TOR THE G.IZETTE OF THE UNITED STATES.
[The following was sent to the press prio r to the ac
counts which have been receive J of the recent fall
of Smpt—but it is judged expedient to pursue the
publication, as it may furni/h better data jor ju
ture calculation than have hitherto governed.^
THE extraordinary and still increasing rife of
public {tock, including that of the bank of
the United States, is such as can Hot fail to im
press on lober minds an apprehension for the
consequences. There is room to fear that it will
be so wrought up, as to prove a bubble, ruinous
to tlie fortunes of many individuals, and, (or a
time, hurtful to public credit. Tocheck, if pos
sible, this rage, and indicate the point at which
the value of the different kinds of public ftovk is
likely to become ftaiionary, is an attempt, re
commended both by teivdernefs to individuals
and regard to public good. It is ti be feared in
deed that already the matter has proceeded so
far, that the propagation of morejult ideas, may
tend to the injury of not a few ; but it is better
to<iiazard this consequence, than to forbear a
difculiion which may contribute to prevent the
further progress of a spirit which may be pro
ductive of general calamity.
Nothing can be more erroneous than the foun
dation upon which are built the hopes of those
who coniider the present prices of llock, as itill
lliort of what they will attain at a period not far
dillant, and who make vast speculations on that
idea. It is common to hear it said that British
four per cents are above par—Why then ftiould
not American fix per cents be worth thirty fliil
lings in the pound ?
They cannot be To, for the most obvious rea
sons.—The market rate of interest of money in
England is four per cent —in the United States
it is not less than fix, excluding the operation of
those causes, which at present raise it beyoncl
that point. A citizen of Great-Britain will not
purchase flocks in this country which yield liini
only four per cent, when he can purchase those
of his own at the fame rate. Distance will be an
objection to it—He cannot turn his property here
as quickly as if it were in his own country, ei
ther to apply it to any beneficial undertaking, or
to secure himfelf, on the profpetft of any disas
trous event in public affair 9— Ke cannot receive
the dividends as expeditioufly in one cafe as in
the other —He inufl pay a co;mniflion to agents,
who receive and remit, and is fubjeft tolois from
the slate of exchange. All these differences can
not bin be efliinated as equivalenr to I per cent.
Hence American 6 percents. considered as a per
petuity, could not be worth more than 24/. in
the pound. Considered as a fund redeemable in
certain proportions, they are worth <*t>nliderably
lels.
Turn to Holland—The tifual rate of imereft
given there by foreign powers, and hitherto by
the United States, computing the charges, is not
]ess than 5! per cent. Snppofe, as is not impro
bable, the United States fliould be able to borrow
there in time to come at 4! per cent, including
charges—suppose even four, which is remote and
improbable—as allowance must be made for the
fame circumstances which have been mentioned
in refpeft to England, the conclnfion must be the
fame in relation to Dutch as to Englifli piitchaf
ers. It is not probable that the Dutch capitalist
will be disposed to speculate in the funds here,
when they yield less than 5 per cent.
It ought to be remembered that the United
States have still considerable loans to make in
Holland to pay the arrears to France ; and that
they vv:ll continue to have from year to year, for
several years to come, loans to make to r eim bin fe
the inllallmenr.s of the foreign debt, which will
be yearly falling due. This employment for
Dutch capi r al in new loans to the government of
the United States, will necefl'arily impede Specu
lations in the exilting debt, when they no lon
ger affurd a considerable profit.
Let it also be recollected, that both Englifia and
Dutch capitaliils are di(covering, that lands, ca
nals, and a variety of other objects, nfford scope
for Speculation more profitable shan the funds—
and that when 110 longer allured by considerable
profit, they will divert their Speculations from
the latter to the former. This has in faiTt al
ready begun.
I hat foreign {peculations in our funds have
of late abated, may be inferred from the present
fcarciry of bills on Europe, and the sudden life
in the rate of exchange.
How then are ihefe high prices which some
people dream of to be fupuorted ? Is our own ca
pital equal to it ?—When the funds (hall no longer
yield even five per cent, and foreign purchases
are at an end, who will be found to deal in the
funds, while iinmenle trads of waste land, as
well as commerce and .manufactures, invite to a
far more profitable employment of money ?
of so many being now embarked, is
Prices from foreign
purvljPcs j but when it is discovered that this
expectation lias been too sanguine, it may be
counted upon that a large part of the domestic
capital now engaged in the game will be with
drawn.
