ART. CONTENTS OF NO. I., VOL. XLI. ARTICLES. PAGE I. ATTRIBUTES OF MONEY. BY CHARLES H. CARROLL, Merchant, of Boston, Mass.... II. THE PANAMA CANAL Translated from the French of M. CHEVALIER by GIDEON FORRESTER BARSTOW, of Boston, Mass................................. III. COMMERCIAL AND INDUSTRIAL CITIES OF THE UNITED STATES. No. LXVI. SAN FRANCISCO, CALIFORNIA. Early Settlement-Effect of Gold DiscoverySite of the City-Bay-Buildings-Local Business-Pacific Commerce-Improvement of Population-Passengers-Gold Exports-Valuation - Classified Population-Other Industries-Agriculture-Manufactures-Value of Gold-Prices of Merchandise - Quartz Mills-Destination of Gold-Yield-Decrease per head-Mint Established-Operations of-Import of Treasure-Export of other Produce - Manufacturing Industries-Flour Mills-Saw Mills - Gold Assay-Sugar Refineries-Furniture-Paper Mills-Capital imported in the State-Goods imported for six years-Home Produce supplants Imports -Surplus Exported-Quantities and Values-Value of Imports and Exports-Tonnage and Freights-Destination of Tonnage-General Improvement of the Place-Changing Character of the City Relations-Natural Wealth-City Debt-Improved RevenuesRegular Administration ........ IV. FRANCE. No 11. Evidence available for the Treatment of the Subjects in the succeeding Pages -The Comptoir d'Escompte - Position of the Bank of France during the Suspension-Measures of the new Government. By JOSEPH S. CRAWLEY, Esq., of Philadelphia, Pa..................... 19 31 43 .... 55 V. STRICTURES ON A REVIEW OF MR. CAREY'S LETTERS TO THE PRESIDENT. BY HENRY CAREY BAIRD, Esq., of Philadelphia, Pa.................. JOURNAL OF MERCANTILE LAW. Forged Bill of Exchange-Liability of the Payer..... Judgment Entered on Confession-What is a Sufficient Statement.. Notes of Decisions .... Forfeiture for Undervaluation -Decision in Admiralty-Evidence-Loss of Cargo... COMMERCIAL CHRONICLE AND REVIEW. Infinences of the Month-War and Imports-Large Arrivals-Two years in one-Small Trade last year-More required this-Goods sold well-Yearly Averages-Supply not large-Fall in Produce-Discount of Bills-Rise in Sterling-Demand for Gold-Weekly Exports and Exchange-Rates of Exchange - Our Demand for Gold-French Expenses-Failures in Europe-Rates of Interest in Europe-Paper Money of Germany Hoarding - Caution in making Loans-Rates of Money in New York-Distrust of Paper-Government LoansReceipts and Exports of Specie-New York Assay-office-United States Mint-Specie from New York and Boston-Product of Gold-Australia and California-Kinds of Specie Exported-Migration-Excess of Gold Exports over Imports-Drain from the Interior-Drafts upon the Banks - Money wanted for Crops................ 63 71 72 78 74 75 76-85 PAGE JOURNAL OF BANKING, CURRENCY, AND FINANCE. Price of Consols... City Weekly Bank Returns-Banks of New York, Boston, Philadelphia, New Orleans, Pittsburg. St Louis, Providence.. Illinois State Indebtedness... Report of the Boston Clearing House, for the year ending March 31, 1859 Loaning Money in Minnesota.- Board of Currency.................................... 85 87 89 90 91 92 93 94 93 Claims of Citizens of the United States against Foreign Governments.. STATISTICS OF TRADE AND COMMERCE. Trade of Shanghae... Trade of Smyrna for 1858.-Shipping Trade of Trebizond.. Commerce of Nova Scotia.-Coffee Trade.. Consumption and Value of Oysters.- Memphis Cotton Statistics... Life Insurance Companies in Massachusetts.. JOURNAL OF INSURANCE. INTELLIGENCE. Risks and Losses in Massachusetts.-Providence Insurance Companies. NAUTICAL The Floating School of Baltimore.. Breakwater Harbor of Liverpool.-Marine Losses for May... COMMERCIAL REGULATIONS. Convention between the United States and Belgium Circular to Collectors of the Customs-Plated Ware-Castors, Liquor Stands, etc.. POSTAL DEPARTMENT. United States Mail Steamers for Europe... Postage to Turks Islands... RAILROAD, CANAL, AND STEAMBOAT STATISTICS. Coal Burning Engines.... Connecticut Railroads.-French Railroads The Jointed steamship.. Railway Legislation in Austria and Prussia. British and American Railways. - Roads, Railways, and Canals made in India since 1948 JOURNAL OF MINING, MANUFACTURES, AND ART. Manufacture of different Kinds of Leather-Copper Mines.. Manufacture of Paper from Straw.-Staining and Polishing Marble. 116 117 118 119 120 121 122 123 124 125 125 126 127 128 Resources of South Carolina.-The Cotton Power... 129 130 Acceptance of Original and Duplicate Bills.-Macklin's Advice to his Son. 185 136 137 188 139 140 141 THE BOOK TRADE. Notices of new Books or new Editions..... ......142-144 HUNT'S MERCHANTS' MAGAZINE AND COMMERCIAL REVIEW. JULY, 1859. Art. I.