IMAGE EVALUATION
TEST TARGET (MT-3)

V m^^

I/,

1.0

I.I

I- IIIIIM illll^'^

^ Itt 12.2

•■S

1.25

- 1^
1.4 ii.6

Photoeraphic

Sciaices
Corporation

23 WEST MAIN STKEET

WEBSTER, N.Y. 14S80

(716) 872-4503

CIHM/ICMH

Microfiche

Series.

CIHM/ICMH
Collection de
microfiches.

Canadian Institute for Historical Microreproductions / Institut Canadian da mlcroraproductiona historlquaa

Ttefmieal and Bibilogriiphie NotM/NotM .^lehniquM M bibliographiquM

Th« Inititut* ha« atttrnptcd to obtain tha boat

Originat copy svailbbla for filming, featurat of thia
copy which may ba bibliographically uniqua.
which may attar any of tha imagas in tha
reproduction, or which may significantly changa
tha utuat maihod of filming, ara ehaclcad balow.

Cotourad eovara/
Couwartura 49 couiaur

r~n Covarj damagad/

Couwartura andommagia

Covara rastored and/or laminatad/
Couvartura rosta^^ria at/ou patlicuida

□ Covar title mtasing/
Utit

itra da couvartura manqua

□ Colourad mapa/
Cartas gaographiquaa an eoulaur

□ Colourad ink (i.a. othar than btua or blackl/
Encra da couiaur (i.a. autra qua blaua ou noiral

□ Colourad plataa and/or iltustrationa/
Planchaa at/ou illustrationa an couiaur

□ filou
Rali<

nd with othar matarial/
i avac d'autraa documanta

Tight binding may cauta shadows or distortion
along interior margin/

La re liure sarree peut causar da I'ombra ou da la
distorsion la long da la marga intiriaura

Blank leaves added during restoration may
appear within the text. Whenever possible, thasa
have been omitted from filming/
It se peut que certaines pages blanches ajoutaaa
lors dune restauration apparaissent dans la taxta.
mais, iorsque cela itait possible, cas pages n'ont
pas iti filmdes.

Additional comments:/
Commentaires supplimentaires;

L'Inatitut a microfilm* la mai.''aur axamplaira
qu'ii lui a ata possible ^9 sa prucurar. Las ditaila
da cat aaamplaire qui sont paut-dtra uniquas du
point 'fa vua bibliographiquM. qui pauvant modifier
una image reproduita. ou Qui pauvant asigar una
modification dans la m«ttioda normaia da filmaga
aont indiquAa ci-dassoua.

rn Colourad pagaa/

Pagaa da couiaur

Pagaa damaged/
Pagaa amdommagias

□ Pages restored ano/or laminatad/
Pagas rastaur^aa at/ou paliieulAaa

r^P^agaa discoloured, stained or foxad/
LJ Pagaa dacoiortes, tachatiaa ou piquAaa

□ Pagas detached/
Pages datachees

r~l/^howthrough/
L^ Transparenca

□ Quality of print varies/
Qualiti inigala da rimprassion

□ Includrf supplementary matarial/
Comprand du matAriai suppl^mantaira

□ Only edition available/
Seule Edition disponibia

Pages wholly or partially obscured by errata

slips, tissues, etc.. have been refilmad to
ensure the best possible image/
Les pages totatement ou partiellement
obscurciss par un feuillet d'srrats. via palura.
etc., crtt 6ti fiim^es A nouveau de fa-^on a
obtenir ia meilieura image possibla.

This item is filmed at the reduction ratio checked below/

Ca document est film^ au taux de reduction indiqu* ci-dessous.

10X

14X

18X

Z2X

26X

30X

12X

16X

20X

24X

28X

32X

lils
du

difier
ins

lage

The copy filmed here hee been reproduced thenke
to the genero»ity of:

Metropolitan ''oranto Library
C«nacli«n Hiitory Dtptttmtnt

The imeget app««rino hare are the best quality

pofttible considaring th« condition and lagibiiity
of the original copy and in keeping with the
filming contract apecif icatione.

Griginel copies in printed paper covere ere filmed
beginning with the front cover and ending on
the ia$t {>sge with a printed or illustrated impree-
elo». or the bacic cover when eppropriate. All
other original copies ere filmed baginning on the
firet page with a printed or Illustrated lmpree>
eton. end ending on the leat page with e printed
or illuatreted impression.

The last recorded freme on eech microfiche
ehall contain the symbol -"•►(meaning "CON*
TINUED"), or the symbol V (meaning "END"}.
whichever epplios.

Maps, plates, charts, etc.. mey be filmed at
different reduction ratios. Those too large to be
enti.ely included in one exposure are filmed
beginning in the upper left hand corner, left to
right and top to bottom, es many frames as
required. The following diagrams illustrate the
method:

L'exemplaire f itmi fut reproduit grice A le
ginAroalt* da:

Metropolitan Toronto Library
Canadian Hiitory Dtpartmsnt

Lee imeges suivantes ont dt^ reprodultes avec le
plus grand soin, compve tsnu de la condition at
de le nettetA de l'exemplaire film6, ev en
conformit* evec les conditions du contrat de
filmage.

ei.emplaires origineux dont la couverture en
(sapier est imprimde sont film6s en commen9ant
par le premier plat et en terminant soit par la
derniere page qui comporte une empreinte
d'impression ou d'illustration, soit par le second
piMt. selon le cas. Tous les autres exemplaires
originauK sont filmds en commenpant par la
premidra page qui comporte une empreinte
d'impression ou d'illustration et en terminant par
le dernidre page qui comporte une telle
empreinte.

\)n des symboles suivants apparaitra sur la
dernidre image de cheque microfiche, selon le
cas: le symboie — »- signifie "A SUIVRE". le
aymbole V signifie "FIN".

Les ct 2es. planches, tableaux, etc., peuvsnt 6tre
film6s A des taux de reduction diffdrents.
Lorsque le document est trop grand pour §*re
reproduit en un seul clich6, II est fi!m6 d partir
^f/ I'sngle supdrieur gauche, de gauche d droite,
e>' de haut en bas. en prenant le nombre

lages nftcessaire. Les diagrammes suivants

<trent la mithode.

■ta

liure.

1 2 3

:# .

>■-

-WW- ' r? ¥ ¥-t»y? -V vv ,

BibtiotHeque

i>B

VICTOR MORIN

MONTRCAL

T-.^«^«..,, , .-..-- ■-.-^. ■^> - -y. ■ .^,,y^,.^^^f.^^

OF -<

'Esaai^

PRINTED BY JAMES A.

> N

PLAN

OF \ SYSTEM OF

Sir IIowarb

tovernovy and
wine* cf J>Ci'i*

^smaaT®^'3[^^ bahs^s

FOR THE COLONIES.

BY W. JOPUM.

ob^crvattons,
Majesty has
» Government
iU interests.
} it h in can-
tUe general
nstance*, and
id to coutaio

MIRAMICHl.

PRINTED

BY JAMES A. riEUCE, AT THE ^

LAND SCHEDIASMA OFFICE.

1830.

vant,

fr ^ / O^^ .

•» > ♦

V > »

DEDICATION.

To His Excelhncy Major Gcnerc^l Si a IIowar»
Douglas, Bart. Lieutenant'dorernory and
Commander in Chief ^ ofiht Provinct cf J^ai*
Brunsmckj §*c. ^c.

Sill,

Permit me to call your attention to tlie following obserfations,
by dcdicatins them to you. I am persuaded that His Majesty tas
not a Representative wbo has done more to render his Go'crnmeat
popular, iior any Colony a Governor more devoted to its interests.
This last consideration, renders it emlp.er/iiy proper, while it is in con-
formity with public sentiment, that any plan, which has the general
good for its object, should be submitted to you in the first instance; and
I have only to hope, that these few pajes may be found to contaia
luggeitioQs worthy your attention.

I baTe the honor to be.
With great respect,
Your Excellency's rcry obedient humble servant,

WILLIAM JOrLIN.

« f

« v

PREFACK.

^tmm

The Author I»t a Brother in Ergltnd, who is well kftoirn ai «
writer on Banking and Cumw^f and dso aa the fouader of the
ProTincial Bank of Ireland. This Insdtution is esnstrueted oa a new
principle. It is instituted in Loudon, while its estahhshmeRts of
Business are in Ireland. The undertaking, thongh notel, has prov-
id successful to those embarked in it, and higblj bsnefirial to Ireland,
not only by introducing Briti$h eopital into thht country, when eapital
is much wanted, but by affording a means <lf giving iaeraaied aetiTtiy
toitsotoA.

The sueeess of this experiment, led the author to enquire, whether
it might rot be possible to frame an Institution which might in a simi-
lar manner, be useful io the British Colonies in North Ameriea, and
this enquiry led to a eorreepoadenee, of whieh the follewiag may ha
considered the resnlt

« v

)

( •

6^ BAHKIK^;^.

To fupplj with Capital tbe industrious, wbo can turn it to good ac-
count, is unireriallj admitted to be one of the ritost effijctual modsa
of promoting the prosperity of a countrr ": ii •'- pEttlcularlj tbe
case with young Countries, such as Briti
field of eiTjploymg Capital is extensive,
•upply limited, and any weans by wjhic
creased, would prove in the highest degree i
No apology is therefore necessary, for an attewj..
for this purpose, wbieb is the objeti of the folbwinj brief aad iwpsr-
ftct observations.

a . With u» the

(;jeat, but tbe

matcriaUy ia-

) the country.

fuggcst mesne

In considering the best motJe of supplying a dewjni!, it is propar f '
examine the nature of it in the first place: for, wilhwt undetstardij>g
its nature, there is little chanea of forming right cenclusioos on the
•ubject.

