The Journal of Banking
by William M. Gouge,

Vol. I., No. 1,
Philadelphia, Wednesday, July 7, 1841.


This Journal Will Contain,

1st. A new edition of "A Short History of Paper Money and Banking in the United States," by Wm. M. Gouge, with corrections and additions, bringing the narrative down to the present time.

2d. Essays on Banking, Currency, Exchanges and kindred topics, in which efforts will be made to place these subjects in the clearest light possible.

3d. A semi-monthly review of the times, embracing the most important events, especially those which relate to the money and produce markets, and which affect the general operations of business.

4th. Such miscellaneous matter as will, while it will add to the interests of the work, subserve its main object, which is that of showing the true character of our paper money and banking system, and the effect it has on the morals and happiness of different classes of the community.

This Journal will be especially intended for Farmers and Mechanics, but it is hoped it will not prove unuseful to Merchants and other productive members of society.

It will be published once every two weeks.  Each number will contain sixteen pages octavo, double column, with the leaves stitched and cut, thus uniting the advantages of the open sheet with a form convenient for binding.

The paper will be fair, and the type good.  The price will be,
For one copy, one dollar and fifty cents a year.
For four copies, five dollars, or one dollar and twenty-five cents each.
For ten copies, ten dollars, or ore dollar each.

In all cases, subscriptions must be paid in advance.

To the Reader.

A periodical of this kind can obtain general circulation, only through the assistance of those who are friendly to the objects it is designed to advance.  With a view of securing such assistance, a letter, with a copy of the prospectus, was, on the 5th of May last, sent to a number of gentlemen, but as it was found impossible thus to address all whom it was desirable to address, it is respectfully requested that every one into whose hands this number of the Journal of Banking will fall, and who is friendly to the undertaking, will consider the letter which follows, as addressed to him personally -- as much so as if it was superscribed with his own name, and was throughout in the handwriting of the subscriber.

Philadelphia, May 5th, 1841.

Sir,

I take the liberty to forward to you a prospectus of a new periodical I propose to publish, and, if the design meets your approbation, to solicit your kind exertions in its behalf.

Many persons have urged me to publish a new edition of the "Short History of Paper Money and Banking in the United States," with a continuation, bringing down the narrative to the present time.  Eight years have elapsed since it was first presented to the public, and in this interval many incidents have occurred strikingly illustrative of the nature of our paper money and banking system.  I have collected materials for the continuation of the history, and being no longer in the public service, have now leisure to execute the work.

For various reasons the periodical form of publication is preferred.  The semi-monthly review will embrace a collection of facts having a direct bearing on the immediate interests of all who are engaged in business of any kind;  and being given in connection with the history, will unite the present with the past.  Arguments and illustrations necessary for the perfect understanding of the system, will be introduced in the form of Essays, without breaking the continuity of the narrative.  In its main features, however, "The Journal of Banking" will be historical, and, as "history is philosophy teaching by example," it is thought this will be the most effective way of diffusing the truth in relation to a subject in which every member of the community is deeply interested.

The price of the work has been fixed very low, with the intent of placing it within the reach of all who feel disposed to study the important topics of which it will treat.  The deduction to those who take five or ten copies is intended to facilitate collections, and to afford to those who way be kind enough to collect subscribers and forward remittances, an opportunity, if so disposed, to compensate themselves for their trouble.

At the low price fixed upon, a considerable number of subscribers will be necessary to defray the cost of printing and paper, and as no merely local patronage would be sufficient to support a Journal of this kind, it is hoped that those friendly to the undertaking in different parts of the country will send in their names as soon as possible.  I am, Very Respectfully,

Your Obedient Servant,
Wm. M. Gouge.

P.S. Postmasters have a right to frank letters written by themselves, containing subscriptions for periodicals and remittances in payment for the same.

Our regular days of publication, will be the alternate Wednesdays of each month.  We choose the middle of the week because the mail is then least likely to be overloaded with periodicals, and distant subscribers will be able to count with more confidence on receiving their numbers with punctuality.

At the suggestion of several friends, we have been induced to issue some copies of the first number in anticipation of the regular day of publication, in order to give to those who may wish to subscribe, some more definite idea of the general plan and appearance of the work, than can be conveyed by a mere prospectus.

