The Journal of Banking
by William M. Gouge,


Vol. I., No. 8,
Philadelphia,
Wednesday, September 13, 1841.


Paper Money of Asia.

The history of the paper money of China, which is given in our present number, is both curious and interesting.  Mr. Klaproth's statements are abundantly confirmed by Du Halde in his History of China, by Remusat in his Nouveaux Melanges Asiatiques, and by other authors.

Klaproth does not, in his account, mention that from China the use of paper as money spread into India.  This we supply from another source.  Mahomet Togluk, of Delhi, who resigned A.D., 1325, "unfortunately for his people, adopted his ideas upon currency from a Chinese custom of using paper on the Emperor's credit, with the royal seal appended, in lieu of ready money."

In reading the History of Paper Money in China, our readers will bear in mind the fact that as the whole period embraced in the narrative, preceded the discovery of America, silver was many times more valuable then than it is now.  Thus when the Chinese Government issued notes which it intended should be equal in value to 28,000,000 oz. of silver, we must multiply this sum by four or five to get an adequate idea of the effect this operation had on commercial affairs, and so in other cases.

Paper money had an injurious effect on the Chinese nation, as it has had on all nations;  but some individuals were enriched by it.  Remusat quotes one old author, who speaks of a certain minister of the crown, who grew so wealthy by the system which impoverished the community, that he acquired the nick name of the Paper Lord.

African Money Market.

They have a metal currency in Loggun, the first I had seen in Negroland: it consists of thin plates of iron, something in the shape of the tin with which they shoe race horses.  The money market has its fluctuations;  the value of this circulating medium is settled by proclamation, at the commencement of the weekly market every Wednesday;  and speculations are made by the bulls and bears, according to the belief of its rise or fall.  Previous to the Sultan's receiving tribute or duty on bullocks or indigo, the delatoo generally proclaims the currency below par: while, on the contrary, when he has purchases to make for his household, preparatory to their feasts, the value of the metal /is invariably increased.  The proclamation of the value of the metal always creates an amazing disturbance, as if some were losers and others gainers by the variations. --Major Denham's Travels.


The History of Paper Money in China.

From the French of M. Klaproth.

The celebrated traveller Marco Polo, of Venice, was the first person who made known in Europe the existence of the paper money, which was used at that period by the Mongols, who were the masters of China.  These same Mongols afterwards introduced it into Persia;  in which country their paper bills were called djaou or djaw, a word evidently derived from the Chinese tchhao, which means the same thing.

The circumstance, that the Mongols, both in China and Persia, made use of paper money, has led some authors to think that they were the inventors of it;  and the celebrated Schloetzer, of Gottingen, published a dissertation (1797) under this title:  The Mongols, inventors of paper money in the 13th century.  But this learned man might have avoided giving out so hazardous an assertion, if he had read the History of Tchinghiz-khan, and of the Mongol dynasty in China, composed, on Chinese authorities, by Father Gaubil, and published in 1739, about sixty years before the Memoir of Mr. Schloetzer.  In that history (p. 114) is considered, the suppression of the ancient paper money, which was in use under the Soung dynasty, which reigned in China before the Mongols, and there is also mention made of a new species of paper bills which were substituted for the ancient ones, in 1264, by the Minister Kia-szu-tao.

It seemed to me, that it would be interesting to investigate, in Chinese authors, the date of the invention of paper money;  and my undertaking having been crowned with success, I have the honor to offer the result of my researches to the Asiatic Society.

The most ancient financial operation devised by the Chinese ministry, in order to meet the public expenditures, which had become too great for the revenues of the State, has its date in the year 119 before the Christian era, and in the reign of the Emperor Ou-ti, of the great Han dynasty.  At that period they introduced the phi pi [pronounced phee-pee] or value in skins, which were pieces of the skins of certain white deer that were fed in the interior park of the palace.  They were a foot square, Chinese measure, and were ornamented with extremely delicate paintings and embroidery.  Every prince or grandee, and even the members of the imperial family, who wished to make their court to the emperor, or who were invited to ceremonies or repasts in the palace, were obliged to cover with one of these skins the screen (tablette) which they held before their faces in the presence of the "son of Heaven."  The minister of the emperor's household had fixed the price of these phi-pi at 40,000 deniers, which is nearly 300 francs.  They were current at that rate in the palace and among the grandees;  but it seems they never passed as money among the people.

