- ART. VI.-A Sermon preached in the Chapel of Harvard College, October 17, 1841. By HENRY WARE, JR., Parkman Professor, CRITICAL NOTICES. -The Prelatical Doctrine of Apostolical Suc- cession Examined, &c. By THOMAS SMYTH, The Letters of John Adams addressed to his Wife. his Grandson, CHARLES FRANCIS ADAMS. An Argument on the Unconstitutionality of Slavery, - Lectures on Spiritual Christianity. By ISAAC TAYLOR, 308 - A Winter in the Azores, and a Summer at the Baths of the Furnas. By JOSEPH BULLAR, M. D., and HENRY BULLAR, ART. IV. Specimens of Foreign Literature. Vol. X. Theodore : or, The Skeptic's Conversion. Translated by JAMES F. CLARKE, 348 ART. V.- Monaldi : A Tale. By W. ALLSTON, ART. VI.-Two Discourses on the Nature and Province of Natural, Revealed, and Experimental Religion. By ORVILLE DEWEY, Pastor of the Church of the Messiah, in New York, CRITICAL NOTICES.-1. A Sermon delivered at the Funeral of the Rev. Ezra Ripley, D. D. By BARZILLAI FROST. 2. The Death of the Aged: A Discourse preached to the First Church and Society in Concord, Mass., on the Morning of the Sabbath after the Funeral of their late Senior Pastor, Rev. Ezra Ripley, THE CHRISTIAN EXAMINER. SEPTEMBER, 1841. ART. I. — BANKING AND THE BANK OF THE UNITED STATES. SIX LETTERS FROM NICHOLAS BIDDLE, Esq. TO HON. JOHN M. CLAYTON — Philadelphia, April, 1841. The WHEN Mephistopheles, in the great poem in which he is the ruling spirit, was called upon in the court of the Emperor of the world, to discover a method by which the drooping finances of the realm could be refreshed, he expressed his astonishment that money should in any way be wanting under an economy by which it could to so unlimited an extent be created. Mines, he stated, were spread in golden streaks underneath the earth on which the assembled council were standing; and it might not be either a stretch of prerogative, or a perversion of credit, to issue on the basis which was thus presented, paper money in amounts which should be bounded alone by the capacity of the paper manufactories. scheme was in a moment adopted. Before a spade touch d the ground under which the treasure was secreted, notes were sent forth on the faith of wealth as indefinite as it was unknown. The people left their old pursuits, and collected themselves into one vast gambling shop, in which the new currency was made use of as the ground-work on which the games should be conducted. The manufactures became silent, the fruit fields withered away; and in a few months after the specific had been administered, the patient, stimulated at first by the excitement of the drug, fell back at last, as far as can be VOL. XXXI. - 3D s. VOL. XIII. NO. I. 1 learnt from the uncertain narration of the poet, into a torpor in which he became insensible alike to the suggestions of conscience, and the demands of self-preservation. There has scarcely been a commercial nation which has not, at periods when its system was most exposed, been visited by the infection which was thus set afloat by the master of all evil. When by the accession of the Hanover family, the constitution of great Britain was placed on a basis which rescued it from the danger of arbitrary encroachment, and when by the establishment of the Bank of England an example of money-making on the largest scale was set, the credit and the prosperity of the realm were at one moment swelled beyond all reasonable dimensions, and at another shrunk proportionably by the speculations which followed the inflation of the South Sea bubble. In France also, in the minority of Louis XV, at a period when the monied operations of the state, released from the shackles under which in previous reigns they had been placed, were let loose on the wide field before them, the erection of a national banking institution was followed by a series of adventures so wild, that they embraced two thirds of the continent of America in their sphere, and so fatal, that they prostrated at the end the mass of the available means of the French nation. We have experienced, in the United States, from the period of our first existence as an independent nation, the various fluctuations in their full extent, which arise from the establishment of an exaggerated system of paper money. When at the most ominous points in the revolution, we stood in need of a common medium of circulation, which should serve as a measure both for foreign loans and domestic trade, we found our difficulties augmented by the vast amount of worthless paper afloat under the credit of the various states, which raised our standard, while it diminished our wealth. We have been subjected, since our independence was established, to periodical bankruptcies, which have checked our prosperity and shattered our credit. While we possess the qualifications which enable us as a country to raise without limit raw commodities the most useful to mankind, we have found, when we entered into the foreign market, that other nations, whose means were less extensive, and whose productions were much inferior, have been able to undersell us, because the rate of their currency was lower. When, however, we