that at the time of the stoppage of Wiggin & Co., the plaintiffs had a large quantity of bills outstanding which required protection, besides the bills drawn by them for the defendant; and that under an agreement with Baring Brothers & Co., Forbes made remittances, at the same time and afterwards, at the high rate of premium then existing between the United States and England, without any special appropriation to particular bills. The Court were of opinion, that the amount of losses arising from the high rate of exchange, up to the time when the last payment was made by Baring Brothers & Co. on account of the Goddard bills, should be apportioned upon all the bills paid for Russell & Co. up to that time; and that the amount should be ascertained by the assessor. Upon the amount thus ascertained, the plaintiffs will be entitled to interest.

In regard to the claim for losses alleged by the plaintiffs to have been suffered by them in consequence of the withholding advances, by Baring Brothers & Co. on the goods consigned, they having retained them as security for their reimbursement, the Court were of opinion that they could not be sustained. They cannot claim a compensation for the loss of incidental benefits which they might have derived from the use of their money. They might have realised great benefits from the use of it, and on the other hand, they might have incurred ruinous losses.

The cause will be sent to an assessor, in accordance with the agreement of the parties, to ascertain the amount of the claim for the premiums of exchange, on the moneys which the plaintiff's were compelled to advance for the defendant, in consequence of his neglect to provide for the bills as they came to maturity.

COMMERCIAL CHRONICLE AND REVIEW.

STATE OF THE COMMERCIAL WORLD-EFFECTS OF SHORT CROPS IN EUROPE ON THE MARKETS AND ⚫ CONSUMPTION-EVILS OF UNSTABLE LEGISLATION-THE PROPOSED REDUCTION OF THE TARIFFTHE SUB-TREASURY AND THE CURRENCY-LEADING FEATURES OF 192 BANKS OF THE UNITED STATES-ARRIVAL OF FLOUR AT TIDE-WATER, AND VALUE IN NEW YORK, FROM APRIL TO NOVEMBER-FLOUR AND WHEAT ARRIVED AT TIDE-WATER, PER ERIE CANAL, FROM 1839 TO 1845-CIRCULATION OF FREE AND CHARTERED BANKS OF NEW YORK STATE-IMPORT OF GOODS INTO UNITED STATES UNDER THE OPERATION OF DIFFERENT TARIFFS-EXPORTS FOR LAST SIX YEARS-EFFECTS OF TARIFF AND CURRENCY ON TRADE-EXTENT OF THE SPECIE BASIS.

THE state of the commercial world presents an aggravation of all those features on which we touched at the date of our last number as growing out of the bad quality and quantity of the crops of Great Britain. A great deal of the panic which prevailed on this subject was, doubtless, the effect of political agitation; but, nevertheless, the wants of England will be large, and the sales on the part of the United States very considerable; yet, as we indicated in our last number, the prices of flour in New York have not been maintained at the highest points they reached under the excitement of the news. We somewhat elaborately in our last number entered into the causes, which, in our judgment, would modify the effect of the deficient harvest, in diminishing the consumption of cotton. The views we then held, are somewhat justified by a fall in breadstuffs. The whole of the commercial world, up to the harvest just ended in England, was in a high state of prosperity, and a daily improvement in the consumption of goods, the employments of the people, and the wages of industry, were accompanied by a more active employment for capital, and high profits to the owners. A deficiency in the English harvest is the sole interruption to that favorable state of affairs, and that deficiency is greatly exaggerated for political objects. That the crops of potatoes in Ireland are short, is true. It is also true that some 4,000,000 of souls will encounter great distress, but they are not of a class who have heretofore consumed many goods, and therefore a diminished consumption through their present distress cannot take