First, then, w4 have no nanufac^LTes, nor pre wa htjely to hate any
for half a century to come, and it is not lor manufacturing purpotes
that a supply of Capital is wanted . In th« next place j our commcr;!«,
which is very limited compared with that of other Countries of siir/ijar
extent, is chiefly, in New Brunswick at least, wiih which I am bef;t ac-
quainted, in tbe hands of wealthy houses conoctte^ wjth Great Pritain,
who have an abundance of Capital. |Ience it is not in commercial
aperations that any great additioaal supply of it is required. Ill*,
therefore, in agriculture only that Capital is wanted by us to any great
•stent. But we b*ve only to look at the quantity of land vc possess,
wbieb, though settled, is uncultivated and ucimproved to be satisfied
that the extent of dsmand there it lor Cap;talto bathus enploToi
iirery great

Any pkn, ooBSsqacotlr, "^hlch proposes to iutrodiice capital inta
these ColoBies, must have for itt object to adraocc it to the cultivation
of th* soil, or it fianoot be extenst7e!y ute'ul.

It must aho bs observed tint tht demanr] h tu some degree p^eitliar.
Land is at ).rj.<«?iit to tj In.l in tnzr.y jiarts for a nominal consideration
by tbcsft ^v^i c->nc«j!tivat2it. M*?n, in con»eq>i'>nc?, do not remain
lo:tj in ?:: '••ii."'", b::l ir.arry an! ssttle upoii !an<! of their own. Thia
rpnclcrs it tlLTicult lo kef p s«»rraf ♦», and prevents the cmplojnent of
Caoiiril in agriculture on a large scale. The cliief demand for it »
tberefore by small pro'irietors wb» cultivate tbu sioil tbenDsaWei.

It m«?t fiirtlier be cujcrrod lliat Canital leiit for the improremeat
and cuUItdUoo of tbesoil wjiist be l»?nt permanently. The return??
frcni Lan;l ara s!o;v. Eton when employed on th-» best soils, it will
be six or t-'^M yrnr* before it will rcpny the Capital laiJ out upon it*
Jio p'.TJon, thc-rffore, conlJ vpnturu t>T i)jrro\7 money t5 be cxjienrled
on Land, wiiho;:t l!»e repaymc'it oi'itccre kft to his own conveai-
CECt^, or fixrd at sojjje re ioote porlod.

Stnall proprJf'tars, also, can ia gpnsril cnly glvs sccnrKy far small
•urn*. Hence the djrroar.d wj have for capital on good security,
thoi'^b gnat in the aggregate, consists chiefly m a dsmaad for small
loaasy for ludefiiule periods, on the security of Land.

The object for coRsifleration, therefore, is how to stippTy tbedeinandy
it fill not be supplied, iinloss it can be n^aclc tlia ititcrpst of partic^s to
supply It; and th? question H — how can it l« madts the interest of
capitalists to laud money in small suras for iutlefjnile per 10*^8 on such
secarity?

Vt'lert? Capital is wich in request, the csfabllfthmentsof Banl^s is
iii geiit ral ths iirst step rosort.-d to, and this has already been done.
Tberr are lUrl'.^ in all the foor Colonics of Neva Scotia, New
15rijr.sv.*ck» Rjid Uf per and Lowe: Canada — but no benc&t to thdcul-
tiitttorscfLtsr.d has b2cn dcTivcd from tliQiP.

Bants, coii^ifhstandinj', r.re the medium, ilrtugli whicb the Capi-
tal ws require nisi be cbt-iin.-d, ii it be practicable to obJaia it. W«
fbaH therefore proceed ia the rext pl^ee, to examine the naturt of
Bankift^^, and the retsooswbj Qur Badu art not tbts me^am at

^- ^

'!'

fresont; rnd i\ut m\\ naturallj lor.d us to iU ebBliJ«iatt<lD of tU
|>lan it ii our mtentioa to susseit.

pur naok* are Joiot Stock Co,npan;e,-foo«d#j on the u^M "of
tie Banks of Scotland, &nd as Ba.k.ng w ,.i^ t» eii«t in tiie greater
perfection in that r-^untry, we cannot give a belter idea of th« nttu. .
•fit generally, than bj quoting Mr. Tbomat Joi»:itt'.desc.ii.tioD of
Scotch Banking from bis work on tbat subject

« The original aid proper business ef a Banker is to trade m capital
He ougbt to be tbat medium between the borrower aud luid'T d tLe
money mwket, which a merchant i.^ iu other commodities. \f ,, >e
business of a merchant or trader to l...y of the producer on u.e on.
band, Rnd to sell to the consumer or r^.tailer on the other. Tie ae-
quires a knowledge of both parti«, and they of him, and f»r h.» credit
capital, labour, and knowledge, be c\ ^rges a profit up.,, the com-
modity wb.ch, through bis agency IS transferred from the party Avho
has It to sell, to the parly wanting to purchase it. New, what a mer-
chant is !• other commodities, the Scotch Banks are in money They
borrow of those who b*ve it to lend, and tend to those whs want to
borrow It, acquire a knowledge of both parties, and charge a profit of
one per cent. upo. the transaction. Any person opening an account
with them, rifceives four per cent.* upon the balance in their hands.
He may pay money to the ciedit of his account when be chooses, aid
he receives interest for it f.om the day ,t is deposited j ha may dravr
b.s money out of tb« Bank when and in such sums a* he thinks proper,
and only loses interest upon the sum drawc, from the day of receiving
It. On the contrary, any person giving proper securities, may open
an account w»tb them, and draw to the extent of the security -Iven
for which they will charge him five per cent, upon the fluctuating ba-
lance he owes. Consequently, a person who has money to lend is
saved all the trouble, not unattended with risk, of mortgages, and may
have bis mouey, or any part of it, at any time, should a desirable nur-
purchase fab ,n his way; whereas with a mortgage he cannot draw li,,
money when he wants il-must take it altogether when he d.es draw
it-or. If the borrower chooses, must take It whether he wants it or
not. Their object, however, in borrowing, being tu lend, the facilities

iS^^t^^^r^'^s^.^^-:'-^^^^

feiPh-t

10 Olli

1«

girea U Larrofrtrs, are tquallr great. In tbt firtt p!»ce, tbef l»iU
discount bills an-l other mercantile securities, that qre perfectly regu-
lar and good, at any tim«, and to any amount. Thus merchants caa
calculate with certamty upon being accommodated in the course of re-
galar transactions to any extent, which is of infinite serfice to theinj
a'? It would be better for a merchant not to hare such assistance at all
than to have any uncertainty respecting it. In the next placp, they
grant Cash accounts, that is, any person in business, by givin^ two luf-
fictent securities, may open an account with them, and orerdraw them
to the extent of the security ^iven, for which, as before stated he is
charged five per cent upon the balance he owes. Very ^reat advan-
ces, not to rnfjrcantile men •nly, but to all classes of pcrsoni, are
r,ade m ihh way; and in the last place, they make adrances upcn real
property, some of them to a very considtrable extent. The plan they
pursue, I believe, is, for ths proprietor to pledge hit estate, or other
property, with the Bank, for a given amount, open an account with it,
and drawag his occasions may require, to the amount prescribed.
Tims, when any persons wish to borrow, the facilities held out to bor-
rowers induce! them equally with the lenders to make application to the
Bank.

• A^ individuals often call in the money they have lent out on mort-
gage whon they can find better employment for it, or when the death of
a ; artyproducei a division of his property, by which a great expsnce
to the mortgngee is incurred in procuring a fresh mortgage. Banki
are therefore more to be dependeu upon, and borrowers being just as
much wanting hy them as lenders, and the money which they lend
b«»ing rarely, or in fact, never, called in again until it is the pleasure of
the borrower to pay it off, people in want of money, will prefer dealing
with the Banks at even a higher per centage, while lenders, on their
part, prefer dealing with them at a per centage something less than
individuals would give. Thus in consequence of the security of their
property, and tho readiness with which they can at all times obtain it
wlnen wanted, a di(i^r 'nee of one per cent, is not found to be a suffici-
ent inducement for th'^ b:.rrowi»rs and lenderi to pass by the Banks
and to transact th'M'r business direct with each other. If they did, the
f;'ain wo;ild. of course, hava to be divided between them, and a half per
tent, would be no compensation to eith!»r party for the additional m-
fojivenif^nco, risk, and tror.ble, in whieh they would be involved.

are

WbereM the Bank being open aud reaJj at all limes ta meet tb«
wants of each partj unless among particular friends, neither ptrtjr
ever thinks of making farther enquiries upon the subject, but transactn
ibft business with the Banks as a matter of coursa. They are, there-
fore, at once the great depositories of the mono? capital of th^
country,* and the source from whence the aui^pUet of it are
drawn."

The money lodj^ei with the Scotch IS.inks is all payable on demand,
or at a short notice. But a Bank, it must be observed, could n»t
borrow to any extent on such terms, unless it had the power of lending
on nearly similar conditions. It is only the medium between the bor-
rower and the lender, and it must be able to lend or employ the money
upan the same terms as it borrows it. If it stipulates to pay the Mo-
ney it borrows whenever called upon, it must be able to racal its loans
with nearly equal facility.