Ma-touan-lin relates, that after the years ta-nie (A.D. 605--617) until the end of the dynasty of the Soui, the general derangement of affairs in China having reached its height, they made use of all sorts of things in the guise of money;  as, little circular pieces of iron, cut pieces of cloth, and even pasteboard.

At the beginning of the reign of the emperor Hi-ant-soung, of the Thang dynasty, or about A.D. 807, coined copper having become extremely scarce, they renewed the prohibition against making use of vessels and utensils of that metal.  The emperor also compelled the traders who arrived in the capital, and the rich families generally, to deposit their specie in the public chest;  and, in order to facilitate trade, they received securities (bons) which had a currency every where, and to which they gave the name of feythsian, or "flying money."  However, scarcely three years had elapsed, when they were obliged, in the capital, to suppress the use of this paper;  which, then, was no longer current, except in the provinces.

Thai-tsu, the founder of the Soung dynasty, and who ascended the throne A.D. 960, permitted the traders to deposit their silver, and even merchandise, in the different imperial treasuries;  and the securities (bons) which they received were called pian-thsian, or "convenient money."  They received them eagerly every where.  In the year 997, paper of this kind had been issued for 1,700,000 ounces of silver;  and in 1021, there had been an addition to it equivalent to 1,130,000 ounces.

It was in the Chou country, which is now the province of Szu-tchhouan, that they introduced for the first time a real paper money currency;  that is to say, paper bills substituted for silver, and not guarantied by any pledge whatever.  A certain tchang-young introduced it as a substitute for the iron money, which was too clumsy and inconvenient.  These paper bills were called tchitsi, or coupons.  In the the reign of Tchin-tsoung, of the Soung dynasty, (from 997 to 1022,) this example was followed, and they made bills under the name of kiao-tsu, or "exchanges."  These were payable every three years;  so that in the space of sixty-five years there would be twenty-two periods of payment.  Every kiao-tsu was equal to one string of a thousand deniers, and represented one ounce of pure silver.  Sixteen of the richest houses directed this financial operation;  but, in the end, the undertakers of it not being in a condition to fulfil their engagements, they were obliged to become bankrupt, which gave occasion to much litigation.  The emperor abolished the bills of this company, and took away from individuals the power of issuing paper money, reserving to himself the establishment of a bank for bills at Y-tcheou.

About the year 1032, there were 1,256,340 ounces in the bills called kiao-tsu, or "exchanges."  In 1068, it was found that there were counterfeits of them;  and they imposed the same punishment on the counterfeiters as for counterfeiting the Government seals.  At a later period they established, at different intervals, banks for the kiao-tsu bills in several provinces of the empire.  The bills of one province were not current in the others, and they often altered the terms of payment and their mode of circulation.

Under the emperor Kao-tsoung, in 1131, they were desirous of making a military establishment at Outcheou;  but as the necessary funds arrived with great difficulty, the mandarins who had the direction of that undertaking, proposed to the houpou, or minister of the treasury, to issue some kouan-tsu, or securities, with which they might pay the persons who furnished provisions for the troops.  These securities were redeemable at a special office for that purpose;  but it appears they gave rise to abuses and occasional murmuring among the people.  Subsequently, similar securities were put in circulation in other provinces of China.

In 1160, (still during the reign of Kao-tsoung,) the houpou created a new paper currency, called hoei-tsu, or conventionales.  In their origin, these new bills were current only in the province of Tche-kiang and its vicinity;  but they were soon disseminated through the whole empire.  The paper which they used to make them of, was originally manufactured only in the towns of Hoci-tcheou and Tchhi-tcheou of Kiang-nan.  At a later period they also made it at Tching-toufou, in Szu-tchhouan, and at Lin-ngan-fou in the province of Tche-kiang.

The first hoei-tsu (conventionals) were equivalent to a string of one thousand deniers;  but under the reign of Hiao-tsoung, in 1163, they made them of 500, 300, and 200 deniers.  In five years, that is to say, up to the seventh moon of the year 1166, they had issued this paper to the amount of 28,000,400 of ounces;  and on the 13th of the eleventh month of the same year, that amount was found to be increased by 15,600,000 ounces.  During the remainder of the reign of the Soung dynasty, the quantity of this paper went on constantly increasing.