Such arrangements have been made as to insure the publication of the work for one year, whether we lose or gain by it.


The Times.

In several respects, the present times more nearly resemble those of 1819, and the years immediately succeeding, than any other period in our country's history.

Then, as now, the Banks, after having been enormously inflated, suddenly collapsed, and spread ruin and destruction every where around them.

Then, as now, enterprise was chilled, because men knew not what a day would bring forth.  Then, as now, the country was burdened with a heavy public debt.  The case is not materially altered by the fact that the debt pressed then immediately on the Federal Government, and that it now presses on the States.

Then, individuals owed millions on millions more than they could pay.

Then, capitalists could with difficulty find safe and profitable investments, and labourers were consequently left without employment.

Then, wages and the prices of land, and of commodities generally, fell greatly.

Then, as now, the troubles of the times were occasioned in part by extensive speculations in the public lands.

Then, a strong party were calling aloud for relief measures.

Then, owing to the derangement of many of the operations of industry, vice increased and crime abounded.

In these particulars the present times bear a close resemblance to the times of 1819, and some subsequent years.  In other respects they differ.

The Bank revulsion is now more extensive.  Through the period above alluded to, the great body of the Banks in the Atlantic States, at least those north of North Carolina, and, we believe, those of Mississippi and Louisiana, maintained specie payments.  Now, all the Banks to the south and west of New York, with the exception of certain Banks in East Jersey, the Bank of the State of Missouri, and perhaps the Banks of Charleston, S.C. are in a state of suspension.  The Banks of Ohio profess to pay specie;  but, from the best accounts we can gather, their practice but ill accords with their profession.

Then, the public debt was a burden on the Federal Government: now, it is a burden on the states.

The States were not then, as they are now, involved in extensive, and, in most cases, injudicious schemes of public improvement.

Then there was a Bank of the United States, with a capital of thirty-five millions, in full operation.  Now, we are without that blessing or that evil, just which the reader may be pleased to consider it.

The public distress is the same in kind that it was from 1818-19 to 1823-24, but differs from it in degree.  The reader who has not turned his attention to the past, will be surprised to learn that the sufferings of the present day are much less than those that were aforetime experienced.

Our large cities were not half as populous then as they are now, yet, according to Niles' Register, at one season in 1819, there were 10,000 able bodied men in New York daily seeking for employment, or, adding the women, 20,000 persons who desired something to do;  in Philadelphia 20,000 persons were in like condition;  and, in Baltimore, 10,000 were in unsteady employment, or actually suffering because they could not get employment.

Neither is the fall of prices as great now as it was then.  According to the testimony of a Director in the United States Bank, houses in Philadelphia which used to rent for 1,200 dollars a year, brought in 1820 no more than 450 dollars;  fuel which need to cost 12 dollars fell to 5½ dollars;  flour fell from 11 dollars to 4 dollars a barrel;  beef, from 25 cents to 8 cents a pound.  [See Niles' Register, vol. xviii, page 387.]

Lands in nineteen counties of Pennsylvania, which, about the year 1815, brought, on an average, from 93 to 122 dollars an acre, would in 1819 bring no more than from 29 to 42 dollars.  This, we assert on the authority of a Committee of the Senate of Pennsylvania, of which Mr. Raguet was Chairman.

In September, 1820, corn was sold in some parts of Kentucky at 10 cents, and wheat at 20 cents a bushel.  In May, of the following year, corn was as low at Cincinnati, and wheat in some parts of Ohio was 10 cents a bushel.

A Pittsburg paper, in the spring of 1821, referring to prices at that place, says,-- "Flour a barrel, $1.00;  whiskey 15 cents a gallon;  good merchantable pine boards, 20 cents a hundred feet;  sheep and calves, $1.00 a head.  Foreign goods at the old prices.  One bushel and a-half of wheat will buy a pound of coffee;  a barrel of flour will buy a pound of tea;  twelve and a-half barrels will buy one yard of superfine broad cloth."

