1 1 FACTS AND SUGGESTIONS j 1 1 ON THE SUBJECTS OF ; 1 1 c 1 ttirenci anb Jircct f rabf, 1 AnitRKSSEO ro riiK CHAMBEII OF C031)IE1{CE OF MACOi^, Oa. \ I;n (iKN. bl FY riRKKX. MAC ox lUNTED FOR THE CHAMBF-R OF (OMMLRCE SGI. THE WILLIAM R. PERKINS LIBRARY OF DUKE UNIVERSITY Rare Books FACTS AND SUGGESTIONS ON THE SUUJECTS OF €\nxtu\i n)i Wntct Crah, ADDRESSED TO THE CHAMBER OF COMMERCE OF MA.CO]Sr, Oa. By Gen. DUFF GREEN MACON : PRINTED FOR THE CHAMBER OF COMMERCE : 1861. w LETTER TO WM. B. JOHNSTON, President of the Chamber of Commerce, Macon, Ga. Sir: It is with pleasure I acknowledge the receipt of your invitation to attend the Convention, proposed to be held in Ma- con, on the 14th of October, for the purpose of considering how- far it is practicable to achieve the financial independence of the Confederate States ; and having given to the subject many years of anxious consideration, I venture to submit a proposition for the organization of an agency, which I believe will be an effi- cient means of relieving us from the grievous burdens heretofore the consequence ot our system of Commerce and Finance. The report of the Secretary of the Treasury of the United States of March 26, 1860, gives a statement of the condition of the Banks of the United States, from which 1 have prepared the following tables, showing their capital, loans and discounts, specie, circulation and deposits. That we may the better real- ize their relative strength, I have given the population of each State, and have separated the slaveholding from the non-slave- holdinir States : Slaveholding STATES. g-s opq Capital. Loans and Discounts. Specie. i i Circulation. (O o n Population. Alabama, Delaware 8 12 2 29 45 13 31 88 :» 20 34 65 $4,901,000 1,040,775 :«)0,000 10,(M«),50(J 12,K«,G70 24,490,866 ]2,.568,962 9,0S2,951 6,626,478 14,962,062 8,067,037 16,205,156 $13,570,027 .3,150.215 4t)4,6.30 16,770,282 25.2.H4,869 35,401,009 20,898,762 15,461.192 12.213.272 27,801,912 11,751,019 24,975,792 $2,747,174 208,924 32,876 3,211,974 4,502,250 12,115,431 2,779,418 1,160,912 1,617,687 2,334,121 2,267,710 2,!»43,052 $7,477,976 1.135,772 183,640 8,798,100 13,.520,207 11,579,313 4.100,869 7,884,885 5,594.047 ll,475,0:i4 5,.5;i8,378 9,812,197 $4,851,153 976,226 129,518 4,738,289 5.(;(;2,892 li),777.812 8,874,180 .■;,.357,i7t; 1.487,273 4,10.5,615 4,324,799 7,720,IS2 995,917 112,362 145,694 (Vcorgia, Kentucky, Louisiana Marjland, Missouri, North Carolina,. South Carolina,. Tennessee, Virfjinia, Texas, 1,082,797 1,159,609 000,431 800,790 1.201,209 1,008,:J42 715,371 1,146,640 1,593,199 (i00,9.55 Arkansas, 440,775 887,158 120,000 Mississippi, New Mexico and Indian Tcrr'y. _ _ _ Total 827 $128,176,517 $207,749,681 $38,912,129 $87,107,108 $66,074,585 12,683, 2 4t Non-8lavcliold- iuK States. Connecticut, . . . Illinoie, Indiana, Iowa, Kansas, Maine Massachusetts, Michifran, X. llkinpshire, . New tlcrsey, . .. New York Oliio, Pennsylvania, . Rhode Island,.. \(Tmout Wisconsin, t;;ilifornia,. ... Minnesota, ... Oregon, riah Territory, Washington do. Nebraska do. 00 m ng !^ 5 74 74 37 12 1 68 174 4 53 49 303 52 90 91 46 108 $21. 5 -I Q 7, 64, 5, 7, HI, 6, 25, iO. 4. 7, 502,176 251,225 343,210 460,450 52,000 .506,890 519,200 755,465 016,000 ,884,412 441.320 ,890,838 ,.565,582 ,865,569 ,029,210 ,620,0J0 $27,856,785 :»7,229 7,676,861 724,2281 48,25<; 12,654,794 107,417,323 892,949 8,591,6.38 14,909,174 200,351,332 11,100,462 50,327,157 26,719,877 6,946,52.] 7,592,361 Nonslavchold'g 1224 $ 29:1,713,547 $ 484,195,949 Slaveholding, , . I 3271128,176,517 207.749,681 |9,'«9,920 22:5,812 l,5.s:5.140 255,515 8,28S 670,979 7,532,647 24,175 255,278 940,700 20,921.545 1,82,'<.610 8,378,474 450,929 198,409 419.947 $7,561,519 8,981,723 5,:390,ai6 663,806 8,395 4,149,718 22,087,920 222,197 3,271,18:1 4,811,8-32 29,959.506 7,983,889 13,1:12.892 3,.558,295 3.882,98:i 4,439,8.55 $4-4,662,4l)^( ,$119,997,469 187,71 8..'>44 ;«,912.129' 87, 107,01s 66,074.585 $5,574,900 697,0:17 1,700,479 527,37,'^ 2,695] 2,411,022 27,804.6'.t9 :175.:197| l,187,9ftl 5,741. 4*V) 104.070.27;{ 4,039.611 26,167.843 3,553,101 778,8:14 3,035,813 460,670 l.fiS7.404 1,370.802 682,002 14:1,612 619,95'^ 1,231,494 754,291 326,072 676,6)<1 3,N51,563 2.:i77,917 2,924,601 174,621 316,827 768,485 384,770 172,793 52,566 50,000 11,624 28,893 19,0:»;118 12,683,246 I find in a newspaper an ai ticl$, credited to the N. Y. News, so appropriate that I quote it at large : " There is so much misapprehcnaion in relation to our foreign trade, and it is so impor- tant at the present juncture to have a correct understanding upon the subject, that at the risk of repetition we shall recur to it again. For this purpose we shall take from the offi- cial returnsof 1861, the amount of exports, distinguishing the exclusively Northern from the exclusively Southern origin of the articles : UNITED STATES EXPORTS. southern orisin. NORTHERN oniaiN. Forcst $ 6,085,931 Products of the sea $4,156,180 Breadstuffs 9,567,597 Forest 9,368,917 Cotton 191,806,555 Provisions 20,215,226 Tobacco 19,278,621 Breartstuflfs 19,022,901 Ucmp, &c 746,370 Manufactures 25,599,547 Manufactures 10,934,795 Total Northern origin $77,363,070 Total Southern origin $2'38,419,0S0 Total exports $335,782,740 Imports consumed 336,380,173 These arc the figures of the Treasury table, and their careful consideration may dispel some strange illusions that possess the public mind. Amoug the items, it will be observ- ed under the head of products of the forest, Georgia piue and lum'ier, naval Btores, &c., beara high figure. All those who have been patiently awaiting the South to bo "starved out" will observe with some surprise, that it supplies, one-third of all the breadstuffs export- ed from the Union. Ilence, if they cannot " eat Cotton," they will not starve. The manu- factures which originate in the South form also a small sum total for which many are not prepared. The result is that the North furnishes one-fourth of the merchandize exported and the South three fourths. It will now be understood that three-fourths of the national exports are embargoed by blockade. It is very important thoroughly to understand that fact, be. cause on it hangs all thejinance qf the war. Breadstuflfs and provisions, it will be observ- ed, form one half of ihe Northern exports, and the harvest in England being good, those articles, if eold at all. must be sold very low. If \\f t'lni to tlie 'mportations into the cotmtry we find the following results : IMPORTS. Specie. Goods. Total. North, $4,780,598 $.316,842,381 $321,592,970 SotJth, .3,770,540 30,802,738 40,573,284 Total, ' $8,551,135 $:B3,fr45,119 $;i()2,166,2.'34- The specie imports at the youth are mostly silver from Mexico, and of the merchan- dize, coffee counts $0,731,017; sugar for $3,500,000; for Western account, iron, queens ware, &c., for the balance. Now, if we bring the aggregates together, they will show as follows : Total Im. Total Ex. Excess Im. Excess Ex. North. $310,812,381 $ 77,367,070 $239,449,311 South, 36,S02,';38 288,419,670 . 