FOOTNOTES:

FOOTNOTES:[A]Thus the London merchants dispense with the care, trouble, and expense of a money-chest on their own premises, and all money operations are transacted by a small number of bankers at theClearing House. The amount of these transactions often rises to fifteen millions sterling [a day], independently of those which are not strictly commercial, and of those of the retailers, which do not pass through the hands of bankers. SeeBabbage's Economy of Machinery.[B]The whole number of passengers to and from Calais, through which most of the travellers between England and France pass, is only about forty thousand yearly. This is not more than the number passing between Havre and New York.[C]It is estimated that 25,000 vessels enter the port of London yearly.[D]50,000 gallons.

[A]Thus the London merchants dispense with the care, trouble, and expense of a money-chest on their own premises, and all money operations are transacted by a small number of bankers at theClearing House. The amount of these transactions often rises to fifteen millions sterling [a day], independently of those which are not strictly commercial, and of those of the retailers, which do not pass through the hands of bankers. SeeBabbage's Economy of Machinery.

[B]The whole number of passengers to and from Calais, through which most of the travellers between England and France pass, is only about forty thousand yearly. This is not more than the number passing between Havre and New York.

[C]It is estimated that 25,000 vessels enter the port of London yearly.

[D]50,000 gallons.

LIVERPOOL AND THE RAILROAD.

Liverpool, Nov. 7, 1833.

I have just come back from Manchester by the railroad, which is a fine piece of work; I know of nothing that gives a higher idea of the power of man. There are impressions which one cannot describe; such is that of being hurried along at the rate of half a mile a minute, or thirty miles an hour (the speed of the train as we started from Manchester,) without being the least incommoded, and with the most complete feeling of security, for only one accident has happened since the opening of the road, and that was owing to the imprudence of the individual who perished. You pass over and under roads, rivers, and canals; you cross other railroads, and a great number of other roads, without any trouble or confusion. The great forethought and spirit of order which in England they suck in with their mothers' milk, preside in every part, and make it impossible that the trains should fall foul of each other, or that the cars should run down unlucky travellers, or the farmers' wagons; all along the route are gates, which open and shut at the precise momentof time, and watchmen on the look out. How many persons in France would be benefitted by this short trip, did it serve only as a lesson of order and forecast! And then the Mount Olive cut is as well worth seeing as Roland's Breach; the Wapping tunnel will bear a comparison with the caves of Campan; the dike across Chat Moss seems to me as full of interest as the remains of the most famous Roman ways, not excepting even the Appian itself; and there is a column, which, though only a chimney for a steam-engine, is not, perhaps, less perfect in its proportions than Pompey's Pillar. Many tourists, even persons who have not been made weary of sight-seeing in Switzerland and Italy, would find Chester Bridge, which is not, indeed, on the road, but is nevertheless very near it, quite as worthy of a visit as the Devil's Bridge; not to mention that the burning cinders which the engine strews along the route, might suggest to the traveller, without any great stretch of fancy, the idea of being transported in a fiery car, certainly the most poetical of all vehicles.

Those who doubt the policy of introducing railroads into France, and think it prudent to wait for more light, cite, among other arguments, the experiments continually making in England to apply locomotive engines to common roads, the success of which, they think, would save the expense of rails. There is no doubt that railroads, like every other new invention, are susceptible of improvement; but they will always be expensive, and while other nations keep up suchschoolsas the Manchester and Liverpool railroad, and we stand looking on with folded arms, we shall soon find ourselves, by excess of caution, fallen behind all Europe in manufactures and commerce. As for the steam-engines of Gurney, Dance, or anybody else, there is no hope that they will enable us to save the expense of rails. I think it, indeed, very probable that engines may be made to take the place of horses on roadskept in such a state as the English highways; but upon any road whatsoever, and whatever motive power is employed, engines or horses, in order to reach a great speed, from twentyfive to thirty miles an hour, for instance, it is absolutely necessary to cut through hills, and to fill up or bridge over the valleys, just as is done for railroads. Besides this great speed forbids the free circulation of vehicles, and makes it necessary to avoid the level of the frequented routes, and to pass over or under them by means of tunnels or bridges. None of the inconveniences, or liabilities of railroads would be avoided by this system; the expense would be almost the same, for the most costly portion of the work in railroads is the cuts and embankments, the bridges and viaducts; the iron required for the rails forms less than one-third of the expenditure. The expenses of superintending the routes would be the same. Besides, the road once graded, there would be a great gain in laying rails, that is, in making a complete railroad, however little might be the amount of transportation; for on a Macadamised road the force of friction is ten times that on iron rails, so that the use of these new locomotive carriages can never supply the place of railways.

