COMMERCIATL HRELE A NI TED TIONS STATES OF ENGLAND WITH
U.
Tee debt owing by the United States of America to the mer- chants, manufacturers, and capitalists of Great Britain, is im- mense. There are no data which can be relied upon to show its exact amount: but a document published last month in America, and received during the present week from New York, helps us to form some notion of it. We allude to a letter from Mr. NICHOLAS BIDDLE, President of the Bank of the United States, 40 Mr. JOHN QUINCY ADAMS. It may be as well here to refresh the memory of our readers with some particulars of the financial history of Mr. BIDDLE, whose name has become as familiar in England now as that of ABRAM NEWLAND was about half a century wince. In 1818-19, the Bank of the United States, in consequence of bad management, and fraud on the part of some of its directors, especially of those who had the charge of the important branch at Baltimore, (where the firm of SAMUEL SMITH and Bouts:ems will be long remembered in connexion with the bank,) was much embarrassed. Mr. LANGDON CHEVES, who had distinguished himself as a financier, and to whom it was principally due that the goods shipped from England (on the faith of the repeal of the Orders in Council) just before the commencement of the last war were not confiscated, was unanimously selected as the fit person to restore the prosperity of the sinking concern. CHEVES went resolutely—even cruelly—to work. He stopped loans and divi- dends; lie dismissed inefficient officers ; be abolished unprofitable branches ; he compromised bad debts. The result of his opera- tions was the acquisition of the prime material of successful bank- ing—public confidence. Having accomplished his mission, Mr. CHIVES resigned. His successor was NICHOLAS BIDDLE; whose instructions and whose duty led him to pursue the system laid down by his predecessor. For the last nineteen years Mr. BIDDLE has been President of the Bank of the United States. That he has, on the whole, conducted the affairs of that institution, the supreme control of which he speedily acquired and has constantly kept, with extraordinary ability and vigour, few will deny. The owners of the stock will be among the first to acknow- ledge his talent ; and their interest in the wise management of the concern is represented in England by no less a sum than three millions sterling. In his arduous conflict with that brave and honest, but in commerce and finance prejudiced o'd man, General JACKSON, BIDDLE was victorious. For the up- shot is simply this—that the stock belonging to the United States, amounting to seven millions of dollars, the repayment of which JACKSON required, is still held by BIDDLE; and that, with a charter granted by the separate State of Pennsylvania, he is actually carrying on a business of unprecedented amount and im- portance, with spirit and success. He defied JACKSON—and overcame him : he is now engaged in a contest with VAN B UREN- and assuredly has thus far riot been worsted. The deliberate statements of such a man, respecting the com- mercial and financial relations of England with the United States, are well worthy of attention. And, to recur to the important point of the amount of American debt to England, we find that Mr. BIDDLE claims credit for having facilitated the shipping of crops worth " fifteen or twenty millions of dollars "—say four millions of pounds sterling—towards the discharge of the American obligations. Nevertherless, the debt is only in process of payment.
" They (the people in the Southern and Western States) are straining every nerve to pay their debts. Their crops are going forward to provide funds in Europe and at the North ; the Banks are labouring to meet their notes at the Forth; the Legislatures are pledging their credit to raise funds in order that their people may pay their debts. Why should we repulse them? All they mat is time. They have not yet had the benefit of a single crop, and they may require another; and, instead of discrediting them, or diminishing the value of their produce, or curtailing their facilities in sending their crops to market, it is better to help them, and wait till they are more advanced in their preparations. The employment of credit, either of banks or of individuals, most useful to the country at this moment, is to forward its produce to Europe.'.
Thus, although four millions sterling have been transmitted in the Shape of produce to this country, it is thought doubtful whether two crops may not yet be required to pay the demand of England on the United States. To those who have not much studied the subject, this fact—that, after paying four millions sterling, the value of two crops is yet wanted to sponge off the debt—must convey an idea of its original magnitude.
