L POLITICAL ECONOMY. CHAPTER VI. Effects of a Mixed Currency. By AMASA WALKER, late Secretary of State of Massachusetts... IL NEW GRANADA. Peculiarity of the Country, its Character-Course of the Andes- The three great Rivers and their Valleys-Vast Wealth of the Cauca-Its Source, Course, and Destination-Navigation-Enormous Wealth of New Granada-Humboldt's Opinion - Productions of the auca Valley-Markets-Difficulty of Exporting-Rice, Potatoes, and Value of Fat attle-Chocolate and Orange Groves-Plaza of Antioquia Market-Fertie Lands-Native Perseverance and Industry-Population of the Valley of Choco-Consumers, Dress-England's Commercial Advantages and United States' Prejudices-Extension of Commerce-How to do it-Friendly Disposition of the Peo- ple-Exportations-Foreign Markets-Route from Antioquia to the Sea-Mouths of the Magdalena-Fare and Freight on Boats-Powerful Steamers-Distance-Time- Strong Currents-Cost per Carga-Number of Mules on Route-Cost of Importing- Calculations-Gold Dust-Exportation and General Destination-Way Freight of the "General Mosquero," Insurance, Machinery -Remoleno-Income to Carriers of Im- ports-Commerce of New Granada-Internal Communication-Superiority of New Granada over other Spanish American States (Republics) - Agriculture-Education, etc., etc. By J. C. BATTERSBY, Esq., of New York III EUROPEAN COMMERCIAL CORRESPONDENCE. No. vi. By GEORGE FRANCIS IV. GARBLINGS: OR, COMMERCIAL COMMODITIES CHARACTERIZED. NUMBER II. Indian Corn-Rice-Rye-Oats-Barley-Millet-Sorghum or Guinea Corn, and V. COMMERCIAL AND INDUSTRIAL CITIES OF THE UNITED STATES. NUM- BER XLIX. PEORIA, ILLINOIS........ VL MONEY AND BANKING. BY CHARLES H. CARROLL, Merchant, of Massachusetts.... 307 VIL THE LAW MERCHANT. NUMBER X. USURY. By ABBOTT BROTHERS, Counselors- A Law of Banks, Banking Associations, etc., in New York Act in relation to Limited Partnerships in N. York.-Law of Illinois in relation to Conveyances 321 The Tariff-Forfeit of Goods for Undervaluation Liability of Indorsers-Powers of Payer of a Note to Sue Indorser. General Indications of Prosperity-Prophets of Evil still Busy -Considerations in Regard to what constitutes Success or Failure-The Factory that was Successful without declaring a Dividend-Railroads Successful in the same Sense-Money and Stock Markets The Gold Product and Coinage-The Bank Movement-Imports and Exports at New York - Exports of Domestic Produce-The Crops, and Movements of Breadstuffs, etc New York Cotton Market. By CHARLES W. FREDERICKSON, Broker, New York............. PAGE JOURNAL OF BANKING, CURRENCY, AND FINANCE. United States Mint at Philadelphia..... .... 831 841 842 848 Value of Personal Property in Cincinnati.-Stamp Tax on Bills of Exchange in California..... 844 Condition of the Banks in the State of Maine.. STATISTICS OF TRADE AND COMMERCE. The Silk Trade.... The Foreign Commerce of France.. Real Value of Articles imported into the United Kingdom................... Coal Trade of Great Britain..... The Guano Trade .... Foreign Commerce of New Orleans.-Trade of Arkana, a Seaport of India. Montauk Point and Great West or Shinnecock Bay Lights, Long Island, New York ..... Cape Roman and Charleston (S. C.) Lights Marine Barometers.-Chloroform in Sea-sickness Varne Sand, off Folkstone.-Discovery of a Dangerous Shoal... COMMERCIAL REGULATIONS. Classification of Mousseline de Laine... Cotton Vestings and Cotton Fringes.-The New Brazilian Tariff.. Commercial Kegulations between Russia and Japan... Instructions for the Stowage of Cargoes.-The Venezuelan Duty of Ten Per Cent.. Commercial Regulations at San Francisco.-The Roman Tariff. Weight-marks and Tare on Casks.- San Francisco Chamber of Commerce.. Post-office at Rio Janeiro.... POSTAL DEPARTMENT. Postage to Ports on the West Coast of Africa and England..... JOURNAL OF INSURANCE. Incorporation of Insurance Companies in New York.. Dividends of Boston Insurance Companies-Correction. STATISTICS OF AGRICULTURE, &c. The Agriculture of Ohio.. The Chinese Sugar Cane in Texas.-When Cotton Blooms in Alabama 845 845 846 347 848 849 850 851 852 359 353 858 854 854 355 857 858 859 360 360 861 862 362 863 864 364 STATISTICS OF POPULATION, &c. Immigration to the United States 869 870 RAILROAD, CANAL, AND STEAMBOAT STATISTICS. Suggestions and Statistics of Railroads and Canals. NUMBER II. Superiority of Railways over Canals-Table of Travel and Traffic Diverted to Railways-Reminiscences of the Past-The Best and Shortest Route to the West, by Railway, from the City of New York to the Lakes.. 