Besides this, there were also the kiao-tsu, and some other paper peculiar to the provinces;  so that the empire was flooded with paper bills, which depreciated from day today, in spite of the different changes and modifications which the Government thought fit to make in them, in order to enhance the currency of them.

Finally, in the reign of Ly-tsoung, of the same dynasty, and in 1264, the minister Kia-szu-tao, seeing the currency of the hoei-tsu so low, and the price of provisions so high, thought it proper to substitute in part for this paper a new description of bills, which he called yn-kouan, or silver obligations.  The hoei-tsu of seventeen terms, as they were called, were entirely abolished;  and they took up three of those of eighteen terms with one of the new bills, which bore the character kia.  But, though they received even the torn bills in payment of imposts, the minister could not succeed in effecting a rise in the currency of the paper issued by the treasury, nor a reduction in the price of merchandise.

While the latter emperors of the Soung dynasty were withdrawn into the south of China, the north part of the country found itself under the domination of the Niu-tchy, a people of the Tungusian race, that had founded a new empire under the name of Kin, or Kingdom of Gold.  Their princes are known in the Arabian and Persian historians, by the name of Altoun-khan.  The continued wars which laid waste all China, had considerably impoverished all the provinces of that fine country;  so that in the year 1155, copper having become extremely scarce in the kingdom of Kin, they were obliged to establish among them banks for paper bills, upon the plan of the kiao-tsu of the Soung dynasty.  The bills of two, four, eight, and ten strings of a thousand deniers were called large bills;  and the small bills were of 100, :300, 700, and 900 pieces of copper.  Their rate was fixed for seven years;  and after that term they exchanged the old bills for new ones.  In all the provinces there were banks, and the Government retained fifteen pieces of copper for each string of one thousand, in order to cover the expense of making and registering the bills.

In the latter half of the 13th century, the Mongols made themselves masters of China, where they founded the dynasty called Youan, which reigned from 1279 to 1367.  Even before the entire subjugation of China, Koublai-khan, or Chitsou, the first emperor of that dynasty, had introduced paper bills among the Mongols, between 1260 and 1263.  In 1284 he directed the mandarin Lou-chi-joung to present to him a plan for the emission of a new paper money;  but that emission did not take place till 1287;  and from that time the Mongols only increased the quantity of their paper bills called paotchhao, or paper money of value.

Bills of one string, made in the years tchiyouan, (1264-1294,) were substituted for those of five strings, or of 5000 deniers, which they had created during the years tchoung-thoung, (1260-1263,) and which were made of the bark of the tchu tree, (morus papyrifera,) and one foot square, Chinese measure.  Those of one string of the years tchi-ta, (1308-1311,) succeeded those of tchi-yuan of five strings.  They were valued at one ounce of pure silver, and the tenth part of an ounce of gold.  In this manner the Government had reimbursed, by four per cent. of value, the capital of the first emission, and by twenty per cent, that of the second.  Towards the end of the Youan dynasty, the paper money had lost much of its credit;  and in 1351, they found themselves obliged again to make changes in their system of paper currency;  but all their expedients and attempts to produce a rise in the funds were fruitless;  and the Mongols were compelled to abandon China, which they had totally ruined by their tchhao, or "paper money of value."

This state of things obliged the emperors of the Ming dynasty, who succeeded the Mongols, not only not to abolish the tchhaos, but to create a new emission of them.  In 1375, they issued six different kinds of paper, viz: bills of one string, of a thousand deniers, of 500, 300, 200, and 100 copper pieces;  those of a thousand deniers were equivalent to one ounce of silver.  They prohibited the people's making use of gold, silver, or valuable articles to trade with.  The value of these bills fell at once, and they would give only thirteen strings of copper pieces for seventeen in paper.

It appears that the first Ming emperors increased considerably the quantity of these bills;  for in 1448, they had so little credit, that they would only give three deniers for one tchhao of a string of one thousand.  The Government thought to remedy this disgrace of its paper, by prohibiting the use of copper pieces, and by forcing the people to use only paper bills.  Seven years afterwards there appeared an ordinance which provided, that they would collect in the paper currency, the imposts of the markets in the two capitals of the Empire.  However, these measures did not produce the desired effect;  and the tchhaos having remained in discredit, terminated by disappearing from circulation.  At least history makes no further mention of them after the year 1445.