The troubles of those days, like those of the present times, had their origin in a Banking System, resting on principles fundamentally erroneous.  It is folly to attribute them to this or that measure of this or that administration.  Even supposing this or that measure to be very objectionable, the most it has done has been to give to existing evils their present form and feature.  If this or that measure had not been adopted, the evil would have shown itself in some other form, if not now, at some not distant day.  A corrupt fountain cannot send forth sweet waters.

Equally fallacious is that course of reasoning which ascribes our present sufferings to mere mismanagement on the part of the officers of Banks.  As human nature is at present constituted, and as Banks are at present constituted, mismanagement of their affairs is inevitable.  Is it rational to suppose such institutions can be well conducted, when there is entire freedom from personal responsibility on the part of both officers and stockholders ?  The fault is less in the men than in the system.

In some respects the times are better than they were from 1818-19 to 1823-24, and in others they are worse.

The public debt is twice as great as it was then, but the wealth of the community has increased in more than equal proportion.  The burden of the debt then, however, fell on the Federal Government, which had more facilities for collecting a revenue to pay the interest than are by the State Governments.

The States were not then, as they are now, involved in schemes of internal improvement, calling for the incurring of new debts at a time when they cannot pay the interest on the old.

The credit of the State Governments was then good, because they had used it sparingly, and they had it in their power to apply it to the relief, or the apparent relief, of the debtor class, by establishing "Commonwealth Banks," and by other contrivances.  Now the credit of some of the State Governments is so low, that they find it difficult to pay the wages of their own officers.

Great part of the distress that existed then, was occasioned, as it is now, by extensive purchases of wild land.  But then, such of those lands as were bought from the Federal Government, were bought on credit, and Government relieved this class of speculators by taking back the land, and thus freeing them from obligations to the amount of millions.  Of late years the public lands have been sold for cash, and as this cash has been "deposited with the States," the Government has it not in its power to relieve this numerous class of speculators, by receiving back the land, and giving them back the money.

In all these respects the condition of the country is worse than it was at the former great bank revulsion: and it is also worse in that we have more broken banks to clear out of the way.  The whole extent of the evils we are to endure, is not yet known.

It is worse also in regard to our foreign relations.  At that time, the prospect was pacific.  Now, there are some specks in the horizon betokening war.  The difficulties on the Canadian frontier it may not be very hard to adjust, but the Maine boundary line is a very delicate question.  Border disputes are a more frequent cause of war than even the ambition of kings.

The country is in a better condition than it was in 1818-19, inasmuch as its resources are more fully devolved.

The "recuperative powers" of the people, to use the phraseology of one who was once a great favorite in the money circles, are so great that, if left to themselves, they would soon restore prosperity.  But we are threatened with a course of most pestiferous legislation on the part of both Congress and the State Legislatures.  All our woes are artificial, and they are to be artificially increased by the adoption of measures which are to be brought forward as means of relief.

Under such circumstances as these, do we commence our Journal or Banking.  We propose to give in it a new edition of "A short History of Paper Money and Banking in the United States."  The only edition of this work at present on sale, is in very small type.  An edition in larger type has been called for by many.  After due reflection, we have been brought to believe this is the most eligible way of bringing forth the new edition.

Another reason why we introduce this History, and the Inquiry thereunto prefixed, into our Journal, is, that as it was written before the excitement arose, it may command the unprejudiced attention of some, who would be very chary of receiving any thing written at the present day.  Times have indeed changed since that History and Inquiry were first published, but principles remain the same;  and we know not that we could, if we were to try, give a better exposition, for popular use, of the principles of our banking system, than is contained in that volume.

This history we propose to bring down to the present time.  The experience of the last eight years was not wanted by those who were acquainted with principles, to convince them of the true nature of paper money banking.  We know not that any new principle of the system has been developed between 1832 and 1840;  but some of its features have been magnified as under an oxyhydrogen microscope, so that he must be blind who does not see its deformities.  It is of great importance to give a continuation of the history.

To the history of the past we propose to add the history of the present, giving every two weeks a review of the times.  In so doing we shall not deprive our Journal of unity of design.  If certain daily papers are almost as interesting as a volume of Old Bailey Trials, or of the Newgate Calendar, it is paper money banking that makes them so.  This it is that stamps the character of the age.  We shall not, of course, be able to give the incidents of the day in much detail, but we shall give enough to let the reader catch the spirit of the times in which he lives.  We may, for example, sometimes add up the murders and other atrocities recorded in some of the leading newspapers, and by comparing one number of our Journal with another, the reader may ascertain whether the times are growing better or growing worse.

