1£x Hthris 
 
 SEYMOUR DURST 
 
 ~t ' 'Fort ntewv ^Arn^erdam, oj> Je Mat&atarus 
 
 When you leave, please leave this hook 
 
 Because it has been said 
 "Ever'thinQ comes t' him who waits 
 
 Except a loaned hook." 
 
 i~«7 6 <f 
 
 Avery Architectural and Fine Arts Library 
 
 (in i 01 Si YMOUR B. I)i rsi Old York LIBRARY 
 
Digitized by the Internet Archive 
 in 2014 
 
 https://archive.org/details/reviewoftradecomOOmcre 
 
A 
 
 r e Vi e w 
 
 OF 
 OF 
 
 NEW- YORK, 
 
 FROM 1815 TO THE PRESENT TIME. 
 WITH 
 
 AN INQUIRY 
 
 INTO THE 
 
 CAUSES OF THE PRESENT DISTRESS, 
 
 AND 
 
 THE MEANS OF OBVIATING IT. 
 BY AN OBSERVER. 
 
 JNEW-YORK : 
 
 PRINTED BY C. S. VAN WINKLE, 
 101 Greenwich-street: 
 
 1820. 
 
Southern. District of Netv- Vorfr, ss. 
 
 BE IT REMEMBERED, that on the twenty -eighth day of January, in the 
 forty-fourth year of the Independence of the United States of America, John 
 M'Creaov, of the said district, hath deposited in this office the title of a book, the 
 right whereof he claims as proprietor, in the words following, to wit: 
 
 " A Review of the trade and commerce of New- York, from 1815 to the present 
 time With an Inquiry into the cause of the present distress, and the means of ob- 
 viating it By an Observer." 
 
 In conformity to the act of Congress of the United States, entitled, " An act for 
 the encouragement of learning, by securing the copies of maps, charts, and books, 
 to the autnors and proprietors of such copies during the times therein mentioned 
 and also, to an act, entitled, "An act supplementary to an act, entitled, an act for 
 the encouragement of learning, by securing the copies of maps, charts, and books, 
 to the authors and proprietors of such copies, during the times therein mentioned, 
 and extending the benefits thereof to the arts of designing, engraving, and etching 
 historical and other prints." 
 
 GILBERT LIVINGSTON THOMPSON, 
 Clerk of the Southern District of New- York. 
 
PREFACE, 
 
 The review here given of the business of New- 
 York, for the last five years, might easily have 
 been extended to a volume. The great object has 
 been, to comprise as much matter as possible in few 
 words. Little attention has been paid to the selection 
 of words or to beauty of language. The subject is 
 a mercantile one; and on such a subject simplicity and 
 correctness oj detail is all that is required. It ivas 
 originally intended to have added a table, exhibiting the 
 amount of the imports and exports of New-York, for 
 a considerable period ; and to have exhibited the value 
 of the raw materials of the United States, in Liverpool, 
 for a number of years past. It ivas likewise intended 
 to have given a comparative view of the amount of 
 goods sold at auction, and of the imports into New- 
 York, for a successive number of years. This is the 
 only method that can be adopted, to show the compara- 
 
iv 
 
 tive amount of business in the hands of the auc- 
 tioneer 's y and the great monopoly of trade which they 
 enjoy. 
 
 The materials for these tables are collecting, but it 
 will require some length of time for their completion. 
 Should this revieiv be received favourably, they will 
 be given at some future period. 
 
R E V I E W 
 
 OF 
 
 THE TRADE AND COMMERCE 
 
 OF 
 
 NEW-YORK. 
 
 The year eighteen hundred and fifteen will be long 
 remembered, as forming an interesting era in the an- 
 nals of our country. It returned to us peace — estab- 
 lished our national character — broke down the con- 
 tentions of party, which had threatened the unity of 
 the states — replenished our exhausted treasury, and 
 restored to our citizens the prosecution of their for- 
 mer mercantile pursuits. The gloom which for years 
 had hung upon our prospects appeared to be dissi- 
 pated, and the path opened to national greatness and 
 individual wealth. In the prosecution of public con- 
 cerns we are realizing our highest hopes ; while the 
 affairs of private life, on the contrary, have been doom - 
 ed to encounter embarrassment, distress, and ruin. 
 
 Of this we shall be deeply convinced by looking 
 back upon the business of the first year of the peace, 
 and comparing its active scenes — the noise, the bustle, 
 and the hurry of the times — the sprightly, gay, and 
 
6 
 
 animated countenances of the merchants, with the 
 present general stagnation of business — the silence of 
 the streets — the decay of the shipping, and the immense 
 sacrifice of property by our citizens. A review, there- 
 fore, of the past, and an investigation of the causes 
 that have produced such general ruin, cannot be un- 
 acceptable. Such a review will present a history of 
 what has taken place ; and, by a close examination 
 into the causes that produced them, we shall be ena- 
 bled to ascertain whether they have yet ceased to ope- 
 rate ; and if not, whether any thing can be done to 
 release us from their baleful influence. 
 
 In pursuing this inquiry, it will be necessary, in 
 order to a full development of the subject, to revert 
 back to a period anterior to the one immediately in 
 view. 
 
 The true interests of our country, and the character 
 and pursuits of its inhabitants, had hardly begun to 
 unfold themselves when the French revolution burst 
 upon the world. This great event not only involved 
 the interests of all Europe, but deeply affected the 
 wealth and mercantile pursuits of America. 
 
 The scarcity of provisions in France, in 1791, pre- 
 sented a market for the surplus produce of America, 
 superior to any we had before enjoyed. Those who 
 made shipments thither acquired, in a short time, 
 large fortunes. The field thus opened, awakened the 
 mercantile spirit and enterprise of our country. The 
 events that followed gave new elasticity to the springs 
 already put in operation. 
 
 England, at this time, was too much occupied with 
 providing for the safety of her own government, to 
 
1 
 
 observe the increasing greatness of America. The 
 ports of almost every nation were thrown open to us — 
 we became the carriers of continental Europe, and the 
 productions of our soil everywhere found a ready 
 market. From 1792 to 1804, we enjoyed the trade 
 of a large part of the world without a rival. The 
 great belligerents turned their attention to us. Eng- 
 land beheld her commercial rival. France saw us 
 spreading the manufactures of Britain throughout the 
 continent: — the jealousy of both was excited, and 
 efforts were made to check our hitherto uninterrupted 
 mercantile prosperity. Napoleon issued his decrees- 
 England her orders in council ; both professing that 
 they were compelled to resort to these measures to 
 counteract those of the other nation. 
 
 It is unnecessary to inquire, at this time, whether 
 England or France was the first aggressor upon our 
 commercial rights ; it is sufficient to say, that our 
 foreign trade was deeply affected by these measures of 
 the two great contending powers. The feelings and 
 the interests of our merchants were excited by them, 
 and the national government was loudly called upon 
 to vindicate our national rights and national charac- 
 ter. Notwithstanding the injurious effects of these 
 measures, our trade continued to prosper. The skill 
 and superiority of American seamen were never better 
 evinced than in the manner they evaded the British, 
 cruisers that blockaded the whole coast of France : 
 and, although captures to a large amount were made, 
 enough escaped to make the trade profitable, and pay 
 for the risks that were run. 
 
a 
 
 Such was the situation of the commerce of the 
 United States, from the commencement of the Frenc h 
 Revolution up to December, 1807, when either the 
 wisdom or the policy of the government of this coun- 
 try prompted them to adopt a restrictive system, that 
 deprived the merchants of this country of the lucra- 
 tive trade that they had hitherto enjoyed. The em- 
 barrassments that were produced by this measure were 
 obviated, in a great measure, by the paper system, 
 which, at that period, was fast increasing in this 
 country. 
 
