FOOTNOTES:

FOOTNOTES:[L]The dividends of the Bank of North America were, in 1792, 15 per cent.; in 1793, 13 1-2; from 1794 to 1799 inclusive, 12 per cent.; from 1804 to 1810, 9 per cent. Those of the old Bank of the United States varied from 7 5-8 to 10 per cent. Those of the Pennsylvania Bank, from 1792 to 1810, from 8 to 10. The Bank of the United States regularly divides 7 per cent. to the share-holders. In the city of New York the average dividends of the banks in 1832, was 6.14 per cent.; of the country banks 9 per cent. It must not be forgotten that the legal rate of interest is higher in the United States than in Europe; it is 6 per cent. in Pennsylvania, 7 in New York, from 8 to 9 in the Southern States, and 10 in Louisiana. In the Western States there is no regulation of interest by law, but the ordinary rate is very high.

[L]The dividends of the Bank of North America were, in 1792, 15 per cent.; in 1793, 13 1-2; from 1794 to 1799 inclusive, 12 per cent.; from 1804 to 1810, 9 per cent. Those of the old Bank of the United States varied from 7 5-8 to 10 per cent. Those of the Pennsylvania Bank, from 1792 to 1810, from 8 to 10. The Bank of the United States regularly divides 7 per cent. to the share-holders. In the city of New York the average dividends of the banks in 1832, was 6.14 per cent.; of the country banks 9 per cent. It must not be forgotten that the legal rate of interest is higher in the United States than in Europe; it is 6 per cent. in Pennsylvania, 7 in New York, from 8 to 9 in the Southern States, and 10 in Louisiana. In the Western States there is no regulation of interest by law, but the ordinary rate is very high.

MOVEMENT OF PARTIES.—BANK QUESTION.

Philadelphia, Jan. 5, 1834.

Of all the cities of the Union, the peaceful Philadelphia is the most disturbed by the Bank question, because it is the seat of the mother bank. The State of Pennsylvania also, of all the States, suffers the most from the financial crisis, because it is the most deeply in debt, and is obliged to borrow more, either to finish its canals and railroads, or to pay the interest on its existing debt. Conceive of the situation of a State, whose population amounts to only 1,500,000 souls, loaded with a debt of twenty and a half millions, whose ordinary expenditures are less than 600,000 dollars, but which must raise one million to pay interest already accrued, and nearly two millions and a half, for the next summer, under penalty of seeing her great works, executed at an enormous expense, go to ruin, and who knows not whither to turn. This is not all; some oldloans must be reimbursed next May, or in three months, and, to crown the whole, the capitalists who contracted last year for a loan of three millions, to be employed on the public works, are, in consequence of the present crisis, unable to fulfil their contracts. The local banks, which are bound by their charters to lend the State at the rate of 5 per cent., rather stand in need of assistance themselves. To these public embarrassments is added the private distress, and thus this country, which Cobbett, who always shows talent, and occasionally gleams of good sense, dubs theAnti-Malthusian, exhibits for the present the spectacle of a superabundance of labourers. In the manufacturing districts of Pennsylvania, many of the operatives are without work.

The condition of the rest of the country is not, in general, any more favorable. I am very ready to believe that the Anti-Jackson newspapers, for so they call themselves, exaggerate the distress; but making all due allowance for rhetorical flourishes, it is still undeniable that there is much distress, especially among the commercial class. Bare figures are more eloquent than the best advocates of the Bank, and it is a notorious fact, that excellent paper has been discounted at the rate of 18 per cent. per annum, and at even higher rates, in New York, Philadelphia, and Baltimore. The price currents and the state of the stock-market, show a general fall in prices of 15, 20, 30, and even 40 per cent. Thus far the efforts of the President to fell the hydra of the moneyed aristocracy, the Mammoth, the Monster, have had no other effect than to blast credit and the commercial prosperity of the country; for the Bank has been administered with so much ability, especially since the presidency of Mr Biddle, one of the most distinguished men in the country, that notwithstanding the abrupt removal of the public deposits, notwithstanding the unexpected and unfair assaults upon some of thebranches, particularly that of Savannah[M], it is beyond comparison the most solvent and safe of all the financial institutions in the Union. At this critical moment it has as much specie (ten millions) as all the other 500 banks taken together, and I know from good authority, that many Jackson men (this is the epithet adopted by themselves), have been very glad to be sprinkled with a few drops of thevenomof this dangerousreptile.

If what is now taking place in this country were to occur in any European monarchy, those persons who insist upon all nations having a government cast in the republican mould, whatever may be the condition of their territory and population, their wealth and knowledge, their character and manners, would not fail to make it the text of their harangues against monarchical governments; holding up to view the picture of an unparallelled commercial prosperity, checked of a sudden by the caprice of the sovereign, they would prove that such is one of the unavoidable consequences of an opposition between the interest of the ruler and the welfare of the nation; they would demonstrate by geometrical syllogisms, that it is the essence of monarchy to place authority in the hands of the weak and the foolish, who, to gratify their personal malice, would not hesitate to hazard the happiness of millions. They would raise the cry of secret influence, of intrigue, which, according to them, is one of the attributes of monarchies. Unluckily for this theory, it is belied by facts under my own eyes, in the most thorough andflourishing republic that has ever existed. The selfishness of royalty, or more correctly speaking of courts, has hitherto begot much mischief and will continue to do so in future; but it has met with its match in the bosom of republics, and above all under a system ofabsoluteequality, which distributes political power inabsolutelyequal quantities to the intelligent and the ignorant, to the most eminent merchant and author, and the brutal and drunken peasant of Ireland, who is but just enrolled in the list of citizens. Anabsolutepeople, as well as anabsoluteking, may reject for a time the lessons of experience and the councils of wisdom; a people as well as a king, may have its courtiers. A people on the throne, whose authority is limited by no checks, may blindly and recklessly espouse the quarrels of the minions of the day; let those who doubt it come here and see it. Ignorance of the true interests of the country is not the exclusive prerogative of monarchies. The official papers of the Federal Executive in the affair of the Bank, so far as concerns a knowledge of the principles of government and the springs of the public welfare, are on a level with the measures of the government of Spain or Rome. And yet this Executive is the creature of the popular choice in the largest sense. It is not merely in monarchies, that a dancer is to be seen in the post that belongs to a mathematician. The camarilla! Never have I heard it so much talked about, as since I have been in this country. It is here called theKitchen Cabinet, and admitting a fourth of what is said by the opposition to be true, it is difficult not to believe that its influence upon public affairs is greater than that of the ministerial cabinet.

