The New York Herald Newspaper, December 3, 1857, Page 2

HIGHLY CURIOUS FINANCIAL VIEWS. THE OPINIONS OF A RETIRED STATESMAN. TRE REVULSION IN THE UNITED STATES. | State of Currency and Credit in Europe. Dangerous Condition of the Great Bankers in England, France, &c. ‘TO JAMES GORDON BENNETT, EDITOR OF THE HERALD. Wasninaton, November, 1857. Dean Srx:—The commercial crisis in which this country is now involved is not a question of banks, brokers and broken merchants. It has spread over political events, entangling our foreign policy and obliterating our great domestic hopes and grievances. While Sir Gore Ouseley, who has just reached here, will, I fancy, find little difficulty in carrying out his mission to Lord Palmerston’s satisfaction, Pacific railroads are below quotation and slavery is unspoken ef, even in our Eastern streets. It has shaken not America alone—it will shake Europe. You will therefore not have seen with surprise the hot and hasty return of Mr. Auguste Belmont, our late Charge d’Affuires to the Hague and principal agent in this country of the Jewish kings of gold, nor chronicled with especial wonder the many closet conferences and communings which have taken place between the Rothschilds’ minister and the chief magistrate of this country. I do not doubt that prudent sagacity which is Mr. Buchanan's chief characteristic, or ques- tion his power of penetrating how far that financial and commercial! policy which Mr. Belmont is said to have urged within the past few days with great zeal and ability, derives its impulse and argument from the peculiar interests of the European moneyed powers he represents. Bnt let it be remembered that the whisper of the Rothschilds in royal ears has never been remarkably disinterested, nor does their, agent, Mr. Belmont, bring to the deliberation any powers except those delegated to him by his teachers in finance. His information on Ame- rican matters is limited, and his judgment equal- ly circumscribed. As an instance I may cite the fact that on the first indications of our disaster an English official applied to the house of Belmont for information and advice on this sub- ject, when he was told with gay confidence that pos- sessing means which ran through every artery of the country and familiar with every minute fluctuation in the beating of its monetary pulse, her condition might be pronounced to be perfectly sound and healthy, and that all who gave warning to the con- trary were interested in the creation of a temporary panic. Thus at no monrent has our history been more big ‘with colossal events, and as the posture of the Union for the next fifty years will inevitably be affected, if not determined, by the action of Congress and the several State Legislatures within the next six months, it may be wise and well for one who holds the interests and prosperity of this country alone at heart, to present a calm and clear review of the causes of the present crisis and its probable conse. quences here and in Europe. Railroad speculation and mismanagement may be the present and active cause of this trouble to a great extent; our banking disaster hinges upon it; Dut we must look elsewhere for the remote cause of a disaster which has now assumed the proportions of a national catastrophe, the effects of which must deeply affect, if they do not paralyze, the constitu- tion of commerce to the uttermost parts of the world. Railroad speculation is but the branch of a financial disease existing for many years in our system, and i ' NEW YORK HERALD, THURSDAY, DECEMBER 3, 1857. not include city lots, which run in the principal cities from dollars to a thousand dollars » foot front. An cecnete «f the vonne of So fee si dpb yl , the nt prices al land is held tient wil tbe found. t0 ‘reach one -hun- dred and seventy-three millions of dollars, not in- cluding the buil . There is not one-tenth of the house sold in cities that have even a shant, upon them ; there is not one-fiftieth of the land sok that is under cultivation. Where did the money come from that must be kept constantly floating over all this vast scheme? To the im of New York, Boston and Philadelphia we may reply, that in some it comes from their pam The buyers from West bought in the Kast on credit, sold them, and ran with the into speculation im real estate in their neighborhood, alleging to the bers here that they found it impossible to obtain cash from their customers. The jobbers were obliged to obtain time from the im ra, and the import- ers from the foreign manufacturers. Had real estate out West up, the bu would have realized, and would have made their appearance in our mar- kets with the fruits of their speculation, taken up their paper and made fresh purchases. But it was not so. Real estate bas not stirred for two reas out West last spring, (except a small effort made in St. Lot which faded off, and a faint attempt in \. Chicago has stood still, Cincinnati has e back. So all moneys invested are held down tight, and our Western buyers, having no money, and having spent all their credit, keep away from this seaboard, and we have a bad season. This inflation of the West is the remote canse of the present crisis. The immense prosperity and the blooming picture afforded to the eyes of world some fifteen years ago, first delu capital into sys- tematic investments. Railways were planned and executed without much more mi ment than usual, and seldom cost in the end more than three or four times the original estimate with which money was tempted into them. We do not speak in sar- casm; it has always been so, both here andin Eng- land. The main lines then constructed, as was the case in England with the Lendon and Birming- ham and nchester and Liverpool, were not only good, but paid fair dividends out of bona fide profits. Had railway construction ended here, or moved on gradually, all might have been well to this day; but with the example of the railway crash in England under their eyes, the directors of similar speculations here began, in 1846, to enter the very road to ruin, clearly indicated to their avoidance, and the public, while’ reading the calamities abroad, eagerly sought precisely the same sources of destruc- tion at home. ‘The success and soundness of the early main lines were, of course, used as a basis on which to build up imaginary returns and to decoy speculators into in- vestinent. Under the excitement of its presumed progress, its credit abroad, and its inflated value at home, the West really believed in its own prosperity. The con- sumption ‘of imported goods was reckless, but it served to increase and confirm confidence amongst importers and manufacturers. Who could sup} that each man consumed for four? To these eviden- ces of progress and prosperity the schemers from the West pointed, while they invited capital to garry out rom for railways over the uninhabited prairie and yetween unbuilt cities. It would have been useless to argue against the necessity of railways on such grounds, for the West—like Aladdin’s palace—was to be built ina night. The market was flooded with railroad schemes ;_ stock was , money raised, and the West was fauped at every point, for it was rich enough pour forth in- terminable streams of wealth at every pore. Greedy of their profit, competing tracks were built beside the best paying of the — . The Western States cheered on the ‘ion, and Congress made extravagant grants of their only tangible re- sources, real estate, to excite speculation, and thus the railway mania reached its c! The old lines became alarmed, and built branches on the smallest provocation. The capital of several lines was in- creased in proportion; some jumped from five to twenty millions in this struggle. The result exhi- bited “itself in an early stage to the directors. The ew schemes were rotten from the beginning; the traffic was not up to their running expenses at any time. The old lines had been able to pay dividends on their original stock, but their increase of revenue could not pay interest on the debts incurred through competition. Then commenced that system of financiering which has led to the present crisis. Loans were contracted with banks on this seaboard under repre- sentations which directors knew to be untrue, and which their property could never stand to. Even the Illinois Central found that the sales of its lands, however forced, were insufficient to make up the deficit of the road, and were obliged to borrow to which we trace the seat of disorder. The rail- ways themselves, with their iron arms, may be said to ‘point towards the cause of our disappointment in_ their results. They lead us to the We: It is a sound practical maxim “Let us begin at the beginning:” and in probing the crisis we touch the cause in that Western mania that has afflicted the body of the community during the last twenty years. It may be aptly called the “growing pain” of the young country, and like many youths who outgrow their strength we are laid up with it. Let us ex- gehe Ge. pietere afforded by the trans-Alleghany States. ye see there a populsiice not engaged in the legitimate an usual chan- nels of commerce and agriculture, or if they were, such slow matters were regarded as only a necessary means and a secondary object to one great absorbing idea: speculation in’ real estate. Into this scheme the merchant flung his gains, his clerk threw his salary; the farmer sowed his crop, and bis laborer counted over his savings, with the one absorbing idea that all was to be invested in | land. For the last twenty years a belief,a wild faith in the West, has been growing, spreading and ab- sorbing all classes in this wide expanse of country. It was well founded in the first instance; but when capitalists of the seaboard swelled the tide of West- | ern speculation, when subsequently the same feeling indefinite as such feelings always are—ot blind faith in this agricultural Golconda reached Europe, when Germany and England crowded into the golden field, it is natural that the Western people, who never claimed either moderation or circumspection as a characteristic, should rush into an exaggera- tion, in which the whole commercial world now finds itself more or less ensnared. Let us not mistake the character of this specula- tion in Western lands. It was not lands to cultivate lands to build on; it was simply lands to sell and lands to buy. Real estate was only figarative—the real object of purchase and sale waa the progress of | the country. To-morrow was worth so much more than to-day, and as fortunes were made and carried away from the West, speculation was maddened at home and confidence increased abroad. The bayers would not see that the lands were not producing pro- portionably to their increasing market value. They refused to observe that most of them were not pro- | ducing at all; the most intelligent hoped the fever | would last their time: the most foolish believed it | would goon forever. Thus the whole face of the eoun- try has been for the last ten years one vast “land ex- change.” Half sections of wild lands and corner a8 cities were used like stocks and | arded as an im redit could rest | r of an agricultural communi: | ty and a sound productive value. It was made, by convenient local laws, to represent as convertible a thing as bonds, bills or scrip, passing through a dozen hands within sixty days, with less productive value than a fancy stock, and in most cases the buy- ers knew less about its condition and prospects. Millions of acres were bought and sold without either | buyer or seller knowing or caring in what county | the estate lay, where it was, or if it was anywhere, so longas each could get rid of bis investment with- in a reasonable time. To encourage public improvements, canal and railroad enterprises were endowed by Congress with so many millions of acres ; and this land was thrast | market to pay the cost of constructing the ments and interest toshareholders. All this initiated the system of selling land on time, the in- stalments running over three, five, seven, and fre- quently ten years, bearing interest as low sometimes | money to pay interest, and, failing that, to go into bankruptcy. “At this juncture we have to record a bad feature in this history. The schemers and di- rectors, laying their false statements before the com- mission agents who moved foreign capital in this market, and under whose advice foreign investments were made, offered these honses a certain bonus on the loans they might obtain from their principals abroad. Without hesitating to inquire “Into the valne of these securities, or duly investigating the truth of the representations, to take the mildest view of the case, these commission houses either ad- vised or permitted large investments to come from abroad and to be engulphed in our general ruin, to the destruction of the credit of the country and to our particular disgrace. Thus, we perceive that the money which might have been invested to the at prosperity of our country, in sound cofamercial and agricultural trade, was directed into a field of extravagant enterprise. It was piled up on the t gambling table of the ‘West, or cast recklessly into the construction of wild railway projects, thus fulfilling no useful purpose and representing no property leumnoaianety productive. Such a system must always, one day, by an inevita- ble law of things, come to anend. No resources, however rajfid in their growth and_vigorons in their developernent, could sustain it. With us the end has come. Undeterred by the warning voice of the lead- ing journals of the country, which clearly saw and clearly pointed to this result, our banking institn- tions last May expanded beyond all justifiable hounds, to enable importers here to provide for a de- mand which never came. Finding that in the fall not only did the fabulous consumers of the West not come on to make new purchases, but did not even pay for those previously made; finding that railway nies not only did not repay the advances made hem, but were thirsting for fresh loans, the banks naturally took alarm and commenced con tracting with a” hand as tight as it was open in ex- panding in the spring. And with the contraction came the crisis. In 1814 the government of the United States had borrowed money for national purposes which it could not repay, and we had a national Lempgin wid In 1837 the government had entered into a kind of general financial partnership with the States; the govern- ment cubbenly dissolved the firm, and we had a States bankruptey. In 1857 the people, deluded by the popular idea that the expansion of the Western coun- try justified a great amount of supplies and improve- ments, incurred a large debt to Earope for importa. tions, to an extent not greater than the West called for, but far beyond their ability to pay for; therefore we are in the midst of our first mercantile bank ruptey. New York, Philadelphia and Boston are agencies between Europe and the West, taking com mission cach way. The West has deceived us, and we have deceived Rurope. The West alone has pro- fitted by the affair. It possesses the rail ranala and immigration, for while h it never can pay, and the imports it has consumed, for which it never will pay. We can only hope that by the introduction of regu- larity and prudence into ite future expenditares it may afford a large market abmoad, and instead of speculating on what it will be, it may apply its en- ergies to develope its resources and show what it ought to he—a ready and punctual customer—in- stead of what it is, a reckless insolvent. To aggravate our condition the sugar crop of the South has gradually declined, caused, as it is al- leged, either by decreptitude in the cane itself, which has lost its generative power, or by the land having been overcropped and exhausted. This product has fallen away materially, nor has it been replaced. Having thus enceinctly placed before you our views as two per eent ‘ annum : inducement to invest. I Thus A sold to B on three years credit : B sold to C on the same time, but at an advance: C in like manner to 1), and so on; until in two years A's ex | tate had arrived at Z, who paid A through a long | chain of imtermediate holders, resting on each other, and the whole of them resting on a square mile of prairie twenty miles from anywhere, known ouly to geography, and actually indicated in the deeds of tale by ita latitude and longitude. At this junctore the United States government issued one hundred and thirty millions of acres of pub: lic lands in the form of land warrants, for 80, 160, and 520 acres respecti destined to reward the old ser vants of the republic with a homestead and a liveli hood. Of course the old servants of the nr turtied them into cash; and in throwing these parcels of land apon the they called out a new swarm of stnall specul real acene who n 1856 we had the railroads and canals selling, selling, through the cities and towns; the locaters and buyers of land warrants ped weddling, peddling, through the villages and je cottages. There was not a tradesman from is, nor a laborer from Milwaukie shad not snugly etowed away his r his corner lot. ‘In many cases the deluged the West in the summer of 1555 therefore selling to Padok quarter revtion tradeamen could not help it, for customers had fre- | 7 tly nothing else to offer in payment for their | food and clothing, so a slice of land was accepted in lien of cae But where did the money come from to do this? | ‘There are one hundred and filty millions of unpro- ductive acres @ land, now held in purchase, for | which, at alow avers heen promised and on which two b tine paid, a similar aum is be pave te be paid four dollare an acre has dred millions & of the causes of the present crisis and ite probable consequences here, let us consider what is likely to be its effect upon the opposite side of the ocean. ‘This American disaster comes uj Europe at a singularly inauspicious moment. e general char- acter of monetary affairs in the Old World requires to be thoroughly understood in order to arrive at an adequate appreciation of the result. It must be borne in and that Europe is groaning under a heavy Jond of debt, and that apart from landed property ialk of Earopean wealth consists of bonds se- red hy the different governments, the value of which entirely depends upon the confidence of the public. The shaking of this confidence would at once reduce the bonds to a mere nominal value, as the hold- cers would all be eager to realise, and no one disposes to buy. Hence the real danger to Europe is not #0 mach to be found inany transient commercial revulsion as in a general unsettling of the faith in the solvency of the respective governments. We shall present! show how disastefs in the mercantile community threaten to add formidable items to the series of cir. cumstances which for a namber of years past have conspired to accumulate fuel for a terrible monetary conflagration. But we must in the first instance dwell to some extent upon the pecutiar character of those circumstances We shall avoid as far as possi- ble statistical groupings. They tend rather to com- licate than disentangle the real bearing of the main facta. It is above all things important to point first to the general influence of the industrial develope ment of the last fifty years or so, It is a mistake, and @ grievous one very commonly fallen into, to suppose that exaggerated activity was confined to this country, although here a thousand circumstances inherent to a new country invested it with a cha racter of unprecedented impetuosity and vigor. But with the invention of railroads it epread everywhere feam gathered in the world with its iron grasp. Ip Great Britain, France, Germany and Holland, in fact throngh all the most civilized regions of the world, iriaete aes seaad git ae ene " sucl taki & gradual return, and pass in the shaj of bonds from hand to hand ih tins of comparative pees not the less certain that in times of preciat unreal bests whieh did not exist fifty since; and it will be found that the same gigantic agenciesof pub- lic wealth in times of become so many for- midable sources of Bite’ in times of penury. This new modern Pte th wealt cree tional poverty, as the case may be, has never been properly taken into benoit ind ‘one of ae sults will be that a national financial crisis in Europe, which in former days involved, let us say, millions of wens ‘et ae _ curtis ig now As aggravated TO) new _and scarcely Teas colossal item of railway bonds. It is a singular fact that the agents who chiefly mont all these two coe of securities, are The bulk of the businessis chie! Berlin, Hamburg, Paris, London, les, Rome, Amsterdam, and New of which cities they have houses ; , Fould of Paris, and the Hope, of Amsterdam. These this trade. The stock and the public tims, as the case number. the fort, relial these great houses as the faith in the responsibility of the one and solvency of the other # not shaken, all is well and in . The crisis here may for a make havoc, even fierce havoc, in cei classes and localities in Europe; bat as long as these two great monetary questions admit of a sat answer, no crisis in America, however deep and for- midable, can seriously shake the European balance of mo: power. it when, as of late in Europe, doubts begin to be entertained in several cases about the agreeable solution of those two questions, the American crisis is calculated to give an increased torce and to the doubt, and may perform that feat which no revolution has yet succeeded in effect- ing—a permanent destruction of the present forms of European governments. There is no use in disguising it, for it is a clear, broad fact, that bankruptcy has been only driven back from the Austrian, French and some other European governments, as it has been driven from so many of our railroads here, by the onerous ex- pedient of continued loans; and that these loans have only been made practicable by the extraordinary de- velopement of industrial activity which was, to a great extent, produced by the new demand for com- modities which sprang up in America, demands which were materially increased and strengthened by the new supplies of gold from California and Australia. This is a broad statement of broad facts, but they will bear the closest analysis, and it can actually be proved that Austria,and France, and Prussia, and Sardinia and Turkey—we do not in- clude England of course, thongh the failure of others would react on her—and whole hosts of small, needy governments would never have been able ipreelesuena it Asoecion bad nt indirectly supplied the means, by diffusing—through her colossal pop, “oe of labor; of British, German, Swiss manutactured goods; of coffee, from Brazil; of tea, from China; of spices, drugs and dyes, from the British possessions in India; of wine, spirits and beer, of the liquor dealers of the world; and a thou- sand other articles of luxury and necessity—new elements of wealth all over the globe, and ‘ieu- — over Eufope. If these new elements of wealth had not been introduced into Europe, the govern- ments would have succumbed to the revolutions of 1848, financially, much more painfully than they did for a time politically. Loans would have been im- practicable. Austria, and other rotten countries, ‘would have become bankrupt. In a word, the financial gloom of those years would have settled down into confirmed insolvency, if it had not been for the new accession of wealth which was vaguely ascribed to the gold beds of California, but which, in reality, was produced by the gigantic accession of new consumers, which the extraordinary develope- ment of the colonization of America brought to the ageerey of the world’s goods and chattels, and by ‘he great skill and activity of the European manu- facturers and working c! in meeting the de- mand. How is it that the Russian war passed smoothly over the money markets of Europe without rafflin them to any perceptible degree of per centage? Mil- lions were actually taken away from the general cir- culation and sunk in unproductive armaments. The labor of thousands of workingmen were diverted from the normal channels of activity into the abnor- mal pursuits of war; Fh consols kept steady, Steig- litz bonds and metalliques were not shaken, rents continued in comparative buoyancy, the Bank of England hardly felt the pinch, snd money remained abundant at the average rates. Thus an event which, at the beginning of the century, would have unhinged the great money houses and shaken the exchequers of royally, peeved well nigh unnoticed in the financial world, and while the most formidable war, except Napoleon's, since the days of Alexan- der, was raging on the battlefields of the East, the stock exchanges of Europe did not move a muscle. Sueh steadiness of public confidence, in the face of such disturbing events, could not have been manifested if for five millions which Europe thus lost, ten millions had not been added to its exchequers by American consumers. On the same basis the whole marvel admits of easy explana- tion, and it is perfectly patent to the wisest English statesman, however politic they may deem it to slide in public over the fact. Well, this Russtan war has been brought to a close; sag ay oe gyal nogreat blic calamity at work Europe, excepting in 3reat Britain, which suffers from the revolt of its great Eastern dominion. Politically (although deep under the apparent calm there rankles a bitter feeling of alienation among the working classes against such of their poli- tical or theological or industrial masters as they deem unjust) Europe may be said to be at peace just now. Butstomachic, material, pecuniary agonies, are the chief revolution makers.‘ C’est le ventrequi gouverne la moude.” Those rankling feelings of dis- satisfaction which in times of prosperity are eva- porated in pleasure and enjoyment, are apt in times of adversity to explode, and wreak mischief and re- venge indiscriminately. At the present moment, the most combustible of all nations—the French. happens to wince most severely, as do we here, under the agonies inflicted’ by swindling railways and stockjobbing extravaganzas. Still, howeyer this may affect individuals or classes, the two great paramount questions, which alone can shake the financial equilibrium of Europe, have not been agitated yet. ¢ Rothschilds the great money houses’ display as much financial nerve as ever, and the governments feel littie uneasiness about eventual deficiencies in their exchequer, sin: public confidence in their bonds holds strong, and nothing has occurred to baffle their attempts at rais ~ new loans. But the plot is thickening. We have shown how the shock of public confidence has been averted chiefly by the American demand for European la bor. “We have shown how loans would have been impracticable if it had not been for the indirect sistance thus rendered by America to the tottering exchequers of European Powers. All this is altered now. Not that we expect an immediate crash in Europe. Many honses. will at once; but if instead of thousands, there were millions of banks America, and all the millions’ suspended and re mained irretrievably broken, Enarope would not be —— affected. What will break Europe is, not the breaking of banks here—that, on the whole, will be looked on as a species of financial hocus-pocus—bat, as sure as heaven is above, the falling off of American consumption of the | peed of Buropean artifice and labor will break Europe, if the recnperative energies of this country should fail in this instance for any conside- rable period. Half of the manafacturing population of Europe is supported by the labor requisite for the American market. It isso in the silk districts of France, it is so in the cotton and wool districts of England, it isso in the wool districts of Germany, it is so all over Europe. The sources of wealth in Ba- rope will thas be sappe one hand, while on the other the chronic pauperism of the Old World will he fearfully aggravated by the mass of proletarians who, from present indications, will for some time fnore and more cease to relieve the overcrowded population at home by emigration to this country. misery of those classes of the European people who depend on manufacture for their support will be intense. From St. Etienne to Macclesfield, from Nuremberg to Glasgow, from Lyons to Manchester, from Sevres to Worcester, there will be one hage cry of distress. The misery will work its way up gradu- ally to the higher classes, and to the high seats of financial and political power. An {nroad from another qnarter will be made by the necessary a suspension of inany second class English, rench and German houses, and even some few first class, consequent upon the American disaster, and as for a« Mngland is concerned, upon the injury to her East India trade. Yet all this will not affect the stronghold of the Puropean financial equilibrium. The banks of Bag: land, France, Holland and Germany, the Roths- childs and the great loan houses, the — rail way bonds and government stocks, will continue to stand erect. The public confidence, which, far more than any intrinsic power, constitutes their strength. is not shaken yet in Europe. The real facts of the case have not oozed out. The popular nd is more busy with the figures than with the philosophy of modern finance. It is not known, except to some few European statesmen, that the prospertty which England has enjoyed for several years back is chiefly owing to the prosperity of this country. For all practical purposes in Europe, it matters very little whether the new springs of wealth diffused hy American consamption have been sudden ly stoppe dor not. As long as the moral confidence Jp Chole chiet agents of Suance aud in the ity of government, paired, nothing is to be feared. But sake, sup) the fal of one the great re houses; the Barings, the Hopee, or the Foulds, not speak of the Rothschilds. This would be a shaker of confidence. Or let us su; pose again, for argument sake, a revolution in Paris, or what is far more probable a revulsion in French rentes and a panic in the French stock aad share markets, for France would be the first ted by the American news. This again would be a shaker of confidence. But, inthe absence of any such or similar event, confidence in Europe, in time hallowed establishments and stocks, be slow in dying. Yet when it becomes gradually understood, as the absence of an American markey will soon practically evince, that the intrinsic rottenness of European finances has only been saved from total annihilation ti assistance derived from this country, the news that this source of salvation is going to be dried up, may by of confidence. however, is of much degrees assume the proportions of a shaker The wealth ‘of i individuals in Europe, am, ari be itude than he oe parative! r people of! country may be pre- to. ve. The scoumnated plate and Jewel the wealthy private families of Europe ‘would alone be sufficient, if brought to the hammer, to buy up the whole moneyed property of the United States. The accuinulation of money, and in many in- stances, of hard cash, is equally it; but the mo- ment confidence ceases to €: ing begins, and those countries whose individual citizens poa- sess immense amounts of wealth may be dragged into insolvency in times of excitement such as now seem to threaten Europe. Suppose the Rothschilds, who, from the extinction of financial genius in their family, barely weathered the storm of '48, and threw the Londosg Stock Exchange into hysterics by the exhibition of their incompetency and ipsa should succumb to this dawning crisis, then would there perhaps be laid a foundation for a fundamental crash of confidence. It is a hypothesis far less ludi- corous to-day than it would have been fifty years ago, when the old Rothschilds were alive, and deserved by their intellectual money management that confi dence of the financial ‘world which the present representatives of the firm, with the exception of the head of the Paris house, have hopelessly for- feited, by their lpable evidences of inability. Such a catastrophe would be to all the smaller money houses of Europe what the failure of the United States banks was to separate States at that celebrated epoch. From one end of Europe to the other the Jew money houses would fall, and some of the royal houses be likely to follow. The Austrian government is the most dependent of all upon the Jews and loans, and could not pay one semi-yearly dividend without their assistance. There has never been a time since the destruction of Jeru- salem, when the prospects of the Rothschilds and thewJew houses of Europe looked so dark. Their prosperity depends entirely on public confidence in vernment and securities. This is not shaken yet, but the American crisis may accelerate the first visi- tation of the shock. The suspension of stock ex- change men of London, Paris and Berlin is nothing but the bursting of a bubble. The failure of re- spectable merchants is, in most cases, nothing be- yond a legitimate and honorable vicissitude of com- merce. The starving of English, German and French manufacturing hands would be nothing but Tia oabaral ve to which Lenore is pool and might met by temporary expedients, or oon- ed, as in 1824, iato salen ond silent endurance. But the bursting of one of those huge Jew houses would be a memorable event, and strike the exchange of the world with fear andawe. Not even the house of Baring, commercially considered, could fall with a more clinking and sonorous crash. There is that in the Rothschilds and their compeers which almost identifies their destinies with the public exchequers. Hence the importance attached to their movements, and the alarm felt at the slightest betrayal of weak- ness. Not until the Rothschilds fall, and consols, rentes and metalliques decline one-half, will the higher and mone: classes of Europe begin to ce, and the shaking of confidence in moneyed in- stitutions, lead to the shaking of thrones, and in- augurate a period of insolvency, revolution and anarchy. Aslongas the two European confidence tests remain impregnable, this, or any other crisis, will have in Europe but short and Nt oneal feeble effects. Now, we do not apprehend any suc a immediately, but it may be gradually ripen- ing in the lap of time ; for of all the doleful events which have broken on Europe for the last fifty years, nothing could be so pregnant with disastrous conse- quences as the falling off of goods for the American market, for this threatens to cut off the only any valve which has hitherto prevented Europe from fall- ing on the slippery floor of its bankrupt governments, excess of pauperism, and intrinsic national rotten- ness. How has the news of our financial crisis found England? With her great Eastern market of India blocked up, and forced to send out gold for the main- tenance of a larg¢ army in the East, she has sudden- ly seen her great Western market, which has turned huge wheels of her wealth, also closed to her, and that she not only will not get her debts for ex- ported merchandise, but if she wishes for cotton, which, to some extent, she must have, she must send here cash. The loss of her great Western and East- ern markets, and a drain of gold on both sides! With the loss of her market for export, her wheels, to @ great extent, must become silent; her chimneys cease to send up the emblem of wealth, and her operative hands be cast upon the highway. Those who have witnessed similar seasons, on a feebler scale, can imagine the consequences. In 1824 it re- quired half the military force of England to compel the operatives of Manchester to be silent, and eat little bread. In 1857 England has every soldier in the East, and needs more than she can furnish. When the news of the crisis has time to do its work, we expect to see most of the houses of Glasgow, which are not strong, broken, and half of the houses in Belfast, and half in Manchester follow; but do not anticipate immediately an immediate crash. Doubt- Jess, the ruin will run on to London, and some hith- erto sound second class houses will fall there; bat not the great houses, as the Barings or Peabodys, as Kome Keer to apprehend. But I believe the loss of this market for - con- tinuance of time will bring hteeged to England a period that will strain all her long tried and power. ful energy to preserve her national position and nome. At the best it must be to her a time of fear- ful trial. She may find some partial alleviation in the harvest of 1857, which, all over Europe, has been | one of luxuriant plenty. All the continent, in one way or other, is enabled to export grain. England and Holland will be the only markets in which it can be bought. This will create a strong competi- tion between sellers in favor of English consumers, and food will be cheap, but that which procures it scarce and dear. The other European countries—France and Ger- many—tust become serionsly affected by the crisis. i are both, especially France, financially rotten. Various manufactures there have been organized for the American market. Almost all the woollen cloths made in Europe are made of a special texture for the American, and a special for the Baropean consumers; and the fabries madq for America will find few if any buyers in Barope. The merchandise sent back to European manufacturers from here will thus be almost entirely lost to them, and they will be forced to stop production | and dismiss han ‘The surplas grain on the conti- nent, too, will be undersold by the competition of our lore, who will he ferced to di of their corn at any price. Thus, the non-payment of debts owed to continental bankers and manufacturers, and the cheapness of in resulting from American compe- tition, will derange the hushandry of Central Europe, and create large commercial failures and disasters, The safest European countries, at this moment, unquestionably, are such as have a certain developement in cotton manufacture and export little or nothing, as Russia and Sweden. They pay forthe cotton in cash, and consuming within themselves the necessary quantity, have no necessfty to reduce hands. “But those who fabricate for the American market must reduce, as they will be unable to come into competition with countries like Russia, defended by a strong proteetive tariff. Tt may be comnteniy aeaeeineten that the United States will exhibit, under the oppression of this crisis and its consequences, a vital power, and measure her real wealth so palpably that the American people will gain, by their energetic recovery of credit, the position they held before this crisis, Our country is more stably and ~ rely founded than any other country in the world. It is based on labor and labor only; the whole scheme of American government is to provide for the comfort, the order and progress of the producing classes. Enterprise, and all pursuits based on capital, are secondary considerations. We have no classes like the aristocracy and the church, left like mortgages on the population to be main- tained in idleness. We have no great standing ar- mies and navies to create burthensome taxes. We are free from nat! I debt. We produce the three great universal neeessities of the world:—Cotton for paiment, grain and meat for food, and gold to exchange for what goods we please. All the minerals and metals of com- mercial value—coal, iron and copper—lie in virgin masses under our feet. We possess twenty thonsand miles of river navigable for steam and crowded with vessels. The face of the country is a network of railroads, all facilitating the transmission and ex- portation of this paralleled wealth, which needs ut the work to Mhder marketable. Add to this that our poptfation, men and women, are working ople, all, without exception; so that we have wenty-five millions of shoulders to the wheel. But the country must look to itself in this emer. ency. Let no help be hoped for, dreamed of, rom abroad; it is worse than loss of time, for it distracts the mind of the nation from one object. We have the means to pay, which, # energetically employed in developing our resources, will soon bring round recovery. Let us not place any dependence in bank expan- | sion, or monetary manmuvring to bolster up a dis eased trade and rotten railroad speculation. In the first it is not in the power of the banks to re- spond to the call, and no legislative aid can be applied without this most sacred element of Fe idence—that no remedy can be administered it is founded on principles derived from the vicious state of things existing around—but rather amid 80 much confusion and uncertainty it is the more to adhere to principles founded on truth and justice, which alone can give a firm basis on which the future structure of property and industry can rest. To correct the evils around us it is not well to lower one’s views to their level, but try to deal with them on the footing of scientific truth, trusting, as every man endowed with the power of clearly apprehending abstsact principles will ever trust, to the self-correcting power which a true course always carries with it, and to make the most grievous individual pardabios subservient to the ulti- mate advan’ of the whole. “One of the it requisites to recovery is, to place the t public properties of the country in a sound 1g condition. Let those who have at- tempted to, 1p more land than they oceupy, let go just so much as obliges She to ae the eat of makin ents on it, or paying the year! ite- rest. Bestate will fall. ithe sooner the r. Let us know its real value, and then we shall know what we are worth, and live accordingly. Let what- ever mines, canals, and such securities as now live by borrowing money to pay their dividends, instead cf earning them, go to liquidation. Let the fact be broadly stated, and clearly under- tood, that, with some exceptions, all ‘the rail- roads of this country are financially rotten. All impostures, however vivacious, have a fixed limit to their career, like all other things. They have their entrances and exits, gorge a while, until at last, stale, exploded, and entirely found out, they gradually fade from the world into the limbo where their predecessors of the repose, to delude and deceive no more. The chronicles of the money market record, in the unet language of figures, the rise, progress, and fall of all such speculative delusions. First, then, the railways must come to pieces, and into liquidation. What must be done, it were well to © quickly. There is no help for them. Let them be honestly ceded into the hands of those who are bona Side sors. The Ce ghee with the most eco- nomic management, will it hard enough to get a HA hk of them. Those that are solvent, or within hail of salvation, may right themselves when the wrecks are cleared away which now oppress the market. There is no alternative. The old main trunk lines, supported as they are by many settled cities, and so much firm trade, if fairly managed, will always pay a good steady income on investment. But for their younger brethren, they must go the way of all such delusions. After all, death and de- struction are not the worst things. Depraved lifé is worse, and commercial disease is as deplorable in ill as physical disease. They must remember that this crisis is one of those tempests that rise up to purify the commercial atmosphere, not always discrimina’ ing, but never sparta, the weak. e first action of the government of the United States, if truly represented, has been to contract its expenses. is, we think, with great deference, has been a fatal mistake. The United States govern- ment is rich; its bonds are above par, but it is acting like a trader whose credit was shaken, or a mannfac- turer who sees no means of paying his labor. It is the bounden duty of every rich citizen who has wealth to. spend to do it now, generously, nay, even ohn let him economise when other folks will feel his economy less. So we say to the United States government, instead of contracting its ex- penses it must expand, even if it cost Sweaty vegre of economy to come. Whatever public works are in progress, let them be continued; whatever improve- ments have been decided on, let them be commenced; and whatever are in contemplation, let them be de- cided upon. Now food is cheap and will be cheaper; now labor is plentiful and low-priced; now the work can be done for less money than ever, and most robably it never can be done so Cag hereafter. y this timely expansion the pee will profit and the government economise. If carried out with and decision, the measure will ran ahead of * the politicians,” and escape whole before they can agree on the partition of its plunder. It may be said that this policy will necessitate a loan. Letit be so. Our national credit is above par; we cannot, of course, anticipate unerringly the movements of finance, but as public confidence re- vives, and 4s other investments reveal their worth- Jessness and disappear, it is more than probable that the United States securities will experience the bene- fit of their soundness, and will rise. A loan, there- fore, may be contracted on very advantageous terms. To follow out the political action of this project, let us suppose one hundred millions thus flowing out into the various channels of labor. Coin would forthwith return into circulation, and the banks would be relieved through their only legitimate source of assistance—the labor of the people and restored confidence. This feeling of public confi- dence will not be established by any action of the wealthier classes; the game is no longer in their hands, and we look upon it as providential and good that it should happen so. Let the feeling come from the basis of the social stracture—the laboring class; it must flow upward, and this confidence, born among the people, must ascend to allay the present fear of commerce, while the daily wages of labor or toil confirm the finance of the country. It should be the sacred duty of our government to excite, and of our public pm to display, this reli- ance, so eminently republican, of the rich upon the oes that the people at aaa may appreciate their inter-dependence, and be thereby taught to cling to the government which can succor them so promptly, the poor first, and through them the whole estate, (A this the great hour of our country’s sorrow and need. Asa further measure of relief, it might be advisa- ble to modify the tariff now existing on our foreign importations. A sliding scale, with adjustments similar to those adopted by Sir Robert Peel, to re- lieve in a like moment of peril, might be adopted. Tt is not necessary, however, to enter into any pro- found discussion on this matter; it will, it must, be- come a serious subject of deliberation amongst those eminent statesmen who stand around the Presiden- tial chair. But whether as a permanent part of our future commercial scheme, or whether it be im for a specific time, to answer a purpose, we know that the feelings of commercial men on this sea- board have been undergoing a serious change in this regard within the last year. Many who were once indignant ne we of a protective tariff now yield up their convictions with a sigh, while those more deeply prejudiced listen to its discussion with un- wonted silence. ‘The effect of a motion in Congress on this matter would tend to agitate the foreign markets in a man- ner favorable to our need. Enropean manufac- turers and export houses would urgently propose any | facilities to our trade, and submit to any terms what- ever, rather than see the United States shut the door upon their goods. Those who well regard the position of England will understand how appalling such prospects would be to her government. All Europe allied in feeli against her, except Austria the helpless bankrupt, and France the faithless Fa howe the two great markets of the world, Hindostan and the United States, at least temporarily lost; all this forms a combination more to be dreaded than the greatest | scheme that Napoleon the Great ever constructed for her conquest and her downfall. Should you deem those views sufficiently worthy of the attention of the people to eit them publicity, command them from the hand of A RETIRED STATESMAN. SIR ROBERT PEEL'S BANKRUPT ACT OF 1544, An Act to late the Issue of Bank Notes, and for Giving to the Governor and Com=- ee So in Pri- vileges for a Limited + Jovy 19, 1844. Whereas it is expedient to regulate the issue of bills or notes payable on demand; and whereas an act was in the fourth year of the of his late Majesty King William the Fourth, intituled “An set for giving to the Corporation of the Governor and Company of the Bank of England certain priviloges for a limited period, oj tain conditions"’ and it is expedient that the privi of exclusive banking therein mentioned should be continued to the said Governor and Company of the Bank of England, with such alterations as are herein contained, under cer- tain conditions—may jt, therefore, please your Majesty that it may be enacted, and be it enacted by the Queen's mont excellent Majesty, by and with the advice and con sent of the Lords Mpirviml and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, that from and after thirty-first day of August, one thousand eight red and forty fuer, the issue of promiasory notes of the Governor and Company of the Banke of England payable on demand shall be sepa. rated and thenceforth kept wholly Mstinet from the gene- ral banking business of the said Governor and Company , and the business of and relating to such issue shall be thenveforth conducted and carried on by the said Gover. nor and Company in a separate department, to be called “ The Issue Department of the Bank of England,’ subject to the rules and regulations heremafter contained; and it shall be lawful for The Court of Directors of the said Gov ernot and Company, if they sball think fit, to appoint a committee or ittees of directors for the conduct and management of such issue department of the Bank of England, and from time to time to remove the members, and define, alte Jate the constitation and powors of sue commit think fit, subject to any by-laws, rules which may be made for that purpose: provid Hews, that the said partment shall be kept separate and distine the banking department of the said Governor and Com pany 2. And be itennctod, that upon the thirty first day of Anguet, one thousand cight hundred and forty four, there shall be transferred, appropriated and set apart by the said Governor and Company to the issue department of the Bank of England securities to the valde of fourteen ment of the Bank of Baciand, sch on amoens of Bank of England notes as wi Bank of England notes then in circulation, be equal to the aggregate amount, of England notes, into the of the Bank of agland or to any other persons or persom whatsoever, save in exchange for other Bank of England notes, or for gold coin, or for gold or silver bullion re- for the said issuo ent under Ceived or purchased the provisions of this act, or in exchange for securities ac- quired and taken in the issue department under the provisions herein contained: provided always that it shalt lawful for the sald Governor and Company in their banking department to issue all such’ Bank of England notes as they shall at any time receive from the said issue department or otherwise, in the same manuer in all re- spect as such issue would be lawful to any other person . And whereas it is necessary to limit the amount of silver bullion on which it shall be lawful for the issue de- partment of the Bank of England to issue- Bank of notos—be it the ®sball not be lawful or tho Bank of England to in tho issue de} of the said bank at any one time an amount of silver bul- jon one-fourth of the gold coiu and bullion at such time held by the of im the iasue de- partment. 4. And be it enacted, that from and after the thirty-first ° day of August, one thousand eight hundred and forty-four, all persons shall be entitled to demand from the issue de- partment of the Bank of England Bank of England notes im exchange for gold bullion, at the rate of three pounds seventeen — and nine pence per ounce of standard gold: provided always that the said Governor and Com- pany shall in all cases be entitled to require such gold bul- ion to be melted and assayed by persons approved by the said Governor ana Company , at the expense of the partics tendering such gold bullion. 6. Provided always, and be it enacted, that if ang banker who, on the sixth day of May, one thousand eight hundred and forty-four, was issuing “his own bank netes shall cease to issue his own bank notes, it shall be lawful for her Majesty in Council, at any time after the cessation of such issue, upon the application of the said Governie and Company, to authorize and empower the said Gover- nor and Company to increase the amount of securities im the said issue department beyond the total sum or valae | of fourteen million pounds, and thereupon to issue addi- tional Bank of England notes to an amount not exceeding such increased amount of securities specified ia such order in council, and so from time to time: provided always that such increased amount of securities specified in such order in council shall in no case exceed the pr tion of two-thirds the amount of bank notes which the banker oe ceasing to issue may havé been authorized to issue ua- der the provisions of this act; and every such order im council shall be published in the next succeeding Loudow 6 And be it enacted, that on account of the amount of Bank of England notes issued by the issue department of the Bank of England, and of gold coin and of gold and silver bullion respectively, and of securities ia the said issue department, and also an account of the ca: pital stock and the deposits, and of the money and secu. rities belonging to the said Governor and Company in the banking department of the Bank of England, on some day in every week, to be fixed by the Commissioners of ‘Stamps and Taxes, shall be transmitted by the said Gov- ‘ernor and Company weekly to the said Commissioners, ia the form prescribed in the schedule hereunto annexed, marked A, and shall be published by the said Commis- sioners in ‘the next succeeding London Gazelle, in whiok the same may be conveniently inserted. 7. And be it enacted, that from and after the said thirty- first day of August, one thousand eight hundred and forty four, the said Governor and Company of the of Eng. land’ shall be released and discharged from the payment of apy stamp duty, or composition in respect of stamp duty, upon or in respect of their promissory notes paya- ble to bearer on demand; and all such notes shall thence. forth be and continue free, and wholly exempt from all liability to any stamp duty whatsoever. 