ply of foreign exchange is unequal to the daily demand, the vaults of the banks may be exhausted before any precautions can prevent it. These very precautions, too, consisting as they do almost exclusively of curtailments in their loans, made suddenly--mostly without concert, and always under the influence of anxiety if not alarm, may fall with oppressive weight on the community, by the pressure on which alone can be produced the necessary re-action. This re-action moreover is necessarily slow, since our distance from Europe makes it less easy to restore the equilibrium than between adjoining countries in the same hemisphere. As this defect in our moneyed system depends on the legislature, the bank has no power to remove it, and can only strive to guard against its dangers. Its tendency is to produce abrupt transitions, and violent shocks injurious to private credit, and which might prove subversive of the currency. It belongs then to the conservative power over the circulating medium which devolves on the bank, not to be a passive observer of these movements, but to take an ample share in all that concerns the foreign exchanges. It may thus foresee, and either avert or diminish an approaching danger-it can thus break the force of a sudden shock, and supplying from its own accumulations or its own credits in Europe the more pressing demands, enable the state institutions to provide for their own safety, and thus produce the necessary alteration in the state of the exchanges with the least possible pressure upon the banks or the community.

"In addition to the ordinary causes of fluctuation in the metallic currency, there was another of great importance in the character of the trade to China and India, which, requiring annually many millions of the precious metals, very frequently caused abrupt and inconvenient changes in the amount of the currency and of private credit, by forcing the state banks to sudden curtailments as an act of necessary self-defence. To abate the pressure of this demand, the bank offered as a substitute for the shipments of coin, to supply its own bills on Europe, which in the India and China markets were often more valuable than the coin itself. This experiment proved successful, alike to the merchants and to the community, who were thus less incommoded by sudden diminutions of the currency. Owing to the operation of general causes, that trade has within a few years greatly declined,--but should it revive, the bills of the bank will doubtless constitute a considerable portion of the remittances from this country. Even in its present comparatively inactive state, the amount of bills furnished by the bank within the past year for the trade of India, China and South America, amounts to $883,500.

"By this combination of the soundness of the local currencies, and a thorough identification of the bank with the real business and exchanges of the country, it was hoped to accomplish the purposes for which it was established. With this view it began by giving to its whole funds an active and business character, for which purpose all the stock of the bank which had been forfeited was sold, and the proceeds applied to the commercial operations of the country. The bank and the branches then

issued freely and exclusively their own notes, taking care to protect and provide for them by the discount of bills of exchange---and they received freely the notes of the solvent state banks, with whom periodical and convenient but certain settlements of accounts were made.

"This system has now been in operation for several years. It was at first experimental and of doubtful issue, and as the consequences were equally important to the bank and the community, its progress has been watched with deep solicitude. Its success, therefore, has been seen with proportionate satisfaction. Time and experience have now demonstrated that the bank has been able to accomplish all the purposes for which it was created, to rectify the disorders of the currency, to sustain a large and sound circulation, and to reduce the commercial exchanges within the most economical limits, and this by means in themselves highly advantageous to the community, not in any degree injurious to the state institutions, and at the same time profitable to the bank itself. The evidences of this can be best observed by comparing the past and present situation of the currency, the exchanges, the country and the bank.

"1. Before the establishment of the bank, the cirlating medium of the middle, western and southern states consisted exclusively of an inconvertible paper money; every part of that country suffered under the most oppressive of all taxes on industry, a depreciated currency; the commercial exchanges between different states and even different neighbourhoods, were burdened with the fluctuations of their respective representatives of money, while the government itself, unable to make its funds received in one section available for its expenditures in another, was embarrassed in the midst of its nominal excesses of revenue. These disorders are now remedied. The local currencies generally are equivalent to specie within their respective spheres of circulation, and a large mass of general currency is superadded for general circulation. That this effect was produced directly by the operations of the bank requires no demonstration. The extent of its contribution to the general currency, will be seen in the facts.

"1st, That since January 1, 1823, it has furnished to the mint, to be converted into American coin, bullion to the amount of $12,046,415 35

"2d, That the gross circulation of the bank on the 1st of January 1823, was

And on the 1st of August 1831,
Making an increase of

4,589,446 90 22.399,447 52 17,810,000 62

"From both periods a deduction is to be made of the notes in their passage between the bank and the branches. The total amount known to be in actual circulation on the 1st of August was $19,377,910.