But to return to the Bank. Congress met on the 3d of December; and most of the State Legislatures are now in session. Every where, and above all in Congress, the great, not to say the only question agitated, is that of theBank. The subject of the discussions is the removal of the public deposits, which the President has withdrawn from the Bank after a military fashion, having previously, in the same spirit, removed from office the Secretary of the Treasury, Mr Duane, who, although opposed to the Bank, considered the President's course illegal and rash. Thus far, the manifestations of public opinion and the deliberative assemblies are extremely various and discordant. In New Jersey, a small and unimportant State, the Assembly has adopted, by a large majority, resolutions approving the acts of the administration, and instructing its delegates in Congress to support the President; notwithstanding which, Mr Southard, one of the Senators from that State, has made an excellent speech on the other side of the question. The Assembly of New York, the first State in wealth and population, has adopted similar resolutions by a vote of 118 to 9. Some persons to be sure, assert that this is because New York would like to have the Mother Bank.[N]The youthful State of Ohio, whose growth borders on the miraculous (it now contains eleven hundred thousand inhabitants, although but 50 years ago it had not six thousand), Ohio, the Benjamin of the democracy, has strongly expressed the same wishes. The little State of Maine has done the same. The administration party lately had a brilliant opportunity of displaying its sympathies and its hatred. The 8th of January, the anniversary of the battle of New Orleans, was celebrated by innumerable public dinners, at each of which numerous toasts were drank. President Jackson was the hero, and the Bank was the scape-goat, of the day. It would be impossible to imagine the flood of accusations, insults, and threats, which waspoured upon it, mingled with jests in the taste of the country upon Mr Biddle; thus, at one of these dinners, the Bank was toasted, as beinggoverned by Young Nick according to the principles of Old Nick.

But the population of New England, particularly that of Massachusetts, is opposed to the administration. In Virginia the same opinions seems to prevail, and it is the same with several of the old Southern States. The merchants and manufacturers of New York, Philadelphia, Baltimore, Boston, and a hundred other places, have held meetings and adopted resolutions, strongly censuring the conduct of the government towards the Bank, and accusing it of having caused the present crisis. Most of the Philadelphia Banks have petitioned in favor of the Bank. Several Banks at Boston and in Virginia have refused to take the public money in deposit; those of Charleston have been unanimous in this measure. The majority of persons of intelligence, experience, and moderation, and most of the merchants and manufacturers, are in favour of the Bank. The country, particularly in the Middle and Western States, and the operatives in the towns, go for General Jackson.

In Congress the majority of the Senate is friendly to the Bank, and the majority of the House is on the side of the Administration. The superiority in debate belongs to the defenders of the Bank. In the Senate, the three greatest statesmen in the country, Messrs Clay, Webster, and Calhoun, are on this side of the question, and the speeches of Messrs Clay and Calhoun have made a strong impression. In the House Mr Binney, of Philadelphia, and Mr McDuffie have pleaded the same cause with ability. On the other side there has been more highflown declamation than reasoning. I have been struck with the resemblance between most of the speeches and newspaper essays directed against the Bank, and our republican tiradesof 1791 and 1792. There are the same declamatory tone, the same swollen style, the same appeal to the popular passions, with this difference, that the allegations made here are vague, empty, and indefinite, while with us fifty years ago the grievances were real. Most generally the pictures presented in these declamations, are fantastical delineations of the moneyed aristocracy overrunning the country with seduction, corruption, and slavery in its train; or of Mr Biddle aiming at the crown. Amidst this swarm of speeches and essays, one hardly ever meets with any indications of serious study or a tolerable knowledge of the subject; but I have been struck with the speech of Mr Cambreleng, who has put forth some prudent suggestions as to the reforms required in the present system of banking. For it must be confessed, that this animosity of the President and the body of the people against the Bank of the United States, blind and unreasonable as it is, is founded on a real necessity, namely, that of a complete reorganization of the banking system. When Congress renewed the charter of the Bank of the United States without modification, in 1832, it committed an error. It should have seized this opportunity to place the currency of the country on a more solid basis; and if General Jackson had abode by the terms of his veto message, in which he declared that he was not opposed in principle to the establishment of a National Bank, but that the present Bank could not be retained without some modification, he might have become the benefactor of his country. He would not, indeed, have received Cobbett's congratulations, but he would have obtained the approbation of all statesmen and men of sense in the Old and the New World. However, whatever his friends may say, as the President did not foresee the distress, which has befallen American commerce, and as nobody can doubt his patriotism, we need need not yet despair of seeing him adopt this wise course.

The present crisis abundantly proves the wretched condition of the currency, for the original cause of it was quite slight; it was merely the transfer from the vaults of one bank to those of another of ten millions, an inconsiderable sum relatively to the amount of the business of the country. If the local banks, in spite of the control exercised by the Bank of the United States, had not previously passed all bounds, they would have been able, when the Bank of the United States was obliged to contract its discounts by the withdrawing of the public money, to have enlarged their own in the same proportion, since those same funds were transferred to their vaults. But the framework of these banks is so badly put together, that it shakes at the slightest breath. The slight motion in the political and commercial atmosphere caused by the President's blow at the Bank, in removing the public deposits, was enough to make them totter. They are like a colossus with clay feet, which should have feet of gold, or in other words, specie in their vaults.