This the Scotch Banks can do. ' There is a densand for money re-
giTlarly occurring, every week throughout the year upon Bills at short
dates, which the Banks discount. These Bills are likevi^-e weekly
•fallins; due, so that as they lend money outoa one hand, it comes in o«
the other. But when called upon unexpectedly, to repay money depo-
sited with them they do not lend out the same weekly amount upon
Bills as usual. They curtail their loans in proportion as their de-
posits are withdrawn. They consequently suffer no inconvenienss
themselves, whatever their borrowing customers may do, fro.Ti the mo-
ney being taken out of their bands.

They likewise employ part of the money deposited with them in pur-
chasing Government securities, which they can always turn into monf^y
at a moments notice. By these means they are enabled to make in-
terest of money from week to week, and sometimes even from day to
day. So that they can take money, and calculate upon making intjr-

est of it for the shortest pariods.

But our Banks cannot lend and therefore cannot borrow on thosa
principles. We have not a regular succession of Bills founded upon
commercial and manufacturieg transactions occurring throughout (he

* There «re tliirtv-two Ranking Comnaoies in Srotlanrl: xnrl it i» romput^rl Iiy
tlie Rankers themsolvp.ft, thflt the money depnsiteH with them, t^ die Public, i« corv-
• iderahly alwve 20 rnillioni.— Nipte to 5th Edition.

} »

V'hi..hfhPvr. 1. • •'^i''^/ ^^^'^fpt at their o\fn couvenience, and

customers, "'lercii *od that of their

The only moner which eur Banks at present hiT. th« n. r

lending m this m-^nn^.r; j • j ^ I'reseni naTa the power of

•in.«, and 1.; Zl TV .7 "^ ""'""' ''"= ""' "> "^''^y =" "->'
Ih. 1 tier „ c ,,, ' '.T "'■ ""■' "'"' " " «"'-» »™-.t of

I,ro„erTr .^'"' »"■»""« 'I'^y ""7 likewi« |.„d as .bey thi„k

:s:: • :: :;:;,t;r "^^ "'-, - -^ " '''-- -'--•

Capital o» 11,. . v °' ''°"'''"'"' "'"' "'« '"""=■"'1 "'«'•'= "for

|.re.enl. ' ""'' "" "">' "•"^'' »' "<« » •!.= ca.c .t

o J 1 , io„.in.r with th» expense of foreclosure ihould it orow
»cc.«ar, ,vu„ all .„e oil™ c-os, incident, to whi.U ™.r„!les .,.
«uVcl. J'""ot,thoreror.i„tl,e„,y„f„„,,,,,„/,tT'f""7

ti-uuiertst ol a iJank to lend money ia small

jsiims upon such security with us, not only musl the r^tc of interest be
higher, hut the nature of the security must be rv hdered more simple aud
less troublesome than mortgages are in general.

On tl\e other hand the proprietor of good Land in a goo J ftituatioii
would willingly pay more than six per cent for Capifal, rather Uian not
have it. Two or tliree pounds additional per anniiin is Mothino; com-
pared "to the advantage of obtaining Capital siifiicietjt to give effect to
his industry and valu«; to his lar/d.

• . ■ i. : • ■ . *■ •

Now, leaving the law of usury as it stands, the only mode of advan-
cing money at a higher rate of interest than six per cent is for the
party borrowing it to transfer his property to the lender and take k
pcfp -'tual lease of U at th«; interest agreed u^jon.

In the Colonies, where the regular payment of the int«rest could net
"be depended upon, nothing but a .summary povv«r of ejectoneot equal ta
that which a landlord possesses, would be sutVicient for the niort^affq
even if the usury laws vTere done away. The party advanciBsy th?
money should be put neither to exnence nor trouble in transferrin* the
lease to a person willing to perform the obligations of it, should the
party who has obtained the money fail to do so. This is the onlv prin-
ciple on which money could b« advanced with us at alt aii land la SKiall
sums.

' • *

It is therefore the only means uader the law, as it now stands, to
be devised, by which there is any chance of a person ohtaioing roooey
on t\'^ security of Land, however well he might be enabled to employ
it, and however able and willing he might be to give such a rate of in-
terest as would induce parties to let him have the money he wants.
la new Countries, where Capital is in great request, and the security
fiot of that kind which exists in Countries more advanced in wealth and
population, usury laws evidently retard thtf prosperity of the Country,
by preventing the influx of Capital into it. People can better afford
to give a Idige interest for a small sum than for a large one, and can
better afford to give ten per cent in America than five per cent in
!England. Whereas a person who lends a Hundred Pounds in the
Woods of America must evidently have a much larger interest to in-
duce him to do so, than if he were lending ten Thousand Pounds upon
estates of ample value in l^ngland. The iinertst paid him must ncl

insref/ C9mperKat« hlio for tbt titc of Lis money, but also f»r the addii

tional risk and trouble of the trtnsattioD. This the usuary laws do
not allow & person to pay. They therefore deprive him cf the means
of obtaining money, though he might be very well able to afford, and
most anxious to give, a siaTjciont interest to induce parties to lend hiin
it. fhc* mode fingg;t>sto(!, however, avoids this injurious law and
leatps the borrower an-l the lender to deal upon such terma
as may b* lomid mulually agreeable to their respective in-
terests,

Nor is it of any importance to the general prosperity of the Country
trhoth'T a person ^ofs Capita! at less than its real value to hira or not
provided ho <lii;'s jj^t it. Cnpital judiciously employed is as productive
at one raiti of inttrost as at anothar. If it even were idly spent and
aqusnderM r.^vay, the Country would not be the worse for it. The
spending of th>7 money wouM bensfit some while the party who advanced
it, if he did net get his interest regularly paid woald eject th: spend-
thrift t9 whom he had advanced the money, and gat some mon indus-
trious indivi^luais to tak:i his place. The property would he improved
by the change of liind-;, and the idle proprietor in a Country where
thore is plen(y of employment would be compelled by necessity to work
farwag^s. This wojld be beneficial to the community, and whcra
wages are good the coaditiin of th<i individual himself would probably
rot b* rcndarcd worse. The tendency of the system so far would
therefore be to transfer property from the hands of the idle and cxtra-
ragant t? those of the iadv...rious uod saving.

The above principle is the only one upon which it appears practica-
ble for either Uaaks or individuals to lend money with any prospect of
advantage in the present situation of the Colonies. But our Banks,
as WR have before observed, could not lend money even on this prin-
ciple to any extent, because they have it not to lend, and
the next question is — how u their power ef lending to bo in-
creased?

The power of Banks to lend depends, as before stated, i.pon their
poorer of horr;>wing, and if they lend for long periods they must be able
to borronr for long periods. The proper business of a Bank is to be
the medium between the borrower and the lender, and having pointed
cut the way in which money may niib advantage b'5 lent for long pc-

riotis, it rtir<ains to be suggested low the Baoks tre to obtain moaef on
the same terras.

The couTcnience of haTiag a phnof security, where money can ba
placed in safety, at a fair rate of interest regularly pai.l either uatil
the parties hava accumulate J suffiotent to nake purchase with, or for
the purpose of proTidinf^for wi.lows, children &.r, is very p;rcat; and ia
CTery Country there arc persons desirous to avail themselves of such a
place if there be one. To thesis persons it is not material whether
they hava the power of callinjv for their money upon demand or not.
If they had a se--unty oasily trinsferablo, it would amount to the sama
thinfj. But in tho Colonies no such securities are to be had. Thu
British funds are the only security m which money can be th-.is jntestetl
and they are out of th;5 reach ofporsoni with only small saving;s such as
are made\v;th us, independent of thfMr yielding a Tery low rate of in-
terest, and draining the Capital from, instead of bringing jt to, th«
Countrt. Now it would b'i a great advantage if our Banks would b«
to us what the liritish fan Is an; to Great Britain. The government
does not pay off the principal of the debt: it only pays the interest; but,
as the ri'vhtto recc've that interest is transferable, vrhen one party, is
desirous to part with, there is always another party willing to purchase
his right, and no inconvenience results from tb8 mooej having been ir^
redeemably lent to the Government.

We would therefore suggest that our Banks sbould borvow on tba
same principles If a person, we shall say, had a hundred dollars, or
indeed any sum, great or small, to lend, let the Banks take »t, and
agree to give a fair rate of interest for it, say five per cent, presuming
of course that thoy can lend it with advantage on land, lu the manner
proposed. Let thsm not agree to p^ay the principal sum back again,
but let the party have the power of transferring thj right to receive the
interest to any one he pleases; or let them, if he should prefer it, give
Iiim their promissory note, transferable by indorsation from hand to
hand, in which they promise to pay the Interest to order, but not the
principal; That is, provided the sum deposited amount to a Huudred
dollars, on such a sum as would prevent the note passing current as
money; for the Bank can always circulate without interest, as much
money as the country will absorb. Besides which] cash notes must by
law be payable on demand.

I !

% a littTe management on tlie part of the Bank m not taling all the
money offered them on these terms, or in lending money on these bills,
paying them oiTon reasonable notice, when any person was particularly
in want of money and could not get it elsewhere, the Talua of. thes«
notes or securities might always be kept up at pa'r and
»rould cOiise(j"ueritly ha in request by all persons who had monsy tn
spare.