201,616,9.32 We have here the conclusive fact that the three-fourths of the whole foreign trade of the country is Southern. Theexports are produced there, and the goods they get payment for conie'to them through New York, to the great profit of its merchants. The South also sent North for Northern consumption, Iftst yearas follows : Cotton, 1,000,000 bales. $55,000,000 Tobacco, 10,000,000 Sugar, 18,000,000 Rice, , 1,000,000 Wheat and corn ' 5,000,000 Naval Stores, 1,000,000 Total, $90,000,000 For this and more, domestic manufacttires and 'Western produce, mingled with impor- ted goods, went South in payment. The whole of this is blockaded. The Morrill tariff was intended to increase the proportion of domestic manufacture and diminish the propor- tion of imported goods sent South in payment It will now be remembered what we recently stated, that even if the North can sell as •much breadstuffslhis year as in the year of short harvests, she has in round numbers but $.30,000,000 with which to pay for the tea, coffee, sugar, and all those articles that made up this aggregate of $330 280,172 of goods Imported, besides $22,00'),(K)0 of interest money to be paid abroad. To import the same amount will involve the pajTiient of $'256,000,000 of specie in a single yi^ar, or every dollar in the country. North and South. If one-third only of the usual imports were made, the pressure for specie will be such as to make loans im- possible and taxes unavailable. An importation of $125 000,000 only, ^ould give hardly more revenue, even under the Morrill tarriff, than would pay the interest on the public debt, while it would convulse the country by draining it of specie. The fact must continually be borne in mind that the Middle and New England States can, of themselves, have jittle or no trade with England and Western Europe, because they are producers of the same articles. New England competes with Old England in the purchase of raw materials and food, and the sales of manufactured articles. There are no trading interests between them. They both wart Western food, and both want Southern materials. Of the importations that are brought into New York, a large portion goes to the South, which raised the produce with which tney were purchased through New York commercial houses. In this connection, we call attention to the following, from the London Economist, in relation to the British trade for the first three months of this year : " Our commerce with the South and with the North is now for the first time dividod in the official tables. It appears that all onr direct exports are to the North. The fig-- urerare: Exports to Northern States, Exports to Southern States, .t'3,922,1.^3 174,50;J 6 Show iuga startling contrast in the amount we actually eell to the twc hoUigerentS. The coutraBt is nearly as remarkable iu what we buy, only it is reversed! Imports into Great Britain from Northern port?, £4,097,868 Imports into Great Britain from Southern porta, 6,13(i,i86 '* We Bee in these simple figures the record of the causes of much that has occurred in Lombard street. " It is therefore difficult to say with which of the combatants in this miserable struggle <\c arc the most connected. One party supplies ue with the materials of our industry, the other party purchases th£ fruits of that industry from us." This is a very singular error for so high a commercial antliority as the Loudon Econo- mist to tall into. What England receives is Southern produce, direct from the South ; but what she sends to the North, that is to say. to New York, is on its way to the South. If the separation was unfortunately to take place, England would not continue to sell large" j- to the North, but the goods would go direct to the ports from whence the raw material is de- rived. In such an unfortunate state of affairs the West would be bound over hand and foot to the Eastern States. She would have to buy their manufactures dear and sell them food cheap. The interests of the South and the West are identical, both being agricultural, and both of them sources of supply for Europe iu opposition to the Eastern States. The great Western valley of th&Mississippi, with its undeveloped natural manufacturing ad- vantages, has the vast Southern market open to its future enterprise, when capital shall have accumulated from agricultural industry and fertile land. "This war is retarding her progress fifty years.at least, and perhaps ruining it forever. If we analyse the condition of the l^anks, we find that they had — Loans and discounts . $G91,'»l.-.,580 Circulation. ' ' 207,102,477 Deposits, S57,S0a,127 Making amass of credits of, $l,la2,S50,lS4 Whilst the specie in alHhc-banks was only, 83,594,537 ■ It will be seen that with a popi^lation of 3,851,563, Kew York had— t-apital, ■ $111,441,320 Depositcs, 104,070,273 Loans and discounts, 200,•351^332 Specie, 20,921,5ja Circulation, • 29,959,500 The slaveholding State?,, with a iiopulation of 12,683,246, had — Capital, 1126,176,517 Deposites, 60,074,585 Loans and discounts, 207,749,681 Specie, "^^ 912,129 fhcilation. ■ , 87,107,103 Why is this? We have seen that the South furnish $238,- 4:19,680 of the exports, whilst the entire ISTorth furnish but $77,368,070 ; and as tbese e.xpotts are the basis of our foreign trade, there must be some efficient cause which has produced such a striking difference between the financial organization of the North and of the South. What is that cause? Is it not that the South is agricultural and the North is commercial and manufacturing? Is it not because the financial system of the United States was organized in reference to the business of the North, and that the organization is not suited to the business of the South ? The dealings of the merchant and manufacturer are from day to day. The dealings of the planter are from year to year. The banking system of the United States was organ- ized in reference to the business of Northern men, and is there- fore adapted to the business of merchants and manufacturers, whose daily receipts enable them to make frequent payments, but it is not adapted to the business of planters, whose receipts being from year to yeai'^ require an entirely different financial arrangement. Is the condition of the financial world such that we can organize a financial system suited to the industry and wants of the South, which will enable th.e planters of the South to make a safe and profitable "use of credit? ' I believe it is, and propose to create, as the basis of such a system, an agency, to consist of an incorporated company with sufficient capital, to be invested in good public and private securities, with branches an! agencies in the several Confederate States and in Europe. 3ave we the means of creating such an agency ? The cot- toi; crop may be estimated at $200,000,000 per annum. Part of 1 he proceeds invested in the Treasury notes or bonds of the Coi:fe4 185,030 47,000 . 1,200 8,000 63,924 187,923 12:^,022 114,798 3:«,866 384,770 460,670 1,687,404 1,370,802 682,002 619,958 1,231,494 754,291 172,79;j 326,072 076,084 3,851,563 2,377,917 52,566 3,924,501 174,621 315,827 768,483 50,000 11,624 143,642 23,893 Totals I 19,834.5 ! 842,118.135 1,644,(J44 19,033,118 There are some striliing and instructive facts exhibited in these Tables — the first of which is, the large sums invested in railroads, and the character of the investments. Much of the sum so invested in the Confederate States is advanced by plant- ers, more on the account of the reduction of the cost of trans- portation of their Cotton, than of the' dividends on the shares. With them, it is a means of placing their crops in market, ra- ther than an investment of capital. The appropriation of the sums so invested, as part of the capital of an "agency," to be substituted for the northern and foreign agents, whose credit has been heretofore so important a part of the machinery, by which Southern produce was placed in the foreign market, would seem to be natural and easy; and especially when we take into account tlie fact that the railroads now in use are but the commencement of a system requiring an expenditure many times greater than has been made, and that the proposed agency would enable Southern Hailroad Companies to obtain funds for the further extension of the system, upon terms much more favorable than could otherwise be doqe. It is now well understood and admitted that money, prop- erly and economically expended on well located railroads, adds from five to ten times the sum so