have been thus prevented from freely disposing of the fruit of those great resources with which nature has endowed us, the redundancy of our currency has enabled us to give the most exorbitant prices for foreign commodities. Our own manufactures are not sold abroad, because, from the high pitch to which wages are raised among us, and the still higher pitch at which the articles necessary to the manufacturer are fixed, we are unable to export them, except at an expense which makes them easily undersold by the productions of other countries. Foreign goods, on the other hand, meet with a ready market with us, because they are produced with much less expense, and are sold at a much lower price. We have bought, therefore, far more than we have sold. Our specie has been drawn from us in a solid stream, while the paper substitute that has been provided for it, like the floating bridge which has been fastened to the banks when the tide had carried it to the highest, and is then, when the water subsides, left suspended on its precarious support, has been unable to bear up against the strain which was immediately thrown upon it. We have proved by our own experience a point which would otherwise have been doubted, that a people, whose resources are boundless, and whose strength gigantic, can become in a few years bankrupt from the bursting of a bubble which it had itself inflated. That the embarrassment of our commerce and the discredit of our name can be traced to the vast enlargement of our nominal currency by the imprudent issues of our banks, may be readily demonstrated; but it seems equally demonstrable, that banking, when conducted under reasonable restraints and in good faith, is useful in the highest degree, both to the purposes of trade and the conveniences of every-day life. Of the three usual attributes of Banks, as they exist at present, there is not one that could be dispensed with by a mercantile community. To a merchant, in the first place, who is constantly in want of ready money for the payment of dues, and who is also constantly in the receipt of large sums which are amply sufficient for that purpose, great risk will be prevented, and great trouble saved, by his depositing his funds as they come to hand with a banker, from whom they can be drawn when wanted. He can pay off the demands which are presented against him, by a check which will be as good as the sum it represents; and the banker thinks himself fully compensated for his trouble and risk, by the use of the money in the mean time. When a large amount, in the second place, is to be transferred from point to point, or when for other reasons it becomes inconvenient to carry it to and fro in the cumbrous shape of gold and silver, the operations of trade are greatly facilitated by the introduction in its place of a note which actually represents it, and which can be changed again into specie when required by the holder. When a trader, in the third place, has contracted with a foreign dealer for an article, which he will sell six months hence in the home market for an advance, but for which at present he has not funds at hand to pay, his own condition is materially assisted, as well as the general movements of business quickened, by the money that is advanced to him by his banker on the condition, that when the period is over to which the loan extends is expired, the amount shall be repaid with interest. The three ordinary properties of banking, therefore, as they are classified by the illustrations which have just been given, are useful, in the strongest sense of the word, to the operations of a commercial country. But beneficial as they are, when exercised with wisdom, they become, when let loose from the restraints of good faith and prudence, as destructive as the component agents of the atmosphere when the bands with which they are confined are broken. The merchant finds it convenient to deposite his cash on hand in an institution where it would be far safer than in his own house; but should the banker prove faithless, the distress occasioned will be far greater than that which would have arisen, had the capitalist remained in possession of his money. The notes of a solvent bank are of great service to the traveller, as well as to the general dealer; but should the bank break, not only will the note-holders lose the worth of the nominal value of the paper, but a general distrust will be inspired in the community. Should the merchant whose note has been discounted refuse to pay, or be unable to pay the sum he has thus engaged to make good, he will endanger the general credit of the institution which has assisted him, and perhaps lead the way to its stoppage. When it is remembered that with us at present, the three operations of deposit, of circulation, and of discount, are united under one establishment, that they have become linked together so intimately, that a shock received by one member is distributed throughout the whole system, that by a loss received in either of the three departments the whole institution must suffer, it will be seen how easy it is for the fraud or the |