is
technically defined.
With great respect,
S. P . C h a s e , Sec. o f the Treasury.
H ir a m B a r n e y , Esq., Collector, New York.




324

The Book Trade.

THE;

BOOK

[October,

TRADE.

Heat Considered as a Mode o f M otion.

Being a Course of Twelve Lectures, deliv­
ered at the Royal Institution of Great Britain, &c. By J ohn T yndall, F. R. S.
New Y ork : D. A ppleton & Co. 1863.

This is a book that the unscientific as well as the scientific can read with pleasure,
for it is not burdened with technicalities, although relating to the highest department
o f scholastic learning. Works of this kind, adapted to the popular comprehension,
are much needed, and will always be sought after. The late Professor M itchell
was very successful in his attempts to popularize Astronomy, and his lectures and
writings are particularly valuable on that account. We wish that science could alalways be taught in simpler language.. In this course o f lectures, Prof, T yndall has
experimentally demonstrated and reduced to a complete system the dynamic theory
of heat, as opposed to the m aterial theory, until recently accepted by all natural phi­
losophers. It is sufficient for a general comprehension o f this subject, to state that
the former theory supposes heat to be simply a mode of motion among the ultimate
particles of bodies, both requiring and generating a certain amount of mechauical
force in its production ; while the latter regards it as the effect of a subtile calorific
fluid, pervading all matter by insinuating itself between the particles, exerting a force
in direct antagonism’ to cohesive attraction, and constantly seeking an equilibrium.
But there are facts and phenomena in nature which it has hitherto been difficult to
reconcile with either of these theories ; and it is the object of the author, in these lec­
tures, to remove this difficulty so far as the dynamic theory is concerned. That he
has entirely succeeded, we could hardly, with our limited knowledge of the subject,
undertake to say ; and yet the experiments he introduces, and which he has illustra­
ted in this work by handsome plates, seem conclusive as far as they go. Certainly,
this book is a very valuable contribution to the world’s stock of information respect­
ing the nature and laws of Heat, and, if the conclusions are correct, must exert a
great influence on practical science, as applied to the useful arts.
By T homas H. H uxley , F. R. S., F. L. S.,
Professor of Natural History in the Jerrnyn Street School of Mines. New York:
D. A ppleton & Go., 443 and 445 Broadway. 1863.

Evidence as to M an’s P la ce in Nature.

It takes a vast amount of labor to write a book. Those who have tried it know
i t ; those who have not may rest with perfect security upon this statement, without
personally experimenting. Prof. H u x l e y has written, rewritten, punctuated, para­
graphed, corrected, copied,printed, and published a volume of 184 pages, all to ^rrove
that he and George Washington, Napoleon Bonaparte, Alfred the Great, and all the
rest of us, are one with the brutes and descended from apes— Gibbons, gorillas, ourang
outangs, or Chimpanzees—he pleasantly allows us to take our choice.
The thorough absurdity and scientific unsoundness of the argument is too long and
important a topic to be discussed here; but those who are interested in the subject
may find it ably treated in the March, May, and July numbers of the American Journal




1863.]

The Book Trade.

325

o f Science. For our own part, we hardly wonder that a hard worked professor should
look back to that far off time and with envy try to discover his happy ancestors un­
developed and irresponsible, having nothing to do but to swing by their tails and eat
nuts all day.
To be sure, if the theory is proved to be true, things will be slightly reversed; an­
cestral tables will be more mortifying the further back they go, and the old stigma
o f an “ obscure origin” will become an exalted compliment. W e respect the uncon­
querable love of Race, even in monkeys, and eannot but think that one who seeks so
diligently for his own ape-origin deserves to find it. Should the learned professor
ever establish his own pedigree, without break or flaw, we expect that be will send
over the ocean a chart of his genealogical tree, with a sturdy old gorilla at the base,
stout Chimpanzees and ourangs for its lower branches, fine fantastic little baboons
sprouting out on either side, and at the summit a crowning shoot bearing the illus­
trious initials o f “ T. H. H., F.R.S., F.L.S.”
The Thirteenth A n n u a l R eport o f the P hiladelphia B oard o f Trade. Prepared for
the Executive Council, by Loam B lodqet, Secretary. Philadelphia: C ollins ,

Printer, 705 Jayne Street.

1863.