expended to the value of the property connected with such improvements ; and that much of the boasted wealth of the Xorth was derived from the use of their credit, and in the expenditure of the large sums invested lO in their railroads. The sums thus expeiided in the Nurth were chiefly borrowed, and the credit which enabled them to borrow was created, chiefly, by the exports which were derived, as we have seen, from the South. But there is another strikins: feat- ure of the j)ast, which is, that the credit of the Northern Rail- road Companies was worth more, and funds could be obtained by them in Europe on better terms than they could be obtained by tiie Railroad Companies of the South. The northern roads cost an average of $42,364 per mile, while the cost of the southern roads was l»ut §2S,92Q. The value of the exports of the South was more than three times that of the North, and being chiefly in cotton, rice, tobacco, lumber and naval stores, all bulky and heavy articles and comparatively cheap commod ities, furnishing nearly, if not quite, eight times the transporta. tion, gave greater and inore certain employment to the. south- ern roads, and consequently a surer and better basis of credit. Why, then, was the credit of the Northei-n Railroad Compans ies better than the "credit i.-f the Southern ? Why could Massa- chusetts borrow money in Europe at less than 5 percent., when some of our best Southern Railroad (Companies could not get it at 10 per cent.? Is not the answer to be found in the fact that the North has been the financial agent of the South I That whilst the excess of Southern products exported was §201 616,- 932, the excess of Northern imports was $230,4-10,311 ?■ Does not this solve the problem? Does it not explain why Northern credit has been worth more than Southern credit ? .■ . Have we no remedy ? How did the North obtain the con- trol of so large a part of our exports? Was it not by their as- sociation of capital that they were eriabled to control the ma- chinery of commerce ? The credit of an association' -of fifty persons, each worth ten thousand dollars, is much stronger than the credit of either or all of them separately; It is in the asso. elation of capital, and concert of action, that the financial power of the North consists. If we would relieve ourselves from the tax, which they have levied on the profits of our labor, we, too, must have associations of capital and concert of financial action ; and our a'^sociation and our action should be adapted to the na- ture and wants of our industry. The products of northern labor are made available, as I have said, from day to day, at short periods ; therefore the bank discounts at sixty or ninety days supply their wants and maintain their system of credits. The 11 l)rodncts of southern industry are made available from year to year, and tliercfore the jHanters require a diffeient financial system, to enable them to make a ])rotitable use of credit.-- Hence the northern baidc**, in concert with the Euroi)ean con- sumers, have organized a system of credits f-r the movement of the cotton crop, which Assumes to be a prompt ]>ayment to the planter, but which in truth, gives to the purchaser a credit of nearly twelve tnonths, ^taxing the planter with several com mis- sions and sundry charges, which he is required to pay as an in- dis])ensable> ]iart of the machinery, by which more than $200,- 000,000 are paid for northern imports out of the proceeds of the sales of southern products, to l)e charged with alarge additional commercial prolit by the nurthern merchant, before the southern planter is permitted to use the merchandize imported and paid for with the pre ducts of his industry, I am awaie that the planter should not be a merchant, and that merchants, ships and banks are indispensable parts of the machinery of foreign commerce. I do not propose to make the planter a merchant, or to dispense with a single southern bank or a single southern merchant. What I propose is, to substitute 8n association of persons interested in the production and trans pol'tation of southern staples in lieu of the northern and foreign agents, who, by the use of the Credit predicated on their control of southern labor, have levied uiany millions of dollars in the shape of commissions and commercial profits, upon the sale of the products of southern industry. The process heretofore has been that the merchants, factors and banks of the Sotith deliv^ ered the products of southern labor to northern or European agents,, in exchange for their drodit in the shape of bills, which were paid out of the proceeds of sales made in the North and in Europe. I propose to substitute a southern agency, composed chiefly of southern planters, who by depositing with the agency in payment for shares, Confederate bonds an'd notes, or other good securities, will create a bona fide capital, which would have, here and in Europe, greater resources and a better credit than the northern or European agents to be superseded " by them, and who being directly interested in protecting the value of their own labor, will use their credit and capital thus creat- ed to prevent its depreciation in the foreign markets. It will require no less southern banks and no less southern merchants to carry on the trade of the South than heretofore. So far from 12 reducing the number or the profits of the southern banks or southern merchants, it is apparent that if, as I believe, the agency will aid in giving a direct trade witli Europe, and by dispensing with northern agents and northern merchants, in- crease the value of southern exports, it will increase in like pro- portion the amount of southern imports, increasing in that pro- portion the consumption of ioreign goods, which being free from the northern taxes heretofore levied in the shape of custom duties and commercial profits, will not only increase the num- ber^ but will proportionally iucrease the profits of southern mer- chants. The banks are the appropriate agenta of the merchants, and a system which increases the nu:::iber and profits of tiie mer- chants, will benefit the banks. But I return to the objection that the planter should be a planter. He- now employs a factor, through whom he transfers his crop to the northern or European agent, by whom it is sold •in the North or in Europe. What I propose is, that the plant- ers shall, by association, create an agency to supercede the northern or foreign agents. I admit that the value and efticien- cy of that agency will depend upon the persons chosen to ra9n- age it, and that these persons will be chosen by the planters. But if the planter is competent to-select factors qualified to select the northern and foreign agents, heretofore part of the machinery of southern trade, surely they will be competent to select proper persons for the management of the agency to be organized by them as a substitute for the northern and foreign agents heretofore selected by their factors. The question then is reduced to thi^ : Are the planters of the South competent to select proper persons to manage such an agency, and can such persons be selected in the South ? That the planters can aftbrd to .pay salaries sufficient to command the best talents, of tried and unimpeached integrity, cannot, be questioned ; and that such persons can be had for sufficient compensation, is appar^ ent in the skill and entei-prise which characterize the people of the South, whether tested by the management of our banks, our railways, our literarj^ institutions, or in the cabinet, the forum, the plantation or the field of battle. That we have among us persons competent to execute the trust, and that the association will be fully competent to select them, we require no further proof than a comparison of the management of our banks and our railroads with themanaijement of the banks and 13 railroads in the North. What northern railroad can compare favorably with the railroads of Georgia, or what President or Superintendent of a northern railroad can compare favorably with the Presidents and Superintendents of our railroad com- panies ? But these considerations address themselves to the pecunia- ry interests of the South. 