ducements operating upon the State to keep up that system at all hazards, rather than to meet the responsibility which must ultimately, in case of its failure, fall upon them, can easily be estimated.

We have, as yet, said little of those more obvious objections to the law, which have already occurred to the minds of most sensible and reflecting persons among us. Yet we cannot pass the subject without, at least, remarking upon the difficulty likely to arise under our popular system of government, from combining the interests of private individuals into masses, by throwing their lands, to a great extent, into the hands of the State government, subject, in case of trouble in the pecuniary affairs of the public, to be levied upon, summarily, at a ruinous sacrifice to the owners. The notion of making land the basis of a currency is not a new one. It has often been attempted in times past, and in various shapes, but so far as we have the means of knowing, with uniform want of success. Now, we are at a loss to perceive why the operation, again proposed, should be likely to be any more fortunate than its predecessors have been. The indispensable attribute of money is convertibility into any and every article wanted, whether by the pleasure, or caprice, or convenience of the holder. In order to this, it must also be divisible to the extent necessary to accommodate a purchase, whether it bet very small or very large. Neither of these qualities can ever belong to land; but on the contrary, land itself is always the article which stands in the most need of the aid of money, in order to become transferable at all. A laborer can buy neither bread nor meat for the day with an acre of land, but must first proceed to sell that acre for money, and with that he gets what he wants, exactly in the quantity required. So the comptroller of New York, with fif teen or twenty millions of landed estate, mortgaged for the redemption of bills to that amount, would be utterly unable to convert a five dollar bill without coming into the market to get the coin. But fifteen or twenty millions of landed property cannot be brought into the market at any one time in any part of the United States, without at once reducing the value of the whole of that species of property in the vicinity of where it is situated. Hence the difficulty of conversion, and a necessity of sacrifice or delay. Sacrifice will be ruinous to the owner, while delay will prove injurious to the bill holder, especially to that poorer class who cannot keep money for any length of time on hand. The alternative is disagreeable, for on either side great popular uneasiness may reasonably be apprehended on the part of the combined land owners, if their property is sold at much less than its value; and on the part of the bill holders, if it is not, and they suffer by the consequent depreciation of their bills.

After all, it is not unlikely that the effect of any public disaster, if such should happen, would simply be to compel the State to guarantee the circulation in the first instance, and reserve to itself an opportunity, subsequently, to convert the assets in such manner as completely to indemnify her for the advances she would be compelled to make. This would not probably be severely injurious to her prosperity, although it might be embarrassing. For ourselves, we hope that she will never have occasion to be driven even to this; and that the dangers we have thus undertaken to foresee from the free banking law, will prove imaginary. If it were not for the extensive injury to result from all errors committed in this department of science, we should always be in favor of testing the value of new theories by experiment. We believe there is something yet to be learnt, and if the state of New York shall prove fortunate enough to establish, by her present law, the possibility

VOL. I. NO. IL

16

of securing even the stability of that portion of the circulating medium within her limits, which has heretofore been subject to injurious fluctuations; we think the rest of the country, and the commercial world generally, will have reason to be grateful to her, for risking so much in the attempt.

But whether the free banking law is an improvement, or is not, there is no probability that it will afford any solution of the great problem presented to the world by the credit system: which is, whether any issue of notes to serve as money, by private portions of the community, can be so restricted as to prevent the fluctuations in property, which are found at present in pretty regular recurring intervals to take place. In England, the writers upon the subject are gradually retreating to the position that there should be but a single source of issue. We are not yet prepared to admit the superiority of that plan in practice, however fair it may seem in theory. And even if we were, a single glance at the condition of the United States would show that at least for them the idea is not feasible. Whatever may be the political bearing of the subject, no one acquainted with the past experience of the country can fail to admit that a national bank has hitherto been the only remedy in our power which has answered any useful purpose, and we think Professor Tucker has done nothing more than strictly his duty in submitting to the public, as he has done, the reasoning which, upon purely financial ground, has brought him to this conclusion. A national bank, with powers more divided than they were heretofore, in some respects restricted and in others modified, is the only device which we have ever yet been able confidently to believe a means of preserving the currency in the union perfectly sound.

It is with some surprise that we perceive the author to maintain the expediency of more than one national bank. This idea appeared to us so entirely at variance with the habitual good sense which reigns elsewhere in his work, that we were curious to see the reasoning by which he endeavors to support it. That no injustice may be done him, we will now extract it.

