latter cheaper, and consequently, the difficulty of liquidating the internal debt is increased, and a revulsion ensues as an inevitable consequence. The individual who purchased an article of property on a credit at the price of one hundred dollars, must now sell it at fifty dollars, and if he happens to owe half the amount that his property was worth in money, a few months before, and he cannot obtain indulgence until the storm passes, he is ruined. Such consequences could scarcely happen in a community that is not indebted to distant countriesfor in such case, if a portion of the community contract debts beyond their ability to pay promptly, yet, as the quantity of money remains the same, there is still a probability of selling their property at the value which it bore when the debts were created; and unless the debtor had been guilty of great folly or extravagance, he would be able to extricate himself and escape from absolute ruin. Hence, we are persuaded that by diminishing our foreign commerce, and producing all the appliances of comfort at home, we shall escape most of the evils incident to an extensive and liberal credit system.

Commerce cannot be carried on extensively at a great distance without the use of credit in some form or other, unless we return to the primitive system of barter; for if, in all cases, money was sent from one country to another to be exchanged for other commodities, it would be kept constantly in transitu, and become an article of commerce merely, instead of a circulating medium. By the use of credit in its various forms, very little money enters into foreign commerce, except for the purpose of liquidating balances that arise from over-trading-from failure of crops, depression of prices, or other causes of like nature; but some one or other of these accidents occur with sufficient frequency to give rise to a rapid succession of revulsions. For, as soon as the country has recovered from the effects of one, and begins to prosper, it is again flooded with foreign commodities exceeding in amount the ordinary means of paying for them.

Under ordinary circumstances, very little money enters into the commerce between foreign countries. Nor are the exchanges made by the barter of specific articles, but principally through the agency of credit, based upon the commodities to be exchanged. A merchant in New York purchases goods in Liverpool on credit, the shipper of American produce draws a bill upon his factor in Liverpool, and the New York merchant purchases the bill and remits it to Liverpool to pay for his goods, and thus the money remains at home to perform its proper functions in the internal trade of the respective countries. This looks well in theory and is doubtless the only system upon which foreign commerce can be extensively carried on. But in practice it is subject to many contingencies that are calculated to disturb the relative value of money and property. If, for instance, a large. portion of the exports of the United States should consist of wheat; and if, by reason of an unusually large crop in Great Britain and the north of Europe, the demand for wheat should cease, an exigency would arise requiring the shipment of money to pay the balances due for British manufactures. This raises the price

of money in the United States-the drain commences in New York and other eastern cities—the banks contract their discounts to the merchant-money becomes scarce, and the price of produce depressed—the eastern merchant calls upon the merchant in the west for remittances, and the latter pressing upon his customers the consumers-the drain of specie is established throughout the entire country, and the revulsion becomes complete. Its force and effect will, of course, be in proportion to the amount of specie required to supply the foreign demand. But, although the revulsion may not be so considerable as to ruin a great number of individuals, yet, whatever materially disturbs the relative value of money and property, is an evil-for it is calculated to disappoint the laborer in his just expectations, and while it discourages many from embarking in branches of industry calculated to improve the resources of the country, it excites a spirit of speculation in those who imagine that they possess sufficient foresight to turn the evervarying and fluctuating prices of property to their own advantage. And finally, these revulsions seriously retard the progressive improvement of the physical and moral condition of society.

We have shown that under ordinary circumstances, the extension of credit does not materially affect the relative value of money and property. An exception to this proposition, however, is found in the case of banks of discount and circulation. Bank bills, circulating as money, and exchangeable at all times for the precious metals, increases the volume of circulation, and consequently raises the price of other commodities. If wisely managed, banks are capable of giving permanency to prices, by breaking the force of the revulsions which arise from the contingencies of foreign commerce; for as long as they possess the confidence of the bill holders, the specie which is drawn from their vaults is but little felt by the community. But it generally happens that either for the want of wisdom in the management of banks, or owing to speculative views on the part of those who control them, instead of giving permanency to the value of money, and sustaining the community against the shocks of revulsions, they are themselves the cause of frequent fluctuations in the value of money and property, and in struggling to sustain themselves, increase the disasters of the community.

Banks of issue tend to cheapen money, and if skilfully directed and thoroughly established in the confidence of all who may in any way be interested in their solvency, they afford to the country in which they are located decided advantages over those wherein no banks exist, provided there should be an extensive commercial intercourse between them. For, besides the advantages of cheap money which we endeavored to illustrate in the first part of this article, they possess the power of raising and depressing prices at pleasure. The Bank of England, for instance, by raising the rate of interest or curtailing her discounts, can put down the price of our produce at pleasure. This she has frequently done in regard to the price of cotton; and by a simple resolution contained in a few lines, See page 291-2.

deprived this country of many millions of dollars which we should otherwise have received in return for that article. It was this power that rendered the bank of the United States so odious to the people of this country. Yet, notwithstanding the sacrifices which were made in putting it down, we are continually striving to place ourselves more and more under the influence of the Bank of England by extending our commerce with Great Britain.

Thus we have endeavored, through a series of numbers, to examine the principles which govern our foreign commerce, and to point out the many disadvantages to which we are subjected by reason of making our exchanges at so great a distance from home. And in the conclusion of the subject we propose to recapitulate the leading propositions, for the purpose of bringing the whole argument to the mind of the reader at one view. The following are the leading points which we have aimed to establish:

1st. That the great number of persons employed in effecting the exchange of commodities at so great a distance, reduces the number of producers, and increases the burthen, while it diminishes the profits of labor; and is, consequently, detri mental to both the moral and mental improvement of the industrial classes.

