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cussion, nevertheless, gave much annoyance to the Bank of France, and injured the interests of credit by doubting for a moment the sound principles by which that establishment is guided. This incident is now ended. The Bank of Savoy summoned Mr. EMILE PEREIRE to fulfil his engagements; but as he did not do that, the shareholders are in treaty with the Bank of France for the purchase of their privilege. If we are correctly informed, the bank will give 4.000,000 ($800,000) to the shareholders of the Bank of Savoy. This will confirm the privileges of the French Bank in relation to the issue of circulating notes. It is to be remarked, however, that some of the provincial Banks are issuing interest-bearing notes. The Credit Agricole, of Paris, issue notes bearing $3.65c part interest, or one per cent per day. These notes are made payable at five days sight; because to make them payable at sight would infringe the privilege of the Bank of France. The multiplicity of joint stock companies in France seems to be almost as rapid as in England.

A company with a capital of 12,000,000f, in 500f shares, lately took in hind the shipbuilding yards of M. ARMAN, at Bordeaux and Ajaccio, and the enginebuilding establishment of M. MAZALINE, at Havre. This week the announcement is made that M. CEZARD, a well known sugar refiner of Nantes, is forming a company, with a capital of 5,500,000f, in 11,000 shares of 500f, for the purpose of taking off his hands his two refineries at Nantes. These refineries are among the largest in that country, and turn out about 36,000 tons of refined sugar annually. They are to be taken by the company, with all their materiel, and the good-will of the business, for 2.700,000f, though they are declared to be worth more. M. CEZARD is to hold shares in the company to the amount of 1,200,000f. Its name is to be Raffineries Nantaises.

A company headed by M. MICHEL CHEVALIER, bearing the name of Societe Immobilier de Limoges, has been formed, for the purpose of building houses and selling building ground in that town. Its capital has been fixed at 1,250,000f, in 1,500 shares, and it is now soliciting subscriptions to the shares.

The Austrian credit Foncier has been a great suceess thus far, and now that peace is once more restored, the expansive movement may be considered as having a new impulse. The cloud in the future is, however, the possibility of sudden peace in the United States. Not that there is not a great deal of suffering occasioned by the war, but a peace which suddenly throws open the Southern ports, with their supplies of produce at prices now five or six times above peace prices, would produce such a financial revulsion as might prove very disasterous. The Bank of France returns are as follows:

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The rate of interest in France is, as a general thing, maintained much more regular, and at lower rates, than in Euglaud. The Bank is, however, not exposed to the same number and strength of demands as that of London, and its reserve of specie is relatively larger.

THE

MERCHANTS' MAGAZINE

AND

COMMERCIAL REVIEW.

CONTENTS OF No. IV., VOL. LI.

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IL THE COMMERCIAL PROGRESS AND RESOURCES OF CENTRAL BRITISH
AMERICA. BY HENRY YOULE HIND, M.A., F.R.G.S......

183

IIL THE SANDWICH ISLANDS. No. III.-HAWAII AND MAUI. By H. B. A........ 193 IV. FINANCES OF THE STATES. NEW JERSEY-CALIFORNIA... 200

V. COMMERCIAL LAW No. 14. THE CARRIAGE OF GOODS AND PASSENGERS... 207 The liability of the Common Carrier....

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A Notice by the Carrier respeeting his liability.

The Carrier's liability for Goods carried by Passengers..

VL. THE NEW INTERNAL REVENUE LAW......

207

210

210

219

215

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Gold Interest due November 1, and before that time, to be paid at once, and amount of

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THE

MERCHANTS' MAGAZINE

AND

COMMERCIAL REVIEW.

OCTOBER, 1864.

THE NATIONAL DEBT AND NATIONAL RESOURCES.

THE payment of the National debt, which has now become so large, and which is growing with such rapidity, is a subject of absorbing interest to every one, and it is high time that the true principles of taxation, and the real resources of the nation, out of which it must be paid, should be clearly understood. During the first years of the war it was deemed patriotism to shut one's eyes to the expense of it, and so hold out the idea that the national resources were inexhaustable. Hence any one bold enough to raise his voice against the financial policy pursued was considered disloyal, and debt, quadrupled by reason of paper money, was pushed to the utmost limit. Now, however, the country is beginning to see that patriotism consists, rather in battling this wasteful system, than in abetting such measures as must exhaust the national resources before the object of the war can be obtained. Yet the idea is still diligently inculcated by many, and believed by some, that the national means are exhaustless, and that the success of the war cannot be endangered by any measure of extravagance and waste. Believing this error to be a dangerous, yes a fatal one-that it would soon bring us to bankruptcy and repudiation-we have done what we could, from time to time, to expose it, and show the necessity of a speedy return to a sound basis. Yet the Government paper issues are continued, and our debt is being multiplied by reason of them in a fearful ratio, and this is permitted by the country just because writers are found to flatter the people with the idea of our inexhaustible resources.

This idea, too, is encouraged by the further one that a few weeks will bring us peace and union again. Would to God that it might be so! but to manage our finances on the supposition that it will be, is, in the light of the past three and a-half years, wild in the extreme. Yet these twin errors-that the wealth of the country is inexhaustible, and that peace will very soon be declared-are deceptions that are helping one another, and if persisted in, and allowed to continue to give shape to our financial policy, can bring nothing but disaster.

