the period when they have to make their returns, to increase the amount of bullion in their coffers by temporary loans, and all manner of devices. The whole system is, in fact, bottomed on the most vicious principles. But it is unnecessary, after what has recently occurred, to insist further upon the gross and glaring defects of American banking. Perhaps no instance is to be found in the history of commerce of such a wanton over-issue of paper as took place in the United States in 1835 and 1836. The result was such as every man of sense must have anticipated. The revulsion to which it necessarily led, after producing a frightful extent of bankruptcy and suffering in all parts of the Union, compelled, in May, 1837, every bank within the States, without, we believe, a single exception, to suspend payments! In 1838, such of them as were not entirely swept off resumed specie payments; and in 1839, by far the larger number of them, with the bank of the United States at their head, again suspended payments! The United States Bank is not merely, however, unable from temporary embarrassments to pay its notes in specie; it is entangled in more serious difficulties, and is believed by many to be substantially insolvent. If it be really in this predicament, it is what we did not anticipate. It was originally incorporated by Congress in 1816 for 20 years, and had a paid-up capital of 35,000,000 dollars, or of more than seven millions sterling. The question whether the charter should be renewed was debated with extraordinary vehemence in all parts of the Union. The late president, General Jackson, was violently opposed to the re-incorporation of the bank; and rejected a bill for that purpose that had been approved by both the other branches of the legislature. Ultimately, however, a majority of Congress came round to General Jackson's views, and the charter was definitively refused. The bank afterwards succeeded in obtaining a charter from the state of Pennsylvania. This, however, merely enables it to carry on business in that state, but it has since obtained leave from some of the other states to establish branches within their limits. The embarrassments in which this institution has been involved are believed to have been mainly caused by the improvidence with which it has made advances on state stocks, the stocks of public companies, and such like securities. The extreme facility with which money, or rather what was called money, might be borrowed from the different banking establishments in America, in 1835 and 1836, created quite a mania for all sorts of joint stock and other speculative projects, such as banks, canals, railways, &c.; and this rage has been still farther promoted by the different state governments embarking deeply in the same sort of projects, and borrowing largely to carry them on. (See FUNDS, AMERICAN, in this Supp.) The bank of the United States is believed to have made very large advances on this sort of securities; and after the revulsion in America in 1836 and 1837, this bank and every other institution in the Union that had any stock of any kind to dispose of, sent it over to England, where the temptation of a high rate of interest made vast quantities be sold in 1837 and 1838. But notwithstanding the proverbial gullibility of John Bull, and his determination to confide in every thing of which he knows little or nothing, the market here was beginning to be overloaded with American securities, and the collision that took place in Maine, in March, 1839, put a complete stop to their further sale. The agent of the U. States Bank is understood, when this occurrence took place, to have had a very large amount of such securities on his hands; and he has since had the greatest difficulty in raising money upon them, except at a great sacrifice. The bank of the United States is also believed to have been materially injured by the advances she made to the holders of cotton. It has been alleged, too, that these advances were made, not so much in the view of supporting credit in America as of procuring consignments for a particular house in Liverpool. But it is hardly possible to suppose that such should have been the case, or that an institution with 7,000,000l. of capital should have been perverted from its legitimate purpose, and brought into jeopardy for so paltry and disgraceful an object. Since the stoppage of the U. States Bank the following statement has appeared: Statement of the Affairs of the Bank of the United States in Pennsylvania, Oct. 1. 1839. But this account, like all others of the same kind, is absolutely worthless. It communicates no information, or none that can be depended upon, as to the real state of the bank. Who knows any thing of the value of the bills for 11,318,469 dollars, discounted on "private security?" or of those for the 17,926,022 dollars, discounted on "other security ?" They may be, and, no doubt, will be said to be as good as cash! But who attaches any value to an unexamined balance sheet, put forth by an individual or association that has stopped payment? The rendering of such accounts is, in fact, nothing better than a mere farce. If the bank of the United States be really insolvent and unable to meet its engagements, a question will most likely arise as to the liability of the holders of bank stock resident in this country to make good its engagements. Will the charter protect them, or will it not? This is a question which, we believe, has not hitherto been mooted, but no doubt it will soon force itself on the public attention. We do not know how the existing law may be interpreted; but if they are to be protected, the sooner it is changed the better. Had the United States Bank not opened an agency here, the case would have been different: but having opened an office, and transacted a large amount of business in London, it has become to all intents and purposes an English establishment; and the partners belonging to it in England must, one should think, be amenable to English law, and