In this way the Bank would become a kind of Saving Bank?.
They would have s.o(;nts in duTerent parts to receive the deposits of the
public, ino7>(?y would be saved and placed with them which is noit
squandered. There is nothinj iuduces people so much to save money
as a safe and toiiVGnieiit place of deposit where interest can be had
lor it. This has been proved by the Savmj Banks of England, whea
millions have been deposited by working men that would otherwis,*
lave been spent. The circulation of these notes might b« render' J
ialso much more extensive by making the interest on them payable in
LchdoH at the optica of the holder. They would then frequently be
sent to Knglaiid either as a secuiity or as a remittance^ and inight
even become ii negociable security in that Country.

In advancing money on land, on the principle pointed out, t!»e only
additional expn^ice the Banks would be put to would be that of having
a Surveyor to value ttie property on which loans were to be made, and
looking after thi* interest in case of its not being regularly paid. This
bight perhaps freciueiitly occur, but if the money were judiciously ad-
Vaccexl the Bauks cuuhi suffer no loss;

, The iiankj hovvevor, generally speaking, must be regularly, paid.
The Lund of any defaulter, after a reasonable indulgence, would have
to be trausterred to other parties. But these, if the property were
v/orth the rent, there would be no difficulty in finding. T.'ouble would
be the Oidy loss, and this would fall upon the Surveyor. He would
go J-ound the Country once or twice a year, and in his tour would look
at and value the property upon which loans were wanted — determine
Vhat was to be done with those who failed to make their regular pay-
tnents and negotiate with thosd who wished to take any land that had
fallen Into thi hands of the Bank. A Surveyor would thus be the
tnly additional expence consequent upon this system of loans, which,
care bein^ takes not to advance upon any property above Us value,
faw,ht be carried to a great extent without any difiiculty.

: S:.-^-

iling all the
these bills,

particularly

112 of. tbes<i

p&r and

d njonsy tu

ng Bank<».
)osits of tlia
lich is noi»
save money
an be had
jiand, wheu
I othervvis,»
i« render'J
payable ia
equently be
and ihight

, the only
[ of having
made, and
aid. 'J his
tiously ad-

lariy, paid.

would have

porty wer«

3uble would

He would

would look

-determine

igular pay-

d that had

us be the

ans, which,

it$ value,

The additional expense conspquent npcn this KTstcm cf borioi^ict
pointed out would also be small. The trouble ol rccoirltif th« luontt
and paying the interest would be all the trouble iiivolved~a trouble
tvhich any respertable shareholder, in districts remote from the Bank
vould undertake probably for nothing, or at any riite for very trifhi.g
consideration. The system of business recommended may thoreiore
be tried, should it be approved, without any great pecuniary sacrifiw
presuming it not to succeed, which is tio tnfli.is rccoir.niPiidation in fa-
Tour of any proposed improvt^fient.

it may in the way of objfiction, nowcver, be observed, that the trade
of the Colonies is at present conducted nearly altoo-ether br Barter
and money could not be had to pay the proposed reut with. In answer
to this, it is only necessary to observe that the Merchants would not
give goods for produce, if it were not worth money, and m scllinjr then-
produce the parties would have to stipulate with th« Merchants"for af
Diuch money as would pay their rent.

Corn, upon which Hip Cultivator of thfi soil would Lave chitliy to re-
ly for this purpose, is received in the British market at a low duty
from the Colonies— is always sold for ready moner— and w,|| always
produce ready money~to those who have it to dis'pose of; independent
of the West India market, which could as well be voppjied with flour
by New Brunswick and Nova Scot.a, as by any other part of Ameri-
ca, if Its cohabitants were sufficiently industrious to produce it.

Hitherto th. Colonics but New Brunswick In particular have chief-
ly depended upon the Timber trade for obtaining the British manufar.
tures, the Tea-the Sugar-and other necessaries, as also the money
which they required. But they bare in the fruitfulnes, of the soil a
much better dependence, and we of course look to its improvement, and

to the corn produce, as the source from which the interest or rent is
cDieily to be paid.

*a upou it. The Bank would not lend him the money, excei-t thb
Land were in inch a state as that he could do so. Were not this th«
Mse ,t would not be worth the money advanced vpon it It niust bs
already doarod, and possess a value independent of the industry .^f Hi -.
party borrowing the sioney, before the JBanks could have any Ihii,^ t>
do with it. But the rent could not be paid without industry tho^igli
easily paid with it. Besides this it may be observed that the Baidv*
will by this system make moi.ey mors plontiful than heretofore, and
thereby furnish the means themselves b;r which the payment of the
rents m meney will be facilitated.

We havethu5 pointed out a principle ur,oD which our Baiks might
deal m Capital, and become the medium, between the borrowers and
the lenders for long periods, presuming the lenders to be parties resi-
dent m the Celonies themselves. But there is another plan by which
the Banks might obtain money upon perhaps easier terms, or at all
events to a greater extent, were they to make the necessary ar-
rangements for that purpose, and that is, by borrowing it in
£nglaad.

In England Capital is superabundant, and the rate of interest low
at an instance of it the East India Company are enabled to borrotr
money upon their bonds at 3 per cent* that is, upon their promissory
notes cr securities transferable from hand to hand, the interest of
which the Cempany stipulates to pay, but not the principal; the same
kind of noje, in short, which we bare lecommendcd our Banks to
issue.

Tfce lecurity af the East India Company is of course greater in the
estimation of the British Public than any of our Banks can ofler.
But there can be little doubt that if the credit our ]3aiiks were pro-
perly established in England, and the interest paid there, they would
be able to raise money upon their notes, or Bonds, at 5 per cent at
most, but probably at a ikucIj lower rate.

Notr, to obtaia this credit the British Public inust be assured of

* "^^.^ ^'"* '"''''"^ Compnnjr <\](\ (jivc 1 ppr cent, hut are now enuhlcJ to olitain
mni.ev af r. pur rent, and guve notice some short time ago tinu tliev would \,uy ott
t1»« l.ond.- on wliidi the jj;ive i |K;r cent (wiiich el.ey Jiad the power cf doHt",
linleM the helders cf tbein would f^ku a^tr cciit wliich the/ geucrallv did.

n
I

tliotigh

might

it ia

two things i first thai the uUImiitc security is arnj-!c; an-J next tiat lUa
interest will he regularly paid. - . ,.•

To randvT thft secuflty ample, *ho Kaii!vS must possess iar<.:i? Oa;)i»
lals— a Capital of 250,000 dollars (£.34, ItJG 13 C) f'i* ttisianr**
it may easily !)e conceiveJ, would not be fcuflicicnt to establish a credit
in LoDiloii. The Capitals of our Hanks, which do rM m gnneral,
wc Leliove, exceed that ainount, consecjuentiy would have ti> 02 en-
larged. .

It would not, lowcTcr, be necessary that this should hfl dnnc hy an
advance of cash. If the additional Capital were subscribed in Cash
in the first instance, it must be lent out upon mortgage in the next.
We have no other way in which a large Capital could be safrly em-
ployed. ^ The Capital might therefore be enlarged by a suhscrijitioa
ia securities at once. Instead of the shareholders paying Cash, thpy
might give security for thv- araouot, the laaieas »f they' had paid »p tlwj
amount and burro;Yed it again.

A million of dollars (£216, 666 IS 4) is probably th-^ least Capi-
tal which a Bank should possess in America, in ord«r to ©btain credit
in London. The larger the Capital, however, th» greater would be th8
coiifiJence of the Bntisb Public, and the more favourable, consf-quent.
ly, would be the terms on which money would be obtained, liut as-
suming 1,000,000 dollars to be sufficient, we would suggest that the
Banks should raise their Capitals to that amount by calling upon their
Aarcholdcrs to lodge securities, in proportion to tho shares tii.7 res^
pectively held, to the extent required to make up that sum. As they
are in gensral men of property, they would not it is presumed, hav«
mnch difficulty in obeying such a call, and, the secuiitiL'S being j.roper-
ly taken, the security cfiercd to the Publi;: would be as complete as i£
the Mrhole had beer* advanced in Cash.

But it must also be observed, that as the holders of fiC Bi;!s,
upon which the nioiu-y was borrowed could net dtnuind poy-
• ment of theni and would be in a worse situation, in that r.'SjM'ct, tliaii
the other creditors of the IJahks, especial provision should b« tmula
for their safety over and abuve the security which the Capilal of th^j
Bank afforded, or the Bills wc dd stili not po.s-ss the credit r.'-
c^uisite .

l>r tbi. rurpcM, the money tLui borroired o«pht to b« .Jvarced bo
hnd eie.us.nlv and (he Innd, be exclusirel; pledged for th« payment
Ih ,^^;;' '"'i^^^ ^« ^««* ««'J^'' *n act of the Legislature. Erery
. ep,nde.don,ht ,0 be taken, t. rrnder this class of creditors, nore
especally the I^nt;,h creditors, perfecd; safe. Without this a per-
manent curfidencH could never be established, nor an/ solid rrood be
eipecte,?. Having made arrangements, however, which ^vill be effrc-

t«7j.n that respect the next step is to convince the British Public
of it.

For<b;sr«rp..e,theparticuf«r.so/ these arrangement, should be
Jubhshed as also an annual statement of the affa.rs of the BanU
I. cannot be expected, however, that the British Capitalists would
riace ,mpl.c.t reliance on those stuten.e.ts, .nl.s, th.y .vere well ac
nua,nted w.tb tho part.es by whom they were .nad.. It will in conse-
queucc be r.c.snry that they should be published by persons uf well
Wn charactrr and rc-spe.tability in London, who have an opportuni-
ty of ascerta.n.ng their correctness, and who are pledged far the truth
of whatsvijp thry may publish.