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Let us, then, for a few moments, look at this question of payment of our national debt, and see out of what it must be paid, if at all. And in doing this we may repeat some things said in our article of last month, in reply to the correspondent of the Times: but the subject is one of so much importance-involving really our national honor and such incorrect notions are being disseminated by those who should know better, that we deem it a sacred duty to the country to expose the fallacies of the day.

The first great governing truth, then, we should remember, is that the national debt must be paid out of the national income; and the second is that our national income consists in the amount produced by the individuals composing the nation, less the amount consumed by them. Hence, therefore, the ability to pay can be increased only by increasing the amount produced, or decreasing the amount consumed. These propositions appear so plain and self-evident that one would think none could be found to doubt them. Yet superficial thinkers, instead of enquiring into the yearly income of the nation, to see what we as a people can pay, appeal to vague estimates of the prospective value of mines and other property, and start new theories, with the expectation of obtaining two golden eggs where there was but one before. One writer will thus point to our mineral resources, and say, with apparent sincerity, is there not within the very earth itself, many times the gold to pay our debt with! Surely there is; and the simple-minded man might also have added that the earth contained a greater source of wealth than even its gold-the richness enabling it to afford nourishment necessary for innumerable bushels of wheat and corn and oats. But can we sell those crops before we have raised them, or can we pay out the gold before it is mined? Furthermore, Lave we not been producing both gold and crops, heretofore, as fast as we could, with the capital and labor we possessed? Remember, too, that this same gold and richness was there when the Continental dollar was valueless; and for the same reason, the fact of their being such wealth in the earth now, will never add a cent towards the security of our debt, if the annual payments of interest, &c., more than equal the amount of our national savings from these and other sources. The mines are only of value to the nation for the amount of wealth they annually produce, over and above the expense of production.

Other writers take the money value of all the property in the country as evidence of ability to pay, and the unthinking public are caught by such a display. Thus we are informed that although the debt is $2,000,000,000, and may possibly be $4,000,000,000 before the war is terminated, yet the wealth of the country is $16,159,000,000-meaning the census value attached in 1860 to all the land, slaves, utensils, buildings, ships, machinery, waterfalls, factories, railroads, public debt, incorporate capital, &c., in the whole country. A Mr. WELLS has recently published a pamphlet called "Our Burden and our Strength," in which he assumes that this nominal wealth is a means of paying the debt. Yet there never was a conclusion more unsound. For instauce, a little reflection will show any person that 4,000,000 black slaves, whose money value is, by the census, $2,160,000,000 of the above aggregate, can in no manner be applied to the payment of the public debt, except by the wealth they may annually produce after paying out of it the cost of their support,

the expense of the plantation, &c. In some years there is no surplus, and the planter's capital is diminished; while in others there is much. But for Mr. WELLS, or anyone else, to parade the nominal money value of these blacks (one-eighth of the whole aggregate value) as a resource for the payment of the debt now being contracted, is too much, we should fancy, for the credulity of anyone.*

And if this is the case with the blacks, is it in any way different with regard to the value of the lands they cultivate, which lands are also estimated at $4,000,000,000, in this grand aggregate from the census of $16,159,000,000? Clearly not. The only value of those lands consists in the annual production which the black labor draws from them. That value, in 1860, was, per census: Naval stores, $3,695,474; rice, $2,207,148; tobacco, $21,074,038; sugar, 31,455,241; cotton, $204,128,493: making a total production of $262,560,394, by 4,000,000 slaves, or $65 64 per head. But it costs $75 per annum to support the hand, and this, therefore, gives a loss of $10, which is made up by other productions, such as food, &c. In some years there is, no doubt, a surplus. But this is first applicable (unless the plantation is to decrease in value each year) to the improvement of land, the construction of fences and houses and roads, and to the increase of machines, implements, furniture, &c.; and then the remaining balance is the fund out of which the payment of town, county, state and federal taxes must be made. At the North the value of land has also acquired great proportions (and is so put down in the census estimate), because the labor of settlers, by the aid of machinery, has drawn from it a very large annual supply of produce; and out of the surplus, after the support of the family, the repairs of fences and buildings, their extension, &c., have been defrayed. The nominal value of the land, from which the produce has been drawn, is no more applicable to the payment of the present debt, than it was to the expenses of the revolutionary war. In this country almost within the memory of some of its inhabitants, the land (now thickly settled) has been a wilderness, but has gradually been reclaimed from the domination of the savages by the patient industry of poor emigrants. Most of these have gone on to land, which they cleared and planted, suffering every privation until the first crops were grown, and Indian corn has been the main dependence of them all. It grew early and easily, and at once gave food to man and beast. The

* This same Mr. WELLS, for the purpose of showing how little a burden the debt is, calls the amount of it $1,750,000,000, and then says, it is only equivalent to $72 92 for each person. In other words, every family in the land (counting five to each family) owed, through the general government, $364 60 when the debt was only $1,750,000,000, and, on the first of January, will owe about $600. This at six per cent would make $36 interest for each family to pay each year; and if we add to this the probable peace expenses of the government (which we have shown would be as much more), it would make $72 as the annual payment of each family to the United States Government if the war was closed the first of January! Now, let Mr. WELLS do one more sum-let him tell us how many families there are in the country able to pay $72 a year taxes—and if he does it correctly, he will find that he has made the most discouraging and startling estimate of our burden and our strength" any of us have seen.

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