Ccnf* i ifC53 Duke University Libraries Proceedings of Conf Pam #653 Treasure f^Mlin PROCEEDINGS OF THK HELD IN MACON, C4A., JUJ.Y 4, 186J, 1 1 niimriinicatlon on, the proposed issue of Treasury yof>'. Baylor, Thomas M. Foreman, of Georgia, and James W. Castens of Alabama. Subsequently, Gen. Duff Green was added to the commit- tee by resolution. The following resolution, offered by Mr. C. G. Baylor, was adopted : Resolved, That the Governor of this State be requested to take such steps as may be necessary, to enable him to place be- fore the people, or their representatives in the Legislature, such information as may serve to promote the 'development of the cotton yarn interest of the South, with a view to opening a for- eign demand for Sonthern spun cotton yarns._ Mr.'W* Call, of Florida, presented a series of resolutions, t. w^hich were read, and, on his motion, referred to the committee \d' eleven. ^ Gen. Duff Green presented an essay prepared by him on the Bub|ect of the finances of the Confederate Government, which, 3 without being read, was, on l)is motion, referred to thecommit- tee of eleven. C. G. Baylor baving declined to serve on the committee of eleven, Thomas E. McKeill, of South Carolina, was appointed in his place. On motion, two additional secretaries were^ appointed — T. R. Bloom and James T. Nisbet, of Macon. Convention adjourned until tomorrow morning at M o'clock. Macon, July 5t.h. 1801. The Convention met pursuant to adjournment. The following resolutions were presented by Hon. A. E. Cochran of Georgia, and, at his suggestion, laid upon the table until the report of the committee of eleven should be disposed of: 1. Resolved, That this Convention, having in view the ap- preciation of the bonds of the Confederate States in the hands of the planters, who shall furnish the Government in its emergen- cy, with the products of their labor in exchange for such bonds, and with the further view of securing their general circulation in payment of debts, at least at par value, respectfully recom- mend to the Legislatures of the several States of the Confedera- cy, to authorize "by enactment, the several banks therein to is- sue bills— say to the amountof one-third of their capital stock — based upon such Confederate State bonds, dollar for dollar, un- der such regulations as each Legislature may deem wise and proper. 2. Resolved, That the State Legislatures be requested to provide by law for tiie investment of the funds in the hands of executors, adininistiators, guardians and other trustees in the bonds of the Confederate States. Mr. McNeill of South Carolina, laid upon the table the fol- lowing resolutions : 1st. Resolved, That in consideration of the fact that there will be held in London, during the next year a ''World's Fair;" also, that the productions and resources of the Confederate States are comparatively but little known to the wovld;*. it is considered by this Convention desirable that the governments of the several States, and also the Confederate States, shall take such steps as will place them before the world in a proper man- ner. . • . 2d. Resolved, Thattlie Governors of each ofHhe Confeilci- M ^^d^f^^^Lmj ate States are requested to appoint at once suitable persons to make such selections of agricultural products,* native woods, mineral ores, ttc, as, in their judgment, will best accomplish the object desired, and make such arrangements as will ensure their proper representation. Resolved, That a copy of these resolutions be forwarded to the Governors of the several States of the Confederacy, by the President of this Convention. The committee appointed to select Vice Presidents for the Convention, reported the names of Williams Rutherford of Geor- gia, Thomas McNeill of South Carolina, J. W. Castens of Ala- bama and George K. Walker of Florida, which report, on rao* tion, was adopted. J. II. II. Washington of Georgia, chairman of the commit, tee of twelve, announced that the committee had not been able to agree, and submitted the report of the majority. The" follow- ing minority report from the same committee, was submitted by Ex-Gov. Broome of Florida. ' MINORITY REPORT. Your committee charged with the duty of presentingto this Convention, a plan for securing the largest amount of financial aid to the Government of the Confederate States, have instruct- , ed me to submit the foflowing report : Without entering into a discussion of the causes which have led to our present political relations to the balance of the world, -we would simply say^ that we are citieens of the Confederate States of America, and are ready to respond to every obligation d.ue from, good- and loyal citizens to their Government. The form of -Government adopted by the Confederate States, com- mands, in the main, the hearty approval of our whole people. Thd* President elected and his Constitutional advisers appoint- ed undier the Provisional Government, possess the confidence of the peojj(l^ to an extent equalled only by that awarded to the Father of his country, and the patriots called into his councils in the earliest and purest days of the late United States Govern, ment. The war which'bas been forced upon us, we recognize as the toflEspri^kg of abolition fanaticism; and aided by an organized po- litical despotism is designed to destroy the property, ancl forever 5 to crush the liberty and power of these States. The issue pre- sented is absolute submission or complete subjugation. That issue has been accepted. The country has been called upon to furnish the men and the money necessary for the chastisement of the impudent invaders. The call has been answered by our young men to an extent entirely beyond the capacity of the Government to accept. Xot by mercenary hirelings, but by the pride and flower of the country. Men whose bosoms are filled with the glorious traditions of 1776. Men who are ready to ofter their lives for the preservation of constitutional liberty ; and of all that is lovely and endearing in home and its affec- tions. These are the men who constitute our Confederate army; they are our sons, our brothers, our neighbors, our friends and ourselves. It was to consider the means best adapted to pro- vide the money necessary for the support of such a Government, such a cause and such an army, that you, gentlemen cotton planters, assembled this Convention on the anniversary of the memorable and ever glorious 4tli of July, 1770. Your committee find themselves happily* relieved from the necessity of appealing to the patriotism or liberality of the cot- ton planters present or absent, in behalf of this great object. — All seem ready and anxious to contribute according to their a- .bility. Your committee will, therefore, devote themselv.es to the development of a plan of contribution, which in fheir judg- ment will afford to the Government the largest possible aid. It has been proposed that each cotton planter shall agree to deliver to his factor, to be sold by a day certain, such portions of his crop as he can spare for investment, and require the pro-, ceeds investeil'in the Bunds of the Confederate States. <»f Amer- ica. J . . With great respect for the wisdom of those who have sug- gested and advocated this -plan, your Committee must express a doubt of its entire practicability. Certainty is, at this time, a necessity with the Government. To what extent ca8.,thi3 plan be relied upon with certainty ? Let us see. A planter who makes one hundred bales of cotton and sells it for twelve cfents per pound, or si.xty dollars per bale, will have , an income of six thousand dollars. Suppose such a planter qhu meet his actual expenses with two thousand dollars, then he may invest tis siii- -5*3- e plub of four thousand in the bonds of the Confederate States. On the other hand, >ui)i)08e he should receive for his crop only five cents per pound, his income will be only two thousand five hundred dollars, which will leave him only five hundred dollars for in\estment. With such a scale of jirices the investment in the Confederate bonds would be very small: neither meeting the wants of the Government, nor the ]>atriotic desires of the ]>eople. But it ma}' be said that such a j^rice is not likely to prevail tor the growing crop. Your comniittoo hope that it will not, and readily concede that it should not. They know that the last three American crops have averaged over 4,100,000 b^^s ; that these have been sold at fair jirices, and have been insufiicient for the demand. The stock now remaining un hand is consid- ered sufficient for only twenty weeks regular consumption, while middling uplands are quoted, and scarcely to be had in Liver- pool, at 7fd. equal, at an ordinary exchange, to about lo} cents, and are now worth in New York, about 14:V cents per pound. The growing crop is conceded on all hands to cover a less area of land, than that of the year 1800, and is not likely to exceed, it it equals, the avei'age product of the last three years. Under such circumstances we should ordinarily be justified in expect- ing a very high range of prices ; but the circumstances by which we are now surrounded render ordinary rules of calculation en. tirely uncertain. Should- the blockade of the cotton ports con tinue, the crop cannot be sold for money, exce])t at ruinously low prices. Cotton is a favorite security and purchases are usually made by the use of credits. A house in Savannah, for instance, whom we will call A., desires to pm'chase one thousand bales of cot- ton. He writes to his friend B. in Macon, requesting him to purchase it for him, and draw upon him at sixty days for the amount, and enough over, to cover the discount, commissions, freight, &c., all of which is promptly done. The bank desir- ing exchange on Savannah, which is worth a premium, readily discounts the draft, and thus the funds are raised to give the ])lanter the mone3'^for his cotton ; but you observe, that although a cash piirchase, the cash is borrowed. B. sends the cotton for- ward to A., that he may dispose of it and get the money to pro- tect his draft. A. ships the cotton to Liverpool, and at the ma- turity of B's sixty day draft, draws upon the agent or partner of the Liverpool house, who resides in New York or New Orleans at sixty days, for the amount, which draft is a lien upon the cot- ton sent forward. The Bank in Savannah desiring exchange on New York or New Orleans, to sell at a premium, readily dis- counts the bill, and supplies the money to pay B's draft. This draft matures in New York or New Orleans, and then the a- gent or partner draws at sixty days sight, upon the house in