place. The remedies most likely to be applied by the government, are to admit coarse grains free of duty into Ireland, and as this measure of itself would afford but little relief to those not possessed with means wherewith to buy, it must be accompanied by large disbursements in employment of the people. This will probably be done in the construction of public works in the most distressed sections, which are precisely those which are in most need of the works; because, the distress is the consequence of the want of suitable communications with the markets. Out of present evils, will therefore arise much future good. It does not appear that the government will venture on the expedient of throwing open the ports of England free to the import of grain. The head of the government is no doubt anxious to modify the corn laws so far as by increasing the import to enhance the revenues derivable from grain; but the oligarchy, headed by a superannuated military man, are not yet prepared for such a concession to the people. Apart from this circumstance of the crops, the whole state of affairs is eminently prosperous. Money has indeed been advanced to 3 per cent per annum by the bank, but exchanges being in all quarters in favor of England, the money circulates in England, and is actively employed. But the disposition to loan may have been greatly checked by the panic in relation to the corn laws, and will be corrected as that panic subsides. The consumption of goods and raw produce is very large, and the masses are well employed at comparatively good wages. All these are indications of continued health, which point to a progressive large demand for American produce. It is to be observed that as the foreign markets for English goods continue healthy, and money is still cheap in the manufacturing districts, there is but little apprehension of those large exports of goods to the United States, for the purpose of realizing money, which formerly marked a period of distress. It is further to be observed that the great railway speculations, which had produced such alarm, have greatly subsided, and appear to be more imaginary than real. The state of commercial affairs, as far as the condition of the foreign markets is concerned, is eminently healthy; and, therefore, there is every prospect of an extensive and remunerative market for the products of this country. We are, however, about to experience the evils of unstable legislation. The reaction of the tariff of 1842 is now to be experienced, and the message of the President, as well as of the report of the Secretary, advise the reduction of the present tariff to a maximum rate of 20 per cent, with discriminations for revenue purposes only below that rate. It is also recommended to preserve the cash duties, and to establish a uniform system of warehousing. The importance of this latter regulation to the commerce of this country, we have fully discussed in a former number. Under the cash system, without warehousing privilege, the large carrying trade that formerly existed between the United States and the countries of South America, has nearly perished, and with it a large export of domestic goods to make up assorted cargoes has been lost. The establishment of a uniform and extensive system of warehouses, would eminently tend to provide at all times a plentiful supply of foreign goods, on which the duty would be payable only when needed for consumption. The importer of small capital would thus be freed from the burden of the payment of large cash dutics, and the outlay of a cash capital thus advanced to the government. A large assortment of foreign goods, at all times on hand, to make up assorted cargoes, without the ceremony and loss attending drawbacks, will be of vast service in extending our foreign trade, and the export of domestic produce and manufactured goods. In the mean time, the probable reduction of the tariff has a depressing effect upon the import trade, more especially in that the proposed abolition of the minimums and specific duties will make an immense change in the ad valorem rate of many chief articles of import, and consequently, the disposition to import more than is required for immediate wants is diminished.

The reduction of the tariff, as far as its influence upon the amount of imports is affected, will be counteracted to a very considerable extent, through the influence of the proposed

re-establishment of the sub-treasury plan of finance for the federal government. It is probable that the re-enactment of that law now, will, for a long series of years settle the vexed question of finances, and ensure, by its constant and universal action at least a currency very near a specie level. The sub-treasury law of the United States was passed and approved July 4, 1840. The presidential election took place and changed the character of the government, involving a repeal of the law Angust 13, 1841. It was consequently in operation one year and one month, and repealed without any substitute having been provided. The funds of the government have since been kept in various banks, subject to the order of the secretary of the treasury, who could change no depository without rendering a sufficient reason. The security given by the banks, has been mostly United States stock, or that of the states. This, under any circumstances, could be but a temporary arrangement. The money of the government thus reposing in bank vaults, without interest, has been the basis of extended loans, and has agitated the market to a considerable extent. The funds of the government being constantly liable to be removed, could with safety to the banks be employed only on stock loans subject to call. This was attended with all the inconveniences of growing speculation, and inflated prices whenever the revenues were large, and of panic and sudden fall whenever the wants of the government required the withdrawal of loans so made. The stock market being usually looked to as a kind of barometer of the financial atmosphere, served, under such artificial fluctuations, only to disturb the general quiet, and produce unfounded alarm, to the great injury of general business. The proposed operation of the sub-treasury plan of finance with the specie clause, is now productive of some disquiet among those who have been in the habit of ascribing all the revulsions of past years growing out of the explosions of overwrought credits, to the operation of specie "circulars" and clauses. There is doubtless some ground for uneasiness, not however, arising from what exists, but from what may be the case by the time that the specie clause of the sub-treasury, (if that law should be reenacted,) would come into operation. We may first recount the leading features of the law as passed July, 1840: It provides that new fire proof vaults be constructed in the new treasury building at Washington; these are to constitute the treasury of the United States. The mint at New Orleans and the mint at Philadelphia to be places of deposit. Also there shall be vaults for depositing money under the charge of receivers-general in the custom-houses of New York and Boston, and similar places to be erected at Charleston, S. C., and St. Louis, Mo.; also under the direction of receivers-general, who shall be nominated by the president, with the advice and consent of the senate, and hold office four years. These officers are to keep the money safely, without loaning or using, until they receive orders from the department to pay out or transfer; and all collectors and receivers shall pay over to the receiver, in their several districts, all the money in their possession once a week. The salaries of the receivers be as follows: Salary of receiver-general at New York,..

