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1 V . ' . "".. .. " '.r . . " 1 I , . . 1 ' . V- .. w '"'it. " V -.if- !.,- 1- - ' s V r 1 : -h;vvv y; : y.; ;?i-viA-.H?iJ?-? t- aTii.i'f-HM' .vV'r5ss 4uSxiwi& irjk,- -v ".-,?' -r' -f : - " ' state of the cxrcnlctlnzJlediT.. ; r jro. Dm -. ? rlCf uciiMiv.viwK(iiuivii uvva- iion a, di ffertncc d F valde beKrea ti hank notes if one city o'r 8titc,:& i Froin Uiq natural cou rsco fcomm If rouiuq erce tuU m every. coraraumtr. in $rftes!r$tcdM9 alternately indebted io pru- another, Banks also becbnie lebtors antl creditor oreichcther, &, do cities, Btateland- nations . . If ,iie indivrduil merchant owes a debt to pother, samemes.thereditor finds t bis intererst ta taka from Ki9 debtor h navroent of Bis demand, some artin clc of icerciianaiic, pr oiner iiuaoie on:moditr tvhich he is in .want of, & tican tne. negociauon .oe wiLSoul the intervention of m T?it in order that nO difficaltv A ta the credrtor; from tHe-refusal t frf (ne debtbr tof pa r in other, mode j tha with merchandizei- the nconstitu- j Jja ot tne unueu aiaies ueciare inai tothinj but coix hail be made a legal fender. ' f" ' y f Kqt it happens that in the prosecu citioh of commerce between two dis tant cities or countries; one imports feaa the ether merchandized a great er value thin her, merchants are . able tuay for, in other merchandize, which h wanted by (thc crediting city or na ria., Hence krise3 what is called a Llance or trade, and it is pie. same iind of debt wljich is owed by one in iitidaal to another., : la onr importations from Great Bri tain, nor merchants incur a vast debt British merchants. This debt is By stupmentsof Araerjcan produce Hrect to Great Brital q ; f By shipments of American and fo rctzn uroduce'to tlie continent of Eu- loj'e ; the 'proceeds 'of the sales of th:ch aro remitted to .England By remittances of British govern, Ken"t and "mercajitilebills of exchange, purchased iix Canada, the West J nd i es tnd elewhereV or sent to tlie ITnitcd Sratcs, for the purchase of produce by British and other merchants. If the debt due to a foreign nation be prater than cart be paid by the indebt ed nation in its produce, or in the pro ceeds orjt shipped abroad, a balance .f tra3e becomes due, and this balance ant ho nald in that reneral article oil Merchandize called specie which is n article of value everr where ; is ibt a nation wants. It specie,' from 2fi scarcity, cannot be obtained, then the halancc cannot bo paid immediate Ij. and t!ie crediting natfontwil be o feed to wait for payment until 1 the Mitur is enabled to discharge his t!cjt by on of the modes within his lwer. In the meantime, however, the cre titor is desirous of havihff his capital replaced, and the a)nsefuence is, that a one class of merchants want more fandfo remit, than (another class can tkan-for, a competition .takes place and bi11 of exchange, like every other article, for which the demand' is great er than the stock at market caii.snp-1-v, rise in value, and command a pre ia:um. The reverse, is the case where, mm to be drawn for is freaier an the wants' of the marketr lu that f bills depreciate, and rthns a con- a i: t fi n -tu a t i o n J al w ay s t e n d i n g, k o w - r. to an criuiiibrium) exists. -.JJut k mot be observed) that theffioup bilU of exchanger is not 4ltoether y pori.oncd to trie amount .wanted cc the sum which can be drawn for, V instance, if fen millions werewaht- lnI nn jrce only be drawn for bills Aoahl nut command double their tiomi- , iialac The debtor rather than in- JT,r fc0 creat n tnss, would wait until f could nay h account in the onli Jarv modes & the result wou! 1 thcrc " bc, that he wuMreducethca J?ocnt of hU importations", until he had t"n? to cxtincuisli his debts. Thc prc acpon bills of exchange, there ; rr? in p..rf. c kind of eompensa- n w t, e vr.iin Ayho 5i filing r-- J' ALlUilS 111 uic usual : - the nature of commercial lar ar ' nHrcorc"more properly dC2f; tV cftcctcd, than tothcactud l, -V1?r-,lsf at market. ' ' "i'inni o ineimr zLV.'wicti I of bur citien and interior country bank notes. have .heretofore been the gene ral instrument oftrade as well as of I Jion.'chcap, transnortatipn, and, above