Liv- erpool, and discounts the dralt with some Banker or merchant, who wants European exchange. Before its maturity the cotton is sold to the manufacturer, or exporter, on three months and ten day's credit, and his note discounted, and the money raised to pay the draft. Thus it is seen that the one thousand bales having passed through a system of credits covering a peiiod of nearly ten months, finally furnishes the money to pay for its own original purchase, and yet everybody has been paid at maturity ; and tl.is is the history, substantially, of nine out of every ten bales o! cotton raised in the Confederate States of America. These various credits are based upon the cotton, and could not exist without its shipment. Destroy this system of credit and the whole cotton crop sold, would have to be paid for in cash, and its value would be measured by the avarice of a few speculators and corporations, who might chance to have a few millions ot dollars. Thus it is seen, that with our ports. blockaded, the exporta- tion of cotton prohibited — the basis of credit destroyed, and our planters bound to sell on a day certain, the prospect of a large investment in Confederate State Stocks is by no means flatter- ing- Your Committee however, will present for your considera- tion a plan, which if adopted by the Government, they think may be relied upon to meet its financial wants. Instead of the planter selling his cotton for bank bills, and investing them ijn the bonds of the Confederate States, let the Governnient enter the market as a purchaser, at a minimum price, of all the cotto^L offered for sale, that is not wanted by other purchasers at or a- , bove that price. ' . 8 Let the price established as a ininimura be a fair one ; say the average price paid for the last three crops. Let middling cottons be assumed as the basis, and tlie price be graded above and below as is now done in regular commercial transactions. — No derangement need be experienced in the management of the crop. The planters' factors would sell it as usual, but the Government Agent or Sub-Treasurer being the best bidder, Avould of course command the staple. The payment should be made in Treasury notes of the Confederacy, of denominations ranging from five to one hundred dollars, having five years to run, and should be made the general circulating medium. They should bear a small interest, and be convertible into 8 per ceiit. bonds at the pleasure of the holder. These Treasury notes be- ing recei%'ed at par by the cotton planters would become imme- diately a paper circulation of uniform value throughout the Confederate States, and would be a credit equal to gold and sil ver to the Government in the purchase ot all Commissary and Quarter Master's stores — in the payment of troops, and in dis- charge of the pressing engagements of every description. The fact announced that the great cotton planting interest of the country, having $200,000,000 vegetable gold almost ready tj gather, had voluntarily placed it at the disposal of the govern- ment, receiving as cash their Treasury notes in payment, and that such aid had been accepted, would exert a moral efiect upon the European nations which it would be difficult to estimate. — The Government, backed by 200,000,000 dollars in cotton, which to the world has become a necessity nearly equal to that of bread, would be able, with such a concentration of commercial power, to control the question of commercial treaties with tiie principal commercial nations of the world. Our credit would immediately be established in the principal money marts, and a peace upon our own terms, be con(|uered at an early day. But the advantages to result to our people individually would be scarcely less important than those that would l)c conferred upon our Government. The crop, in this way, instead of remaining in the planter's Gin House, or being locked up on jilanter's accouht in his fac- tor's stores, would be actually sold, and the proceeds go into ac- tive circulation — thus enabling the planter to pay his merchant, 9 the merchant to pay his banker, and the banker to discharge his obligations to the community. The country would show its capa- city for prosperity even in war, and while failure is legibly writ- ten upon the financial schemes of our enemies, our Government and people would show a strength and energy unequalled by any young Government of which history has yet spoken. !N^or would the cotton planter be alone benefitted. The establish- ment of a Treasury note currency upon such a basis, would en- able the Government to pay fur the vastsupplies of grain, flour, bacon, pork, forage, &c., necessary for the vigorous prosecution of the war, in a currency equal to specie, and tlius distribute its benefits throughout the entire country. Such a system your Committee believe, would effectually concentrate the cotton crop where it could be made most effect- ive for our political and commercial benefit, and at the same time would impart life, energy, and prosperity to the various and multiplied interests of the country at large. They, there, fore, recommend the adoption of tiie following resolutions : Resolved, That in the opinion of this Convention, the best and most extensive aid that can be given by the cotton planters to the Government financially, will be by selling to their agents the entire cotton crop, at a fair price, say the average price of the last three crops, and receive in payment for the same, their Treasmy notes, bearing a low rate of interest, and to be used as a circulating medium, and to be converted into eight per cent. . bonds at the option of the holder. Resolved, That should the Government decide to enter the market as is here suggested, we pledge ourselves to sell our en- tire crop of cotton for the said Treasury notes, and to use our best efforts to induce every cotton planter in the country to do tiie same. Resolved, That should the Government decline to enter the market as a purchaser, we then recotnmend to our fellow plant- ers throughout the Confederate States, to invest their whole in- come, above actual expenses, in the bonds or Treasury notes of the Government. Resolved, That this Convention will send delegates to Rich- mond to confer with the Government, and, if possible, procure their assent to the proposition contained in the first resolution. JAMES E. BROOME, Chairman. A minority report from the committee of twelve, not differ- ing materially from the majority report, was also submitted by lO W. K. Call of Florida, but snbseqaeutly withdrawn, after the majority report had been modified and presented, as follows : MAJORITY REPOllT. The Committee of Twelve appointed to consider and present to the Convention, the best means of aiding the Government of the CoufoJerate States, begs leave to report the following reso- lutions, which we think cover the whole ground, and we re- spectfully recommend their passage bj' the Convention. 1st. Jlcsolved. That we do hereby declare our willingness to aid the G'lvernnieMt with the entiix' Cotton croj), if the same shall be needed fur its use. :iid. Resulved, Tiiat we recommend tn the Cotton Planters of the several States, to hold meetings in their counties and pledge thenibelvos to aid the Government, with such part of the growing crop as may be required for that ]>urpose. 3d. Resolved, That we recommend to the Congress of the Confederate States to consider and devise S(»ine system by which the Cotton and other crops may become available in support of the credit of tiie Government, either as a secui'ity fur li>ans of money to the Government, or as a basis i'ov b*>nds and treasury notes issued thereby. 4th. Resolved, That if, in the judgment of Congress, the purchase and control of Cotton and other products be deemed advisable, we recommend an issue of the pulilic credit for tiiat purpose, in the purchase by the Governuient of such partoi-tlie whole of our exportable products, as ma}' bo deemed ex]>edient by Congress. r>th. Resolved, That we recommend to the Congress of the Confederate States, to authorize the issue of Treasury' notes of denominations suited for circulation as currency, for an amount equal to the exigencies of the Government. Such notes to l)e paid out as money in payment of all Government dues, and made receivable for all taxes and duties, and convertible into eight per cent, bonds of the Confederate States, at the ])leasure of the holder. Oth. Resolved, That we recommend the several Confederate States and the people thereof, that tliey receive and i)ay out at par the Treasury notes of the Confederate(TOVcrnment, and that it be recommended to the Cotton rianters and all other citizens of the Confederate States, to pledge themselves to receive said Treasury notes at ])ar value, for their cotton, and other commod. ities, and for all the uses of currency. Tth. Resolved, That we recommend to the planters and farm- ers in the Confederate States, to invest at least one-half of the 11 proceeds of the sale of their entire crops in the eight per cent, bonds of the Confederate States; and to Capitalists and persons having mone}^ to lend that they invest in like manner in these bonds. A long, able and interesting discussion upon these two re- ports took place— participated in by Messi's. C. G. Baylor, Geo. K. Walker, Duff Green, Gen. Whitfield, J. E. Broome, A. S. Atkinson, J, H. R. Washington, W. K. Call, and other mem. bers of the Convention, and after a test vote, the minority re- port was withdrawn, and that of the majority adopted. The resolutions laid upon the table during the moftiiug ses- sion, by Hon. A. E. Cochran of Georgia, were taken up, and after some discussion, adopted. The resolutions laid upon th<^ table by T. McNeill, of South- Carolina, were taken up and ado])ted. The Committee of twelve, through their Chairman, J. H. R. Washington, presented the following supplemental report, which was adopted : Your committee charged with the duty of presenting to this Convention apian for securing the largest amount of financial aid to the Government of the Confederate States, have instruct- ed me to submit the following supplemental Report : One of the jiapers referred to there, is an extended argument by General Dufi Green, accompanied by statistical tables bear, ingupon the subject of finance generally, and the value of con. vertible treasury notes particularly. From the experience and ability of the author, and the great labor bestowed upon the sta- tistical department, yonr committee believe that it embodies a large mass of valuable information, and recmmend that the same be published