The Mandchous, [Mantchoos,] who succeeded the Ming dynasty, and who are at present the absolute masters of China, have never attempted to issue any paper money whatever;  for these barbarians are as yet ignorant of the fundamental principle of all good financial administrations, namely, that the more debts a country has, the more rich and happy it is.

In Japan, paper money is called kami-zeni.  Its introduction into the empire dates from the time of Dairo Go-daigo-no-tenoo, who reigned from 1319 to 1331, and who in 1334 was reinstated on the throne, which he occupied again for three yeers.  However, it never threw out of use the pieces of copper, and the Japanese assignats have always represented considerable values.  I am not certain whether they are yet in use, but it appears certain that they used them sixty or seventy years ago.

Note.-- The paper bills of the Soung-Kin, and Mongol dynasties, were all made of the bark of the tchu [Mulberry] tree.  Those of the first were only sheets printed and authenticated with the Government stamps;  but those of the Mongols exhibited other ornaments.  The paper, which was used by the Minga to make their bills, was made from all sorts of plants.  We find in the work of Father Du Halde, (vol. ii., p. 16:3,) a figure of one of the paper bills of the time of the Minga.


The United States Bank.--Public Loans.

The following is part of a letter from a respected correspondent in Philadelphia County.

"The failure of the United States Bank of Pennsylvania is a most reproachful occurrence to our City, State, and Nation: and the subject will, I hope, receive the most thorough investigation.  "Search Jerusalem with candles!"  Let us have a complete and minute chart of the disastrous voyage of the bank, and the whole history of her pilots --not so much, if at all, with a view to retribution, but as beacons for the future.  Give us the whole truth --let who will be exposed.  Causes may thus be accurately and distinctly investigated and ascertained --history may be arrived at, and philosophy illustrated and supported.

"I read your dissertations on banking with judicial gravity and critical sternness.  From the friend of gold we expect gold seven times tried.  You will not, I hope, condemn the use because of the abuse.  In your sixth number you say, speaking of public loans, 'government wants capital, not mere credit.'  If banks are in a sound state, as they clearly ought to be, and as perfect as legislation can make them, which will include a due proportion between their bank notes and specie, are not their notes to all intents 'capital,' as much so as an equal amount of silver, or their value in land and labor ?"

The causes that led to the destruction of the Bank of the United States belong to our proposed continuation of the History of Banking, rather than to the Journal.  To give these as they ought to be given, we want certain materials which are not accessible to the public at large.  They might be obtained, if a faithful investigation of the affairs of the bank were made by a committee of the stockholders.  As our correspondent is acquainted with many of them, we would suggest to him the propriety of urging them to have a thorough inquiry made into the manner in which the Bank of the United States has been conducted.

In relation to the second point touched on by our correspondent, we must be permitted to observe that we cannot regard mere evidences of debt as capital.  The notes of banks, even when they are ready to pay specie for them, promptly, on demand, are mere evidences of debt.  The bank that issues them, does, indeed, derive as much revenue from them as it would from so much capital, but it is only because, through their instrumentality, the capital of the farmer, manufacturer, or other producer, is transferred to the bank borrower, who pays interest to the bank, instead of paying it to the farmer, manufacturer, or other producer to whom the interest is in justice due.


Bank Note Endorsements.

Some of the good people of this city never pay away a bank note, without first endorsing it: not exactly with their own names, but with some sentence full of meaning.

As writing such sentences was found rather troublesome, recourse has been had to printing, and ten such "endorsements" as are found below can be purchased of Mr. James Davis, bookseller, 449 Market street, at the low price of one cent.  They are printed with good large type, on fair paper.

It will be observed that the quotations are from the writings and speeches of men of all parties --Old Federalists and Modern Whigs, Democrats of the olden times and Democrats of the modern times;  and, therefore, men of all parties ought to be satisfied with them.

Those who use them should be careful not to paste them on the back of notes payable to order.  Through a mistake of this kind, a man might lose ten dollars, though the cost of the paper endorsement would be but one tenth part of a cent.

"For a long time I saw with pain, the advances of an aristocratic moneyed power, which threatened to cast a poisonous mildew over our precious liberties.  They would have rendered our fair country a passive instrument in their hands, in which case Freedom would have vanished from among us." --La Fayette.