"This circulation is in all respects equal, and in most respects superior, in value, to any metallic currency of the same amount. Indeed there is not now, and probably never has been, in any other extensive country, a paper currency comparable to this for the union of all the qualities of a good circulating medium-perfect security-easy converti

bility into the metals-and general uniformity of value.

"The notes of the bank, moreover, not only afford a sound currency themselves, but they sustain and purify the much larger mass of circulating medium into which they are infused. By receiving freely the notes of the state banks within convenient reach of the bank and its branches, and by frequent settlements with them, these institutions are kept in the habitual presence of an accountability, which naturally induces them so to apportion their issues to their means, as to secure the soundness of their currency. Of the manner in which they have executed this extremely delicate part of their duty, which connects them with the state institutions, it is not for the board of directors to speak. But they bear a willing testimony in favour of the uprightness and intelligence which generally characterize the administration of those institutions, and the support which they have always yielded to any measures calculated to maintain the soundness of the currency.

"On the few occasions where it has become necessary to insist on the performance of their obligations, from which either a want of judgment, or the pressure of urgent necessity had induced them to depart, the bank has endeavoured to perform its own duty with all the forbearance consistent with the thorough execution of it, and those institutions themselves, have generally found in the increased credit arising from fidelity to their engagements, a full compensation for all the temporary inconvenience which that fidelity required. It is indeed confidently believed that the solvent state institutions, recognize in the bank its true character, as a common friend, not a jealous competitor; and that the good feelings uniformly entertained for them by the bank, are reciprocated. They know that the duties of its position make it only a more prominent agent in preserving the soundness of the currency, on which their own stability and prosperity equally depend; and that if its competition sometimes appears to prevent more abundant profits, they find an indemnity in the general security of property which its operations are designed to protect. Undoubtedly these operations have been so far beneficial to them, that if its own notes

are equivalent to specie, it has contributed to make those of the state institutions equally valuable within their respective spheres, and that many of these institutions earn larger profits than the bank itself. "2d. The reduction in the exchanges effected by the bank from the extravagant charges on internal trade to the present moderate limits need not now be particularized. A single fact will be sufficient to illustrate it. Before the bank was organized the differences of exchange in favour or against Philadelphia, in its relations with the other commercial cities, was as follows.

"With Boston, 17 per cent; with New York, 91 per cent; with Baltimore, 4 per cent; with Washington, 7 per cent; with Charleston, 6 per cent.

"At present these exchanges are generally, either at par, or at the utmost, one half of one per cent. "This has naturally followed the rectification of the currency, As long as the general circulation of the United States consists of specie or its equivalents, the rates of exchange between any two places in it can never much, nor permanently vary from the expense of their transportation from one place to another; and a reduction to nearly that rate was the inevitable consequence of the résumption of specie payments. The bank has, however, been able to do more than this. The large mass of its operations in exchanges, by giving to it funds in various parts of the union which the course of its own business, as well as that of the government, requires to be transferred, furnishes it with the means of transferring at the same time the property of individuals at a very reduced expense. Accordingly funds are transferred to the remotest points of the union, sometimes at no expense whatever, and always with charges so moderate, as to afford facilities of interior communication, probably not equalled by those of any other country.

"The following table exhibits the amount of domestic and foreign exchange purchased at the bank, and the several branches, the amount of the drafts furnished by them on each other respectively, and the amount of transfers made on account of the government, during the year ending on the 1st of July last.

"From this it will appear, that the purchases of bills of exchange amount to more than forty-four millions, the drafts issued by the bank and the branches on each other exceed forty-two millions; and the transfers on account of the government were upwards of twelve millions. If to these be added the amount of bills not purchased in the first instance by the bank, but collected through its agency, the aggregate will represent an actual movement in the business of the union, much ex-. ceeding one hundred millions of dollars. This has been conducted at a very moderate expense, and with a facility which has caused so large a displacement of funds, to be almost imperceptible in apy of the interests of the community. More experience and a greater mass of operations may enable the bank to reduce still further, even these slight charges; but should it be able only to retain them at their present rates, it will have accomplished all that is necessary or perhaps desirable.

