1839, to $162,092,132, including only $5,595,176 in specie; while our exports were but $112,251,673, exclusive of specie to the amount of $8,776,743; showing a nominal balance of trade against us that year of about $44,000,000; a drain of over $3,000,000 of specie from the country, and a large increase of our foreign debt.

This large balance of trade against us and drain of specie, occasioned a second suspension of specie payments on the 9th of October, 1839, by Mr. Biddle's United States Bank of Pennsylvania, which was soon after followed by nearly all the banks south and west of the State of New York. No other country ever felt so quickly and sensibly, and suffered so severely, the disastrous effects of excessive importations of foreign goods, and an unfavorable balance of trade; for no other country ever had so small an amount of specie in proportion to the extent of their commerce; and in no other country was the credit system ever carried to so great an extent, upon a foundation so slight and frail.

The amount of specie in the United States, October 1st, 1839, being about $73,000,000, and October 1st, 1842, but $62,000,000, in round numbers; the quantity in the banks $45,000,000, in 1839, and but $33,545,000, December, 1842, averaging about $39,000,000, left in circulation, including what was hoarded up and withdrawn from use, from $28,000,000 to $29,000,000.

When specie is exported it is withdrawn entirely from the vaults of the banks in the commercial cities, and they draw the specie from the banks of the country and the interior cities, and the amount in circulation is scarcely affected at all Export two years in succession to pay for foreign goods, $5,000,000 each year more specie than is imported, accompanied by a great increase of debt by means of heavy importations, these $10,000,000 being withdrawn from the banks, reduces their specie to about $30,000,000, and this, of itself, will often produce a panic and a run upon the banks, and cause a draw upon them of $5,000,000 or $10,000,000 more, and thereby occasion a failure of many of them, and perhaps a general suspension of specie payments. The suspension of October, 1839, was occasioned by the exportation of specie, and the heavy importations of goods the previous year, though the balance of specie exported was but little over $3,000,000; and the suspension of May, 1837, was in consequence of the immense importation of foreign goods; the rapid accumulation of a heavy foreign debt, and the anticipation of large exportations of specie to pay it; the great expansion of the banks, and their heavy loans to speculators who could not pay. All these things contributed to create

a panic, and induce a withdrawal of deposits, and a run upon the banks, and soon led to a general suspension of specie payments in self defence, and before the anticipated exportation of specie to pay our foreign debt has commenced.

Statement of the amount of bank-notes issued to each inhabitant, and the estimated amount of coin and bank-notes in circulation, in each of the following divisions of the United States, at the date of their reports nearest to the last day of December of each of the undermentioned years.

For some months, annually, after harvest, including the fall and forepart of the winter, the bank-notes of the commercial and manufacturing States are sent into the agricultural States to pay for agricultural products; and during that portion of the year, the circulating money of the agricultural States is greater than is indicated in the above table; but the merchants soon collect the greater portion of it and send it to the commercial cities to pay for goods; so that during half or more of the year, it is much less, and perhaps did not average more than is above stated, during the years referred to.

Bank paper being a cheaper currency than coin, its natural tendency is to displace coin, and induce its exportation and consumption in the arts. The balance of trade being generally in favor of manufacturing and commercial, and against agricultural States, the tendencies of trade are to drain the latter of their coin, and to transfer it to the former. The products of manufacturing labor, when sold in the markets of the commercial world, amount to about twice as much as those of agricultural labor employed in either cold or temperate

climates; but not so when the latter is employed in the culture of cotton, sugar, coffee, and other tropical products, in a soil and climate adapted to them. Labor employed in mining and manufacturing in Great Britain, or in the United States, is more than twice as productive as agricultural labor can be made in Ohio and the North-western States. In fact, the average income of the people of the manufacturing States of Massachusetts and Rhode Island, and of Great Britain, is more than twice as great as that of the agricultural State of Ohio, and nearly twice as great as that of the agricultural State of Vermont. A majority of mankind are inclined to spend all they can earn, and all they can get credit for, and as the wants of agricultural communities are generally greater than their incomes, they often buy more than they can pay for with their crops within the year; and hence agricultural countries are usually involved in debt; the balance of trade is almost universally against them; and this drains them of the precious metals, and tends to depress their industry and the price of their products still more. Poverty, and nothing but poverty, a want of ability to pay promptly, and a loss or diminution of credit, tends to check importations, and to restore the balance of trade, by lessening the demand for, and the price of goods, and the inducement to import them.

