The principles and manner of transacting business are nearly the same in all our banks, except that those of Lexington and Newark have connected insurance with banking. Some of the banks have more directors than others; the highest number twenty-five, and the lowest seven. The desire to afford an extension of bank favours to prevent monopoly in times of a scarcity of money, have occasioned a greater number of directors than would otherwise be necessary; this has also occasioned an annual disability in a part of the direction of the preceding year at each election.

The discounts, at the rate of 6 per cent. per annum, are generally for sixty days only, but it has been generally expected that a renewal of at least a major part of each note, against which no negative may intervene, will be obtained on application a few days preceding the time of payment.

As for safety of the banks a single negative vote is deemed sufficient to check a loan; it is the interest of each community to promote a rivalry in banking as in all other trading institutions; this is in fact the only way to correct the only evil incident to these invaluable institutions, viz. that of monopoly, to which might be added an abuse of a power in a director over the commercial reputation of a rival in trade.

But it is presumed, that in a country so young, the vices of the old world are not yet practised to any extent; the last objection is then of little moment, except to guard against the possible evils of futurity.

Under the heads of MONEY and BANKS, it is proposed to offer some remarks on an important improvement in both, and to state that, however deficient we may be in other financial points, we have attained to one, by which we abundantly excel the rest of the world in our national measures. But for this we are more indebted to providence or to our particular situation than to any common cause; hence, our expressions of gratitude preclude those which might lead us to err in any account of our enviable and inestimable situation, from the following cause: By our war for independence, our nation won from Canada near three hundred millions of acres of land, the superior averaged excellence of which we have only recently discovered. As this immense and invaluable prize was deemed a natural offset for the expenses of the war, it was very early considered, in whole or in part, as pledged for the redemption of our present and future public debts. Hence, it was obvious that till these lands were expended, no heavy taxes could be necessary after a simple and complete modification of this almost inexhaustible mass of wealth was perfected, and the lands, in order for sale. Although a variety of opinions prevented a due regard to the value of these lands, yet the congress of the United States, by a law of March, 1796, have insured their primary object by the establishment of an immense national land bank, the entire stock of which consists in three hundred million of acres on

the north-east side of the Mississippi. A sufficient number of these lands are already surveyed and laid out into square sections of one hundred sixty acres each, and in townships of twenty five thousand acres; and the certificates of the public debt are now daily discounting at two dollars the acre, for 6 per cent. stocks, &c. (the particulars have another place in this work.)

The principal offices of discount and sale of the national lands are now at the principal bank in the treasury of the United States, city of Washington, and at the branch offices at Steubenville, Marietta, Chilicothe, Zanesville, Cincinnati, Vincennes, and are daily extending. Some doubts entertained of the expediency of opening at present the sales of the immense additional stock of lands acquired by the purchase of Louisiana, render it uncertain when this important measure will take place, but no doubt, in due time, the whole will be effected, and furnish more resources than will be expended by posterity for a century to come.

By these simple and well organized means, it is now ascertained that even with the present scarcity of money, less than one-tenth of our public lands are sufficient to extinguish the whole of the present public debt, if that can be called a debt which is thus more than amply provided for. The time in which this will be perfected must depend chiefly on the plenty or scarcity of our home circulations of facile money. With six dollars a head, the present public debt would sink in the land offices of discount, in about fifteen years; but with twelve dollars (a head) in circulation, and sales only by auction, advancing on the minimun of two dollars, the lands would bring above fifty to one hundred per cent. on the present prices. To follow the effects of additional loans on the price of our lands is a most interesting study; lands would rise, labor would fall, but other things, being governed by European commerce, would not be changed from their present state.

Previous to our views of NATIONAL DEBTS, it may be proper to shew that the aversion both to a public debt and to banks arose originally from the jealousy of the European hereditary barons and immense land holders, lest the mercantile gentlemen should by these means become their equals, or approach nearer to that liberty and equality, which they could not bear. The cause of opposition even Mr. Hume could not conceal, for in speaking of public stocks, while objecting to the increase of transferable wealth:

"In this unnatural state of society (says he, with all the feelings of an ancient British baron) ADIEU TO ALL IDEAS OF NOBILITY AND GENTRY! The stocks can be transferred in an instant, and will seldom be transferred during three generations from father to son, or were they to remain ever so long in one family, they would convey no hereditary authority to the possessor, and by this means (alas,) the several ranks of men are lost!"

These consequences, so mortifying to a British gentleman with noble blood in his veins, made him add several severe reflections, which

neither his own natural good sense, nor the experience of the British nation have ever justified.

Public debts and banks being favourable to a more equal distribution of wealth, will not be suffered long, in an absolute monarchy, unless the wise monarch himself be a real friend to the people, for the reasons explained by Mr. Hume, but for those very reasons they were advocated as early as 1776, first by Mr. Paine, as follows:

Extract from Common Sense, 1776.

"No nation ought to be without a public debt, it is a national bond. "No country on the globe is so happily situated, or so internally capable of raising a fleet as America. Tar, timber, iron and cordage are her natural produce. We need go abroad for nothing.

"We ought to build a fleet to encourage commerce. It being the best money we can lay out. It is that nice point of policy in which commerce and protection are united. Let us build, even if we want them not. We never can be more capable to begin than now."

Voltaire acknowledges the importance of a paper credit when he says, "If the circulation of paper could be maintained, which has at least doubled the strength of England, France would acquire its last degree of perfection."

Mr. Anderson compares national paper to bank paper in its beneficial effects. He admits that both have existed in the distressing times of a scarcity of specie, but will not admit that they were ever a cause of this scarcity.