"3d. The influence of these measures on the country has been in every stage of them eminently salutary. The substitution of a sound currency for a depreciated and irresponsible circulation, which was hastening to involve in confusion, all public and private interests, is of itself an advantage, which can scarcely be over-estimated, conferring, as it does, stability on property, and security on all the rewards of industry; while the interior commerce of the whole union is relieved from the oppressions of a multifarious and fluctuating paper money, requiring at each step some new sacrifice which, however disguised, fell ultimately as charge on the productive industry of the country.

a

281,195 04

8,636,681 35

The means, moreover, by which these objects have been attained, the restraint on the over issues of other institutions-the extensive operations in domestic and foreign exchange-the bringing of the institution into immediate contact and sympathy with the real business of all parts of the country, are in themselves direct and positive benefits to the community. They form too the natural occupation of a Bank of the United States, which, divested of all local influences and interests, finds its appropriate sphere in facilitating the commerce of the states with each other and with foreign nations. Accordingly, it may be assumed with safety, that there has never been in the history of this country, any period when its moneyed concerns were more steady and equal-its interior trade transacted with more economy and convenience, and the necessary fluctuations incident to its foreign commerce less sensibly felt, than during the last eight years. This term is sufficiently long and various to test the efficacy of the system. It embraced a period, when, in addition to its habitual causes of fluctuation the moneyed system was disturbed by the reimbursement of many millions of the public debt, a great portion of which was to be remitted to Europe, and more especially it included the year 1825, one of the most critical in our own history, and probably the most disastrous to the banking system of England.

"4th. Having explained the effects of this system on the currency, the exchanges, the state banks, and the community, it remains to show that these purposes have been accomplished without any sacrifice to the interests of the stockholders, but that

And a decrease of the funded debt, of
Making the actual increase
"The 3d and last consideration is the comparative
productiveness of the operations of the bank at
these periods:

The nett profits of the year ending
July 1822, were,

The nett profits of the year ending
July 1831, were,
Making an increase of

$1,469,444 91

834,450

134,252

"This state of things is calculated to justify the expectation, that a continuance of the same prosperity will at length indemnify the stockholders for the privations of profit to which they have been so long subjected. Hitherto their compensation has been comparatively inadequate. Owing to the large expenses incident to the establishment of the bank, and to the great losses growing out of its early misfortunes, the whole amount of dividend, from January 1817 to July 1831, a period of fourteen years and a half, has been only $72.85, or a small fraction beyond five per cent a year, on the original subscriptions of one hundred dollars. The dividend during the last three years and a half, has amounted to seven per cent a year; and it would require a continuance of the same dividend for eleven years and a half more to make the annual dividend, from the establishment of the bank, equal to six per cent a year.

"If, however, the stockholders have been less benefitted by their investment than was anticipated, they may derive consolation for their diminished profits, in the general prosperity of the country at large, to which the operations of the bank have contributed.

"It is, indeed, the main design of presenting these details, to show the practicability of continuing these advantages without a sacrifice of the personal interests of the stockholders. The experiment, for such it undoubtedly was, of sustaining a large and sound and uniform currency, and of reducing the exchanges of the country to the most economical limits, has been fairly and fully made upon systematic principles. It has now for many years succeeded, and it may be presumed that the same efforts will continue to produce similar results. But in any event, the Board of Directors have the satisfaction of knowing that their exertions have thus far rendered the bank not unproductive of benefit to the country; and that if any unforeseen causes should hereafter prevent or diminish the beneficial operations of the institution, it shall not fail from any want of zealous devotion to the great interests which they have been appointed to administer."

The advantages of this system are felt by every man who can read and write: but we cannot properly appreciate them, without considering the origin of the post-office establishment in other countries, and its progress in our own. Nothing more clearly than the letter-mail marks the dif ference in the character of ancient and modern times.

Philip de Comines dates the establishment of regular posts in 1462, and ascribes their origin to Louis XI. of France. Other authors contend that they were in use in the reign of Charlemagne, and afterwards discontinued. Be this as it may, the posts established by Louis XI. were only for the use of the court: for the author of the life of the Duke d'Espernon says, that the packet or letter office was not set up in France in the year 1619.

As establishments for the use of government, posts are of a far more ancient date than the time of either Louis XI. or of Charlemagne. Herodotus ascribes their origin to Cyrus. Augustus introduced them among the Romans; and they are mentioned in the code of Theodosius. But they were employed only to forward the public dispatches, or to convey political intelligence.

It is surprising that they were not sooner used for the purposes of commerce and of private communication. It is, at most, but about 200 years since the public posts were made to afford any great facilities to individuals. In Camden's Annals, we read that Mr. Thomas Randolph, who was often employed by Queen Elizabeth in affairs relating to Scotland, was, in 1581, in the office of chief postmaster of England: but in what manner the office was instituted does not clearly appear. Charles I. certainly regarded it as a source of emolument: for in the nineteenth volume of the Fœdera, there is a grant to William Frizell, and