PUBLISHED WEDNESDAYS AND SATURDAYS BY JOHN FEN NO, No. 69. HIGH STREET, BETWEEN SECOND AND THIRD STRF.FTS, PHTI Aim PHI
[No. 40, of Vol. lII.] Wednesday, September 14, 1791.
FROM THE AMERICAN DAILY ADVERTISER.
Reflections relative to the Stock of the Bank of the
United States, and to the National Funds.
ALTHOUGH the debt of the United States has been among the
circumstances, which have inclined the mindsof individuals
to tne continuan-e of (he union, yet it fecms difficult to demon
ftraie, that a public debt is so far a public blefling as to render i\ ■
existence of such a demand upon a nation lucrative and defirab e
in a pecuniary sense. It is however certain, that it is actually pr< -
friable to a people to evinre a real ability and a sincere difpofitic 1
to d'feharge such debts as they may have been obliged to .
The advantages which a trader (or a nation) gains by a pertettcr -
dit, re sting upon his hone ft y and foliJitv, need not be dwelt upon*
It is happy for this country, that all its citizens perceive the ad
vantages of the recent restoration of public and private credit,
arising from covjlitutions and laws enforcingjuftice, banishing paper
tenders and other violations of the rights of property, and inveit
ing the general government with powers better adapted to the at
tainment of national fafety, order and prosperity. The impulses
to industry and economy, resulting from a convi£lion that the pay
ment of honest debts is no longer to be procrastinated, and from
J the acquisition of a government able and desirous to preserve to
every man the fruits of his labour, have operated to produccunpre
cedented exports. These abundant productions (hipped to fo
reign markets, procure copious supplies of necessaries, and upon
terms, generally speaking, much more favorable to the consumer
than heretofore. The concurrence of these circumstances has ren
dered our country and its business and public funds, more invit
ing to judicious and monied foreigners. One species of property
after another has, and will continue to feel the spring given by
their cash, and the rich and cautious part of our citizens, who had
nnder the lot mer constitutions and laws too frequent occasions to
complain, have been tempted to bring their money once more in
to the business of the country. These are the precious cffe&s at
home of hontfl policy. Abroad they are no less fatisfadlory and
undeniable. Among the most wary people of Europe, loans have
been negociated upon terms as favorable as those which have been
made for the mod punctual, wealthy, and best accredited nations
of the old world.
In this date of things it would have been extraordinary if, the
funds of the United States, and of the institutions conneded with
their affairs and colnmerce,*had not risen to their natural and in
trinsic value.
Hence the rife of the price at -which our public debt has been
fold in the market, hence too the demand which has appeared for
the stock of the bank of the United States. If these (and particu
larly the latter) have been suddenly and strangely operated upon,
it is partly owing to the quickness of action which sudden transi
tions from distress and disorder to great profpcritv generally pro
duce in nations and individuals. It is believed however, that the
liifagreeable fiu6tif9f*?>ns which have taken plac in a small degree
in regard to the d*bt, and so strikingly in rhe c_f of the Bank
Script, have been occafioncd at leafl in part, by the want of the
[wceflarv knowledge among a very large number of the public
creditors and stockholders. The intention of this paper is not
to set a going any too lively movements on thcfc fubjetts, fluctu
ations in which,are to be regretted on public and private confide -
rations, but to contribute towards the prevention of them in fu
ture, by recalling or communicating relative fadt?, which are for
gotten or unknown.
With refpeft to the Bank Script, it is remembered, that compa
risons of the U. S. bank flock with that of the bank of England,
have been made in detail and in figures, which piaccd Script at
315 dollars. Prudent men made large deductions from that
price, because it was known, that money is yet more valuable in
America than in Europe; because the certificate part of the bank
Itock is liable to be paid off in inftallments,and because our bank
is not like that of England, a monopoly. These confederations,
however, ought not to have reduced it down to the prices, which
were lalked of, which will be fatisfa£lorily manifefted by advert
ing to the nature of the stock of the bank of England. The funds
of that institution are wholly made up cf the three per cent, debt
of Great Britain, and areas follows :
Purchased of the South Sea Company,
On their original fund reduced in the year 1743, 3*200,000
For cancelling exchequer bills, 3d year Geo. lit.