In order to ths It w=Il ba ncccssnry that each B.nk should have «
body of £h,r.lmk!ors ,n LcuJor,, who shall ch.c,s« a comrrltt.e out of
the;rnni.,.>erta whom an account of the procecu.r.gsof the Bank
; »hould be constantly f.rni.hed, and who should a!s. cause invest:..tion
to be muHe ,nto the affr.rs of the Bar,!, upon the spot a..d ta!;c such
other .nea:.s as they .night deem proper to obtain a correct view at all
times of Its Situation and management.

It sl^uld hle,v;se be the medium through wbtchthe Bills in question
trcre issued and the money borrowed, and it ought to have the power
to hm.t the operations of the Bank, and even stop them altogether,
«.ould.t appear at any time proper for the ultimate security of the
British ir,"!ditors, and shareholders.

•n.c .n.o.r.Uf Capital raised ia .. n we shouM propose to be
on. m or -,rj,COO dollars* for each ». ..t raised in Amerie.. .

That coniiderce, however, in foreion speculation, which prevailei

t JtiSlSj ttt! 18 4

Ivaneed bo
ff pajment
p. Efery
tors, iDore
[lis a per-
' »ood be
11 be pfffc-
sh Public

should be
le Banks.
its would
c well ac-
in conse*
IS i»f well
opportwni-
' the truth

I'J huve ti
<!eout of
ihc Bank
estigjition
take such
lew at all

I question
ibe power
'together,
ty of the

>S8 to be
srica.

prevailed

in England tw$ or three ypar* ajjri, ba? es,iortcnce«l a rsnction, .ind
been succeeded by distrust in the opposite extreme, and it ivould bo dil-
ficult now to obtain subscribers to any fore? iindertakmg ia which
the profit was not reduced to cerlrilnt/. Hence it would b j necossarj
to guarantee the British Shareholders a ccrliin prefit, sa^ per cent,
to induce them to take shares.

This, however, inigjit be tlons ivjtiitnit 3117 sacrifice on tha part of
the existing Banks. Wa ara not iiware of the precise amount of
Capital which each possesses, and of the dividends which they pay,
but let us assume their Capitals to be 250,000 dollars'! each and
their dividends on their Capitals to be 10 per cent.^We may ulso per-
haps safely assume that if they pay 10 per cent iipoa thiir present
Capitals they would be able to pay equal to 7 1-2 per cent upon ao
equal amount raised in England, even witliout the additio>-:al advantaije
contemplated from English connexion.

The division of profits upon thi* supposition would stand thus:

The profits upon tha present capital of 250,000 dollars )
at 10 per cent. ^ $25,000

The profits upon the capital raised io England 250,000 > , « -r,^
dollars, at 7 1-2 percent. \ *^»^^^

Total profit Dollars $43,750

This would be the profit made upon the capital advanced in Cash.
The total capital, however, oTer which this prolit would have to be
divided, would be 1,250,000 dollars; but as the English Shareholders
of one fifth of the stock, would be ia as great an advance of cash as
the American holders of the other four fifths, interest must ba allowed
vpon Ihe Cash first, and the profits divided afterwards.

We shall therefore deduct five per cent upon the capital >
of 800,000 dollars m cash \ 25,000

Which will leave $18,750
©factual profit.

One half of the interest would of courrc go to the American, and
the other half to the English Shareholders. But four fifths of the
t £oi,KQ 13 4.

2S
Actual profit would s» ta tht Englisli SliarebuWer
Tiair respcctira iWiienis would coosetiucntl/ ttind tbu«

AaiERi(;AN siiARcuoLnens.

^;'i"f«t Uollart 12,500

4-otbof the actual proit „ 15,000

Dollars, 27,000
Dfilag 2,o00 di^llars cr one per cent, more than they received before.

BHiriSH 8.rUt;L:ilOLDCRff.

Interest juara>ite»id Djllara l?,500

l-cvli*c»ftlie actual profit 3,750

Dollars 16,250
Being 5 1-2 ner cent .ipoji the Cash advanced.

If th» actual Capital raised in England be equal to the actual Capi-
tal raised iu America, while iho nominal Capit.il or Capitals raisc-ii
bjr securities in America, give the Anoerican Shareholders the com-
fiiaiid of tour fifths, of the actual profits, the A;^^orcian Shareholders
can harJlj fail to gam by tlij arrangement, so long- as the profits exceed
five per cent, for, u-hile t\vj British Capitalist contributes one half to
the surplus profit, na on.'v gets ona fifth of if; and that the profit- must

alwojs exceed fii-: vorc^'.t, un'^r tue worst of circumstances there
cau be littb doubt.

Banking in (he Colonies cannot be a business of risk as in Eng-
land. The transactions are all small and tlie parties well known.
• xnere is no opportunity of deceiving the Kank to any extent. Jf ac-
eommodaticn bills be offered for discount they are known to be surh.
The Banks canno' be blinded by a system of busin .s which has the
appearance of being real but is not so The acu:;cness which is
necessary to a Banker in England is hardly wanted with us, and
Banking is proportionately safe. This is the case with even the most
hazardous descri;;tion of Sank busmess, namely the lending money
upon Bills. But Bank business with us cannot be done io any great
■extent, except in the way of permanent loans, or advances on real se-
-f.urity, andif the plan pointed out were adopted the Capital of the
-London Shareholders v7ould he advanced upon land, and the profit from.

•I

ed before.

jal Ca{>i-
U raises!

ihe coni-
rcholders
ts exceed
half to
jfii" must
;es there

in Eng-
il known.
If ac-
be surli.

has the
which is

us, and
the most
g monoy
tiy great

real se-
ll of the
rofit from

st would \f inad« without any risk whatever, so that the 5 per cent
jnio;ht be guaranteed without the remotest chance of the American
Shareholder mciir.ing the least a.lditiona! risk by it, while the certaioty
offiTe per cent, wjlh the prospect of considerabiy more as the business
of the Banks extended and would, there is little doubt, be a sullicient
inducement to the British Capitalist to lake shares i-, them, provided
Ihe arrangeincuts were properly made, and he cleui ly saw he was safe
io doing so.

UpoH this, indeed, the whole depends. AM the American arrange-
ments should be made first, and busmess on the principles recom-
mended be commenced, and successfully conducted in the (/olonies, be-
fore any attempt was made to obtain the London Shareholders. They
ought to see that a way was made for the employment of their Cap'*'>l
before it was called for, and that they wore unit;>d to join a concc.u i-i
successful operation. The money likewise borrowed in London should
be borrowed very gradually. Confidence is a plant of slow growth,
and requires to be reared with delicacy and caution. But if (bi
Banks flouriihed, a statement ot their affairs were aiiimully published
and the interest regularly paid, there can be no doubt that in time
they might obtain upon reasonable terms whatever money they could
profitably employ.

Should however the Banks, be disposed to try the system rccom-.
mended, ihey ought not to be deterred, by any fear of being thought
extortionate from obtaining, in the first instance, the best interest they
could in America, In the present state of property, nothing but a
good interest or rent would pay for the trouble incurred. Independent
of which, upon the success of the attempt, in the first instance, de-
pends our obtaining larger supplies on more moderate terms hereafttir.
When the attempt has succeeded, the road for the influx of Capital
may be said to have been opened, and the supplies .will be obtained
and maybe granted on better terms. We anticipated that if the sys-
tem be carried into successful operation, money will in time be borrow-
ed in London at four percent, and lent in the Colonies at five, the ex-
tent of business compensating for the low .ruts of profit. But it would
be no .kindness to the Country to cr-m.mence by lending money at such
a rata of interest as would not yield a sufficient profit to iudura perse-
verance in the attempt. There is no fear of the parties who want it

giving for it more than it is worth to them, and the more profifable the
business is in tlie commencement, the greater the inducement to per-
severance, and the better for the Country in the end.

As we have before observed, the system of lending money on Land,
roigbt be carried to a very great extent without puttmg the Banks to
any great additional cxpence. When once the advance was made, if
the party regularly paid his rent, no fjrth'^r trouble would be involved,
and if he did not, i' would only be necessary to dispossess him, and
dispose of the lease, to another party. In doing this, however, it may
be worthy of roma.k that the London connexion of the Bank would be
a great ailvantage, and might be the means of introducing a very re-
^pedable cl^^.s of settlers i.to the Colonies. The Bank would oidy
Julvancc upo.. land in some degree cloured and f:t for the occupation
of tiioso, who by means of their Capital, their knowledge and their in-
diotiy, could turn it to good account.

OffhiscL^s.^ th.-re are hundreds and thousands in England, who
would b.! g',-.d to avail t'l.'mselvos of so rosp^^clable a channel, to obtain
it a fair value a suitable place to emigrant to, already nttcul for their
reacpticn; nnd the bank ;vouldk,ab!?m this v.ay at ouco to tenant
tny pron.aty that might fail mto its hands. The security of the Bank
r,'ould howover always depend upon their not advancing more money
vpon any property than the Land was worth.

The pror.fg derived by Ihe Bank from these loans would not be con-
fi.ied merely to the difference between the interest given and the in-
t« rest got. The circulation ot the Banks would be fuoportionately
extended, and their other channels of business enlarged Besides
Avh'.cb, if a Bank had lent, we shall say, a Hundred Pounds, and re-
ceived .«=even or eight pounds a year of rent for it, this rent Avould in the
cor.rse of time come to be worth more than a Hundred pounds. As
money became more plentiful, and could be had on better terms, it
might be worth £110 or £V20, which the Bank would charge, if the
party wished to discharge the incumbrance.