8. And be it enacted, that from and after the said thirty: first day of August, one thousand eight hundred and forty four, the payment or deduction of the annual sum of one hundred and twenty thousand pounds, made by the said Governor and Company under the provisions of the said act, passed in the fourth year of the reign of his late Ma- jesty King William the Fourth, out of the sums payable to ‘them for the charges of management of the public unre- deemed debt, sha!l cease; and in liew thereof the said Governor and Company, in consideration of the privile; of exclusive banking, and the exem) from stamp du- ties given to them by this act, shall, during the continu- ance of such privileges and such exemption respectively, Dut no longer, deduct and allow to the public from the sums now payable by law to the said Governor and Com. pany for the charges of ent of the public unre deemed debt, the annual sum of one hundr thousand pounds, anything in any act or acts of Parlia- ment, or in any agreement, to the coatrary notwithstanding provided always that such deduction shall in no respect prejudice or affect the rights of the said Governor an¢ Company to be paid for the management of the publie debt, at the rate and according to the terms provided in an act passed in the forty-eighth year of the reign of his late Majesty King George the Third, intituled “An Act to authorize the advancing for the public service upon.cer- tain conditions, a proportion of the balance remaining im the Bank of England for the payment of unclaimed divi dends, annunities and lottery prizes, and for regulating the allowances to be made for the management of the na tional debt.” 9. And be it enacted, that in case, under the provisions hereinbefore contained, the securities held in the gaid #- sue department of the Bank of England shall at any time be increased beyond the total amount of fourteen million pounds, then and in each and every year in which the same shall bappen, and so long as such increase shall com- tinue, the said Governor and Company shall, in addition to the said annual sum of one hundred and eighty thousand nds, make a further payment or allowance to the pub- ic equal in amount to the net profit derived in the said issue department during the current year from such addi- tional securities, after deducting the amount of the ex penses occasioned by the additional iavue during the same period, which expenses shail include the amount of any and every composition or payment to be made by the said Governor and Company to any banker, in consideration of the discontinuance at any time hereafter of the issue of bank notes by such banker; and such further payment or allowance to the public by the said Governor and Compa. ny shail, in every year while the public shall be entitled to receive the same, be deducted from the amount by law payable to the said Governor and Company for the charges of management of the unredeemed public debt, in the same manner as the said avnual sum of one bundred aad eighty thousand pounds is hereby directed to be deaucted therefrom. 10. And be it enacted, that from and after the passing of this act no person, other thau a banker, who, on the sixth day of May, ove thousand eight hundred and forty four, was lawfully issuing his own bank notes, shall make or issue bank notes in any part of the United Kiag dom. 11. And be it enacted, that from and after the passing of this act it shall not be lawful for any banker to draw, accept, make or issue in England or Wales any bill of ex change or promissory note, or engagement for the pay ment of money payable to bearer on demand, or to bor. row, owe or take up, in England or Wales, any sums or sum of money on the bills or notes of such banker pays. ble to bearer on demand: save and except that it shail be lawful for any banker who was on the sixth day of May, ‘one thousand eight hundred and forty-four, carrying on the business of a banker in England or Wales, and was then lawfully issuing, in England or Wales, his own bank notes under the authority of a @ to that effect, to continue to issue such notes to the extent and under ihe conditions hereinafter mentioned, but not farther or other wise: and the right of any company or partnership to con. tinue to issue such notes shall not be in any manner pre. judiced or affected by any change which may hereafter take place in the personal composition of such company or partnership, either by the transfer of any shares or shire therein, or by the admission of any new partner or ber thereto, or by the retirement of any present er or member ‘therefrom: provided always That it shall. not be lawfal for any company or partuership, now consisting of only six or lems than six persons, to issue bank notes at Any time after the number of partners therein shall ex cved six in the whole 12. And be it enacted, that if any banker in any part of the United Kingdom who after the passing of this ‘st shall be entitled to issue bank notes, shail become bauk- rupt, or shall cease to carry on the business of a banker, or efiall discontinue the issue of bank notes, either by cement with the Governor and Company of the Kk of England or otherwise, it shall not be lawful for such banker at any time thereafter to issue any such notes. 13. And be it enacted, that every banker claiming under this act to continue to issue bank notes in England or Wales shall, within one month next after the passing of thie act, give notice, in writing, to the Commissioners of Stamps and Taxes, at their head office in London, of euch claim, and of the piace and namo and firm at and unaer which such banker has ixeued such notes during the twelve weeks next preceding the twenty seventh day of April last; and thereupon the said Commissioners shall ax certain if such banker was on the sixth day of May, one thousand eight hundred and forty four, carrying on the business of a banker, and lawfully iseuiag bis own bank notes in England or Wales; and if it shall 8 appear, then the said Commissioners shall proceed to ascertain the ave rage amount of the bank notes of such banker which were in circulation during the said period of twelve weeks pre. ceding the twenty-seventh day of April last, according to the returns made by such banker, in pursuance of the act passed in the fourth and fifth years of the reign of her present Majesty, intituled “An Act to make further pro vision relative to the returns to be made by the banks of the amount of their notes in circulation,’ and the said Commissioners, or any two of thom, shall certify ander their hands to’ s ker the sald average amount whan so ascertained as aforesaid; and it shall be lawful for every such banker to continue to issne hie own bank notes after the passing of this act: provided, nevertheless, that such banker shall not at any time after the tenth day: of October, one thousand eight hundred and forty four have in circulation upon the average of a period of four weeks, to be ascertained as hereinafter mentioned, a greater amount of notes than the amount so certified 14. Provided always, and be it enacted, that if it shall be made to appear to the Commissioners of Stamps and Taxes that any two or more banks have, by written con tract of agreement—which contract or agreement shall he produced to the said Commissioners—become tinited with in the twelve weeks next preceding such twenty seventh day of April, as aforesaid, it shall be lawful for the «aid and eighty million pounds, whereof the debt due by ye ablic tothe | Commissioners to ascertain the average amount of the said Governor and Company shall be afd be deemed a | notes of each such hank in the manner hereinbefore di part; and there shall also at the same time be transferred, | rected, and to certify the average amount of the notes of appropriated and set apart by the said Governor and Com. | the two or more banks so united, as the amount which pany to the said issue department so much of the gold | the united bank shail thereafter be authorized to issue coin and gold and ailver bullion then bel! by the Rank of ot to the regulations of this act a England as shall not be required by the banking depart 6. And be it enacted, that the ment thereof, and thereupon there shall he delivered out | Stamp: and Taxes shall, at the time of ¢ Of the said issue department into the said banking depart- ) banker such particulars ag they ary hereinbefore reqriced