under the direction of the officers of this Convention. Ado])ted. J. H R. Washington of Georgia, presented the following resolution, which was adopted : Resolved, That when this Convention adjourns, it will ad- journ to meet in this city on the 15th October next, and that we invite the Agriculturists of every State and cuunty in the Confederate States, to meet with us on that occasion, and unite with us in presenting such other and further measures tV)r the support of i;ur Government as may be just and proper. The following resolution, presented by A. S. Atkinson of Georgia, was adopted : Resolved, That J. II. R. Washington, T. G. Holt. E. D. 12 Huguenin and A. E. Cochran, be a committee with power, if in their opinion the public exigencies require it, to call a meet, ing at an earlier day. Mr. Baylor, of Georgia, presented the following resolution, which was adopted : Resolved, That a c<»py of the proceedings of this Convention be transmitted to the President of the Cutton Planters' Conven- tion of Georgia, by which body the meeting ot this Convention was first suggested. The Convention, then after a vote of thanks to its officers, and the passage of a resolution, requesting the new8pa])crs of the Confederate States to publish the proceedings, adjourned to meet in Macon, on the 15th day of October next. J. M. CHAMBERS, President. John J. Guesiiam, ) Thurston R. Bloom, j- Secretaries. James T. Nisbet, ) Remarks on the proposed issue of Treasury Notes. The Confederate States propose to contract a loan of fifty millions of dollars, of which twenty millions of dollars to be in the shape of Treasury Notes, without interest, but receivable in payment of |)ublic dues and convertible into Bonds, bearing eight per cent, interest. It is proposed that the States and cities, towns and counties of the several States shall make these notes receivable for taxes, and that the Banks and Railroad Compa nies shall receive them and pay them out as currency. The question to be considered is. Can such notes be made a curren- cy equal to specie i The constitution gives to Congress power '• to coin money, and regulate the value thereof, and of foreign coin," and de- clares that no State " shall make anything but gold and silver coin a tender in payment of debts." Tlierefore, nothing but gold and silver is money. Vet Bank notes, which are paid on demand in specie, are accounted and used as money ; and such notes have again and again been so used, even when the Banks issuing them were authorized by law to suspend specie payment. The Bank of Ehgland was required, by act of Parliament, to suspend in 171)7, and did not resume until ls2o ; and the Banks in the United States have been permitted to suspend payment 13 so often, and for such periods, that the confidence of the public in Bani^ notes, ;ind the value of a paper currency, must be admitted. Adam Smith says : " The gold and ailver which circulates in auy country, and by means of which the pro- duce of land and labor is annually circulated and distributed to the proper consumers, is, in the same manner as the ready money of the dealer, all dead stock. It is a very valuable part of the capital of the country, which produces nothing to the country. The judicious operations of banking, by substituting paper in the room of a great part of this gold and silver, enables the country to convert a great part of the dead stock into active and produc- tive stock, which produces something to the country.'" Again, he says : " A paper money, consisting in bank notes, issued by a people of undoubted credit, payable on demand, without any condition, and in fact always readily paid as soon as pre- sented, is in every respect equal in value to gold and silver money." Ricardo says : "If there were perfect security that the power of issuing paper money would not be aljused; that is, if there were perfect security for its being used in such quantities as to preserve its value relatively to the mass of circulating commodities nearly uniform, the precious metals might be entirely discarded from circulatiou.'' An able British writer has said : "A variety of circumstances contribute to make taxation oppressive at dift'erent periods ; such as embarrassed trade, depreciated prices of productions, dearness of corn, a panic in the money market," &c.; and adds: "the only remedy for such a state of things is a general distribution of labor, a good supply of corn, and a money market undisturbed by continual fluctuations." The constitution not only gives to Congress the power to coin money and regulate its value, but also "to fix a standard of weights and measures." The purpose of giving these pow- ers to Congress was to secure, as far as practicable, a certain, fixed, value of property, by preventing fluctuations in the value of money. It was to enable the seller to know how much he is to receive, and the purchaser to know how much he is to give. It was to establish justice and right in the transactions between man and man ; and the States were forbidden to make any- thing else than gold and silver a tender in payment of debts, because it was supposed that the limited quantity of these metals caused them to fluctuate in value less than other com- modities. But it is apparent that in forbidding the States to make an}^- thing else than gold and silver a tender in payment of debts, it was no less the purpose of the constitution to strengthen and increase the value of credit, than to give a certain and fixed value to money. For as there could be no debts without a previous use of credit, the regulation which requires the pay- ment to be made in gold and silver coin, the value of which had been regulated by Congress, tends to give the same value to credit as to these coins. The Confederate Staties propose to borrow money. Have 14 they the means ul payment, and will they pay as they premise to do? We believe that the people of these States have ample means \vithin themselves t«> advance to themselves all the I'unds which they may rojuire, and that, as the debt will be dne from themselves to themselves, there can be no cause to apprehend that they will nut pay themselves. If the value of credit de- pends on the ability of the debtor to pay and the certainty of ])ayment, when the debt becomes due, and the people of the Confederate States become thcnisolves the creditors of them- selves, then there could be no strongcT basis of credit than that of the proposed loan. The use of public credit is of comparatively recent origin. The extent to which it may be used by an enlightened people, is illustrated by the progress of the Purlu- Dkut of England. We are indebted to Ayres' Financial liegister, ot 1857, for a series of Tables derived from official sources. The following table shows the aggregate amount of the Public Debt of the United Kingdom, at different periods, witli tlic nmonnt of the public revenue. nebi. liiterost. Pub. licvciiuc Public Debt at the Ruvoluiion iu ICSS $ 3,321,:un *i;i9,;W5 $10,0(lii.42j Debt contracted diiriuf; the rcitrn of Willliim III.. 7s,(j52,l!t5 (•.,35r>,4:i-) " attheaccegsiou oft^.uceii Anue, liii;((2 si,<)73,510 0,rj5J,7liO l!>,4Tli.00(t '• contracted durin;; thif rcigu l8S,t.5:j,30.'i 10,20-.2 (kS(i ■ at the accession of George I., in 1714 -JtO.T-it^SlS 1C,75(;,&10 aiVlMMWO •• reduced durinj,' this reign 10,2()5,tilO l)t>9,035 '• at thcaccei-sion orGeor2;c II.. iul727 'J(K),401,17r. IC.,087,80.5 :W,!SlO,000 •' reduced during 12 years jjcace, ending 17:!ii. . a.'"),(i88,()litl 1,207,(5.30 '• atcomiuencenicnt of >^pauish war inl7-Jt» . .. 3:W,77.S,115 14,820,17.5 34,:J70.000 " increased during seven years" war 156,6t».%4 1.5 .'>,484,8!).5 " atthe end of the Spanish war. in 174s .391,4Cfi,.5(R) 20,80.5,070 31.(il,5,000 •' reduced during eight years of peace lti,tJ07,3(Hi 3,321,385 • at commencement of war in l'..5(i 372.S.59,20,(A5,000 '■ increased during seven years of war M(>0,.55.5,020 12.220,.520 •• at the end of the war, in 17fi:; 7315,111,220 20.20-1,205 12,t;i7.-.'20 ■• reduced during thirteen years of peace.. . . 53,0i»S,9().5 1.S2(),000 '• at opening of the American war, iu 1775 079,715,255 27,;tei4,205 .51.327,000 " increased during eiglit years of war !)12,709,095 19,215,420 •• at the end of the American war I,192,424,:i50 H;,.599,fi25 .59,820,000 '• reduced during ten year.- of peace 23,75(1,305 717,945 •' at commencement of French war, in 1793... 1,1G8,(>()S,045 l.5,8Sl,C.SO S{,20-1,070 • contracted during Frencli war. ending 1815.. 3,()5.5,444,100 115,244,7-10 •• of tlie Inited Kingdom at the consolida- I i o.ii ii.) >i(i-, ic.l 1»,; i-w -i-n onn n~^-il--0-^ 11.1.1,0,120 .).0,000,000 The entire amoimt of the public debt of the United King- dom is made up of several distinct items, under the heads of Funded Debt, in the shajic of loans contracted, or bj' funding securities, of terminable and life annuities, and of the unfunded det)t, consisting of Exchequer bonds and Exchequer bills. The following Table, compiled from Pailiamentary Documents, 15 shows the total amount of debt funded and unfunded, and the total annual charge from 1820 to 1855, inclusive. Y, Total am't Debt, Total aiimial y Total ara"t Debt, Total auiiual funded & unf'd. charge. funded &unfd. charge. 1820 $4,l(i-2,()5(!,050 $158,198,8^5 ItSSS $.3,926,868, 7(W $145,34S,0'(5 1821 4,i:i4,39(i,58.5 15i»,3:M,500 ]83i» a,92:),562.6W 146,791,005 1822 4,164,056,475 148,596,190 1840 :i.9:}T,240,.375 145,856,905 1823 4,132,216,82(1 148,020,035 1841 3,954,373,040 147,077,;553 1824 4,067,(i08,.36O 145,784,065 1842 3,056,252,200 146,281,860 1825 4,030,612,.3.35 144,099,895 1843 3,932,881,960 145,221,4.35 1826 4,041, S37,9.'50 145.487,170 1844 3,937,990,725 141,017,495 1827 4,025.118,710 144,857,700 1845 3,92.5,265,110 140,246,.525 1828 3,999,897,700 144.587,025 1S46 3,914,594,920 1.39,592,2.^5 1829 .3,983,712,410 144.009,615 1S47 3,951,741,755 140,780,090 1830 3,915,483,2:^0 138,720,245 18-48 3,959,046,li9() 112,2;«,300 1831 3,905,476,170 1.39,980,9.30 1.S49 3,954,6.35,08.") 110,842,255 18.32 3,898,982,745 1.39,859,140 1.^50 .3,935,145,810 139.301,650 1833 3,897,828,915 140.767,835 1S.51 3,914,;M6,91() i:to,910,810 1834 3,860,9M,245 1 39,08:3,4:J5 lS.