The proportion of metals, of which we have an excess in France, is here extremely small. In many States, among others New York, there is an enormous quantity of bills of one, two, and three dollars. In South Carolina there are 25 cent, and even 12 1-2 cent bills. In Pennsylvania, Virginia, and some other States, there are none of less than five dollars. The Bank of the United States emits none of less than that sum; but this minimum is too low. Most political economists, and particularly the English, lay it down as an axiom, that the most perfect money is paper; this is true, if we suppose a nation in which any disturbance of industry, in consequence or apprehension of war, from foolish speculations, from glut or panic, is impossible. In such a land of cockayne, such a terrestrial paradise, an unshaken confidence would prevail in all transactions, and consolidate all interests. Themetals would only serve to strike medals and to preserve inscriptions intended to commemorate this ineffable bliss. Paper would there be on a par with gold, and even higher, as some English writers have maintained it should be. I do not know if there will ever be a nation in such a state of heavenly happiness; but I doubt it, because in the world of finance, as well as in the world of passion, I consider the Tender River a fable, and pastorals a sport of fancy; but it is very evident that no such people exists now, or will for some time to come. Now in the United States, the present banking system, like that of England from 1797 to 1821, or even 1825, is founded on this theory of the most perfect money. It is provided, indeed, that the banks shall pay gold for their paper on demand; but by the side of this clause, which tends to keep a certain quantity of the metals in the country, is inserted another, which neutralises it; it is the power of emitting bills in any number, and of the sum of 1, 2, 3, or 5 dollars. In prosperous times, the emission of paper is abundant, indefinite; as the necessity of a metallic standard ceases to be felt, in proportion to the confidence which prevails, the metals disappear before the excess of paper; there is scarcely any left in the country. Since I have been in the United States, I have not seen a piece of gold except in the mint. No sooner is it struck off, than the gold is exported to Europe and melted down. When a crisis comes on, the demand for the precious metals increases rapidly, because every one attaches more value to a positive standard than to paper, and the later the application of the remedy for the scarcity of metals, the longer does the crisis last, and the more serious does it become.

In a new country, where capital cannot, of course, be abundant, for capital of all kinds, whether of articles of food or precious metals, is the accumulated produce of labour, it is natural, that the proportion of paper moneyshould equal and surpass that of metallic money. The existence of paper money is even a great benefit to any country. In France we have the enormous sum of 600 million dollars in specie; (seeNote10, at the end of the volume); in the United States 40 millions are sufficient for all the transactions of a commerce nearly as extensive as our own. In England the amount of specie at present does not exceed 220 millions, mostly in gold. Bank notes in circulation, which constitute the rest of the currency, amount at this time, in the United States, to 100 million, that is, two and a half times the amount of specie; in England to about the same as the specie, which gives for the whole circulation of

If we had in France the industrial habits of the English and Anglo-Americans, 200 millions of circulating medium, half in paper and half in specie, would probably be sufficient for our operations; but considering our commercial inferiority, suppose that we should require 300 millions, of which two thirds should be metallic, and one third paper, it would follow that we might advantageously employ 400 millions, which are now unproductive in the form of specie, and which add nothing to our pleasures, our comfort, or our industrial capacity. But if we might expect great benefit from banks of circulation and the paper which they would issue, it is evident that the Americans, in the present stage of their wealth, and considering their actual capital, would find their advantage in putting some check upon themselves in this matter. It might then be proper to raise the minimum of bills of the Bank of the United States to 10, 15, or 20 dollars, as in England there is no paper less than the five pound note. The National Bank, if it were powerful enough, would keep the local banks in check, and for this reason it is expedient to increase thecapital. There would then be specie enough in the country for all purposes less than the paper minimum, and in case of any disturbance, the currency would be less readily deranged.

Nor is this the only point in which the charter of the Bank of the United States requires modification; its relations with the Federal government, as well as with the State governments, need to be modified; and some projects worthy of consideration, in this view, have been broached. It would also, probably, be expedient, as Mr Cambreleng has remarked, to change the rules and regulations relating to private and public deposits, and to provide that in future they should bear interest as they do in the Scotch banks. If this system were adopted by all the American banks, they would gain in solidity, and they would embrace the interest of all classes, and become provident institutions for the general good; while at present, their direct profits, the dividends, fall exclusively to the share-holders, who belong to the wealthier classes; a fact which contributes not a little to their unpopularity. Finally, it would be proper to consider to what degree the immediate advantages of credit might be extended to mechanics and farmers. In this respect the banks are yet absolutely aristocratical institutions, the Americans having preserved in banking almost all the usages of their ancestors, the English. The American banks are now chiefly devoted to the use of speculators and merchants.

In the midst of so many contradictions, it is difficult to foresee what will be the issue of the struggle. The friends of the Administration maintain that President Jackson and Vice President Van Buren are not only opposed to the Bank as it is, but to any National Bank, and that they will never yield. The Globe, the avowed organ of the President, has told Mr Clay, that unless hecan find a Brutus(to assassinate General Jackson,) the Bank willneither have the deposits nor a new charter. We may doubt, however, whether the President's mind is so decisively made up, and after all a majority of both houses can set at nought theveto. As to the Vice President, whom his opponents call the cunning Van Buren, as he aspires to succeed the President, many persons declare that his object is to gain the vote of the powerful State of New York, by transferring thither the seat of the Mother Bank, but that he is too enlightened seriously to wish the destruction of an institution fraught with so much good to the country.

However this may be, it would be surprising if the present crisis were not followed, sooner or later, by a reaction in favour of the Bank of the United States with suitable modifications, or of another National Bank, which, as Mr Webster observed, would amount to the same thing, if the share-holders of the present Bank are not sacrificed. The jealous democracy of this country has this advantage over other democracies, that in the main it has much good sense; the recollection of old sufferings caused by the abuses of the banking system, and a jealousy of all pretensions to superiority, have led it to give ear to much noisy declamation about the aristocracy of money, particularly when it has been mixed up with flattery of itself. It may have been led astray for a moment, when its own prerogatives were the subject of discussion, as those sovereigns who assert the divine right of kings, take fire in respect to theirs. Proud of its gigantic labours, it may have been tempted to believe, that to it everything was possible and easy, that it had only to frown to cause the Bank to crumble into the dust at its feet, without being itself shaken by the shock. But facts, positive, inexorable facts now bear witness that it was mistaken, that it has trusted too much to its powers and its star, that the agency of the Bank of the United States is indispensable. The influenceof facts has spread step by step even to the country people, who no longer find buyers of their produce. The argument is palpable and effectual; passion cannot long blind men of sense to such facts, for men of sense are those who do not give themselves up implicitly to abstractions, and who admit that every theory which is point blank against fact, is false or incomplete. This is the reason why good sense is worth to the full as much in politics, as talents.