Philadelphia being at present the centre of the rotten bank system, and New-York of the (relatively) sound, we propose to give the prices of the leading articles of produce, the rates of exchange, and the prices of bank notes in each city.  These, while they will be useful for present business, will also be useful for future reference.

In essays on banking, currency, exchanges, and kindred topics, our correspondents and ourselves will be able to present the same subjects in different aspects, and thus adapt them to different minds.  We shall also have opportunities of discussing various questions of public policy, which must necessarily arise, and which will deeply affect the well being of the community.

To these we shall add, as stated in our prospectus, such miscellaneous articles as will add interest to our pages and subserve our main design.  Among these will be some statistical tables, embodying, in a small compass, a great number of facts.  But we shall avoid encumbering our columns with such details as teach nothing.  It is only general results that are interesting.  Heavy documents we shall not insert at length, trusting our readers will be satisfied with the substance.

Such is our plan.  We shall spare no exertion to carry it into execution in such manner as shall merit the approbation of those who may favor us with their support.


The History of Banking.

In a new preface to this work, we have endeavoured to correct an erroneous impression which some appear to entertain, in regard to the time when, and the design with which it was written.

As evidence that the work was not at the time of its first appearance regarded as of a partizan character, we give the following extracts from Journals, conducted by gentlemen who were not supporters of the last two administrations.

"The work is from the pen of a gentleman who has devoted much time to the subject upon which he has now written, and who probably understands it more thoroughly than any other individual in the country -- at least than any one who has given publicity to his views and knowledge in the matter in such a form.  The book before us abounds in facts which could not have been collected but with earnest and industrious research.

"The account of provincial and continental paper money, for example, must have required no light or careless thumbing of olden records.  As a history of a medium and pursuit which always have and always will interest every community and every individual, the book in question deserves the attention and patronage of every member of society, who desires to be clearly enlightened on a favourite and paramount theme." --Philadelphia Gazette, March, 1833.

"This volume has claims upon the attention of all persons who feel any interest in the history of paper money and banking;  or who seek light on the principles of the system, or take any pleasure in studying the effects of the system on morals and happiness.  The work commends itself especially to banking institutions and persons engaged in commerce.  Besides the history, which is, though condensed, very full, there are reflections on political economy and social and other relations, which cannot do else than assure to Mr. Gouge the commendations of an enlightened people." --Philadelphia Commercial Herald, March, 1833.

"Mr. Gouge's book on banking and paper money is one which all should read." --Moore's Philadelphia Prices Current, March, 1833.

"Mr. Gouge is favourably known as the strong advocate for the destruction of small notes under five dollars, and for his unshrinking honesty of opinion on the subject of banking in general.  In his present production he has entered upon an untrodden field, and given a history of various State banking institutions, as well as of the Bank of the United States, and presented in a small space a great quantity of facts, to which legislators and others should pay particular attention." --Saturday Evening Post, February. 1833.

"A popular treatise on banking has long been considered a desideratum in this country.  A general understanding of the operation and influence of incorporating banking companies would not only have saved the country from much distress, but have prevented many disagreeable occurrences, the tendency of which has been to lower the standard of morality, and diminish the confidence which is essential to the prosperity of a commercial people.  Until a knowledge of this subject is generally diffused, the people must continue exposed to the arts both of speculators in money transactions, and of intriguers and adventurers in politics.

"The volume before us is admirably adapted to convey this sort of knowledge in a plain and intelligible manner.  We are not prepared, just now, to pronounce an opinion as to the views of the subject taken by Mr. Gouge;  but we must do him the justice to say that he has collected and digested such a mass of information, and commented on it with so much intelligence that his work cannot fail to have a beneficial effect.  It merits the notice of all who take sincere interest in the public welfare." --Baltimore Gazette, March, 1833.

