THE general state of financial affairs does not present any material change from that which we described at the date of our last. There is but little increase in the demand for money for business purposes; a slight improvement has indeed taken place in some branches of business, but not of a character to call into play those artificial accommodations of money, controlled by corporate institutions, although a disposition to sell on more liberal terms is manifest in many quarters. This is the season of the year when, the crops having mostly gone forward, and the bills drawn against them exhausted, that a turn in the exchanges takes place, and the bulk of the exports of specie for the year are made. In many quarters an opinion prevails, that from this time until the appearance of the new crop, specie will go out of the country to the extent of some three or four millions, and that in consequence the banks will call in their loans, that they have made on stock securities, and cause a fall from the high prices created by the expansion of the institutions in that direction. Hence a great deal of caution is exercised. In truth, the market is yet struggling against a superabundance of state credits, never yet absorbed for actual private investment. In our last number we illustrated the rapid increase of stocks in the United States and the immense quantity which is yet out standing. A very large amount of those stocks is held in the nature of trusts, here and in Europe, and is constantly pressing the market, faster than the demand for permanent private investment absorbs those offered. The discredit attending the utter failure of the movement of the Federal Government in sending an agent to Europe last year to negotiate a United States stock, is producing its fruits. In the year 1840, at a time of great abundance of money,

Pennsylvania, Maryland, Illinois

Mississippi,

In iana,
Michigan,

Total,

an association of Paris and London bankers, with the view to obtain employment for the money then seeking investment, published proposals to issue certificates to bearer on deposite with them of certain foreign stocks. For this purpose they received Ohio 6 per cent. and New York State and City 5per cent. stock, for which they gave certificates with coupons attached for interest, payable half-yearly at the office in Paris or London, after the payment of interest by the State. This arrangement was for the purpose of making American stocks better known on the Paris Bourse, and was to continue until 1849. About $500,000 of these administration certificates are now outstanding, and although the interest has ever been regularly and promptly paid, they were at the latest accounts rapidly returning upon the association, and the stocks sent to this side for sale. This is the effect, upon the minds of European capitalists, of the natural results of that immense extension of the credit system of which the late National Bank was the instrument. In London, another large amount of stocks is hanging over the market on account of the United States Bank. year 1839, when the late National Bank was staggering to its fall, its agent in London was deeply embarrassed by the accumulating liabilities of the Bank there, without means to meet them. In the fore part of October the bills of the Bank were dishonored by a leading Paris house, and the discredit attending that event, precipitated an avalanche of debt upon the agent in London. Instant and total destruction was avoided only by obtaining two loans of the London houses, one for £800,000 and the other for £900,000, making over $8,000,000 by pledging nearly $15,000,000 of State stocks, as follows:

In the

Par value. $5,119,906

579,000 1,401,000 3,088,000

758,000 3,852,000

$14,797,906

On these stocks were issued debenture certificates, bearing 10 per cent., interest, and payable in twelve and eighteen months. Those at maturity were not paid, and were renewed from time to time on additional security; all the stocks pledged are delinquent in interest, and have fallen very low in value. An attempt has recently been made to have the stocks divided, pro rata, among the holders of the debentures at their market price, and hold the bank for the deficit, or to sell the whole of the stocks at auction for cash, pay a dividend on the debenture, and hold the bank for the difference. This latter course, it is now thought, will be pursued. Many other smaller amounts of stock are held by assignment from different bankrupt institutions, and are gradually finding their way to this side for sale, and must be carried," if carried at all, by American capital. All these amounts of stocks, reaching full $30,000,000, were surplus creations above the demand for private permanent investment, and are an incubus upon the market. It does not appear that the foreign private holders of American stocks in general have any disposition to sell; on the contrary, among the most intelligent, an opinion appears to prevail that the crisis is passed, that the paper revulsion has spent itself, and that the returning prosperity of the country, on a sound specie basis, will not only preserve the credit of those states which continue to pay, but will ultimately restore the honor of all, and free them from debt.