 The war that our government declared, in the year 
 1812, against Great Britain, called into action the 
 whole resources of America, and ended in fostering the 
 high prices that our mercantile prosperity had created 
 in this country. 
 
 At the conclusion of the late war, there had been, 
 from the commencement of the French Revolution up 
 to that period, four great causes combined, which cre- 
 ated the nominal high prices that were then experi- 
 rienced, and which, although reduced, in some mea- 
 sure, at the present time, have not yet, by any means, 
 fallen to their lowest ebb. These four causes were, 
 
 First. The whole wealth of the civilized world was 
 put, and kept, in constant circulation. 
 
 Second. The credit of every nation was called into 
 action. 
 
 Third. A paper system was devised and put in 
 execution, which created a nominal capital, by which 
 the nominal amount of our circulating medium was 
 greatly increased ; and, 
 
9 
 
 Fourth. Individual credit was exerted to the ut- 
 most. 
 
 In order to show more fully the effect of these 
 causes, it may not be improper to take a rapid view 
 of their rise and progress. 
 
 From the commencement of the French Revolution 
 up to the battle of Waterloo, and the treaty of Ghent, 
 nearly the whole world was continually engaged in 
 one mighty contest. Armies, surpassing any thing 
 that had been before, were raised, fed, and clothed. 
 During the whole of this period, France alone con- 
 stantly maintained an army in the field, varying from 
 two hundred thousand to twelve hundred thousand 
 men, the average of which, for twenty-five years, can- 
 not be estimated at less than seven hundred thousand 
 men for each year. 
 
 In carrying on these amazing wars, all the wealth 
 and all the credit of the civilized world was put in 
 operation. The riches that the church of Rome had 
 been hoarding up for centuries were, by one act of 
 confiscation, transferred to the treasury of Napoleon. 
 A system of taxation and contribution, embracing in 
 its grasp all the luxuries and necessaries of life, was 
 devised. Even the haunts erf dissipation and vice 
 were legalized and interwoven into the financial sys- 
 tem of France. England, during the whole of this 
 period, called into immediate action all the wealth 
 and all the credit of that immense empire. The paper 
 of her National Bank received the protection of Par- 
 liament. The credit of the government was exerted 
 to the utmost. The other nations of Europe made 
 
 2 
 
10 
 
 the same exertions in proportion to their capacity : 
 Spain drained the mines of Mexico and Peru ; Rus- 
 sia subsidized Asia ; whilst England called to her aid 
 the gold of Ophir, and the wealth of India. The arm 
 of power, in many instances, seized upon property 
 wherever it could be found, and converted ^ to its 
 own use. American property to a vast amount was 
 condemned without a shadow of law or right, merely 
 to aid in replenishing the exhausted treasuries of the 
 contending powers. 
 
 The great increase of the circulating medium of 
 Europe, thus produced, had the natural tendency to 
 enhance the nominal price of every thing ; and the 
 balance of trade in favour of the United States, at that 
 time, gave to us the full proportion of the increase of 
 the precious metals. 
 
 Whilst these causes were operating in Europe to 
 increase the wealth and power of America, a system 
 of banking was devised and carried into execution in 
 this country. The evils arising from this system have 
 gradually extended themselves until the present time. 
 The bank of North America was established in Phila- 
 delphia, in the year 1781, with a capital of two mil- 
 lions of dollars. Since that time, a period of thirty- 
 eight years, the nominal banking capital of the United 
 States has been augmented to not less than one hun- 
 dred and fifty millions of dollars. 
 
 The evils of this paper system were not felt as long 
 as the United States enjoyed the uninterrupted trade of 
 Europe. The increasing demand for the productions 
 of our soil, and the large balance of trade in our favour, 
 arising from our being the carriers of continental 
 
11 
 
 Europe, enabled the banks of this country to emit 
 paper to any amount, without the danger of its being 
 thrown back upon them.* 
 
 The restrictive system adopted by our government 
 in eighteen hundred and seven, and followed up until 
 the conclusion of the late war, operated, in some mea- 
 sure, to check our mercantile prosperity. This system 
 produced much embarrassment : the merchants com- 
 plained — the national legislature was petitioned — 
 the general government adhered to its restrictive sys- 
 tem — new banks were incorporated by the state legis- 
 
 * The subject of the balance of trade of this country is gene- 
 rally misunderstood. The estimates of the treasury depart- 
 ment of the United States are grossly erroneous. This pro- 
 ceeds from the impossibility of having accurate returns from 
 the custom-houses, of the exports and imports of this country, 
 under the- present revenue laws. There are no data from which 
 the balance of trade, either for or against this country, can be 
 estimated. The best criterion is the course of exchange. This, 
 with England, has never been, for six months in succession, 
 against us, when the banks of this country have generally paid 
 specie. 
 
 The trade beyond the Cape of Good Hope is, not unfrequent- 
 ly, represented as beino- disadvantageous to this country. This 
 is a mistake The limits of the pjjesent work will not admit of 
 entering into a discussion of the question. The error, however, 
 arises from comparing the amount of imports from India, debited 
 against our trade, with the amount of exports, consisting princi- 
 pally of specie, credited at the custom-house. Whereas, a large 
 portion of that which really pays for cargoes imported, is pro- 
 cured with very little cost to us. after the vessels leave this coun- 
 try : such as furs from the north west coast of America, sandal 
 wood, skins, and other South i^ea productions, and, of course, is 
 entirely left out of the account in our custom-house estimates. 
 
12 
 
 latures, and large amounts of paper were put in circu- 
 lation, sanctioned by their authority, and the co-opera- 
 tive influence of wealthy and interested stockholders. 
 
 With this state of things existing, the United States 
 engaged in war. This threw into circulation the 
 whole credit of the government. To complete the 
 catalogue, the monied institutions of our country re- 
 solved upon a paper system, by which they professed 
 themselves unable to meet their engagements, and 
 virtually declared to the world that they were bank- 
 rupts. 
 
 During the whole of this period, individual credit 
 was exerted to the utmost. A system of implication 
 and endorsement was introduced. The notes of indi- 
 viduals were made negotiable. They frequently 
 were passed in payment in the place of money. 
 
 The reasons, therefore, of the gradual increase of 
 the nominal value of things, from 1790 to 1815, is 
 obvious. It was the throwing into circulation the 
 whole of the wealth and credit of the civilized world. 
 In order to show the great change in prices thus pro- 
 duced, the following schedule is given, exhibiting the 
 gradual increase from 1770 to 1790, and the great ad- 
 vance from that time to 1815. The periods select- 
 ed for this exhibition were times of general peace. 
 The first period being between the conclusion of the 
 old French war, as it is called, and the commencement 
 of the American Revolution. The second period is 
 previous to the French Revolution. The third and 
 last period is the year 1815, the first year after the 
 world had sat down in universal peace. 
 
13 
 
 The following Schedule exhibits the prices of the arti- 
 cles enumerated, at the folloicing periods. 
 