It is worth while to observe here, that all the political difficulties in which the United States have become involved, and which have threatened the existence of the Union itself, have been settled by means of what are here called compromises, and in Francejustes-milieux. Thus was ended the serious dispute on the Missouri question, which had well nigh set the Union in a flame. It was made a question whether Missouri should be received into the Confederacy with a constitution sanctioning the institution of slavery. After a long and ineffectual debate, Mr Clay moved that Missouri should be admitted unconditionally, but that, at the same time, it should be declared that in future no new State lying north of 36° 30´ of latitude, should be admitted into the Union with this institution; this proposition was received with general favour, and the admission of Missouri was carried. In the next session, however, a new quarrel arose between the North and the South, more violent and bitter than the former, in relation to an article in the constitution of Missouri, prohibiting any free man of colour from entering the State. Another compromise, proposed by Mr Clay, finally settled the whole question in 1821, after it had kept the country in a flame for three years. In 1833, another compromise was made in respect to the tariff, the honour of which also belongs to Mr Clay. This question will sooner or later be settled in the same manner; the Union cannot do without a National Bank, and it will have one.

There are some lucky persons who succeed in everything, and there are some lucky nations with whom everything turns out well, even those events which seemed about to bury them in ruins. The United States is one of these privileged communities. When Villeroi came back to Versailles, after his defeat, Louis XIV. said to him, "Marshal, nobody is lucky at our time of life." Charles V. also, as he grew old, said that fortune was like a woman, and preferred young men to old ones. Louis and Charles were right so far as this, that when a man, young or old, has finished his mission, foresight, ability, and perseverance profit him little; he fails in whatever he undertakes, whilst he who has a mission yet to fulfil, takes new strength from the most violent blows. This is true of nations as well as of individuals. The American people is a young people, which has a mission to perform; nothing less than to redeem a world from savage forests, panthers, and bears. It moves with mighty strides towards its object, for it has not, like the nations of Europe, the burden of a heavy past on its shoulders. It may be checked in its career for a time by the present crisis, but it will come out of it safe and sound, and more healthy than when it entered it. It will come out with increased resources, with a reformed banking system, and according to all appearances, even with an improved National Bank. May the nations of Europe not have to wait long for institutions, which have so powerfully assisted England and America in their progress!

FOOTNOTES:[M]The Savannah branch had out only 500,000 dollars in bills. The collector of the port accumulated them, as they were received for customs duties, and one day a broker presented himself at the counter with 380,000 dollars in bills, for which he demanded specie; but the disappearance of the bills of the branch from circulation had not been unnoticed, and funds had been provided for any exigency. Payment was, therefore, instantly made, and the broker, not knowing what to do with so much specie, was obliged to request the cashier to receive it in deposit.[N]New York is the chief seat of commerce, but Philadelphia is more central, and is, besides, the city of American capitalists. The removal to New York would also require the transference of the mint and some other public offices to that city, at great expense.

[M]The Savannah branch had out only 500,000 dollars in bills. The collector of the port accumulated them, as they were received for customs duties, and one day a broker presented himself at the counter with 380,000 dollars in bills, for which he demanded specie; but the disappearance of the bills of the branch from circulation had not been unnoticed, and funds had been provided for any exigency. Payment was, therefore, instantly made, and the broker, not knowing what to do with so much specie, was obliged to request the cashier to receive it in deposit.

[N]New York is the chief seat of commerce, but Philadelphia is more central, and is, besides, the city of American capitalists. The removal to New York would also require the transference of the mint and some other public offices to that city, at great expense.

PROGRESS OF THE STRUGGLE.—NEW POWERS.

Baltimore, March 1, 1834.

Failures begin to be frequent in the United States, particularly in New York and Pennsylvania; the great commercial and manufacturing houses are shaking. Meanwhile the Senators and Representatives in Congress are making speeches on the crisis, its causes, and consequences. Three months have already been taken up in discussing the question, whether the Secretary of the Treasury had or had not the right to withdraw the public deposits from the vaults of the Bank, without that institution having given any just cause of complaint, and merely because it was strongly suspected of aristocratical tendencies. The resolutions which have given rise to these debates, have been referred by the Senate to the Committee on Finance, and by the House to the Committee of Ways and Means. Debates will rise on the reports of these committees, on petitions and memorials, and incidental matters, and, I am told, will last two or three months longer. This slowness is at first glance difficult to be understood, among a people, which, above all things, strives to save time, and which is so much given to haste and despatch, that its most suitable emblem would be a locomotive engine or a steamboat, just as the Centaurs were anciently confounded with their horses. From all the large towns of the North, committees appointed by great public meetings, bring to Washington memorials signed by thousands, calling for prompt and efficient measures to put an end to the crisis. On the other hand, the partisans of the Administrationfind fault with the prolixity of the legislators. The calmness, or rather phlegm, which the Americans have inherited from their English ancestors, is kept undisturbed in both houses of Congress, and the solemn debate goes on. One speaker for example, Mr Benton, occupied four sessions, four whole days, with his speech, which led Mr Calhoun to observe, that the Senator from Missouri took up more time in expressing his opinion on a single fact, than the French people had done in achieving a revolution. But these interminable delays ought not to be too lightly condemned, and for myself I only shrug my shoulders, when I hear some impatient individuals asserting that Congress would be more expeditious, were it not for the eight dollars a day which they receive during the session. This delay may seem irreconcileable with one of the distinctive traits of the American character, but in reality is imperiously demanded by the form and spirit of the government, by the institutions and political habits of the country.