Things however Hnd their level, and this prospect of ultimate advan-
tage would have the elFoct of lowering the rate of interest bargained
tor in the first instance, and it would probably suit the party better to
pay a bonus when he was rich, than a proportionately higher rent or in-
terest when he was poor.

"ofilabl*? the
lent to per-

y on Land,
Banks to
IS made, if
le involved,
hiui, and
ver, it may
ik would be
fi very re-
would oiily
occupation
nd thtnr in-

;land, who
I, to obtain
1 for their
to tenant
f the Bank
ore mority

lot be con-
,nd the iii-
artionately
Besides
5, and re-
ould in the
ind.s. As
terms, it
'ge, if the

ate advan-

bargained
better to

rent or m-

The advaiitn^G to the Colonics from this influx of Capital need no:
be insisted upon. The value of property generally would be increased,
and trade would be extended. A person with sufncient Capital to
cultivate a piece of Land, but who could not purchase it also, would be
able to do so with the assistance of the Bank without diverting much
of his Capital to that purpose. Any person therefore with the means
of cultivatin"- land would have the power to buy it.. This would increase
the demand for and consequently its value..

Men with Capital and industry live better than men wlio have nei-
ther. Their consumption of manufactures — of Colonial and other pro-
,]i,ce — is increased, as is also the consumption of those they employ.
This would increase the import trade.. On the other hand, the pro-
duce they raised from the soil, would require exporting, after supply.ng
the home market, and this would extend the export trade. It is diffi-
cult to give an fiucqu'ite conception of the bcneikial elTects which are
always found to attend upon the judicious application of Capital, in
giving efloct to the industry, a»d improving the wealth and commerce
of a Country. The elVcct must be seen in order to be understood.
But all experience points out, and all intelligent persons agree in con-
sidering the introduction of Capital as the most effectual means, not
only of promoting the prospcriij of a Country, but of improving the con-
dition of the people.

In the foregoing observations we have recommended the existing
Banking Establishments to adopt the pruiciples of business pointed out,
and to new model themselves accordingly. But old Establishments
that are doing well, are in general deshous to let well alone, anu are
slow to adopt what may aj)pear speculative improvemer*^ for the public
good, ct what they may conceive to be the hazard of tneir own.

Should they not adopt, therefore the plans recommended, but at tlie
same time should the proprietors of land, and those who take an inter-
est in the general prosperity of the Colonies, be convinced that Banks
on the principal pointed out would be highly beneficial, it will be for
them to consider, whether it would not be worth their while to form
Banks of their own, the Legislature of course giving every facility for
that purjiose.

£8

T$ cstablwli thei« Banks Tfoiild require rerf Kttle paid ap Capital/
If, wc shall say, upon a Capital of 1,000,000 Dollars 100,000 or trtn
50,000, were paid up, it might be suiUcicnt, the object of course bein*
to rai.se Capital by the deposits of the public, and by connexion with
'England, and not by the subscription ia Cash of the shareholders in
America,

The Capital might also be subscribed in small shares, say of lOD
Dollars each. The Cash to be paid up on such a share would only ba
fire or ten Dollars, and there is hardly any land that keeps a tamil/
which is not worth a hundred. So that every man who has any land at
all, and five or ten Dollars in Cash, could if he chose take a Bank
thare. By this meanSi the shareholders would be distributed all over
the Country. .

Koxr the circulation of notes is oni of the principal sources of proCi
with Banks ia the Colonies at present, and the proposed Banks havin*
Stock -holders in every place, who would naturally be desirious ofprtj-
ttoting their interest, in opposition to the Banks they had no share io,
the proposed Banks would be able to get hold of this source of profit,
and keep it in a great measure to themselves, every shareholder, th«
xaomcnt he obtained a note of any other Bank, would exchange it tor a
aote of his own, with some agent, or principal Shareholder, in his neigh-
bourhood, who would be furnished by the Bank with a supply gf notes
i(y make the exchange with, and thus these Banks would be enabled to
keep the circulation in a great measure in their own hands.-

This would at once pay the expence of the Establishments and secur«

the'p success at the outset; and having consolidated themselves in

America, they might next proceed to make arrangements in Londoa

• en the principles pointed out, or upon any other principles which aigbt

Jje found desirable U til parties.

^^>t i , Tm :ne, fir •• fieH ^.{ e.ip'"rin;j'* t-%A f^A f.rem-.'-tY.'uf. P«|« If.
>fi l>nf 2nd p<i-a^rapb, fur " a plan of ' read placa of Fapfs l.i 2nd pmrar'^pl*'
^th !.•;■»-, fir " '..•hftn n,t:i:ons" rfla]u:,ercm;ii;onj. 22na page, lit l»: Ut

ap Capital;

000 or eTcti

lourse beinj

lexioo with •

reholdcrs in

ay of 103

oulcl onljr ba

ps a tamil/

-14,

any land at

ce a Bank

Led all over

569 of profit
nks having:
ious of pr(j-
share io,
e ofprofjt|
holder, ths
ige it tor a
bis n eigh-
ty gf notes
enabled to

md secure
iselves in
Londoa
iicb ttigbt

««tf.
«. nr

CONCLUSION DES OBSERVATIONS

D'ANTI-BANQUE,

Sur les Sanques du Canada.

[Pour les articles qui ont precedes voir les numcros suivans de la
Gazette de Quebec^ 4 et 29 Novembre, 13, 20 et 30 Dg»
cembre 1830^ edl Janvier, 1931.)

POUR se former une idee des principes injuste» qui dirigcnt
nos banques, il suffit d'observer qu'elles ne payent point d'in-
terets aux personnes quideposent des somnies d'argent dans leur
voutes, si ce n'est en quelques cas assez rares. Cependant it est
constant que ceux qui placent leur argent dans la Banque d' Angle.*-
terre, en prennent des billets, dont les interets leur sont pay^s,
jusqu'aujour du remboursement. La menie pratique s'obser?e eri
plusieurs autres Banques. En France les inscriptions sur le grand
livre ou les rentes dues par I'etiit, qui ne sont dans le fond qua
desplacemeus d'argent dont le Gouvernement estgaranl, portent
interet en faveur des creanciers. Mais la faction qui nous pour-
suit incessamn^ent depuis la conquete jusqu'a ce jour, avec U
plus parfaite determination de parvenir par tous les moyens possi-
bles k I'entiere destruction de nos droits et privileges, et a U
complete expropriation des Canadiens de leur sol natal, par mille
moyens insidieux, nous soUicite d'accepter tout ce qu'il y a de
pernicieux dans les institutions de I'ancien continent, mais icarte
avec le soin le plus perflde tout ce qui pourrait favoriser un

pays nalssant comnie le notre. Que de projets, que d'esperances
lie fonde pas cclte faction sur iiolrc iacx|jeiieiice, et sur noiiu
bonne foi.llfHut compter bien rori sur son independance pour
oser lui resister, presque toujoufs on dcvicnt fa victiuie de ses per-
fidies. Celle faction a Tan meme de susciter contie iioud iios
propres compatriotes ; en un mot elle sait nousdiviser.

ReTenons aux banquet. L'Encyclo|)edie de D'AIemhert et
Diderot, au mot banque, dit que »* "les couipagnies et les baoques
achefent d'avilir I'or et I'aigent dans leur qualite de signe, en
multipliant par de nouvelles fictions les representations des den-
rees." Dans nies communications piecedentes j'ai fait voir les
consequences desa&ireuse qui en resultaient aux produits de notre
Industrie lors qu'ils se p;esetitaient dans des marches etrangers en
concurrence avec d'autres pays ou les prix de la main d'c-avre et
desdenret'S sont 4 meilleur marche qu'ici ; sans compter la Icn-
gueur des voyages et le plus haut prix du fret. L'existence seule
du papier-monnaie, cause I'eaiportation du numeraire metallique
qui ne pouvant plus 6tre ofiert que sur le meme pied que le pa-
pier-monnaie, court cljez I'etranger trouver des acquereurs qui
puisseni le prendre pour ce qu'il vaut. '* Depuis long temps, dit
Hay^ les metaux piecieux, c'est 4 dire Tor et i'aigeat,
■ont la monnaie^ la plus generalement adopte.** Adam
Smith est de la meme opinion. Je citerai un passage de ce
celebre fondateur de I'economie politique. — Je'donne la tra-
duction de bay. '« Le commerce et I'industrie d'une nation,
ainsi suspendus sur les ailes icariennes des billets de banque, ne
cheminent pas d'une maniere si assureeque sur le solide terrain de
Tor et de I'argent. Outre les accidens auxquels les exposent
rimprudence et la mali.dresse des directeurs d'une banque, il en
est d'autres que toiite I'liabilite humaine ne saurait prevoir ni
pr^veuir. Une guerre mallieureuse, par exemple, qui ferait pas-
■er entre les mains de I'ennemi le gage qui soutient le credit des
bdlets, occasionnerait une bien plus grande confusion que si la
circulation du pays ttait fondee sur I'or et I'argent. L'instrument
■ des ecJianges perdant alors toute sa valeur, ks echanges ne pour-
raient plus ^tre que des trocs difficiles. Tous les impots ayant ete
acquiites en billets, le prince netrouverait plus rien dans ses cof-
fres pour payer ses troupes ni pour rompiir ses magasins. Un prince
Jaloux de delendre en tout temps, avec avantage, son territoire et
ia puissance doit done se tenir en garde centre cette multiplica-
tion demesuree de billets de confiance, qui devient ruineue pou
les banqucs et funeste aux pays, mais meme contre une multipli-
cation moderee en apparence, qui tendrait seulementa rempiaccrs
une trop grande panic dei'agent uaturel des echanges dans ses
etats

^ 1

V .'.'

