Up to 1838 this trade scarcely existed, and it began in 1838-9 by large purchases, which necessarily were paid for in money. Such a trade could not however continue. Its first effect was to drain England of coin, and by so doing to reduce prices to an exceedingly low level. From that time goods took the place of the precious metals in the payment of the continued large import of grain, and the trade continued on the healthy basis of a mutual exchange of the produce of industry. Now it appears that among the goods taken by the North of Europe in payment for her grain were an increase per annum of 27,000,000 yards of cotton cloth, from 1842 to 1844. England has reached a point where her wants of grain exceed her own means of supply, and she is dependent upon Europe for the deficit, and to pay for that surplus, cotton forms an important item. Thus increasing to a great degree her dependence upon the United States for that article. The consideration of these facts, which have all come into existence since the last war, places the idea of a rupture between the two countries at a great distance, more especially when the risk of a short harvest is taken into the account. The commercial community on both sides of the water have a firm dependence on this mutual interest in the preservation of peace throughout the world. A dependence which has grown up with international intercourse in spite of the restrictions adopted by governments for some fancied good that may be derived from them. While this positive dependence of England upon

foreign commerce and the trade of her citizens, has served to ensure the confidence of mercantile men in both hemispheres, in the continuance of a good understanding, in the face of the little display of the English ministry, the absence of such a state of things in the Republic of Mexico has manifestly en hanced the danger of ill-advised movements on the part of that country. An indolent, uneducated, non-commercial and passionate people, ruled by ambitious military men, are not to be restrained by principles either of philanthropy or commerce when induced by the sophistry of interested parties to believe that they have been wronged. These considerations have given greater influence to the Mexican question, and it has lain heavily upon the markets for many weeks. Towards the close of the month, however, the apprehensions subsided, as successive arrivals from that quarter gave no advice of any strong popular movement on the subject, and rather a moderate tone in the Mexican Congress. Apart from these political questions the general state of commercial affairs has improved. The imports have been much less this spring than last, while the advance in the general articles of farm produce has given greater means to the farmer to pay up, and the excess of payments being largely in favor of the city, the returns of the New York Banks show an increase of specie on hand over the February returns. The general progress of business down to April 1st is evinced in the following table of United States revenues:

....

10,750,000

25,500

11,225,500

Mar. 31, 1844 June 30, 66

The customs revenues for the quarter ending March 31st this year are about 20 per cent. less than for the corresponding quarter of last year, and the receipts which have accrued at the New York and Boston Custom Houses, thus far, show that the customs for the quarter closing with the fiscal year June 30, will be less than during the same quarter of last year, in the same ratio, or equal to a diminution of $3,300,000 in the customs for the last half of the fiscal year 1845. This represents a diminution of $10,000,000 in the amount of dutiable goods imported-an important item in the demand for sterling bills at a season of the year when the supply is usually the smallest. From causes. also, which we indicated in our last number, the exports of United States produce are considerably increased, affording an improved supply of bills of a general nature, while the price of cotton continues firm, notwithstanding that the receipts of the article at all the ports are now in excess of any former year, and that the crop of 1844-5 will prove the largest ever yet sent to market. All these are elements in the maintenance of a healthy condition of the exchanges for the coming year, if they do not induce a renewed import of the precious metals. By a healthy state of exchanges we mean their repose at a point so near the actual par as not to permit either an import or an export of coin. A derangement of commercial intercourse is indicated as much by excessive imports of specie as by its export, although the former movement is looked upon generally with popular favor. The trade of nations is essentially one of barter, and wherever large movements of coin are observable the fact is indicative only of a state of things unfavorable to commerce.

Another circumstance, of a nature not only favorable to the exchanges, but also indicative of strong confidence in high quarters, of an uninterrupted intercourse between this country and England, as well as of a returning faith in the honor of our State governments, has been the consummation of the longpending negotiation for the Illinois loan of $1,600,000 for the completion of the canal of that State. In our April number we gave a synopsis of the law then just passed in amendment of the original law. It appears that some doubts were entertained as to the manner in

which that law would be received by the London creditor, in as much as that it was not such, in all its terms, as they required as the condition of the loan. The return of the steamer, however, brought its confirmation, even amidst the Oregon panic which prevailed in London. When we consider that two of the members of the principal subscribing houses are members of the present government of England, the fact of the loan is indicative of no very warlike intentions. In accordance with the law, therefore, Governor Ford issued a proclamation for an election for trustees, to be held on the 27th May, in New York city, under the direction of a United States District Judge. The first instalment of the funds will be immediately drawn for, and the work progress under the direction of the trustees. The work will undoubtedly greatly promote the settlement of Illinois, and contribute largely to the development of her resources.

