Rhode Island and Pennsylvania, not including the Banks of Philadelphia, is estimated by him at eight millions.

The gross circulation of the Bank of the United States. in January 1829, was 13,391,110 dollars, and in January 1832 it was 24,630,747 dollars. The net circulation was at the first of these periods, 11,901,656—at the second it was 21,250,545 dollars. The increase in the net circulation was about seventy-eight per cent.

Other causes besides the new mode of operation adopted by the United States' Bank have contributed to this increase of currency. Multitudes of those who were ruined by the events which followed the war, had found relief in death. Others had sought an asylum in the poor-house. The children of others had become old enough to till, as hirelings, the farms their fathers once owned. A new generation of business men had come on the stage of action, and the incidents of 1818-19 were fast fading from the minds of those who were then old enough to be observant of the course of affairs. In such a country as the United States, the silent operations of society work great changes in a period of ten or twenty years. Pernicious as the Banking system is, it cannot exhaust the natural sources of wealth, or destroy that desire in men to better their condition, which is the main spring of action. The country was more populous and more wealthy than it was at any previous period. It could bear more Banking, and more Banking it was made to bear.

The combined operations of these causes began to be very visible in their effects in the latter part of 1829, after the embarrassments caused by a pressure in Europe were over. The rise of property on Market street, Philadelphia, was a subject of newspaper boast in November.

An increase of the trade with Mexico, and a decline of the trade with China, contributed to swell the amount of specie in the country. In 1830, the exports of gold and silver were only 2,178,773 dollars, while the imports were 8,155,964. A method adopted by the Bank of the United States, and imitated by private capitalists, of drawing bills on England to be negotiated beyond the Cape of Good Hope, was one of the causes which, in this year, diminished the export of gold and silver. The committee of Congress say, "this new method of dealing in bills of exchange

does not economize the specie of the country at all. It is a universal law of drawing, that funds must either go before or follow after the draft to honor it at maturity; and whether it goes directly or circuitously, the funds to discharge it must sooner or later arrive at the place of payment. These bills are to be paid in England, but they go round the Cape of Good Hope before they reach their place of destination. Instead, therefore, of sending the specie directly to India and China, as formerly, who does not perceive that it must now be sent to England, the country upon which these bills are drawn, there to meet them upon the arrival at the place where they are to be paid? The Bank consequently becomes the shipper of the specie, to pay its bills, in place of the merchant, to purchase his merchandise in the East Indies. It is simply and purely nothing but a change of the destination of the specie, with only the advantage of its going to London.

"The supplying of bills encourages an operation which commences and ends without the employment of any capital whatever, and is similar in character to respondentia securities. The buyer is enabled, within the term of credit, to make the voyage, dispose of his goods, and obtain from the proceeds the funds to meet his obligation, and the Bank to transmit the same to the place upon which the bills are drawn, (which are at six months' sight,) long before they be come due. It would seem to produce a greater export of specie, eventually, than would otherwise take place, if the operations were commenced with specie, and not with bills. purchased in the manner described: for the merchant, relying upon his immediate resources, would not engage to such an extent in the business, and would combine in the operation much of the produce of the country, whereas, relying upon an extensive credit, he hazards every thing on the success of the enterprize. It is a species of speculation in trade, leading to great risks, and certainly terminating in over-trading-the evils of which the country is now sorely experiencing. By loans of a similar character by insurance companies, providing funds for traders to China, Government has sustained more loss than in any other branches of trade."

All this is true enough, but this method of drawing bills to be negotiated beyond the Cape of Good Hope, enables

the Banks to increase their issues, inasmuch as it defers the demand for specie for six months, a year, or longer. It contributed, with other causes, to swell the amount of silver in the vaults of the Banks, in the latter part of 1829, and in 1830, and 1831.

In March 1830, the Bank of the United States had in its vaults 8,038,246 dollars, which was more than it ever had before. In December, the Banks of the city of New York complained that they had so much specie that they did not know what to do with it. The amount in their vaults was said to be seven millions.

Throughout 1830 and the greater part of 1831, the Banks generally extended their operations. Money was unusually plenty, and little embarrassment was suffered, except what was produced by the action of the Banks on one another, in their struggle to determine which should circulate most paper. The effect in Philadelphia was to raise property, in many parts of the town, as high, or nearly as high, as it was during the suspension of specie payments. Great part of Market street was rebuilt with elegant stores. Rents rose enormously in business places. The trade with the Western country was increased greatly; and speculation showed its activity in a variety of forms. In almost every part of the country, the same effects were observable, in either a greater or a less degree.