Annuities of the year 1714,
Do. 1719*
Do. i74^»
Sterling, £. 11.686,800
which includes the capital, being £*.10,780,000 fterlmg, and afurplus
undivided, 0f£*.906,800 sterling. On the credit of this mafsof
public paper, all of which is at only three per cent, tho lawful in
t< reft is at 5 per cent, do they deprnd in their operations ; that is,
aII their Jlock is two percent, worje than money. On the other
hand, all the Jlock of the bank of the United States is 111 money, or in
public stock better than money, because the interest is paid quar
terly, and '.he pricc in the market is actually above par. What the
t-xcefs beyond par for fix percent, (lock ought to be, will not be
considered here. It is not. to be forgotten, that the bank of the
United States may take fix per cent, interest on its loans, and that
the bank of England can only take Jive percent. The stock of the
American bank,as far as fix-tenths, is in public debt yielding twice
the rare of interest drawn on the public debt belonging to the
JEnglith bank; so that five millions of the certificates of the bank
of the United States (or half'ns stock) will produce to it as great a
proportionate inteicft as if its whole funds were on an interest
«4)uhl to the English certificates, and the interest of one million of
fix per ccnts. and the use of lour millions of fpccie, are left as the
Juperior advantage to our ivjlitutitw. This fulid and undeniable
vantage has not been taken into any eftimatc that has been exhi
bited ; and (hough it is not infilled that it ought to run script up
to 315 dollars, yet it proves it to be more valuable than nas been
generally supposed.
It is very interfiling to fettle the opinion of the value of the
Jjocks, or debt of the United Slates. Our loans abroad, which
yield the foreign lender precifcly Jive percent, prove that they
might as well purchase at in the pound, were it not for the
commissions and distance. fiut the European interrft.is only
paid annually, and in America it is difchargcd quarterly. Again
—«the conilwution and laws have given perfect tecurity to private
loans by citizens and foreigners—the fubferiptions to every bank
in the United States are now filled, and other cireumftances pro
nsife the reduction of the euftomary interest. A reduction of an
unit p?r cent, would add to the value of the fix per cents,
were tVjsy irredeemable. The intercit of money on private con
tract is paid less min&uallv and with trouble, and cannot be dr
manded but once per annum—the dividends of the banks arc paid
ha/J yearly, but the public funds give their owncis the convenience
ju.d profit of quarterly payments. Four per cent. funds in Eu
rope are worth about 1001. in their markets, which mult by
comparison raise our fix per cent, flocks in the eltnnation of fo
reigners. It is a very encourag ng new cir_umflance too, tha
»iy placing our debt onthe public books, the injurious and alarm
ng consequences of counterfeits are done away, further—if the
fix per cent, stocks are compared with ground rents, formerly
fold at 20 years purchase, though they were difficult to collect an
nually, and if we remember that in some parts of America money
could not be easily placed in punClual hands at fix per cent, and
that, in one or two States, more than five per cent, could not
have been obtained with good lecunty and quarterly intercit, wi
(h II perceive thji the fix per cent, llock is an inviting- objeCt,
- ven to our own citizens, and will not Suffer on comparing it
with the productivenessof matured real estate. The quality of
eajy convertibility into cajk, at any moment, must recommend it
to 1 he attention of the vigilant and cnterprifing capitalilt.
It is really not desired to renew by these observations the too
lively feelings of the holders of the public debt or bank script.
The objeCts in view are to give relative faCts, on which, in com
bination with other proper confederations, sober-minded men
may ground fafe and fail calculations, and to prove to
whose feelings may have been pained at the appearances of Sport
ing in thefunds and bank flock, that there are faCts and circum
stances in extenuation and explanation of the events, many 01
some of which may have been forgotten or unknown. The pub
lic Satisfaction, and the reputation and ctedit of the country in
Europe may be promoted perhaps by explanations and remarks
as candid and true as these are intended to be. By a perfect un
derstanding «f the SubjeCt, it is believed, that a greater degree ol
(lability may be given tothe several species of the national paper.