The general discussion in Congress has no other object than to open a full and free public inquest, which enables each and all to make up an opinion. It gives rise to a discussion of the question by the innumerable journals in the United States (where there are 1200 political newspapers), by the twentyfour legislatures, each composed of two houses, and by the public meetings in the cities and towns. It is an animated exchange of arguments of every calibre and every degree, of contradictory resolutions, mixed up with applauses and hisses, of exaggerated eulogies and brutal invectives. A stranger, who finds himself suddenly thrown into the midst of this hubbub, is confounded and stupefied; he seems to himself to be present in the primeval or the final chaos, or at least at the general breaking up of the Union. But after a certain time some gleams of light break forth from these thick clouds, from the bosom of this confusion,—gleams, which the goodsense of the people hails with joy, and which light up the Congress. We see here the realization of theForumon an immense scale, theForumwith its tumult, its cries, its pasquinades, but also with its sure instincts, and its flashes of native and untaught genius. It is a spectacle, in its details, occasionally prosaic and repulsive, but, as a whole, imposing as the troubled ocean. In a country like this, it is impossible to avoid these delays; first, because it takes a long time to interchange words between the frontiers of Canada and the Gulf of Mexico, and secondly, because nothing is so dangerous as precipitation in aForum, whether it only covers the narrow space between theRostraand the Tarpeian Rock, or extends from Lake Champlain to the mouth of the Mississippi, and from the Illinois to the Cape of Florida. Unfortunately the session in theForumlasts longer than usual this time. The demagogues have set the popular passions in violent agitation; the sovereign people has allowed itself to be magnetised by its flatterers, and it will require some time to be able to shake off the trance. The healing beam, which will fix the gaze of the multitude and dissipate the charm that envelopes them, has not yet broke forth from the East, or from the West; meanwhile the merchants and manufacturers, who are stretched upon the coals, writhe in vain; there is no answer to their cries.

The Bank, meantime, disappears from sight and keeps silence; it continues to attend to its own business, and prudently confines itself to that alone. Its best policy is to avoid as much as possible making itself the subject of common talk. The demagogues have raised such a cry of monopoly and aristocracy, that the people have come to believe the Bank a colossus of aristocracy, a prop of monopoly. These wordsmonopolyandaristocracyare here, what the wordJesuitswas in France a few years ago; if the enemies of any institution can write on its backthis kind ofabracadabra, it is pointed at, hooted at, and hissed at by the multitude. Such is the magic power of these words, that speculators employ them on all occasions as charms to draw customers. For example, at the head of the advertisements of steamboats you read in staring characters:No Monopoly!!!It is pitiful to say that the Bank of the United States has a monopoly, when there are no less than five hundred other banks in the country; by this course of reasoning one might convict the sun of enjoying a monopoly of light. And yet the multitude has believed it, and believes it still. Now the best policy for those against whom such a storm of unpopularity is raised, is to run for port, as the sailors do in a gale of wind. The Bank has twice attempted to strike a blow, by taking advantage of the mistakes of its enemies, and both times the stroke has recoiled on itself.

The first time, the subject of dispute was a draft on the French government, which was sold to the Bank last year by the Federal government, and which France refused to pay; the draft was, therefore, protested, and then paid by the correspondent of the Bank in Paris in honour of the endorser. In this affair the Executive of the United States committed two faults: 1. It was an act of indiscretion to draw on the French government, before the Chambers had made the necessary appropriation for paying the stipulated indemnity; 2. Instead of drawing on the French government by a bill of exchange, and selling the bill to the Bank, without knowing whether it would be accepted, the Executive would have conducted itself with more propriety towards France, towards the Bank, and towards itself, if it had authorized the Bank to receive the moneys paid by the French government, in the capacity of its agent or attorney. By the commercial practice of all countries, and of this in particular, the Bank had a right to damages, and it put in its claim. Its object intaking this step, was much more to expose the errors of the Executive, than to pocket the sum of 50,000 or 80,000 dollars. But its adversaries immediately raised the cry, that the Bank was not contented with exacting enormous sums from the sweat of the people to the profit of the stockholders, (observe that the dividends of the Bank are moderate, compared with those of other banking companies in the country, and that the Federal government is itself the largest share-holder); but that it was now attempting, by petty chicanery, to extort a portion of the public revenue, and to bury thepeople's money in Biddle's pockets. To this reasoning, and it passes for demonstration, the multitude answered by imprecations against monopoly and the moneyed aristocracy, and by renewed shouts ofHurrah for Jackson!

A few days since we witnessed another episode of this kind. The Bank is charged, by act of Congress, with the duty of paying the pensions of the old soldiers of the revolution. It performs the service gratuitously, and it is notoriously a troublesome one. It has received several sums of money for this object, and at this moment has about 500,000 dollars in its vaults, intended for the next payments. The Administration, desirous of transferring this agency from the Bank, has demanded the funds, books, and papers connected with it. The Bank replied, that it has been made the depository of this trust by act of Congress, and that it cannot, ought not, and will not surrender it, unless in obedience to an act of Congress. The Bank was right; the refusal was founded in justice; but mark the consequences. Its adversaries express the greatest sympathy for these illustrious relics of the revolution, whom the arrogance of the Bank, as they say, is about to plunge, at the close of their career, into the most dreadful misery; they pour forth the most pathetic lamentations over these glorious defenders of the country, whom amoney-corporationis about to strip of the provision made for their declining years by the nation's gratitude. You may imagine all the noisy arguments and patriotic harangues, that can be delivered on this text. On the 4th of February, the President sent a message to Congress in the same strain. All this is mere declamation, of the most common-place and the most hypocritical kind; for who will prevent the deliverers of America from duly receiving their pensions, except those who shall refuse them drafts on the Bank, which the Bank would pay at once? But a people under fascination is not influenced by reason, and it is at this moment believed by the multitude that the Bank has determined to kill the noble veterans of Independence by hunger. Once more, then, anathemas against monopoly, hatred to the moneyed aristocracy!Hurrah for Jackson!Jackson forever!