I I. & irrii i.iiiii ruirii iiiikiriu I transitions, between, distant nations, there is .nq.reas'on why the .same- rela tion'may: not exist between. neisrhj.jr states and cities, Te same causes wiH prndAce' the same electa' andv if tpecie tlfe Uhiversal'artrcle of. traffic, is jiot to bobtained Prt eDinnent 'of balances ot.trde, an agin exchange ivill ahvavs exist. r; , . ' . In dealings between fie merchants n, ,uic iiiii cuwuueucj: inai r cxisu m rnuaaeipnia, Dy tne merchants, lor the theiralue, have well adapted them j purchase of goods. f , -.LZ-for. these purposes. But a' bank' note BetweePiuladeiphia and the' Wes has no jnore right to claim a. currency tern country, there is a' balance'of trade In a strange or distant.lace, than the j in.fayor.pfthe.city. ' This arises from promissory note of an indlvidi for J a; demand throughout (the; interior,' for a number of individuals Its uniform. I than the cpuhfr is at this time able to value at hone h derived entirely from ;t pay in domeStic products. It is atate 'seiuea. suimiuiimunncwiutii ich",ioi unuzs lviiicu ouirni noi jonsrta exist, ;i koney.-ii crs the note ofa responsible merchant innd has, its rise in the great necessities mkv a- I current where he resides, and vet a - of the people,dispronortioned ;to all merchant would .be' laughed at ; who' V would suppose that his note should be ' current. at a distance from home."; Hence, then, it follows, that as a bank 'j note can only answer the purposes of . ; j money, 'where every body is willing to . usual supply , of one season. The i pel receive it as such) it ceases to be hi'o- riod .will o'doiiht. arrive swhen an je riey when it gets among people who tire . quilibrium in jrade will exist between not willing to give it general currency. ! - the city and country, and when Mik It then becomes, like other commodi- bank notes of both, will mutually pass ties of value, a mere article of merchant uuc, auu iu iuia iiui uuiv can it ue regarded when it has travelled to a dis tant place. ? . -How, then, it will be asked5 is its va lue abroad , to be determined ? The answer is plain.; By the kame rules and principles that establish the price ef alt other commodities, namely, the Suaptityat market, tiie Acmand, and j le probable time at which the causes j which produce its variation shall have) ceased to operate. its value, there fore, will be determine! by the course of trade, and the balance then result ing, and hence it appears evident tliat the difference in the value of the notes of two distant banks does not arise but from the natural and unavoidable dit avaSnted by -ffie latter operation, of a .free .commerce; except specie; and, i ' I ' AVer have above. enumerated the se-.,. Secondly, the enhanced value of spe veral causes which have produced ba- cje jn Great-Britain. r . lances of trade against the middle and ; , The folowin& question now arises : southern, and in faror of the eastern j j Wh Was 'not the price of specie, from states namely: ..the tatter cause, raised above the value The immense amount of domestic manufactures exported from vN. Enj land to the other states and Hie grcit Value of. foreign produce and manufactures, imported by. them and shipped to the south, before their own regular importations. were made, by the riiiddle and southern states. I Hie influence of these causes has! extended A-r v.TT,mcU: rjt onria. and hence in all intermediate I places exchanges bear different o-ios,i studying their own interests., iininak m'j Jt;,o ih -,Inth. ', V ins their remittances to Great-Britain n-r-it o n f K;f ! coursQ of exchan-e, to those who are: j unacquainted therewith, we shall quote below in a note,' the rates as they have latteny existea in rnuaaeipnia, wiui With reject to th states feouth of i Viiwitilf, filikrinrrK tiolrrnmniA rr with ! X' C.l.l 1,- 1 , nf -England has been productive, of , A1CH an a-io .against, them, yet that agio is notas great as that winch exists against the middle state. But their commerce with the middle states has produced an aio in their favor, which has been oc- casinned by their exportations to those statm, and to foreign countries upon the account of .northern