To fix the debt at a steady value, is perhaps the mod desirable
point in finance we have now to accomplish ; bccaufe an imme
diate and certain consequence will be, the frequent application of
the funds in purchases, which will relieve the incumbered own
ers of real estate and benefit all others. In the mean tyrce, it must
vield them the greatest Satisfaction that the public credit has been
regained, and Supported without the imposition of the smallest
buiden on their property. The rife of the funds has already oc
casioned money to be so plenty as to fill the several banks in Bos
ton, New-York, Philadelphia, and Baltimore. This will pre
vent the further application of the private monies of foreigners
and citizens in that way, which must now be applied to build
houses, improve farms, purchase lands in the fettled and unfet
ib d counties, or will be employed in loans to individuals. A
good mortgage law, and thefubjr fling of real cjluteto execution for debt,
in any State, wherein it is Jo liable, will make money plenty,
and easily attainable on private Security.
It is not difficult to create great accommodations to trade by
means of the public debt. The new bank is a proof of if. A
very copious stock has been created by it. The experiment is not
new, having been fuccefsfully tried in England and Ireland. The
old bank of North America has virtually adopted the measure,
by laying out one fifth ot its capital in purchasing the public
debt. An insurance company might easily be eftabbfhed upon
it, and they might extend their operations to very convenient
loans on bottomry and refpondentia. We pay heavy sums for
insurance, and various kinds of mercantile credit to foreigners,
who consider it often as a favor. It is plain, that the more we
can trade on our own funds and institutions, the more freely we
can operate and enterprize, and the better terms can we com
mand in the credits we may afterwards incline to take abroad.
We also perceive, that the debt and the money made by it can
and will be applied to promote manufactures. The want of
capital has, more than any thing else, hitherto impeded this
branch of trade. A considerable fund is already fubfciibed — the
most precious European machineiy is now made, or making by
means of that fund—artifans of very considerable talents from a
broad are engaged, and a foundation is laid tor a fuccefsful ex
emplification of the powers and capacity of this country in the
economizing and lucrative bufiuefs of manufactures.
Let then the candid and serious take a careful "iew of the us -
ful purposes to which the public funds of the United States may
be applied—let those who think that too much profit has anfen
to the purchasers, remember, that the public pays not a dollar
more on that and that the country is profiting of its cre
dit at home and abioad—and above all, let serious mouied men
refle6>, that during thetime when pnees were the most fluctuating
the ability of the United States, the produCtiveness of theafligned
rr venues, and the prosperity of the country were as preat as a?
any moment before, and consequently the intrivfic value of
the public debt and bank Jlock was as fixed and solid, as ij no fluctua
tions had occurred.
£. 4,000,000
500, 0c0
1,250.000
1,750,000
986,800
A Friend to Sobtr Dialing and Public Credit
HAVING accidentally heard that Dr. Parry, an ingenious
phyfictan at Bath, had d'feovered a method of suspending
madness for a fhnrt time, we determined to mention it in ou
journal ; but wishing, as far as in our power not to convey any in
telligence to the public, but what is authentic, we wrote to Dr.
Parry on the fubj?£t, and have received the following anfvrer :
TO THE EDITOR OF THE ANALYTICAL REVIEW.
S I R,
IT is now a year and an half, fmcc, from circumflances, o'
analogy, I dif overed a method of suspending, in many indanres,
mania, head aeh, vertigo, convulsions and hyflerical complaints
by a mechanical operation. The method I allude to is (lopping,
by means of the fingers or thumbs, one 01 both of the common
trunks of the carotcd * arteries. Where the paroxvfm is recent,
this method generally succeeds almost mftantanroufly like magic ,
and the symptoms dtfappear as long as the prefTure is continued,
but, for the raoft part, immediately return as soon as it is removed
I cat,not now relate to you all the confcquences of its operation :
but I may obfei ve, in g neral, that it has led me to a pra&ice in
the disorders which I have mentioned, particularly those called
nervous, which is totally oppofuc to that commonly employed,
and infinitely more fuccefsful.
It is my intention to enlarge something more on this fubjrft in
a paper which I mean to prepare, either for one of the m<dica:
societies in London,or for one which some of my si ienhave larci\
inlfituted in Glouceftcrfhire. But it would 'ake avo ume to relate
all the facts which this difenvery seems to explain, and the ron
fequences to which it leads. C. H. PARRY.