This continued till October, 1831, when "an active demand for money" began, the consequences of which have since been felt in various parts of the country in various forms.

The President of the United States' Bank, in a letter dated April 16th, 1832, addressed to Mr. Clayton, the chairman of the committee of Congress, gives the following account of the state of affairs:

"In addition to the business of domestic exchange, the amount of local loans has increased, owing to the greater demand for the use of money during the last year, and the conversion into the more active form of business of the stocks repaid by Government to the Bank. The first grew naturally out of the state of trade. For eighteen months, the want of employment for capital, and the derangement of industry arising from political and other causes, rendered money very abundant in France and England, the two

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countries whose situation so much influences our own, and produced a corresponding ease and plenty in the United States, while at the same time, the disturbed state of Europe, and the Cholera which interposed new obstacles to trade, with certain parts of it, naturally directed the manufacturers of England and France to this country, which is by far the best and safest markets for their productions. These circumstances occasioned, during the past twelve months, an unusual importation of foreign merchandise. While the treatment of this temporary commercial disease was in progress, the sufferers naturally looked for the cause of it every where but in themselves, and the Bank was reproached with having contributed to occasion the importations. Without going into detail, one single fact is quite decisive on this subject. It will be seen from the following official statement, marked B, that the large importations last year began with the month of April, and of course they must have been founded, so far back as the Bank was concerned, on the state of things in this country a month or two previous, say the month of March last. Now, it will be seen from the state of the Bank before the committee, that, for nearly two years before the month of March last, (1831,) the local discounts of the Bank had undergone no perceptible increase-those for July 1829 being $34,196,000, and those for March 1831 being $34,220,000, an increase within that period of only 24,000 dollars."

This does not appear to be a correct mode of viewing the subject. The exchange dealings of the Bank ought to be taken into consideration as well as the local discounts. They contribute quite as much to credit traffic. It is through them the Bank is able to circulate its branch drafts. The arrival of these branch drafts in the great Atlantic cities, is, as the President of the Bank has stated elsewhere, "the signal of relief to the southern and western traders." The receipt of them at the office at New York, was nearly twelve millions in the year 1828, and upwards of eleven millions in 1829. The receipt of them at Philadelphia, and at the three offices of New York, Baltimore, and Boston, amounted to upwards of thirty-seven million dollars, in the two years of 1828 and 1829. It is with these branch drafts that the southern and western merchants pay for foreign merchandise. It is with these the importer pays the

duties to the Government. Nothing, therefore, can contribute more efficiently to an increase of imports.

"The large importations must have been founded, so far as the Bank was concerned, on the state of things in this country a month or two previous." This is unquestionable, and the state of things in this country was then affected by the new system of operations begun by the Bank in 1827. Between the two dates mentioned in the extract, the net circulation of the United Sates' Bank was increased from 13,780,847 to 16,933,122, or about twenty-two per cent., and though the increase in the circulation of the local Banks may not have been in the same proportion, there is reason to believe it was considerable. It may be admitted that the state of trade in Europe, and, perhaps, the Cholera, tended to swell the importations, but any disposition to over-trading thereby induced, would, if we had been without moneyed corporations and without paper money, soon have been checked by the necessity of paying cash, or at least making engagements to pay in specie.-The President of the Bank proceeds as follows:

"Without having contributed to produce them, the Bank found, about nine months ago, large importations, requiring for their diffusion through the country, increased facilities connected with Banking: having the means of giving them, -being in fact created for the purpose of giving them—it gave them; it had the means of giving, because, in the early part of the year, it had been strengthened for business, purposely, by the addition of two millions of its funds. in Europe transferred home, by the repayment of about ten millions of the funded debt paid back by Government since October, 1830, making an increase of active means amounting to twelve millions. When, in the progress of a few months, the continuance of these importations, and the revenue which had accrued on them, produced an effect on the actual state of the market, the Bank applied itself immediately to correct any disadvantages from it to the community. The actual position of things was simply this: There were large importations requiring means of remittance to Europe to pay for them; there were large amounts of revenue to Government, amounting in New York alone, from March 1831, to March 1832, to nearly seventeen million dollars, requiring great forbearance towards the