 Article^ 
 
 its 
 
 
 
 1790 
 
 181 
 
 5 
 
 For making a coat, without trim- 
 
 
 
 
 
 
 
 mings, 
 
 IP 1 
 
 75 
 
 
 00 
 
 7 
 
 00 
 
 For making a vest, without trim- 
 
 
 
 
 
 
 mi nscs, 
 
 
 
 56 
 
 u 
 
 
 1 
 
 75 
 
 For making small clothes or pan- 
 
 
 
 
 
 
 
 taloons, 
 
 o 
 
 56 
 
 
 
 621 
 
 1 
 
 75 
 
 For making coat, vest, and panta- 
 
 
 
 
 
 
 
 loons, 
 
 3 
 
 00 
 
 4 
 
 00 
 
 16 
 
 00 
 
 For furnishin " materials, and ma 
 
 
 
 
 
 
 
 king coat, vest, and pantaloons, 
 
 25 
 
 00 
 
 32 
 
 00 
 
 65 
 
 00 
 
 Fine shoes, 
 
 o 
 
 80 
 
 1 
 
 00 
 
 3 
 
 00 
 
 Fine boots, 
 
 3 
 
 00 
 
 4 
 
 00 
 
 9 
 
 00 
 
 Mason's work, per day, 
 
 
 
 44 
 
 
 
 60 
 
 1 
 
 75 
 
 Carpenter's work, per day, 
 
 
 
 40 
 
 
 
 56 
 
 1 
 
 50 
 
 Common labourers, per day's 
 
 
 
 
 
 
 
 work, 
 
 
 
 25 
 
 
 
 37 
 
 1 
 
 00 
 
 Cartman's cartage, per load, 
 
 
 
 9 
 
 
 
 121 
 
 
 
 25 
 
 Good board, per week, 
 
 1 
 
 50 
 
 2 
 
 00" 
 
 6 
 
 00 
 
 Beef, per pound, 
 
 
 
 3 
 
 
 
 4 
 
 
 
 121 
 
 Pork, per pound, 
 
 
 
 3 
 
 
 
 4 
 
 
 
 10 
 
 Butter, per pound, 
 
 
 
 6 
 
 
 
 9 
 
 
 
 30 
 
 Eggs, per dozen, 
 
 
 
 4 
 
 
 
 6 
 
 
 
 18 
 
 Labour per day, in the country, 
 
 
 
 
 
 
 
 for mowing and getting in hay, 
 
 
 
 30 
 
 
 
 37 
 
 1 
 
 00 
 
 Labour per day, in harvest, 
 
 
 
 37 
 
 
 
 50 
 
 1 
 
 25 
 
 Wheat, per bushel, 
 
 
 
 50 
 
 
 
 75 
 
 2 
 
 00 
 
 Rye, per bushel, 
 
 
 
 37 
 
 
 
 50 
 
 1 
 
 25 
 
 Corn, per bushel. 
 
 
 
 30 
 
 
 
 37 
 
 1 
 
 12 
 
14 
 
 From this view of the comparative prices of things, 
 it appears, that from 1770 to 1790, a period of twenty 
 years, the average increase in the nominal value of 
 commodities was about twenty-five per cent., whilst, 
 from 1790 to 1815, a lapse of twenty-five years, 
 prices had considerably more than doubled. The 
 statement that is given has been collected principally 
 from books kept at the different periods selected. 
 Where they have been insufficient, recourse has been 
 had to the recollections of those who were then upon 
 the stage of action, and who still remain amongst us. 
 It is believed to be correct. 
 
 The reasons of the increase in prices, from 1770 to 
 1790, were the revolutionary war; the facilities that 
 national independence gave to national intercourse, 
 and the gradual increase of the precious metals in this 
 country. The commerce of the United States, at this 
 time, was not so extensive as to require the exporta- 
 tion of gold and silver for its support. During the 
 revolutionary war, very considerable quantities of 
 specie were imported into this country, to support the 
 unprofitable contest that the British carried on. To 
 this cause, more than any other, may be attributed the 
 increase of prices after the revolutionary war, over 
 those that preceded it. With this view of the sub- 
 ject, the reasons of the increase in prices, from 1770 
 to 1790, is obvious. 
 
 The causes that produced the great nominal in- 
 crease in the value of things from 1790 up to 1815, 
 have been stated. So far as they have ceased to exist, 
 there must be a proportional reduction in the apparent 
 value of commodities. The national resources of 
 
15 
 
 Europe are exhausted, and the credit of the govern- 
 ments is now unexerted. In this country, our bank- 
 ing system is prostrated, and individual credit broken 
 down. There is, therefore, no reason that can be as- 
 signed, why prices should not be reduced to what they 
 were previous to the French Revolution, unless it be 
 the gradual increase of the precious metals both in 
 Europe and America. How far this cause will have 
 any influence deserves attention. 
 
 The India trade, which has been vigorously pur- 
 sued ever since the adoption of the constitution of the 
 United States, has had a constant tendency to drain 
 us of the specie which the balance of trade in our fa- 
 vour for the greater part of the last thirty years has 
 been constantly bringing into this country. There 
 are no data from which an estimate can be made of our 
 imports or exports, of the precious metals. It is, how- 
 ever, believed, that the quantity of gold and silver in 
 the United States is not greater now, in proportion to 
 the population, than it was thirty years a^o. 
 
 In Europe, the fact is nearly the same ; for, whilst 
 the rapacious sacrilege of the governments of Europe 
 has converted into specie the gold and silver of the 
 crucifix and the altar, there has been a constant current 
 of the precious metals setting from Europe and Ame- 
 rica toward the ^aj^ to adorn the sanctuaries of the 
 gods of Chinese idolatry. 
 
 Gold and silver are the standards by which the 
 value of all other commodities is estimated. They 
 do not possess within themselves any intrinsic value, 
 Human labour, and the productions of its industry, 
 are the only criteria by which the real value of any 
 
J6 
 
 thing can be estimated. Still, however, as specie, by 
 universal consent, fixes the nominal value of things, 
 their prices must be greater or less, in proportion to 
 the quantity of precious metals in circulation. 
 
 The revolution in South America is the only cause 
 that will prevent both Europe and America from being 
 placed in the same condition, with respect to the nomi- 
 nal value of things, that they were in 1790. How far 
 this event will produce any alteration, deserves some 
 attention. 
 
 The mines of South America have, ever since the 
 discovery of the New World, been pouring forth their 
 treasures to administer only to the sordid and narrow 
 views of their Spanish masters. We have hitherto 
 been cut of! from the trade of the richest and fairest 
 portion of the globe. The events which have taken 
 place, and that are still unfolding themselves, have 
 opened South America to the world. Her gold and 
 silver are enriching every nation. Some allowance 
 must be made for the increase of the precious metals 
 for the last thirty years. This, probably, should not 
 exceed ten per cent. Adding this, therefore, to the 
 prices of 1790, the true value of things, at the present 
 time, may be estimated.* 
 
 The immense wealth that has been thrown into 
 circulation during the series of fitfcfs that have taken 
 
 * South America will, in all probability, rival the United States 
 in many raw materials. This, however, will have no immediate 
 influence. The effect of the increase of the precious metals will 
 always be the same. If South America should become our rival 
 in raw materials, such an event would only change the course of 
 trade. 
 
17 
 
 place at and since the close of the last century, cannot 
 be expected to cease immediately in its operation. 
 This the experience of the last four years has shown 
 to be the fact. 
 
 The consequences of this retrograde order of things 
 have been truly deplorable. It has involved thousands 
 in bankruptcy and ruin, both in Europe and America. 
 It has beggared the active and industrious, and swept 
 away, with an irresistible force, the fancied wealth of 
 many years. Its effects have not been confined to in- 
 dividuals only — Governments have experienced them. 
 England, at this moment, is rocking to her centre from 
 this very cause. 
 
