the bank. Many banks have been formed and put into operation that relied almost entirely on their circulation, issued without any substantial capital as a basis, for the active means of doing business. Artful men, instead of loaning capital to the public through a bank, have often created banks to be used as agents to extract funds from the public, to be loaned to themselves.

Under the proposed system, no bank could obtain notes for issue without first pledging substantial means for their redemption. Banks with fictitious capitals, such as have inundated the country with a spurious currency in times past, could have no existence. And each bank being obliged to pay interest upon all its notes borrowed of the National Bank -whether in hand or in use by the public-would in the first instance borrow no larger amount than its business would require, and having its per centum profit on its circulation reduced by the interest paid on it to the bank of issue, would have less inducement than now to press its circulation beyond the amount which the demands of business would keep permanently afloat. Thus would the principal causes of the fluctuations in our currency—a redundancy at one period, and its sudden contractions at another be avoided, and a sound, healthy, and uniform medium be created.

Under a national system like this, the business of local banking might be left almost free to private enterprise and capital. A few general provisions by the laws of the States, regulating the formation and mode of conducting associations for banking purposes, would only be necessary. The objections to free banking, as introduced into New York, and which promises to become popular in other States; the difficulties of prescribing in advance, by general laws, the specific nature of the pledges to be given to the State for the notes issued for a long period of time to come, in which the changes and fluctuations of the commercial world may totally change the value of securities; the cumbrous machinery, and the unnatural arrangement of making the executive department of a State the supervisors of a branch of the commercial business of its citizens, and in certain events, turning the State Treasurer into a broker for the sale of stocks and mortgaged real estate for the redemption of protested banknotes in sums from one dollar to one thousand-would all be avoided by a National Bank, which should be the sole bank of issue for the country. Her dealings with the local banks would be like the dealings of the Bank of England with the local and private banks of that country. She could be safely left to prescribe her own rules of business, and to take such security for her notes issued as she deemed safe for the time being, and which she could change and renew, as her security and the wants and convenience of her customers required. She could receive a pledge of public stocks, of bonds and mortgages-or, like the Bank of England, she could advance on a pledge of commercial bills, to be collected by her on distant points, or she could discount well secured private notes.

This system of national banking, which would afford a safe and stable medium of equal value throughout the Republic, would not materially diminish the profits of the sound and well-conducted local banks. The average expenses of each bank for engraving, printing, and preparing its bills, are about $2,500 per annum, which amounts to about $1,000,000 for the 400 banks now in operation, or about one per cent on the whole paper circulation of the country. The saving of this expense, and the in

creased circulation it would give to sound and well-conducted institutions, by excluding the paper of spurious and unsound banks, which are always the most active in gaining the profits of issuing bills, with the advantages they would derive from a general agent through which to effect, with small cost, all their exchanges, would compensate them in a great degree for the loss of the right to circulate their own bills-a right which in too many cases has proved a delusion, leading them into errors and imprudences that have frequently been their ruin.

The commercial exchanges of a country will always balance themselves. Every community must, as a general rule, sell as much as it buys; its own accounts must in the end balance themselves. An institution that can embrace within itself the whole exchanges of a country, finds itself in the course of its business to be but a mere accountant for the people. It receives and transmits the obligations of one portion of the country to another, and of that other against the first, or of the second party against a third party, and receives of the third party the amount due the first, and one cancels the other, and in the end the accounts are balanced by a simple record upon its books.

A system of exchanges that shall embrace the Commerce of the world would thus balance themselves; and the Bank of Amsterdam and the Bank of England have at successive periods acted as agents of the commercial world without absorbing but a small amount of their active capitals. Their credit was the only means requisite. A National Bank in the United States, which could embrace its whole commercial operations, could perform its exchanges without absorbing but a small amount of its active capital, and at a very small per centum cost.

A National Bank, to accomplish all that would be required of it, would not need a capital of over $10,000,000. The Bank of England, which performs the exchanges of the world, and furnishes a currency for the largest commercial empire in the world, has no active capital of its own. It performs all its immense duties by its credit. The government absorbed all its capital ages ago. But to give our bank undoubted credit with the community, its capital might be extended to $20,000,000. It would furnish a circulating medium, through the local banks, of at least $100,000,000, and in a few years the demands of business would require $150,000,000. A charge of two per cent interest on the loan of its notes for this amount, would yield a revenue of 15 per cent on its capital from this source alone. If, in addition to this, it should charge but one-quarter per cent on the collections and exchanges it should make for the local banks, which it would perform to the amount of $400,000,000 annually, it would have an additional revenue of $1,000,000, or 5 per cent on its capital, making its aggregate revenue 20 per cent per annum, besides the interest on the loan and use of its actual capital.

All of these important services could be rendered to the country at a small cost to the bank itself. Its accounts being restricted to its dealings with the local banks, would not exceed-beside those kept with the government-five hundred in number. These, if distributed among twenty branches, would be but twenty-five for each; and although each account might be large in amount, it would be exceedingly simple in character. But few officers and assistants would therefore be required to perform its business. By the recent improvements in the art of engraving and copperplate printing, bank-bills of a uniform character and from plates made

from the same dies, can be furnished for a tithe of the expense of what they now cost the various independent banks.

A National Bank on this plan, while it would not destroy nor impair the State Banks now chartered, would restore to Congress the control and supervision of the currency, giving them, by the inspection of the records. of the bank, an exact and certain account of the weekly, and even daily fluctuations of the circulating medium of the country, and thereby enable the Legislature to trace many of the vicissitudes of trade to their causes, and to apply such remedies as are practicable to the evils of a varying and variable currency. The rise and fall in the amount of the circulating medium could be daily noted with the same accuracy as the variations of the mercury in a barometer.

E. Y. C.

Art. II.-COMMERCE OF THE UNITED STATES.

NUMBER XXI.

PASSAGE OF THE STAMP-ACT-ITS EFFECT ON AMERICAN, BRITISH, AND WEST INDIA COMMERCECONGRESS—NON-IMPORTATION-AMERICAN MANUFACTURES-BRITISH GOODS IN THE COLONIES.

DISREGARDING alike the excited feelings of the Americans and the commercial embarrassment and discontents of England, the ministry proceeded, early in the year 1765, to press upon Parliament the obnoxious project of the colonial stamp tax. In this act of temerity, the cabinet was sustained by an overwhelmning majority of both houses. Col. Barre, Alderman Beckford, Gen. Conway, and a few other able and enlightened friends of British Commerce and of colonial rights, opposed the bill in the House of Commons. The main argument advanced by them was the same as was employed by the provincials; namely, that any measures to raise a revenue by direct taxation in America were unjust and inexpedient, so long as England retained to herself the monopoly of American trade, which was in itself a burden fully compensating for the immunity of the colonies from inward taxation. The bill passed the Commons (February) by a vote of 250 to 50, and in the Lords (March) met with scarcely a show of opposition.

The duties levied by this act extended to all the British possessions in America, both continental and insular, and to all dominions in the western hemisphere which might be thereafter acquired. The stamp list included contracts of all kinds, and every form of commercial and legal writing; and besides these, pamphlets, newspapers, advertisements, almanacs, cards, dice, &c. The rates imposed upon the principal forms of paper-use were

as follows:

On warrants to audit accounts, passports, policies of insurance, &c. ...

On all bonds, letters of attorney, notarial acts, &c.
On all acts of incorporation..

On guardianships and letters of administration..

On bail pieces and appearances on them..

On certioris, writs of error, &c. ..

On tines, common recoveries, and attachments.

On all pleas in courts of law.

On licenses to practice as attorneys..

On pamphlets and newspapers, of half a sheet or less.

On pamphlets and newspapers, over half and less than a whole sheet..

On pamphlets and newspapers, one to six sheets..

On all advertisements.

Ou almanacs, of one side of one sheet

All books, papers, &c., not printed in English, double duties.

The date for the act to go into effect was the 1st of November of the same year. The collection of the duties was placed under the management of the Commissioners of Stamps, already existing in Great Britain, who were authorized and directed to appoint officers within the colonies to attend in all the colonial courts, and see to the enforcement of the act generally.

At the present day, the tax on newspapers would be regarded, in the concern of both the commercial and general public interests, as by far the most onerous and impolitic item of the above list; but at that time, when public journalism was so little advanced, and the relations of Commerce, especially, with the press, so very partially developed, the newspaper tax was a very minor consideration. It seems scarcely, in fact, to have received any particular mention, the especial grievance being the duty upon the multifarious uses of writing-paper.

There was not that immediate and universal outburst of enraged feeling in America, which many had expected, although there was some violence exhibited, especially in the large towns. The prevailing tone was that of a deep indignation, momentarily subdued by a profound grief at the consequences foreseen from this baneful measure. At Boston and Philadelphia the bells were muffled and tolled, and a gloomy funeral air hung over those towns, although in the former some spirits, more under the influence of anger than of melancholy, sacked the houses of the governor and other crown officers, and put those gentlemen in considerable personal fear. In New York the citizens formed in procession, bearing a copy of the act with the grim figure of a death's head and the descriptive title, "The Folly of England and the Ruin of America;" which, after being carried about the town, was as publicly consigned to the flames.

The decent exhibition of grief over the passage of the act was, however, very brief. The occasion required a more active remedy than a dejected spirit. The full strength of universal exasperation speedily appeared, resolving itself into the determined purpose of resisting the execution of the offensive statute, at every hazard to property, life, and all the rights and interests compromised to its observance. The colonial legislatures then in session (May and June) generally seconded the popular feeling, though some of them were rather timid in the expression of their sentiments, Patrick Henry's famous resolutions were urged by his wonderful eloquence through the Virginia Assembly, although in his absence, the next day, the pith of them, contained in the declaration of the exclusive right of that body to tax the inhabitants of the colony, was expunged. The assertion of the right of the colony to withhold obedience from any law or ordi

nance of taxation, not originating with themselves, was lopped off at the outset as treasonable. But the enumeration of rights remaining was still a negative affirmation of the rejected clauses. The legislatures of Massachusetts and other colonies expressed opinions strongly reprobatory of the

act.

To make good the forcible resistance upon which the public mind had determined, the necessity of union among the colonies was evident, and the Massachusetts Assembly, therefore, recommended in June a general convention or congress to meet at New York in October. To this proposition nine of the colonies for whom it was intended (the West Indies and the present British American provinces not being included, owing to the weakness of some and ignorance as to the feeling or the distance of the others,) responded by approving resolutions, and by appointment of delegates. The assemblies of Virginia and North Carolina were not in session; Georgia was indisposed to move either way; the legislature of New Hampshire alone positively dissented from the measure. All the colonies with whom Commerce was a leading pursuit were represented in the meeting, and were ready to uphold its conclusions with all necessary means.

The legislatures, as well as many primary assemblages of the people, also sent earnest petitions to the king and to Parliament, discussing the matter of the colonial rights, remonstrating on the palpable invasion of them, and praying the repeal of the prejudicial statute. Agents were also despatched by the legislatures, to use their most strenuous endeavors in aid of this object. The petitions were generally denied even the favor of a parliamentary reception, for the reason that they boldly questioned the power of the Parliament to tax the colonies. The petition from New York was so intemperate that no one was found who dared present it.

The popular excitement, stimulated by the industrious efforts of the leaders of the liberal side, continued meanwhile on the increase. Prior to the meeting of the Congress, town and county meetings were held in nearly all the colonies, inflammatory harangues were made by the popular orators, and spirited resolutions were adopted; the commercial towns taking the lead in these movements, and giving tone to the rest. These meetings were designed to indicate the line of its duty to the continental convention. Associations were formed for the purpose of preventing the execution of the stamp act. The most remarkable of these, under the name of "Sons of Liberty," appearing first in Connecticut and New York, soon extended to other colonies, and acquired, in the course of the subsequent difficulties, an immense influence. They were to march at their own expense to any part of the continent, to resist any attempt to enforce the act; the liberty of the press they were also to defend at every hazard, and their lives and property stood pledged for the defense of all who might be endangered from their exertions in the common cause. At the same time, many of the leading merchants came into associations to discourage all importations from Great Britain.

The depressive effect of the stamp act upon Commerce was visible from the moment of its passage. In anticipation of its operation, and of the troubles growing out of the effort to enforce it, combined with the results of the sugar act, outward trade rapidly diminished. In June, the number of vessels trading to the West Indies was not one-fifth as large as before the passage of the act, four months previously. The intercourse with Great Britain was also much reduced. A number of bankruptcies resulted