-)2 3,896,826,020 138,578,970 18;i5 3,937,632,330 1 W,8.37,450 1853 3,854,115,005 137,302,045 18.36 3,941,992.8.50 144,525,565 IS.Vl 3,87:3,986 090 1:35,466,700 1837 3,931 ..598,690 116,665,740 1855 4,017,476,915 110,929,790 We know that many persons, speculating on the immense weight of the public debt of England, have anticipated her nation- al bankruptcy; but it is an important fact that the people of Eng- land are themselves the creditors, as well as the debtors, and that they are enabled to bear this immense burden, great as it is, because the immense sums paid by themselves as taxes, are received by themselves as dividends. This fact is so important as illustrating the capacity' of an industrious and intelligent peo- ple to absorb a domestic public debt, that we give a table, show- ing the number of persons entitled to receive dividends on the public debt of the United Kingdom, which proves that, large as that debt is, it has been absorbed and is held by the masses — by the persons of small incomes — by the people, who have placed their surplus earnings in that fund, as a safe and per- manent investment, and who have thus become inleir=ted in the stability of the government. There were, in 1856. 185,181 persons entitled to dividends of $25 and inid. i 86.491 do. " " " 50 am;., aing $25 179,884 do, " 250 " ' 50 46,596 do. • ■ 500 " ■' 250 26,201 do. " 1,000 '• '• 500 7,400 do. •' 1,.500 " ■■ 1,000 4,981 do. • ■■ 2,500 '• •• l,.50O 2,291 do. ■• ■■ •• 5,000 '• •• 2,.500 780 do. - 10,000 ■' '■ 5,000 448 do. ■' •• uxcccdiuy 10,000 (^riving 540,208 as the number of all classes entitled to dividends. As a further illustration of the capacity of a people to place large sums in the shape of a funded debt, bearing a low rate of interest, we refer to the Savings Banks of Great Britain and Ire- 24fl,876 do. 169,638 do. 122,787 d«i. 75,501 do. 130,154 do. ia5,614 do. 51.459 do. 8(;,22<« do. 41.285 do. 27,076 do. 16,508 do. 25.200 do. 1,480 do. 16 land. Tbe first Savings Bank originated in l.SO-t with a woman, Mrs. Priscilla "Wakefield — who, in charity, agreed to receive pennies from the laboring poor during the summer, to he repaid at Christmas with 5 per cent, interest. The sums deposited in Savings Banks had so increased that Parliament required the amounts to he placed under the control of commissioners, by whom it was invested in the public debt; and the following statement shows the number of depositors, with the amuunt of deposits in November, 1S55. There were 180,110 persons depositing not more than — $5 making $-2is:i.590 " 5 and notcscecdiug $25 :1.170,70;) " .... 25 •• '• " 50 6,b-95,a65 " .... 50 " !' " 75 7.345,605 " .... 75. 100 6.474,285 " .... 100 " " •' 150 IS.-'iDO.OSO " .... 150 " '• " 200 ]7,671.M5 " ... 200 " . '» " 250 11,416.850 " .... 2.50 " '• " •■VH) 26,187 520 " .... 3,50 " " ■• .500 17,88!l.015 " .... 500 ' 676 15.01.3,.34O "... 575 " " ■• •(50 11,247.265 •'.... 7,50 "■. " '• 1,000 81.422,480 depositing more than 1,0(10. . . .' 1,655,410 1,281,626 individuals who deposited f l(il,24;j,220 14,148 charitable institutions, which deposited 3.:i86,l'.Hl 8,758 friendly societies, which deposited 0,686,265 1,304,&"3 total number of depositors, who deposited $171,31,5,675 These depositors receive but 2.94 per cent, per annum as interest — the difference between 3 per cent, and 2.!>4: per cent. (a fraction more than one half of one tenth of one per cent.) be- ing deducted fur tiie manai^ement of the fund. Surely if the working classes of Great Britain can absorb so large a part of a funded debt of more than four thousand millions of dollars, bearing an interest of three percent., and tlie depositors in the Savings Banks can place to the use of the government more than one hundred and seventy millions, at less than three ])er cent, interest, the people of the Confederate States can absorb a sum, bearing interest at the rate of eight per cent., much more than sufficient to pay the whole expenditures of the government for a longer period than any probable duration of the war. In that case, all that will be required in taxes will be a sum sufficient to pay the interest on so much as may be funded ; for it should be borne in mind that to the extent that these notes are used as currency, they should bear no interest, and to that extent their issue will diminish taxation. Thus, if $200,0U0,U00 be used as currency, the saving of interest will be 8 per cent, or $16,000,000 per annum, which saving will be to the whole people in the 17 proportion which they would otherwise be required to pay taxes. A more significant feature of the financial strength of the people of England is, that during the war Vith France, they advanced as loans and subsidies to Hanover, Hesse Cassel, Sar- dinia, Prussia, Hesse Darmstadt, Baden, Germany, Brunswick, Portugal, Prince of Orange, Bavaria, Russia, Sweden, Spain, Sicily, Austria, Morocco, Denmark, Holland, and to France !! the sum of $301,047,813. The imagination may well be startled at the magnitude of these sunis, and accustomed, as we have been, to consider the Bank of England as the Regulator of the monetary system and credit of the world, we naturally assume that it is to the finan- cial strength and great resources of that Bank that the people of England are indebted for the ability to sustain the weight of such a burden of taxation. We are the more inclined to do this because it is known that the Bank is the financial agent of the .government, and that Parliament, in X797, passed an act requir- ing the Bank to suspend specie payment as a means of enabling the Bank to aid in sustaining the public credit. In this connec- tion, the following Table, showing the equivalent of three per cent, stock for the amount of debt funded, the stock created for £100 in money, the market value of the paper Pound in gold, and the value per cent, of the paper currency, with the average circulation of Bank of England notes, is given. Amount of ! debt fui3(ie<^. Equivalent in Stock creat- Mark'tv'lne| Market raliie i Av'raae cir*u- 1 Years three per cent. ,«! for £100, of paper percent. 3fpa- lationof Bank slock. i in money. £ in gold. [ler ( tirrency. of Eng. notes. i: £ £ s. d. £. X~ d. £.. 1800 20.r)(.Hi.inHi 32,18.5,000 168.50 . 20 0.0 lOU d 0 1 1.5,160,000 ISOl :}(),!•! 11.150 (;3..578.100 174.54 18 3.8 91 12 4 1 15,800,000 1802 •J5,00l 1.01)0 .•!-J.'.)!)(l.»i:«) 132.17 18 6.5 92 14 2 i l(i,427,000 1803 12.(K)i( OHO ■^0. I^:!.;«0 173.55 19 .5.fi 97 (> 10 1 10.500,000 IWM 14.51H),(I()0 2(i,3!)0.(){MJ 185.00 , 19 5.6. 97 6 10 : 17,406,000 : 1S05 22.501), 100 41,S(X),01H) 177.20 19 5 6 97 0 10 10,876,000 1 \ 180fi 2O,0O0.0lKI 33,200,000 107.70 19 5 6 97 6 10 16,791,(K)0 1 1807 15,700.000 24,71)8,2! 10 1.50.20 19 5.6 97 6 10 ' 16,705,000 1 1J»8 14,500,000 23,530,022 ' 102.07 19 5.6 97 6 10 17,128,000 1809 22.532,100 30.218,740 101.30 19 5.6 97 6 10 18.017,000 1 1810 21,711,000 33,112,100 152.07 17 6.| 18 5.1 86 10 K , 22,541,000 1 1811 24,000,000 30,721,520 l(iH..53 92 3 2 1 23.282.000 181 a 34.721,325 .57,198.3,S0 180 0(1 16 8 7 79 5 3 i 28,437,000 ISW 04,755,700 118,73fi.(i!»0 184.87 15 5.4 77 2 0 ' 24,023,(KK) 1 1814 24,007,400 30,839,930 154.17 14 11.7 74 17 (1 i 26,901,000 ' 1815 54.l:!5,58!» 102,787,340 191 ..52 16 7.8 83 3 9 ! 26,887,000 1810 16 7.8 83 5 9 26,574,0(K> IMT 10 5.6 97 0 10 28,274.000 ISl^t 10 5.6 <>7 0 10 1 27,221.000 1810 19 13 95 11 0 25,227,000 1S-i() 19 5.8 97 8 0 23,569,000 1821 ^ 20 0.0 100 0 0 1 22,471,000 1 These tables show that in ISOO, three years after the Bank 18 of England bad suspended specie payment, the bank note was at par, althonfili the ]>nltlic credit was T.s^ per cent, below par; and that although the value of the paper pound was, in 1814, reduced to 14 shillings 11.7 pence, it was again at par in 1821, although the Bank did not resume specie payment until 1825. Another hti iking fact is, that whilst the average Je|>rociation of tbe Bank of England notes, Jis compared with gold, was less than two per cent, the depreciation of the public credit, as ci,212,0u0, which was then increased to $72,7(;5,000, of which $70,000,000 was invested in the very securities, which were thus depreciated. This fact has a most impoitnnt In-aring on the proposed issue of Treasury notes. It will be seen thai a iai;:;c pari ol the public del)l ol druat Britain was created before 1801, when the census shows that the ]X)pulation was but 10,.>wer thar) elsewhere, and that yet any one, in any other part of the world, wishing to place money in London, is required to pay a premium to do it? Is it not because the Bank ol" lOngland so regulates the exchanges as to make London the financial centre of the world, and compels the commerce of the world to adjust its balances in London? The process is thus : Tlie Barik has $70,000,000 of its $72,705,- 000 invested in three per cent, government debt, and is author- ized to issue its notes for the whole sum thus invested, and for 19 a sum in addition equal to the bullion in its vaults. Thus, wben, as in September, 1852, it had more than $100,000,000 in specie, its issue was over $170,000,000 of Bank notes, and interest was two per cent. only. But when, as in December, 1857, it had but $35,000,000 in specie, the issue" of Bank notes was but $105,000 000, and interest was 1() per cent. Why ten per cen- tum ? Because the purpose was to throw upon the commerce of the country the onus of recruiting the bullion for its vaults, and therefore, instead of receiving the products of the industry of other countries in exchange for the products of theiu industry ; that is, instead of an exchange of staple products, British mer- chants and mauutacturers were compelled under the pressure of the Bank screw, to demand specie ; because, as the Bank is compelled to curtail its circulation as the specie in its vaults is diminished, the Bank is not only compelled to curtail its dif. counts, but is compelled to demand specie, or its own notes, which are equivalent to specie, in payment. Thus there being an extraordinary demand for bullion to defray the expense of the war in the Crimea and in India, (there was remitted to India in two years by one single line of steamers $154-,591,855)and as a large part of this was in silver, and the circulation of France was chiefly silver, the export of the silver from France was from January, 1852, to January, 1858, $225,400,000 mor^i than the imports, and the Bank of Fraace was compelled to purchase, between the 1st July, 1855, and the Ist January, 1858, the enormous sum of $272,600,000 in gold, at a premium of $2,800,000, to supply the place of the silver thus transferred to India ; and the custom-house returns show that the export of gold from the United States, for seven years preceding the 1st July, 1857, was upwards of $320,000,000. la it not apparent that England got from France the silver sent to India, and that she obtained from the United States and Aus- tralia the gold to pay for it 'i Adam Smith, Jacobs and Ricardo all agree that the gold and silver in a prosperous