 In taking a more immediate view of the period that 
 has elapsed since the peace, and of the business that 
 has been transacted since that time, the education and 
 situation of the active business class of the community 
 requires the first attention. Nearly a whole genera- 
 tion passed off the stage of action during the eventful 
 wars in Europe. Those who embarked in business 
 in 1815 had been educated under a different state of 
 the world than the one then before them. They were 
 illy calculated to reason upon what would be the re- 
 gulai course of business, at a jime of universal peace, 
 and, without reflection, they plunged themselves into 
 the same round of extensive mercantile operations to 
 which they had previously been accustomed. The 
 high prices that the productions of the United States 
 commanded, the first two years after the peace, fos- 
 tered this procedure. But the nations of Europe re- 
 quired only time to begin to revive their wasted agri- 
 
 3 
 
1 u 
 
 culture, and other peaceful pursuits, to show the 
 fallacy of these expectations. 
 
 There have been, since the year 1815, two great 
 periods of mercantile pressure, and commercial fail- 
 ures. The first occurred in the winter of 1816 and 
 17, and the following spring. The other took place 
 in the spring and summer of 1819. The cause that 
 produced these failures was the same — that of over 
 trading. The class of merchants that were affected 
 by it, at the different periods, were in a great measure 
 distinct. The failures of 1^17 were principally 
 among the importers and dealers in foreign merchan- 
 dise. Those of 1819 affected the shipping merchant, 
 and the dealer in the productions of our soil. The 
 reasons of this are obvious. 
 
 The banks of New- York, together with those south 
 and w T est of them, suspended specie payments in the 
 summer of 1814, without fixing upon any period when 
 they would resume them. The temporary excitement 
 that this measure produced, was soon lulled to rest by 
 their liberal discounts, and the commanding influence 
 which the directors and stockholders of these monied 
 aristocracies possessed. The then situation of the 
 country might have required a temporary suspension 
 of specie payment by the banks, but there can be no 
 reason assigned, either of principle or policy, why the 
 directors of these institutions did not, professing them- 
 selves solvent, fix upon some time when they would 
 redeem their notes, and direct their whole attention 
 toward the accomplishment of this desirable object. 
 So far from this being the case, they continued to dis- 
 count liberally. At this time, there was no regular 
 
19 
 
 business doing. The only use to which money could 
 be applied, was either to wild and mad speculation, or 
 the carrying on an illicit trade with an open enemy. 
 The evidence of this fact is too fresh in the recollec- 
 tion of every one to require a repetition of it ; and ge- 
 nerally, the banks that suspended payment, never made 
 better dividends than they did during that period — the 
 first, and it is hoped the last instance, that will ever 
 occur in this country, of any association of men pub- 
 licly declaring to the world that they are growing rich, 
 and refuse to fulfil, on demand, their honest engage- 
 ments. 
 
 There never was a time when merchants stood less 
 in need of bank accommodations, than at the com- 
 mencement of the peace. They had collected in all 
 their funds. Their capitals were laying idle. Had 
 the banks shut their discount books at that time, spe- 
 cie would have fallen to par — exchange would not 
 have been against this country — merchants would not 
 have done business to ten, and even twenty times the 
 amount of their capitals, and the long catalogue of 
 distress and ruin that has followed would not have 
 had an existence. 
 
 The restrictive system thaMvas pursued by the go- 
 vernment, for some time previous, and during the late 
 war, cleared our market of almost the whole of the 
 productions of the art and industry of other countries. 
 At the return of peace, the stores were empty, and the 
 warehouses of the importers drained of their contents. 
 The situation of the interior of the country was the 
 same. The remnants and rubbish of the shops had 
 been converted into elegant dresses. The wardrobes 
 
20 
 
 of every one were exhausted. The return of peace 
 opened the United States to the commerce of the 
 world. The manufactories of Europe and Asia were 
 poured in upon us. A mercantile mania spread 
 through the country. Thousands, unacquainted with 
 business, embarked in it. The facilities of pro- 
 curing discounts at the banks made every body rich. 
 This induced the importers to give larger orders for 
 goods than they otherwise would. The same cause 
 induced the venders of goods to country traders to be 
 profuse in their credits. The business of J 815 was 
 one great struggle, who should get the most goods, and 
 dispose of them the quickest. When the business of 
 this year had closed, merchants were frequently in- 
 quiring for the residence and character of those whom 
 they had trusted. In footing up the profits of this 
 year's business on paper, many had even more than 
 doubled their capitals. Forty, sixty, and one hundred 
 thousand dollars, were set down as the profits of one 
 year's regular business. 
 
 The first decline in the price of goods, after the 
 peace, was in December, 1815. This had considera- 
 ble influence in damping the feelings of many of the 
 importers who had large stocks of goods on hand. 
 There was a peculiar fatality accompanying the Euro- 
 pean fall ships of this year. Many of the principal 
 ones, laden with full cargoes, had passages of from 
 sixty to ninety days. The consequence was, that 
 shipments that should have reached here in the fore 
 part of October, did not arrive until the last of No- 
 vember, too late for the business of that season. Du- 
 ring the winter of 1815 and 16, debts to a large 
 
21 
 
 amount became due. The bonds given by the im- 
 porters, for the goods imported in the spring and sum- 
 mer of 1815, were to be paid. The notes given by the 
 jobbers* to the importers likewise became payable. 
 The importers had realized the avails of these notes, 
 through the medium of the banks, long before they 
 became due, and vested the money thus procured in 
 funds to remit abroad. The jobbers had trusted the 
 whole of their capital and credit from one end of the 
 Union to the other. Both the importers and jobbers 
 had to rely upon the banks for assistance. This pro- 
 duced a great demand for money. The price of goods 
 was reduced still lower, and sacrifices were made at 
 auction to gain relief. 
 
 At the opening of the spring, business did not re- 
 vive as fast as was anticipated. Money was scarce. 
 The country merchants made only partial payments — 
 they had trusted out their stocks, and wanted a new 
 supply : those whose credit would permit, made new 
 purchases. The debts, both of the inland and foreign 
 merchants, were increased. The demand for goods 
 for the southern market was even increased toward 
 the close of this year over that of the preceding one. 
 
 The low price of merchandiser compared with what 
 it had been, induced many to make large purchases. 
 It was believed that the market had reached its lowest 
 ebb. The quantity of goods sold at auction increased, 
 and package sales took place. 
 
 The exhausted situation of Europe, after the re- 
 turn of general peace, gave the American market a 
 
 * A term applied to the vendors of dry goods to country 
 traders. 
 
22 
 
 decided preference over every other. The large 
 manufacturers of England wished to participate in 
 this advantage. They sent hither a swarm of agents, 
 accompanied with a flood of their fabrics. This 
 inundated our market, and at the close of the year 
 18:6, the United States were overwhelmed with an 
 excess of foreign commodities, partly on the account 
 of our own citizens, and partly on account of foreign 
 speculators. 
 
 In almost, all instances, up to the termination of 
 the year 18)6, the avails of goods sold on a credit 
 were anticipated by the importers, from ninety days 
 to four months, through the medium of the banks. 
 This, together with their custom-house bonds, gave 
 them the double advantage of their credit. The 
 means thus procured were constantly used for the 
 purpose of extending business, the evils of which 
 have since more than balanced the temporary gains. 
 