1 would present higher and stronger motives for the proposed association, which belong to the polit- ical relations of the Confederate States with the other peoples of the earth. The entire population of the world is. estimated as follows : Africa, (an estimate) from 60,000,000 to 200,000,000 America ' 67,896,041 Asia, including islands 775,000,000 Australia, and islands 1,445.000 Europe, 275,806,741 Polynesia, (an estimate) 1,500,000 Making eitimated population to be 1,301,647,782 As the population of Asia is so much greater than that of Europe, and the trade of India has, in the progress of European civilization, been more or less a monopoly, it has, in tarn, en- riched the nations by whom it was enjoyed, from the days of Solomon until now. A close monopoly of this trade was held by the British East India Company for more than two hundred years. ' They levied a tribute so great and imposed burdens so onerous, that, having exhausted the accumulated wealth of the former governments of India, they were compelled to rely, for payment of their demands, chiefly upon the cheap manufac- tures of India. But the invention of the cotton-gin, the power loom and the spinning jenny, had reduced the cost of tex- tile fabrics in England so much below the cost of production in India that the East India Company could no longer make a profit on such goods imported from India. It' was also found that the other European nations, profiting by the example of England, had established for themselves a system of manufac- tures, and instead of being, as they had been, consumers of British goods, had become competitors in the markets of the world. These European nations had few or no tropical colonies, and it was seen that, exercising a control over the trade with. India, England, by exchanging her manufactures for the trop- ical products of India suited to the wants and consumption of her European competitors, could still levy a tribute, in the 14: 6ha}>c of commercial proHtB, on the tropical products of India, which she might receive in exchange for her manufactures, and sell for consumption to tlie other nations of Europe. But it vas foreseen by Warren Hastinffs, the conqueror of India, and he wrote a pamphlet to prove, that African labor in America could produce at less cost than the labor any and the repeal of the discriminating duties favoring the West India planters ; and the merchants of Liverpool inter- ested in the slave trade, the owners of Weat India estates and the East India Company united their influence and prevented the contemplated measures until 1833, when the British Parli- ament emancipated the slaves in the West Indies, repealed the discriminating duties favoring West India produce, abrogated the East India monopoly and opened the trade of India to Brit- ish .enterprise. The late wars with Russia, India and China, were but parts of the same system of measures for the main- tenance and promotion of British commeiCe, and illustrate the extent and the manner in which the power and resources of England will be exerted for that object. Let us pause and ex- amine the bearing of these facts upon the future of the Confed- erate States, and especially upon their relation to' the interests and prosperity of the planters of these States. The. productive industry of a people is the true source of their wealth. England and Wales, with a population of less than 20,000,000, are estimated to have, in their machinery, a creative power eqital to the labor of (100,000,000 of men. It is the profits derived trom this employment of her capital that en ables lier to pay $4:11,000,000 of taxes, the sum required to pay the interest on her national del>t and the current expenses of her governiiient. With her, then, the maintenance. and con- tinuance of her system, of industry and commerce, -is an indis- pensable necessity. She has 5,000,000 of people eiiiployed, and more than $500,000,000 of capital invested in the purchase and manufacture of cotton, and is. dependent upon the Confed- erate States for three fourths of the supply of the raw mateiial. The question which most interests the more civilized and weal- thy nations of the earth, who use machinery, is, how they can 15 most advantageously dispose of the products of tteir industry to the less civilized, who do not use machinery ; and hence, France and England, burying the traditional hatred of ages, united in opposing the progress of Russia and in the war with China, and made it a condition of the peace with China that they should be ])erniitted to introduce their manufactures into China, and to take Chinese coolies, as laborers, to Australia and Algeria — the purpose being to use them as slaves^ in the culture of cotton. I refer to these facts to show the relation which the growth and manufacture of cotton have to the pro- gress and civilization of the age in which we live, and to enforce the necessity jvnd propriety of an association of those interested in its production, for the maintenance and advancement of their common interests. We have a climate, soil and labor, which enable us to defy all competition ; and we may assume that the progress of events and of public opinion will vindicate the character of our industry, and place the Confederate States among the first and greatest of civilized nations ; and yet there are several features in the crisis in which we are "now placed, which deserve to be considered. The population of the United States in 17!»0 was 3,929,872, of whom 697,897 were slaves. In 1^60' it was 31,676,217, of whom more than 12,000,000 were in the slaveholding States and more than 4,000,000 were slaves. The same relative in- crease would, in the next seventy years, give within the limits of the late United States, a population of 255,000,000, and to the slaveholding States, including New Mexico and the Indian Territory west of Arkansas, nearly 100,000,000, of whom 24,- 000,000 will be slaves, enabling the Soutl^, to furnish more than 24;000,000 bales of cotton. - ; ' ■ Europe, excluding Russia and Turkey, hus a pop'iUa'J-m ( f 195,434,660, on a territory of 1,455,025 square > '^ -. divided into fifty separate governments, as follows : Slateiof Europ(. Andorra (Pyrenees) Anhalt-Bcmburg, - Anhalt-Dcssau-Cotten - Austria, . . . . Baden, ..... Bavaria, .... lielginm, .... Bremen. . . . . Brnnpwick, .... Church, States ol the Governnienls. Sq. miles. PcqvdatUm. Republic, .190 7,000 Duchy a39 56,031 " 678 119,515 Empire, 248,551 35,040,810 - Grand Duchy, 5,712 1,335,952 - Kingdom, 28,435 4,615,748 " 11,313 4,671,183 - Free City, 112 88,850 - Dticliy 1,525 274,069 - Popedom, 12,082 2,110,080 16 states of Evrope. Denmark. France, Frankfort, Great Britain. Greece, - - - - Ham'bnrg, Hanover, Ueese-Caesel. ncsse-Darmstadt, nesse-Homburg, - Holland with Luxembourg, - Ionian Islands Lichtenstein, Lippe, Lippe Schaumburg, Lubec, - - ■ - Mecklenburg-Schwei in, Mecklenburg-Strelitz, Monaco, Nassau, Oldenburg, Portugal, Prussia, ' - Reuss, Principalities of - San Marino, Sardinia, Saxony, - - Saxe-Altenburg, Saxe-Coburg-Gotba, - Saxe-Me in.-Hilburgh. , Saxe-Weim.