state constitutes in value a very small })roportion of its wealth, not more than one per centum. Mr. Calhuun, in his speech in l^^;)!, on the recharter of the Bank of the United States, said : '^ What this proportion is, in our " country, and other trading and commercial communities, is '• somewiiat uncertain. I speak conjccturally in fixing it as 1 to " 'j!5 or 30 ; though I presume this is not far from the truth." so The Bank uf England notes were, in 1TI>7, made, and con- tinue to be, a legal tender in payment of debts. " Money" has been defined to be "a token issued by government, and made a tender in payment of debts,'' and a Bank of England Xote is, therefore, money in England. As the mone}'^ (to use the language of Adam Smith) "which "circulates in any country, and by means of which the produce "of its land and labor is distributed to the proj)er consumer!?," is 80 small a part of the aggregate value of its property, it foUows that if any part of that which is requisite to make that distribu- tion be arbitrarily withdrawn, such diminution must necessarily affect the exclumgeable values of the aggregate property, not in the proportion which tlic sum so withdrawal hears to tht siirn, inprevious circulation^ nor in the proportion which the sum so withdrawn horc to the previous aggregate value of the whole property of the country^ hut in a proportion intermediate he- tween the two^ according to the circumstances under which the withdrawal is made. For, if the contraction be sudden, the effect will be a panic, creating a ruinous depreciation of the values of property. This feature of the financial policy of the Bank of England has borne with a crushing and most ruinous effect upon the monetary system of the United States ; for theirs being the weaker part of the British system, it was necessarily subject to all the contingencies by M'hich the money market of London was affected, with the certainty tiiat the explosions must of necessity take place in the United States. For, inas- much as that Bank's issues are regulated by the bullion in its vaults, if, from any cause, there be an unusual demand for specie, as there was in 1825 to enable the Bank to resume and continue specie payments, or in 1836 to pay the West India planters the ^100,000,000 due for their emancipated slaves and to purchase bread, or as in 1857 to defray the expenses of the \> ar in India, then the pressure for specie on the Bank will compel the Bank to curtail its discounts, and merchants and inanufacturers be- ing compelled to i>ay their indebtedness, instead of selling their good-) and manufactures in that nuirket, will send them through a London Banker to New York to be sold at auction, the pro- ceeds to be remitted in specie. It is thus that the regulations of the Bank of England act on prices ; and it was hecause the merchants of England, under the pressure of the Bank screw, were compelled to demand specie, instead of shipping Ainer- 21 ican produce in exchange for their merchandize in 1823, and in 1837 and again in 1857, that the banks of the United States were compelled to suspend specie payments ; and it was the fruitless efforts of the banks of the United States to sustain them- selves against the pressure thus created, that overwhelmed the United States in ruin and bankruptcy. The continual fluctua- tions, the expansions and contractions of the currency and of the credit of the United States, and the overwhelming losses and disasters consequent upon them, are due, not to the overtrading or imprudent speculations of the people of the United States, bi;t are each and all traceable to the defects in the monetary system of England, which, whilst making the largest possible use of credit, compels the Bank of England periodically to arrest the progress of her industry by reducing her credits and her cur- rency to an apparent specie basis. We say apparent: for fre- quent and disastrous as these recurring spasmodic efforts have been, they onlj-- prove that the end proposed is impossible. To us, it seems that if the issue of Treasury notes of the Con- federate States, of denominations suited for currency, and con- vertible into bonds bearing a rate of interest, which will make them equal to gold and silver, and they are received by the Con- federate States, by the several States, and by the several coun- ties, cities and towns for taxes, and are also received and paid out by our banks and Railroad Companies as currency, then they will be received by all our people as money for all the pro- duce of our soil and labor, and we can by their use place our produce in the market on terms that will enable us to regulate the exchange of the world. Such a currency will so diminish the home demand fur gold and silver, that the quantity requir- ed for the payment of debts and purchase of property will be no more than the small sums required for change ; and this currency, although it will not take wings atid fly to London at the call of the Bank of England, will command the commodi- ties which constitute our exports, and which were the basis of the immense bank credits and deposits in the banks of New York, and which, if we desire it, will create so large a balance in our favor aa to compel the flow of a counter current of the precious metals into the vaults of our banks, giving to our mon- etary system a strength and stability, which will enable us to use the public credit, in the shape of Treasury notes, for a sum so large as to reduce the duties on imposts below the hopes of the most sanfjnine advocate of free trade. 22 What 6uni of Treasury Noteb may be thus used as currency, and what the rate of interest on the bonds should be, are mat- ters of detail to be fixed by exjierience ; biit if the sum be $100,000,000, and the interest on the bonds be s per 100, the eaving will be $8,000,000 per dnnum, less the cost of issuance and administration. If it be $200,000,000, and we see no reason why it may not be more, then the saving to the public will be $16,000,000 per annum, less as bctbre. But this saving will be only a small I'mH ni tlie bcnctir> to flow from such a system. The convertibility into a funded del»t bearing a proper rate of interest, will always keep the notes at par. and the fact that this currency is iTot liable t(» rake wings and fly away to England or elsewhere, will regulate the <|uau>. tity 60 as to secure to us a cheaj) and stable currency, which will give constant and profitable employment to our people. It will build our Railroads, cultivate our lands, and, more than all, it will not only prevent depreciation but will give a constant gradual progressive increase in the values of our property. By showing that we have within ourselves all the credit and re- sources to defend and protect our rights, it will, it is to be ho})ed, bring us a speedy and satisfactory peace. Fot if the North find that we not only have the men to fight our battles, but the credit to pay the expense of the war. they will be niore inclined to peace. It has been objected that the public may fear an over-issue and consequent depreciation. The answer is, that the holder of Treasury notes may at jileasure convert them into bonds, bear- ing a rate of interest giving a value equal to gold and silver. They will not, therefore, be like the paper mone}' of the Kevo- lution, which was issued at nominal rates, and were not ledeera- ed because they were so issued ; but they will partake of the character of the funded debt of the United States, which bear- ing interest, was a favorite investment and paid ofi' at a pre- mium. This feature will regulate the quantity of Treasury notes in circulation, and tie value of the funded debt. For if the (luaiility of Treasury notes is so great as to depreciate their value, then they would be funded, and if the price of the funded debt was much above par, so as to diminish the quantity of Treasury notes in circulation, as they should be redeemable at pleasure, the Cxovernment by an increased issue of notes con. verfcible into bonds at a diminished rate of interest, should 23 cancel a sufficient suui of the funded debt to supply the re quisite circulation, and thus reduce the bonds to par. Thus the bonds and the notes may be made to regulate the value of eacli other 80 as that the value of each shall at all times be at ptu with gold and silver. Again. As we have before said, the Banks of the United States have been so often permitted to suspend specie payment, and the value of the notes of the suspended Banks as a curren- cy has been so fully established, that it is only necessarj' to compare the Treasury notes with the Bank notes, to prove that they will be a reliable currency. Congress has power " to borrow money on the credit of the Confederate States." The Treasury notes will be a loan, and Congress has power " to lay and collect taxes, duties, imposts and excises for revenue, ne- cessary to pay the debts, provide for the common defence and carry on the government of the Confederate States.'' The.pow- er of.taxationvinoludes the right ''to pay tbe'.S^bts. and as the Bank notes represent the property of the Banks only, and the T easury notes represent all the property of all the people of all the Confederate States, including as well the property of B inks, as the other property of every description, it follows ' ti .it the basis of the Treasury notes is as much stronger than tlij basis of the Bank notes as the relative wealth of all the peo- ple of all the Confederat-e States, including the wealth of the Banks themselves, is to the wealth of the Banks. But we have a guarantee that there will not be an over issue of the Treasury notes in the fact that so much as are funded will be a debt on the people, whj, through their representatives, can regulate the issues so as to limit the sums to be funded. The writer had the honor to be the intimate and confiden- tial personal and political friend of Mr. Calhoun, and for many years, to vindicate his opinions, principles, conduct and mo- tives from the aspersions of his personal and p6litical enemies, and especially from the aspersions ofTliose whose political prin- ciples, (if they are worthy to be dignified as principles) meas- ures and policy he then foresaw and foretold, would, if trium- phant in the government, necessarily dissolve the Union. The subject of finance and currency was frequently discussed be- tween them, and Mr. Calhoun again and again said that an issue 24 of public credit, under wise regulations, forbidding an over issue^ was the cheapest and best lorin of currency. Were he now living, bis whole iulluence would be exerted to protect the Confederate States from the defects of the monetary system of England and the United States to which we have referred. In confirmation of the same views, we would refer to the able work on the " Ways and Means of Payment," by Stephen Colwell, uf Philadelphia, in which he gives a chapter on the usQ ol public credit as currency. The facts and illustrations which he gives in explanation of the use of credits are so im- portant, that wtf nuote much at large. Upoh this subject, he says: . .. .