stitutional currency, an event which the present state of things will shortly bring about. The decennial portion of the nineteenth century, which expired with the year 1840, was marked with the most violent and extraordinary changes in the financial and commercial world, chiefly affecting the three great nations of France, the United States, and the Empire of Great Britain. The period alluded to commenced under circumstances calculated to produce the happiest effects in promoting the commercial and social intercourse of the nations of the earth, on a basis productive of mutual benefit. These circumstances, taking their rise at the general cessation of hostilities in 1815, had developed the commercial principle in legislation, which gained strength in a period of fifteen years of profound peace, until in 1830 it exercised a powerful influence upon the governments of the respective nations. No country had made such rapid advances as France in the prosecution of the peaceful arts. Its results were seen in the revolution of 1830, which placed the "citizen king" upon the throne, and paved the way to liberal principles in commercial legislation. In the United States a revolution of a less violent character had taken place, and the democratic ascendency in the Federal government had justly began to exert its influence upon commercial regulations. The effect was speedily seen in the enactment of the compromise law, providing for a gradual return to unrestricted trade from the high protective tariff of 1828. In England a similar change had taken place, and the party avowing the most liberal doctrines on the subject of commercial intercourse had come into power. Thus it happened, that in the three leading nations of the earth, the progress of events had placed in power, simultaneously, the parties in each most inclined to favor national intercourse on the broad basis of mutual advantage. It was natural to suppose that such a combination of powerful leading causes should have produced effects extraordinary in themselves and of the greatest consequences to commerce at large. These results were only to be dreaded from the fact that the combined movement of all three countries in connection with that of the commercial world, revolved round and pivoted upon the paper system of England;-a system which, vicious in itself, was originated in a period of the world when the commerce of mankind was not only very much inferior to what it now is, but was restricted and confined to comparatively small circles, by slowness of intercourse, by the barbarous restrictions imposed upon trade, and, above all, by the almost continual hostilities of the leading nations against each other. This system, which, on the restoration of peace in 1815, was revived and placed upon as good footing as possible, was yet so precarious in its nature that Mr. Huskisson stated at the time, that "the government did not contemplate the possibility of the Bank continuing to pay specie during a continuous large import of foreign corn.' Such was the uncertain foundation for the extended operations of trade under the new order of things. This Bank was the centre of that system whose prosperity was speculation and extravagance, and whose reverse was ruin and want. Knowing no medium, it converted England and the commercial world into a species of stock exchange, where gambling establishes its empire with all its train of factitious emotions and excitements, and sudden rises and falls. During the period subsequent to the great revulsion of 1825, the operations of the Bank in England, like that of the National Bank in the United States, continued remarkably steady. Undisturbed by violent fluctuations in the movements of the banks, the commercial classes in both countries were unusually prosperous. In 1830 the violent change in the French government caused a momentary loss of confidence and stagnation in business, which exhibited itself in an excess of the currency of England as compared with that of France. The consequence of that derangement was a continued diminution of the bullion held by the Bank of England from July, 1830, to the spring of 1832, when the gradual restoration of credit on the continent gave a favorable turn to the exchanges, which continued until 1833, when the Bank held £11,000,000 in bullion. At the time that the exchanges became favorable to England began the general extension of paper credits in all these countries. After the great revulsion of 1825 in England, the Bank of England, at the suggestion of Lord Liverpool, then at the head of the government, established branches in different parts of England, as it was said, to control the issues of the private banks. At the same time provision was made by Parliament for the establishment of joint stock banks. During the season of steady prosperity which succeeded, up to 1832, however, that liberty was not much availed of, not more than twenty banks having been established. In 1832, however, seven banks went into operation, and up to 1837, one hundred and two new joint stock banks were established, and one hundred and thirteen private banks were turned into joint stock concerns. In France there were many new banks established, principally under the influence of Lafitte, and the Bank of France established seven branches in different departments. In the United States the banking mania was still more apparent, and over three hundred new banks were established. The progress of these bank credits in the United States and England, where they were carried to the greatest height, may be seen in the following table: this rise in prices, exchange on the continent fell 2 per cent., and that the bank lost $25,000,000 in specie, which went to the continent in payment for goods imported directly into England, and also into the United States, and PRICES OF LEADING paid for by bills drawn on American account against open credits in London. The imports into the United States were accelerated by a similar increase of prices arising from the same causes, as seen in the following table. ARTICLES IN THE NEW YORK MARKET, FOR OCTOBER OF EXPORTS AND CUSTOMS REVENUE OF FRANCE, ENGLAND, AND THE UNITED STATES. make the deficiency to be supplied from abroad greater. However, from 1832 to 1838, no deficiency occurred, and in all that time the bubble rolled onwards. Although a revulsion occurred in the United States, in 1836-7, nothing transpired to shake the commerce of all three countries, until the failure of the