Since then, however, the deliveries have again increased, showing that the extent of the enhanced consumption had not been overrated by the purchases of the retailers, under the first reduction of the tariff. This is a matter of extreme interest at this time, inasmuch as that it proves, incontestably, the operation of oppressive duties, in depriving the people, of not only comforts, but necessaries; and that when government does not interfere with the pursuits of commerce and trade, the people obtain a greater share of the comforts of life for the same amount of labor, and therefore are more happy, and their trade more prosperous. The

system of internal free trade, which exists in Germany, as a result of the Customs' Union, is yearly producing a greater consumption of both goods and produce, and in all parts of Europe, the removal of governmental restrictions, of one kind or another, is producing, to a greater or less extent, the same desirable results. The United States, on the other hand, which should show the greatest advancement in prosperity, have, under the weight of the present tariff, rather receded than otherwise during the past year. The imports for the year, ending June 30, 1845, as compared with previous years, have been as follows:

Specie.....

Free goods..

Specific...

Total..

Domestic.....

Total.....

....

.107,429.

...183,405......814,446

military resources of that government are such as to enable her to carry on a vigorous war with this without increasing her peace expenditure, or material

This general and increasing ability of the people of all countries, to consume the products of industry, constitutes a broad basis for a most healthy trade; yet, several causes, mostly political, have operated to create mistrust at the sources of enterprizes, and to paralyze financial affairs, as well as many branches of business. A cause, common to the United States and England, has been the war cloud which arose in the West, and which, momentarily assuming a threatening aspect, served to make large operators pause in their enterprize, and capitalists to show a more reserved disposition until the course of events became more marked. This circumstance has operated to a far greater extent in the United States than in England, to check the natural flow of commerce. The United States have a large amount of their promises outstanding in England, which in the event of a war would, to a great extent, be sent here for sale. The government would require large loans to carry on the government, as well as for warlike purposes, because its sole means of revenue in time of peace, the customs, would be subverted by war. The sea-board would also, in all proba bility, be subjected to severe losses, and the demand from these three causes would make a fearful difference in the value of securities, notwithstanding that the cessation of commerce would necessarily throw into other channels a large capital now engaged in that pursuit. In England, these causes all operate to a less extent. The approach of a war would cause capital to go home to England, whence in time of peace it is disposed to emigrate for more profitable investment than it there unds. It has been estimated, that the

small fears of invasion are there entertained. Under these circumstances, opinion leads to the apprehension of a far greater fluctuation in values, here, consequent upon a war, than in England; hence a greater degree of sensitiveness is manifest upon the bare possibility of such an event. Two other causes, in England, have greatly tended to assist the evil influence of war fears-these are, the position of the rail-road deposites, and the state of the harvest, with all its political commotion. In the United States, the opposition of the banks and political partizans to the independence of the treasury of the federal government, and the natural pause in the import trade, consequent upon the expected reduction of the present onerous tariff, aided by a little speculation in breadstuffs, growing out of the want of a just appreciation of the real extent of the deficit in the English and Irish harvests, have all tended to interfere with the otherwise prosperous state of affairs. The government regulations, in relation to rail-roads in England required, that a certain instalment, £2 per cent. should be deposited with the government by the 30th of November last, prior to the application to parliament, to authorize the construction. It is estimated from the best sources, that the amount thus paid into local banks, on account of these roads, amounts to near £20,000000, a most incredible sum, and to pay this sum, in money, into the hands of the chancery accountant, as the law requires, prior to the 30th of February, is manifestly impossible, inasmuch as that it amounts to the whole outstanding issues of the Bank of England. It has been proposed to the government to allow of the transfer by each local depository, of commercial bills to the Bank of England, and that institution to notify the government that it is prepared with the funds. This, the government has refused, and it is supposed with the view of quashing all the proceedings hitherto had on behalf of the new rail-roads, on the ground of their non-compliance with the letter of the law. The uncertain position of so

great a volume of money, to be paid in a short time, naturally produces uneasiness on the part of those who yet remember the disastrous effects of the West India loan of the government in 1835. That was a loan for £15,228,966 to indemnify the West India planters for the slaves emancipated. We have alluded to this, because the amount of money now to be paid to the government is equally large, the payments are to be completed in less time, and the apprehensions that the operation engenders in the public mind has a great effect upon the disposition of capitalists to lend, and consequently affects the market to a very considerable extent.

The kind of panic which has been created in relation to the crops, has had the effect of checking the operations of

July 12.

dealers, in anticipation of a diminished consumption of goods, which, it is supposed, will result from the alleged scarcity of food. A great deal of the panic created in relation to the crops has been the effect of the efforts of the opposition, united with the anti-corn law league, to overthrow the existing corn laws and the ministry-one or both.