872 The Liability of Counties for Subscription to Railroads..... Steamboat Building at Glasgow, Scotland.-Investments in Railroads Generally............... Comparative Costs of Wood and Coal on Railroads................ JOURNAL OF MINING AND MANUFACTURES. Manufactures in the City of New York Lighting a Mine with Gas.... .... Copper in the Minnesota Mine.-Manufacture of Gas from Coal and Wood.. The Mineral Wealth of Great Britain... Lard and Tallow Candles.-Adulteration of Oil Cakes.-Soap from Fish Blubber. MERCANTILE MISCELLANIES. Mercantile Library Association of New York.. Small Trades of Boston.... A Law of England to Prevent Stocks and other Gambling.. The Palm Oil of Africa, and the Hog's Lard of the West Confidence in One's Self-"Mind Your Business."-Civility and Success.. Feats in Navigation.-Philosophy for Speculators... THE BOOK TRADE. Notices of 22 New Books or New Editions... 895-400 HUNT'S MERCHANTS' MAGAZINE AND COMMERCIAL REVIEW. SEPTEMBER, 1857. Art. I. POLITICAL ECONOMY.* CHAPTER VL EFFECTS OF A MIXED CURRENCY. IN our last chapter we commenced an examination into the nature and effects of a mixed currency. We now continue and conclude the subject. III. A mixed currency causes great fluctuations in the interest of money, and much enhances its average rate. This must follow as a consequence of what we have before shown. If it so stimulates demand at one time, and paralyzes it at another, it would naturally follow that the rate of interest would be equally fluctuating; and practically, we find that it has always been so wherever such a currency has existed. Every person familiar with the business of this country for the last forty years, must know that there have been occasional periods within that time when money, in the great marts of trade, was worth no more than 5 per cent per annum, and a drug at that; and, on the other hand, there have been corresponding periods when money, to all who must raise it at the market price, would cost 18 per cent and upwards; and that, between these extremes, the rate of interest has been constantly vibrating. Now, this is the legitimate consequence of a mixed *For chapter i., see Merchants' Magazine for March; for chapter ii., see same for May; for chapter iii., see same for June, 1857, (vol. xxxvi., pp. 275-282, 547–552, and 669-677;) for chapter iv., see same for July; and for chapter v., see same for August, (vol. xxxvii., pp. 24-33 and 159–166.) ERRATA.-July number, page 29, for "ambiguitous" read ubiquitous; on page 32, for “1798", read 1693; on page 33, for "intelligent" read intelligible. currency. If it does cause a vast extension of credit, it must cause a great demand for money to meet those credits; and the demand for money to pay debts is an imperative demand, and cannot be postponed. A man is seldom, if ever, in immediate distress for money with which to purchase merchandise, but he is often so for money to meet his notes at the bank. He would never think of paying 2 per cent per month for money to buy goods with, but will often pay that for the means of sustaining his credit. Now, as a mixed currency so vastly extends the whole credit system, as it alternately makes money very plenty and very scarce, it must of necessity cause corresponding fluctuations in the rate of interest, and, on an average, greatly increase it. But the rate of interest is not only thus continually varying, but is, in fact, describing a cycle. Starting at zero, the low point we have here indicated-5 per cent-it rises by irregular steps till it has attained the highest point of which it is susceptible; then descends to the original point of departure. Like the currency it represents, it is never for a long time stationary, never natural. The caprices and interests of those who manufacture credit money cause its extraordinary rise, and the laws of trade at length come in to force its return to the natural rate, (which, in the United States, may be assumed to be 6 per cent ;) but the excess of the advance that has been created, by its reaction brings the rate down to something less than the natural point. But it never long remains there. Money soon becomes worth the legal rate, and will continue to command that rate, or more, according to the demand. The cycle usually requires a period of about seven years for its completion, but disturbing causes may accelerate or retard a monetary revoJution; so that no person, however shrewd, can tell when the different points will be attained. The general result is certain, the time of its occurrence contingent. Without professing absolute accuracy, we give the following as an approximation : For the seven years... Or 10 per cent annually. 5 per cent per annum..... 6 per cent per annum.. Permanent loans on mortgages and the like are not included in the above estimate, as they are not usually influenced, to any great extent, by the ordinary fluctuations of the monetary world. We appeal with entire confidence to men of business, whether this estimate does not mainly correspond with facts within their experience. We do not say that, with a value-money currency, there would be no variations in the rate of interest; but we do affirm that, with a mixed currency, these variations are greater, and the average rate much higher. And this, we think, will not be disputed. It may be objected, by those who know little (practically) of money affairs, that the legal rate of interest being at 6 or 7 per cent generally, and the greater part of all loans being made through banks restricted by law, the average rates cannot be so high as we have supposed. To this we reply, that legal restrictions alter the case but little. Money always does bring what it is worth for the time being-law or no lawand all attempts to fix the price of money are worse than nugatory. IV. A mixed currency can never be relied upon by the business community. This we have already, incidentally, shown, if we have proved such a currency to be a vacillating one, but the point is so important that we propose to consider it as a distinct proposition. Mixed-currency banks always owe a larger sum payable on demand, than they have money on hand to pay with. They always promise to pay specie for all claims made upon them, when it is generally true of them that, if one-half their debts were demanded at once, they would be obliged to suspend payment. Take, for an example, the banks of Massachusetts: These, in October last, by official returns, had in circulation.. Total immediately liabilities To meet these, they had only... -four millions and a half to pay fifty millions with! $26 544,315 50 23,437,256 99 $49,981,572 49 4,555,571 41 Now, that they were legally liable to be called on for the whole of the fifty millions is certain; that they might actually be called on for a large part of this is equally true. The amount deposited in banks is a more immediate liability than their bills in circulation, for the latter are scattered over the country, while the former is generally due to those near the banks, and may be drawn by checks at any moment, and to a great extent will be, in case of an extraordinary demand for money. The individual who should owe $50,000 of borrowed money, for which he was liable to be called upon at any moment, and had only $4,500 to pay with, would not be thought in a very eligible or safe condition; yet such is the position of most of the banks in this country. And we ask, Is it not true that they are not RELIABLE? We do not say that they are not safe, that their promises will not eventually all be met; that is not the present question. Have the business men, the merchants and manufacturers, sufficient assurance that these banks will afford them at all times the reasonable accommodation they require? The banks profess to supply the community with money; can they be depended upon for this? After having expanded the currency until they have involved the whole community greatly in debt, and so raised prices that it requires many times the natural amount of money to meet the existing state of things, can the banks continue to furnish the same amount of currency to enable them to discharge their obligations? Certainly not; for as soon as there is a demand on the banks of Massachusetts-as they were situated last October, and probably still are-for one million of specie, that moment they must stop all discounts. They are expanded more than 10 to 1, including their indebtedness for deposits, and they must loan out nothing, redeem their own bills as fast as possible, and take care of themselves; and should another and another million be called for, they must contract so rapidly that ruin will stare business men in the face; the weaker banks will begin to fail, the sound (?) banks will be run upon, and, to save gen eral destruction, there must be a general suspension. This has happened time and again in this country. Most banks chartered prior to 1840 have suspended at least two or three times, and must suspend as many times more in an equal number of years. The Bank of England suspended in |