Thus the general surface of affairs presents an increase of prosperity which has been delayed in the last two years only by the fitful action of laws, Federal and State, with their consequences. The violent vacillations of the foreign trade presented in the tables of customs receipts were the undoubted results of commercial legislation of Congress, which, by imposing sudden and onerous burdens on imports, caused the trade in 1843 to be less than in any year since the war; and, as a consequence, money to become very abundant. This surplus of money, acting upon a scarcity of goods, produced unusual imports in 1844, and a reaction is taking place in this year. We have in former numbers alluded to the embarrassments and failures that grew out of the extreme depression of agricultural produce last year, and the probability that advancing prices would remedy the evil. The pernicious system of creating false money by the issue of bank notes, has been the means of promoting speculation, and has led to the failure of the Bank of St. Clair, Michigan, involving the discredit of four other banks, three in Ohio-concerns which, from their fatal privilege of issuing promises to circulate as money, have formed a nucleus of speculative ramifications, the failure of which involves severe losses and great distress among the innocent holders of the mis

called money. This occurrence is now, fortunately, an isolated fact, inasmuch as Banks are, as compared with former years, small in number, and the proportion their issues bear to the general currency is very small. Hence the circumstances which produced the failure are local, although developing effects which are inherent in the paper system. It is gratifying that the explosion has taken place thus early, before the extension of over issues had involved other banks, and induced a national disaster similar to that which exploded in former years. The capital of the broken bank is about $100,000 only, yet its issues are supposed to have exceeded $500,000, circulating mostly in Ohio, where they were made payable at the offices of individual brokers.

The citizens of Ohio, after having suffered in former years to a very great extent from excessive banking, have, at the late session of their Legislature, authorized a new creation of banks. This was effected under the influence of the dominant party, which took advantage of the want of currency within the State, at a time when the issues of the banks had been withdrawn from circulation in consequence of the failure or liquidation of the issues, and before the course of trade had resupplied the channels of trade with the constitutional currency, to urge the necessity of bank paper as a circulating medium. The popular prejudice against banks was overcome by a complication of requirements, the effect of which, it was alleged, would prevent the dangers inherent in the system. This resulted in authorizing two modes of banking, one on the old system of chartered rights, and the other in imitation of the New York free banking law. The law, as if in distrust of the creatures it brings into existence, limits the capital and circulation to specified sums. Thus there are in existence twelve old banks with a capital of $3,792,240, which are allowed to continue business, and in addition sixty-three new banks are authorized with an aggregate capital of $6,150,000, making together a capital of $9,942,240, to be employed in banking in Ohio. These banks may circulate their promises as money to the extent of $16,675,000. This precise amount is assumed by the law to be safe and no more. Notwithstanding that, it is larger by near $7,000,000 than the highest

amount ever circulated in that State, and which resulted in such ruinous revulsions. It is very clear to a reasonable mind, that if the currency so furnished is sound, it is useless to limit it. If it is not sound, it should not exist at all. No government ever attempted to limit the quantity of the precious metals which should circulate, for the obvious reason that they can never accumulate in any state or country beyond the actual wants of its trade, and we are told that paper convertible into the precious metals is every way equal to them as a currency and preferable for daily use. When, however, the people discover by sad experience the dangers of paper, it is proposed to avoid the danger by arbitrarily limiting the amount. The design of this parade of caution is apparently to deceive the unwary, and to induce the belief that legislative restrictions can make that safe which of its nature is fraught with danger to the community. The Ohio law is composed of seventy-five sections of great length, all professing to regulate banking-that simple business, which is conducted by individuals in New York as well as other large commercial cities of the world, entirely independent of all law, without danger to the community, and eminently in aid of commerce. The "regulations," however, apply almost entirely to issues of paper as money, by which means the banker becomes a borrower instead of a lender. Nearly all the disasters and losses that have attended banking in the United States have grown out of this fact, that it is not what the bankers have loaned, but what they have borrowed of the people by means of their paper issues that involved their failure. The seventy-five sections of the Ohio law are occupied almost exclusively with detailing the manner in which banks may borrow of the people; not a word is said of the manner in which the people may borrow of the banks. The first method of issuing notes is for seven banks or more to associate and appoint each an agent. These agents assemble at Columbus and become incorporated as the "State Bank of Ohio," each bank which sends an agent being a branch of the bank, and charged with the salary and expenses of its agent, who is supposed to exercise a supervisory power over the bank that appoints and pays him, and he has a vote in the board for every $50,