-Eisenach, Schwartzburg-Rudolstadt, Schwartzburg-Sondershausen. Sicilies, The Two - Spain, - . - - Sweden, { - Norway, ) - - - Switzerland, Waldeck, Wirtemburg, Government. Sq. miles. Poj'^iodon . Kingdom, 21,856 2,468,713 Empire, 212,341 36,746,432 Free City, 39 79,278 - Kingdom, 110,840 28,888,597 " 18,344 1,067,216 - Free City, 135 222,379 Kingdom, 14,600 l.SU3,976 - Electorate, 4,430 726,686 Grand Duchy, 3,761 845,571 Landgravate, 106 25,746 Kiijgdom, 13,890 3,494,161 Republic, 1,006 246,483 Principality, 61 T,150 " 446 106,086 - " 170 30,144 - Free City, 1«3 55,423 Grand Duchy, 4,701 541,395 " " 997 99,628 Principality, 12 7,627 Duchy, 1,736 443,648 Grand Duchy, 2,470 2M,359 - Kingdom, 34,500 3,5(J8,895 " 107,300 17,739,918 Principality, 5S8 121.203 Republic, 21 8,000 - Kingdom, 48,026 11,029,21(5 - 5,705 2,122,148 Duchy, 491 135,574 " 790 153,879 " 968 168,816 " 1,403 267,112 Principality, 405 70,030 " 358 62,074 - Kingdom, 41,521 8,703,130 " 176,480 15,454,514 " 170,715 3,639,3.32 " 121,725 1,490,047 - Republic, 15,301 2,391,478 Principality, 455 57,550 - Kingdom, 7,568 1,690,898 Totals 1,455,205 195,434,660 'Now when we take iuto consideration the fact that England waged a war of more than 20 years against France to prevent the conquest of any of these governments, for the avowed pur- pose of maintaining the balance of po^er as it existed in En- rope, and that she has since united with France to arrest the progress of Russia and to compel China to purchase her manu- tactures and furnish Coolies as slaves, it is not to be presumed that she will permit the United States to annex her American colonies, or that she will unite in the subjugation of the South. For as if the Union 'had been preserved and the same ratio of 17 increase were maintained, it would give to the United States at the end of the next seventy years more than 255,000,000 of peo- ple, it surely requires no argument to satisfy intelligent minds that England will greatly prefer to foster and strengthen the Confederate States, not only because she prefers the creation of an independent government as a check upon the otherwise pre- ponderating power of the United States, but because the failure of all their eftbrts to obtain a supply of cotton elsewhere must convince the manufacturers of England that our soil, climate and labor are best suited to its production, and if they do not purchase the raw material from us, we will become their most successful competitors in its manufacture. For the slavehc)ld' ing States, including those to be formed west of Arkansas, will have a territory of more than 1,200,000 square miles, cajmble of sustaining a population greater than all the population of Europe, and as England and the other manufacturing States of Eurojje will be dependent on us for the supply of the raw material, so essential to their industry, it is to be hoped that the late success of our arms will induce the leading powers of Europe to unite in urging the acknowledgment of our independence, and that their interference will give us peace. If the war and the block- ade continue, then, if the Confederate Gov^-nmeut purchases the cotton crop and pays for it in Treasury notes ^vithout inter- est, that purchase and the expenditures of the war will give us an abundant and cheap currency to be employed in building up mauufactures; and availing ourselves of improved machinery, we can convert our cotton into yarns and cloths, and should the war continue for threfe years, we can then supply the increasing demand in Africa, India and China with greater profit than it can be supplied by Great Britain herself. The estimate is that she has invested In spinning and weaving, $3:26,250,000 In dyeing and bleaching, 150,000,000 In transportation and purchase of cotton, 47,500,000 Making the entire sum which she has invested in the manufacture but, - $503,750,000 The war of 1812 caused large sums to be invested in manu- factures in the Northern States, and if the war continues and we are prevented from exchanging our cotton for British man-> ufactures, it will divert large sums into manufactures in the 18 South. "\V"e will in that case be enabled to produce cheaper and undersell all competitors. We can raise our own food and thus we will have cheap bread. We can raise our own cotton and thus save the cost of transportation. We will be more than half way on the route from Europe to China, which is to be- come the chief market, and if England and France do not unite with us in coercing a peace, the shipping interest of the East and the manufacturing and agricultural interests of the North- west will soon unite and give us a peace. If they do this and the Northwest be wise and becomes a separate government, as is more than probable, then if that section establishes proper commercial relations with as, it will become the seat of the richest manufacturing industry in the world, and receiving their supplies of the raw material and tropical products from the South, these two people will be bound together by interests stronger even than the late constitutional Union. In either case we should have our " Agency" to foster, promote and sus- tain our financial independence. Do you not see in the manifestation of God's providence in the progress of the slaveholding States, that He has committed to them, as a chosen people, an important and peculiar trust, connected with the spread of His gospel ? Did He not send the Huguenots to South Carolina, the Chivalry to Virginia and North Carolina, the Puritans to New England, the Quakers and Scotch Irish to Pennsylvania, and the Catholics to Maryland under circumstances which necessarily gave birth to the revolu- tion, which created the United States? Did He not by the slave trade bring into the United States some 400,000 African slavee, who by their natural increase now number more than 4,000,000? Has He not permitted a false philanthropy and a false religion to bring the descendants of these Africans within the Southern States, where the climate, soil and productions five the best reward for their industry ? Has He not fostered and developed the resource's ot these States, so increased their numbers, and so trained and educated our people that they have the strength, the will, the resources and the knowledge, aided as they manifestly are by His superintending providence, to assert and maintain their independence as a nation ? Do you not see that the tendency, if not the inevitable consequence, of 19 the pending war will be to give a unity of inteiest and of opinion and a consequent permanence to the government of the Confeder- ate States, which, as their territory is sufficient to sustain a popu- lation of more than 200,000,000, must in a few years give them a numerical strength greater than any other of the civilized na- tions of the earth ? For it is obvious that instead of having such a bond of union as our institution of African slavery gives to us, the rivalries and conflict of interests between the Eastern and "Western States of the Federal Union will cause them to divide, like the governments of Europe, into many nationali- ties? Do you not see that tlie active and angrj^ discussions of the questions of slavery and the tariff, which have so much ab- sorbed the public mind for the last thirty j-ears, were providen- tially interposed to unite us and prepare us, as a people, for be- coming a separate and independent nation ? Have you not seen that our President and Congress acknowledge that the strong hand of the Almighty has upheld our armies and given them the victories won on the field of battle ? Do you not realize that the great heart of our people, of men, women and children, unite in c.ie common sentiment of faith, gratitude and praise to God iv: these manifestations of His preference and protec- tion? Why it it that we, as a people, are thus made the special objects of Grod's providence? What is the trust committed to us and what its purpose? "What is our peculiar characteristic as a