"The work is one of great research, manifesting a thorough acquaintance with all the prominent facts, historical and statistical, connected with this complex and important question from the earliest periods, and in all their connexions and varieties.  As a book of reference in this particular, it is valuable, and must be generally acceptable.  The information it conveys is not accessible from other sources, without great toil and difficulty, and is of an important character to the evident interests of the whole community.

"The principles maintained by the author, and upon which his facts and illustrations are brought to bear, are a distinct matter, and not likely to be admitted by the advocates of the present order of things.  Mr. Gouge is an uncompromising opponent of banks, paper money, and corporations, as they now exist.  His views are supported by a scientific investigation into the character and qualities of currency of all kinds, the nature of money, the history and real character of banks of deposit, of discount, of circulation;  the nature of credit and its results;  the effect of restrictions on bank charters;  the essential qualities of bank notes;  their 'convertibility' and 'elasticity;'  and, in short, of all the commercial questions connected with the circulating medium.  These points are discussed with care and precision, and, moreover, with a tone of complete conviction, which shows the author to be thoroughly in earnest in the momentous principles he is enforcing by his arguments." --Baltimore American, March, 1833.

"On our last page will be found an advertisement of this book, which we recommend as a very valuable addition to the library of every political economist and statesman.  It is, in our estimation, decidedly the best book on banking that we have ever met with, and exposes in the most minute details, the mischiefs resulting from incorporating people to do what ought to be left to individuals to accomplish, upon their personal responsibility." --"The Examiner and Journal of Political Economy," edited by Condy Raguet, Esq., Philadelphia, October 30, 1833.

We shall add some notices from Democratic presses, supporters of the last two administrations.

The first is from the New York Evening Post, of September 15, 1834, at that time edited by Wm. Legget, Esq.

"It is much to be desired that some enterprising publisher might make arrangements with Mr. Gouge, to publish an extensive addition of his excellent work in a form so cheap and convenient as to insure a large circulation.  The subject which it treats of is one of immense importance: it is one on which men's minds are exceedingly vague and imperfect;  and the work embodies more information and more sound reasoning, as to the history, nature, and operations of the paper money system in this country, than all the other works combined, which have ever been composed on the subject.  It is written, moreover, with great clearness and perspicuity of style, with admirable arrangement of topics, and in a temper perfectly impartial and dispassionate.  There is no declamation, no highly coloured statements, no rhetorical flourishes in its pages to mislead the reader's judgment, and enlist his prejudices against Banks. --Facts and sound arguments are wholly relied upon to accomplish the end in view, and they are so stated, that the book is not only one of the most useful, but one of the most interesting treatises we know of in any branch of economical science."

Mr. Legget afterwards gave further evidence of the estimation in which he held the work, by having it stereotyped at his own risk and expense.

"It is a work compiled with great diligence, and such perfect fairness that we do not recollect to have seen one of its statements disputed." --N.Y. Evening Post, July, 1837. -- Wm.C. Bryant, editor.

"This treatise possesses sterling merit;  and it should constitute a part of the library of every statesman and political economist in the country.  It is replete with many valuable and novel facts, and they are presented with a force and precision which must please every diversity of taste.

Fault has been found with its classification and mode of arrangement: but it strikes us that these objections are in a great measure groundless.  It is written with a tact far from common.  The intimate connection between the various branches of the subject fully manifest this --it mirrors forth the picture in a clear and vivid manner." --New York New Era, December, 1839.

"It is written with perspicuity and elegance, and the facts have been collected with great care and much research.  So impressed are we with its value and importance, that we doubt if any man can claim to be thoroughly conversant with, and master of the history of American Banking, without reading this work." --Hartford Times, August, 1837.



Pennsylvania Relief Law.

In this law the Banks of the Commonwealth are divided into two classes, those that pay a tax on their dividends, and those that pay no such tax: and some special enactments are made respecting the Bank of the United States.

Several sections of the act appear to have been inserted merely to facilitate the Bank of the United States in making an assignment of its effects.  As the stockholders have resolved not to take advantage of these sections, it is unnecessary here to give them in detail.  The other special provisions, in relation to the United States Bank, are, first, one which gives it all the benefits of the act, provided the stockholders will consent that it shall be subject to such general laws as may be hereafter enacted for the regulation of the banks of this Commonwealth.  Secondly, one which exempts it from any participation in the issue of the new kind of State Paper Money, hereinafter to be described.