The correctness of these views is proved by what is now doing in England; while the new steam carriages are getting ready for regular service, railroad companies are already at work or are organizing in all quarters. Two works are now in progress which will connect Liverpool with London, by way of Birmingham; the whole length will be one hundred and ninety-five miles. Although a trial of the new carriages is making on the Birmingham road, shares in the railroad between that town and London are at a high premium. Another company is preparing to construct a railroad from London to Bath and Bristol, a distance of one hundred and fifteen miles; companies are also formed for connecting London with Southampton, onthe Havre route to Paris, and with Brighton, on the Dieppe route; other shorter works are projected. It is not that the experiments of Gurney and Dance are unknown or slighted; on the contrary, their importance is fully felt; the newspapers are full of them, and they even excite some enthusiasm. In this country, where it is a settled maxim that the labourer is worthy of his hire, I saw vessels all along the road which had been gratuitously brought and filled by the inhabitants for the use of one of these steam-carriages; unluckily the carriage did not arrive when it was expected; it had got out of order, as it too often does.

The Liverpool and Manchester railroad owes its brilliant success to the substantial and permanent nature of the interest which binds together the two towns. It would be impossible to realize a more complete division of labor; Manchester, with the country twenty miles round it, is nothing but a workshop; Liverpool manufactures nothing, but merely sells what her neighbours produce. Liverpool is not, whatever the guide book may say, another Venice, rising from the waves; it is a counting-house, and nothing but a counting-house, though on a vast scale, and under the most perfect regulations, of any in the world. The business is all done in a space smaller than thePlace du Carrousel, where are the handsome Exchange, the Town House, and all the banking houses, &c. At four or five o'clock each one shuts up his cell (for the offices deserve this name), and retires to his house or his country seat, for many of the residences are on the other side of the Mersey. Liverpool and Manchester are surrounded by a double and three fold series of canals; the Duke of Bridgewater's canal, the Leeds and Liverpool, the Sankey, Leigh, Bolton and Bury, Mersey and Irwell canals, without taking into account the rivers Irwell, Mersey, and Weaver, which though small, form fine bays attheir mouths, and are more easily and regularly navigable than our great rivers, while the navigation is carried on with a promptitude and despatch wholly unknown in France. Since the peace these two towns have enjoyed such a high degree of prosperity, that ten years ago these means of communication, with the addition of a fine road, were found to be insufficient. The counting-house and the manufactory wished to be nearer to each other; accordingly, on the 10th of May, 1824, a memorial, signed by one hundred and fifty merchants, declared the necessity of new routes; and a railroad was decided on. The work was begun in June, 1826, and the road was opened in due form, on the 15th of September, 1830. A tunnel is now constructing, one mile and a quarter in length, which will carry the railroad into the heart of the town, and will cost about 800,000 dollars.

The chief article of English commerce, that in which it has no rival, and which opens all the ports of the world to English vessels, is cottons of all descriptions. The value of the produce and manufactures annually exported from the United Kingdom, during the last ten years, has averaged 190 millions of dollars.[E]That of cottons alone has ranged from 80 to 90 millions, and the greater part is made in Manchester and the vicinity.[F]This single fact would sufficiently explain the commercial importance of Liverpool; add to this that Liverpool is in the neighbourhood of the founderies and forges of Staffordshire and Shropshire, and the manufactories of Birmingham andSheffield; that the diminished width of the island, in the 53d degree of latitude, enables her to reach out her hands at once to the eastern and western coasts; that she is the centre of the business between England and Ireland; that she approaches, at the same time, Scotland and Wales; that she is the head quarters of steam navigation in England, and it will be seen at a glance that Liverpool is the seat of a prodigious commerce, inferior only to that of London. Eleven thousand vessels measuring 1,400,000 tons, enter her nine docks every year; two-fifths of the whole exports of England are shipped hence, and more than one-fifth of the British customs duty, or nearly 20,000,000 dollars (equal to the total sum of the French customs), are collected here. Since the modification of the East India Company's charter, the Liverpool merchants flatter themselves with the hope of securing a great part of the India trade, which has hitherto been monopolized by London; they aspire to rival the commerce of the capital, and it must be confessed that they are taking the right road to success.