-ATTRIBUTES OF MONEY. I HAD sketched for publication in your Magazine some thoughts on the Attributes of Money, when your May number came to hand, containing the strictures of your contributor "B.," on my article relating to Commercial Value, published in March last. Finding these thoughts pertinent to his questions, I will, with your leave, communicate them, along with a reply to him, in this article. Patience is not only a qualification, but a necessity, in the prosecution of any science. I hope he will not get out of patience with political economy, because students are not yet well agreed in all points regarding its principles. Enough has already been developed to show that there must be a perfect consistency in its parts, and there can be no doubt that its conclusions will be established sooner or later with the unalterable precision of mathematics; they are irrefragable, like the principles of astronomy, however men have differed, and may differ, in their thoughts about them. Ptolemy taught astronomy as well as he knew; nevertheless the earth did not stand still, according to his teaching. "And yet it moves," notwithstanding the church, and its persecution of Galileo for saying so. Events are occurring that will give an impetus to the study of political economy, and its practical application to finance and trade, such as the world has never known before. The sudden and almost fabulous supply of gold, for example, has opened upon our abnormal banking system a power of expansion that must, in the nature of things, damage the interests of trade and of society, to a degree past all endurance. With nothing to check or control this system but the selfinterest of men, who are authorized by law to issue promises to pay money they never possessed, and that never existed, filling the whole nation with obligations as impossible to comply with as promises to deliver the stars of heaven; with the competition of thousands of banks now, or soon to be, in getting interest on these fictions as money wherever a bank can be planted, we cannot fail of being punished by a commer cial crisis every three or five years, that will convince our merchants that political economy is a science which has been neglected too long in connection with their business. Double entry, which compels an even balance of debit and credit, in real as well as personal accounts, and the practical nature of the merchant's aims and habits of thought, render him more competent to investigate this branch of the subject than the closet student. Within a few days, in examining the attributes of money for this article, I have arrived at a startling conclusion, that I believe bas never before been discovered or thought of, i. e., that one-half the amounts due on our debtcirculating property are, from the necessity of the case, in virtual bankruptcy; and, from a parity of reasoning, one-half the people concerned in it are hopelessly bankrupt all the time. I think this will be made plain to any experienced accountant in the following exposition. I have assumed in a previous article that the currency of this country amounts to $600,000,000, and the whole property as 25 to 1 of the currency, or $15,000,000,000. Of this about two-fifths is in circulation, or $6,000,000,000, being 10 to 1 of the currency. The currency is $200,000,000 of money circulating, at 10 to 1, $2,000,000,000 of property; and $400,000,000 of bank debt circulating, at 10 to 1, $4,000,000,000 of property. These sums and proportions are as nearly correct as they can be estimated at this time in our actual business. Then we have $4,000,000,000 of property circulating through debt and credit, depending upon the $400,000,000 of debt currency for the adjustment of its obligations. In other words, somebody owes $4,000,000,000 on this property, and, as the debt must be balanced by credit, somebody is creditor for it all. The currency and property will mingle in all ways and in all proportions, but the average, or settlement, must come to this; there is $2,000,000,000 of property circulating in money without debt, $4,000,000,000 circulating in debt without money, and $9,000,000,000 not circulating; that is, not in market and not in debt. It follows that if anybody owns of the debt-circulating property more than he owes, somebody owes for the same just so much more than he owns, thus:— A owes $20,000, and his assets are... $30,000 30,000 $60,000 A being worth $10,000, B is bankrupt $10,000. The account must be held to the inexorable law of