The Bank of the United States has, as was to be expected, hasted to avail itself of the privileges of an act which legalises its suspension of specie payments, and which exempts it from the payment of more than six per cent. interest on any of its dishonored obligations.  In this respect it is put on the same footing, by the Relief Law, as the other banks.  But it is not required, like them, to act as an agent in issuing the new kind of State Paper Money, though it may receive the same on deposit, and re-issue it at pleasure.

The other banks, as already observed, are divided into two classes, and they are required to issue two distinct kinds of State Paper Money.

The first and most numerous class are the banks paying a tax on their dividends.  These are required to issue notes amounting, in the aggregate, to three million one hundred thousand dollars, $775,000 of which are to be in notes of the denomination of five dollars, and the residue, or $2,325,000, in notes of the denominations of one and two dollars.  They are not to be issued in the name of the State, but in the name of the respective banks, each emitting a proportion graduated to its capital.  The notes thus issued are to be passed to the credit of the State, and to be called a loan to the State, redeemable in five years, or sooner, at the pleasure of the Legislature.

As a compensation to the banks for the expense and trouble attendant on the issue of this State Paper Money, they are to receive one per cent. per annum on the amount.

The second class of banks includes, we believe, only the Bank of Pennsylvania, the Farmers and Mechanics, and the Mechanics, of Philadelphia.  In consideration of their having paid bonuses for their charters, they are exempted from the payment of a tax on dividends.  They are required to deposit, with the Auditor General, stocks of the State amounting to at least five per cent. on their capital paid in, and are authorised to issue notes to an equal amount, in denominations of not less than five dollars.  The banks paying a tax on their dividends, are also allowed to issue such notes to an amount not exceeding seven per cent. on their capital paid in.

The notes which represent credits on the Auditor General's books, may, by way of distinction, be called State Credit Notes;  and those which represent stocks deposited with that officer, may be called State Stock Notes.  These do not, however, differ essentially.  On the stocks deposited, the State is to pay no interest: and on the credits in the Auditor General's book, the banks are to receive no interest: the one per cent. (though called interest) being, as we conceive, merely sufficient to cover trouble and expenses of management.

These two kinds of State Paper Money also resemble each other in the mode provided for their redemption.  There is no chance of redeeming either in less amounts than one hundred dollars: then they can be redeemed at the counter of the banks that issue them, but not in silver or gold, or the notes of even non-specie paying banks, or even in State Stocks, but in orders on the Auditor General for State Stocks.

This is a deplorable state of things.  A bankrupt State orders the emission of upwards of three millions of State Paper Money, redeemable only in State Stocks, which were, at the time the act was passed, twenty per cent. below par;  which have since fallen several per cent. more, and which may fall, no one knows how low.  Nor is this all.  It authorises this State Paper Money to be increased in amount to between five and six millions: and in order to obtain circulation for it, consents that the banks shall, if they will receive it in payment of debts, postpone the resumption of specie payments as long as shall suit their own convenience !

The State Credit Notes and the State Stock Notes will be exactly alike in character and appearance: but, viewing the subject in another light, the Legislature may be said to have ordered the issue of nearly as many kinds of State Paper Money as there are banks in the Commonwealth.  Each bank (the Bank of the United States excepted) is to issue its proportion in its own name;  each, if the notes are presented at its counter in sums of one hundred dollars and upwards, is to give an order to the holder for State Stock to that amount: each is to pay the interest on the Stock procured on its own order, in lieu of paying a tax on dividends: and, finally, each is compelled to receive such of these notes as may be issued by itself in payment of any debt due to itself, but not to receive the State notes issued by any other bank.  We are thus to have fifty legal tenders in the payment of bank debts; but what will be a legal tender to the Bank of Pennsylvania, will not be a legal tender to the Philadelphia Bank, and so of all the others.

This is but the beginning of a new modification of the paper money system.  Who can assure us that next year the Legislature will not order five millions more to be added to this new kind of circulating medium, and five millions more in the year succeeding, and so on till it runs the course of the French assignats, or of the old continental money.