The vast amount of the debt having been—not ascertained, but reasonably conjectured, the next question is, how can it be dis- charged? And here it is but fair to remark, that the conduct of the American people, since the commencement of the commercial ditli- 'euhies, has been highly honourable. Against the American houses in England we have heard no reproach, except that of having sinned, with similar establishments in this country, in going too far. Against that sin let us place the example and the temptation which our own modes of dealing with the currency presented. But there has been, w ith no noticeable exceptions, a general determination and exertion in America to pay debts. It seems to be undeniable that the Bank of the United States has done much towards aiding 'the operation. Mr. BIDDLE has stepped beyond the bounds of legitimate banking ; he has not only purchased bills, but has actu- ally shipped cotton to a Mr. BIDDLE junior, in Liverpool. The operation, however, as explained by Mr. BIDDLE'S friends, is not a speculation in the ordinary use of the word. The cotton is merely a collateral security for bills of exchange sold to the American merchants. The recent commercial disasters have destroyed the credit of most of the houses who were wont to draw on their English correspondents ; and the Bank of the United States, in their place, has given the requisite facilities, drawing on its own consignee. In this view, the transactions are safe, as well as useful, if the amount of the advances is not larger than the worth of the produce justifies. The result has been, the forwarding of a large amount of a valuable commodity in discharge of the debt to English merchants and manufacturers; most unquestionably. avery irregular banking transaction; of which the British cre- ditors have about as much right to complain as the patient, who was enraged at being saved from suffocation by a physician's lan- cet—it would have been so much more delicate to have been bled by a surgeon. Were it not for the suspension of specie payments in the United States, Mr. BIDDLE would not be able to afford such extraordinary aid in forwarding produce to England : and herein lies the imme- diate interest of this country in putting off the resumption of cash payments by the Bank. On this point. hear the American finan- cier, endeavouring to prove that the intention of the New York Banks to resume specie payments during the present month is injudicious- " There prevails a notion that the credit of the country abroad will be in- jured by not resuming. Not in the least. Every Italy connected with Ame- rica knew the reasons of suspending, and entirely approved of it as the only measure that could have saved the country. What Europeans want now is, that we should pay our debt. That is our first duty ; and if they see, u they cannot fail to see, that these premature efforts to resume specie payments pre- vent the collection of what is due to them, they will perceive, that in endea- vouring to secure an object wholly domestic, they have been sacrificed. In re- spect to the dividends and the stock, payable abroad, many of them are payable in pounds sterling, or guilders, or franca, so that we place the money there at our own cost ; and as to dividends payable here, they have almost universally been remitted in the equivalents to specie. What the general merchants of France and England desire, is that we should take their merchandise—that we should trade with them. The state of our currency is a very subordinate con- cern. You deal with them, and pay them in their own currency. They know little and care less about the sort of currency in which you deal with the South and West."
Very true, Mr. BIDDLE. All that we do require, in the first in- stance, is that your countrymen should pay their debts; and it is ridiculous to complain of the payment because it is made through a channel not perfectly legitimate—because in the place of bills drawn by GOODHUE and Co. on BARING% there are others drawn by Mr. N. BIDDLE on Mr. JAUDON. Look to your own internal exchanges—only send money to England, or money's worth.
But it is erroneous to maintain that we have no interest in the manner in which it is attempted to discharge the debt due from America to England. The chief American commodity for export is raw cotton; our chief export is cotton manufactured; and if the remittance of the raw material is made in such a manner and on such terms as to cripple the importers of the United States hereafter, then it may become a question, how far the British cre- ditors have been benefited by the assistance of Mr. BIDDLE.
