Note 4—page 36.
Shipping.
Statement of the tonnage belonging to the principal ports of France, England and the United States in 1835.
| Ports. | Tonnage. |
|---|---|
| London | 566,152 |
| New York | 376,697 |
| Boston | 226,041 |
| Newcastle | 208,100 |
| Liverpool | 207,833 |
| Sunderland | 132,070 |
| Philadelphia | 86,445 |
| New Orleans | 79,467 |
| New Bedford | 76,533 |
| Whitehaven | 65,878 |
| Hull | 63,524 |
| Bordeaux | 69,690 |
| Marseilles | 68,314 |
| Havre | 68,070 |
| Portland (U. S.) | 57,666 |
| Baltimore | 54,416 |
| Nantes | 51,528 |
| Bristol | 42,913 |
To render the comparison exact, it would be necessary to deduct one fourth from the French tonnage, in order to allow for the different modes of measurement. The French method is mathematically more correct, but it lays our vessels under the disadvantage of being obliged to pay heavier tonnage dues; but a law of 1836 has authorised the government to make a change in this respect.
Out of 1,824,000 tons of shipping entered and cleared at the French ports in 1835, only 31 per cent. was French shipping; out of 5,025,000 tons entered and cleared at the British ports, 75 per cent. was of English vessels. In the United States, from 1817 to 1830, foreign shipping formed less than 15 per cent. of the vessels in the foreign trade; in 1831, it was 26 per cent., and in 1832, 30 per cent., leaving 70 per cent. for the American shipping.
French navigation is in a deplorable state of feebleness, and the evil increases daily. In 1832, the total amount of French shipping was 670,000 tons, of British 2,225,000, of American 1,440,000. In France and England the amount varies little from year to year, but in the United States it increases rapidly, and in 1837 it was 1,896,685.
Note 5—page 38—omitted.
Note 6—page 38.
All the banks in the United States, like the Bank of France in Paris, are at once banks of discount and loan, and banks of deposit and circulation. Almost the whole currency of this country consists of paper-money, the metals being chiefly in the the vaults of the banks, which cannot dispense with them, because their bills are payable on demand in gold and silver.
The old Bank of the United States, founded in 1791, had a capital of ten million dollars, the Federal government holding one fifth of the stock. The present Bank was incorporated in 1816, with the right of establishing any number of branches. The Bank of England also has branches in Manchester, Birmingham, Liverpool, Leeds, Gloucester, Bristol, Hull, Newcastle, Norwich, Swansea, and Exeter. The Bank of France has but two branches, one at St. Etienne and the other at Rheims, both established since 1836.
The capital of the Bank of the United States is 35,000,000, in 350,000 shares of 100 dollars each. That of the Bank of England is 11,000,000 pounds, divided into shares of one hundred pounds; and that of the Bank of France is 90,000,000 francs, in shares of 1000 francs, of which 22,100 are held by the Bank itself. The United States' Bank stock was at a premium of 25 to 30 per cent. before General Jackson began his war upon it, that of the Bank of France is at an advance of 129 percent., and that of the Bank of England at 116 per cent. advance.
The operations of the Bank of the United States consist in discounting commercial paper with two names, in making advances upon public stock and other securities, and in trading in the precious metals. The Bank of France discounts commercial paper with three names, or with two names and a deposit of Bank stock as collateral security. It is at present authorised to advance four-fifths on public stock on the sole guarantee of the depositor. It also makes advances on deposits of bullion and foreign coins, charging a commission of one eighth for forty-five days, or one per cent. a year. The commercial attributes of the Bank of England are still more limited than those of the Bank of France. It makes no advances on public securities, except while the transfer books are closed, which occurs for a certain period in London.
The Bank of the United States discounts at the rate of six per cent.; the Bank of France at four per cent.; and the Bank of England at different rates, but rarely at less than four per cent., which is high in London. In 1836, the rate was advanced to four and a half and five per cent. The Bank of the United States effects foreign and domestic exchanges; the Bank of England only domestic exchange, which it does without charge for those who have an account open with it; and the Bank of France operates neither.
The circulation of the Bank of the United States has varied within late years from ten to twenty millions; in October 1835, it was twentyfive millions, consisting chiefly of five and ten dollar notes. Of late years the circulation of the Bank of England has amounted to about 100 million dollars. Since 1830, the Bank of France has usually had a circulation of forty millions, so that the two last institutions play a more important part as banks of circulation, than the first. In the United States, the five or six hundred local banks, whose aggregate circulation is five or six times greater than that of the United States' Bank, perform this service. This coëxistence of more than five hundred distinct currencies is the great defect in the financial system of this country. The joint-stock banks, which have been of late much multiplied in England, tend to introduce the same confusion into that country.
The Bank of the United States has generally in its vaults about ten millions in specie, but during the struggle with General Jackson, it had, at times, a sum equal to its bills in circulation, or from sixteen to eighteen millions. The Bank of England endeavours to keep on hand from forty to fifty millions, but it sometime sinks as low as thirty. The Bank of France always has at least twenty and sometimes more than forty millions; in 1832, it had fifty-three millions, or more than its whole paper circulation.