1 <

'^'4

>. 1 >

: > \

' I

I'esp^rances
et sur notru
idunce pour
e de ses par-
te fioua DOS

^lemhert et
les baoques
le signe, eii
lis lies den-
fait voir les
its de notre
Btrangers en
1 d'c^avre et
pter la Icii-
stence seuie
e metallique
d que ie pa«
jnereurs qui
I temps, dit
it I'aigeal,
.'• Adam
sage de ce
nne la tra-
une uation,
banque, ne
le terrain de
3S exposent
tnque, il en
prevoir ni
ferait pas-
! credit des
I que si la
('instrument
es ne pour-
Hs ayant ete
ans ses cof-
>' Un prince
[erritoire et
niultiplica*
ineue pou
e niultipli.

remplacers
in dans ses

r)m4 nia ro.nmunUatl.in inset e«» dans li g.i/etlr de Q •ehoc da
13 ilect>iiil)re dernier, .i'ni observe ijn*? I« ntimer.iiiv aiij^m nte i>ii
vileur amt'surequ il decline en qu«ntiu% rt qu'il •ItVliiif rn »a!(Mir
a inesurtMnril augMHMteen (jiMiUite. D'ca principt' .i'ai fire l;»
coiise(|UPiH;e (pie plin il y a»aitde numeraire en cirnil ition et plus
Ii\ niiiin d'oeuvri; <a log diMireos t'laieat cheres, cc qui cniilirme lo
passage dc TE'icyclopodie cite ci-dessus, et ce qui expli(pie le de-
Sivantage que nous eprouvons lorsque nous otfrons les produits de
notre Industrie dins des marche* etrangers, quand des nations
Chez lesquelles les produils de Tiudustrie sont a rn«'illeur
marche que chez nous,?ienneiit en concurrence avec nous. D'apres
tes observations la question de savoir coinbien il nous fant de nu-
meraire se prcsente d'tlle.meine. D'u.', cote il faui un certain©
quantite de numeraire pour consoinmer tons les echanges, de
I'autre cote une surabondance de numeraire decoiiccrte foutesnos
speculations sur I'exportation desproduits de notre Industrie, Cette
question n'est pas sans de grandes diHicultes, c'est pourquoi je
reclame toute I'attention du lecteur avecd'autant plus d'instance
qu'il s'agit de la fortune du pays, qu'il s'agit de savoir si nous al-
Ions le livrer au monopole et a I'agiotage des Kanques. Say traite
cette question en divers endroits. •• Nul auteur de poids,
dit ce savantf n'a evalue le numeraire necessaire a la circu-
lation a plus d'un cinquieme dfs produits annuels ordinaires
d'une nation, et suivant les calculs de quelques-uns, il ne va
pas a un trentieme ; c'est done I'estimer au plus hant que
de le porter au cinquieme des produits annuels, et quant 4
moijje crois cette evaluation fort au-dessus de la verite, admet*
tonsla pourtant. Alors un pays qui aurait pour 20 millions de
produits annuels n'aurait que 4 millions de numeraire. En sup-
posant done que la moitie de ce numeraire, ou 2 millions, pussent
t'tre remplaces par des billets de confiance, et employes en ac-
croissenient du capital national, ils n'accroitraient, une fois pour
toutes, ce capital que d'une valeur egale a deux vingtiemes^ou au
di.viemc des produits d'une annee,

Les produits annuels seraient peutetre a leur tour evaluesbien
haut, si on les portait au dixieme de la valeur du capital productif
national ; je les estime ainsi dans la supposition que les capitaux
productifs rapportent, Tun dans I'autre, cinq pour cent, et I'indus-
trie qu'ils tiennent en actlvite, autant. Si les billets de confiance
ont fourni un secours egal au dixieme du produit annuel, ils n'ont
done accin le capital national productif que d'un centieme, en eva.
luant ce secours au plus haut , , , . Ce n'est jamais qu'une petite
partie de ses revenus qu'une nation qui prospere, parvient a sous-
traire a sa consommation improdiictive, pour I'ajouter a ses ca-
pitaux productifs. Les nations stalionaires, commeon satt, n'a«

JMiKtnt rien i I<Hirs capitaux ; ct celles qui tletliia-ut en coiis®™-
intnl lous les ims une p;ir(ie,

Oaus un autre endioit, (lit Say, "quelle que soit I'ubondauce oil
raiete du numeraire, conime oi» a besoiu tiuiie fertaine somme
|)(.nr cousommer tous les echaiiges, le numeraire aui^meiite eii
valeura mesure qu'il decline e» quancte et deciiue eti fa-
leurauiesure qu'il aut;men(e «>n quuntite. S'il y apour trois
milliards de numeraire en France, et qu'un e>eueinent re
duise cette quu.Uite de francs a 1500 millions ces 1500 mil-
ions vaudroi.i auiaut que les rrois milliards pouvaient valoir."
1 an. un autre endroil Say dit -'un capital dans le sens le
plus eendu se compose de tuus les capitaox des particu-
liers ; et plus la nat.on est indu.trieuse et prospere, et plus son ca-
p. al en^argent est peu de chose, compare avec la totalite de ses ca-
pitaux. -Dans un autre endroitnotre savant dit- qu'il nous suf
.r,e que le nun.era.re demeurant en cirurladon. esl borne par les
besoms de la c.culat.on du pays. Dan. cette etat dechose, si I'oa

tt^ZTT" '",' "' ^'"'''' ■' ''' ^ ^'^^^"t ^"- ^'«^ '-^ i"«'^^'-'t,
v.hu. m.i '"' /'''''""'•^•' ^^'^"e surabondance fait haisser si
valeu. maiscomnuMl n'y apointde ralsons pour que s.i valeur

hanc , etou par consequent il n'y a point de surabondance, U
marchand.se monnaio se ,6pand dani ces lieux-la, o el e a
conserve plus de valeur, et oi, par consequent; ellerouve ^
s'echaiiger centre une nhm or.n/i,,. , .*•.- . * ccuouved
eu d-dutres termite 1 ' S'^'i'i^e quai.tite de marchandises ;

sit a me I eur Z'l ' '""T''' '^^'''''^' ^^ "" ^'' n.archandise

We n lie ^nT'^' ' r '* '''^'"^ "'"^ "^'^"•- "" "^^^rchan.iises
t^ga.e a celle qui est sortie en especes. '» «;,y lvalue la tntilir«
des capitaux derAn^leterr^A rlr-Mv .,.ir • ^ e^-""'- »a totalite

capital. Colquhou'd; ,». ZT ,*"" '" '-'"r l'"''« '''= »"»
«rovu,c.« ,1,, r"!l:..,!l .. '."If'. ^'.""'"'Uie .lu'il d„„„. d„ deux

, . . -. V... 1 ^.igleterre. • '

Je vais manwenant tacher d'apprecier et ce nu'il v -, ,?»•

•I

bondance on
line iiunime
j^ineiite en
iae e» fa-
apour trois
eiieiuent re
i 1500 miU
mt valoir.

le sens [^
des particu-
plus son ca-
te (leses cu-
'il nous suf"
ornc par Its
:hoHe, si I'ou
u de la mar-
> cet instant,
it haisser sa
ue sfi valeur
ots de con-
londuMCc, U

oil elle a
lie trouve a,
rchundises ;
liircJiandisea
larctiandises
3 la total ite
t millions de
rculaient e«

I'ont porte
it-a-diie lii
it qu' a dix-
rtie de son
ne des deux
<. toutes les
luatre cent
300,000/. :
aiiuoncerait
iveau pays,