66 Whatever may be the benefits of a national bank, they would all seem to be increased by having more than one, except that the profits to the shareholders would be somewhat diminished. This division of the privileges and duties of a national bank is recommended by the following considerations: "First, whatever may be the power and influence which may be possessed by a bank that has a large capital, with branches dispersed over every part of the Union, and is the fiscal agent of the government, it would obviously be lessened by being divided. Though this power and influence have been greatly overrated by popular jealousy and party antipathies, yet, as it is still honestly believed by a large mass of our citizens to be formidable, their fears are entitled to respect, and should be quieted if possible. The feelings of a large portion of the people will never be disregarded by a wise and a just government, even when they are founded on prejudice.

Secondly, the plan would secure to the public the benefit of competition in all those functions in which a national bank has any advantage over state banks; as in domestic exchange, in furnishing a more uniform currency, and in fiscal services to the government, both at home and abroad. Their profits, then, on the purchase of bills, and the sale of their own drafts, would not only be less than would be charged by the state banks, but at the lowest rates at which they could be afforded.

Thirdly, -the two or three national banks would be salutary and effective checks on each other. We have seen that the state banks, whose excessive issues are so effectually controlled by a national bank, are also a re

ciprocal check on the latter; but their power could never be so great, both from defect of concert and unity of action, and for want of the important aid that would be afforded by the funds of the government. The national banks, thus equal in capital, in credit, and resources, in all parts of the union, would give the public the same security against the redundant issues that a single national bank has hitherto afforded against those of a state bank; and thus a further answer could be given to those who have objected to a national bank, that, while it restrained the operations of the state banks, it was unrestricted itself."

We must be pardoned for expressing an opinion that this argument is nothing more than a weak concession to the principles of the Virginia school of statesmen. For as to the question of power, if we give it up at all, we may as well give it up entirely, as to receive it in such useless portions. The only value of a bank is in its ability to do good, and the argument against it from its abuse of power, is only the common one which applies to the use of all the great agents of the universe. Now it is plain if we take three banks instead of one, because three are not so likely to act with equal vigor as one, and because they will check one another; we may find that while we have multiplied the sources of abuse, we have, in the same ratio, been diminishing the ability to benefit the public. For in regard to the matter of competitions, which constitutes the Professor's second reason, that is not what we want to create in America from legislation. It springs up of itself wherever it can be used, and it never will be wanting where any sources of pecuniary profit are to be found. The State banks compete with each other, and would do so with a national bank more than enough. The great object is to keep that competition within bounds; and this can never be done by multiplying national banks. For if the argument in favor of three be good, we know not how that in favor of four could be resisted, or any superior number beyond one. We consider one necessary, exactly as we consider one State government, or one national government, necessary, and not two; because the object is to control and to regulate what can be controlled or regulated in no other manner. But to do this well, it must be done simply. A single agency is the most effective instrument imaginable, as well to avoid the one extreme of regulating too much, as the other of not regulating at all.

Neither do we perceive how two or three banks would be such salutary and effective checks upon each other, as the author pretends. Each would exercise its power of contraction to a certain extent, and no more. It could not prevent the expansion of one of its equals, nor establish any uniformity of action throughout the country. In moments of prosperity, to be sure, the competition for business would be likely to tempt them all to go to the outside of a safe line of conduct in accommodating the public, but we see no evidence to prove that similar motive would exist in common to prompt

any

a contrary course when it was needed.

Yet, after all, the great obstacle to the Professor's plan would arise from its failing to supply some general system of regulation. It is now pretty well ascertained that the difficulties most likely to befal the currency must be foreseen by a thorough analysis of the elements which form the foreign exchanges of the country. And that a season of prosperity, and extended domestic trade, is often apt to terminate in a drain of specie from abroad. At these moments it is that a national bank can do good by exercising a counteractive power over the circulation in a system of steady and uniform preparation at all exposed points at once. This system necessarily bears upon

the state banks at those points, and turns their attention to the expediency of following suit. The machine of credit, then, moves harmoniously, and the danger apprehended is thus in a way to be avoided. But if there were two or three national institutions, with each a different head and management, and each directed from a different point, as for instance, from New York, Philadelphia, and New Orleans; it may be doubted whether the president of the New Orleans bank would see the state of the currency with the same eyes that he of Philadelphia did, or whether the latter would be always prepared to concur with his rival in New York. Hence, a difference in policy, and the fatal consequences of a disagreement. One institution would rapidly undo the work of the other, and the State banks, thus freed from restraint, would act exactly as they pleased; and the currency would be left to its fate, very much after the same fashion that it now is when there is no national bank at all.