In a former number, we mentioned the departure of the commissioners of Illinois with a view to effect in London a compromise with the state creditors, by which the Illinois and Michigan canal shall be completed, and the means of the people to pay their debts increased thereby. At the latest accounts, these gentlemen had been favorably received by those most interested, and success seemed within their grasp. The final payment of the Illinois debt will have the highest moral influence upon those of the other states, and it is the duty of the foreign houses to lend their assistance to the attainment of that object. It is undoubtedly the case that the impulse which, through the agency of the late national bank was imparted to the credit system in this country, originated in London. In

1833-4, the Bank of England designedly made money cheap, in order to play into the hands of the government, which was then carrying through the West India loan for £15,000,000 to emancipate the slaves of the West India Islands. To aid in this, the Bank of England made money very plenty and very cheap. The consequence was, that the people of all countries went to England to borrow its cheap money; among others, the late National Bank borrowed £1,200,000, or $5,700,000, to aid in "settling up its affairs." This facility of getting money from England tempted states, corporations, companies and individuals into borrowing, the late National Bank being the instrument of credit through which borrowed money poured into all sections of the country. When the inevitable ruin at length came, the States were left with gigantic works halffinished, and the means on which they had been taught to depend for the completion of them, cut off. In this state of things, the moral obligation of the debt and its fulfilment belongs as well to the tempters as the tempted; and, therefore, the States, in making offers of compromise to the best of their ability, have a right to expect that they will be favorably received.

The general state of business is such as has generally been looked forward to. A steadily increased demand and improving prices are apparent in the leading branches of business. This, apparently, is a reaction from the great stagnation of trade and the ruinously low prices which resulted from the great and sudden reversion from the 20 per cent. tariff of the compromise act, which expired on the 30th of June, last year, to a tariff more prohibitive in its operations than even the famous enactment of 1828. There has not for years, probably since the war, been a a less amount of business transacted in the port of New York than during the eight months commencing July 1, 1842, and ending March 1, 1843. Since the last-mentioned period, the absolute wants of the community have induced a greater demand for goods, the stocks of which were reduced by exports for benefit of debenture and by limited imports. The consequence has been, that all the late sales of hardware, dry goods, groceries, &c., show an improvement in prices of from 10 to 15

per cent. over the lowest points of depression last spring. Assortments of goods have become broken, and imports to make them good have increased to an extent which affords homewardbound packets freights nearly double in value to those that they procured through the corresponding months of last year. Still the imports are by no means large. The revenue of the port of New York, for the month of July, was about $1,100,000, which, according to the usual proportion of twothirds, gives a customs revenue of $1,650,000 for the whole Union for the month, and shows a large increase over that of the same period of last year. The foreign exchanges show, however, a balance still in favor of the United States, although nearly at par. They have not advanced materially since the quotations in our June number, with the exception of France, on which point they have risen to f.5,26, and some small amounts of the best Mexican dollars have been shipped. The general import of specie, however, continues larger than the export. The basis on which trade is conducted throughout the Union now, is such, that no large and sudden demands for specie can take place. No large banking or mercantile credits are now outstanding. Capital, for the most part, is in the hands of its proper owners, and cannot be extracted thence without an equivalent. The immense amount of specie lying idle in the Atlantic Banks, as compared with last year, notwithstanding the increase in the business of the country, is proof that a far larger amount of trade is now conducted without the intervention of bank facilities than formerly, and that the goods purchased are actually paid for, showing a great increase in real prosperity as distinguished from that precarious business which, under a National Bank, depended for its continuance upon the nod of a dozen men in Threadneedle-street. The banks of

the Atlantic cities are both able and eager to extend their mercantile advances, in order to sustain their accustomed dividends; but, happily for the country, the great machinery which gave vent and activity to those advances is, for the most part, destroyed through the effect of its own corruptions. Under the late National Bank, when smaller institutions were multiplied in all sections of the country, a system of both buying and selling goods on long credits grew up. The interior banks gave facilities to innumerable traders to purchase goods at six and twelve months, and enabled them, in their turn, to give credit to consumers. The goods thus bought and sold were, for the most part, in excess of what the people would have been able to buy if confined to the actual profits of their own industry. The vent thus fictitiously created for imported goods, generated an increased demand from the importers upon the Atlantic banks for facilities. Every extension of the latter, therefore, tended directly to swell the imports, and immense credits were built up dependent entirely upon the strength of the interior banks. The more they pushed their loans, the more the demand grew upon those of the Atlantic cities, and the stability of the whole depended upon the amount of specie in the latter. All this has now changed. In Florida, Arkansas, Alabama, Mississippi, Michigan and Illinois, there are now comparatively no banks, where, in January, 1840, with a population of 1,777,000 there were $89,672,000 of bank loans, or over $52 per head. In other leading States, where banks are still in operation, an immense reduction in loans has taken. place. This reduction is apparent in the following table of bank loans in five States, from 1835 down to July, 1843. These loans represent the artificial aid given to the people to enable them to buy and consume goods beyond their present means of paying for them, as follow:

The reduction is really much larger than even these figures indicate, because many of the institutions whose loans are here included, are about closing up their affairs. 1839 was a year of great imports, and the amount for the year was $162,092,132, being the largest amount ever imported in one year, with the exception of 1836. In January, 1839, it appears that the bank loans of the above five states were $174,065,043. The population was 6,134,994. The loans of the banks were therefore equal to about $29 per head. In January, 1843, the loans in the same states had been reduced to $110,103,277-a diminution of $64,000,000, or over $10 per head. The imports in 1842 had fallen to $99,357,329. This facility of selling goods on credit, through the instrumentality of bank loans, swells the imports inordinately, and counteracts the effect of any duties, how high soever they may be laid under the pretence of protection. The reduction in bank loans, for the whole Union, in 1842, was about $160,000,000, or about $9 per head. The imported goods consumed, in 1839, were equal to an average of $9.25 per head in the Union. In 1842, the consumption was only $4.50 per head, although the exports of American produce were larger in the latter than in the former year. The banks are

now not in a condition to renew their loans, yet the masses of the people are more wealthy than ever. They have, however, no other means of purchasing than with the proceeds of their industry, and the money value of that depends upon the export of the surplus. Hence, a large proportion of the business now done is for cash or an actual interchange of commodities, creating no demand for bank facilities. The purchases of goods now made on the Atlantic border, instead of being settled for, as heretofore, with a note, payable in six or twelve months, at a bank in the interior, are paid for with the proceeds of produce actually here, nct that which is to grow next year. The imports of goods, which take place to meet such a demand as this, will scarcely exceed the value of that portion of the produce which finds its way abroad. The variety and value of these exports, under the present regulations of Great Britain, are rapidly increasing. The export of agricultural products to England is becoming important, and prices are on the rise. A late parliamentary document gives the following statement of the trade with the United States at three periods, to which we have added the average duties in the United States at each period, giving the equivalent ad valorem for specific duties:

The United States return for 1842 has not yet been published. This table embraces the whole operation of the compromise tariff. In 1833, it was in full operation at the highest rates. In 1836, the second biennial reduction took place. In 1842, the last instalment was taken off; and from July 1st to September 1st, the 20 per cent. duty only was in operation. Now, in 1842, under the lowest duty, the amount of exports from England to this country was one-half that of 1833, the year of the highest duties, notwithstanding that financial embarrassment had reduced prices in England for 1842 very far below those of 1833. With low prices in England, and low duties here, onehalf the goods were sent to the United States that were exported under the high English prices and American duties for 1833. In the year 1836, the average duties on the above articles were 32.5 per cent., and the import was £12,425,000. In 1842, the average duties were 25.9 a 20 per cent., a reduction of 6 a 12 per cent. ; yet the import fell off to £3,528,000, or to about 25 per cent. of that of 1836. To what other agency can this enormous decrease of business be ascribed than to the diminution of bank loans? If, then, the imports were so seriously affected by the contraction of the banks in those years, an extensive increase of imports beyond the proceeds of the exports cannot reasonably be looked for under the actual liquidation of a large portion of those institutions, which before only curtailed their movements. Herein consists the great inconsistency and evident want of principle, which induces Whig politicians

322,486 334,678

408,330 561,028

to tax the people for the professed support and "protection" of a class of manufacturers, while at the same moment they seek the establishment of a national bank, the action of which would counteract the operation of the most extravagant tariff. The welfare of the whole people consists in unrestricted industry, and a sound and cheap currency, which will insure to that industry its just reward. The real "protection" of the American people will then be found where nature placed it, viz., in their unsurpassed enterprise, skill, and persevering industry.

Under the violent fluctuation of trade exhibited in the above-enumerated facts, the finances, and nearly the credit, of the Federal Union, have been brought within the verge of ruin. The party lately in power is that which, since the formation of the Union, has ever been in favor of a splendid central government, with a preponderating executive power. This is only to be obtained by an enormous revenue. Now, the people of the United States, although prompt to expend their blood and treasure for the general welfare, will not submit to onerous direct taxes merely to support a government in an extravagance at war with the first principles of republicanism. The land revenues and the Federal customs afford ample means, with judicious management, to carry on the government vigorously and successfully, but will not allow republican officers to ape the splendor of the ministers of monarchy. It would be political death for any public man to propose taxes for such a purpose. Yet the same end is sought to be arrived at by indirection, that is, by a combi