 From the peace up to the commencement of the 
 year 1817, the debts of the merchants were gradually 
 increased, and the demand for bank discounts con- 
 stantly augmented. The national bank, going into 
 operation at this period, coerced the state banks to 
 make arrangements to pay specie. This could only 
 be done by lessening their discounts. The effect of 
 such a measure can be easily anticipated. At the 
 moment the merchants were the most in want of 
 money, the banks were compelled to do what they 
 might and should have done in 1815 — resume their 
 payments. The remark is again repeated, that no 
 reason can be assigned why the banks did not draw 
 in their paper immediately after the peace, so as to 
 
23 
 
 enable them to pay specie for their notes, unless it be 
 the dishonest intentions of the directors to make mo- 
 ney at the expense of the community. The high 
 nominal price that specie then bore did not arise from 
 its unusual scarcity. It proceeded from the depre- 
 ciated value of bank notes. The establishment of 
 the United States Bank (however bad it may have 
 been conducted) has been of great advantage, merely 
 because it laid the foundation for the more correct di- 
 rection of the whole paper system. 
 
 From this, it appears that at the commencement of 
 the year 1817, the merchants owed more money than 
 at any previous period since the peace— that the banks 
 had gradually increased the amount of their discounts, 
 and that at the very moment the merchants required 
 the most assistance, the banks were compelled to draw 
 in their paper. This produced a pressure for money 
 without a parallel in this country. 
 
 The consequences were truly deplorable : the fan- 
 cied wealth of the merchants vanished in an instant. 
 It was nothing but a continued series of devising 
 means to pay the debts of the day — of running through 
 the streets to borrow money — of petitioning the^banks 
 for assistance — of bowing, and cringing, and fa'wniu^ 
 around the directors, hoping to be taken into favour 
 by these then lords of paper rags. Some were suc- 
 cessful, and others were not. Those who had the 
 most friends in the banks received the most money. 
 Capital had but little influence ; patronage was the 
 order of the day. It is a mistaken idea that banks 
 facilitate mercantile operations. They present allure- 
 ments to many, and give assistance to only a few. 
 
24 
 
 The auctions were crowded with goods. Prices were 
 reduced. Immense sacrifices were made. What cost 
 one pound sterling brought no more currency. Some- 
 times goods did not bring enough to pay the duties 
 upon them. The spirit and independence of the 
 merchants were broken. They presented the gloomy 
 spectacle of a defeated army, flying at every point, and 
 using no combined effort to ward off the blow that 
 was falling upon every one of them. 
 
 It is much to be regretted that the National Legis- 
 lature did not pass a general bankrupt law, when they 
 incorporated the United States Bank. Such a law, by 
 making an equal distribution of the bankrupt's estate 
 amongst all his creditors, would, at that time, have 
 had the most happy effect. It would have destroyed 
 the whole system of confidential creditors. It would 
 have checked the long catalogue of implication and 
 endorsement. It would have prevented the banks 
 from obtaining more than their proportion of insolvent 
 estates. It would have prevented the ruin of thou- 
 sands. Instances would then not have occurred of 
 whole estates going to pay friends — Friends, who 
 only became so because they knew that their debts 
 would be paid at all events. Such a law would put 
 a stop to over trading, and relieve us from the effects of 
 mad speculation. It is the want of practical mer- 
 cantile knowledge in the National Legislature that 
 has prevented such a law from being enacted long ere 
 the present time. 
 
 The business of selling goods by auction has held 
 a conspicuous place in the trade of New-York since 
 the peace. This manner of vending property, although 
 
25 
 
 long practised, never excited any particular attention 
 until the last three or four years. Previous to that, 
 auctions were limited in their operations. They had had 
 but little influence upon the community. They were 
 thought to be an advantage both for the purchase and 
 sale of goods to the extent to which they were then 
 used. The embarrassments of 1816-17, compelled 
 the holders of merchandise to effect sales. This 
 threw, at one time, into the hands of the auctioneers, 
 almost the whole trade of the city. What accident 
 thus gave them, they have been able to retain. They 
 now possess the monopoly of a large part of the trade 
 of New-York. The foreign merchant and manufac- 
 turer, through them, has taken the trade of the city 
 out of our own hands. The American merchant, de- 
 prived of his business, is now left to provide for his 
 family, to contribute towards the support of govern- 
 ment, and to perform civil and military duties. Fo- 
 reign agents have supplanted him. Those who have 
 little or no interest in this country are made rich at 
 the expense of ourselves. The foreign manufacturers 
 have sent hither their agents. They are, to a great 
 extent, young men. They pay little or no taxes, and 
 perform none of the duties of citizens. To them, con- 
 signments are made. These, when received, go di- 
 rectly into the hands of the auctioneers, w 7 ho, not un- 
 frequently, bond them at the custom house. They 
 are immediately sold, and their avails remitted, forth- 
 with, out of the country. The manufacturers of Bir- 
 minham and Manchester, in England, have become the 
 traders of New- York. It requires not more than four 
 
 4 
 
26 
 
 months from the time goods are out of the hands of 
 the workmen, for them to be sent to this country, sold, 
 and the avails returned to England. The credit given 
 at the custom house, is added to the profits on foreign 
 capital, and both transported to enrich Great Britain. 
 
 The expenses of the American merchant, who im- 
 ports and vends in one year 50,000 dollars of mer- 
 chandize, at a moderate computation, will amount to 
 2,500 dollars He is likewise assessed and taxed for 
 the full amount of his property. The foreign mer- 
 chant, with the same expense, (the auction duty and 
 commission,) and without performing any of the of- 
 fices of a citizen, can send hither and vend 160,000 
 dollars' worth of goods in the same time, through the 
 medium of the auctions. This gives the foreign mer- 
 chant three times the advantage over the American 
 trader. This system takes immediately out of the 
 country the profits of its own business. On principles 
 of political economy no system of trade was ever more 
 absurd, and yet the wisdom of the state legislature has 
 thought proper to protect it, and the council of ap- 
 pointment gravely select thirty-six persons from the 
 whole population of New-York, whose duty it is to 
 enrich themselves and make the city poor. It gives a 
 monopoly of trade into the hands of a few. It is a 
 system alike ruinous, unconstitutional, and unjust. 
 
 It is true, that a very considerable proportion of the 
 business of the auctioneers, since the peace, has been 
 on American account. This has arisen from the exi- 
 gencies of the times; but as the system is settling 
 down, fixed and regular, this view of the subject is 
 given, in order to show its future effects. 
 
27 
 
 It was intended to exhibit, in one view, the amount 
 of goods sold at auction, and the amount of imports 
 into New-York, for each year, from 1802 up to 1820, 
 in order to show the gradual increase of auction sales 
 over other business. The difficulty of procuring the 
 necessary documents has prevented this exhibition. 
 