Incidents.

Those who suppose that a Journal of Banking must necessarily be filled with dry details of figures, and still drier disquisitions, will have only to read a few numbers of our periodical to be convinced of their error.  It will abound in incidents of a most striking character.  So much of our first number is necessarily taken up with prefatory matter, that we cannot here do justice to this part of our design.  But the reader may form some judgment of what he may hereafter expect, from a rapid glance at events of recent occurrence.

We begin with our native city, Philadelphia.  Here there have been, within a few weeks, sundry meetings respecting the affairs of a bank, which once had a capital of thirty-five millions.  The meetings have been very exciting, and there has been, besides, a very spirited controversy in the newspapers.  The stockholders ask what has become of the capital.  It is agreed, on all hands, that great part of it is sunk, and some think it is all gone.  A committee lay the fault on a former President.  The President says, that if he has done wrong, some of the members of the committee are as much to blame as he is.  Among other things, it is alleged that about a million of money has been expended, and no satisfactory account rendered thereof.  As these events are of anterior occurrence to the establishment of our periodical, the particulars belong rather to the continuation of the History of Banking, than to the Journal.  We only allude to them here, to show what the reader may expect if any thing of the like kind should occur again.  They have formed the chief topic of interest for some time, in some of the daily and weekly newspapers, and they would lose none of their interest by being stripped of all extraneous matters, and served up in their pure essence in a semi-monthly.

Closely following on this, we have a notice that Dr. Dyott, the great free banker, who had been convicted of fraudulent insolvency, has been pardoned by the Governor.  No reason is given, but one of the newspapers, perhaps maliciously, observes, that the Governor thought it unfair to keep the Doctor any longer in close confinement, while so many others, not less culpable than he, are in the enjoyment of liberty.

Stepping into the Tabernacle, where the (old school) General Assembly of the Presbyterian Church, are in session, we find that reverend body appointing a committee to inquire how much of their funds as have been invested in stocks are still available.

Passing over into New Jersey, we hear, at New Brunswick, of the execution of Peter Robinson, for the murder of a bank president.  Debt urged Robinson to the commission of this awful crime, and it appears, from his own statement, that if he had only known that it was possible to renew a note, he would in all probability have not imbued his hands in the blood of a fellow being.

Arriving at New York, we learn that a very distinguished man has just reached there from Montreal.  It is no less a personage than the Hon. C.F. Mitchell, ex-member of Congress for the Niagara district.  He had committed some very ingenious acts of forgery, by which the banks suffered.  His hiding place in Canada was discovered.  He very romantically jumped out of a garret window to escape from his pursuers, and still more romantically jumped into the St. Lawrence;  and, what is still more romantic, if true, he cast his last twenty-seven hundred dollars into the stream.  And these are but part of the adventures of the Honorable ex-member.

Going from New-York into Connecticut, "the land of steady habits," we are struck dumb by the intelligence that an officer of a rail-road company has just run off with forty thousand dollars of its funds in his pockets.

Passing on rapidly into the State of Maine, we hear that the President of the Frankfort Bank has been arrested on a charge of swindling.  We beg to know the particulars, and are told, in brief, that he took the funds of the bank, purchased stock of various persons at fifty per cent, sold it at par, kept the profits, and paid the bank in wild land that was worthless, but which he charged at two dollars and a half an acre.

Disgusted with the east, we resolve to try the west.  We travel as fast as locomotive and steamboat can carry us, and land at Cleveland, Ohio.  Thence we proceed to Columbus, the capital of the State.  Here we learn that two banks have agreed to lend the State one million and sixty-nine thousand dollars, and to secure themselves against all loss, have State stocks pledged to them exceeding a million and a quarter in value.  Our informant adds, that the day after the contract is completed, both the banks stop specie payments !