nation? Is it not that we are the owners of African slaves and produce by their labor the greater part of the cotton, which forms tlie basis of that comnierce which is so efficient an agency for the spread of the gospel ? If 1 am correct in these views, (and who can doubt it?) then the Confederate States are to be the first and greatest of civilized nations, a people chosen in the providence of God, to whom He has committed in an especial manner an important part of that commerce which is, as it were, the wings upon which He sends His gospel to heathen nations? If this be so, and credit be as we have seen, so important and indispensable for the development of our industry and the ex- tension of commerce, then such an organization and consolida- tion of capital as the proposed agency will create, is not only a financial necessity, but an indispensable christian duty. For if the war continues, it will give a safe and profitable investment 20 of the notes and bonds of the Confederate States, and if we have peace, it will aid the direct trade to Europe, and so lar as it may prevent an undne export of specie will sustain the credit of our banks and give stability to our currency, which will ]iromote the employment and greater distribution of labor, which will secure our permanent prosperit}'. The remarks on the proposed issue of Treasury notes sub- mitted to the late Convention of cotton planters, and by them ordered to be printed, were intended to show that an issue of Treasury notes is the best form in which the loan to the Confed- erate States can be made. The statistics given demonstrate that, inasmuch as the Treasury notes are to be convertable into S per cent, bonds, the amount, which may not be so converted, will be of equal value with the bonds, and that as the bonds will be equal in value to gold and the notes may be converted at the pletisure of the holder, all beyond the sum required as cur- rency will be so converted, and therefore the sura so required will not depreciate much, if any, below the value of gold and silver. Those remarks were hastily thrown together, at the request of gentlemen of wealth, experienced in the cotton trade in New Orleans, and submitted to the Convention, imperfect as I knew them to be, because I believed their chief value to consist in the facts and statistics they gave, rather than in any suggestions or arguments of mine. 1 am sensible that finance and currency, inv61viDg as they do the progress and prosperity of civilized so- ciety, have been elaborately discussed by men of such ability and position that their opinions have assumed the weight of authority. Yet I do not hesitate to assert that there is scarce any subjects, affecting their interests, less understood by the great mass of the people. If the laborer or man of business can use a bank note as gold, he does not stop to ask what is its real value, but receives it as money because others will so receive it of him. This confidence in the value of bank notes is the re- sult of habit, and rests chiefly on a fallacy, to-wit : a belief that the bank note is the .actual bona fide representative of specie, and may at all times be converted into gold or silver coin. To prove that this belief is a fallacy, I refer to the Report of the Secretary of the Treasury, dated 2G March, 1S60, which shows that the circulation of the banks of the United States, as exhib- 21 ited by the returns to the Treasury Department, nearest to the 1 Jan., ISCO, was, -•-..- $-207,lO2,47~ Whilst their specie was but, !?3,5St 59T It is obvious that the S3 millions of specie could not redeem the 207 millions of -bank notes, and yet these bank notes were equal in value to gold and silver. Why so? The same report shows that the loans and discounts were $691,045,580. It is apparent therefore that what gave value to the $207,102,477 of bank notes, was not the $S3,534,o97 of specie, but the $691,045,- 580 of loans and discounts. It was not the specie held in their vaults, but the bills receivable held in their drr^wers that gave value to the bank circulation. Does not this show that the val- ue of the bank note depends much more on the ability of those who are indebted to the banks to pay in bank notes what they owe, than it does on the specie in the banks ? Say that there had been a run upon all the banks, and that the whole sum of $83,535,597 of specie had been taken by returning that sum in bank notes, it would have left in circulation $123,567,880 wilh- out any specie to redeem them. But to meet this circulation ot $123,567,880 the banks would have held a demand against the public for loans and discounts of $691,945,580. Do you not see that if the public could pay the banks this balance of $123,- 567,880 in bank notes, there would still be a balance in favor of the banks of $563,376,700, less their deposits ; and that if re- quired to pay up their entire deposits, there would still be a bal- ance in favor of the banks of $314,586,577 to be paid in specie, for they held — Loans and discounts, $091,945,580 Specie, 83,5:}4,59T $TT5,4S0,177 Their circulation was but, ' - $007,102,471 Their deposits, 233,803,120 $400,904,000 Leavins balance due to the banks, after paying bills and deposits, $314,580,577 But we have seen, on the authority of Mr. Colwell, that in 1857, the banks of New York, with $12,000,000 in specie and but 8,000,000 in circulation, had 95,000,000 of deposits, show- ing that a very large part ot the deposits were credits given by the banks to their customers, and that instead of representing debts due by the banks to the public, the deposits represented to a great extent credits given by the banks to facilitate the movement of commodities, which credits were adjusted daily 22 by exclianfjing them at the clearing lioiise, ami therefore were not, as many suj)pose(l, a specie demand against tiie banks. Does any one ask why, if such be the condition of the banks, their notes depreciate, and why tiiey are compelled to suspend specie payment i I reply timt the l»anks suspend, not because of any dej)reciation of their notes, but because they ure unable to redeem them in specie, and that they are unable to pay spe- cie to the public, because the public are unable to pay bank notes to them. The Bank note is used as a substitute rather than as the representative of specie, and the banks suspend pay- ing specie, because the demand for bank notes, resulting from some political or tinancial derangement of the monetary system, is such that they cannot bo otherwise supplied in requisite quan- tities. The purpose of the suspension therefore is to enable the banks to supjtly the jniblic with an increased quantity of bank notes, which they could not do, if they continued to pay specie. Thus the Bank of England suspended jiayment in 1797, because she could not otherwise supply the bank notes requisite to carry on the war with France, and the banks of the United States suspended in 1812, because they could not otherwise supply the bank notes i-equisite t(j maintain the war with England, and having partially resumed, they again 'suspended, because the Bank of the United States, chartered for the avowed purpose of aiding the process of resumption, became the agency through which the merchants of England absorbed and remitted to Eng- land the specie of this country preparat}' to the resumption, in 1825, of specie payments by the Bank of England. They again suspended in 1S37, because Parliament, having emancipated the West India slaves and abolished the monopoly of the East India Company, placed in the Bank of England $100,000,000 to pay the West India claimants, and some $25,000,000 of the commercial assetts of tiie East India Company, which being loaned by the Bank to the money dealers of England, inflated the currency at least 50 per cent, and caused the wildest specu- lations in Mexican and South Amejican lo.