harvest of England in 1833. The following table will show the import of wheat into England, and the import and export of grain into and from France and the United States, in each year. IMPORT AND EXPORT OF GRAIN IN FRANCE, ENGLAND, AND THE UNITED STATES. In this table, in order the more easily to compare results, we have reduced the French litres and the English quarters to bushels, and given the equivalent in bushels of wheat for the American flour exported. This movement of wheat, then, was the key of not only all the commercial movements of nearly the whole world, but on it depended the wealth and prosperity of every man in Great Britain and the United States. In the years of full harvest in England, viz., from 1831 to 1838, the paper bubble in both hemispheres was immensely inflated. The concussion which took place in this country, consequent upon the withdrawal of the London credits in 1836-7, caused by the alarm of the Bank of England, growing out of the immense diminution of its bullion, which, as seen in the table, fell from £11,000,000, in 1833 to about £4,287,000 in 1837, would not have been serious had the harvest in the following year continued good. For we find in the table that the bank succeeded, by cutting off American credits, in getting back its bullion in the following year, when it again reached £10,126,000. The harvest was then, however, deficient, and 23,000,000 bushels of wheat were imported-an enormous quantity, equal to one fourth of the whole produce of the United States in that year, according to the late census. The result is evident in the decrease of bullion held by the bank, which fell to £2,522,000 during the year 1839, and the stoppage of the bank in the fall of that year was averted only by the loan of £4,000,000 obtained from the Bank of France. Since then, until the present year, England has not had a sufficient harvest. The consequence has been that the Bank of England with the utmost exertion, could scarcely retain its bullion, even at the expense of the trade of the country. The large purchases of corn from abroad had enriched the continent, and furnished the means more actively to compete with the manufactures of England, and therefore to reduce the demand for them. Thus, simultaneously with high rates for food, the demand for labor was decreased, until the manufacturing districts of England were reduced to insurrection and anarchy. The whole country is enduring the penalties of its own excesses. It is infatuated with the idea that it is to manufacture for all the world, and, with glutted markets and prices for goods too low to pay, it continues to grind down the wages of its workmen, and to accelerate the ceaseless whirl of its machines, whose motive power are paper banks and joint-stock compa nies. Under the stimulus of their institution in 1835-6, it was estimated that the capital employed in manufacturing machinery in Lancashire was doubled, and a similar result was produced in all other sections. The whirlwind of a paper revulsion has now passed over it, and that description of property is comparatively valueless. Cotton-spinning establishments which were valued at £100,000, or $500,000, have recently been com promised at one fourth that valuation, or £25,000. It is recorded in the London papers, as an instance of the value of machinery, that the stock in trade of a hand-loom weaver, which cost £20, was sold for 8s. for firewood. The decay of trade in the great iron district of South Staffordshire is represented in the following figures, showing the number of furnaces in blast at different periods: 1839 there were in blast 120 furnaces, yielding pig iron, tons 8,400 In January 1842 Sept. 1842 Sept. 24, 1842 Here was a branch of industry reduced to about 12 per cent. of its former magnitude, throwing hundreds and thousands of people out of the means of bread, by the compressing power of the Bank, joined to the scantiness of the harvest and the foreign competition in manufactures. In the United States the same cause has bankrupted individuals, destroyed a great proportion of the banks, and left many of the States indelibly stained with the disgrace of repudiation. In France there had been less paper expansion, and consequently less depression. The continent became enriched by the money extracted from the United States and England during the inflation, and therefore prepared more successfully to compete with the latter in future. We have seen that the period of ten years-1830 to 1840-commenced under the happiest prospects and ended with the direst reverse. We have now entered upon a fresh term with a different order of things. In England, although the late ministry professed liberal principles of trade, they did nothing during the long period of apparent prosperity to change the exist ing regulations. A new ministry are now in power, and have been obliged by the prevailing distress to carry out the principles professed by their opponents, and have made bold strides towards free trade by the amelioration of the tariff. In the United States the reverse has taken place: the distresses here wrought a temporary change in the Federal government, and the opportunity has been seized upon by the party in power to restore the oppressive tariff rates of former years. The credit system is, however, so far crippled by the effects of its own excesses as to be incapable of a speedy renovation. The aggregate real wealth of the country is however very great, and nothing seems to prevent a return of trade but faulty legislation. We have a large surplus of produce which, to be available, must find its way abroad, and the state of affairs in England is such as to lead to the hope that a large market will yet be found there. It has been an old policy with the government of England, whenever, by financial revulsion, the distresses of the people have driven them to insurrection, to call in the assistance of the Bank, which, by rendering money artificially abundant, gave a temporary relief and averted the storm. Never in the history of England has its danger from this cause been so great, deepseated and wide-spread as now, and revolution seems to have been averted only by the chance of a good harvest giving the Bank power to make money lavishly abundant, a power which she has not been slack in using during the past few weeks. The following is a table of that which constitutes the basis of the currency of England, viz. the circulation and bullion of the Bank at different periods: |