■•■■•■■,', " WtaatL-rer inav be.Mid iii dcreuci\of the pbBitionthitt paper currency is ba^ed upon the precious! mot.nli*. ft 5b very ccH'ain tlial. bothMn tUia Country and In TBnc;laud, paper cur- rency if the diief medium ol |m)iueiit. In the liri't «itrht months of ls."i7, the ele irin-rs or paylIu•llt^ at the New York Clearing' Hou>e fluctuated between $IC5,(KX),0(I0 and JtTd.Ofld.Otx) for each mouth. In addition Kj xvliich, largp payments occuired, not indicated at Oie Clear- ing no\i*e. All payuKnipniade In any Bank by a check on tluit Hank are comi)leted there, and do not ^'o to tlie I'lcftriiip House. The Banks only resort to the Clearing noui^e for the adjubtnieut of the chcckn they receive and the elaiiusthuy huld ou otlier Banks. The monthly paynientF of New York were little less than $!K)0.(Kin.O(t(» from January to Au'..:nst. 1857. During tliat lirae the avenige amount pf specie in the Banks was under f ia,0(K).(HHi : the deposit!- avcragtHl ^ri,(K)(i,0»"i, and the circulatiou ^8,(XK),t)(iO. U is apparent, then, that |!lM,00(t,000 of Bank notes and deposits efl'octed, by aid of the books of the Bauke, payment of not less than |;;Ki.(KI0.1Khi daily, whilst the if I '.',01)0,000 of specie iu the Banks scarcely n)ovc2.000,(HR( and the deposits to J:'.il,(KHl,000 ; in the mid- dl.of October, the loans, hid fallen to $;)7,0(IO,mK", and the deposits to ,*.V.J,O0ti,00U. Thus the Banks were obliged to withdraw from the public fiW.iioo.OOO of paper currency, to keep $12,00,00(i,OiKi, they continued it. About the middle of October even this terrible expedi.int failed. The patience of the pub- lic gave way : the j)eop!e stJ'p|>eil into the Banks and took out $l.000.0IK) of specie, and the Banks stopped. But the consciiueuces and operation of this contraction arc not shown by the fad of the withdrawal of fiHsOOO.OOO of currency in as many days. The amount of cur- rency at any parti(uliir time never exhibits the amount of payments which that currency can ellect iua biugleday, its power or etticiency must be estimated by the sum ot the pay- ments, which can be accomplished within a given lime. The real contra an actual l.illiug oil, in the monthly i)aymeuts of the Clearing House alone, of $:r>0,- 000,000, or more than {J;l2,000,ooo daily : that is. the ell'orts of tho Banks to keep less tlian $12,000,000 of specie involved a diniinution of the ))ayments of the city of $l'J,00O,0;i0 daily. The whole sum of the payments made in the Clearing nonse, in the months of Sei)tembcr. October, November and Uecend)er, Is".:, were less, by :fl,42S,ooO,000, than the amount paid the preceding four months. The s.'v.riiy of this contraction was further shown by the advance of Intere-I from '^ to 10 per.-.Mr in .Inly to'i-l and .•«•, percent, in October." 25 The same writer estimates the payments in the United States in 1857 at $90,000,000,000, and assumes that $85,000,000,000 were paid through the agency of the Banks and by set off; and says : •'The credit t-ystcm has thus accomplished the great result of separating theactual sale and delivery of commodities— the actual transactions of commerce— Irom the payments. The progress of civilization and private integrity, have made this possible; its immense advantage is such as not only to secure its continuance, but to make it a very strong safe- guard of commercial honesty. Almost the entire commerce, foreign and domestic, of the whole civili/ed world is now carried on from day to dav and year to year with much less, we believe, than one per cent, of the actual values exchanged in coin and bullion. The whole of the prices, sales, bargains, books of account, notes and bills of exchange are ex- pressed in money of account ; and the whole processes of adjustment by bankers, brokers and clearing houses are all stated and expressed in money of account. "The credit system, then, intervenes with its various devices of books of account, ))vomissory notes, bills of exchange, bunk notes, bank deposits, clearing houses, &c., to cn.iblethe parties who have bought and sold, who are all creditors and all debtors, to liqui- date their debts and credits, and thus extii guish them so far as they are equal ; that is, where a merchant has to receive during the year $200,000 and to pny $inO,(.0(>, the credit systemadjusts the whole sum of $3iM,000, by paying the $l(i,000 difference in money, and extingui.shing the |:i80,(IOO by set ofl" or liquidation. The goods, which go out of the manu- factory or warehouse, pay for those which come iu. The difference only requires money. To effect the exchange with advantage, laborer.*, horses,' warehouses, wagons, drays, c^nal boats, railways and ships are employed; to effect the payments gold and silver for the bal- ances, • ills of exchange, promissory notes, bank notes, banks, bankers, and all tT>e devices of books, checks and clearing or balancing accoijnts are requisite. ' The economy of these means of making payments is scarce less than that enjoyed by commerce in the means of transportation above mentioned. To make the daily payments of the clearing houses in gold would require some three or four hundred tellers; in silver an army of sonic thousands, with a vast number of drays, carts and laborers for its rehiovi^l. The cost of keeping on hand such a quantity of the precious mettils would be enormous for the interest alone, besides all the extra expense of tellers, clerks and assistants. To save this, the maclfinery of credit is put in motion, and payments are effected as we have described. What a nation imports it pays for by what it exports; what a district receives for its consumption it pays for by what it furnishes for the consumption of others, and whiit anindividualmcrchantpurthafceinthe way of his business he pays for by what he sells in the way of his business. When coined money is used iu these transactions, they oan only he carried on to the extent that such money can be obtained for the purpose, and with that speed at which money can be made to circulate ; but when credit in its various forms is used, then this business linds no limit but the limit of human induittry in producing, and humanpowcr in transportation and distribution and human integrity in the subsequent processes of payment." If we analize the condition of the Banks of New York in 1857, we find that, beyond the sum of $12,000,000, all was cred- it. The sum of specie and Bank notes was but $-20,000,000, and yet their deposits were $95,000,000 ! It is apparent that these ninety five millions of deposits were the proceeds of the bills receivable, discounted by the banks for account of their customers, which being passed to the credit of the debtors of the banks became deposits, and were represented in the opera- tions of trade by certified checks, which checks were used in the purchase and movement of commodities and were received by the banks in payment of debts due to them, and as the debits and credits balanced each other, the payment of thirty millions daily was arranged through the clearing house by an exchange 2(> of these certified cl»eck>. For it is apparent that if sixty banks held thirty millions of bills receivable, which were represented by thirty millions of certified checks which checks had on theday be- fore bei-ii paid out in the purchase or movement of commodities, the sums due each bank were equal to the sums due by such banks, aiid therefore the sums which each bank was entitled to receive were equal to the sums, which such banks were re<|uired to j>ay ; and it was found that each bank would, in the course of its busi- ness receive a sum of the certified checks of other Banks suffi- cient to |)ay all of its own certified checks or nearly so; and that if upon an exchanji^c of these checks through the clearing house, each day, the accounts were not balanced, all that was required was an arrangement between the banks for adjusting the bal- ances, and this was done by depositing specie, or bills receiva- ble, with a bank or trustees mutually chosen, thus creating a fund, a check upon which was received in payment. It was thus that the credit of the banks was made the basis ot these operations and enabled the merchants of New York to move tho immense mass of commodities, which entered into their don)es- tic and foreign trade of that year, and of which tho exports of Confederate States constituted the greater part. In further illustration of the extent to whicl^ credit may be used under the ini])roved inachiner}' of commerce, we refer to the fact, stated by Chevalier, as translated by Mr. Cobden, that by the oflScial returns of the banks of England and AVales for ten years, from 1S4() to JS56, the annual average circulation of bank notes had diminished $7,!