The great want of the country, then, is of some single power which shall think of the state of the currency, and of that only, and which shall always keep itself prepared to act in cases of emergency. This power should not be entirely under the control of the commercial interest, though it ought to sympathise with it; and it should be wholly separated from political influence of any kind. Nothing but the very highest grade of personal integrity should be called into the management, no suspicion of personal interest should be admitted; - above all, politicians of every denomination should be rigidly excluded from either the direction or the participation of the favors of the institution. This may seem harsh and unreasonable, but it is indispensable. The currency has suffered too much already from the connexion that has been made between finance and general politics. The two should be kept separate; not, to be sure, in the manner contemplated by the present government, of sacrificing the one to the other, but by preventing any collision between them. The commercial division of the country ask nothing better than to be let alone. In consideration of the advantages they would derive from a sound currency and a well regulated system of exchange, they would almost too readily consent to retire from the field of political action; and in so doing, they would be more likely to be benefitting the community in their particular province, than those mock patriots ever can, who combine, so very closely, the professions of attachment to the people's interest, with the most active zeal in promoting their own. A respectable merchant, who minds his own business, is a better and more useful man than a factious president. And an upright and independent bank direction, out of politics, would promote the good of the nation much more than any party-ridden house of Congress.

CHRONICLES OF COMMERCE.

ART. III. COMMERCIAL SKETCH OF BOSTON, WITH STATISTICAL FACTS, AND NOTICES OF EMINENT MERCHANTS.

to Alden Bradford,

THE state of Massachusetts, it is well known, was settled by the puritans in the early part of the seventeenth century. Men of stern minds and great inflexibility of purpose, who abandoned their native country, and sought in the

i

wilderness for that religious toleration, which was denied them at home. There they reared their temples to the Almighty, and worshipped, as they believed, in the manner most primitive and apostolic, abjuring all such rites and ceremonies as conflicted with their peculiar tenets. From the commencement, the settlers were men of different classes and occupations in life, and some of them were traders or merchants, and naturally turned their attention to those pursuits to which they had been accustomed. Others were mechanics, but the larger portion were cultivators of the soil.

In September, 1628, two years after the first company settled at Salem, the number of inhabitants exceeded two thousand; the greater part of these arrived with Winthrop, in June, 1630, and settled at Charleston, Watertown, Boston, Dorchester, and Roxbury. So large was the annual increase, that, including the few removed to Hartford and New Haven, the population of Massachusetts, in 1641, amounted to twenty-one thousand. This would justify, and naturally excite, the commercial spirit, and the inhabitants were too active and enterprising to leave the trade of the colony in the hands of the British merchants. In the first eleven or twelve years, dating back from its earliest settlement, two hundred ships had arrived at Boston and Salem, with large quantities of goods and provisions, of various kinds; and as we have before remarked, bringing large numbers of emigrants, to encourage and strengthen the earlier adventurers; and we find them soon competing with the English merchants for the trade of the colony. Vessels were early purchased for this purpose, and employed in voyages to the West Indies, and to Great Britain. Several were built for the coasting trade to Virginia, returning with cargoes of corn- and one ship of three hundred tons, for more distant voyages. Governor Winthrop early had one built of a smaller size, and one was built at Plymouth, by subscription, among the inhabitants.

Maverick, who was settled on an island, or more properly a peninsula, in Boston harbor, now called East Boston, was among the first who turned his attention to navigation; and, on the arrival of Winthrop and his company, in 1630, was a merchant, and the owner of a small vessel engaged in the West India trade.

Edward Gibbons became connected with him at an early period, and visited the islands for the purposes of trade. They also traded with the French near the bay of Fundy, where the French had two places fortified, and a considerable settlement; but Gibbons, trusting De La Tour, a French resident there, with goods to a large amount, which he had imported from the West Indies, and purchased of British merchants, trading to Boston; by the failure. of De La Tour to pay, Gibbons became embarrassed, and eventually a bankrupt, when he was somewhat advanced in life. Gibbons appears always to have sustained a high reputation, as he was a representative for Boston in the general court, for several years, and commander in chief, under the governor, of the militia of Massachusetts.

As population increased, commerce and navigation became extended. Twenty or thirty years before the settlement of Boston, say from 1600 to 1610, the English and French had engrossed the fisheries on the coast of Massachusetts and Maine, and large quantities were taken and exported to the West Indies, and to Europe; but in twenty years after the first settlement of Boston, they engaged in an active competition in the fisheries; and furs, to a large amount, were sent to Europe, and disposed of at handsome profits. Sarsaparilla was also shipped to England, and found a ready market, on account of its supposed medicinal qualities, and the charm of novelty attached