Thinking we have learned enough of the way the system works in Ohio, we do not deem it worth while to tarry long there, but embark on the first opportunity, at Cincinnati, for New-Orleans.  At Louisville, at Vicksburg, and at every other landing place, rumors reach us of some fraud or default, growing out of our factitious credit and paper money system.  We cannot stop to gather the particulars, but hasten on to our point of destination.  Here we learn that two individuals, having got some genuine drafts from one of the Banks of New-Orleans, alter them in such a way as to perpetrate extensive frauds on we know not how many banks in different parts of the country.  This at once explains and verifies the rumors we heard on our passage down the Ohio and the Mississippi.  We inquire if there is any thing else new in the banking world, and are told that a man of small means has purchased the Merchants' Bank, having a chartered capital of one million dollars.  Well, this may be "a fair business transaction," but it shows the nature of the credit system.  Anything more ?  Nothing but some defaults to the amount of one or two hundred thousand dollars, on the part of certain clerks, in two of the banks.  As this is an every day occurrence, it does not engage our attention long, and we presume that they have, of course, escaped to Texas or to Paris.

We step into the Reading Room at the Exchange, to look at the Philadelphia Papers, and unexpectedly find ourselves in the midst of "a row."  An effort is making to expel Mr. Samuel Wright from the room, because he is suspected of having given to the Vicksburg Sentinel some intelligence unfavorable to speculators.  In the confusion the gas lights are extinguished, and we make our escape.

We embark for Mobile.  Here we learn that one of the most worthy citizens of the place has just hanged himself on account of his pecuniary embarrassments, and that the Legislature of Alabama has given the banks of that State the privilege of postponing indefinitely the resumption of specie payments.  This is enough for us.  We proceed as rapidly as we can into Georgia.  We want to become better acquainted with "the noble, generous South."  But we have hardly entered the State, before we hear of a default, to the amount of sixty thousand dollars, on the part of the officers of one of the banks.  Why, this is as bed as what befel us on our entrance into "the land of steady habits."

"Our ear is pained, our soul in sick
with every day's report of wrong and outrage."

We resolve to hear no more;  and, lumping into the railroad cars, travel night and day till we reach Philadelphia.

So many incidents, and so various in their character, all occurring within a few weeks, and all connected, either directly or indirectly, with our factitious credit and paper money system !  A Journal of Banking dry and uninteresting !  Why, the adventures of Rinaldo Rinaldini could hardly be more spirit stirring.


"Pretty and Smooth Reading."

"Ah," some may exclaim, "your incidents may be striking enough, but no periodical succeeds now-a-days, unless it contains something in the manner of tales."

Well, then, there is the story of "The Little Frenchman and his Bank Notes;"  the story of the "Irish Banker at the Lakes of Killarney."  And, to say nothing of others, the "Auto-biography of Ferret Snap Newcraft, Esq."  We know Ferret well.  Then there are the "Extracts from the Diary of a certain Bank Director."  Inquiries have been made of Deacon Graball if he will not furnish us with some additional extracts for our Journal.  His reply is rather equivocal: but he hints that if his pastor, the Rev. Dr. McThwackem, will consent, he will take the matter into consideration.  From the known kindness of that reverend gentleman, we have the best reasons for hoping that he will speak a good word for us to his parishioner.

It is possible to tell the truth in such a way as to make it as pleasant reading as fiction.  It is by seizing hold on some principle, and then developing it, according to the order of nature, to its ultimate consequences.  This is what has been done in the "Irish Banker," and other pieces of that character.

"But poetry !  Without poetry, it is impossible to please the ladies.  No work can succeed that has not their approbation.  And you cannot give us poetry !"

We are not so certain of that.  The multiplication table has been set to music.  What hinders the rendering of the principles of banking in rhyme ?  We cannot boast that the "gods have made us poetical;"  but we know of some hard money men who write very pretty verses.  If it should become necessary, we shall invoke them to invoke the Muses in behalf of our Journal, or rather of our cause.  Thomas Moore's "Odes on Cash, Corn and Catholics," show that the Muses, when invoked in such a cause, are not always invoked in vain.

One thing is very certain.  If we do not pass

"From grave to gap, from lively to severe,"

the fault will be in us and in our correspondents.  It will not be in our subject.

The learned Dean Prideaux, author of "The Connections of Sacred and Profane History," used to say that "it was a doubt with him whether the benefit the world receives from government, is sufficient to make amends for the calamities it suffers from the follies, mistakes, and mal-administration of those who manage it."  What would the Dean have said, if he had been acquainted with the history of modern banking ?