"National as well as more private paper credit, by doing the office of real money or coin, so far from being injurious as some have insinuated, is a real and a very considerable benefit to commerce. But this, he adds, can never be the case for any considerable duraration, or in any eminent degree, but in opulent commercial countries, and in such only where the liberties of the whole people are inviolably established."

British Views of a National Debt.

"Those who compare public with private debts are totally in error, says Dr. Gardner. They consider the debt of England similar to a debt contracted between two private individuals, to which it bears not the least resemblance. The private debtor is obliged to pay his creditor, if his effects are sufficient for that purpose; the public are under no obligation to pay theirs, because they originally granted them no more than a perpetual and transferable annuity. The principal of a private debt is secured by law, though the interest cannot always be got without much difficulty and delay; the interest of the public debt is punctually discharged, but the principal

cannot be obtained by any other means than by transferring it to another person for whatever price he may be willing to give; the private debtor is often poorer in proportion to his debt, but the public is often enriched by whatever it owes: hence the private debtor would be richer if his debts were discharged, but the nation would be impoverished if hers were paid off."

The following is an extract from Blackstone's Commentaries, page 329, viz. "The advantage resulting to a nation from public debts is the increase of circulation, by multiplying the cash of the nation and by creating a new species of currency assignable at any time in any quantity, always ready to be employed in any beneficial undertaking by means of its transferable quality, and yet producing some profit when it lies idle and unemployed. A certain portion of debt seems therefore to be highly useful."

Perhaps one hundred ingenious essays have been written, in the last century, in support of the advantages to be derived from a judicious exercise of financial skill, wherever the credit of a nation is fully established; but no one has yet succeeded in defining the bounds or utmost limit of this exercise. The British government were once thought by many to be in a fair way to put this to the final test, but it is said their alarm for the consequences of a possible bankruptcy has driven them to a dernier resort, once deemed destructive to national credit, viz. After having extended their system of taxation to every eligible point, they have recently had recourse to a tax on the income of their national creditors, for the deficit of each year, by which they propose always to keep their debt from passing beyond its present *physical weight, and yet their stocks, though the debt has increased since 1784 nominally more than 200,000,000 pounds sterling, have, nevertheless, risen greatly in price since that period; for their 3 per cents were then at 46, that now in 1806 are above 60 per cent. though liable to be burthened with an income tax of from five per cent. to any amount hereafter!! that the vague exigencies of the state under their present financial practices may require, either to reduce the physical or the nominal amount of their debt, or to cause it to remain as it now is, declining, both by the increasing riches of the nation and by the universal depreciation of specie and of all money. (See notes R. S. and the table, page 142), where, by an accurate detail of facts, this universal depreciation, owing to the continual flow of specie from the mines, is fully explained.

As no other nation has ever been able to support the same extent of credit under the same, or, indeed, under any circumstances, there will always be a variety of opinions on the efficacy of their novel expedients in finance, on which their own ins and outs will continuc at variance; the latter will often side with the enemies of Britain in pro

The physical or real debt differs from the nominal by the depreciation of money. See page 142.) And also, comparatively, by the increased ability of the debtors.

nouncing those measures that contribute most to their triumphs as containing the seeds of their own destruction, and the real or supposed intricacy of the question will often enable those to gain proselites, while exerting but a moderate share of ordinary talents, if assisted by the boldness common to such predictions. To the opinions already given by Voltaire we add those of another respectable foreigner who had no interest in deceiving, and was not very liable himself to be deceived by mere appearances. "It is not foreigners alone," says Mr. de Pinto, in his essay on circulation and credit, "who are still unacquainted with the nature of the national debt of England, many thoughtless Englishmen state their debt as a counterpoise to all their successes. An artificial capital which did not exist before becomes fixed and permanent, and by means of public credit circulates to the advantage of the public, as if it were in effect so much real treasure that thus enriched the kingdom." "Indirect taxes for the most part return unto the hands that gave them. It is always the rich, or those who spend most money, that pay the chief of the taxes, and the circulation turns greatly to the advantage of industry." "To suppress one million of the revenue where the coin circulates from hand to hand twenty times in one year, would rob the industrious of the profits of twenty millions."*

The nominal augmentations of the British public debt have greatly increased; (See the comparative expense of each of their former wars) for example, the three years war ending in 1721 cost but two millions per annum more than their taxes. That of nine years, of George the second, ending in 1748, five millions; the seven years war ending 1763, fifteen millions; the seven years war with the UNITED STATES near twenty millions, and their present war will not average less than twenty nine millions, unless they should amend their present financial plan, a thing EASILY EFFECTED if one able financier alone could be permitted to manage it. The financial plan of a nation, like the command of an army, can rarely if ever be submitted to the controul of many without injury; because there are scarcely ever two very great generals, or two very able financiers in any one country in the same age; owing, in part, to the aversion that universally preils against financial studies, and more to the deep rooted prejudices and jealousies that the heads of the minor, or opposition party of every country have had an imaginary interest in diffusing, to oppose and to disappoint, at all events, their rulers in power, and to promote their ruin however the interest of the nation may be involved in the measure. Such, alas! is human nature, under all governments and in all ages, if history may be believed.

* Public circulations are so different from mere taxes they ought not to bear the same names. A mere tax for foreign expenditure, is often a great grievance even to the rich; but the poor rejoice in a foreign loan for domestic circulation, well knowing that they can gain something by the handling before they return the money to the fountain, whence it may again flow, in a perpetual routine with equal benefits.