In tracing the history of Liverpool, Manchester, or any other English town, we are struck with a fact which is full of good omen for France; it is this, that a people never engages heartily and successfully in commerce and manufactures, until it feels itself safe from civil or religious despotism; but once assured on that point, it moves rapidly and right forward in its industrial career. So long as England was restrained in her franchises or her faith, she was possessed with one idea, how to throw off the yoke; once freed from this care, she has achieved in the different branches of industry what no nation has ever done before. In the beginning of the last century, not long after the expulsion of the Stuarts, when Liverpool had only 5,000 inhabitants, with no commerce but a feeble coasting trade, some of her merchants conceived the idea of competing with Bristol, which then monopolized the West Indian trade. Bristol exported to America the products of the fisheries in the German Ocean, and some fustians and checks manufactured in Germany, and the Liverpool adventurers took cargoes of Scotch stuffs; but the attempt was unsuccessful, the Scotch goods were of inferior quality. Manchester then relieved them from this difficulty; there were already some manufacturers in that place, who imitated and surpassed the German articles, and thus provided, the merchants of Liverpool were able to sustain a competition with those of Bristol. The smuggling trade with the Spanish colonies, and the slave trade, undertaken in competition with Bristol, continued to enrich Liverpool and consequently Manchester. In 1764, when Bristol fitted out 32 ships for Africa and 74 for America, Liverpool ran 105 to the former and 141 to the latter; in the same year 1589 vessels entered the port of Liverpool, while only 675 arrived at Bristol. At present Bristol is a second-rate mart compared with Liverpool; not that the former has declined; on the contrary, it is a wealthy city, with a trade tenfold what it was a hundred years ago. But in the midst of the general progress, Liverpool has advanced at high speed. It now contains 180,000 inhabitants, or, including the suburbs, 225,000, without reckoning the floating population of strangers and sailors. During the siege of Calais, when Edward III. collected all the strength of England, this town found it difficult to furnish one vessel, carrying six men; in 1829, it owned 806 vessels of 161,780 tons burthen, manned by 9,091 sailors. (See Note 4, at the end of the volume.) During the wars of the French Revolution, Liverpool was able to bear her share of the burdens of the country, and to spend 170,000 dollars annually in works of public utility and in embellishing the town. In 1797 she volunteered to raise a troopof horse and eight companies of foot at her own charge; in 1798 she raised a regiment of volunteers and the sum of 80,000 dollars, and in 1803, when Napoleon threatened England with invasion, two regiments of infantry and 600 artillerists. In the same period a host of useful and charitable institutions were founded by subscription, and the Exchange was built at the cost of 600,000 dollars. All this is the work of one century; hardly had James II. reached Saint Germain, when the first dock in Liverpool was opened; within thirty years the Mersey and Irwell were canalled. It was the same throughout England. We must not exaggerate and abuse historical parallels, but, unless we shut our eyes, it is impossible not to perceive a striking analogy between the state of England after the fall of the Stuarts, and that of France since 1830. With both people there is a feeling of profound security in regard to their liberties, a deep conviction that they have gained a decisive victory, and that they have nothing to fear from the encroachments of the civil power or of a religious corporation; the same wish to see political reforms gives rise to substantial and palpable improvement in the condition of the people, and the same disposition on the part of the government to enlighten and realize the popular will.

The old dynasties of England and France fell in consequence of their efforts to give political power to the clergy, rather than from any attempt to restore the feudal system with its brutality and its rapacity; for the deposed princes themselves were neither rapacious nor violent. The English revolution, however, was far from giving birth to irreligion; Liverpool,—which is, so to speak, of to-day, which bears the stamp, not of England as she was in the sixteenth or the fourteenth century, but of England as she was in the eighteenth century, as she is in our own time,—Liverpool is a proof of this. There is no townin France which numbers as many churches as Liverpool, where there are thirty-seven of the establishment, in addition to forty-three dissenters' chapels and meeting houses, Presbyterian, Baptist, Methodist, Unitarian, Quaker, Jewish, and Roman Catholic; the last have here five chapels. Most of these have been built since 1750, and nearly one half since 1800; I have a list under my eye, and the dates are 1803, 1810, 1813, 1814, 1815, 1815, 1815, 1816, 1821, 1826, 1826, 1827, 1827, 1830, 1831. Are we to believe that this analogy will hold good on our own soil, and that as she grows rich by industry, France will return to the religious sentiment? I wish it, I hope it; we are already past the time when atheism was fashionable in France; it will not, however, be under the flag of the Anglican church, or of any other protestant sect that France will rally; she must have a more imposing and pompous worship.

FOOTNOTES:[E]The annual exports of France are little more than half this sum. (See Note 3, at the end of the volume.)[F]The population of Lancashire, in which are situated Liverpool and Manchester, increased, between 1801 and 1831, from 672,731 to 1,336,854, that is, it doubled. The increase of population in the rest of the United Kingdom was only fifty per cent.

[E]The annual exports of France are little more than half this sum. (See Note 3, at the end of the volume.)

[F]The population of Lancashire, in which are situated Liverpool and Manchester, increased, between 1801 and 1831, from 672,731 to 1,336,854, that is, it doubled. The increase of population in the rest of the United Kingdom was only fifty per cent.

WAR OF THE PRESIDENT OF THE UNITED STATES UPON THE BANK.

New York, January 1, 1834.