Bath, May 16, 1788.
* Arteries, on each fide of the r.e:k) which Jtrve t§ convey the
from the heart to the brain.
157
FROM THE ANALYTICAL RWIEW.
ttit&o
[Whole No. 248.]
FROM TIIE LEE.
CONJECTURES ON TAXATION.;
FAXES may be considered as a compofntah in
lieu of per(bnal service, paid to the ft ate'fur
the support and equipment of those who are don
flantly employed in the service of the public, or
furniih the means for its protection.
It has been alleged,thai certain imposts are paid
by particular orders of the people, without af
fecting the other clafies of the community. '
Wheji we tefieft however, on the dependence
the different ranks of the people have upon each (
other, we can hardly conceive how one class can'
be affedled, without affecting all the other clades.
We ought 110 c to confound the advance, with
the ultimate payment of the taxes; the one is ob
vious, the other may elude our obl'ervation. /
When the circumstances of a nation are p.V»f
perons, it is probable, that everj' additional tax
is ulriinately paid, by :tn increased produce of
the labour of the inductions class of citizens.
If an additional tax is imposed, in confequencs
of an additinn made to the number of the servants
of the public, f.ich addition may diminish Ihe
number of productive labourers ; but the dimi
tiifhed number of labourers may be able to pro
duce as much as the undimini.'hed did. O if an
additional tax be imposed, in consequence of a
more ample provision made for the servants of
the Hate, the productive labourers may be able
to increase the produce of the labour, as much as
the increased provision made to tlie servants of
the state amounts to.
Such increase in the produce of labour, is not
neceflarily the rcfult of an increased exeriion in
industry. As the different branches of industry
are improved, the fame actual exertion produce*
mine than before such improvement took place.
During the progressive itare of a narion there
fore, taxes may be sometimes increased, without
much affecting the great body of the people.
Hence taxes with regard to the,nation in gene
ral, when they are imposed ir. consequence of in
creasing the servants of the (late, may in a cer
tain degree be nominal only ; for if such addi
tion is made from the idle diflipated, fuclj
of tliefe as have 110 fund, from which to defray
their expences, are perhaps no g<eater tax upon
the public when serving the itaie, than they were
before.
Taxes being advanced in money, if the value
of money diminiflies, additional taxes mult be
imposed ; and if such additional taxes are only
equivalent to the fall in the value of money, such
additional taxes will be no more than nominal.
When the circumstances of a (late are itaiion
ary, as production and consumption, or expendi
ture, are equal, every additional rax niuft bedif
charwed, by a diminution of consumption or ex
penditure
11l the declining state of a nation, when pro
duce is less than expendituie, additional t ixes
mud be paid by the exportation of (lock ; in this
cafe they will be doubly felt by the body of the
people.
Induflrry by the exportation of (lock will lose
a valuable inltrument, ami fufter by losing the
demand, which the (lock, while remaining at
home, made upon it.
Taxes then being ultimately paid, either by an
increase of the produce of labour, a diminution
of consumption or expenditure, or by exporting
(lock, it does not appear, will be less fell by the
body of the people, when advanced to the state
by an import on wine, than by a duty upon cau
dles.
Certain individuals will at all times have it in
their power to fiee themselves from the burden
of taxes, by throwing their /hare of it upon the
flioulders of others. This depends not Co murh
on their rank and fit uation, as on the demand for
their labour, or for the use of their property.
The exempt ion therefore, that individuals may
enjoy, from raxes, does not so much depend up
on the mode by which it ft advanced, as upon the
circumlVanccs above mentioned.
Taxes being advanced in money, and in consi
derable funis, the lower clafles of the people not
being poHefled of money, cannot be fubjeified to
• lie advance of taxes.
Hence poll taxes have been found oppreflive;
and such taxes are obnoxious, because they are
100 visible. Taxes of this fpecieswill generality
be paid with reluctance, and in many cases with
difficulty ; of this kind may be reckoned the win
dow and lioufe taxes. (T$ be continued.)
X