Whenever, therefore, the Bank has allowed itself to be drawn into a conflict, which is the enemy's country, it is pronounced to be in the wrong, though it were ten times right. On the contrary, when it has kept to its discounts and credits, it has always been able, without opening its mouth, to belie the charges of its enemies, who not only impute to it the atrocious crime of being suspected of aristocracy and monopoly, but attribute to it now the public distress, of which they denied the existence a few months ago, and of which they are themselves the authors. Very lately the Bank came to the relief of several local banks, which were in danger of failing, and a few days since it opened its coffers liberally to Allen & Co., one of the principal houses in the country, who, although having a capital much beyond the amount of their debts, were obliged, by the pressure of the times, to suspend payments; the failure of that house, which has no less than 24 branches, would have involved hundreds of others. This is the only way in which the Bank should assume the offensive;such acts, without a word of comment, would secure it the favour and the support of all impartial and enlightened men, and the gratitude of the commercial interest, much more completely than the most eloquent protests against the measures of this or that secretary, or the most ingenious and able defence of itself.

I am more and more convinced that the United States will reap advantage from this crisis; sooner or later the reform of the banking system must result from it. Very probably, the National Bank, if it is maintained, and the local banks, will hereafter be less absolutely separated from the Federal and State governments; that is to say, that the Federal and local governments will assume the control of the Banks, and consequently the banks will become a part of the governments. In this way many of the abuses of the banking system will be reformed, and the legitimate and just influence of the banks will be strengthened. It would be easy to cite numerous facts, which go to prove the tendency towards this result; thus in some of the States, the Legislatures have established, or are occupied in establishing banks, in which the State is a share-holder to the amount of one half or two fifths of the capital, appoints a certain number of the directors, and reserves to itself an important control over the operations. There are some States, as for example, Illinois, in which every other kind of bank is expressly forbidden by the constitution.

Republican publicists acknowledge only three classes of powers, the executive, legislative, and judicial; but it will soon be seen in the United States, that there is also a financial power, or at least the banks will form a branch of government quite as efficient as either of the others. The Bank of the United States is more essential to the prosperity of the country than the Executive, as now organized. The latter, conducts a little diplomatic intercourse, well or ill, with the European powers, nominates and removes some unimportant functionaries, manœuvres an army of 6,000 men in the western wilderness, adds now and then some sticks of timber to the dozen ships of war that are on the stocks at Portsmouth, Boston, New York, Philadelphia, Washington, Norfolk, and Pensacola. All this might actually cease to be done without endangering the safety of the country, and without seriously wounding its prosperity, that is, its industry. But take from the country its institutions for the maintenance of credit, or only that which controls and regulates all the others, the Bank of the United States, and you plunge it into a commercial anarchy which would finally result in political anarchy.

The word politics cannot have the same meaning in the United States as in Europe. The United States, are not engaged, like the nations of Europe, in territorial combinations and the preservation of the balance of a continent, nor are they entangled in treaties of Westphalia or Vienna. They are free from all those difficulties, which in Europe arise from a difference of origin or religion, or from the conflict between rival pretensions, between old interests and new interests. They have no neighbour, which excites their suspicions. The policy of the United States consists in the extension of their commerce, and the occupation by agriculture of the vast domain, which nature has given them; in these points is involved the great mass of their general and individual interests; these are the objects which inflame their political and individual passions. As the Banks are the soul of their commerce, their rising manufactures, and even their agriculture, it is evident that the success of theirpoliticsis intimately and directly connected with the right organization of their banking system. The real government of the country, that is to say, the control of its essential interests, is as much in the banks asin any body or power established by the constitution. The time is come when this fact should be recognised and sanctioned. As among a military people the office of marshal or lord-high-constable is the first in the kingdom, so among a people which has nothing to do with war, and has only to employ itself with its industry, that of President of the central bank, for example, ought to be a public charge,political, in the sense adapted to the condition and wants of that people,—and one of the first rank in the country.

From this point of view, it may be said, that what is now passing in the United States, is a struggle in which the combatants are, on the one side, the military interest and the law, which have hitherto divided between them the control of public affairs, and on the other, the financial interest, which now claims its share in them; the two first have coalesced against the last, and have succeeded for a time in raising the multitude against it, but they will fail in the long run, since the multitude has more to gain from it than from them. It is said, that, when the committee of the New York merchants went to Washington to present a petition with 10,000 names in favour of the Bank, the President observed to them, that they declared the grievances of the brokers, capitalists, and merchants of Wall Street and Pearl Street, but that Wall Street and Pearl Street were not the people. I do not know whether the story is true or not, but I know that such an answer would express the opinion of the dominant party. There is a school here, which attempts to eliminate the wealthy classes from the people, and which is just the reverse of the old school of European Tories, which reduces the people to the higher classes, and excludes from that rank the greater number of the nation. And nothing can be more unjust, for in order to measure the real importance of the menof Pearl Street and Wall Street, it is only necessary to consider what New York would be without them.

In fifty years the population of New York has increased tenfold, its wealth probably an hundred fold; its animating influences have been felt for hundreds of miles around. This unparalleled growth is not the work of lawyers and military men; the merit belongs chiefly to the industry, the capital, the intelligence, and the enterprise of that, numerically speaking, insignificant minority of Wall Street and Pearl Street. It is very easy to cant about the aristocracy of dollars, and those filthy metals which men call gold and silver. And yet have not those vile metals ceased to be vile, when they are the fruit of the industry and enterprise of those who possess them? If there is a country in the world where it is preposterous to prate about the aristocracy of dollars, and about the filthy metals, it is this. For here, more than any where else, every body has some employment; whoever has capital is engaged in turning it to profit, and can neither increase nor even keep it without great activity and vigilance. A man's wealth is, therefore, very generally in the ratio of his importance, and even of his agricultural, manufacturing, or commercial capacity. The merchants are not without their faults; they are disposed to weigh everything in their doubloon-scales, and a people governed entirely by merchants would certainly be to be pitied. But a people governed by lawyers or by soldiers would be no happier and no freer. The policy of the Hamburg Senate in basely giving up unhappy political fugitives to the English executioner, deserves the contempt of every man of honour; but would the rule of Russian or even of Napoleon's bayonets, or the babbling anarchy of the Directory, be less loathsome to those whose heart beats with the love of liberty or with feelings of individual and national honour?