" 'No State shall emit bills of credit.'  Can a State charter swarms of banks to flood the land with bills of credit and bills of no credit, until they shall eat up and devour our substance, and bring upon us more plagues than were ever brought upon Egypt ?  No!  This is clearly a violation of the Constitution of the United States." --Wm. Leggett.

"I feel myself bound, by the defying manner of the arguments advanced in the support of the renewal of the U.S. Bank Charter, to obey the paramount duties I owe to my country and its Constitution, to make one effort, however feeble, to avert the passage of what appears to me to be a most unjustifiable law."

"What is a corporation such as the bill contemplates ?  It is a splendid association of individuals taken from the mass of society, and vested with exemption, and surrounded with immunities.  By whom is this immense power wielded ?  By a body who, in derogation of the great principle of our institutions, responsibility to the People, are amenable only to a few Stockholders, and they chiefly foreigners." --Henry Clay, 1911.

"The paper system, being founded on public confidence, and having in itself no intrinsic value, is liable to great and sudden fluctuations;  thereby, rendering property insecure, and the wages of labor unsteady and uncertain.  The corporations which create paper money cannot be relied on to keep the circulating medium uniform in amount.  In times of prosperity, when confidence is high, they are tempted by the prospect of gain, or by the influence of those who expect to profit by it, to extend their issues of paper beyond the bounds of discretion, and the reasonable demands of business, and when these issues have been pushed from day to day, until public confidence is shaken, then a reaction takes place, they immediately withdraw the credits they have given, suddenly contract their issues, produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community." --Andrew Jackson's Farewell Address, 1837.

"I cannot but lament, from my inmost soul, that lust of paper money which appears in some parts of the United States.  There will never be any uniform rule if there is a sense of justice, nor any clear credit, public or private, nor any settled confidence in public men or measures, until paper money is done away." --John Adams to John Jay, 1886.

"No nation had a better currency than the United States;  there was no nation which had guarded the currency with more care;  for the framers of the Constitution, and those who enacted the early statutes on the subject, were Hard Money Men;  they had felt, and therefore duly appreciated the evils of a paper medium;  they therefore sedulously guarded the currency of the United States from debasement.  The legal currency of the United States is gold and silver.  This is a subject upon which Congress has run into folly." --Daniel Webster, 1816.

Extract from a Speech of Daniel Webster in the U.S. Senate in 1832.

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money.  This is the most effectual of inventions to fertilize the rich man's field by the sweat of the poor man's brow."

"The wisdom of man, in my humble opinion, cannot devise a plan by which the credit of paper issues would be long supported;  consequently, depreciation keeps pace with the quantity of the emission, articles for which it is exchanged rise in a greater ratio than the sinking value of the money.  Wherein, then, is the farmer, the planter, the artizan benefited ?  An evil, equally great is the door it immediately opens for speculation, by which the least designing, and perhaps the most valuable part of the community are preyed upon by the more knowing and crafty speculators." --Washington, 1787.

"They (the banks) grow rich upon the interest of their debts exacted from the whole community, upon which debts and promises of payment, struck off at the rate of a million in a day, they pay no interest whatever.

"Banks raise and depress at pleasure, not only the prices of wages, but of every article the working-man is compelled to purchase for the subsistence of himself and family;  and if they augment for a time the nominal price of wages, it is only to enhance in a still greater proportion the price of living and subsistence." --Robert J. Walker in U.S. Senate, 1840.

"For one, I enter my protest against banking as conducted in this country --a system not to be supported by any sound principles of Political Economy-- a gross delusion, a dream of a visionary --a system which has done more to corrupt the morals of society than any thing else-- which has introduced a struggle for wealth, instead of that honorable struggle which governs the actions of a Patriot, and makes ambition virtuous." --John Tyler in U.S. Senate, 1819.


From Melincourt, a work published in London 30 years ago.

The Paper Mill.