The Bank of the United States does not discount notes of above four months' date, although this restriction is voluntary; the great mass of its discounts is on paper of two months date. The Banks of France and England cannot discount bills of more than 90 days date.
The bills of the United States Bank circulate throughout the Union; the revenue officers are obliged to receive them on the same footing as specie. The Bank, in return, is obliged to redeem them in specie on demand, under penalty of paying interest on the sum demanded at the rate of 12 per cent. per annum, and of forfeiting its charter. It is not, however, bound to redeem the bills of the branches, except at their respective counters, although it does so in fact. The bills of the Bank of England are a legal tender in England, and with the exception of those of the branches, are redeemable in gold and silver only in London. The bills of the Bank of France are current only in Paris, and are not there a legal tender.
The Bank of the United States and the Bank of France only issue bills payable to bearer; the Bank of England has a certain amount of Bank post-bills, or bills payable to order at seven days sight, being equivalent to about one tenth or one twelfth of its whole circulation.
The Bank of the United States receives deposits, on which it pays no interest. The Scotch banks pay interest on deposits at the rate of 2 to 2½ per cent. The Banks of England and France do not pay interest on deposits, but the latter gets bills on Paris cashed for its depositors without charge.
The number of accounts current opened by the Bank of the United States is indefinite; in that country and Scotland almost all persons have an account with the banks, and are thus freed from the necessity of keeping any considerable sums on hand. They hardly keep enough in the house to defray the expenses of the household for a few days, and payments are made by checks on a bank. The banks are, therefore, the cashiers of the whole community. This concentration of the whole disposable fund of the country in the banks, gives them the means of extending their operations greatly, and renders the capital, which would otherwise be scattered about and lie idle, active and productive.
The dividends of the Bank of the United States have been regularly at the rate of seven per cent.; those of the Bank of France vary from eight to ten on the original capital; those of the Bank of England are at present eight per cent. on the nominal capital, which is the original capital successively modified by acts of parliament. Independently of the ordinary dividends, which were originally seven per cent., afterwards rose to ten, and are now eight, the Bank of England has made several extraordinary dividends, and it increased the nominal capital on which the dividends are paid, twentyfive per cent. in 1816. Mr McCulloch makes the total sum of the extraordinary dividends and of the reserved profits carried to the extension of the capital, from 1799 to 1832, eighty-two millions, which with the reimbursements required by the new charter, amounts to one hundred and five millions. The Bank of France has divided beyond its ordinary dividends, the sum of four and a half millions.
The Bank of the United States, previous to 1834, was charged with the keeping of the public moneys, which were remitted to it by the collectors and receivers and of which it was the legal depository, with the transfer of funds for the service of the Treasury, and with the payments on the public debt and of pensions. It is forbidden to lend more than 500,000 dollars to the Federal government, and more than 50,000 to any State. In this respect it differs from the Banks of France and England, which make, and especially once made, enormous advances to the state. This is the principal object of the Bank of England, the whole capital of which is lent to the government at the rate of three per cent. Besides this the Bank of England receives the Exchequer Bills, and the Bank of France the Treasury Certificates (bons du Tresor), which bear a low rate of interest. These banks have made inconceivable loans to the state in time of war; in 1814, the advances of the Bank of England amounted to 165 millions, inclusive of the public deposits, which sometimes amounted to 60 millions. The Bank of France, however, has at present little connexion with the government, and has, therefore, greatly extended its commercial operations. In 1836, it had on hand notes to the value of 27 million dollars, without reckoning four millions advanced on deposits of public funds; from 1830 to 1835 the amount had not exceeded seventeen millions.
The local or State banks in the United States are organized on principles analogous to those of the National Bank. They are incorporated companies, receiving their corporate privileges from the States, and, therefore, confined to the limits of the State. Sometimes their bills are not current out of the town or county in which they are situated. They are institutions of credit and circulation almost exclusively for the use of merchants. Not having the resource of exchanges, and rarely having any deposits, they aim to enlarge their profits, by extending their circulation through excessive discounts and loans, which often floods the country with an excess of paper money. Their capitals seldom exceed one million dollars, and are often much less; but several have lately been established in the South with capitals of from three to ten millions.
In England the private bankers have the right of emitting bills payable to bearer, except, if there are less than six partners in the house, within the distance of sixty miles of London; in point of fact there are none issued within that space. The bills issued by private bankers amount to about 8,500,000 pounds. In Paris, the Bank of France has the exclusive privilege of issuing bills payable to bearer.
The joint stock banks in England are not chartered companies, nor are they under any control. All the partners are personally responsible. These country banks are very numerous, and they offer, perhaps, less security than the American State banks. In all times of crisis, in 1792-93, 1814-15-16, 1825-26, many of them have become bankrupts or suspended payment; in 1816, 240 were obliged to take one of these alternatives. In 1809 their issues amounted to 24 million pounds; in 1821-23, they had fallen eight millions, and in 1825, had again risen to fourteen millions. Since the suppression of notes of less than five pounds, they have been much reduced. At present (1836), these institutions are becoming multiplied to such a degree as to inspire serious alarm in prudent men.