The revolutions of ages, which change religion, manners, and customs, modify also the nature of the powers that regulate society. Providence humbles the mighty, when they obstinately shut their eyes to the new spirit of the age, and raises up the lowly, whom this new spirit fires. Four thousand years ago, it was one of the most important dignities in Egypt to have the charge of embalming the sacred birds or of spreading the litter of the bull Apis. In the Eastern empire the post ofprotovestiarywas one of the first in the state, and not to go so far back, it was the ambition of many in France, hardly four years ago, to becomegentilhomme de la chambre, as thegroom of the stole, or, in other words, theservant in charge of the wardrobe, is now one of the grand dignitaries of England. Nobody now-a-days embalms sacred birds, nobody spreads the litter of Apis. No one intrigues for the post of protovestiary or gentleman of the chamber, and from present appearances, I do not think that even the dignity of Groom of the Stole, will long be an object of ambition in England. There are no longer lord-high-constables, or great vassals, or knights-errant, or peers of France in the old sense of the word. The French aristocracy, so brilliant fifty years ago, has fallen like corn before the reaper. The mansions of the old heroes have become factories; the convents have been changed into spinning-works; I have seen Gothic naves in the best style of art transformed into workshops or granaries, and our brave troops have become peaceable labourers on the military roads.

Boards of petty clerks, whom the Castellans had employed to record their sovereign decrees, became in Franceparlements, which braved the kings and assumed to be guardians of the laws of the realm. At present the forge masters of Burgundy and the Nivernais, the distillers of Montpelier, the clothiers of Sedan and Elbeuf, have taken the place of theparlements. German princes, who can boast of their fifty quarters, dance attendance inthe imperial, royal, or ministerial antechambers, while their Majesties or their Excellencies are conversing familiarly with some banker who has no patent of nobility, and who even disdains to oblige his royal friends by accepting one. The East India Company, a company of merchants if ever there was one, has more subjects than the emperors of Russia and Austria together. If in the Old World, where the old interests had marked every corner of the land with their stamp, the old interests, the military and the law, are thus obliged to come to terms with the new interest of industry, with the power of money, how can it be possible, that, in the New World, where the past has never taken deep root, where all thoughts are turned toward business and wealth, this same power will not force its way into the political scene, in spite of the opposition of its adversaries and its envious rivals?

RAILROADS IN AMERICA.

Richmond, (Va.) March 15, 1834.

Three thousand years ago the kings of the earth were happy; happy as a king; but the old proverb is now become a falsehood. Then no Constantinople was coveted; the citadels of Antwerp and Ancona were not built. No one troubled himself about the Rhenish frontier; the natural and simple Herodotus told marvellous tales, like those of theArabian Nights, about the country watered by the Rhine. The banks of the Danube were tracklessmorasses; Vienna was not yet, nor of course the Treaty of Vienna. Peace reigned between the sovereigns, or at least their contests were real together academical, philosophical, and literary. The good king Nectanebus, an enlightened prince, a patron of the arts, played charades with his neighbours, the mighty monarchs of Asia; he guessed all their riddles without their being able to solve his in turn; his glory was unmatched, his people rolled in prosperity. The condition of men of letters and science was, to be sure, somewhat of the meanest; grammarians and philosophers were sometimes dragged to market with halters on their necks, to be sold like cattle, a treatment to which none but negroes are now subject. But if they were men of genius, their good star threw them into the hands of the best of masters, such as Xanthus, the most patient and kind of men, or good natured princes, like Nectanebus, who knew how to appreciate true merit. Æsop having become the property of this good king, soon got to be his counsellor, friend, and confidant, revised his charades and riddles, and suggested new ones to the king in such a modest way, that Nectanebus really believed himself the author of them. One day Nectanebus, by his advice, proposed to his rival monarchs this difficult problem; How would you build a city in the air? After they had puzzled their brains without success, Nectanebus prepared to give a solution of the question in the presence of the ambassadors of the Asiatic sovereigns solemnly convoked; Æsop put some little boys in baskets, which were carried up into the air by eagles trained for the purpose, and the boys began to cry out to the astonished ambassadors; "Give us stone and mortar, and we will build you a city." This old story has often occurred to my mind since I have been in the United States, and I have often said to myself, if Æsop's boys had been Americans, instead of having been subjects of king Nectanebus, they would, have demanded materials, not for building a city, but for constructing a railroad. In fact there is a perfect mania in this country on the subject of railroads.

While at Liverpool, I went aboard the Pacific to engage a berth, and Capt. Waite, a very worthy man, who believes in God with all his heart, and is not any the less on that account a very skilful commander, and a most intrepid sailor, offered me the latest American newspapers. The first I opened happened to be theRailroad Journal. Soon after sailing I fell sea-sick, and had scarcely a moment's relief till my arrival at New York; of all my recollections of the voyage, the most distinct is that of having heard the word railroad occurring once every ten minutes, in the conversation of the passengers. At New York, I went to visit the docks for building and repairing vessels; after having examined the dry dock and two or three other docks, my guide, himself an enthusiast on the subject of railroads, carried me to the railroad-dock, where the ships are moved along a railway. In Virginia, I found railroads at the bottom of the coal mines, which is not, indeed, new to a European. At Philadelphia I visited the excellent penitentiary, where everything was so neat, quiet, and comfortable, (if that word may be applied to a prison), in comparison with the abominable prisons in France, which are noisy, filthy, unhealthy, cold in winter, and damp in summer. The warden, Mr Wood, who manages the institution with great vigilance and philanthropy, after having shown me the prisoners' cells, the yards in which they take the air, the kitchen where the cooking is done by steam, and allowed me to visit one of the convicts, a poor fellow from Alsace, said to me, just as I was taking my leave; "But you have not seen everything yet, I must show you my railroad;" and in fact there was a railroad in the prison, for the cart in which food was brought to the prisoners.

