SINCE our last publication, most unexpectedly the tariff bill, which had been vetoed on account of the clause repealing the condition on which the distribution act of last year was passed, has become a law, with that objectionable section stricken out. The present law, although it bears, if we take into consideration the peculiar state of the currency, more of a protective or prohibitive character than any which has gone before it, produced temporarily on its passage a generally better feeling. It is of such a nature as to be highly popular with the manufacturers of those domestic goods which have heretofore been supposed to suffer most from the competition of imported goods, and, with the present extremely low rate of raw material, produce, and labor, the prospect of extending the markets for domestic goods and wares at higher rates has given an impetus to the movements of the manufacturers. The dealers in imported goods, many of which are prohibited under the new law, and of which fair stocks are held, were encouraged with the prospect of obtaining better prices after the tendency had been so long downwards. The people at large have also been inclined to hope that the tariff, by some magic influence, would impart a degree of activity to trade, to which it has long been a stranger.

The people have been too much inclined to look to the government for assistance in their daily transactions. There is, perhaps, no subject on which such a number of ill-founded popular prejudices exist. The number of idle tales spread about by the industry of faction, and by the zeal of foolish good intention, and greedily devoured by the malignant credulity of mankind, tend infinitely to aggravate prejudices which in themselves are sufficiently strong. In that state of affairs, and of the public in relation to them, the first thing that the government owes to the people is information. To provide for us in our necessities is not in the power of government. It would be vain presumption in statesmen to think they can do it. The people maintain them, and not they

the people. It is in the power of gov ernment to prevent much evil; it can do very little good in this, or perhaps in anything else. Of the government measure of relief, the only actual results thus far appear to be the advance in price of some few articles of foreign goods, which can no longer be imported. Buyers do not, however, seem inclined to submit to this advance, and they purchase very sparingly. There has been no advance, nor increased activity in domestic goods, nor is there likely to be. The stocks of goods are large, and if any disposition to improve were apparent in prices it would only have the effect of increasing the supplies, by tempting new capital and new operators into the trade. The only result upon business which is likely to be felt this fall from the tariff may be to check the downward tendency of prices.

The want of a tariff has not been among the causes of the depression in trade. The stagnation which has been so long felt seems to have arisen from far other causes. The country is full of produce at exceedingly low prices. The cities have been filled with goods, foreign and domestic, offering at prices at which they can neither be produced nor imported. The want of a tariff could have had no agency in preventing an interchange of these commodities. The difficulty seems rather to have arisen from the fact that a great revolution has been and is going on, not only in the manner of doing business, but in the direction of that business. Until within a very few years all the business of the Union has been done on a system of bank credits; both the purchase of produce and the sale of merchandize. The local banks, operating under the supervision and control of the National Bank and branches, became the agents of credit, by which constantly accumulating quantities of goods were brought into the country and sold and consumed on credit. The natural tendency of that system was to concentrate trade at the money centre, New York, where about 60 per cent. of all the foreign goods

imported into the United States are entered, the proportion having increased from about 35 per cent. in 1826, when the United States Bank was first regularly in operation, to 60 per cent. at the present time. Under that system dealers from all quarters of the Union came to New York, and being in fair standing, could purchase goods at four to eight months, giving their notes payable at their own local banks. A discount of these notes could always be readily procured, either through the banks or the large monied houses in Wall street. These notes were very generally lodged with the National Bank at the place of payment, and at their maturity were always paid in the notes of the local banks. By these means a balance was constantly accumulating in favor of the branch against the local banks where it was situated, and this balance was the instrument by which it held them in perfect control. If any one bank extended itself too freely it was instantly checked by the balance accumulating against it at the branch. The proceeds of the notes, thus collected, were transmitted freely from one branch to another, all communicating with the mother bank, and forming a machine by which collections were facilitated, at the same time that the paper currency was rendered uniform, by confining each bank within its proper sphere of business, according to its capital and means.

This restriction and control was a frequent cause of complaint on the part of the local banks, who complained of "the tyranny" of the National Bank. Holding this general command over the banks of the Union, it is evident that no universal inflation of the currency could take place, unless the controlling power or National Bank itself expanded. That institution was subject to no check itself, except that which always arose from a foreign demand for specie when the currency became too full. As long, therefore, as no unusual influence was brought to bear upon the foreign exchanges, they were a true index of the state of the currency, whether full or otherwise. The high tariff of 1828 was undoubtedly the first of a series of events which produced a derangement of the currency, by operating artificially upon the fo reign exchanges. The effect of that tariff was to cause the imports in the years 1829-1830 to average each year $13,000,000 less than the average of the five preceding years, making $26,000,000 less of foreign goods to pay for in those two years. This, of course, had a powerful influence in keeping specie in the country, and removed the only check upon the movements of the National Bank. The effect of this was magical, and is seen in the following table of the loans, specie circulation, and deposits of that institution for five years:

This calculation presents, as accurately as the imperfect returns of the local Banks for 1832 will admit, the enormous expansion which took place. The credit means of the United States Bank, rose from 61 per cent. of its capital in 1829, to 106 per cent. in 1832, and those of the local banks rose 50 per cent., or from 61 in 1829, to 91 in 1832. The consequence of this vast inflation, was, that the imports became greater than ever, and the demand for specie being renewed from abroad led to the revulsion of 1834. At that time a new influence began to be exerted on the foreign exchanges, which was the system of open credits, by which the long dated paper of American importers was discounted for the purchase of Lancashire goods, by the London houses, backed by the Bank of England. This prevented the natural check upon the bank, viz. the foreign demand for spe

cie, from operating upon the currency here, until the Bank of England, in the summer of 1836, broke through those credits, and brought the accumulated demand for coin upon the New York markets, giving the banking system here a shock from which it has never recovered. In 1838-9, again, a new agent influenced the foreign exchanges. This was State Stocks, large amounts of which being sold abroad, the proceeds were returned in goods, and specie, again causing the banks to inflate. The failure of this new agent of credit through excess of issue, was not followed by an accumulated demand for coin, because the stocks, being the immediate means of payment for the goods do not mature for years to come. In illustration of that which we have here set forth, we may give the following table from official sources, showing