It is the interest of the British trading community that the existing debt shall be settled on such terms as to preserve a valu- able, a necessary body of customers, from ruin. Future orders as well as present payments must be considered. If the facili- ties now granted to the American merchants are only on terms which it will be ruinous to fulfil—if loans are now made in a way which resembles the accommodation granted by usurers to spend- thrifts—which is the case if' bank-notes, worth nominally 100 cents, but really only 73 cents, are to be repaid in specie or bank- notes worth actually 100 cents,—then it is a fraud to pretend that the vast operations of the United States Bank are beneficial : they are simply the means of carrying large immediate profits to tl.e credit of that establishment, at the expense, probably, of eventual injury to all the parties concerned. Now, the money advanced to the American shippers by the Bank of the United States, is in a depreciated currency : it must be repaid, sooner or la•er, in a currency enhanced in value. The " screw" will be put on : it has been partially applied in New York ; and hence slackness of payments and of orders from that quarter. Hear Mr. BIDDLE- "It appears by the published statements of the Banks of the city of New York, that since the suspension, to 1st :March 1S38, they have reduced their loans and discounts from forty-six millions to thirty millions, and their circula- tion from nine millions to two millions—an aggregate diminution from fifty-five millions to thirty.three millions. If this, or any thing near this, be the reduc- tion, what is the coneequence? A man who contracted a debt to the Banks in New York before the suspension, finds his ability to provide means for the pay- ment of that debt reduced one-third or nearly one-half,—that is to say, the dollar he now pays is equivalent to one and a half or almost two dollars when he borrowed it, besides the interest. Such a process of reduction would have been wholly intolerable it' the citizens had not escaped from it, and sought alleviation by loans elsewhere. But if the other cities had followed the example of New York, and made similar reductions, the whole country would have sunk under it, or revolted against it " But have not the New York merchants already undergone only that which all debtors must suffer ? How does Mr. BIDDLE, who contemplates the not distant resumption of cash payments uni- versally, propose to free the debtor from the difficulty of having to pay more than lie received?—fur this is the dilemma of those who pay in enhanced currency the obligations contracted when the currency was depreciated. Mr. BIDDLE says that the opera- tion shall be very gradual.
" After the suspension, the true course of this country was to begin a gentle and gradual diminution of loans sufficient to prevent the beside of expansion while the restraints of specie payments were removed, ant to prepare for the re.
gumption, but with no rash competition as to the amount which the several banks could enetail—to make no violent changes in the standard of value, and give time fon a settlement with foreigners, and among ourselves, on the same or nearly themes. basis ape which these mutual eugsgsmeos were eaatracted-•
letting the crops go to their destined markets without depreciating their prices. After this, the resumption, with the aid of Congress, would have been easy and spontaneous. it was in this spirit that the Bank of the United States has not diminished ten per cent. of its loans, while it added about three millions to its specie, and will have given the necessary facilities for shipping the crops of the South and West to the amount of probably fifteen or twenty millions of dollars ; placing its own confidential agent in England to protect the great and pecuni- ary interests of the country. This seemed to be its proper function."
This has a very pleasant and soothing sound; but Mr. BIDDLE will not fix any time at which the resumption of cash payments will be practicable and prudent ; and in the mean while, it may be doubted whether he has the power, supposing that he has the desire, to prevent such a depreciation of the currency as will render the resumption of cash payments formidable to all and ruinous to multitudes. Here, however, it becomes Englishmen to speak with humble modesty, bearing in mind the evils occa- sioned by fluctuations in their own mismanaged currency, to which in no slight degree the extent of the American embarrassments may be traced.
The event alone can determine, whether the assistance rendered by the Bank of the United States to the American merchants only staves off an evil day, or enables them to weather the storm. Mainly on the decision of this question also rests the value of the shares of that institution. If we were to hazard a prophecy,--re. garding the talent with which the Bank has been hitherto conducted—having also a good opinion of American industry, honesty, and ability to pay—we should be inclined to say, despite of uncertainty and darkness in which the future is enveloped, that even this crisis will pass without any violent shock. There is, there will be, more than "inconvenience," Mr. SPRING RICE : there will be heavy loss and extensive distress. But there is a vista on which the light shines in the long path of dreary embar- rassment. On the talent, vigour, and integrity of the Americans, and on the incalculable resources of their country, there is reason- able ground of reliance.
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