merchants,' produce to a greater value, than the a moant of the conimodtfieii. w hich they require to be shipped to. them in pay ment, v . j We cannot always ascertain from ! the agio of exchange the actual profit- Able, or unprofitable course of the a Vrcf trade between:any two given. pla ces. As for instance the dirtci trade or mutual exchange of commodities be tween Boston and Norfolk, might be in J ;n lioston ana iM.onoiK, mignt ne in r of the j latter? yet If Norfolk vcrcj favor 3.t, : ' i vfasliinffton,C2 l-!Tto3 l6v 'dls-T Alexandria, j jccuni9aaf w - w w. ravel -to the continent oi Europe, ana Wenicountr3142to5dou3 j e g-tisb enfment can offer VXTv? cent a!;?0.i5 the service of its Allied ( v w; LP WnP ; - r P consider vtne, cou rse vof exchange between Philadel phia, anif Baltimorel v' tTh& latterowes a balance tthe forpefJ 'iThi.s baianci .c apprenena,' is noLjne result ol any. but arises from the- interentTon a. tliird party, : viz;;e;;tp'o.pn more markei, and paid for in tlie notes, uuvc ui um.awic is sum ai int.m t iriTir riTV lun r limn Ma i a a w through rtr cduntry,i are Briuirht- tS former, years, from ,the , almost - entire consumption . of their stock t6f foreign manufactures which has obliged them, since the f conclusion jof the peace,' td purchase , to a '.creater amoant tiian the with each. other at par: '.That period may perhaps be distant, but it must ax . rive, or tlie trade,between the'ejtyand" cou niry win De , ruinous . xo tne iauer The individual who is always in debt will . probably become' bankrupt, an1 the man who purchases arid, consumes more soods than he can nav for. : will l?e very likely to go behind hand, . 1. NO. lit In a fornier nuinbeKWe Endeavored to prove that the causes which have grouuccdj'in the middle and Bouthem tates an appreciation Of spicie, were cAily ! ' t ' - j- hirst, a balance oftrade due by those States to the Eastern States without of bank notes at Boston, andnthercas tern towns, where the banks-did not suspend specie payments ? This is a question frequently proposed by those who imagine thatthc difference be tween bank notes; and specie, where a difference exists, is the entire result of the depreciation of ie former ; but it can readily be answered. The.peo- ; pie of New-En":land hnirland,, like every other commercial people, ate continual y or -elsewhere, they are ever disposed fi adopt the mod? which they consider ' KelJ to be most advantageous' In the case under consideration,two modes presented themselves, the shipment of specie and the remittance of exchange. r Specie was fti ar; bills Of exchange i ju . :. . l BKierauuii ihc su rciiui nais., aim c waerauuii uic nr iik,, uu - Pcl U1 i i ' T 1L? "4 ."8 tt.L tt "au :"3T LA Is C ! always estimated bj the merchant) ;j as rauch coud made upon the I..i.tmc4 rsf 4ia liHor. i iiTinh f Vi o err Jo of the Tormcr.' As proof of the' fact that exchange was thus far below par, we need only to mention the general principle,! tnat whenever, a. balance of trade is due by one. city or nation to another, every substitute for money as- sunies a value relative to that balance. I Bills of exchange aVe' of this j nature, 'and as one of the mediums of re mi t- ! tance have,' like treasury-bills and go- j vernment Atock, supported througJy)ut, f Hi valuable character. H Thev werent lone time in Boston, twelve &,an half ; per cent below par, when in Philadel- - M - c5mnlanded n advahce 5 fhu exbitinga difference equal "to .ernment iot iub iiiicin. u uicir ulh sidics; tT;he notes of thebantEn-j inland cease to ne money wnen tney J . . .. . . - .I troops,which th ey; would prefer td moi ney thehavebeecpmpeUea cnre specieratcthe xtrayaffant rate 'of j iwcHty-uve 10 .jjurty per uuui. -preim um lyjien the war'ceases or approach- es to a close,; specie, will -depreciate Ja England and as'it -becomes a less prof 1 UUWIC4UUUD VI WllUIUCIdCj V 11X UAlb; a?cpiTespon,dhi:fatkinin.erica; then, rwelwish rtbr (tscertaih; at; what period ourbanks Will : resume specie payments, we must loojcjto Europeand to the. course; of trade- A& soon' as it , no longer coniiques co oe in uemanu for exportation, for Ahe payment of domestic Daiasces 0,1 rraae, every Dpay wholiolds it will be anxious to get clear of the risk of keeping ii'9 . & will there fore deposit it, in the banks. 