This country is now in the crisis of a high industrial fever, which has assumed a political character, and is of a very serious nature; for the industrial interest, in this country, is the most important. Last year, when the dispute between the Northern and Southern States, relative to the tariff was settled, (see Note 5, at the end ofthe volume,) the wise and prudent thanked God, that the danger, which had threatened their country, had been averted; there seemed to them nothing further to obstruct its triumphant career of conquests over nature, with an ever accelerated rapidity and increased success. A series of causes, to appearance of slight moment, has changed these hopes into fears. Some trifling circumstances revived the old quarrel between the democratic party, to which the President belongs, and the Bank of the United States, and both sides grew warm. (See Note 6, at the end of the volume.) President Jackson, a man of good intentions and ardent patriotism, but too hasty towards those who venture to contradict him, declared a deadly war against the Bank, and pushed it with all the energy and fury, in the same cut-and-thrust style, that he had the war against the Indians and English twenty years before. He set his veto to the bill that had passed both houses of Congress, renewing the Bank charter, which was about to expire in three years. Not satisfied with this blow, he withdrew from the hands of the Bank the public money, which, by the provisions of its charter, had been deposited in them, and which gave it the means of very materially extending its operations; for the excess of the deposits over the exigencies of the government amount to not less than ten millions. The Bank, which had paid to the government a bonus of 1,500,000 dollars for the privilege of being the depository of the public funds, cried out loudly against this measure, and with good reason, for no one denies, that no institution in the union is better able to meet all its liabilities. It has reduced its discounts, first, because the removal of the public deposits has diminished the amount of specie in its vaults, and also, as it declares, whether right or wrong, because its very existence being threatened by the President's veto, it is prudent to restrain the sphere ofits operations, and to prepare in time for the final settlement of its concerns. As this institution takes the lead in the financial world, the other banks, even those to which the public deposits have been transferred, have been obliged, in their turn, to restrict their operations. Not only are they afraid to extend their discounts in proportion to the amount of these deposits, but they are obliged to contract them, because they find themselves, as objects of the favour of government in this respect, in a state of hostility with the Bank of the United States, and it is necessary to be on their guard in the presence of so formidable an adversary. Thus are the sources of credit suddenly dried up. Now credit is the life-blood of the prosperity of the United States; without credit, the populous towns which are springing up on all sides, as if by magic, the opulent States, which, far away from the Atlantic and beyond the Alleghanies, stretch along the Ohio and the Mississippi, would become a solitary wilderness, savage forests or pathless swamps. The city of New York alone has twenty banks, the annual average discounts of which, during the last eight years, have amounted to one hundred millions. At Paris, where the transactions are certainly more extensive than in New York, the discounts of the Bank of France, in 1831, amounted to 223 million francs, and in 1832 to 151 millions.[G]The amount of the discounts of the Philadelphia banks, in 1831, was 150 millions. A general shock to credit, however transient, is here more terrible than the most frightful earthquake.

If I did not fear to lengthen out this letter beyond measure, I would give some details concerning the strugglebetween the two parties, concerning their tactics and their measures in Congress and out of it, concerning Mr Clay's speeches and General Jackson's home thrusts. But I think it more important at present, to call your attention to the part which the Bank of the United States has played since its establishment, and to the causes which stirred up against it that mass of hatred and distrust, from which General Jackson derives confidence in his measures. For it is not merely his own dislike that he gratifies; from the last elections, which in almost all the States are based on universal suffrage, it is plain that the numerical majority of the population is, at this moment, opposed to the Bank.

The Americans had already used and abused systems of credit while under the English rule. As soon as they had achieved their independence, they became bolder in their enterprises, more sanguine, or, if you please, more rash in their speculations. They stood in great need of credit; the number of banks was multiplied, and many abuses crept in. The State legislatures made no difficulty in granting bank-charters to whoever asked for them, and in this respect they have not changed their practice. If they imposed some restraints, they had no means of ascertaining or securing their strict observance. The banks, therefore, often issued an amount of bills wholly disproportionate to their real capital, not merely twice or thrice, but ten times the value of their specie and other means. The originators of the bank often chose themselves directors, and discounted no paper but their own, or rather they lent to themselves the whole circulation of the bank, on the bare deposit of the bank shares. This was an ingenious process to enable whoever pleased to coin current money, without ingots of gold or silver. The mismanagement of these banking companies has sometimes been such, that instances have occurred where the officers of the bankhave, on their own authority, opened a credit for themselves, and generally admitted their friends to share in the privilege. Thus it was discovered, that the cashier of the City Bank in Baltimore had lent himself 166,548 dollars, and had made loans to one of his friends to the amount of 185,382 dollars; all the other officers had taken the same liberty, with the exception of one clerk and the porter.

The banks abusing the privilege of issuing bills, that is to say of making loans, individuals abused the privilege of borrowing; hence mad speculations, and consequently losses by the lender and borrower. The banks cloaked theirs by new issues of paper, individuals theirs by new loans; but there were many failures of speculators, and some of banks. The latter excited the public indignation without reforming any one. The honest and moderate working classes, the farmers[H]and mechanics, who found that in the end they were the dupes of the speculators, since by the depreciation of the paper money, which they had taken as so much specie, they came in for a share of the loss, but had no part in the gain, that is, in the dividends, conceived a violent hatred against the banking system. To this particular cause of dislike, was added that aversion which may be found in Europe and everywhere else, felt by persons of methodical habits, gaining little by hard labour, but gaining regularly, against those who are impatient to make their fortune, and to make it at all events, and who waste what they make in the most unbounded luxury and by the most foolish enterprises, in less time than they have been in acquiring it. Then there was the natural jealousy of simplicity against cunning, of slow and heavy minds against the shrewd penetration of others. Therewas also that suspicious distrust of all new influences, and all power that aims to strike its roots deep, a distrust, which is essential to the American, and which is the source, explanation, and safeguard of his republican institutions. In short, in 1811, when the old Bank of the United States, which was on a much smaller scale than the present Bank, petitioned Congress for a renewal of its charter, an appeal was made to the farmers and mechanics, and, as at the present day, the hobgoblin ofa new aristocracy, and the worst of all, an aristocracy of money, was summoned up; the petition was not granted.