not to the law of Pennsylvania. If this be not the case, it will necessarily follow that any institution, though consisting wholly of Englishmen, that obtained a charter from any foreign state, even though it were not generally known that it was chartered, as the foreign law might not require this to be divulged, might open places of business in London and Liverpool, and, after getting some hundreds of thousands of pounds into debt, might suspend payments, and laugh at the credulous dupes they had reduced to beggary and ruin. It would be, no doubt, strenuously affirmed of such an institution, that it had a paid-up capital amounting, perhaps, to several millions sterling; that it was a "highly respectable" association, and conducted by gentlemen of the "highest character:" probably, too, a balance sheet would be occasionally put forth" demonstrating" its flourishing situation; and a portion of the press would not fail to direct the particular attention of its readers to the "admirable principle" on which it was founded, and the 'ability" of its managers! John Bull must change very much, indeed, if these representations, combined with the advantageous terms that would very probably be offered to those dealing with it in the first instance, did not procure for it a considerable amount of credit. But in the end, it would, most likely, turn out that no one knew whether it ever had any paid-up capital. And, supposing it had, what is to hinder the partners or managers from dividing it wholly amongst themselves? The legislature of England has wisely refused to allow of partnerships (except in extraordinary cases) being instituted here with limited responsibility; being well convinced that, despite every possible precaution, they would be sure, in many instances to be perverted to the basest purposes. And is it to be endured that foreigners should acquire privileges in this country denied to natives? or that foreign governments should have power to organise and establish institutions amongst us on a principle which parliament justly regards as most objectionable? If the law of England authorise this, it is most certainly high time that it were amended, and that a check were given to what must otherwise be by far the safest and most profitable species of swindling. But we do not believe that such can be the law. British subjects who embark their capital in foreign trading associations may, in so far as respects their interest in them, be amenable only to the foreign law, provided the associations to which they belong restrict their operations to foreign countries. But should these associations send agents here, and open offices and carry on business within the United Kingdom, the case is altogether different: the legislature of Pennsylvania may be omnipotent at home, but it is impotent in England; it may, if it choose, institute trading companies, with limited responsibility, or with no responsibility at all; but if these be joined by Englishmen, make England the scene of their operations, and issue their balance sheets in the city of London, what are they in practice but English companies? And such of our countrymen as have embarked in them would seem to have but slender grounds of complaint, should they be taught that they are responsible to our law; that the law of a foreign country cannot protect them; and that they will be made liable, in the event of the concern becoming bankrupt, to the utmost shilling of their fortunes for its liabilities to British subjects. Owing to the privilege claimed by the different states, and exercised without interruption from the Revolution downwards, it is, we fear, impossible to effect the suppression of local paper in America, or to establish a paper currency which should at all times vary in amount and value, as if it were metallic. But the states have it in their power to do that which is next best they may compel all banks which issue notes to give security for their issues. This, though it would not prevent destructive oscillations in the amount and value of the currency, would, at all events, prevent those ruinous and ever-recurring stoppages and bankruptcies of the issuers of paper-money, that render the American banking system one of the severest scourges to which any people was ever subjected. Common sense and experience alike demonstrate the inefficacy of all the regulations enacted by the American legislatures to prevent the abuse of banking. It is in vain for them to lay it down that the issues shall never exceed a certain proportion of the capital of the bank, and so forth. Such regulations are all very well, provided the banks choose to respect them; but there are no means whatever of insuring their observance; and their only effect is to make the public look for protection and security to what is altogether impotent and worthless for any good purpose. The suppression of local issues is indispensable in order to make a paper currency what it ought to be. If, however, this be impossible in America, there is nothing left but to take security from the issuers of notes. All schemes for the improvement of banks, by making regulations as to the proportion of their issues, and advances to their bullion, capital, &c., are downright delusion and quackery. Table showing the Number and Capital of the various Banks existing in the United States at the undermentioned Periods. (See Letter of the Secretary of the Treasury, 8th January, 1838.) with 1837. revenue Account of the principal Articles of Produce exported from Java during each of the Ten Years ending Leaves nett gain 669,030 01 81,515 05 or 33 1-2 per cent. on original capital of two millions. Years. Pic. Pic. Lbs. Coffee. Pepper. Indigo. Hides. Cloves. Nut No. Sugar. Tin. Pic. 1828 1829 Pic. 216,182 8,226 23,010 49,400 1,852 1,649 281.612 6,104 46,368 44,321 2,434 1,159 1830 288,740 6,061 22,063 30,249 803 1,304 1831 299,086 7,836 42,884 63,271 1,581 2,550 120,298 30,252 18,637 5,188 1832 314,173 7,075 168,211 82,385 5,144 3,849 345,872 47.801 