1 It vill then resume its own valrie.and perform its accustomed offices. v , ? . 8 ine. Daiance or craae aue oyine middle to the eastern 5taes has been one of the causes of appreciating the value of specie, so the enhanced value i of specie in the former, haV been one I ottheauses of increasing the; agio of exchange. ?jWhen; specie hecacie de mindetL for exportation merchants, who were- dsi rous; of shipping it en deavored to procure bills upri Boston,, for the Vpurcnase of it the re', where it was at parand thus has the average, rate of exchange upon Boston been equivalent,- or nearfysoj tVthe valued of specie!" t ' 1 "- v -. :y ; ? It is more than probable, even if banks had not suspended specie pay ments during the war, that they wot id have been compelled to have donje it since. The high price of specie irtJGv Britain -would have afforded a Ulierail prospect of profit tby shipping ; ih.' A demand would have been made upon the mirket for it, and the sam effect would have been produced as' by the demand for any other article of mer chandize,' an . enhahcemtiofiispalue. Itjiswenown that ip jforixiey times, Jhe '-call ,.fer ipe'cle.for the China and India 'traces, alone,: JAas frequently obliged the banks to withhold the pay ment ot large sums, find that specie has, often, whilst it vas the curfeht mediu n of exchange.) commanded an advance of one or twj per cent, V hat then could have ' nr evented af much hmore extensive and1 extraordinary de mand, aided by tjffc usual vant3 of trade, from' 'producing a much more enhanced value, even to thex degree of rendering it imp09'sible for the , banks toi continue the, pay ment of their notes? -Prior to the; suspension ot specie payments by tlie banks, , lialant es of trade between our cities at -times ex isted But aS these balances could al- f ways, as far as they were called for, be 1 paid in" specie,1 the- agio of exchange , diij. not extend beyond . the mere ex pense and -risk'.ot transporting specie from one jilace to another. This ex pense ioo,r being of a trifling amount was usually incurred by the Jianks for the accoramodatiort of their customers, and' thus the course of trade was' not generally, known or understood. When specie ceased to 00 paid, distant banks J retused mutually to receive each other's notes in deposit, and thus the' balance of trade was suffered to stand upon its own merits. This is its present state, and so long as specie is not dt par in J all the states of tlie union, so longAvill favorable or unfavorable ajrios of ex- 1 A -1 change continue to exist. - As relates to the easterp States," ti e are of opinion, that although .the agio of' exchange may decrease,' exchange will Seldom, if ever be against them so long as they i'continue to' manufac ture large quanties. .of' goods focy the middle and southern Stat es. Should those 'datter States supply' their own wants by an increase of their' owh ma rrufactures,,; or should they be able to- imporFthe goods they require cheaper from abroao? than from NW-Englarid, then exchange will operate against the "i latter ; for the mere productions of. entto enabTe them to profit by a trade , with the other States. ; ' ' ' ; 'i It isin vainL to attempt any lejal re j medh for a supposed evil, which has its ; orfjnn in the natural operations of com?! mcrce.; as well mignt an endeavor oe made to divert a vast riV r from its ac customed channel, as to ettect the equa Nization of exchange, in any other racife,' than v theintr6mtiiohntdthe corih- tty of such an dmount'-ofti;speer as f would ' be suJEcieni to meet all demands for, foreign .markets, undfbr ih'pQy- ment of all domestic- naUtnccs of trade. The Secretary of the Trearsdry, with 11 add to the price of hi goods tie amount T a vieV) as has generally becTrt appose r!?f the loss he sustains upon the notes;. "of effecting an equilibrium in exchange rin? that' hoflnnir hPttld Jit irech afterthe firsf ofutf!aJin!-pay menof4ntiesjWtsc ana ue noxes 01 sucaauhs 41a . know:.that:AeiIectottis:p1to receive treasury uui& uiwcptM?- 1,,., Whether r--nd;'tfV ceco!;3' measure to efiec his0bjectvveili clearly MMf oerstooa tne suojecx . iiai, result Whyjthat treasury bUIfrhic V are- not .money,-Put: on!ysubsptue; therefor, continued to in had '(lone beforehand k a1stme$ t.91 money even ww a yaiue uearuio. relation to the ; balances ofradan Baltimore ihey ,weije: at hgine 1 5 per cent, above par, and at B6stori.l ori5 belourif. 'y What was tgecbnfet 9fthe banks ?.Ina1l';plae.wh weparVih'eya. v cVMitK'nf its whereas" i&'jewTor;aHd all places further eastwa where thj yere peiowpar, ine pro onswaa iprtPfl: The banks which arcecrto takethem, clearly satHM so long aft no danger - of . peing oyejfetocked f Jvitn them ; whilst tjiose Mb refused to re - ceive them, as clearly percyep, uiai. if they Were to take them, their fjbole Capitals would heliable tobe Wdrbe(l wjth; th enf Had? the , buriks inNeW Yrk, for example; where Ytheytere at three' or four per cent, discount, a nrt'e.A : in rMMv'fl them at var every treasu ry bill sputh of the Ifudsdnv Wbujd ; have been sent there lor xnesaKe 01 ujo profit of exClmn.l As in ths one case then, a bank would, be bli nd 'to its i n - t tercst; that would refuse xo take-at par,' what it could sell at a profit ; so on the other hand, a bank would be equal--y liable to the imputation of fo!Jy,'that wQuld agreto receive par, ; what was only worth three or four per cent below it.' But how is a merchant irt New specie are not receivaoie r vv ivy -York to pay his duties, .without ; 1 '. 1 fit t '--1.- t."' is-1 , it tne notes 01 tne ,qauKs inere 1 surely in ; treasury bills. He wants-jo speciei . : neiiner p 11,01 -any consequencp io.uuii,-: 4 whether orno the governmeiit will re- ceIve.panK-notes,soJonga:l.Qt.lCIlVYf-: & buy in the inarket treasury brils.bcilqw par. .T s-"'- - ft p'-jtif-' ; -This scheme of the treaEiry,we ap prehend, never can effect aTreaiiza tion of .esclaii'se, biit it miyreyedtjiatfy ' become a source . ot pro Eij rce .of prohf spectila- tion to the -frnvernmentk-Mr lorinstance specie shoufd maintain a-hich price, :& the absolute amouri t of treasury 0 bills in existence" shanld'. greatly ; fall ; short of the amount required for the, payment of the duties,i there will be a demand for treasury bills upon the market greater than cad be readily me. "i-ike every otherarticlc of value or traffic, they-sWill nse; and even at lioston they inlay be at par.- But what, will be tiieir. value at other places r Why, they will then bear astheyvdo now, anxact re lation to" the balance of radej and it is possible that afWahinton, should the present balance continue due to the eastern states,, they may be at.tn or twelfrepercetit above parJ The goyefninent then, instead of issuing new bills ai par, might sell them at the L places-wlire they wanted., fund fy&ta&i advance, ana tliusproat pytlie course oftrade. .v , " , 5 , , We cannot see, with some honest Calculators, he wthe continuance of the : present state of things "cah affect ihe; -interests of the country If specie lias been withdrawn from circulation,- it. is because itA has been occupied a-" broad" in .a more profitableemploy ment than' it was engaged in at' home -Its exportation has alded - to the stock and tox the: wealth .of , the na tion,' by the purchase pf mej-cliandize abroad, worth more at home. than-the specie itself To be sureove are sub-' jecv to some vincfmvenl3?s in bur transactions.-. at market jana in' petty deali ngs jhut as we becoiji e accustom ed to the use'of paiier money, the disad- vintage5 wilvanish. AU iargermer-" ' cantile negociations. are'eonducted as ; q they liave heretofore been, "by bank r notes,f 6r checks upon banks As to thejaes.brexchane, where fjajancea -A areduet they 'must, of necessity coft- , - 'if I a;ll"1 ivt-A t.LA' ."-rl 2 ; ::v.: M3- xinup ; vui utrciong wwey wiiifoe so completely understood, as to occasion nO'einbarras3 who isell&;6ods 1r foreign blnknotesiwilt1 il.fi m sit' in , : f.i'! til? 1J1 :1 1! 8. i .1 '! '..1 1 L . -HI If 1, & Mi' 1; i1 t." L . If . i i i rf -'I' T L '. Is- '' 1 1-
The Weekly Raleigh Register (Raleigh, N.C.)
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Nov. 3, 1815, edition 1
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