double-entry. This condition of things is in accordance with the nature of the currency by which it is produced, there being in this currency two obligations existing to pay one and the same value. The bank cannot pay until it is furnished with value by, or from, the discounted note to pay with, because it loans debt and not money. In fact, the bank debt is merely a portion of the general debt of the community, organized into currency, one-half fiction as to value, and circulating with the $4,000,000,000 -part and parcel of the same thing, the element of value being absent on the bank side. Like parent, like child; the whole mass of obligations is therefore lame of one leg. It will be observed that the $400,000,000 of bank currency is in excess of the reserve of coin which performs its function in the money-circulating property. The reader may at first suppose the debtor to have some interest in the money-circulating property, or in the property out of circulation, to alter this relation of debt and credit, but it is not so; the fact that he is a debtor makes him an exclusive partner in the debt-circulating property, and subject to all its embarrassments. It must be considered that the contraction of currency, which reduces the money value of the assets of debtors, does not reduce the sum of their obligations, and creditors gain the property that is lost by debtors in consequence of the contraction. A false price determined the sum of the obligation that is required to be paid in the appreciated value of a reduced currency. Sometimes it may require double the property, on the new valuation, to procure the dollars necessary to discharge the old obligation. He who owes nothing is not injured by the appreciation of the value of money which causes a general fall of prices, because his money is worth just so much more as his property is worth less than before. If I am bankrupt $10,000, it does not help my case that my neighbor is worth $10,000, and I see no way to relieve, or alter, the conclusion that about one-half the people concerned in the business transacted through the debt-banking system, embracing nearly all our merchants and manufacturers, are hopelessly bankrupt. Certainly this is curious and very lamentable if true. I am not disposed to assert it dogmatically, but present it as an open question for the investigation of merchants, bankers, and economists. If any one can point out any fallacy in the argument, I will thank him kindly to present the figures in your pages; I cannot find it myself. The popular and brilliant work of Buckle on Civilization, will, I think, have great influence in promoting the study of political economy. Ralph Waldo Emerson also gives it a prominent place in his admirable lectures, and I make no doubt teachers are yet to come in this country who will demonstrate the truth with more accuracy than the economists of England. I believe our greater rashness in banking will chasten us into knowledge through suffering; but as for Mr. Carey, I apprehend he is too much imbued with the old prejudice of partisan politics, and therefore looking for the truth in the wrong direction-in the laws of man and not in the laws of God. Now, I hope your contributor "B.," who seems to be getting out of patience with all political economy but Mr. Carey's, will have patience with me if I remind him that the nine questions he propounds for my consideration, seem to imply that he is groping in that ancient darkness of the science, into which Adam Smith cast illumination, and which, among European economists, he has the credit of having dispelled, namely, the belief that money alone is wealth, and things valuable only as they will exchange for money. It is, I am sorry to say, far from being dispelled, and is still directing thousands of misguided men to fabled gold fields, through danger and suffering, to hopeless poverty, starvation, and untimely death. I consider money to be last thing we want; at the same time it should be the exclusive currency, because money alone will prevent debt and embarrassment. It is utterly impossible for an industrious community, pursuing the arts of peace with an open commerce, to have too little money; it will come without their seeking. They may substitute debt for money in the currency; then they will infallibly have debt in their general traffic beyond their means of payment-too much debt but not too little money. There must be always about ten dollars of debt created by, and depending upon, every one dollar of convertible debt currency, that without such currency could have no existence. |