630,404

Total......

742,093 709,149 366,138 708,422

Total agricultural.. 27,612,281 33,662,848 54,624,849 37,336,290 38,455,456

Grand total.......

35,452,301 51,105,256 78,092,414 50,883,907 52,375,521

We give below, in conclusion, two statements showing the tonnage and value of property and merchandise going to, and coming from, other States in each year, from 1836 to 1849, inclusive, as follows:

STATEMENT OF THE TONS AND VALUE OF MERCHANDISE GOING TO OTHER STATES BY WAY OF BUFFALO AND OSWEGO IN EACH YEAR, FROM 1836 TO 1849, BOTH INCLUSIVE.

CLUSIVE.

Years.

STATEMENT OF THE VALUE OF PROPERTY COMING FROM, AND MERCHANDISE GOING TO, OTHER STATES BY WAY OF BUFFALO, BLACK ROCK, AND OSWEGO FROM 1836 TO 1849, BOTH IN

1836.

$5,496,816

$9,723,250

Total. $15,217,066

FREEMAN HUNT, Esq., Editor of the Merchants' Magazine, etc.

SIR-In my last letter I criticised at some length Mr. Kellogg's fundamental position that money possesses no value, and, I trust, conclusively refuted it. With this main pillar must of necessity fall the whole fabric of his system. Still, some parts of it seem to require a more detailed exposure. "The power of money to accumulate value by interest" is ascribed by Mr. Kellogg (with his usual felicitous confusion of cause and effect) to the laws which make it a "public tender," and allow interest to be paid for it. If money possess no value, it is certainly not worth paying interest for, and we must look to extraneous causes to ascertain why interest is paid. So far Mr. Kellogg is consistent; but unluckily, his conclusions are as utterly at war with facts as his premises. Do the laws which constitute paper-money a "legal tender" make it worth paying interest for? How was it with continental money and French assignats? The law can indeed make worthless dollars a tender for debts of dollars; but can it compel a man to exchange a barrel of flour for a hundred, or a house for a hundred thousand of them? Still less, then, can it make men pay interest for that which is intrinsically and commercially worthless. But the law never attempts it. It compels no man to pay in any case a higher rate of interest than he can induce the lender to accept; but on the contrary it is continually interposing to moderate the high rates which individuals are willing to receive and to pay.

Having thus shortly disposed of Mr. Kellogg's theory of interest, let us inquire into the true theory. It is a very simple affair, when divested of irrelevant matter. If money possesses value, may be exchanged for value, and so exchanged as to increase value, it is evidently as well worth paying rent for as a farm, or a house, or a machine, for which it may be exchanged. Mr. Kellogg asserts that money is unproductive; and he is joined in this view by F. G. S., and even by G. B. But this is a very unphilosophical way of viewing it. True, money does not grow-neither does a cotton-mill; nor does it literally produce or manufacture-neither does a house; nor does it provide a shelter for its owner-neither does a steam-engine. Yet all these things render, in different ways, important services to men, and in return for those, men are willing to pay rent for them. Are the services of money less important? Is it nothing to serve as a valuable, indestructible, portable,

* Allow me to correct an important misprint in my last letter. About the middle of page 522 of your May number, occurs this sentence:-"Simply because he has not one motive against it," &c. It should read-"not one motive for doing it." Three lines below, the word "ever' should read "over."

"

divisible medium of exchange, available at all times and in all places, and uniting, in short, so many advantages as to be readily received in all parts of the world? But let us take one or two familiar illustrations. A cargo of flour is surely unproductive; yet if a man lend me a cargo of flour for six months, and thus enable me to carry it to another market where it is more wanted, and there sell it at a profit, is it not just that he should receive some part of that profit? And is the case altered, if he lend me the money to buy the flour? Or again; if a man lend me his house to live in, is it not right that I should pay him a rent for the use of it? And is the obligation diminished because, instead of a house, he lends me the money to buy one? Is it not rather in both cases increased, because I can employ the money as I please, and perhaps more profitably than in purchasing the flour and the house?

True, Mr. Kellogg asserts that the rate of interest on money determines the rent of other property; but this is merely another instance of that jumbling together of causes and effects so common in his book. The rent of money, like that of any other commodity, depends on the elements of cost, demand and supply. If a borrower can gain 10 per cent, he will pay 9, if forced to do so by the competition of others. If a capitalist cannot get 2 per cent for his money, he will accept 1. No legal enactment could, at the present moment, compel borrowers in London to pay 3, or lenders in Boston to accept 6, per cent.

Money, then, is justly entitled to interest for two reasons-first, because it can at will be exchanged for productive or useful value, for which rent is willingly paid; and secondly, because it can at will be exchanged for various commodities, the exchange of which is usually attended with profit. But in the third place, money as capital is indispensable to production, by paying the wages of labor, or by furnishing the necessary implements for the successful employment of labor. Mr. Kellogg admits this important fact, and tries to turn it to his own purposes. But if capital be the accumulated produce of labor, what more just and self-evident than that the holder of it should be recompensed for the benefits he confers by the loan of it, just as the laborer himself is "worthy of his hire?" If the capitalist had produced in person the implements, or furnished the labor required, even Mr. Kellogg could not doubt his claim; and because the capital has in his case been converted into money, by lending which he enables another to procure the labor and implements, is the case changed?