2d. That in addition to the enormous expenses incident to the transportation of the raw material to the manufacturer, and the cost of returning it in the form of manufactured articles for consumption, its exportation tends to impoverish the soil, and to reduce the country to a state of sterility.

31. That money continually tends to accumulate at the centre of every commercial system, and by reason of its abundance and cheapness at that point, gives to those residing there an important advantage over those who reside at a great distance from it.

4th. That the physical geography and climate of a country, considered with reference to its relation to other parts of the globe, indicate the proper limits of its commercial system.

5th. That in accordance with the natural laws of commerce, its principal current should move from north to south, and not from cast to west; and hence, the propriety and importance of establishing a separate and distinct commercial system in the Mississippi Valley.

6th. That foreign commerce increases the hazard to which credit is ever more or less liable.

7th. That banks add to the advantages which those residing at or near the great commercial emporiums otherwise possess; and finally, that the profits of labor in the United States, and the price of American produce, are controlled by the Bank of England, through the medium of our commerce with that country.

Our arguments upon these topics are especially designed for the agricultural classes, for it is upon them almost exclusively that the burthen, and ruinous consequences incident to foreign commerce, fall. The merchant, the carrier, and the manufacturer naturally feel but little interest in the subject, nor do they seem to

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ARTIFICIAL AGENTS OF EXCHANGE."

consider that a great distance between the consumer and producer is of any material disadvantage to them.

Considering agriculture as the foundation of all other pursuits, we placed it first in our list of subjects; still, practical agriculture has occupied but a very small space in our Journal. In considering the agricultural interest of the west, we felt but little encouragement to aid in the increase of its products-for the enlargement of the volume would only serve to lower the price until western produce would cease to pay transportation to market. This is a consequence understood by almost every farmer; and hence, instead of endeavoring to instruct the agriculturalist in his practical operations, we have aimed, mainly, to expose the disadvantages under which he labours by reason of his remoteness from market. Irrespective of political opinions, and without reference to any authority upon the subject of political economy, we have sought to establish our reasoning upon the principles of natural and social economy. We are fully aware of the difficulty of removing prejudices from the human mind. We know that many individuals are shackled by political opinions, and dare not give free scope to reason, lest light should shine upon their minds, and convince them of error. Still, we are inspired with a hope that our labors will occasionally fall into the hands of individuals who, like ourselves, are in search of truth, and who sincerely desire the advancement of the physical, social and moral condition of this great Valley. Such, we are assured, will give to our views a fair and patient investigation. Should they do so, and should they also coincide with us in opinion, then we hold that they are bound, as lovers of their country and their species, to join us as co-laborers. It is not sufficient that they simply approve; it is their duty to stand forth as advocates, and laying their own hands to the work, let them persevere until the rewards of western labor shall be commensurate with the unrivalled fertility of the soil, and other advantages which a benevolent Creator has bestowed upon this, the most favored region of the earth.

But we have been told that this is an agricultural country, and that the natural and legitimate pursuit of its inhabitants is farming. This is true, but it does not follow as a necessary consequence that we should neglect our mines and permit the boundless source of power which lies dormant in our vast coal fields to remain unemployed; or that we should not create a home market for our agricultural products, by diversifying labor. Again, we are told that men are not capable of performing as much labor in the west as in the east. If this should be true, still it is no argument why lobor should not be diversified here, as well as elsewhere. But we believe that it will be found, upon inquiry, that operatives in the manufacturing establishments of the west, work as many hours in the day, and perform as much labor here as in the east. We mention this for the purpose of eliciting from those who are engaged in manufacturing in the west, their opinion upon this subject, and we respectfully invite them to furnish us with the result of their experience and observations in regard to the physical capacity of operatives

in this country. And we furthermore invite every friend to the interest of the west, to afford us such facts in relation to the economy of manufacturing in this region, as they may possess. We feel no apprehension that either capital, skill or labor will be wanting, if we can show to the satisfaction of men that any given article of manufacture can be produced as cheap here, as in New England, for, this fact being established, it will require no argument to convince the most obtuse intellect that the manufacturer here possesses an advantage over him of the east, to the extent of the freight and charges, and this, of itself, would be as large a profit on most articles, as a reasonable individual could desire.

ART. II-A RAIL ROAD FROM THE ATLANTIC TO THE PACIFIC. WHERE SHALL THE RAIL ROAD BEGIN ON THE ATLANTIC, AND WHERE SHALL IT END ON THE PACIFIC?

THE large addition recently made to our territory bordering on the Pacific, renders it highly important that our government should adopt and carry into effect some efficient mode of facilitating both commercial and social intercourse between its citizens dwelling on the shores of the two great oceans that bound the Republic on the east and west. The project of a railway to the Pacific, which a short time ago appeared so like the offspring of a disordered imagination, has already become a work of national necessity-for, in our opinion, there is scarcely a probability that we can retain our dominion west of the Rocky Mountains when that country becomes strong in population, unless we establish some mode of intercourse that will cherish a lively sympathy between the people of the cast and the west.

The following communication from Lieutenant MAURY to the Honorable J. C. CALHOUN, upon the subject of a rail road to the Pacific, contains many facts which se think will be found interesting to our readers. We extract from the Merchants' Magazine:

NATIONAL OBSERVATORY, March 29, 1848.

DEAR SIR-I have the pleasure of sending you, as you requested I would do, a chart showing the relative distances to Monterey and the Columbia river from some of the principal points on the Atlantic coast. I have added such other information as, in my judgment, is calculated to throw light on the interesting subject, as to the best route across the country for reaching, by rail road, the Pacific coast of the United States.

I am clearly of the opinion that a rail road, through the heart of the country to the most convenient point of our Pacific coast, is greatly more in accordance with the true interests of the United States, than any route by canal or rail road that