$4,000

2,500

2,500

2,500

500

1,000

$13,000

The Secretary of the Treasury may transfer the money from one depository to another, or to the United States treasury, at his direction. The money in the hands of any depository, shall, at all times, be subject to his draft, whether for transfer or disbursement. The public dues were to be collected as follows:

After 30th June, 1810, in specie, in notes of specie-paying banks.

1841,

66

The 23d section provides as follows:

"That it shall be the duty of the Secretary of the Treasury to issue and publish regulations to enforce the speedy presentation of all the government drafts for payment at the place where payable, and to prescribe the time, according to the different distances of the depositories from the seat of government, within which all drafts upon them respectively, shall be presented for payment; and in default of such presentation, to direct any other mode and place of payment which he may deem proper. But in all those regulations and directions, it shall be the duty of the Secretary of the Treasury to guard, as far as may be, against those drafts being used, or thrown into circulation as a paper currency or medium of exchange."

These were the main features, and the bill was repealed before its provisions in relation to specie came fully into operation, or that the sub-treasury vaults had been prepared for its service. It will be observed that the operation of the specie clause was made gradual in order to accustom the banks and the public to its effects. This part of the law, however, never went into operation, because the money was actually left in bank vaults, for want of the treasury vaults, and the law was repealed before the perfection of the machinery. It is now apprehended that the operation of that clause may produce a dearness of money, and involve a great fall in prices and values. This apprehension admits an inflation of prices now based upon the volume of the paper currency, a state of things which we do not think exists, inasmuch as that the banks' issues have been very limited until the past year, during which, they have, it is true, greatly swollen, but have not yet inAuenced a speculative rise in prices dependant upon the continuance of that inflation. We will take the following table of the returns of 192 banks, to November, 1845, as compared with November, 1844:

LEADING FEATURES OF 192 BANKS OF THE UNITED STATES.

The expansion here is considerable and general, but it is observable that the specie on hand, to the gross circulation, is but as 1 to 1, and is scarcely more than 1 to 14 net; that is, deducting notes on hand; consequently, if all the notes were called in, and the specie paid out, the change in the volume of the circulation, as affected by these banks,

would be now small. The expansion is, however, in very rapid progression. In Ohio, particularly, 21 new banks are in operation under the law passed at the last session, and several more are in progress of organization. The issues of these banks will have a powerful effect upon the state of business, and the level of prices. It is very evident, therefore, that when that inflation has taken place, that the operation of the specie clause will produce a revulsion. The increase of the circulation of the New York banks has been caused rather by the rise of produce, consequent upon the foreign demand, than that it has caused that advance; but it has, no doubt, materially assisted the high price of flour, and has prevented exportation, involving a subsequent fall in price. The progress of the circulation has been as follows:

44

State,

$18,091,324 $20,152,219 18,464,409 $21,625,239

The greatest increase has been in the country chartered banks: that is to say, from August to November, the aggregate increase was $3,160,830; of this the country chartered banks were $2,349,382, leaving but $800,000, for all the other banks. This increase has been almost altogether on the part of the banks in the flour districts. This movement in the flour market was the result of the accounts which reached here of the great scarcity in England. The following table of the monthly receipts of flour and wheat to tide-water, expressed in bbls. of flour, with the price, in New York city, on the first Wednesday in each month, and the value of the receipts for each month, at that price, will indicate the powerful influence which the foreign news exerted:

ARRIVAL OF FLOUR AND WHEAT AT Tide-water, and VALUE IN NEW YORK, MONTHLY, EXPRESSED IN BARRELS OF FLOUR.

The lowest point of flour was in July. The low prices which had (then ruled) operated to prevent flour from coming freely forward; this short supply, reacted upon prices, causing them to rise. When the advance was accelerated by the foreign news, flour and wheat came forward in an abundance never before equalled. This was held at $7 a $7 25-too high to export, and, as the receipts accumulated without a corresponding vent, the rates again fell. The monthly receipts of flour, at tide-water, for several years, with the aggregate receipts of wheat, were as follows: