The New York herald., 1851-11-22

Mr.. Dun Green to Gov. Floyd.

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Mr.. DUR Green TO Gov. Floyd.
DEAR SIR
Other engagements have prevented an earlier
compliance with my promise to submit, in writing
an examination Of the causes which producs the
periodical expansions and contractions of the cur.
xency, and of the combinations formed in England
and the United States to depress the price Of
American produce-especially Of cotton. AS the
subject deeply interests che whole people Of the
United States, l avail myself Of the press as the
medium of communication.
1t is urged that commerce is a reciprocal ex.
change of the products Of labor, and that, there
FORE hig duties on British manufactures nece
diminish the value of American produce in the
British market, for it is said that En- cannot
buy from unless We buy from her
II is also said that, mas much as the price must
be controlled by the universal law of supply and
demand, the value of our cotton in the British mar
ket must depend on the quantity produced
admit that commerce should be reciprocal
exchange OF the products of lssor for then the Ia
of supply and demand would regulate the price !:
but our merchants, acting on the theory that Eng,
!sna Will buy from US as much we buy from Eng
1ano, are, from year to year, compelled to remit
iarge sums IN specie to make up for the deprecia-
Zion IN the price Of American produce, and this oc
ours 20 often and operates SO much to our Injury
that 1t becomes our duty to ascertain why it is so
and whether it be possible to prevent it-whether
this is the legitimate operation of commerce or the
ehsct ofa powerful combination organized for that
purpose.
hBoutS oI Drltisn bankers are located In m 05t OF
our seaports-Bot to buy and pay for cotton
6utto make advances upon bills OF ladng for cot
Ton sent to their houses in Liverpool, to DO sold
there on account Of the American shipper rne
FUNDS TO make these advances are obtained by tho
sale of bills of exchange which are so Sra va that
before they become due the cotton will have re ach-
ed Liverpool. and if sold there for the sum ad-
Vanced (Which seldom if ever exceeds seventy ii ye
per cent of the American price,) the banker re-
ceives the fund to make the payment and gets his
interest, his profit on the exchange, and his two
and half per cent com mission without advancing
one dollar in money. In other words the Ameri
can producer advances the cotton and pockets the
loss-the British banker advances his credit ami
secures the profits.
This is not all-the deficiency must be paid in
specie. Thus, if we assume thai the value of the
cotton crop Is one hundred millions, and that Amer
can merchants relying on the sale of that crop in
Liverpool purchase one hundred millions of dollars
OF British manufactures, 1t follows that if from any
cause the cotton crop sells for ninety millions only
there will be deficiency of ten millions to be paid
In specie; and who does not know that export of
specie to pay that balance will so act upon the
other property Of the country
Now. let us see how this balance is produced,
and how it affects the interests of these foreign
bankers Their agents have drawn bills, payable
Tn Liverpool, after the cotton has reached that
msrket fJr seventyfve per cent only of the Anne ii.
can price DO we not see that If the cotton be sold
for ninety millions, these bills will be paid from the
proceeds Of the cotton sold; that the bankers will
realize their interest on the SUM advanced the
profit on the exchange, and two and half per cent
commission on the ninety millions of dollars, while
the shipper has lost ten millions Of dollars and
do we not see that the importation Of one hundred
millions of merchandise will have created balance
of ten millions to be paid in specie! 1t is well
krown law that the value Of the property Of a
commercial country bears relation to its currency
of thirty the effect, therefore, OF this export
of specie would be to diminish the value of the pro-
perty of this country not ten millions only but thirty
times ten, or three hundred millions, were Il
moi that he VT
will the importation of specie, and that there
fore the effect is limited to the arrangement of com
merce, the fluctuations in the currency, and the
extra cost Of importing specie.
Now these bankers deal in exchange, and it is their
business to make profits by these arrangements.
They desire to make London the centre Of the
fnancial world, and to compel al the world to pay
tribute to them through their financial agency.
They regulate the exchanges of continental Europe
chiefly through the dividend arising from the public
funds and their purpose to regulate the exchanges
between the United States and London Through
their control of the American staples, which they
have obtained in the manner above explained-not
by an advance of money-aot by any OF capital
but by the use OF their credit IL Will thus De seen
that commerce, as now organized, enables the Bri-
tish banker to depreciate the price o. American pro-
duce in he British market, and that he Is Interested
In creating balance to be paid oy US in specie, BE-
Cause il gives greater value to bills OF exchange
and because the British consumer obtains our cot
ton at reduced prices, and enables the British mei-
chant to purchase goods a. lower rate A bIief
subject In 1885, the Bank of England increased
its discounts more than thirty Ave millions OF dol
lars The effect was to stimulate the circulation
In England and greatly increase the price OF cotton
In the British market. Congress having refused
to renew its charter, the Bank of the United
States applied to the State Of Pennsylyan and
thus became D State institution, which made
it necessary to sell out its branches located in other
States. These were paid for in the notes of local
banks. If the Bank Of the United States had re-
quired these notes TO be pdd in specie, It would
have destroyed the greater part OF the local banks,
and greatly injured the Bank of the United States.
1t was therefore, wise in that Bank to invest these
funds in state Bonds, and In advances made upon
cotton and other American produce, sent " com.
mercia house in Liverpool, created for that pur.
pose, and having the cor dence Of the Bank. The
great fire in New York had destroyed a large
amount of merchandise. To enable the New York
merchants TO meet their payments to British manu-
facturers, the Bank Of the United states made
large advances in bills upon Eugand, relying upon
the sale Of American produce, and Of American
securities In that market, to provide the means oil
payment.
and Hope Co, had been the agents Of the Bank
of the United States. Failing TO make n satisfas-
tory arrangement with them, Mr Jsudon was
sent to London to protect the credit Of the Bank.
When he reached there, Pennsylvania and Mary
land Skies selling ut sixteen per cent premium;
but com bination was Immediately for med, which,
aided by the Bank Of England. so deprecated the
price OF American produce and OF American secu-
rifles that Mr. Jaudon unable TO realize funds,
by the sale Of cotton or Of American securities to
pay the bills advanced to the New York merchants,
and 1t was announced, by one II not more Of the
Interested parties, that the bank would be dis
honored. When driven 10 the last extre nifty, and
at the last moment, Mr.. Jaudon borrowed money,
by an hypotbecation Of his State bonds, at a rate
Tar below their value; but as the Bank Of England
had issued notice that no bill drawn account
OF American produce, would be disco lned, and the
combination was such as to prevent the sale of his
State bonds, Mr.. Jaudon was unable TO pay the
ls.Vr AtUha q ItAa anI
not renew the loan, unless he paid instalment OF
6fteen per cent To enable him to do this, the
Bank Of the United States compelled TO issue
Its post notes, which were sold in the market at
depreciation of twenty per cent. This, and other
causes growing out Of the Animation referred TO,
conf elled suspension Of specie payment Mr.
.,d, x.t IL a. ,nIa 4