23,072 14,323 1833 260,166 5,407 217,480 75,421 1,942 1,171 210,947 44,304 30,344 16,731 1834 455,008 7,704 250,423 53,000 4,040 4,200 367,131 39,165 23,379 14,909 1-35 466,871 11,868 535,753 139,995 4,566 5,022 439,543 40,836 25,577 4,905 1836 498,077 7,006 407,798 120,000 2,185 3,886 509,513 47,739 36,430 49,968 684,947 12,487 822,492 93,071 2,925 3,778 676,085 44,417 Rice. Ratans. Mace. Arrack, Leag. 1837 The values of the principal products exported from Java, în 1836, were: Taking the florin at 1s. 8d., the total value of the exports is 3,521,8037. Among the principal articles of import are cotton goods; copper, iron, and steel; glass and earthenware; wines and spirits; provisions, &c. We have not learned the exact value of the imports in 1836, but, taking it at 2,500,000l., it will make the whole trade of the island amount to about 6,000,000%. It is stated in the Dictionary (vol. i. p. 378.) that the export of coffee from Java might be estimated at about 18,000 tons; but it appears from the above table, that it has increased so rapidly that it amounted, in 1837, taking the picul at 136 lbs. to 93,152,792 lbs., or to above 41,500 tons! The export of sugar during the same year exceeded 40,000 tons. BOMBAY. In 1836-7, 28 ships, of the aggregate burden of 20,800 tons, mostly owned by native merchants resident in Bombay, were employed in the China trade; and there are besides a considerable number of large ships engaged in the trade to England and other places. They are for the most part navigated by Indian seamen or Lascars, those of Bombay being accounted by far the best in India; the master and superior officers only, and not always, being Englishmen. In 1836-7, there arrived at Bombay 253 ships (222 under British colours) of the aggre. gate burden of 104,913 tons.-A. The small and sterile island of Bombay affords no produce for exportation; indeed, hardly yields a week's consumption of corn for its inhabitants. Nor does the whole presidency of Bombay, although estimated to contain about 70,000 square miles, and from 10,000,000 to 11,000,000 inhabitants, yield, with the exception of cotton and rice, any of the great colonial staples, such as coffee, sugar, and indigo; a circumstance that seems mainly ascribable to the impolitic restraints upon the employment of British settlers and capital that were long imposed by law, and acted upon with peculiar rigour in this and the sister presidency of Madras, in contradistinction to the greater latitude afforded in Bengal. Bombay is also much less favourably situated, in respect of internal communications, than Calcutta. The Ganges and its tributary streams intersect the richest provinces of India, and give Calcutta a vast command of inland navigation; whereas all the inland trade of Bombay has to be carried on by means of roads, that are seldom available for carriages, and which can be used only by pack-bullocks and camels. The transit duties, by which the inland trade has been grievously oppressed, were abolished in Bengal in 1836; and they either have been, or are, immediately to be abolished in Bombay. And were this judicious measure followed up the formation of lines of road to the principal markets in the interior, a great increase of the trade of the town and improvement of the presidency would be the result. The principal trade of Bombay is carried on with China, Great Britain, the countries on the Persian and Arabian gulfs, Calcutta, Cutch, and Sinde, the Malabar coast, foreign Europe, &c. The imports from China consist principally of raw silk, sugar, and sugarcandy, silk piece goods, treasure, &c. The principal articles of export to China, are raw cotton (44,464,364 lbs., in 1836-37.), opium (20,882 chests, in 1836-37.), principally from Malwa, pearls, sharks' fins and fish maws, sandal-wood, &c. The exports to China being much greater than the imports, the returns for several years past have been made to a large extent in bills on London, drawn by American and other houses in China, and in bills on the Indian governments, drawn by the Agents of the East India Company in China. The trade with the United Kingdom has been regularly increasing since the abolition of the restrictive system. The chief articles of import from Great Britain are, cotton and woollen stuffs, cotton yarn, hardware, copper, iron, and lead, glass, apparel, fur, stationary, wine, &c. The principal articles of export to Britain are, raw cotton (68,163,901 lbs. in 1836-37.), raw silk, from China and Persia, ivory, pepper, and spices, piece goods, coffee, and wool. The export of the last mentioned article has increased with extraordinary rapidity, the quantity shipped for England in 1833-34 being only 69,944 lbs.; whereas the shipments for England in 1836-37 amounted to 2,444,019 lbs.! At present the principal supply of the article is drawn from Cutch and Sinde, and from Marwar, via Guzerat; but active measures have been taken by government for improving the flocks in the pastoral country of the Deccan, so that a further and very considerable increase of this new and important trade may be anticipated. The trade between Bombay and the ports on the Persian gulf has materially varied of late years. A large portion of the articles of British produce and manufacture that were formerly exported to Persia, by way of Bombay and Bushire, being now sent through Trebisond and ports in the Levant; and a considerable portion of the raw silk that used to be exported from Persia, via Bombay, being now also sent through the ports referred to. On the other hand, however, there is a considerable increase in the exports and imports of other articles; so that, on the whole, the amount of the trade has not materially varied. The trade between Bombay and Calcutta is not so great now as it was formerly; the abolition of the restrictive system in 1815 having given Bombay the means of bringing various articles direct from foreign ports which she was previously obliged to import at second-hand from Calcutta, and of exporting directly. |