The panic, so produced, seemed not only to check the operations of trade, but to produce a disposition to hoard gold. This latter feature has evinced itself in the continued diminution of the coin in the Bank, notwithstanding that the exchanges continue in favour of England-gold being dearer in London than either at Paris or Hamburg. The progress of the Bank movement has been as follows:

Oct. 18.

Nov. 22

Securities,. Bullion...

The decrease of coin is, from the highest point, some £2,636,785, and it has not gone out of the country. The securities of the institution have also considerably increased-keeping pace with the advancing rate of interest.The indisposition to lend, on the part of private capitalists, has driven a greater quantity of paper upon the Bank of England. The same causes that prevent capitalists from lending, also conspire to prevent dealers and merchants from embarking in new enterprises.These causes are temporary in their nature, and will leave the markets in an exceedingly sound state when they shall have departed.

In the U. States, the markets are suffering now for the effects of the revolution of 1840. Under the previous administration, a system of federal finance was adopted on sound principles, disconnecting the operation of the Treasury from the movements of banks and the schemes of speculators. The compromise tariff was then in operation, under the implied pledge of the abandonment of the principle of "protection for protection," beyond what might arise incidentally from maximum duties of 20 per cent. Such a rate of duty was

supposed ample to supply the wants of a government economically administered, without admitting of the accumulation of a surplus; and that therefore the collection of the revenues in the constitutional currency, would not only place the Treasury above all dependence upon banks, and the risk of loss through their mismanagement, but that a regular and constant demand for specie, to pass through the federal Treasury into the hands of the people, would prevent those dangerous accumulations of specie in bank vaults, which stimulates their unhealthy action, and result in wide-spread disaster to the people. The law was consequently passed July, 1840. Unfortunately, in that year the accumulated distress of past speculation was upon the country; the plethora of bank paper had been withdrawn, and falling prices, and ruined value attesting the subsidance of an unnatural speculation, yet involved the mass of the people in that distress which overwhelmed the speculators, and an army of bankrupts clamored for release from their obligations; others sought, by a new inflation, to recover a fictitious value for property they wished to sell. These, uniting with the whole

herd of borrowers, effected a revolution, of which the solitary remains are now a most onerous tarif, a public debt of $17,000,000, on which 6 per cent. interest is paid, of which the Treasury contains, or owns, $10,000,000, loaned to speculators, banks, and brokers, without interest.

In March, 1841, when the late administration came into power, the debt of the federal government was then $6.910,669, consisting chielly of Treasury notes, floating in the operations of exchange; and all redeemable within the year, at the pleasure of the government. This description of debt was, of all others, best adapted to the exigencies of the Treasury. Because, when, from a revulsion of trade, caused by the breaking down of the bank currency, or other events, the government revenues fell off, they could be paid out into circulation, and absorbed in the exchanges; and when trade recovered so far as to restore the revenues, they would be returned, and the debt extinguished. Such a revulsion in trade produced the necessity for the Treasury notes. The revenues in the year 1840, from duties on merchandize, were $13,496,834, only, at that time, as seen by the above table of imposts. Nearly one half of the goods imported were free of duty. Mr. Woodbury, then Secretary of the Treasury, proposed to lay a duty of not over 20 per cent. on those articles, except tea and coffee, an operation which would, with the general recovery of trade, restore the revenues. The first act of the extra session of Congress, in the summer of 1841, was to borrow money on a stock debt, redeemable only at the end of a term of years, at the same time the duties were imposed on all articles before free, and raised to 20 per cent. on articles that before paid less than that. The effect of this, was to contract a permanent debt, and to make a temporary debt a permanent one; at the moment that means were taken, which, aided by the recovery of trade, would restore the revenues, and permit the extinguishment of the debt. The consequence has been, that the government has been paying upwards of $1,000,000 interest, on a public debt redeemable only in 20 years, while the revenues accumulated to the extent of $13,000,000 in the Treasury; and the ac