As Mr. Steady and Mr. Fox were passing through the town of Gullgudgeon, they found an immense crowd assembled in a state of extreme confusion, exhibiting every symptom of hurry, anxiety, astonishment and dismay.  They stopped to inquire the cause of the tumult, and found it to proceed from the explosion of a Paper Mill, in other words, the stoppage of the bank of Messrs. Smoke, Shadow, Airbubble, Hop-the-twig & Co. Farmers, bumpkins, artisans, mechanics, tradesmen of all descriptions, the inn-keeper, the lawyer, adjoining doctor, and the parson;  soldiers from the adjoining barracks, and fishermen from the neighboring coast, with their shrill voiced wives, rolling in en masse, like a stormy wave, around a little shop of which the shutters were closed, with the word BANK in golden letters over the door, and a large board on the central shutter, notifying that "Messrs. Smoke, Shadow, Airbubble, Hop-the-twig & Co., had found themselves under the disagreeable necessity of suspending their payments;"  in plain English, they had found it expedient to fly by night, leaving all the machinery of their mill, and all the treasures of their mine, that is to say, several reams of paper, half a dozen account books, a desk, a joint stool, an ink stand, a bunch of quills, and a copper plate, to satisfy the claims of the distracted multitude, who were shoaling in from all quarters with promises to pay, of the said Smoke, Shadow, Airbubble, Hop-the-twig & Co., to the amount of one hundred thousand pounds.

Mr. Fox addressed himself for an explanation of the particulars to a plump and portly divine, who was standing at a little distance from the rest of the crowd, and whose countenance exhibited no symptoms of the rage, grief and despair which was depicted in the physiognomies of his dearly beloved brethren of the town of Gullgudgeon.  "You seem, sir," said Mr. Fox, "to bear the general calamity with Christian resignation."  "I do, sir," said the reverend gentleman, "and with a very orthodox reason --I have none of their notes -- not I.  I was obliged to take them now and then against my will, but I always sent them off to town, and got cash for them directly."

"You mean to say," said Mr. Steady, "you got a bank of England notes for them."

"To be sure," said the divine, "and that is the same thing as cash.  There is a Jacobin rascal in this town, who says it is a bad sign when the children die before the parent, and that a day of reckoning must come sooner or later, for the old lady as well as her daughters;  but myself and my brother magistrates have taken measures for him, and shall soon make the town of Gullgudgeon too hot to hold him, as sure as my name is Tythes."

"You seriously think," said Mr. Fox, "that his opinion is false."

"Sir," said the reverend gentleman, somewhat nettled, "I do not know what right any one can have to ask a man of my cloth what he seriously thinks, when all that the world has to do with is what he seriously says."

"Then you seriously say it, sir ?" said Mr. Fox.

"I do, sir," said the divine, "and for this very orthodox reason, that the system of paper money is inseparably interwoven with the present order of things, and the present order of things I have made up my mind to stick by precisely as long as it lasts."

"And no longer ?" said Mr. Fox.

"I am no Fool, sir," said the divine.

"But, sir," said Mr. Fox, "as you seem to have perceived the instability of what was called (like locus a non lucendo,) the firm of Smoke, Shadow, Airbubble, Hop-the-twig & Co., why did not you warn your flock of the impending danger ?"

"Sir," said the reverend gentlemen, "I dined every week with one of the partners."

Mr. Steady took notice of an elderly woman, who was sitting with a small handful of dirty paper, weeping bitterly on the step of the door.

"Forgive my intrusion," said he;  "I need not ask you why you weep;  the cause is in your hand."

"Ah, sir," said the poor woman, who could scarcely speak for sobbing, "all the savings of twenty years taken from me in a moment;  and my poor boy when he comes home from sea." --She could say no more, grief choked her utterance.

"Good God!" said Mr. Steady, "did you lay by your savings in country paper."

"O, sir!" said the poor woman, "how was I to know that one piece of paper was not as good as another ?  And every body said that the firm of Smoke, Shadow, Airbubble, Hop-the-twig & Co. was as good as gold."  She then unfolded one of the promises to pay, which she handed to Mr. Steady.  He comforted her as well as he could;  but he found the purchasing of one or two of her notes much more efficacious than all the lessons of his philosophy.

"This is all your fault," said a fisherman to his wife; "you would be hoarding and hoarding, and stinting me of my drop of comfort when I came in after a hard day's work, tossed and beaten and wet through with salt water;  and there's what we've got by it."

"It was all your fault," retorted the wife, "when we had scraped together twenty as pretty golden guineas as ever laid in a chest, you would sell 'em, so you would, for twenty-seven pounds of Mr. Smoke Shadow's paper;  and now you see the difference."