Soon after, in 1812, war broke out between England and the United States. The natural effect of war is to diminish confidence, to make the merchants timid, speculators cautious. Most of the banks, having been managed with little prudence in better times, were soon unable to meet the call for specie by the public; they solicited and obtained from their respective legislatures leave to suspend specie payments. Their bills had a forced circulation. At the peace of 1815 the banks were not able to resume specie payments, and the system of inconvertible paper money was persevered in. Imagine then two hundred and forty-six classes of paper money,[I]circulating side by side, having all degrees of value, according to the good or bad credit of the bank which issued them, at 20 per cent., 30 per cent., or 50 per cent. discount. Gold and silver had entirely disappeared; there was no longer any standard of price and value; the amount of bills in circulation had become prodigious.[J]To the bills of the banks was added a great amount of individual obligations of still less value, issued by private persons as suited their wants, and which circulated more or less freely in theneighbourhood. It was a frightful scene of confusion, a Babel, where all business became impracticable from the utter impossibility of the parties understanding each other.

It was now felt that, to restore order in the bosom of this chaos, there was needed a regulating power, capable of commanding confidence, with ample funds to enable it to pay out specie freely, and whose presence and, in case of necessity, whose authority, should serve to recall the local banks to their duty. In 1816, the present Bank of the United States was, therefore, chartered by Congress for a term of 20 years, with a capital of 35 millions, and it went into operation on the 1st of January, 1817. The seat of the mother-bank is Philadelphia, and it has 25 branches scattered over the Union. By its interference and assistance specie payments were resumed by the New York, Philadelphia, Baltimore, Richmond, Norfolk Banks on the 20th February, 1817, and in course of time all the other Banks followed the example. This resumption of specie payments was, first for the banks and then for individuals, the signal, the occasion, the rule of a general settling up of old accounts. As there had been much prodigality, unsuccessful speculations, and dead loss, accumulated through a period of 20 years, there was now a complete breaking up; many banks failed or suspended their operations, and from 1811 to 1830, 165 banks were reduced to one or the other of these alternatives. This state of things lasted three years; they were three years of crisis, three years of suffering for industry, that is, for the people of the United States; for this people is identified with its commerce. The trials of this period have left a deep and lasting impression. Hatred of speculators and of the Banking system has taken root in the hearts of the mass of the people, and now springs up in hostility to the Bank of the United States, which, in the eyes of the multitude, is the representative of the system, although it is itselfinnocent of the mischief, and can alone prevent its recurrence.

The antipathy of the greatest number against the banks has then a reasonable cause, but it is not, therefore, any the less blind and unjust. They see nothing but abuses, and shut their eyes against the advantages. The great extension of credit, which resulted from the great number of banks, and from the absence of all restraint on their proceedings, has been beneficial to all classes, to the farmers and mechanics not less than to the merchants. The banks have served the Americans as a lever to transfer to their soil, to the general profit, the agriculture and manufactures of Europe, and to cover their country with roads, canals, factories, schools, churches, and, in a word, with every thing that goes to make up civilization. Without the banks, the cultivator could not have had the first advances, nor the implements necessary for the cultivation of his farm, and if the credit system has given facilities for stock-jobbing to speculators, it has also enabled him, although indirectly, to buy at the rate of one, two, or three dollars an acre, and to cultivate lands, which are now, in his hands, worth tenfold or a hundred fold their first cost. The mechanics who attack the banking system, forget that they owe to it that growth of manufacturing industry, which has raised their wages from one dollar to two dollars a day. They forget that it furnishes the means by which many of their number raise themselves to competence or wealth; for in this country every enterprising man, of a respectable character, is sure of obtaining credit, and thenceforth his fortune depends upon his own exertions.[K]

At the end of 1819, commerce revived, the financial system of the United States seemed settled on a sure basis. Since that time, some shocks have been felt, as in 1822, and in 1825, the latter the reaction of the great English crisis, but in both cases the storm soon passed away. The root of the evil was struck on the day that the Bank of the United States went into operation. This great establishment, which committed some errors at first and paid the penalty, has for a long time been conducted with the most consummate prudence. Most of the leading commercial men, that is to say, most of the talents, of the country are attached to it as directors, and its foreign correspondents or associates are the houses whose credit is most firmly established, such as the Barings of London, and the Hottinguers of Paris. It exercises the necessary control over all the local banks, obliges them to restrain their emissions by calling upon them for specie, or by refusing to receive their bills when the issues are excessive. It was by its agency that the currency of the United States was established on so large a basis, that, in 1831, the banks were able, without any effort, to discount the amount of 800,000,000 dollars, in the principal cities of the Union, or 1,100,000,000 for the whole country.

