and distress. As I before remarked, if the debt were due to our own citizens, the money would remain amongst us, and be expended in the productions of our own soil and our own industry; but, going abroad, it is so much taken for ever from our resources. What is the cause of this difficulty? Rash and improvident legislation-ignorance of the causes on which the success of all public improvements must depend.

Another most prolific cause of hard times is, the abuse of credit. Credit, in some shape, and to a certain extent, must exist in all civilized communities. It existed as far back as those barbarous times of which we read in the Old Testament. The laws of Moses even prescribe the manner and kind of security which the creditor may exact. The directions he gives are remarkable for their humanity. "No man shall take the upper or the nether millstone to pledge, for he taketh a man's life to pledge. When thou dost lend thy neighbor any thing, thou shalt not go into his house to fetch his pledge. Thou shalt stand abroad; and the man to whom thou dost lend, shall bring out the pledge unto thee." A most humane provision against a cruel and unfeeling invasion of the sensibilities of the poor. Not a day's work is done by the commonest laborer without credit. He trusts his employer for his day's work, at least. So it must often happen, that the em

ployer, if he have any humanity, must credit those whom he employs. Credit arises from another source. The returns for a large proportion of human labor are only annual. There must be a large outlay before any thing can be received. In the meantime, those who labor are compelled to consume as they go along. Some one must advance them their wages, or, in other words, their living. Those who have must lend to those who have not, in order to create new productions. This is done with the confident expectation, that the powers of nature remaining the same, the expenditure will be repaid with interest. So there is a system of mutual credit going on between the country and the city. The city sells to the country on a credit, expecting to be repaid at the coming in of the crop. When the crop comes in, the debt is discharged by the farmers and merchants, in the country, to the merchants in the city. If, on the other hand, the country were rich, and were able to purchase every thing for money, then it would be obliged to give the same credit to the city which the city now gives to the country. The country sends to the city the provisions of a whole year, but they are not immediately consumed. No real returns can be had for them until they are consumed. They must be sold, then, on a credit. The mechanic, too, must live while he labors. He can not sow

and reap the same day, any more than the farmer. Unless he have something laid up, and that can not be the case in the first instance, he must anticipate the receipts from his work; that is, he must have credit.

Besides all these credits, created by transient property, there is credit arising from permanent investments. In these investments, those who have the control of them may employ advantageously the capital of others-may make it yield the legal interest, and something besides. While they show the ability of doing this, they will have credit; that is, the power of borrowing, on security, unemployed capital. Hence, another species of credit.

Indeed, all investments must be made in real estate, or in floating property; in other words, in fixtures or in goods, on their way from the producer to the consumer. Money, in the shape of money, is totally unproductive. It can be made productive only by being invested in something. If a man borrows money, it is not to keep it in the shape of money, but to purchase real estate or floating property. If a man purchase stocks, it is just the same thing. The money put into a bank does not remain there. It is immediately invested in something, indirectly, it is true; generally, in productions in the market. The banks, in fact, are indirectly the purchasers of a large part of the domestic

importations which The owner of bank

produce and the foreign yearly pass through a city. stocks has his money really invested in the merchandise that happens for the time to be in the process of production, or transportation from the producer to the consumer. Those who purchase rail road stock, really own so much of the fixtures of such a concern. Mere money yields nothing.

It is easy to see, that while credit is essential to business, it may easily be carried to excess. It gives, of course, a greater license to expendiA man who purchases without credit, must rely on the earnings of yesterday for the expenses of to-day; and if so, he can not exceed a certain sum, and he can never involve himself in much difficulty. But he who anticipates in the expenditures of to-day the wages of to-morrow, goes upon uncertainties. He knows not what will be on the morrow. It is the easiest thing in the world for him to expend too much. He is not sure of obtaining employment. He is not sure of getting his pay. He is not sure of the amount. It is the easiest thing for him to miscalculate, in all these respects. A man is liable, under the temptation of a long credit, to adopt a style of living altogether too expensive. Individuals may do this, whole communities may do it, a nation may do it. The laborer may anticipate his wages for a week, or a month, or

so long as those who own the necessaries of life will trust him. The farmer may anticipate his crops, even before he puts them in the ground. The manufacturer may pledge all that he has, his fixtures, as well as his floating capital, to procure the means of carrying on his works. There must be, however, a limit to all this; and that limit is, when all creditors become alarmed, and not only cease to give credit, but begin to call in what is already due to them. Then there immediately and necessarily follows universal distress. Credit being at an end, what are people to live on till they can pay up the old scores, and earn something to begin with upon the cash principle? This stoppage of consumption, which ensues upon the stoppage of credit, reacts most disastrously on production. People can not purchase, because they can not pay. The consequence is, an accumulation of stocks, and a fall of prices. Some manufacturers take the alarm, and immediately cease to produce; but, in doing so, they must dismiss a large number of operatives. These operatives must go on to consume, though they have ceased to produce; and are thus eating out the substance of the nation, besides large numbers of them falling into vice or imbecility. Thus an overstretch of credit may cause a disturbance in the course of things which will run on for years, producing the most pernicious results.