d'incertaiti
de citer au

sujet dii numeraire n^cesaaire k in circulation. Say dit qu(

teurs nretendent qu'il s'elere au cinquieme des produits o

le des au-
.^»., nretendent qu'il s'elere au cinquieme (Jes produits ordinaires
d'une nation, tandis que d'autres pretendent qu'il ne ?a pas a uu
trBntieme,ce qui fait une difference de six 4 un, II croit cepen-
da»it que de porter cette evaluation du numeraire en circulation
au cinquieme des produits annuels est fort au dessus de la verite,
peut*etre que de porter cette evaluation au trentieme des produits
annuels est fort au dessous de la verite, Mais quand il affinne ce
dont tout le monde convient, que plus une nation est industrieuse
et prospere et plus son capital en argent compare ave.i la totalit<5
de ses capitaux, est peude chose, il me semble que pour la solution
de cette grande question,queIle est U quantite du numeraire neces-
saire a la circulation dans chaque pays et surtout dans ce\ui-ci, il
nous t'audrait des tableaui de statistique qui nous presenteraient
un t'tat precis des capitaux et des genres d'industrie des principaux
peuples commer<jans« Et ces tableaux seraient obscucis par les
divers accidens de la nature et de la politique interieure et ex*
terieure qui trompentsi souvent les espeiances les mieux fondeeS.
Je met! ce calcul au rang des choses incertaines et ne puis en faire
usage pour determiner la quantite precise du numeraire qui doit
circuler. Je regarde comme certain que plus une nation est in-
dustrieuse et prospere et plus son capital en argent est pea
de chose, d'oii je conclue qu'il ne faut pas procurer u uu
nouveau pays, comme le n6tre,un numeraire ficlif, comm-
des billets, mais qu'il faut faire tons les tfforts possibles pout aug-
nienter les produits de son Industrie. Je regarde comme t vident
que le numeraire en circulation est borne par les besoins du pays,
que si on remplace la moitie par des billets, il y a des cet instant
surabondance et que la marchandise-monnaie se lepand dans les
lieux oil elle a conserve plus de valeur, c'est a dire oii elle s'e»
change ontre une plus grande quantite de marchanilises, L'etat
Statistique de Colquhoun qui evalue tons les capitaux des deux
Provinces du Canada a 23,413,360 livres sterling, les produits
annuels des deux provinces a 7,302,827 livres sterling, les expor-
tations des deux provinces a 1,302,827 livres sterling, et les im-
portations a 1,180,000 livres sterling, ce qui la'sse en faveur du
commerce des deux provinces une balance de 122,827 livres ster-
ling et qui etablit le numeraire en circulation dan3 les deux pro-
vinces vers 1815 a 300,000 livres sterling, est peut-etre ce que
nous avons de mieux en ce genre. Cependant je n'en garantis
pas I'exactitude, et je ne le jrends que par approximation, ou
comme approchant de la veiile. Je suis fache de le dire, mais il
me semble que depuis 181 'i le Haut-Canada a fait beaucoup plus
de progres vers sa prosperite, <|ne notre lias-Canada. Le bcsoin
U'uniiuuieiairecii'cuUnt d'uu cinquieme au trentieme du pioduit

amitiel tJ'un pays me SPmbfe toujoun ui. labyriothe inntriraMe.
qm il aprjs les obsertations f.ifps plus f,.iut. no pounait nnm
comluireaaucunrdsultat utile. Jo me contentcrai clone <!e fair«
quelques observations tirecs dc cet etat statistique tie Coloul.ouu,
quant i !a quaiiiite du numeraire qui doit cirouler en cette Pni-
vince. Je crois que je ne fais que rendre hommau-e k U
»ene« en disunt que c'est beaucoup dire en faveur de notre
proTH.ce que ses capitaux egalent le double de ceux du Ilaut-
l.ana(!a, sur cette donnee je donnerai done pour bases aux
obiefvat.onsque jevais faire, que vers 1S15 |e numeraire en
ciculation dans le Bas-Canada etait 200,000 litres .sterling,
quelque calcul que I'on veuiUe faire sur les donnees de CoUmhoun.
• elativement a notre province, il doit ,subir le retranchenient
LnV^"v """' .!^^^ '* numeraire circulant n'etait que
iOO.fXX) hvres sterling que dirions-nous de I'augmentatioa
que no, banques out ajoute X cette circulation ? Avant de me
prononcer sur ce sujet je dois montrer au lecteur quelle est et

quelle sera cette augmentation D'apre. ce que j'ai dit'

li apresColquhoun.le numeraire circulant dans notre proviuce etait

7nralTy ''''.'''''' «'-»i"g.«tlepa>s prosperdt beuucoup
Jiius qu a present. # . » t-

p'apres le tableau cles banques de ce pays donnee dans la
Se 0.r ^^''-'f emble en 1827 les capitaux verses dans les banques
de Quebec, de Montreal, et du Canada, s'elevaient a se 231,500,
cequi offnra.t en capital un fictif ou de billets sans valeur intrin.6-
q..e un numeraire fictif de £ 694,500, si vous ajoutez a ce num^-
raire circulant ces additions que nous demande la banque de Que-
bec, una noufeJIe banque a Montreal e' une autre dans les Town-
ships, sans compter le double de la circulation des dep6ts dans ces
banques,yous formera un Capital de plus d'un million de numeraire
hctif en c.rcu ation, qui menacer toutes nos banque du danger
mmmentdebanqueroutes, et qui paralizer toutes nos exporta-
tion enAngleterre en les rendant absolument ruineuses pournos
commer^ans. D'apres les a,<torites citees plus haut, etque je pri«

t^^Zr?'/' ''^'k' ^7' '"!" •°"' "'-y-***'" P^^« evidemment and
t.esgrande surabondance de numeraire,au detrlmeu^ delexporU-
tions des produits de notre induttrie. ^

En depit de mes detract? jrs centre lesquels je ne conserve au-
cune rancune, la force naturelle des choses me procure un grand
.nomphe, trioraphe que je signale non pour la gloire de mape.-
sonne que je cache sous un nora emprunte, mais que je signale
umquement dans intention de servir mon pays. J'ai predifque
e retranchementde quatre sous par schelling uroduirait Texporta-
t.on de cette pet.te et tres utile pi^ce de monnaie hors de ce pays.
L accompl.ssemeut de ma prediction se trouve dans le Vindicator

rait itniH
ic <le r.-iiri?
olqutiouit,
ette Pni-
liige k U
tie riotre
ilu Ilaut-
!)ase3 aux
eraire en
sterlings
:)l(]uhoun,
nchement
etait que
mentatioa
mt de me
elle est et
le j'ai dit,
iuce etait
lieuucoup

e dans la
> banquea
231,500,
intrinse«
:e iiume*
de Que-
3S Town-
dans ces
u in eraire
u danger
exporta-
pour no8
le je pria
lent un«
'exporU-

serve au«
un grand
ma pet*
i signale
edit que
exporta*
ce pays,
ndicator

du 21 Janvier, 1831 *' scarcity of Spanish pistareens,** !.ii dis-
|rarition des scUelliugs,cefle grande portion de noire numeraire
deviendra bien rare d'apre?i les speculations de quelque messieurs
des Etats Unis qui les achetent autant quMl en peuvent
troufer pour les transporter dans les lies Espagnoles et |)arti-
culierement a Malaga ; ou ces pieces sont a. cinquante par
cent d'une plus grande valeur que dans le Bas Canada. Un
individu, dit-on en u exporte d'ici jusqu'au montant de j^lOOO.
Nous esperons que la legislature s'empressera de reniedier au
plutot a ce mal, noy« sonimes, iuformes, dit cet estimable editeur,
qu'ils se procurent ces pieces d'argent en payant una prime de
cinq par cent : quant au profit de 50 par cent, il est perniis
d'avoir sesdoutes.A quelle etrange absurdite ne conduit pas le sys«
feme de banque adopte en cepays. D'abord on perniel a no*
l»anquiers d'acaparer tous les profits de toua les genres de com-
merce est et rcngoutmsnt de iios maicliand si deplorable
qu'ilb ne voyent pas qu'ils ne font que glaner apres que les ban-
ques ont fait le choix des speculations les plus lucratives, etcela
eans rcoponsabilite pour leurs billets en circulation,en sorte qu'a.
vec des f aleurs fictives et perissables, Us recueillent la realite
des branches les plus lucratives du commerce.

Une autre abr^urdiie c'est que tant de personnes [excepte
dans les campagne^ ] ne font aucune difference entre ces papiera
et I'or et I'argent. Ce n'est pas par un pur caprice que dans
tous les siecles on a attache une si grande valeur a ces metaux
precieux. Long temps avant I'usage des monnaies, on les
iravaillait avec le plus grand soin pour en faire i'ornement
des temples, des palais et des personnes des souverains et des plus
riches individus. Que I'on juge de I'^clat que produi&ait aux
yeux du t ulgaire de ces temps recules par I'impression qu'ils
produisent encore de nos jours. Lors que dans des siecles moins
recules ou invenia enlin le numeraire metallique pour faciliter
les^changes en quoi consiste toutle commerce, les metaux precieux
qui captivaient depuis tant de siecles les affections du genre hu-
main, furent heureusement employes i etre la matiere dc liv i-
naies, a raiaon de leur aptitude ii se preter aux polds ej aux
formes. Pour inspirer plus de confiance, le droit d'en determiner
ie poids, la forme et la valeur, fut reserfe aux sou?erains, et c'est
encore en Angleterre que ce droit forme une des prerogatives du
Roi. Par quel etrange bouleversement de loutes les idees depuis
long terups etablies a juste litre, allons-nous permettre a quehpies
individus sans responsabilitc,de battre,qu'on permette I'expressi jn,
une raonnaie de papier, au prejudice de la prerogative royale ;
papier qui chasse evidemmenl le numeraire metallique, tout ceU
en tftfeur de banquiers iion responsables, pouivu qu'ils se rcn.

ferment dam certaines formes Infinimciit trop etendues ? comme si •

avecquelques rames dc papier on pouvait aseoi. sur une base solide \

la richesse des nations. C'est certainemeut preparer 4 plaisiria I
toine des families et par consequent du pays, car comme je I'ai

obserre a plusieurs reprises dans mes communicaiions dans la Ga- !

iicHe de Quebee, tous les papiers-monnaies ou billets de confiance <

jaHqu*4 present ont fait banqueroute. N'est-ce pas preparer 4 ce "^
pajrs un avenir desastreus, un nouvel ^tat de barbarie I

ANTI.BANQUi:..

(lups ? comme si
r une base solide
arer 4 plaisir la
r comme je I'ai
ions duos la Ga-
els de confiance
)a9 preparer 4 ce
irie i

BANQUb. j