^ns and mines and other visionary projects. When required to pay the large sums due to the West India claimants, the demand for specie was in- creased by an extraordinary demand for foreign breadstuffs and by the transfer of the public deposits from Mr. Van Buren's pet banks to the State Treasuries and the consequent specie cir- cular, intended to sustain the pet banks, which liad become 23 largely indebted by speculations in the pnblic lands. As the banking system of the United States was a part, and the weak- er part, of the British system, their banks were compelled to suspend, because the export of specie to London under the pres- sure of the Bank of England, was such that they could not other- wise supply the requisite quantity of bank notes to the people of the United States. Again in 1857, the demand for silver to pay the expenses of the war in India was such that the Bank of England, by a turn of the bank screw, caused such an export of specie from New York, that the banks of the United States were compelled to suspend, not because their notes were depre- ciated, but because they could not otherwise supply the people of the United States with the requisite quantity of bank notes. And again, the banks in the Confederate States have suspended, not because their notes have depreciated, but because they could not otherwise aid the Confederate States with the funds requi- site for the maintenance of the present war. Is it not proved that the idea that a bank note should be at all times converta- ble into specie is a fallacy ? Is it not proved that the test of the value of a bank note is its use in the purchase of commodi- ties and the payment of debts? Does it not represent credit rather than specie, and if the credit represented by bank notes may be made available as a currency, equal to specie, may we not give to the Treasury notes equal value as currency ? I admit that the value of specie may appreciate ; but I deny that the notes of well conducted banks depreciate, and more especially in times of panic ; for then, to use the words of an intelligent director of the Bank of England before a committee of Parliament, "it is not specie, but more bank notes, that is wanted." This is proved by the fact that the bank notes are then more difficult to obtain, and will purchase more of other commodities than in times of financial prus!"»erity. A general suspensidn of the banks is the consequence and not the cause of a financial crisis. This is proved by the fact that scarce any property will sell for as much now, payable in the notes of the suspended banks, as the same could have been sold for before the suspension, payable in the notes of the same banks. There is another circumstance which gives increased value to bank notes. The demand of the public against the banks, (to wit, their circulation and deposits) is payable at uncertain and distant periods, whilst the demands of the banks against the 24 public, (to wit, for loans and discounts,) is certain and at short dates. The public, therefore, is required, in payment of their dues to the banks, to deliver either bank notes or specie ; and as the sum of bank notes in circulation is so much less than the sums due the banks, the continuous and repeated demand for bank notes to pay dues to the banks, maintains their value, without reference to their redemption in specie. This feature of the banking system is important in considering the efl'ect which a large issue of Treasury notes, to be used as currency, will have on the interests of the banks. It is known that the profits of banking are greatest when money is most abundant, and if Treasury notes should be substituted for bank notes as currency, the etlect must be that the debtors to the banks will pay them in Treasury notes, instead of bank bills. In such case, the banks will h ive the Treasury notes, with which tu redeem their own notes, or to be loaned to their customers as money, and their profits will be no less than if the payments had been made in gold and silver ; for in that case, the only use they could make of specie would be to redeem their circulation or to lend it to their customers, and if the banks can use the Treasury notes as specie, the value will be the same as specie. We ac- cordingly see that the banks unite in advising an issue of Treas- ury notes for $100,000,000, in addition to the issue already au- thorized; the smaller denominations to be without interest. I argue that as the notes are convertible into Bonds, the question to be considered is not so much what sum may be issued without interest, as what sum may be advantageously used as currency. The estimate must be conjectural; because we have seen that with a circulation of $8,000,000 onlv, the daily bank settlement at the Clearing House in New Tork were 8^0,000,000; and that whilst the average amount of money (bank notes and specie) used in the operations of trade in Eng- land and Wales from 1840 to 1856 had diminished nearly eight millions of dollars, the annual average increase of bills of ex- change amounted to $90,000,000, and that there was at one time in circulation $900,000,000 of such hills !!! The sura of Treasury notes, which maybe substituted for bank notes, specie, ' bills of exchange, and other modes of credit, can only be ascer- tained by the test of experience. But we may refer to the fact ' that the circulation of the banks of the United States, as given above, was $207,102,477, and that this suni was required when — as we bavo seen — the ^vhole niovement of the cotton crop, equal to 8200,000,000, was made hj the use of foreign credit, to show that the sniu required as currency in the Confederate States maj' be much greater than the issue of bank notes, when they were part of the United States. How far Treasury notes or Confederate bonds may be substituted for tlie foreign credit used in the movement of our exports, is a question v/orthy of the "deepest consideration. It has been suggested that the Bank of Enghmd should re- mit their post notes, payable twelve months after date, for the purpose of purchasing the entire cotton crop; and this projjosi- tion has been favorabl}^ received in influential quarters. The ' whole capital of the Bank is but $72,675,000, of which 870,000,- 000 is invested in 3 per cent, consols. As the Bank is forbid- ^den to issue its notes for more than the sum of the bullion in its vaults in addition to the capital thus invested, the sum which it is authorized to issue depends on the bullion it may have, and is tlierefore uncertain and would be seldom, if ever, equal to the value of the crop. Those who make this proposition must be ignorant of this provision, or must contemplate an amendment of its charter lor that purpose. But one single f\ict is, of itself, a conclusive answer to this suggestion. The Bank* of Enijland derives its profits from, and is the chief agent of, ^ i British commerce, which rests upon British manufactures. It is not to be ])resumed that the planters of the South will place tii« control of their cotton with an Institution so much identified with the British manufactnrer; for it will be manifestly the in- terest of the Bank ta reduce the price in the British market, which will necessarily regulate the price in this. Again, I do not suppose the proposition contemplates that the Bank of England shall, itself, become the purchaser of the cotton, but that the post notes shall be loaned to individuals, who may become the purchasers. The objection is no less valid — for as none could purchase without a credit in the Bank of England, the eflfect would be to place the control of the cotton in that Bank, which is