 Another great evil arising from auctions, is the ex- 
 tensive system of implication and endorsement that it 
 has created. In all public sales, where a credit is 
 given, an endorser is required, and sometimes two, or 
 more. In this way the whole of the commercial 
 community has become linked in, one with another. 
 The failure of one house almost always produces that 
 of another, and the practice of preferring one creditor 
 before another — of confidential and ordinary debts — 
 proves conclusively the necessity of a reform. To 
 this must be added, the deceptions that are practised 
 in the measurement, description, and quality, of goods 
 vended at auction. The waste of time that this mode 
 of doing business produces is a serious objection. 
 Every retail dry-good store in the city, requires the 
 addition of one more person to attend it, merely be- 
 cause it occupies the whole time of one person to 
 attend auctions, and this too when the whole amount 
 of purchases, for a year, will not exceed twenty thou- 
 sand dollars. In public sales there is no personal 
 character at stake. The auctioneer takes no respon- 
 sibility upon himself — the owners and manufacturers 
 are unknown. Where this is the case, deceptions 
 will be practised. It is curious to observe the guarded 
 language that is used by auctioneers in announcing 
 the conditions of sales, and the little chance given to 
 
28 
 
 many to have justice done them, provided the articles 
 purchased shouid not correspond with what they ap- 
 peared to be.* 
 
 The pressure for money that occurred in the winter 
 of 1316 an J 17 made it necess iry to urge the country 
 merchants to make immediate payments ; they unfor- 
 tunately had gone beyond their capitals, and involved 
 themselves in ruin. Pre vious to the late war, coun- 
 try dealers generally purchased goods upon a credit 
 of six months of the city merchants. The conditions 
 of which, however, were generally understood to be 
 that the country trader should pay from time to time 
 as he should be enabled ; only allowing interest on 
 what might be due longer than six months ; he was 
 however considered liable for the whole debt at the 
 expiration of the fixed time of credit, if demanded in 
 this way ; a running account was opened, as it is 
 called, by the city trader with his country customers. 
 These accounts frequently ran on for years without the 
 balance due ever being completely paid. After the 
 close of the war business was recommenced upon the 
 same principle. It probably would have followed on 
 in its accustomed track, had business at once became 
 fixed and regular. The country trader made his pur- 
 chases immediately after the peace, upon the same cal- 
 
 * The haughty, overbearing, and ungentlemanly deportment, 
 in transacting business, of some of the auctioneers, arising from 
 the power and wealth which this monopoly of business has given 
 them, deserves animadversion and contempt. The mercantile 
 power in their hands is immense. Six of those engaged in 
 auction business are bank directors. The credit of a large par 
 of the community is raised or depressed at their noc* 
 
29 
 
 eulations that he had previously been accustomed to. 
 In dealing them out to the consumer, he charged them, 
 under the expectation of waiting for his money a con- 
 siderable len^h of time. He did not expect that at 
 the moment his debts fell due in the city, immediate 
 payment would be demanded. The pressure for mo- 
 ney in New-York in 1816 an i 17, compelled the city 
 merchants to require immediate payment of their coun- 
 try customers. This drained the country of its mo- 
 ney. Still there was a large balance due, and the 
 pressing demands of the city called to its aid the as- 
 sistance of law to compel payment. Those who had 
 embarked in business with little capital were unable 
 to meet such a course of things ; and bankruptcy fol- 
 lowed as a natural consequence. 
 
 Another cause that has had great influence in 
 producing bankruptcies in the country, is the large 
 amount of mercantile capital vested in real estate, im- 
 mediately after the peace. The country traders at 
 that time found their stores and dwellings illy calcula- 
 ted for the brilliant imaginary prospects then before 
 them. In villages, building lots rose to three or four 
 times their present value. Large and elegant houses 
 and stores were erected at an- enormous expense. 
 This was done by the assistance of the mercantile 
 credit which the merchants of New-York had so la- 
 vishingly given. 
 
 The depreciation in the value of goods did not im- 
 mediately extend to the country in its effects. In 
 deed, this only compelled the inland traders to do bu- 
 siness at a less profit. The reasons, therefore, of 
 failures in the country, have been very different from 
 
so 
 
 those that produced the failures in the city. They 
 proceeded from the unusual demand for prompt pay, 
 and the misapplication of the mercantile capital and 
 credit of the interior. There were likewise nume- 
 rous failures arising from many persons embarking 
 in business without possessing either capital or know- 
 ledge. From these causes the bad debts in the coun- 
 try have arisen. 
 
 From the spring of 1817 up to the year 1819, bu- 
 siness assumed somewhat of a regular course. The 
 importers and jobbers who sustained their credit 
 through the winter of 1817, directed their whole at- 
 tention toward the collection of their outstanding 
 debts ; they wished to bring together the shattered 
 remains of their previous business. This would ena- 
 ble them to estimate the amount of damage they had 
 sustained in the mercantile tempest which they had 
 encountered. The mode of doing business was very 
 materially changed. The difference between sales 
 for cash and credit was increased. Many who were 
 in the habit of doing business upon a credit, relin- 
 quished it entirely ; a closeness of calculation was 
 introduced in transacting business hitherto unknown. 
 This is always commendable ; it evinces prudence. 
 The southern market continued good, and the pro- 
 ductions of our country commanded a price nearly 
 equal to what they formerly had done. 
 
 Such was the situation of the mercantile community 
 from the spring of 1 8 i 7 up to the commencement of 
 the year 1819, when a new series of commercial em- 
 barrassments occurred. These affected principally 
 the shipper and the dealer in the productions of our 
 
31 
 
 country, and swept away a large part of the remain- 
 ing capital of the United States, and prostrated many 
 of the banks in the country. The causes that pro- 
 duced these failures were in many respects different 
 from those that gave rise to those of 1817; in their 
 effects they were much more injurious. Those of 
 1817 proceeded from the fall in the prices of foreign 
 commodities, whilst the failures of 1819 arose from 
 the depreciation in the value of the staple productions 
 of the United States. The one was limi ed in its ef- 
 fects to the merchant only ; the other extended to the 
 whole community — changing the value of land, and 
 the industry of the country. 
 
 The merchants of the south have since the peace 
 made New- York their principal resort for the purchase 
 of goods ; these purchases are generally made during 
 the months of July, August, and September, upon a 
 credit. To provide for the payment of debts thus con- 
 tracted, drafts are given upon the commission houses 
 in New-York who transact southern business ; where 
 this is not done, notes are given payable at some fu- 
 ture time. The commission merchants have gene- 
 rally accepted for their southern friends, without ha- 
 ving any property on hand from- which money might 
 be realized to meet their engagements ; they relied 
 upon the produce which was to be sent them to sell 
 upon commissions for the necessary funds ; the uni- 
 form credit of the southern merchants justified this 
 course ; they regularly met their engagements, and 
 these transactions were honourable to all concerned. 
 The southern traders make their collections for the 
 goods which they have sold during the year to the 
 
32 
 
 planters at the coming in of the crops. The crops of 
 the planters are usually contracted for by the mer- 
 chants long before they come to maturity ; the price 
 being predicated upon a calculation of what their 
 value would be. 
 
 It has been the practice of the large shipping mer- 
 chants to send annually to the south agents to pur- 
 chase cotton and other staple commodities for export- 
 ation. These agents were provided with letters of 
 credit and instructions to draw drafts on their em- 
 ployers to a certain amount ; these drafts were drawn 
 payable from sixty days to four months after sight. 
 Until the last year few of them were dishonoured, they 
 were purchased with avidity by the southern inland mer- 
 chants, who wished to make remittances to the north. 
 The agent immediately vested the proceeds of drafts 
 thus drawn in cotton, and shipped it immediately to 
 Europe. The moment that the shipper received in- 
 formation of the shipment, he immediately anticipa- 
 ted its arrival abroad, and drew forthwith upon his 
 commission merchant abroad for a large part of the 
 value of the cargo; this new draft was sold to the 
 importers for cash, and the avails remitted to the 
 south to make new purchases ; and a new cargo was 
 purchased partly for cash and partly by new drafts ; 
 the drafts sent on to New- York from the south, drawn 
 by the agents as has been stated, were most generally 
 discounted at the banks for the benefit of the holders. 
 In this way an extensive and complicated business was 
 carried on with moderate capitals, and which might 
 very easily be continued so long as the market re- 
 mained regular. 
 