cumulation has averaged $10,000,000 for more than two years. This money has been loaned to banks without interest; and in their hands has been the basis of loans to speculators, and of a considerable derangement of the currency. That is to say, the federal government has actually been paying $600,000 per annum interest for money that the banks have been using to their own advantage. This state of affairs has been highly injurious to the mercantile interest, because the receiving banks have rigidly demanded, in specie, the balances which the payment of the duties created in their favor against all other banks. The effect has been, whenever the customs have been large in any one month, to draw specie into the vaults of the government bank, and thus to force a curtailment of their mercantile loans on the institutions in general, and, also, to enhance the ability of the pet bank to loan to speculators, and to avail itself of the high rate of interest resulting from the contraction its own movements had compelled the other banks to adopt. Alternate revulsions and speculations have attended this state of affairs. The independent treasury is now to be restored, and the connection between banks and the government finances, to be discontinued. This measure naturally calls forth the most strenuous opposition of those who profit by the present state of affairs, and this evinces itself in a rigid curtailment of loans in those quarters where the greatest distress will be created by it, and by so doing promote the unpopularity of the independent treasury as far as in their power lies. Happily, however, the power of the banks is far less now than in former years, when the late national bank for the same cause made war upon the government in the same manner. The amount of capital seeking investment, in the hands of private individuals, is far greater now than formerly. During the past year there has been paid off, by the federal and state governments, more than $10,000,000 of stock debt, by far the largest portion of which remains for investment here, in the hands of those who received it. Pennsylvania has paid during the year $2,000,000 of interest, and her stock has become permanently active. Michigan has renewed the payment of interest on her

acknowledged debt. Illinois has paid, in specie, a 1 mill tax towards the interest on the state debt; and Indiana is about following the example of Illinois in that particular. These are circumstances which not only add to the 'means of capitalists, but are calculated so far to restore confidence among foreign capitalists as to lead to an extended employment of capital on this side of the Atlantic when present warfears shall have been allayed. These fears have operated alike upon domestic and foreign private lenders to cause them to hold up, and thus give effect to the struggles of the banks against the sub-treasury law. Money has, in consequence, advanced in some cases to over one per cent. per month. This state of affairs is of its nature temporary. The constant maturity of paper, at a time when the disposition to embark in new enterprises is not great, is daily lessening the demand for money, and must, therefore, of itself soon produce a superabundance.

The operation of the Independent Treasury, in connection, as is proposed, with a branch mint in New-York city, will, in the highest degree, favor a regular and abundant supply of money for commercial purposes, if not for speculation. Without a mint in New-York, the operation of the specie feature of the law is practically impossible. The largest importation of specie into the country is at the port of New-York; and there being here no means of coining it, it remains in the bank vaults, and they issue their promises based upon it. If the government demand specie for its dues, it must be drawn from the banks in the shape of foreign coins of all descriptions. This money, at the legal rates, may satisfy the demands of the government; but when the government attempts to pay it into circulation the people will take it reluctantly. Spanish pistoles, Portuguese doubloons, Indian mohurs, and English sovereigns are coins with the nature and value of which they for the most part are unacquainted. If, however, the treasury vault is connected with a branch mint, American new and sound coins may be paid out, and all classes of people will eagerly receive them. The first influence of such an operation will be to give effect to the gold bill of 1834, the object of which was to keep coin in the coun

try; as, however, the law regulating the coinage is of but little use, unless the coinage takes place, a mint in New-York city, where most of the specie arrives in the country, is a necessary adjunct to that law. So provided, a difference of at least 14 per ct. will be produced in the exchanges in favor of keeping the coin in the country; and by affording a plentiful supply of coin, ready for circulation, the treasury will be to the banks of the city what the Bank of England is to the non-issuing banks of London, viz., the furnisher of the currency with which their business is conducted. The active demand for specie thus created by the government will affect the local currency healthily, because it checks the exorbitant issues of those small country banks, the profits of which are derived from the discount on their notes in New-York and other centres of business. It will also act as a powerful antidote to the excessive import of goods on credit, under the modifications of the tariff, which, it is hoped, are about to take place. One of the worst effects of a fluctuating paper currency, is that, by artificially raising prices, it prevents exports. This has, to some extent, occurred during the last few months in relation to flour. A considerable foreign demand sprung up on the strength of the news from England; but the exaggerated accounts arising from political causes, excited hopes here that any price could be obtained for flour. Instead, therefore, of selling, as orders came from England, dealers held, by the aid of bank facilities, until the price rose from $4 50 to $7 25. The effect was, that out of very large receipts only 274.274 bbls. of flour were exported from Sept. 1st to Dec. 26th. This involved a fall to $550, at which rate English buyers again entered the market. This illustrates in some degree the general effect of bank facilities, which, at the same time, promote large imports on credit, and the consequence is revulsion. A low tariff, with the operation of the Independent Treasury, is eminently calculated to promote the import of all that is actually wanted in the country, and cause the export of United States produce in payment, by which means the general welfare of the whole country is improved ad infinitum.