As long as the balance of trade is against a country, it must either export its specie to pay such balance, or buy on credit, accumulate a debt, and eventually be drained of its specie to pay interest, as well as the principal of the debt. Bank-notes may, for a time, supply the place of coin, and thus afford a temporary remedy; but, in the end, they aggravate the evil. By inflating the currency in some instances, and in others keeping it full, they keep up, and often raise the price of both domestic and foreign products, and thereby tend to prevent the exportation of domestic products; to encourage importations; to increase both the quantity and value of goods imported, and exports of specie to pay for them; and to diminish the industry of the country by depriving its own citizens of the benefit of its markets for their products. The necessary consequence is, a run upon the banks for coin, a great diminution in their circulation, many failures of banks, and numerous bankruptcies among the people, attended with a depression of property and industry, and wide-spread embarrassment throughout the country. Such a revulsion necessarily checks importations for a time, and as exportation goes on as usual, the balance of trade is eventually turned in its favor; specie again flows in, and the country partially recovers from its embarrassment.

B. Early Coinage, 1791-18401

The first coinage act of the United States, which was passed in 1792, provided for the coinage of gold, silver and copper coins. The important provisions of this act and those which followed during the next forty years were as follows:

On the 2d April, 1792, a code of laws was enacted for the establishment and regulation of the mint, under which, with slight amendments, the coinage was executed for forty-two years.

The denominations of coin, with their rates, were as follows: Gold. The eagle of ten dollars, to weigh 270 grains, the half and quarter in proportion; all of the fineness of 22 carats, or 917 thousandths.

Silver. The dollar of 100 cents, to weigh 416 grains; the half, quarter, tenth or dime, and twentieth or half-dime, in proportion; the fineness to be 1485 parts in 1664, or 892.4 thousandths.

Copper. The cent, to weigh 264 grains; the half-cent in proportion. Since the act of 1792, the following alterations in the standards have been made:

On the 14th January, 1793, the weight of the cent was reduced to 208 grains; the half-cent in proportion.

January 26th, 1796. President Washington issued a proclamation (as he had been empowered to do by law,) that, "on account of the increased price of copper, and the expense of coinage," the cent would be reduced to 7 dwts. or 168 grains, and the half-cent in proportion. The copper coins have since remained at this standard.

June 28th, 1834. An act was passed, changing the weight and fineness of the gold coins, and the relative value of gold to silver. Before stating the alterations, it may be proper to observe, that the estimate of gold as being worth fifteen times as much as silver, which was the original basis, was found too low at the market value; which, although always fluctuating, was nearer sixteen to one, upon a general average. The effect of our legal proportions was to reduce the coinage of gold, and to restrain its circulation; being always at a premium, the coin was immediately exported to Europe, in the course of trade, and there quickly wrought into other shapes.

To provide a remedy for this evil, engaged the attention of some of our most eminent statesmen for a series of fifteen years. At length, in June, 1834, the weight of the eagle was reduced by law to 258 grains, (the parts in proportion,) of which 232 grains must be fine gold, making the fineness 21 carats 2 car. grains, or 89922 thousandths.

1 Hunt's Merchants' Magazine (New York, 1844), X, 244-6.

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This was an increase of 60 per cent on the former value of gold. The silver coinage was not changed.

The disadvantages of the complex standards of fineness, both in gold and silver, which were difficult to be expressed or remembered, and very inconvenient in regard to the frequent calculations which were based upon them, early determined the present director to endeavor to effect an improvement. The standard of nine-tenths fine, as adopted in France and some other countries, was obviously the most simple, and, upon every consideration, the most suitable. To bring our silver coins to that porportion, without changing the amount of fine silver in them, it was only necessary to put less copper, by 3 grains, in the dollar, reducing its weight to 412 grains. The weight of the gold was not to be changed, but the fineness increased about three-fourths of one thousandth, a difference far within the scope of the legal allowance, and of course hardly appreciable. These proportions were incorporated in a carefully digested and consolidated code of Mint Laws, which was enacted by Congress, in January, 1837. By that act, the eagle is to be 900 thousandths fine, and to weigh 258 grains; the half and quarter in proportion; and the [silver] dollar, at the same fineness, to weigh 412 grains; the parts in proportion. The allowed deviation in fineness, for gold, is from 898 to 902; for silver, 897 to 903. The following is a recapitulation of the various standards, of the gold and silver coins:

It will be proper, in concluding this article, to explain briefly the organization of the mint of the United States. Until the year 1835, there was but one institution, which was located at Philadelphia. In that year three branches of the mint were created by act of Congress. Two of these were for the coinage of gold only, and were to be situated at the towns of Charlotte, in North Carolina, and Dahlonega, in Georgia central points of the gold mining region. The third branch was for both gold and silver, and located at New Orleans,