interested in maintaining the commerce, credit, and prosperity of England, and controlled by persons who have formed ascbciations for. the avowed purpose of jDro- moting the growth of cotton elsewhere, in preference to its pro- duction by us. Again ; If this were not bo, we have seen that whilst the 26 goveniineut of England has placed more than ^4,000,000,000 at 3 per cent., and the Savings Banks hold more than $170,- 000,000 of deposits at less than 3 ])cr cent., the interest charged by the Bank of England fluctuates from 2 to 10 per cent. I trust it will require no argument to satisfy the planters of the South that it will be most nnwise to place the control of the price of their cotton M'ith any foreign agency whatever, and especially such an agency as the Bank of England is. That Bank is the financial agent of the government, as well as of the merchants and manufacturers, of England, and having its capi- tal invested in consols, it may be said that its resources depend entirely on its credit. "With a capital of $72,675,000, seventy millions of which is invested in a debt never to be paid, and the real value of which is the annual interest (or $2,100,000 per annum), aided by the regulation which gives them a control over the credit of the government, and brings the commerce and manufactures of England nnder its supervision, the Bank of England may be said to be charged with the duty of so reg- ulating tlie commerce and the currency of England as to make the commerce ot the rest of the world subservient to the welfare and the progress of England. The wisdom of the measures and policy of the Bank have been the subject of much controversy in Parliament and in the press ; and many able essays have been written to prove that the theory that the bills of the Bank are and should be the actual honafide representatives of specie, is a fallacy. The system of finance and of credit has been pro- gressive; and the concessions to the Bank, resulting from the fallacy that gold and silver are the only safe and legitimate rep- resentatives of bank credit, have given to the Bank of England the power which it exerts over the cred/t and currency of Eng- land, and of all other countries holding extensive commercial relations with England. Tiie process by which the Bank exerts its power is illustrated by two Diagrams, prepared from a man- uscript memorandum and a published exhibit taken from more than four thousand returns of the Bank of England, given to me in 1857 by Mr. Edward Hazleword, a London banker, which will bo found on the opposite page. Seventy millions of dollars of the capital of the Bank is in- vested in consols, and it is authorized to issue this sum in bank notes. It is also authorized to issue bank notes, in addition to this seventy millions, equal to the sum of bullion in its vaults ; Diagram. Showing the Fluctuations of the ^4y>wwU o/ notes issiudhij^of the liahi/itics o/tJicBrnd' ofEngtand for if.n yeca'slj^oifi Wt^toMSA- \l)vtt(irs. fS4A IS^J f8'!,e /S4.7 i84^ l8U9 ^8So fSSf /8SH f8S3 (7.! ooo.oco , A / N fSS.ooo.offc / \ / \ A yi.iJ.ooo.ooc ''\yv i f ^\ f^.. \ / \ f-'tS.OOO.OOP y\ / ^ A A y\/ . / \ Sotesi.r .ru'ol A /^ \ / \ Aa> n/^ \ / V I..1J.000.V01 V \ / \ / vv v \ / V t2S.OfO.000 A \ ; /\ \ / US, OOP.COO / \ \ 1 ' \ \ 1 y io.s,ooo,ooo . \ * / \ / \ , / \ 9S.0OQ. coo / \ / \ / \ / \ A V / \ j \ / \ SS.OOO.COO / \ P \ \ i s / \ / \/ \ i y \ \/ \ \ / vy \ / \ 7d coo. ooo / \ \ V \ \J \/ \ ^rt»^ fta^iA«;M / \ / V V . ShoTt^in(j ^leFtnctuahcTi.f rfi tke?'rf^e c/ivt(^'e~^f c-tfar^ocd hy tkeJicitcJi pfErfffland as re^utaUd tvf ffic J? noJZfzt of bullion ui l/s votxIu tlte-Hame^ivzllie jtiarffzn i^e jiresentmq the buZlien i?i tmlltnits of dotlaf^.f (frpinS3S,ooo.OOOto&lOO ooo.OOO) and tJt£ vf^ega/ar tines jncaeatifu/ me rates o/zn/ei^e-ft 27 tbus, bj reference to the first dia.'.«:rain, it will be seen that the perpendicular lines represent the years from ISi-i to 1853, in- clusive, and that the notes issued in 1852 amounted to $178,- 000,000— that is, $70,000,000 on account of the capital invest- ed in consols, and $108,000,000 on account of the bullion in its vaults; by turning to the second diagram, it will be seen that figures on the margin represent the sum of bullion in the Bank in millions of dollars, and that as in 1852 the bullion was $108,000,000 the issue was $178,000,000, and the rate of inter- est was but two per cent., whereas in December, 1857, the bul- lion in the Bank was but $35,000,000, and the rate of interest was ten per cent. Does any one ask how this fluctuation in the rate of interest charged by the Bank of England, can affect us or our banks ? I answer that our banking system is but a part, and the weak- est part, of the British system, and rests upon the same fallacy, to wit, the idea that gold and silver is the only safe basis of credit and currency. This I have proved by the analyses of our banks and their assets; and all who have studied the effect of the contractions and expansions of credit and currency by the Bank of England, know that the eflect of a low rate of interest in England is to inflate the currency and increase the values of pro2)erty, and that the effect of a high rate of interest is to ren- der money scarce and depress the values of property ; and that this contraction and expansion by the Bank of England acts on us, through our banks, because the purpose of the Bank of Eng- land is to throw upon the commerce of England the onus of bringing back to its vaults the requisite quantity of specie, and that therefore our merchants, who may buy British goods under the expectation that a fund may be created, by the sale of our cotton in Liverpool, which will enable them to buy a bill upon London to pay this debt, may find that the cotton cannot be sold ; or, if sold, it has been at such a depreciation that they will be compelled to obtain the specie from our banks to be re- mitted to London in payment of this debt. The effect of taking the specie from our banks, is to make bank notes as well as spe- cie scarce and dear with us, and we are thus made the victims of the contractions and expansions of the Bank of England, which regulates, at pleasure, the condition of our banks, and will continue to do so as long as our banking system rests on t28 tliesaine fallacy of paying specie, and remains the weiikest ]^nrt i the Cnti.sli system The only rcmccjy — the only piKtoctioii, which \m- can have <>r hope lor, is in a lar^'c issue of Treasury notes by the Confed- erate government, convertible into Confederate Bonds bearing such a.ratc of interest that, whenever the issue of notes may ex- ceed the sum required for currency, the excess will be convert- ed info Bonds. Thus the demand will regulate the quantity of notes used as cnrreticy ; such a currency will not bo convertible into specie, and therefore will not bo used to take the specie out tif oi:r banks to be sent to the Bank of England, but it will be epial to specie for our domestic use ; for the provision that the iiDtes may be converted into Bonds and that the Bonds may be ejuverfced into notes, will so regulate the quantity of our cur- \\H\cy as to i>revcntany depreciation of the values of our pruj)- iiid enable the j)lanters, the values of whoso annual ex j'lrtcJ will soon be more than three hundred millions of dollars, tu create an agency by investing a part of the proceeds, which can place their crops in the foreign markets, and protect their value against the depreciation which must be the frequent re- curring consequence of a dependence upon the banking system of England, or of the Confederate States, so long as that system pretends to rest on a specie basis, and is subject to bo ••■^.t'-i •''•■' — as it must and wlil be — by the Bank of England. Yuui'j tiiily,