Now, this state of prosperity seems to be coming to an end. Here, in New York, the banks have ceased to discount, and on good paper, for two or three months, 15, 18, and 24 per cent. per annum have been paid, the usual rate of the Bank of the United States, and of most of the local banks, being 6 per cent. At Philadelphia, 18 per cent. per annum has been given on excellent paper at short dates. At Baltimore, merchants of great wealth have been obliged to stop payment. Nobody buys; nobody can sell. Orders for foreign goods are held back; and as every body here is engaged in business, this state of things threatens all interests, is the subject of all conversations, of all writing, and of all thoughts. God grant that the sight of the impending danger may calm the passions, and that the good sense of the community may banish empty prejudices and false fears! God grant that both parties may forget their mutual animosities in their anxiety for the common welfare! This should be our prayer, not only for the sake of the destinies of this great nation, but also because our silk manufacturers and the owners of our vineyards, will pay a part of the expenses of the campaign against the banks in general, which the radical party is about to open, by a mortal contest, with the Bank of the United States.

FOOTNOTES:[G]The maximum of the discounts of the Bank of France was in 1810, when it amounted to 710 million francs. In 1813, they were 640 millions, in 1826, 689 millions; at these two periods the Bank made a great effort to sustain commerce. It had less courage in the crisis of 1831-32.[H]The Americans have retained the English wordfarmer, which properly signifies one who cultivates a hired soil,fermier, although among them the cultivators are proprietors.[I]The number of banks at that time.[J]There was more paper in circulation in 1816 than in 1834, when the extent and value of business were very much greater.[K]The mechanics and farmers have no credit open at the banks, but the traders from whom they buy their tools, implements, raw material, and provisions, having that advantage, are able to deal with them on favourable terms; the farmer and mechanic are thus benefitted indirectly, if not immediately, by the banks.

[G]The maximum of the discounts of the Bank of France was in 1810, when it amounted to 710 million francs. In 1813, they were 640 millions, in 1826, 689 millions; at these two periods the Bank made a great effort to sustain commerce. It had less courage in the crisis of 1831-32.

[H]The Americans have retained the English wordfarmer, which properly signifies one who cultivates a hired soil,fermier, although among them the cultivators are proprietors.

[I]The number of banks at that time.

[J]There was more paper in circulation in 1816 than in 1834, when the extent and value of business were very much greater.

[K]The mechanics and farmers have no credit open at the banks, but the traders from whom they buy their tools, implements, raw material, and provisions, having that advantage, are able to deal with them on favourable terms; the farmer and mechanic are thus benefitted indirectly, if not immediately, by the banks.

DEMOCRACY—THE BANK.

New York, January 11, 1834.

The financial crisis brought on by the quarrel between the President and the Bank, has not become more serious; there is a great scarcity of money, that is, a great diminution of credit, but the failures are not yet numerous or considerable. The last arrivals from Europe have brought us the news that several of the trades in Paris and at Lyons have refused to work. What is taking place here in regard to the Bank, is analogous to what is passing in France among the tailors, bakers, and carpenters, and what occurs daily in England among the manufacturing operatives. In Europe, and particularly in France, it is the rising of a democracy or rather a radicalism, which isyet in embryo, and which, if it please God, will never come to maturity. In America, it is the despotic humour of a full grown democracy, passing more and more into radicalism, the longer it rules without a rival and without a counterpoise.

It seems to me improbable that the journeymen carpenters, tailors, and bakers of Paris, should ever give the law to their masters. Among us, the middling class (bourgeoisie) is beginning to feel that it is its duty to improve the condition of the working class. It has the authority, but it is conscious that the people has the physical force. The people has counted its own ranks and those of thebourgeoisie, but it feels that it is not enough to have the number; it sees that it has nothing to expect from violence, and that it can back its friends only by improved habits of order and morality. On both sides their reciprocal rights are mutually acknowledged; each fears and respects the other. Here, on the contrary, it is perfectly natural that the democracy should rule the capitalists, merchants, and manufacturers; it possesses at once the physical force and the political power; the middling and upper classes inspire it neither with fear nor with respect. The equilibrium is gone; there is no guarantee against the popular caprice in the United States, but the good sense of the people; it must be allowed that this good sense is quite extraordinary, but it is not infallible. A popular despotism is as easily deluded by flatterers, as any other despotism.