33 
 
 Another method by which the means to carry 
 on the cotton trade were procured was through the 
 assistance of the banks. This was done by bar- 
 gaining with the directors. It was as follows : appli- 
 cation was made to the directors for a discount to a 
 large amount for six months, offering to give such se- 
 curity as the bank might require, and to receive the 
 post notes of the bank, made payable in ninety days, 
 although interest w T as to be charged for the whole 
 time. The directors agreed to make the required 
 loan upon the applicants paying the six months inte- 
 rest in advance, and engaging to remit the ninety 
 days paper of the bank to the south, and put it in 
 circulation. In this way the banks actually loaned 
 money upon an usurious contract, and in fact re- 
 ceived interest at the rate of more than one percent, a 
 month. How far the directors of banks incorporated 
 by law can reconcile this procedure to good faith, and 
 a proper discharge of the public trust committed to 
 them, is not in the province of the writer to deter- 
 mine. It is his duty to investigate its effects. It 
 must likewise be observed, that whilst these loans 
 were privately made, the banks professed to make no 
 discounts for a longer perio<l ^than sixty or ninety 
 days. It is much to be regretted, that in all cases 
 where banks have been incorporated, the state has 
 not reserved to itself the right of appointing a part of 
 the directors, who should be obligated not to own or 
 have any interest, either directly or indirectly, in any 
 bank stock during the time they were in office. The 
 directors should likewise be made responsible in their 
 
 a 
 
34 
 
 private property for the faithful discharge of the pub- 
 lic trust given them.* 
 
 The incorporated companies of this country are to 
 a great extent mere associations of men for private 
 speculation, protected by the operation of law. How 
 many instances are there of these legalized cheats be- 
 coming bankrupts to an enormous amount, and yet 
 every stockholder worth a fortune ! ! Lord Coke 
 says, that corporate bodies have no souls. 
 
 So long as business continues regular, or is im- 
 proving, fictitious capital flows smoothly on. This 
 was the case with the cotton trade of the United 
 States, from the peace up to December, 1318, when 
 the sudden change of the value of cotton, and almost 
 the whole of the raw materials of this country, broke 
 the spell. From December, 1818, to April, 1819, the 
 productions of the United States fell in Liverpool, 
 upon an average, one third in their price. Cotton 
 fell much more. Nearly the whole of this loss was 
 sustained by the merchants of this country. 
 
 The causes, therefore, of the failures of 1819, are 
 obvious. They followed from the course of manage- 
 ment pursued by the shippers and banks for the four 
 years previous. They were the result of doing busi- 
 ness to a vast amount upon a fictitious capital. For 
 
 * The writer does not wish to be understood as charging the 
 directors of the banks with direct mal-intentions in these trans- 
 actions. He would rather attribute them to ignorance, or the 
 want of sufficient reflection in discharging the duties that de- 
 volved upon them when they became directors of these public 
 institutions , 
 
35 
 
 the purposes of illustration, the following case is 
 stated : A merchant, with a loan of 25,000 dollars, 
 for six months, from the banks, and procured in the bar- 
 gaining manner that has been stated, sent his agent to 
 Georgia, to purchase and ship four cargoes of cotton 
 to Liverpool. This agent was furnished with letters 
 of credit, and directions to draw drafts payable at 
 ninety days after sight, upon the principal. When 
 the agent reached Savannah, he immediately purcha- 
 sed one cargo that cost 25,000 dollars, for which he 
 paid 12,000 dollars in the post notes of the banks of 
 New- York, and for the other half he drew on his 
 principal, at ninety days. The moment the shipment 
 was made, he forwarded to the merchant in New-York 
 the bill of lading of the cargo. This bill was re- 
 ceived four days after the draft was accepted. The 
 merchant immediately drew upon his commission 
 merchant in Liverpool for one half of the cost of the 
 cargo, and disposed of this draft to an importer, for 
 cash, and remitted the amount immediately to his 
 agent at the south. The agent, in the mean t\me P 
 purchased a second cargo equal to the first, with the 
 remaining half of the first 25,000 dollars, and by the 
 assistance of new drafts on his^employer. He again 
 forwarded the bills of lading as before. The princi- 
 pal again anticipated, and drew new drafts on Eng- 
 land, which were disposed of for cash. The avails of 
 these drafts were immediately forwarded to the agent, 
 and vested in new cargoes. In this way, in six weeks 
 from the commencement of the operation, four car- 
 goes, amounting to one hundred thousand dollars. 
 
36 
 
 were purehased and shipped to Liverpool, and the 
 owner constantly in funds to meet his engagements. 
 The bills of lading of these cargoes were uniformly 
 sent to England by the same vessels that the drafts 
 were sent in. The commission merchant in Liver- 
 pool in this way received information of the shipments 
 made to him, and in case of the non-arrival of the 
 cargoes thus consigned, he was instructed to effect in- 
 surance for his own security. 
 
 The history here given of one transaction, is simi- 
 lar to many others that have occurred since the peace. 
 They were transactions bottomed upon no capital, and 
 it required only a change in the market against the 
 speculator, to produce an explosion. This did occur 
 in the winter of 1819, and its effects have been la- 
 mentable. The value of American produce fell, last 
 winter, one third. It was then owned by the mer- 
 chants of this country. They had to sustain the loss ; 
 and that, too, without capitals to meet it. 
 
 Another method by which money was procured of 
 some of the banks, upon long loans, was by discounts, 
 upon a contract to receive the government paper that 
 the banks held, at more than its real value. The 
 government paper thus procured, was sold by those 
 who had obtained it from the banks, in order to raise 
 funds to meet their engagements. These transactions 
 were clearly usurious. The speculating capital that 
 was created by these various manoeuvres between indi- 
 viduals and the monied institutions, was the great 
 reason why the productions of this country did not 
 decline in price long before they did. Had this 
 
37 
 
 decline in price taken place soon after the peace, 
 and before the merchants became deeply involved, 
 it would have prevented the ruin and waste that 
 has occurred in the wealth of this country. The 
 nation has suffered by it. The bankruptcy and 
 gloom that is to be found every where, proves it. It 
 is unnecessary to expatiate upon a subject that is felt 
 by all. Visible distress speaks in a language more for- 
 cible than words. To remedy these evils, and to 
 place things in their regular and natural course, is all 
 that is required. The means of doing this is partly in 
 the power of individuals, and partly in the hands of the 
 legislature. 
 
 From this review of the business of New-York, 
 and of our country, since the peace, it appears that 
 the causes of the present distress have arisen, 
 
 First. From the very situation of the world, a 
 great reduction in the nominal value of things be- 
 came necessary. 
 
 Second. A system of over-trading universally pre- 
 vailed ; and, 
 
 Third. The banks of our country have made use 
 of management (in order to make their stock profita- 
 ble) injurious to the communityT 
 
 The remedy, therefore, for the embarrassments is 
 obvious. It is by doing away the causes that have 
 produced them. This, however, may be considered 
 difficult. There is a natural repugnance in the mind of 
 every one, to yield up those things which they hare been 
 accustomed to for a long time. The manner oi living, 
 and the style of life, are, of all things, the most difficult 
 
38 
 
 to change. Those prices that we have been accustomed 
 to give or receive for commodities, are most generally 
 considered as proper, without inquiry. Besides, there 
 is the power of interest to be overcome. No person 
 is willing to fall one third, or one half, from what he 
 has before received, however strong the arguments 
 may be for the propriety, or even the necessity of such a 
 measure. Still, however, when the necessity of such a 
 measure exists, throughout the whole community, none 
 but those who are in debt will be made the poorer by 
 it. Property, which is to be paid for, falls in their 
 hands. Money increases in value. Hence they feel 
 the effects of the change in a twofold ratio. 
 