>63,r)()0, whilst by reference to the stamp office, it appeal's that the use of bills of exchange had increased at the rate of $l)O,(>O0.O(i() j)er annum, and tiiat witli a circulationof $155,005,135 of bank notes in the United King- dom, there were at a given moment, in 1857, $900,000,000 of bills of exchange in circulation; shewing most conclusively how small a proportion oi' the jn-ccious 7neials\SYei[\i\iiii\ to maintain the value of credit under a well regulated system of commerce. IJy the official returns to the Treasury of the Tnited States, ending July, 185f», it appears that The Exports of Uie Confederate Stales, were .' Sn7,5ri8,86H Whilst their Imports were but 23.23(i,K01 Leaving an excess of Exports of $154,327,0t>7 The Imports of New York, Pennsylvania and Massachusetts, were $'.J8C,8S6,2?S Their Exports 12fi,041,7»4 Making an excess of Imports of $160,844,441 '27 This excess of Northern imports are paid tor by the excess of Southern exports. The process of payments was thus. A Northern or European Banker came to New Orleans, Mobile, Savannah or Charleston, and purchased or made advances on cotton or other pioduce, and paid, not in money, but by a bill of Exchange on New York, which bill upon New York was paid by a second bill upon London, and the bill on London w, s paid by the products of sales of cotton in Liverpool. The cotton in transitu was the basis of the bills of exchange, as well as those upon London, as of those upon New York, and the Southern planters, through the agency of the Northern and European Bankers, placed in London this sum of $154,827,067, to the cred- it of the banks of New York, which had purchased the second bills of exchange. The New York banks purchased these se- cond bills upon London, because the merchants of New York purchased goods in Manchester and Lyons and therefore want funds in London and Paris, and the banks in New Orleans, Mo- bile, Savannah and Charleston purchased the first bills on New York, because the Southern merchants purchased goods in New York and therefore required funds in New York. When we take into account the fact, that, large quantities of cotton, tobacco, flour and naval stores, produced in the Confed- erate States, were included in the exports from New York, it will be seen that, inasmuch as the surplus products of the South constitute so large a part of the basis of the trade and industry of European nations, we have in the Confederate States ample resources for such a regulation of the foreign trade as will protect us from those '■'■ continual fluctuations^'' in the money market of England which have under the system of foreign trade of the U. States produced such ruinous contractions and exf)ansions of the valuesof property. Again, By referring to the table given above, it will be seen that although the Bank of England suspended specie payment in 1707, and did not resume until 1825, the Bank of England note was equal to gold in 1800, although the public credit had depre- ciated 584- per cent. Why was the public credit, which paid a dividend of three per cent, depreciated 58^- per cent, below the credit of the bank note, which did not pay specie and paid no dividend, when nearly the whole capital of the bank was invest- ed in that depreciated public credit, and the bank had a circula- tion of $75,800,000? Was it not because the bank note was used 28 as currency ,and was therefore subject to the laws, which regulate the relatiou between the values of money and of property, whilst the public credit was proi)erty and was bought and sold as pro- perty, and therefore subject to the laws, which regulate the re- lation between the values of property and of money ? If this be so, (and is it not proven ?) should not the Banks, Kail Road Cojiipauies, Merchants, Manufacturers, Laborers, Plant- ers, farmers, all the people of the Confederate States apjree to receive and pay out the Treasury notes of tiie Confederate States, as money, and thus make them avaihible as currency, since be- ing fundable, in case of depreciation, as before said, tiiey will be funded so as to reduce the quantity in circulation to the sum requisite for currency? Indeed we believe that, as soon as we have peace, the gov- ernment may reduce the rate of interest on the funded debt to five, instead of 8 per cent, or even less. Those, who have funds to invest will soon realize that a bond of the Confederate States for twenty dollars, bearing an interest of 5 per 100, will in one year become t .venty one dollars ; whereas twenty dollars in gold, as we will presently show, instead of bearing interest and in- creasing in value, as the Treasury note, when funded, will do, will become from year to year less and less valuable. Jacob's estimated that there was in Europe at the time of the discovery of America, In Gold and SUver, . $170,000,000 And in 1599, 050,000,000 " IfiOfl, 1,485,000,000 1S09, .1,000,000,000 iso't, 1,560,942,800 It is admitted by all that the effect of the increased quantity has been to diminish the value of tiie precious metals. Cheva- lier estimates that the value of silver has fallen as 0 to 1. and of gold as 4 to 1, and argues that if the supply of gold from Aus- tralia, Siberia and (/alifornia continues the same for ten years from 1857 as it then was, the value of gold will be reduced one half. lie estimates the entire produce of gold from the Ameri- can mines, (which was the chief source of supply) from 14l>2 to 1848 at $2,007,900,000, and argues that if the increased annual supply is but $175,000,009, which he asserts to be less than the real sum, then the increase in ten years, will be $1,750,000,000. 29 He estimates the sum to be used as currency in States now short of gold at $250,000,000 To meet increase of population and commerce, )54,000,0(X) For currency of the world, 154,000,000 For wear and tear in ten years, 105,000,000 Fornseof Jewelers, Manufacturers, &c., 245,000,000 Making, 892,500,000 Leaving to act on prices, $857,500,000 He argues that the effect of this increased supply of gold will be to reduce the vahie of fixed incomes, (salaries, bonds, mort- gages, &c.) one half in ten years, whilst Mr. Colwell says that "the whole depreciation of the precious metals produced by this increased quantity does not, measured b}'^ the rise in prices, ex- ceed from 400 to 500 per cent., whilst their volume has swelled to 1500 per cent." But it is admitted by all that the resulting consequence of the great increase of gold will be to reduce its value and to increase the value of labor and other property in the ratio of the depreciation of the precious metals. It is well known that the most astute bankers and capitalists of Europe, now prefer rail road shares to bonds as an investment, because the receipts of rail road companies will increase with the in- creased activity given to industry and commerce, by the increase of the precious metals and the increased price of labor and its products. It follows that if this increase of gold shall diminish the value of the funded debt of Europe, there will be an increas- ed tendency to invest in our rail road shares, because the pro- ducts of the Confederate States, which constitute our exports, must (the greater part of them) pass over our railroads, and the stimulus given to European manufactures by our system of free trade and increased consumption consequent on the increased activity of labor and of commerce, will so increase transporta- tion and travel as to greatly increase the profits on the capital so invested. As with Treasury notes as a currency, we can ex- tend our system of railways and the value of our funded debt will depend on the rate of interest, our railway shares and fund- ed debt may, if we desire it, be placed in the European market in sums sufiicient to strengthen our system of exchanges so as to protect us against any attempt on the part of the Bank of Eng- land to coerce an undue export of our specie. For as the use of our produce is with the people of England a necessity, and the use of their manufactures is to us a convenience, it is apparent that, having a paper currency sufficient tt) su|)ply our domestic exchange and move the body of our exports, we could by our exports 60 regulate our foreign exchange as to give us "a money 30 market undisturbed bv cditinual fluctuations" — that desidera- tum so long soujiht for by the political economists and statesmen of Englarfd. As the purpose ot givit)g to Congress the power to coin mo- ney and regulate its value and inhil)iting the States from making any thing but gold and silver coin a tender in payment of debts, was to give a certain fixed value to money, and thus give a cer- tain and stable value to credit and ])roperty — it would seem that it is no less the duty of government to counteract as far as practicable, all other causes, which ma}' tend to depreciate or render uncertain the values of credit and property, which it was the purpose of the Constitution to protect. It was in conform- ity with this principle that the great Lawgiver said to Moses, " If thou lend money to any oi my people that is poor by thee, thou shaltnot be to him ae an aeurcr, neither eball thou lay upon him usury." " Ye eballdo no unrighteousness in judgment, inmeteyard, in weight or in measure, " " Just balances, jnst weight?, a juet ephah and a just iiim shall ye have. lam the Lord, your God. which brought you out of the laud of Egypt.'" It is because money is the measure of values, as the yard stick is the measure of cl-oth, that the laws of most civilized na- tions forbid its being made a commodity, to he purchased and sold as other commodities are. For as the legitimate use of mo- ney is to measure tliu values of commodities, which arc purchas- ed and sold in the market, the effect of fluctuations in the value ot money is the same as the effect of fluctuations in the standard of weights and measures. Thus if A, were to contract to deliv- to 1j. 100 bushels of wheat or 1000 pounds of beef, on a given day, and the bushel measure or pound were to be changed, so as to require A. to deliver a greater or less quantity of wheat or of beef, all men would say that such cliange in the measure or weight would be unjust. Surely no one will deny that, as the Cunstitutiun has given to Congress power "to fix a standard of weights and measui'es," Government should discharge that duty so ae to prevent, as far as practicable, any such cliange in the weights and measures used in the operations of trade. All men agree in this; because a change in the weights and measures wouM come home to the every days ex])erience of all, and the effect woiil i be so palpable that all would condemn it. If, as we argue, the frequent recurring expansions and contractions of the currency' of England and of the United States are the re suit of the mea.^nre6 adopted by the Bank of England to obtain supply of bullion, which by act. ofParliament regulates the issues of that bank, and tlie effect of such expansions and contractions 31 of the currency be to increase or to lessen tlie values of credit and of property, it is apparent that such expansions and contractions are in effect the same, and will work the same injustice between man and man, as if Government were to pei mit the size and weight of weights and measures to be increased or diminished. Is it not obvious that the duty, imposed by both these reiga as well as of our domestic trade, and oar weights and measures may be restricted to our do-, mestic use. But this difference in the subjects of these two granted powers, does not release the government from the obligation to make the appropriate provisions for each. Tiiereiorc as thevalue of our gold and silver coin is subject to th<; continual fluctuations resulting from the expansions and contractions of the Bank of England, if it be possible to do it, is it not the duty of our Con- gress, under the clause which gives them power to regulate the values of money, to give us a currency having all the requisites, for our own use, of gold and silver, and which, whilst it will en- able us to send into the foreign market all our surplus products as well as gold or silver could do, will i^ot be subject to the ac- tion of the Bank of England and will therefore be free from the continual expansions and contractions and consequent fluctua- tions in value of gold and silver? Whatever else may be said of the government and people of England, none can question the comparitive exten^jf their com- merce or their wealth and resources as a nation. The density of her population and the necessities of her conimoice i , "lire a general distribution of labor, and it is an im^ovtanf 1 cr 'hat whilst, by the use of her machinei}', she is enabled " •. - u oucii employment to her labor as to create her immense resou.ces, she is dependent on the Confederate States for the chief suj)ply of the raw material, which constitutes the basis of so large a part of her industry and prosperity that it may well be said that we are one of the main pillars of her strength and influence. Eug- ;-ind is therefore dependent on us for the maintenance of her w calth and prosperity. It is her policy through her commerce to create a balance against other nations to be paid at the plea- sure of the Dank of England in specie, because slie thus regn lates the exchanges in favor of London. Yet as she is depend- ent upon the Confederate States tor so large a supply of the raw matorial, it is obvious that these States may create for themselves a domestic currency, which can place our exports in our sea- ports and purchase whatever we may want of British merchan- dize, and if we desire it, create a balance to be paid t<> us in specie. Thus we may, through our exports, use the Bank of England itself to regulate the exchanges of the world in our fa- vor. We need not repeat what we have already said to prove that the propo:ed Treasury notes will give us such a onrn-ncy ivs we have described. In further illustration of the value of money we givi'ii tabic showing the minimum rates of interest charged by the Bank of England for a series of years from 184:4 to 1857: Dat" Jan. Feb. Mar Apr May. June July. Aug. Sept. October Nov.iDec. 1 1844 ' 2><^ 1 1845 3 3X 1 1846 3 1 1 1847 3Ji&4 5 55)^6 IS 7 6 5 184814 VA 1 8 ! 18491 i "^^ ., 1860 1 1 :i 1851 1 1 18)2 2 X 2 i 1 1R53 2X 3 1 ay. 44^5 1854 5>i 5 1 law 4>^ 4 3X 44X5 5 C 7 1 185« 65 4>i 567 7 \ii'A 6 18571 6X 6 r>H •i 6>^67S 9 110 It will be seen that the rate of interest charged by the Bank of England has during the 14- years here quoted, changed as often as four times in one month, and varied from two to ten i)ercent. What would be said of a regulation of weiirhts and measures, which Would permit such variations \n their weight and size ^ Would any civilized people i)ennitit^ We think not, and yet such changes in weights and measures wouM not efiect so inju- riously the values of property, because from the nature nf things, every purchaser would first agree upon the weights or nieaeure to be nsei], and would thus regulate (jiiantities f )r himself. But in the case of money, that would be impossible, fr as the value of money, as regulated by the Bank of England, de. pends on contingencies which it is impossible for either of the parties to foresee, it is therefore impossible for them to ascertain or agree upon the effects, which the regulations of the Bank will have upon the values of property. Therefore it is much more the duty of the government to take these facts into considera- tion, and as far as practicable protect the people of the Confeder- 33 ate States against the derangements of the values of property, which are and must continue to be the inevitable consequence of undue contractions and expansions of the currency through the Bank of England. To show that the variations in the rate of interest as quo- ted from the returns of the Bank of England are not an indis- pensable part of the banking system, we give the variations in the rate of interest charged by the Bank of France for a period of 37 years : From 20 Feb., 1800, toNov. 13,|1806, the rate was C percent. " 14 Nov., 1806 to 4 Aug., 1807, " 5 5 Aug., 1807 to 28 Feb., 1814, " 4 1 March. 1814, to 31July, 1814, " .5 " 1 Aug., 1814 to 31 Aug., 1814 " 4 " 1 Sep., 1814. to 21 May, 1819, " 5 IJune, 1819, to .31Jan., 1820 " 4&5 1 Feb., 182J. tol3 Jan, 1847, " 4 " 14. Jan,, 1*47 to 20 Dec, 1847. " 5 " 27 Dec, lt*47. to 2 March, 18.52 " 4 2 March, 1852, to 6 Oct., ia53 " 3 7 Oct.. 1853, to 19 Jan, law, " 4 " 20 Jan., 1854, to 11 Maj, la-il, " 5 " 12 May, 18.54, to 4 Oft, 185.5, " 4 5 Oct., ia5.5, to 17 Oct, 1855, " 5 " 15 0ct.,1855. to .30 March, 1856, " 6 " 31 March, 1856, to 24 Sep., 1856, " 5 " 25 Sep., 1856, to 24 June, 1.857, " f. " 25 June, 1857, to 1 Sep., 1857, " 5^ Does not this table prove conclusively that the fluctuations in the rate of interest made by the Bank of England are not a necessary part of the banking system? Another striking fact bearing on this question is, that whilst the Bank of England, with a view to command the specie wanted for the expenses of the war in the Crimea and in India and China, increased the rate of interest from 2 per cent, in 1852 to 10 j)er cent, in 1857, and thus compelled the merchants and manufacturers of England to purchase the silver, which was the currency of France, the Bank of France purchased $272,- GOO.OOO of gold, at a cost of $2,800,000, to supply the place of the silver, which had been sold to England ! The efiect of the high rate of interest and the contraction of the currency by the Bank of England was to throw on the commerce of England the onus of supplying the specie wanted to defray the e.Kpenses of the war in the Crimea and in India. But it created so great a demand for money and so enhanced its value as to so change the relation of debtor and creditor, that the losses were many 3 34 times the entire siira so cxjiended by the Government. Where- as the entire coet of eup])]}ing the $272,600,000 of gold to the currency of »ance in lieu of the $225,400,000 of silver, which she had lest, was but $2,800,000, a comparatively small sum, which was much more than compensated for by enabling the Bank of France to continue the entire line of its discounts, thus sustaining the industry and commerce of France. If we con- trast the measures and policy of the Bank of England with the measures and policy of the Bank of France, we find that whilst the Bank of England carried ruin and bankruptcy wherever its influence could reach, and especially throughout the United Kingdom and the United States, the Bank of France, by keep- ing the volume of her discounts and the currency full, protected the industry and commerce of France and by giving employ- ment to her people, made France, even in the midst of war, prosperous and happy, and enabled the wise sovereign of France to relieve his people from the burden of the war by plac- ing among themselves his Treasury notes, in sums varying from 5 francs to 1,000, for an amount equal to the increased expen- ses of his Government. This fact is a further illustration of the capacity of a people to absorb a public debt, if issued to the people themselves in a shape which enables them to use it as a currency or to hold it as an investment. The proposition submitted to the people of the Confederate States, as we understand it, is that the people shall agree to lend to the Government such part of their produce as may not be requisite for their own support, and receive in payment the Treasury notes and Bonds ot the Government. AVould it not be a much more simple measure for all the creditors of the Gov- ernment to receive the Treasury notes of the Government in payment, and ibr the several States and all I^anks and corpora- tions and all the people to receive and pay out their notes as money ? If so, then the entire issue should, in the first place, be in Treasury notes, made fundable at the option of the holder, because in that case we will not only save the interest on the sums requisite for currency, but we would get a currency bet- ter than gold or silver, because it will perform all the functions of specie and not be subject to the influence exerted upon a spe cie currency by the Bank of England. 35 Some apprehend that the effect of a large issue of Treasury notes, as currency, will be to limit the circulation of bank notes, 80 as to lessen the profits of the Banks, and that, therefore, they will refuse to receive and pay out Treasury notes. We have seen that the purpose of giving to Congress power to coin mo- ney and regulate its value and to fix a standard of weights and measures, was to "establish justice" betweeu man and man by giving a fixed and stable value to money ; that the eff'ect of the measures and policy of the Bank of England is to defeat that purpose by repeated contractions and expansions of the currency of England, which cause constantly recurring, fluctu- ations in the value of money and consequent fluctuations in the values of property. That the purpose of these contractions is to throw upon the commerce of England the onus of recruiting the bullion wanted for the Bank ; and that the effect of the measures of the Bank is that, instead of receiving the staple products of other nations in exchange for their exports, as un- der a well regulated system of free trade the merchants of England would do, they are compelled to demand specie, bicause the process of compulsion on the part of the Bank is to require payment of debts due the bank ; and as nothing but g>.ld or silver or Bank of England notes will be received in piijment, instead of receiving cotton or other American pro- duce in exchange for his goods, the British merchant is com- pelled to demand specie. The effect of that demand is illustra- ted by the facts stated by Mr. Colwell, who says : " lit Aufftisi,13ol, the loins of the NefM York Banks amounted to $132,000,000, «)/(i ropcr functions in the operations of trade. The use of money is tu measure the values of property as the use « n may, by the use of Treasury notes, be taken up by themselves; that to the extent that these notes are used as currency they will be a better currency than gold and silver coin, or the notes of spe- cie paying banks, for whilst their value will be the same as gold and silver, they will give stability to the currency and to the values of property, because they will not be liable to be carried to the vaults of the Bank of England, and as they ' should bear no interest, they will to the extent at their issue be a saving of that sum in taxes. / ^ ^^ pH8.5