The Bank of the United States is at this time experiencing the truth of this observation. I have already alluded to some of the crying abuses which have excited a violent hatred against the banks in general, although without the aid of the banks it would have been impossible for the United States to have increased in population, wealth, and territory as they have done. These abuseswere and are the acts of the local banks, and not of the Mammoth Bank. On the contrary, the latter, by the control which it exercises over the local banks for its own security, checks and limits these abuses, if it does not completely prevent them. The legislatures of the different States have been repeatedly called to deliberate on the question of abolishing all banks and breaking up the banking system; but they have generally thought, and justly, that the remedy would be worse than the disease. They have attempted to cure the disorder by restrictive provisions in the charter of new banks. The State of of New York, in 1829, embraced the whole subject in the Safety-Fund Act, which established a mutual supervision of the banks over each other, under the direction of the Bank Commissioners, and creates at their common expense a safety fund, designed to indemnify the public in case of the failure of any one of the banks. But these measures of repression or prevention have generally proved inefficacious, either from a defect in the means of coercion possessed by the government, or from a reluctance to use the powers conferred by the laws.

In their report of the 31st of January, 1833, the New York Bank Commissioners urgently call the attention of the legislature to the serious dangers which may result from these institutions as they are now organized, particularly in the country, and to their excessive issues in proportion to the small quantity of specie in their vaults. With two millions in specie, the banks of the State had, at that time, a circulation of above twelve millions. But this report itself proves, that the commissioners did not dare to fulfil the duties imposed on them by the Safety-Fund act; they had the authority to shut up the offending banks. Their warnings have not prevented the legislature from chartering new banks by the dozen. This year it will have to act on 105 petitions for charters, thatis, eighteen more than the actual number of banks in the State. To be sure in the present instance, thelet aloneprinciple will probably be violated, for the Governor's Message of January 7, 1834, urges the two houses to arrest the flood. This Bank mania, as Jefferson called it, is created by the profits of banking, which is, and more especially was, before the institution of the Bank of the United States, the best kind of speculation, exactly in the ratio of the abuses attending it.[L]

In the local banks, especially in the country banks, the chief aim of the president and directors is, at all events, come what may, to make the semi-annual dividend as large as possible. By extending their operations excessively, they may, if they lose the public confidence, be driven to a failure; but in the United States the prospect of such a disaster is much less terrible to the greater number of merchants, and even to the smaller companies, than it is in Europe. (SeeNote7, at the end of the volume.) When a bank fails, there is, indeed, a great outcry, because the number of victims is large, and the loss extends to all classes; for most of the bills being of the denomination of five dollars and under, they are very generally distributed in the hands of the labourers, as well as of the wealthier classes. But just in proportion to the distribution ofthe loss over the greater number of persons, is the quickness with which the clamor ceases. The president, the cashier, the directors, and others principally interested, readily find means to recover from the blow, by obtaining credit elsewhere, and the whole affair is at an end.

The Bank of the United States, on the contrary, directed by men of large fortune and established reputation, connected in business with the principal houses in Europe, charged with a vast responsibility, subject to the supervision of the Federal government, which names five of the directors out of twentyfive, and officiously watched by an army of journalists, is interested and obliged to follow another course. Not that it has not committed some errors; but it paid dear for them, and has never repeated them. Neither are its rules and regulations perfect; the experience of twenty years will doubtless suggest some modifications. But even its adversaries admit that it has been admirably managed. They pretended, at first, that the public money was not safe in its vaults, but they are at present ashamed to insist upon this point, as the investigation made by the House of Representatives proved the absurdity of the charge. The accusations now brought against it are of a political character.

Politically considered, indeed, the existence of an institution so powerful as the Bank of the United States may present some inconveniences. The fundamental maxim of the Federal and State constitutions is, that the supreme authority is null and void; there is no government here in the true sense of the word; that is, no directing power. Each one is his own master; it is self-government in all its purity. This anomalous and monstrous development of the individual principle is no evil here, it is even a great good at present; it is the present stage in the progress of the United States, because self-government is the only form of government to which theAmerican character, as it is, can accommodate itself. If individuality had not free elbow-room here, this people would fall short of its destiny, which is to extend its conquests rapidly over an immense territory, for the good of the whole human race, to substitute, in the shortest time possible, civilization for the solitude of the primitive forests, over a surface ten times greater than all France, of as great average fertility as that country, and capable, therefore, of accommodating 350 millions of inhabitants.

From these considerations it is clear, that any power whatsoever, if possessed of great influence, and exercising it over a great space, would be inconsistent with the political system of the country; for this reason the Federal and State governments are in a permanent state of eclipse. And it is furthermore evident, that the Bank, which is met at every turn as an agent in all transactions, which governs credit, regulates the currency, animates or checks at will the activity of commerce by narrowing or widening the channels of circulation, the Bank, which by its numerous branches is, like the fabled polypus, everywhere present, the Bank with its funds, its centralisation, its trusty creatures, is certainly an anomaly, which may become big with danger. One might, from an abstract, theoretical point of view, imagine cases, in which this financial colossus, seated in the heart of a country absorbed in business, would press with a crushing weight on the liberties of the people. If it were possible that a new Monk should wish to restore the English rule, or that a new Bonaparte, the saviour of the republic in another Marengo, should attempt to make himself dictator, it would also be possible that a conspiracy between the Bank and this Monk, or this Napoleon, might overthrow the liberties of America. But such an event, possible to be sure in theory, (for in theory nothing is impossible,) is, at present, wholly impracticable in fact. Yet there are honest and enlightened men, on whom this theoretical danger makes more impression, than the necessity of a regulator amidst the chaos of 500 banks, or of an agent, which, by controlling the currency, should be in financial affairs, what the vast rivers of the country are in the system of internal communication. They fear more, for this land of industry, from the imperceptible tyranny of the Bank, than from a system in which there would be no check on the cupidity of the local banks, and in which they might renew, with their paper money, if not theassignatsof France, of the Continental money of the Revolution, at least the commercial anarchy which followed the war of 1812.