 In the schedule that has been given, it is curious to 
 observe the equality in the change in the price of la- 
 bour and provisions, from period to period. A bushel 
 of corn has uniformly about paid for a day's work, for 
 mowing and getting in hay, in New England, from the 
 first settlement down to the present day. 
 
 The necessity of a reduction in the nominal value 
 of things, is generally admitted. The great difficulty 
 appears to be in the minds of many to ascertain the 
 proper standard to which things must be reduced. 
 This, unquestionably, is furnished in the prices of 1790. 
 Rents, living, provisions, labour, fand, goods, cattle, 
 travelling expenses, in short, every thing must be 
 placed back to what they were then.* There is no- 
 
 * There is nothing that requires redaction more than rents. 
 The industrious part of the community have emphatically been 
 working for landlords ever since the peace. It is much to be 
 
39 
 
 thing to prevent this from being the case, unless a new 
 series of wars should again desolate Europe ; an 
 event, in the present exhausted condition of that por- 
 tion of the globe, in the highest degree improbable. 
 The idea of such an occurrence speedily taking place, 
 is fit to be discussed only by hot headed Porter 
 House politicians. Heaven, it is believed, has poured 
 its strongest vial of wrath on man, and an age of vir- 
 tuous peace is now about to follow. 
 
 The system of over-trading has destroyed itself. 
 It has been, like a snow ball, rolled over and over, 
 constantly accumulating, until it is crushed by its own 
 weight. 
 
 The banking system of this country is at the pre- 
 sent time its greatest, sorest evil. The disclosures 
 that have been made of the internal management of 
 the United States Bank, and the facts stated in this 
 work of the transactions of the banks of this city, 
 prove too clearly the necessity of a change in the 
 whole system. Nearly all the embarrassments that 
 have taken place in this country since the peace, have 
 arisen from the speculating character of our monied 
 institutions. The arm of law must correct the evil. 
 To temporise with them would -be like giving opiates 
 in a consumption — relieve the cough, and fix the 
 disease. The banks in the interior of the country re- 
 quire no particular notice. Their situation and cha- 
 
 regretted that rents generally commence at the same time. This 
 alone enables the landlords to get at least 15 per cent, more than 
 they otherwise would, from the competition of tenants. New- 
 ark is almost the only city where this is the practice. 
 
40 
 
 racter are well known — the institutions bankrupt, and 
 the directors rich, The management that the bank 
 directors use «s immense ; instance after instance 
 mighi be adduced and the history of a bank, recently 
 incorporate ] in \ T tnv- York, tells the simple story — that 
 the directors appointed by the state to receive sub- 
 scriptions for the stock, took in the first place one half 
 of the -.bares to themselves. This, perhaps, was no 
 more than a reasonable compensation for the trouble 
 and expense of procuring the charter. It is much to 
 be regretted that the national legislature does not pass 
 a law prohibiting banks from issuing notes of a less 
 denomination than ten or twenty dollars. This would 
 have the happy effect of throwing the precious 
 metals into circulation, and destroy the fictitious 
 banking capital which is created by the vast quan- 
 tity of paper of a small denomination that is al- 
 ways in circulation.* It would be a great check 
 upon counterfeiting and the commission of crimes. 
 Nearly all the forged bank paper in circulation is of a 
 less denomination than twenty dollars. The reasons 
 of this are obvious. Small notes can be passed to the 
 poor, the ignorant, and those who receive but little 
 
 * The only argument in favour of banks is, that they facilitate 
 mercantile operations, and that they enable men of capacity, but 
 of small or no capital, to engage in business, with the assistance 
 of the mere names of their friends. It has never been seriously 
 contended, that they were necessary to furnish a circulating me- 
 dium for a nation. In times of great distress, some nations have 
 resorted to a paper system , but the reaction of its effects have 
 always overbalanced the temporary advantages it afforded. 
 
41 
 
 money. They are likewise taken with less attention 
 than larger ones. American gold eagles and half- 
 eagles can be used with as much ease as bank notes. 
 Indeed, Providence seems to have intended gold and 
 silver for the circulating medium of the world. Their 
 great specific gravity above baser metals, and their 
 other distinct characters, almost exclude the possi- 
 bility of deception. 
 
 National industry must likewise be revived, and 
 family manufactures practised as they formerly were.* 
 The idea that it is better to buy because it will cost 
 less than it will to make what conveniently can be 
 done in a family, keeps many poor. That part of 
 our mercantile system that gives the profit and credit 
 of our business to foreigners who reside out of this 
 
 * The principal reason why many of the manufactories of this 
 country do not pay a reasonable profit to the owners, is because 
 they are owned by large companies. The expenses of a presi- 
 dent, of directors, of overseers, of agents, of clerks, are first to 
 be paid. There is likewise much negligence and waste about 
 many of them. In short, the history of many of these institutions 
 is, that the stockholders have only interest enough in them to 
 talk about them, and wonder and complain because they do not 
 pay a profit. Their interest is not sufficient to induce them to 
 take the active management and oversight themselves. Whilst 
 Congress are legislating upon this subject, it might be advisable 
 to pass a law regulating the measurement and some other things 
 about American manufactures. " The Convention of the Friends 
 of National Industry" were silent on this subject, at their late 
 meeting. England has a law to prevent fraud aud deception in 
 these respects. 
 
 <4 
 
42 
 
 country, must be changed as much as possible; this 
 requires the annihilation of auctions. 
 
 Our commerce must be encouraged. There is no- 
 thing that gives more active employment than ships, 
 or tends more to keep money in circulation. The 
 trade to the Pacific Ocean and South Seas should be 
 encouraged. The field that is there opening for com- 
 merce is immense, and it lays in the power of this 
 country to monopolize almost the whole of it. The 
 course of trade is now undergoing a great change. South 
 America, the North West Coast of America, many of 
 the islands in the South and India seas, are a vast 
 field opened to the genius and enterprise of our coun- 
 try. The United States have the means of gaining 
 greater mercantile advantages from China than any 
 European nation can possess. The trade between 
 this country and the Chinese empire is becoming 
 more and more in our favour, and must continue to be 
 so.* 
 
 The internal trade of the United States is rapidly 
 increasing. The vast extent of this country, the 
 great variety of its soil, climate, and productions, the 
 immense advantages that it possesses by nature for 
 
 * The first vessels from this country that ever performed 
 voyages to Canton, were a vessel that previously had been em- 
 ployed as an Albany sloop, rigged into a brig, and commanded 
 by Captain Dean — the other, was the ship Empress of China 
 They sailed from New- York about the year 1784. Commo- 
 dore Truxtun about the same time made a voyage from Philadel- 
 phia. These vessels were furnished with papers by the old 
 Continental Congress. 
 
43 
 
 inland communication, and the noble works that are 
 now going on to facilitate and aid these advantages, 
 opens a field for internal trade and commerce almost 
 be) ond conception. Let the present evils in our in- 
 ternal system be corrected, and the unity of the States 
 preserved entire, our posterity will see the United 
 States capable of becoming the mistress of the world.* 
 
 * The writer last summer saw at Detroit, a vessel of about 
 ten tons burden, that was built in Connecticut. She performed 
 the voyage from Norwich, Con. to Cleaveland, Ohio, with a fa- 
 mily of six persons ; the whole expense of the voyage, including 
 provisions, was only fifty dollars. The whole distance is about 
 700 miles ; of this she had to be drawn on wheels, twenty miles, 
 This vessel had ploughed the waves of the Atlantic, and bound- 
 ed on the billows of Lake Michigan !