The quantities of many of the most important of these articles, it will be observed, as grain, &c., declined as the home product increased; but with the growing wants of an improving community others were received. In fact, the mere growth of local manufactures involved the import of new materials. The increased productions of the place also involved an export of the growing surplus, the leading items of which have been as follows:

EXPORTS OF CALIFORNIA PRODUCE FROM SAN FRANCISCO.

Value

....

$1,491,761 $2,758,147 $2,279,942 $2,719,266 $2,551,690

The value of the foreign trade of San Francisco is as follows:

These exports, of course, embrace the specie sent to foreign countries, and the imports embrace some two to three millions of silver received coastwise. This large business has been attended by a great development in the tonnage movement, as follows:

:

The destination of this tonnage is seen in the following returns of ar

rivals and departures:

ARRIVALS, EXCLUSIVE OF THOSE FROM DOMESTIC PACIFIC ports.

The only striking discrepancies that are noticeable in the foregoing data consist, first, in the continued decrease of the whaling tonnage. The business has not proved lucrative, and we have to remark a continually diminishing quantity of shipping owned at this port so employed from year to year. The high rates paid to hands, and the large expenses of outfits, do not admit of our rivaling the more economical expeditions fitted out by other countries. Second, the prominence of the movement to Fraser River is strongly illustrated by the increased commerce with Vancouver. Third, the excess of the arrivals of tonnage from South American ports this year is accounted for by increased imports of Chili coal over those of the preceding year.

DEPARTURES, EXCLUSIVE OF THOSE TO DOMESTIC PACIFIC PORTS.

From the facts here gathered it will be seen that San Francisco is fast outgrowing its stage of a mere landing place for miners. It is becoming the center of a thriving State, and the gold product is bearing annually a less proportion to its aggregate business and industry. Its population

is becoming more permanent and settled. The excitement of speculation, which the first extraordinary discoveries produced, is now fast settling down into regular business. The actual profits to be derived from gold digging are coming to be ascertained. The relative value of surface washing to quartz crushing, and of different quartz mills to each other, is getting to be justly estimated. The immense losses which the first blind and reckless outlay of capital involved, are ascribed to their true causes. Experience has separated the true from the false, and afforded guides for the judicious employment of capital, where before all was chaos. Of the crowds that thronged into California, the majority have at least gained nothing by the adventure, but the most sagacious and persevering have struck out the true road to prosperity; and while the turbulent and disappointed are disappearing from the scene, regularity, order, security in person and property, and safety in business are being developed. The mass of pioneer speculators who overrun the country did it no service, but to afford, in their abortive efforts, instructive lessons to those who were watching the results. The titles to land and property have become better defined, and, as a consequence, capital from abroad seeks investments on easier terms. The quantities of goods required for consump tion have been ascertained with considerable accuracy. The natural wealth of the country is also being developed, and in a region where two crops of superior grain are gathered from one sowing, the agriculturist was not slow in discovering that plowing was the easiest mode of procuring gold; and the small manufactures are rapidly supplying local wants, and therefore assisting to steady the markets.

The credit of the city, as well as the State, has been trifled with, but matters in that respect are improving. The funded and recognized floating debt of the city and county may be thus stated:-Ten per cent city bonds, issued in 1851, $1,449,800; 7 per cent school bonds, (city,) issued in 1854, $60,000; 10 per cent fire bonds, (city,) issued in 1854, $200,000; 6 per cent bonds, (city,) issued in 1855, in accordance with the report of the Board of Examiners appointed to ascertain the legal floating indebtedness of the city, $324,500; equitable and legal floating debt of the city and county, as per report of the Board of Examiners in 1858, which is now being bonded at 6 per cent interest per annum, $1,169,357; total outstanding indebtedness of city and county, $3,203,657. It is proper to remark in this connection, that the Commissioners of the Funded Debt hold mortgages belonging to the sinking fund of the bonds of 1851, which, in connection with other cash assets, reduce the actual city and county debt to $3,066,016. It should be borne in mind that the debt, although apparently largely increased during the past year, has only been so expanded by the adjustment of old liabilities, contracted during the flush times preceding the revulsions of 1855-56. Like the State, the financial affairs of the city are now well managed, and every expense reduced to a cash basis. For the past two years there has been an economical and honest government, with a revenue constantly accumulating to meet accruing expenses.

Art. I.-FRANCE.

NUMBER II.

I. EVIDENCE AVAILABLE FOR THE TREATMENT OF THE SUBJECTS IN THE SUCCEEDING PAGES. THE COMPTOIR D'ESCOMPTE.

NOTWITHSTANDING the unhappy censorship which at present exists over the French press, there have appeared, in various forms, publications which throw light upon the course of operations which has distinguished the new government. In the elaborate papers of M. Eugene Forcade, in the Revue des Deux Mondes, entitled, "Les Institutions de Credit en France," in the keen and sarcastic strictures of M. P. J. Proudhon, in the "Manuel du Speculateur a la Bourse;" in the sagacious views of Mr. Tooke, in the sixth volume of the History of Prices; and in many other publications by authors of celebrity and talent, there exist the materials from which to form an unimpassioned judgment as to the economical problem now in course of solution in France. I may also mention, as indispensable in a treatise like the present, the statistical and current information contained in the Journal des Economistes, and the Annuaire de l'Economie Politique. From the materials thus afforded, I have largely drawn, in the preparation of the following pages, and if I do not give my authority at every step, it is from an unwillingness to encumber the text with a profusion of notes and references.

In order that nothing may serve to dim our perception of the financial measures put in force by the government, since the coup d'etat, it will be well to exhibit the financial position of France at that date.

The period, from the revolution of 1848 to the date of that event, was distinguished by the inauguration of a special financial policy, which, however necessary it may be held to have been, was nevertheless marked by some exceptional measures, and there is no doubt that had it not been for the favorable course of events, the abundant harvests, and the consequent low price of breadstuffs, and the establishment in favor of France of a very heavy balance of trade, that that policy would have been productive of most disastrous consequences.

"During the years 1848, 1849, and 1850, there was presented in France the singular and suggestive spectacle of a central authority, resting upon foundations obviously insecure-administering a system of paper credit exposed to all the dangers of inconvertibility on the one hand, and on the other, to the large and hasty advances on inferior securities, through the medium of popular discount banks; and still not only escaping any serious damage, but scarcely encoutering any serious peril."* The nature of this phenomenon will appear from a review of the measures which were put in force, and from the causes which may be held to have prevented any serious termination of them.

In the first place the provisional government, by decrees of 7th and 8th of March, 1848, established the class of institutions known as Comptoirs d'Escompte; and in the second place decreed on the night of the 15th of March, 1848, the suspension of cash payments at the Bank of France; an important provision of the decree being the authorization

* Tooke's History of Prices, introduction to part vi., volume vi.

of the issue of notes of the denomination of two hundred and one hundred francs; the smallest hitherto having been of the denomination of one thousand and five hundred francs. This measure was certainly rendered necessary by surrounding circumstances; the extreme internal discredit which prevailed, and the consequent drain of bullion from the vaults of the bank. The establishment of the Comptoir d'Escompte may be considered the initiative step, afterwards so boldly extended by Louis Napoleon, of opening to the nation extraordinary facilities for obtaining credit, and of imparting an artificial impetus to the prostrate condition of commercial operations.

The discounts of the paper of commerce by the Bank of France are confined to bills having not less than three signatures. In the ordinary operations of buying and selling, the holder of bills can only offer to a bank two names, his own and that of the purchaser. The inevitable operation therefore of this provision in the constitution of the Bank of France, is, that the merchant or tradesmen having the paper to offer must carry it to a third party, as an intermediary-this third party being a broker or banker-who, by affixing his own name, being thus provided with the necessary securities to offer, has the power to reimburse himself from the bank.

The principle of demanding the security of three names to a bill may be defended on two grounds.

In the first place, it forms a safeguard against the operations in what we call accommodation paper, inasmuch as the difficulties in the way of the manufacture of such paper are considerably increased, from the necessity of procuring the third security. It is true that it may not be a perfect safeguard against such operations, as it is open to possibility that accommodation bills may be made even with three signatures; but while it is comparatively easy to make an accommodation bill for the purpose of raising money between two parties, the obligation imposed upon the third party, to hold himself responsible for the face of it, by an indorsement, cannot but act as a very powerful check, and must be sufficient for all practical purposes.

But in the second place, while this provision acts as a check upon the discount of accommodation bills, it prevents therefore, at the same time, the expansion which that class of operations entails in the circulation of a country. The discount of a bill, given and received for a bona fide purchase and sale, inasmuch as such a bill represents actual value, is a limit beyond which all advances are an unhealthy expansion. "En escomptant cet effet, une banque publique le retire de la circulation, l'y remplace par une somme équivalente de ses billets, et généralise ainsi le crédit particulier que l'effet représente." Extraordinary facilities, by which discounts may be obtained upon paper not representing actual values, have the effect to expand the circulation beyond its natural limits, and to inflict upon a community the evil of high prices; they create the impression of activity and a great degree of prosperity, which have no foundation in fact; and the result is to cause, at periodical intervals, commercial crises and the extensive ruin of individuals. Our own financial history exhibits, in a singularly appropriate degree, the evil effects of looseness in the exercise of this financial function.

In exercising so delicate a function as that of discounting, by which the reins which control the currency of a country are held, a bank cannot be too careful or too minute in its censorship over the paper which