Sayfadaki görseller
PDF
ePub

At the beginning of 1831, the coined money and bullion amounted to one hundred and three millions. On the 1st of July, it had reached two hundred and twelve millions, and at the end of December, two hundred and sixty-six millions; being the largest amount since its establishment.* Here we find the currency reduced, by the abstraction of coin, more than thirty millions of dollars in less than one year.

The whole monetary system of France is under the control of a single set of men, directors of the bank. They trade upon a small capital, with a view to make large dividends. The more they can overtrade, the larger must those dividends be. The power to overtrade depends upon the amount of the capital of others that can be attracted to their vaults, either on deposit, or in exchange for their circulating notes. The less the confidence that exists in each other, the greater will be the tendency among the people of France to use the notes of the one great bank, and the less will be their disposition to lend out their capital to be used by others, and the greater will be the tendency to leave it in the bank on deposit. That institution is thus directly interested in promoting measures tending to prevent the establishment of confidence, as will be seen by the following comparison of its operations for the two past years. In 1838, a period of prosperity and general confidence, the total amount loaned out was 974 millions of francs. The average time being 56 days, it follows that the amount of loans averaged

It had on hand, of specie,

[ocr errors]

149,000,000 213,000,000

[blocks in formation]

In 1839, a period of universal distrust and distress, its loans amounted to 1,454,000,000, and the average time having been 57 days, its average amount of loans must have been

Specie,

[ocr errors]
[merged small][merged small][ocr errors][merged small]

232,000,000

[merged small][merged small][merged small][ocr errors][merged small][merged small][merged small]

Its power to trade, and to make large dividends, thus increases with want of confidence among the people. It increases its liabilities, and of course is

* Goldsmith, Statistics of France, p. 141.

+ The profits of 1834 were 2,794,000 francs. In 1836, they were 5,848,000 francs, having been more than doubled.

compelled to increase its stock of bullion, diminishing the amount in circulation, and increasing the distress.t

The tendency to uniformity in the rate of profit is exceedingly small. The owners of bank stock have large dividends, while all France has been for years agitated by the discussion of the conversion of five per cent stocks into 4 per cents. The selling price of a share of bank stock was, in 1836, two thousand two hundred and ninety francs, being an advance of 114 per cent upon the cost of one thousand francs. The dividend in that year was one hundred and twelve francs, or above 11 per cent; that of 1839 was probably not less than 15 per cent.

In consequence of there being no return of the deposits in the private and joint-stock banks of ENGLAND, it is difficult to ascertain what is the amount of capital seeking investment, and constituting the currency.

The following statement will show the movement of that portion of it which is connected with the operations of the Bank of England.

[blocks in formation]

Based upon a capital of fifteen millions, we have here currency to the amount sometimes of twenty-four and sometimes of thirty-seven millions, accumulated under the control of a few merchants, who are thus enabled to exercise over the operations of the world, an amount of power unknown to any other body of men whatever. If governed by the purest motives, they may do great injury; but if animated by the selfish desire of making large profits, it is difficult to estimate the extent of ruin that may be produced among the community, by rapid expansions and sudden contractions, all of which tend, by destroying confidence, to compel individuals to resort to their one great bank as the only safe place of deposit. In the manage. ment of such an institution, ignorance or weakness may, however, do nearly as much injury as selfishness or wickedness.

* The vast accumulation of gold in the Bank of France, in the past year, was attended with ruin to an almost incalculable extent. From the 1st of January to the 1st of November, the failures in Paris alone amounted to eight hundred and fiftyeight, the losses by which are stated to have been between fifty-five and sixty millions of francs.

+ For some of the above statements we are indebted to an article recently published in the Morning Herald, the writer of which says,

"The great augmentation in the general movements of the bank, during the past year of distress, illustrates the principle on which the bank acts, viz: to extend itself most when the necessities of the merchants most require assistance. The bank acts rather as a preservative in adversity than as a stimulant in prosperity. Hence the uniformity of the value of money in France."

At no period did "the necessities of the merchants" more require assistance than in 1832, when the loans were little more than one fifth as great as they were in 1826.

From 1833 to 1839, the circulation of the private and joint-stock banks has varied from £10,132,000 to £11,733,000, and may be taken as averaging about eleven millions. It is not improbable that the deposits amount to nearly double that sum, or about twenty millions. Some of these are at an interest of 2 or 24 per cent, and can only become currency after a short notice. The coin in circulation has been differently estimated, but is probably not less than twenty-five millions. This would give for the total currency, including the whole of the deposits

Circulation, specie and notes, £53,000,000
Deposits,

30,000,000

£83,000,000

The total amount of production is stated at two hundred and sixty millions of pounds, or eighty-one dollars per head, being twenty-seven cents per day for three hundred days. The amount of capital remaining in the form of currency is equal to ninety-five days' labor, or the product of nearly one third of a year.

The directors of the bank exercise great power, but centralization is much less perfect than in France, and the one great institution is now, in some degree, checked and controlled by the smaller ones that have risen under the law of 1826.

Inequality in the rate of profit prevails universally. The stockholders of the bank divide 8 per cent, and the proprietors of private and jointstock banks have, on an average, above 8 per cent, while immense masses of capital remain on deposit, yielding little or nothing to the owners, who are always looking out for means of investment, and are frequently compelled to send their capital abroad, because not permitted to invest it at home; thus producing unsteadiness and irregularity in the currency.

In SCOTLAND, the circulation of coin is small, owing to the use of one pound notes. That of bank notes is estimated at four millions. The deposits amount to about twenty-four millions of pounds. A large part of these, like a portion of those of England, do not constitute currency, being deposits on interest; but are liable, at short notice, to become The population is about two and a half millions. The amount of capital yielding no return to the owner is not large, but that which yields but small return is very great, and cannot fail to be productive of great irregularity.