With regard to bank flock, it is more difljcult
to reason with precilion. The imagination has
here too much scope. Dividends from twelve to
fifteen per cent, are talked of; but it is not/
difficult to shew that these are impoffiblc; and
on cool examination it will appearthateven eight
per cenr. which seems to he the loweit supposi
tion, is a point not too much to be calculated
upon.
Stating j of the whole capital as drawing an
intercft from the government of 6 percent. — this
will only be 45 upon the entire capital. Suppose
the rate of dif'rount to be 5 per cenr. as it is the
general opinion it ought to be; and suppose em
ployment found for the whole capital, inasmuch
as the bailk cannot lend beyond its capital, it
cannot make more by its discounts and loans than
y per cent. Hence the whole income of the in
llitution, on the molt favorable supposition, can
never exceed 9- per cent, from which is to be
deducted the expence of management.
The current calculations ori this fubjetf include
the deposits as a source of additional profit; but
they will be no otherwise so than as they will
enable the bank to operate beyond its specie ca
pital. They cannot enable it to have a greater
Aim at imereft at any one time than 10,000,000
dollars; for though the debts of the bank may
exceed its capital, to the extent of the drpofits,
yet as the credits given for the depufits will car
ry no intered*, the sum of 10,000,000 will always
remain thf* utmost limit of the loans and discounts
of the bank, and will alone produce interelh
But the above producft of 9J per cent, includ
ing charges of management, ought not to be
counted upon. It ought to be remembered, that
it is in the difcretiou of the Directors to have
branches or not ; and the propriety of having
them, is a queltion at least of delicacy. If there
are none, it is far from certain that employment
will be found for the entire capital of the bank,
in the sense in which it is expeited. I fay in
the sense in which it is expected—for that part,
which consists of stock, is, by its very conltitu
tion, in employment—but the calculation is upon
a double employment.
It ought also to be kept in view, that a part of
the (lock drawing interelt from the public, will
be redeemable at pleasure—and that the residue
is redeemable in certain proportions. What
ever part from time to time may be paid ofF, can
not be replaced in loans to the government, at
-he fame rate of intereft—lince it is evident in
every view,'that the government will not be dif
pnfed to give more than J percent. These con
siderations go in diminution of the expected pro
fits of the bank.
Upon the whole, if bank stock fiiall yield a
nett profit of 7J per cent, ic ought to fatisfy eve
ry reasonable expectation. It is to be hoped that
while the directors are guided by a liberal tem
per, they will nor be disposed to run ralhly into
forced and critical operations.
It were not an extravagant supposition that the
stock of the bank o1 the United States may fettle
down at fifty per cent, above par, and fix per
cents at about 10 per cent, above par, ancj other
stock in the like proportion. — But this is already
ihort of the standard which governs the present
corn fe of speculations, and far short of that to
which they feeni to be prog; efSng. let prudent
men beware !
It ought not to be overlooked that our govern
ment is yet in its infancy, and that though from
its ftructute, it merits all poflible confidence,
there may nevertheless be accidents which for
a time would give a shock to public opinion very
pernicious to those who outrun the limit of pru
dence.
A general Indian war, of which it must be
confeiled, there is no present appearance, but
which tliTe are canfes enough to produce ; a war
with any foreign power, which though not like
ly, is in the ordinary conrfe of human events ; a
strong appearance of oppofirion in any quarter
to any of the laws of revenue ; the death of the
President, and a variety of other cafnalties, the
poflibility-of which otight not to be 1 oft fight of.
would very sensibly affect the state of the funds
in this country — whet e long habit and experience
have not yet served to confirm the ltamina of
public confidence.
These remarks are designed as cautions against
theexcefsofa spirit which has hitherto done
good, but which carried to a certain extreme
will do much harm. It is probable however they
will be little attended to. For tl)e history of the
public funds in every country affords examples
of the fame malady which appear to have seized
many among us, and for which the only cure has
been found to be—the difcipl'tne of the fufferings
which have attended it.
Advice, it solid, may however prevent the
disease becoming altogether epidemic.
A real Frievd to Public Credit.