Some days ago I happened to be in the little city of Petersburg, which stands at the falls of the Appomattox, and near which there is an excellent railroad. A merchant of the city took me to a manufactory of tobacco, in which some peculiar processes were employed. In these works was manufactured that sort of tobacco which most Americans chew, and will chew for some time to come, in spite of the severe, but in this matter just, censures of English travellers, unless the fashion of vetoes should spread in the United States, and the women should set theirs on the use of tobacco, with as unyielding a resolution, as the President has shown towards the Bank. After having wandered about the workshops amidst the poor little slaves by whom they are filled, I was stopping to look at some of these blacks, who appeared to me almost white, and who had not more than one eighth of African blood in their veins, when my companion said to me, "As you are interested in railroads, you must see the one belonging to the works." Accordingly we went to the room where the tobacco is packed in kegs, and subjected to a powerful pressure. The apparatus for pressing is a very peculiar contrivance, which I will not now stop to describe, but of which the most important part is a moveable railroad, suspended from the ceiling. Thus the Americans have railroads in the water, in the bowels of the earth, and in the air. The benefits of the invention are so palpable to their practical good sense, that they endeavour to make an application of it everywhere and to everything, right or wrong, and when they cannot construct a real, profitable railroad across the country from river to river, from city to city, or from State to State, they get one up, at least, as a plaything, or until they can accomplish something better, under the form of a machine.

The distance from Boston to New Orleans is 1600 miles,or twice the distance from Havre to Marseilles. It is highly probable, that within a few years this immense line will be covered by a series of railroads stretching from bay to bay, from river to river, and offering to the ever-impatient Americans the service of their rapid cars at the points where the steamboats leave their passengers. This is not a castle in the air, like so many of those grand schemes which are projected amidst the fogs of the Seine, the Loire, and the Garonne; it is already half completed. The railroad from Boston to Providence is in active progress; the work goes onà l'Américaine, that is to say, rapidly. From New York to Philadelphia, there will soon be not only one open to travel, but two in competition with each other, the one on the right, the other on the left bank of the Delaware; the passage between the two cities will be made in seven hours, five hours on the railroad, and two in the steamboat, in the beautiful Hudson and the magnificent Bay of New York, which the Americans, who are not afflicted with modesty, compare with the Bay of Naples. From Philadelphia, travellers go to Baltimore by the Delaware and Chesapeake, and by the Newcastle and Frenchtown railroad, in eight hours; from Baltimore to Washington, a railroad has been resolved upon, a company chartered, the shares taken, and the work begun, all within the space of a few months. Between Washington and Blakely, in North Carolina, 60 miles of railroad are completed, from Blakely northwards. A company has just been chartered to complete the remaining space, that is, from Richmond to the Potomac, a distance of 70 miles, and the Potomac bears you to the Federal city by Mt. Vernon, a delightful spot, the patrimony of George Washington, where he passed his honoured old age, where his body now reposes in a modest tomb. Between Washington and Blakely, those who prefer the steamboats, may take another route; by descending the Chesapeaketo Norfolk, they will find another railroad, 70 miles in length, of which two thirds are now finished, and which carries them to Blakely, and even beyond. Blakely is a new town, which you will not find on any map, born of yesterday; it is the eldest, and as yet the only daughter of the Petersburg and Blakely railroad. From Blakely to Charleston the distance is great, but the Americans are enterprising, and there is no region in the world in which railroads can be constructed so easily and so cheaply; the surface has been graded by nature, and the vast forests which cover it, will furnish the wood of which the railroad will be made; for here most of these works have a wooden superstructure. From Charleston, a railroad 137 miles in length, as yet the longest in the world, extends to Augusta, whence to Montgomery, Alabama, there is a long interval to be supplied. From this last town steamboats descend the River Alabama to Mobile, and those who do not wish to pay their respects to the Gulf of Mexico, on their way to New Orleans, will soon find a railroad which will spare them the necessity of offering this act of homage to the memory of the great Cortez.[O]

Within ten years this whole line will be completed, and traversed by locomotive engines, provided the present crisis terminates promptly and happily, as I hope it will. Ten years is a long time in these days, and a plan, whose execution requires ten years, seems like a romance or a dream. But in respect to railroads, the Americans have already something to show. Pennsylvania, which by the last census, in 1830, contained only 1,348,000 inhabitants, has 325 miles of railroads actually completed, or which will be so within the year, without reckoning 76 miles which the capitalists of Philadelphia have constructed in the little States of New Jersey and Delaware. The totallength of all the railroads in France is 95 miles, that is, a little more than what the citizens of Philadelphia, in their liberality, have given to their poor neighbours. In the State of New York, whose population is the most adventurous and the most successful in their speculations, there are at present only four or five short railroads, but if the sixth part of those which are projected and authorized by the Legislature, are executed, New York will not be behind Pennsylvania in this respect. The merchants of Baltimore, which at the time of the Declaration of Independence contained 6,000 inhabitants, and which now numbers 100,000, have taken it into their heads to make a railroad between their city and the Ohio, a distance of above 300 miles. They have begun it with great spirit, and have now finished about one third of the whole road. In almost every section east of the Ohio and the Mississippi, there are railroads projected, in progress, or completed, and on most of them locomotive steam-engines are employed. There are some in the Alleghanies, whose inclined planes are really terrific, from their great inclination; these were originally designed only for the transportation of goods, but passenger-cars have been set up on them, at the risk of breaking the necks of travellers. There are here works well constructed and ill constructed; there are some that have cost dear, (from 40,000 to 50,000 dollars a mile,) and others that have cost little, (from 10,000 to 15,000 dollars a mile). New Orleans has one, a very modest one to be sure, it being only five miles long, but it will soon have others, and after all, it is before old Orleans, for the latter has yet to wait till its capitalists, seized with some violent fit of patriotism, shall be ready to make the sacrifice of devoting some ten or twelve per cent. of their capital to the construction of a railroad thence to Paris. Virginia, whose population is nearly the same with that of the Department of the North, and which isinferior in wealth, already has 75 miles of railroad fully completed, and 110 in progress, exclusive of those begun this year. The Department of the North, where it would be quite as easy to construct them, and where they would be more productive, has not a foot completed, or in progress, and hardly a foot projected. Observe, moreover, that I here speak of railroads alone, the rage for which is quite new in America, while that for canals is of very old date (for in this country fifteen years is an age), and has achieved wonders. There are States which contain 500, 800, or 1,000 miles of canals. We in France are of all people the boldest in theory and speculation, and we have made the world tremble by our political experiments; but during the last twenty years we have shown ourselves the most timid of nations in respect to physical improvements.

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