So.

The amount of power exercised in Scotland is very great, but it is much divided. "In times of prosperity," says Mr. Norman,* “ "they push out their notes and credits to an undue extent, and are consequently compelled to diminish them as violently when circumstances alter." The same writer says, that "in periods of commercial difficulty, no country is said to suffer from insolvency more severely than Scotland." It could not be otherwise. The whole amount of the capitals of the three incorporated banks and of the joint-stock banks, does not probably exceed ten millions, while their loans must exceed thirty millions, the difference being either currency, or deposits liable to conversion into currency. The owners of the banks have 7 or 8 per cent, while the depositors have 2 or 2 per + Ibid., p. 61.

* Remarks on Currency, p. 62.

cent; and, as a natural consequence, the latter are anxious to find means of investing their capital where it will be more productive. Not being permitted to convert it into stock at home, there is every inducement to seek opportunity for employing it abroad, and the currency is thereby rendered unsteady and irregular in both amount and value.

We proceed now to inquire into the operations of various portions of the UNITED STATES, and shall commence with the southern states, taking the returns of the year 1830, as furnished by Mr. Gallatin.

VIRGINIA, NORTH CAROLINA, SOUTH CAROLINA, AND GEORGIA, IN 1830.

Numb. of Banks

Population.

Capital.

Currency. Specie.

Loans.

Virginia,..

Dolls. D. Dolls. D. Dolls. D.C. Dolls.

832,000

68 10,571,000

179,000

520,000

25 4,899,000 90 11,711,000

41,211,000 5,571,000 3 5,831,000 5 North Carolina,..... 3 737,000 3,195,000 4 1,883,000 21 South Carolina,..... 1 581,000 4,631,000 8 7,600,000 13 Georgia, 9 516,000 4,203,000 4,101,000 8 1,305,000 2 53 7,000,000

|3,045,000 17,600,000 619,415,000 6 2,836,000 9334,181,000

There being no notes under $5 in circulation in these states, the specie in circulation must be added, say

173,045,000 17,60

3,200,000 [3,200,000

17 3,045,000 17,600,000 622,615,000 7 6,036,000 2 00 34,181,000

If we take the production of these states at seventy dollars per head for the whole population, male and female, infant and aged, we shall have an amount of two hundred and ten millions, to which the capital seeking investment stands in the ratio of one ninth. It must be observed, however, that owing to the peculiar nature of the relation between the laborer and capitalist, the amount of exchanges is exceedingly small, and the quantity of currency needed for the performance of those exchanges, bears but a small proportion to the amount of production. One ninth in these states bears probably a larger proportion to the amount of trade than one fifth in Scotland or England. The currency is large in proportion to the uses for it, though very small in proportion to that of either England or France. We find loans amounting to thirty-four millions, and yielding,

at 6 per cent,

If we deduct 1 per cent of the capital for management,

there remains,

$2,040,000 176,000

$1,864,000

to be divided among the owners of bank stock amounting to $17,600,000, giving them more than 10 per cent, while the owners of a large amount of deposits have nothing. Here is great inequality of profit.

The power of expanding or contracting the currency is in the hands of the directors of seventeen banks, who may increase their loans to forty millions on the one hand, or diminish them to twenty-five millions on the other.

NEW YORK, NEW JERSEY, AND PENNSYLVANIA, IN 1830.

[blocks in formation]

New York,..

New Jersey,....

[blocks in formation]

30 1,918,000 20,083,000 10 23,000,000 122,200,000 1 15 36,000,000 5 320,000 2,016,000 6 1,700,000 5 200,000 60 3,500,000 Pennsylvania,...... 321,348,000 14,600,000 11 16,000,000 112,700,000 2 00 25,000,000 To this must, however, be added the specie in circulation in Pennsylvania, in which no notes under $5 were used, say

1,500,000,

1,500,000,

18464,500,0

|67|3,586,000 36,699,000 10 42,200,000 12 6,600,000 1 84 64,500,000

If we take the production of these states at one hundred and twenty dollars per head, we shall obtain the sum of four hundred and thirty millions. The currency is less than one tenth of that amount, and is not probably more than one third as much in proportion to the amount of ex. changes as in the southern states.

The amount of loans is $64,500,000, yielding, at 6 per cent, $3,870,000 Deducting 1 per cent for expenses,

we have .

Being equal to 9 per cent upon the amount of capital.

370,000

$3,500,000

The power of contraction and expansion is less than in any of the cases we have examined, and it is more widely distributed, being divided among the directors of sixty-seven banks, none of which can exercise much influence.

[blocks in formation]

R. Island,. 47
Mass.,.

Conn.,

Dolls. Dolls. Dolls. Dolls. 97,000 6,118,000 63 1,534,000 16 66 610,000 20,420,000 34 7,292,000 12 10 297,000 4,415,000 15 N. H.,. 18 269,000 1,791,000 6 Maine,... 18 309,000 2,050,000 7 Vermont,.. 10 280,000 432,000 1

Dolls. D. C. Dolls. 343,000 3 55 7,309,000 987,000 1 6426,825,000

2,400,000 8

415,000 1 40 6,400,000

916,000 3

226,000 80 2,481,000

1,046,000 3

208,000 67 2,888,000

804,000 3

428,000 1 50

per head.

856,000

|1691,862,000 35,226,000 194 |13,992,000 7 2,607,000 1 4046,759,000

Taking the product of these states at one hundred and thirty-three dollars per head, we have a sum of two hundred and fifty millions. The currency amounts to 5 per cent of this sum. The power of contraction and expansion is exceedingly small, and it is so minutely subdivided that individual caprice, fear, or selfishness can exercise scarcely any influence.

Amount

of loans.

« ÖncekiDevam »