122
PETERSBURG, May 6 =
HHHIS day our court has publidied a particulJ
X . of expedition of L i e '/
nam General Prince Galhtzin againltthe k'j "
Turks that was polled in the fort of Maczin {
the fortifications of Ibrailow. His one '
which met with such complete success were
ned on from the 4 th to the t2th of Apiil j
colt the enemy 4 doo men and 25 pieces of cannon
an immenie quatiSty of amuniiion, and fcveril
vefl'els, either funk or deltroyed. The en( j f
the expedition having been attained, and tl e
body of troops commanded by Prince Gallitzi
too finall to stand without support beyond the
Danube, was employed during the night of t | )e
I2th of April, in levelling the fortifications and
then retired without accident to Galacz. ' ,
WARSAW, May 18
The king has named the ministers who are t|
compote his council, all agreeably to the re-»ul a
tions ertablifhed by the new conltitntion. 3
In the fittings of the Diet of the 1 jth and 16th
of this month, the examination of the project
presented by the committee of the Constitution
for the organization of future Diets,was finilhed.
This plan though very voluminous, and com
peted of 24 articles, was adopted unaniinouflv
and without a woi\d of debate. Every thing pro
mises that the conltitution will be compleared in
the month July next, and thenthe states may be
difiniil'ed.
We every day receive from all parts of the
kingdom, tlie oaths by which citizens, tribunals,
civil and military officers of the Palatinats aild
the different bodies of croups bear testimony of
their acqoiefcenee in the new order of things.
In the fiiting of the 17th, a very interelling
scene rook place on the ledture of a note which
the Compre de Goltz delivered relative to the
new conftiiution. In it the King of PrufTia re
news the assurances of his friendship for the King
and the Republic. After the lecture of this note
M. Kurkololki spoke again ft the new constitution,
and concluded with faying, " that it was not
surprizing that the king of Pruifia, Jhould ap
prove a conflitution the plan of which he had afiftti
in framing." This bold assertion struck the As
sembly with nftonifliment. A general expreflioq
of indignation was ready to burst on the
of it ; when, the king, to fliew the falfity of itj
Paid that M. Dried nzycki Secretary of the com
mittee of foreign affairs, held in his hand a note
of the Compte de Goltz, written the evening of
the day on which the revolution took place, in;
which he unequivocally exprefies his surprise that
the court of Poland had kept the plan a secret
from his mailer, their ally.—After these .few
words were uttered M. Kurkololki, was covered/
with confufion. ./
COPENHAGEN, May 21
Three hundred veflels of different nations have
palled the Sound since the 17th inft. Some En
{rlifh vell'els among the reft, bound for Peterf
buifr
The city of Dangberg, in the Bifhoprick of
tVybourg, has been alinoft totally tleftroyed by
fire.
Government has jufl laid an additional tax up
on Brown Sugars, imported into Denmark and
Norway for confuiliption there. Sugars import
ed to supply foreign countries, are not fubjeiftto
this new duty.
VIENNA, May 25.
The Emperor has given orders that arms should
neither be given nor fold to French refugees in
any part of his dominions.
The EleAor of Saxony has not yet been able
to give a positive answer concerning the Crowri
of Poland, which is offered him by the New Con
(Htutiou of that kingdom, lie is to call a meet
ing of the States of Saxony, and consult their o
pinion. Hitherto the crown of Poland has pro* -
ed a fatal present to the Electorate ; but times
are changed ; and Saxony having had time to
repair the effects of its former misfortunes, is
now able to defend its new good fortune.
Fortunately, Prnffia at this time is desirous
from motivos of felf interest, to fee this political
marriage take place between Poland and the
Electorate.
June f. It is now too evident, any longer to
doubt, that the efforts of Aultria are all tli 1 eccec
to lay aiide the declarations of Reichenbach in
the present negociations. Those former a
rations were merely calculated to conceal
close alliance with Russia ; which alliance > a s
been kept in full energy, by the adlivity an
good faith of the two parties. All our poits m
the Adriatic sea are open to Russia : I heie t ey
fit out their fleets, they there fi*ek rciuge v, ieu
prefied, and there they repair their velle 3.
this very moment their flotilla under the con
mand of Col. Lajnbro Cazzoni, is in oui P O, l s '
The Count Elgin, Envoy Extraordinary tro
he Court of London, met his Imperial »
at Mantua, had a long conference there, an