000 of circulation that the institution he represents may have outstanding at the time of his vote. The duties of this board of control seem to be confined entirely to the preparing of notes to be issued by the banks that employ them. When a bank requires notes for circulation, it is required to deposite in Ohio, in United States stock or specie, ten per cent. of the amount with the board of control to constitute a safety fund. The notes are then signed by the president of the board of control, registered and delivered to the banks, by the cashier of which they are countersigned and ready for circulation. In putting them out, however, the bank is required to retain on hand thirty per cent. of the amount in cash funds, of which onehalf shall be specie. Therefore, onehalf or fifteen per cent. of the circulation is required to be "specie funds." This phrase is usually applied to bank notes on hand, and the amount seldom or never, in the course of business, falls below fifteen per cent.: thus the returns of the New York banks showed a circulation of $18,365,031, and of bank notes on hand $3,148,213 or about seventeen per cent, being more than the requirement of the Ohio law. There is then required fifteen per cent. gold or silver to be kept

on hand, yet the fifty-fifth section provides that "sight drafts" on New York, Philadelphia, Boston or Baltimore, shall be "deemed gold and silver wherever these terms are used in this act." Hence "gold and silver" can be manufactured at a moment's notice. Paying out bills for a "kite" on a New York agent will provide any amount of legal "gold and silver." Thus, long sections of the law containing fancied restrictions, are neutralized by other long sections explaining away the restrictions, and the whole matter rests precisely as under the old law. In plain matter of fact, an Ohio bank of $100,000 capital may issue $200,000 of circulation, by merely paying away part of it for Ohio stocks to deposite with the clerks of all the banks associated under the name of a "Board of Control." Several banks have already been organized under this law, and unless it is promptly repealed that State will yet undergo losses compared to which the failure of the St. Clair bank will be as nothing. It is to be hoped that this latter occurrence will so operate upon the citizens as to deprive the banks of the ability to obtain too extended a circulation before a repeal of the law takes place.

A Fragment on the Irish Roman Catholic Church. By the late SYDNEY SMITH. 4th edition. London: Longmans: 1845. 8vo., pp. 32.

It seems that Sydney Smith, at the time of his death, was engaged on an unfinished paper on the affairs of Ireland; one of those neatly couched pamphlets which he sent forth from time to time, at some opportune moment when he could readily get the public ear, and discharge his memory of the good things he had said and meditated since the last. This we conjecture to have been the method of Sydney Smith's publications. He was never a very regular or methodical author; he sat down with no enthusiasm to write books; he handled a subject delicately, and despatched it for ever; his writings were writings of the occasion. Yet he managed to put a great deal in them that is permanent, drawing his ar

guments and illustrations out of the imperishable world of good nature and good sense. They will live, for he threw himself into them, the style, force and manner of a witty, pungent, straightforward gentleman. Sydney Smith knew himself thoroughly. He knew when to speak, and when to be silent: he never frustrated a good thing by coming forward with it too soon or lingering over it too late. We may suspect from the nicety of his works, and the skilful disposition of the different portions of his writings, with an eye to reputation, that he understood something of the practical conduct of life, and the proceedings at Doctor's Commons, since his death, have left us in no doubt upon the subject. It appears from his will that he died worth about eighty thousand pounds; yet he has passed all his life for an abandoned mitre-less Whig, who sacrificed his fortune for his principles; who preferred poverty to To