“Will you! by heavens, then pray do; it’s just the thing I want, for how else I am to get over next Monday and the acceptances I must take up, is more than I can tell.”
All the banks have stopped payment in specie, and there is not a dollar to be had. I walked down Wall Street, and had a convincing proof of the great demand for money, for somebody picked my pocket.
The militia are under arms, as riots are expected. The banks in the country and other towns have followed the example of New York, and thus has General Jackson’s currency bill been repealed without the aid of Congress. Affairs are now at their worst, and now that such is the case, the New Yorkers appear to recover their spirits. One of the newspapers humorously observes—“All Broadway is like unto a new-made widow, and don’t know whether to laugh or cry.” There certainly is a very remarkable energy in the American disposition; if they fall, they bound up again. Somebody has observed that the New York merchants are of that elastic nature, that, when fit for nothing else, they might be converted into coach springs, and such really appears to be their character.
Nobody refuses to take the paper of the New York banks, although they virtually have stopped payment;—they never refuse anything in New York;—but nobody will give specie in change, and great distress is occasioned by this want of a circulating medium. Some of the shopkeepers told me that they had been obliged to turn away a hundred dollars a-day, and many a Southerner, who has come up with a large supply of southern notes, has found himself a pauper, and has been indebted to a friend for a few dollars in specie to get home again.
The radicals here, for there are radicals, it appears, in a democracy—
“In the lowest depth, a lower deep—”
are very loud in their complaints. I was watching the swarming multitude in Wall Street this morning, when one of these fellows was declaiming against the banks for stopping specie payments, and “robbing a poor man in such a willanous manner,” when one of the merchants, who appeared to know his customer, said to him—“Well, as you say, it is hard for a poor fellow like you not to be able to get dollars for his notes; hand them out, and I’ll give you specie for them myself!” The blackguard had not a cent in his pocket, and walked away looking very foolish. He reminded me of a little chimney-sweeper at the Tower Hamlets election, asking—“Vot vos my hopinions about primaginitur?”—a very important point to him certainly, he having no parents, and having been brought up by the parish.
I was in a store when a thorough-bred democrat walked in: he talked loud, and voluntarily gave it as his opinion that all this distress was the very best thing that could have happened to the country, as America would now keep all the specie and pay her English creditors with bankruptcies. There always appears to me to be a great want of moral principle in all radicals; indeed, the levelling principles of radicalism are adverse to the sacred rights of meum et tuum. At Philadelphia the ultra-democrats have held a large public meeting, at which one of the first resolutions brought forward and agreed to was—“That they did not owe one farthing to the English people.”
“They may say the times are bad,” said a young American to me, “but I think that they are excellent. A twenty dollar note used to last me but a week, but now it is as good as Fortunatus’s purse, which was never empty. I eat my dinner at the hotel, and show them my twenty dollar note. The landlord turns away from it, as if it were the head of Medusa, and begs that I will pay another time. I buy every thing that I want, and I have only to offer my twenty dollar note in payment, and my credit is unbounded—that is, for any sum under twenty dollars. If they ever do give change again in New York it will make a very unfortunate change in my affairs.”
A government circular, enforcing the act of Congress, which obliges all those who have to pay custom-house duties or postage to do so in specie, has created great dissatisfaction, and added much to the distress and difficulty. At the same time that they (the government) refuse to take from their debtors the notes of the banks, upon the ground that they are no longer legal tenders, they compel their creditors to take those very notes—having had a large quantity in their possession at the time that the banks suspended specie payments—an act of despotism which the English Government would not venture upon.
Miss Martineau’s work is before me. How dangerous it is to prophecy. Speaking of the merchants of New York, and their recovering after the heavy losses they sustained by the calamitous fire of 1835, she says, that although eighteen millions of property were destroyed, not one merchant failed; and she continues, “It seems now as if the commercial credit of New York could stand any shock short of an earthquake like that of Lisbon.” That was the prophecy of 1836. Where is the commercial credit of New York now in 1837?!!!
The distress for change has produced a curious remedy. Every man is now his own banker. Go to the theatres and places of public amusement, and, instead of change, you receive an IOU from the treasury. At the hotels and oyster-cellars it is the same thing. Call for a glass of brandy and water and the change is fifteen tickets, each “good for one glass of brandy and water.” At an oyster-shop, eat a plate of oysters, and you have in return seven tickets, good for one plate of oysters each. It is the same every where.—The barbers give you tickets, good for so many shaves; and were there beggars in the streets, I presume they would give you tickets in change, good for so much philanthropy. Dealers, in general, give out their own bank-notes, or as they are called here, shin plasters, which are good for one dollar, and from that down to two and a-half cents, all of which are redeemable, and redeemable only upon a general return to cash payments.
Hence arises another variety of exchange in Wall Street.
“Tom, do you want any oysters for lunch to-day?”
“Yes!”
“Then here’s a ticket, and give me two shaves in return.”
The most prominent causes of this convulsion have already been laid before the English public; but there is one—that of speculating in land—which has not been sufficiently dwelt upon, nor has the importance been given to it which it deserves; as, perhaps, next to the losses occasioned by the great fire, it led, more than any other species of over-speculation and over-trading, to the distress which has ensued. Not but that the event must have taken place in the natural course of things. Cash payments produce sure but small returns; but no commerce can be carried on by this means on any extended scale. Credit, as long as it is good, is so much extra capital, in itself nominal and non-existent, but producing real returns. If any one will look back upon the commercial history of these last fifty years, he will perceive that the system of credit is always attended with a periodical blow up; in England, perhaps, once in twenty years; in America, once in from seven to ten. This arises from their being no safety valve—no check which can be put to it by mutual consent of all parties. One house extends its credit, and for a time, its profits; another follows the example. The facility of credit induces those who obtain it to embark in other speculations, foreign to their business; for credit thus becomes extra capital which they do not know how to employ. Such has been the case in the present instance: but this is no reason for the credit system not being continued. These occasional explosions act as warnings, and, for the time, people are more cautious: they stop for a while to repair damages, and recover from their consternation; and when they go a-head again, it is not quite so fast. The loss is severely felt, because people are not prepared to meet it; but if all the profits of the years of healthy credit were added up, and the balance sheet struck between that and the loss at the explosion, the advantage gained by the credit system would still be found to be great. The advancement of America depends wholly upon it. It is by credit alone that she has made such rapid strides, and it is by credit alone that she can continue to flourish, at the same time that she enriches those who trade with her. In this latter crisis there was more blame to be attached to the English houses, who forced their credit upon the Americans, than to the Americans, who, having such unlimited credit, thought that they might advantageously speculate with the capital of others.
One of the most singular affections of the human mind is a proneness to excessive