"Here is an illustration," mid Mr. Fox to Mr. Steady, "of the old maxim of experience teaching wisdom.  We ought now to be convinced, if not before, what Plato has said is strictly true, that there will be no end of human misery till governors become philosophers or philosophers governors;  and that all the evils which this country suffers, and I fear will suffer, to a much greater extent, from the bursting of this fatal bubble of paper money --this chimerical symbol of imaginary riches, are owing to the want of true political wisdom in our rulers, by which they might have seen things in their causes, not felt them only in their effects, as even the most vulgar man does;  and by which foresight all the mischiefs that are befalling us might have been prevented."

A respectable looking female approached the crowd, and addressing herself to Mr. Fox, who seemed most at leisure to attend her, asked him what chance there seemed to be for the creditors of Messrs Smoke, Shadow, Airbubble, Hop-the-twig & Co.  "By what I can gather from the people around me," said Mr. Fox, "none whatever."  The lady was in great distress at this intelligence, and said that they were her bankers, and that it was the second misfortune of the kind that had happened to her.  Mr. Fox expressed his astonishment that she should have twice been the victim of the system of paper coinage, which seemed to contradict the old adage about a burnt child;  and said it was for his part astonishing to him how any human being could be so deluded after the perils of the system had been so clearly pointed out, and amongst other things in a pamphlet on the insubstantiality of Smoke.  "Indeed," she said "she had something better to do than to trouble herself about politics, and wondered he should insult her in her distress by talking of such stuff to her."

"Was there ever such infatuation ?" said Mr. Fox, as the lady turned away.  "This is one of those persons who choose to walk blindfold on the edge of a precipice, because it is too much trouble to see, and quarrel with their best friends for requesting them to make use of their eyes."

"A curse light on all kite flyers!" vociferated a sturdy farmer.  "Od rabbit me! here be a bundle of trash, masters! not worth a five and six penny dollar altogether.  This comes of paper mills.  'I promise to pay,' ecod !  Oh, the good old days of golden guineas, when I used to ride home from market with a great heavy bag in my pocket;  and when I wapped it down on the old oak table, it used to make such a sound as did one's heart good to hear it.  No promise to pay then.  Now a man may eat his fortune in a sandwich, or set fire to it in a farthing rushlight.  Promise to pay ! --the lying rascals, they never meant to pay;  they knew all the time they had nothing to pay with.  But such a pretty, smooth spoken, palavering set of rascals, standing with quills behind their ears, and smiles on their faces! why, Lord bless you! they would have made you believe that black was white, and though you could never get any thing of 'em but one o' their own dirty bits of paper in change for another, they were as rich as so many Jews.  Ecod ! and we were all fools enough to believe them, and now see what we have come to."

"Yes, father," said a young fop at his elbow "all blown, curse me."

"Yes," said the farmer, "and you're burst and blown, and you must sell your hunter, and turn to the plough tail;  and your sisters must churn butter, and milk the cows, instead of jingling pennyvorties, and dancing at race balls with squires. --We must be old English farmers again;  and none of your fine high-flying promise to pay gentlefolks.  There they be --spell 'em: 'I promise to pay to Mr. Gregory Gass, or bearer, on demand, the sum of five pounds-- Gullgudgeon Bank, April 1st --For Smoke, Shadow, Airbubble, Self and Company, Henry Hopthetwig, Entered, Davenport Walkoff'  And there be the coat of arms: two blacksmiths blowing a forge, wi' the chimney for the crest, and a wreath of smoke coming out o' it;  and the motto, 'You can't catch a bowl full !'  Od rabbit me! here be a whole handful of 'em, and I'll sell 'em all for a five and six penny dollar."

The "Jacobin rascal" of whom the reverend gentleman had spoken, happened to be at the farmer's elbow --"I told you how it would be," said he, "Master Sheepshead, many years ago;  and I remember you wanted to put me in the stocks for my trouble."

"Why, I believe I did, Master Lookout," said the farmer, with a very penitent face;  "but if you'll call on me some day, we'll drown old grudges in a jug of ale, and light our pipes with the promises of Master Hop-the-twig and his gang."

"Not with all of them, I entreat you," said Mr. Lookout, "I hope you will have one of them framed and glazed, and suspended over your chimney, as a warning to your children, and your children's children for ever, against the blessed comforts of paper money."

"Why, Lord love you, Master Lookout," said the farmer, "we shall have nothing but paper money still, you see, only from another mill like;  it is a bad state of things, and must come to a bad end, sooner or later;  but it will last my time."