Unluckily for the United States, it is not on this high ground of foresight, that President Jackson and his friends take their stand in their attack on the Bank. They do not say, that it is possible that it may some time, under a new state of things, become an instrument of oppression; they pretend that it is so already. According to them, it tends to nothing less than the subjugation of the country to its rule. In his last annual message, and in an official paper read to the cabinet on the 18th of September, 1833, the President accuses the Bank: 1. With having intrigued to bring up the question of the renewal of its charter in Congress during the session of 1831-32, in order to reduce him to the alternative of giving his sanction to the bill, or losing the votes of the friends of the Bank in the approaching election, if he refused it. He forgets that he had himself, in his message at the opening of that session, recommended to Congress to settle the business. 2. Of having meddled with politics in opposing his election in 1832, and of having, with this purpose, enlarged its loans and discounts twenty-eight and a half millions. The Bank replies that the statement is incorrect; that its books show, that its available means having been augmented, between January and May, 1831, ten millions, and therequisitions of commerce having increased, it had judged it expedient to extend its credits seventeen and a half millions, so that the actual extension of its operations was only four and a half millions. 3. Of having attempted to corrupt the public press, either by printing a great number of pamphlets, or by gaining over the newspapers. The Bank answers to this charge, that it has a perfect right to defend itself by the press, against the continual attacks upon it to which the press gives currency, that it may certainly be allowed to reprint the speeches delivered in its favor in Congress, or essays in which questions of banking are luminously treated, such as that by the celebrated Mr Gallatin, who was twelve years Secretary of the Treasury, and afterward minister to France. As to the vague imputation of attempting to corrupt a press, which pours forth such a number of journals as the press of the United States, (seeNote8, at the end of the volume,) it does not deserve a serious answer.

If a European government, from motives of this character, on facts thus destitute of proof, should attempt to destroy an institution essential to the prosperity of the country, the cry of despotism would be raised on all sides. If the state were itself interested in the institution to the amount of one fifth of its capital (7 millions of dollars), many persons would charge such an attempt not only with violence, but with folly. In the United States the numerical majority, which is the majority of electors, applauded General Jackson's campaign against the Bank almost as enthusiastically as his campaign at New Orleans. The military success of General Jackson, his honesty, his iron firmness, have given him an astonishing popularity. The Bank, on the contrary, in spite of its daily services, (seeNote9, at the end of the volume,) is unpopular; it is so on account of the popular hatred of the Banking System, on account of that jealousy, which, in a land of perfectequality and suspicious democracy, follows in the steps of wealth and pomp; it is so because its extensive privileges shock all republican feelings. In the United States, in spite of the general habits and laws of equality, there is a sort of aristocracy founded on knowledge or on commercial distinction. This aristocracy, somewhat prone to entertain a contempt for the vulgar multitude, causes a strong reaction against itself in the popular mind, and as it supports the Bank by its influence and its writings, this is enough, of itself, to set the pure democracy against the institution. Add to this, that the Bank, irritated by the hostile demonstrations of the administration, has sometimes answered it by angry acts of reprisal, not grave in themselves, but unfortunate in their consequences, and of which its adversaries have adroitly availed themselves to excite the popular passions. Although the Bank has the majority of the Senate in its favor, the chances are now against it. Unless the multitude, which now shoutsHurrah for Jackson!without reflection, shall be led, between this and March, 1836, when its charter expires, to reflect seriously on the matter, it will disappear, until a new experience shall again prove that it is impossible to get along without it.

Thus, at the very moment when the English Reform ministry is renewing the charter and confirming the privileges of the Bank of England, with the approbation of all Europe, here a compact mass, in which, indeed, the enlightened do not form the majority, but in which, notwithstanding, some are included, deals the death-blow to a similar institution, tried and proved by long services. Thus, while one of the greatest, perhaps, in an economical point of view, the very greatest of the benefits which France could receive, would be the establishment of a system of banks, connected with each other as the twenty branches of the Bank of the United States are with themother bank, America is about to witness, if not the death, at least the suspension of an institution, that has been fruitful of so much good, without the slightest immediate loss of popularity by those who are doing the work of destruction. So goes the world in the United States. The history of this affair shows that the political springs are here wholly different from those that operate in Europe, and that nevertheless, intrigue and petty hate have free course here as well as elsewhere.

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