These annual reports of our Boards of Trad e throughout the country always have
in them statistical and other information o f great value, and the Philadelphia report
for the last year shows especial care and labor in its preparation We published last
month in the Merchants' M agazine a very full and valuable account of the iron p ro-'
duction o f Pennsylvania for 1862, and through mistake credited it to a Philadelphia
paper. The matter was really prepared by Mr. B lodget, and will be found in his
report. In fact, every trade and interest that conduces to the prosperity of Pennsyl­
vania appears to have received more or less of his attention, making his yearly review
very complete.
Sights A -F o o t.

By W ilkie C ollins.

Philadelphia.

T. B. P eterson.

As the title indicates, this is an account o f sights seen.by the author on a pedes­
trian tour. Perhaps no more interesting portion of England could have been chosen
than the county of Cornwall for just such an expedition, and the author has improved
all his advantages, and given his experience and descriptions in such a clever, entertain­
ing, and agreeable way as to add greatly to the interest o f the facts he narrates. The
valuable description o f Pilchard Fishing published in this number, will be recognized
as coming from this source.
The A m erican P ublishers’ Circular and L itera ry Gazette, published by G eorge
W . C hilds , Philadelphia, has already become indispensible to the reading public, al­
though it has only reached its tenth number. Full of information upon the very sub­
jects about which we all desire to be informed, and yet, before this, never knew pre­
cisely where to find, it well deserves the favor with which it is being received. W e
wish it all manner of success.

D. A ppleton & Co. will publish, in October, the first number of a Mew A m erican
It will contain the chief regulations of the Post-office, and a complete
list o f post-offices throughout the United States, with other information for the peo­
ple. The work is to be published quarterly, and under the authoriry and sanction of
the Postmaster-general,
P o sta l Guide.

T icknor & F ields have just issued Our Old Home— a series of English Sketches,
b y N athaniel H awthorne .




326

[October, 1863 •

The Book Trade.

N E W BOOKS RECEIV ED , SOME OF W HICH W IL L BE NOTICED H ERE­
AFTER.
By Mrs. H enry W ood, author of “ Verner’s Pride,” “ The
Castle’s Heir,” “ The Chan dings,” (Sic., ifcc. Printed from the Manuscript and ad"
vance Proof-sheets, issued here in advance of the publication of the work in Europe.
Philadelphia : T. B. P eterson & Brothers .

Squire Trevelyn's H eir.

By B. E stvan, Colonel o f Cavalry in the Confederate
New York : D. A ppleton & C ompany , 443 and 445 Broadway. 1863.

W a r P ictu res fr o m the South.

Army.

A Memoir of the Embarkation o f the Sick and Wounded from
the Penin ula of Virginia in the Summer o f 1862. Compiled and published at the
request o f the Sanitary Commission. Boston: T icknor ill F ields . 1863.

H ospital Transports.

Comprising the “ Histories” or “ Chronicle
Plays ” o f Shakspeare, carefully expurgated and revised, with introductory and
explanatory notes, expressly adapted to the use of Schools, Colleges, and the Fam­
ily Reading Circle. By J ohn W. S. H ows, author of the “ Shaksperian Reader,”
&c, &c. New York : D. A ppleton & C ompany . 1863.

The H istorical Shaksperian Reader.

Two Pictures, or What W e Think o f Ourselves and W hat the W orld Thinks o f Us.

By M. J. M cI ntosh, author o f “ Two Lives; or, To Seem and To Be,” “ Charms
and Counter-charms,” &c,, Ac. New York: D. A ppleton cfc C ompany.
A novel of New York and the Arm y, in 1862. B y H enry M or Editor of the New York Atlas, and author of the successful Railroad book,
“ Sprees and Splashes,” Complete in two large volumes, of over five hundred
pages, in paper covers. Price one dollar, or bound in one volume, cloth, for $1 50.
Philadelphia: T. B. P eterson & B rothers, 306 Chestnut St.

Shoulder-Straps.
ford ,

A P ra ctica l Treatise on Business ; or, How to Get, Save, Spend, Give, Lend, and B e ­
queath M oney, with an In q u iry into the Chances o f Success and Causes o f F ailure
in Business. By E dwin T. F reedley . Also, Prize Essays, Statistics, miscellane­
ous and numerous Private Letters from successful and distinguished Men. Thirtyfifth thousand. Philadelphia: J B. L ippincott &. Co.
Opportunities f o r Industry and the S afe Investment o f Capital, or a Thousand
Chances to M ake M oney.

By E dwin T. F reedley .

Philadelphia: J. B. L ippin ­

& Co.

cott

An attempt to Analyze and Discuss the Subject of Money in its most im­
portant practical phases. D. A ppleton & Co. 1863.

M oney.

L ig h t.

By H elen M odet.

1863.

By H enry K ingsley, author o f “ Ravenshoe,” etc.
& F ields . 1863.

A u stin E lliot.
nor

D. A ppleton & Co.

Boston: T ic k ­

W eak L un gs and H ow to Make them S tro n g ; or, Diseases of the Organs of the Chest,

with their home treatment by the Movement Cure. By Dio L ew is , M. D.
fusely illustrated. Boston: T icknor <fe F ields . 1863.

Pro­

A Class-Book in Chemistry, in which the latest Facts and Principles of the Science

are explained and applied to the Arts of Life and the Phenomena of Nature. A
new edition, with over three hundred illustrations. By E dward L. Y oumans, M.
D., author of the “ Chemical Chart,” “ Chemical Atlas,” etc. D. A ppleton ifc Co.
1863.




THE

MERCHANTS’ MAGAZINE
AND

C 0 M M E R C IA L

REVIEW.

E stab lish e d .In ly , I S 30.

E D IT E D

W ILLIAM

VOLUM E X L 1 X .

CONTENTS

BY

B. D A N A .

OCTOBER, 1863.

OF

No.

IV.,

A rt.

NUMBER IV .

VOL.

XL IX.
page

I. MERCANTILE BIOG RAPH Y.
JOHN GRIGG, OF P H ILA D E L­
PH IA. W ith a P o r t r a it ................................................................................ 249
II.

R U SSIA AND THE UNITED STATES— F U T U R E EM PIRES........ 262

III. THE H ISTO RY AND PRINCIPLES OF MONEY. B y R ichard S ulley , of I ndiana ................................. ’ .................................................................... 261
IV . BOOK-KEEPING; I ts U se, N ecessity,

and

S implestM ode................... 275

Y . THE TELEG RAPH TO IN D IA ...................................................................... 281
V I. NEGOTIABLE P A P E R ; O r , N otes of H and and B ills of E xchange .
C ommercial L aw, N o. 7 .................................................................................. 283
V II.

V III.

CONSIDERATIONS CONCERNING THE EFFECT AND PRO BA­
BLE CONSEQUENCE TO RESU LT FROM THE ESTABLISH ­
MENT OF BANKS UNDER THE ACT TO PRO VID E A NATION­
A L CURRENCY. S hould such B anks be A dmitted to the C lear ­
ing -house A ssociation ?..................................................................................... 290
COMMERCIAL CHRONICLE AND R E V IE W . Improved B u sin essEffect on Paper— Accumulation of Money— Increase of Deposits— Di­
minished Stocks— More Paper Less Capital— Larger Imports— Ware-




328

Contents o f October N o.. 1863.
)
house— Large Importation— Hood Crops— Lessened Exports —Specie—
Exports of—Exchange— Stocks Imported— Stock Speculation— Govern­
ment Loan— Interest-bearing Legal Tender Notes—Effect o f........... . . . 296

IX .

THE PILCH A RD FISH E R Y IN CORNW ALL.

By W ilkie Collins. 302

X . A Y E A R ’S R A IL W A Y W O RK IN G REAT B R IT A IN ....................... 308

J O U R N A L OF B A N K I N G ,

CURRENCY,

AND F I N A N C E .

Bank Items and Bank Returns....................

309

New York Banks........................................................................................................

317

Boston Banks...................................................................................................................... 317
Philadelphia Banks........................................................................................................... 318
Bank of England....................................................................

319

Weekly Statement............................................................................................................ 319
Finances of the Confederate States—Letter from Secretary Memmingef

COMMERCIAL

.........320

REGULATIONS.

Circular Relating to Small Parcels or Presents not Intended for S a le ................. 322
Circular to Collectors o f Customs Amending Circular o f May 23, 1862............... 322
Circular Relative to Invoices Prjpr to July 1, 1863................................................... 323

T II E B O O K

TRADE.

Notices of New Publications in the United States




324