"You are not in the last stage of consumption, are you ?" said Mr. Lookout.

"Lord love you, no," said the farmer, "do I look so ?"

"No, but you talk so," said Mr. Lookout, "I'll only say to you, mark the end of it;  it is a system of rascality and villainy, and must end sooner or later with disgrace and ruin to all concerned in it."

"Do you hear him?" said the Rev. Mr. Tythes.  "Do you hear the Jacobin rascal ?  Do you hear the libellous, seditious, factious, levelling, revolutionary, republican, democratical, atheistical villain ?"



A Bank Man.

We were toiling on towards the top of the mountain, when, at a sudden turn, we met a solitary traveller.  He was a tall, dark-complexioned man, with a broad brimmed Panama hat, rolled up at the sides;  a striped woollen Guatimala jacket, with fringe at the bottom;  plaid pantaloons, leather spatter dashes, spurs, and sword;  he was mounted on a noble mule with a highpeaked saddle, and the butts of a pair of horseman's pistols peeped out of the holsters.  His face was covered with sweat and mud;  his breast and legs were spattered, and his right side was a complete incrustation: altogether, his appearance was fearful.  It seemed strange to meet any one on such a road;  to our surprise, he accosted us in English.  He had set out with muleteers and Indians, but had lost them in some of the windings of the wood, and was seeking his way alone.  He had crossed the mountain twice before, but had never known it so bad;  he had been thrown twice;  once his mule rolled over him, and nearly crushed him;  and now she was so frightened that he could hardly urge her along.  He dismounted, and the trembling beast and his own exhausted state, confirmed all that he had said.  He asked us for brandy, wine, or water, or any thing to revive him;  but unfortunately, our stores were ahead, and for him to go back one step was out of the question.  Imagine our surprise, when, with his feet buried in the mud, he told us that he had been two years in Guatimala, negotiating for a bank charter.  Fresh as I was from the land of banks, I almost thought he intended a fling at me;  but he did not look like one in the humor for jesting;  and, for the benefit of those who will regard it as an evidence of incipient improvement, I am able to state that he had the charter secured when he rolled over in the mud, and was then on his way to England to sell the stock. --Stephen's Incidents of Travel in Central America.


Legal Decision.

An important case was decided in the Oyer and Terminer, at Utica, a day or two ago.  It was that of the Central Bank at Utica vs. The Bank of New York, involving the loss of some $20,000 by the one or the other party.  The material question regarded the right to three days grace on a draft by one bank on another.  The draft in this case was sent by the plaintiff to the defendant bank for collection, not paid at maturity, and only protested by the bank after three days had expired.  The Central contends that it should have been protested on the day when, by its terms, it fell due;  the Bank of New York responds, that uniform immemorial usage allows three days grace on such as on other drafts.  Verdict for defendant.  The case is to be carried up, exceptions having been taken.


The Erie Banks

In one of our former numbers, we mentioned that this bank was willing to take some hundred thousand dollars more of the State Loan.  We are gratified now in being able to state, that the State Treasurer has taken legal advice on the subject, and that Mr. Binney has given it as his opinion, that the Relief Law would not sanction this financiering expedient.  One of conditions on which the bank was willing to take an additional amount of the loan, or in other words to issue some hundred thousand dollars in small notes, redeemable in stocks, was that the officers of the bank should have the privilege of paying them out to such contractors on the public works as they themselves might select !


Incidents.

In the city of New York, a Mr. Colt, the author of a treatise on book-keeping, has murdered Mr. Adams, who had printed his book for him.  Putting all the circumstances of the case together, as narrated in the daily papers, it would seem that Mr. Adams went to demand payment from Mr. Colt, of a sum of 200 dollars, and that words ensued between them.  Our readers will recollect that it was debt that led Robinson to murder Mr. Suydam, the president of the Farmers' and Mechanics' Bank of New Brunswick.

Paper financiering is not at present confined to banks and bank officers.  A number of gentlemen are trying their hands at it, some in one way, some in another.  Among the most distinguished is alleged to be a certain Col. Munroe Edwards, alias, John C. Caldwell.  He has been arrested in this city, on a charge of having, by means of forged bills of credit, defrauded two New York houses of about 52,000 dollars.  He is described as a young and handsome man, of genteel appearance, and prepossessing address.