The abstract question of interest on money being disposed of, the only remaining inquiry must be, what are its legitimate rates? And here it will be easy to show that usury-laws have by no means improved the condition of borrowers or diminished the gains of lenders. They have undoubtedly to some extent compelled certain individuals and corporations to lend their money nominally at 6 per cent, or not at all. The natural operation of such a law is two-fold. 1. It tends to prevent that instantaneous rise of interest which, like the fall of the barometer, is the sure indication of commercial danger; and 2. It tends to exclude capitalists from their proper and legitimate business of lending on interest, by making high rates unlawful, and thus depriving borrowers of the benefit of the capital of others at the very time when it is most needful. Were it not that the necessities of borrowers, and the good sense of the community to a great extent neutralized the effects of these foolish laws, their mischief would be immense.

Mr. Kellogg's position, that no rate of interest above 1 per cent per an

num can be permanently sustained, has been already completely overthrown in my first letter. I have there shown that the actual average earnings of the community are at any rate from 10 to 20 per cent on their capital, out of which their debts, including interest, may be paid, and a comfortable support realized. A small part only of the capital of the community, as G. B. justly urges, is lent on interest; and of the interest collected but a smail part is, or can be, accumulated and reinvested. The laboring classes, who receive cash wages, seldom need to pay interest, but, on the contrary, by industry and economy, often become lenders themselves. To this fact our sa vings banks, and many other corporate institutions, will bear ample testimony.

It is evident that no definite limit can be assigned to rates of interest. Like all other values, the value of money must be regulated by the laws of supply and demand. The sagacious merchant may occasionally hire it at quadruple the legal rate, and yet employ it more profitably than he could at another time, though he were to borrow it without interest.

Again--an honest man will procure money at any cost to pay his debts, just as in the deserts of Africa he would give a purse of gold for a draught of water. But the crisis over, he will pay no more than he can profitably afford to do for the use of money. True, he may be greatly harassed, and his legitimate profits curtailed, by the competition of needy individuals or corporations; but the evil, like all other economic evils, will gradually remedy itself, as our own community, after a crisis of an unexampled length and severity, are now living to see.

Rates of interest, then, must be left to regulate themselves. The less they are interfered with the more sound and healthy will the condition of the mercantile community be, and the less will be the danger of sudden revulsions and commercial panics and crises. The expedient of paper-money is a mere temporary palliation of scarcity; in fact, it is only a further extension of credit, and must ultimately increase the evil it is intended to remedy. If money be scarce, it must be economized until more can be procured; and what so likely to produce both these results as a high rate of interest?

In a new country profits are usually large, and capital scarce. In other words, the supply of money is limited, and the demand (practically) unlimited. In such circumstances, a high rate of interest is no proof of an unsound or unhealthy state of society, but rather the contrary; just as high rents and prices of real estate prove the prosperous condition of a town.

In one word, rates of interest depend far more on borrowers than on lenders. It is the interest of every capitalist to accumulate; and it depends on the borrowers whether the accumulation shall be enough, and more than enough, for their wants. Nay, every borrower, and every laborer, may become himself a lender, by the simple expedient of laying by a portion of his earnings.

Let us turn now to the receivers of interest. I have already shown that a large part of them at least do not profit so much by their capital as those who do borrow it of them; for the same borrowers are able to borrow of others at double or treble the legal rates, and still to make profit by it.

I have also shown that the accumulation of capital imagined by Mr. Kellogg and F. G. S., is mere fiction; the fact being, that much of the bank capital, which is such a bug-bear to these gentlemen, is held by the very laboring classes whose condition they so kindly commiserate; men who have saved by economy what they had earned by hard labor, or perhaps have be

queathed it to their otherwise destitute families. Surely, even Mr. Kellogg would not curtail these incomes, nor dread the accumulation or "compounding" of the interest which hardly suffices to purchase a widow's daily bread. But we must now turn to capitalists-that monstrous excrescence of the social system, who are the objects of such abundance of ill-will, and in sketching whose portraits, real or imaginary, Mr. Kellogg has exhausted the copious resources of his fertile imagination. Now we have the unlucky mechanic, condemned to build house after house for his rapacious landlord--" in seventy years, one hundred and twenty-seven houses!" Next the poor farmer must disburse an equal number of farms for the use of but one. Anon we have "ten thousand wealthy citizens," with their families, settled like Prospero on an uncultivated island, (suppose Manhattan,) with their bonds and mortgages, and by means of these potent instruments compelling the wretched Calibans of the mainland to minister to their every want, and fulfil their every caprice.

"Sic vos non vobis mellificatis apes!"

Last, but not least, dimly looms the figure of the great New York capitalist, with his two millions of income, appropriating annually the earnings of twenty thousand farmers, the wages of above seven thousand able-bodied laborers, the equivalent of two millions of bushels of wheat, the produce of 133,333 acres of land! "Can any laboring community be prosperous," asks Mr. Kellogg, "and pay so great an amount of interest on capital?" Truly, I fear not. I cannot, any more than Mr. Kellogg, understand how such a state of things can be desirable or beneficial. I agree with him, that great wealth is too often a great curse; but I disagree as to the possibility of preventing it by any remedy man can apply. Great power is always dangerous, and in the shape of money it is not the less so, that it is too often combined with meanness and selfishness of soul. Still, it cannot be helped. In this world, the sagacious, resolute, unscrupulous votary of any pursuit, may, and often does, achieve his object, in spite of all the obstacles his fellow men can throw in his way. Witness Cæsar and Napoleon; witness the Rothschilds, Stephen Girard, and John Jacob Astor. Does Mr. Kellogg suppose that any legal enactment, or any state of society, short of absolute anarchy, could have prevented the success of the one class, or diminished the annual profits of the other? Where there is a will, there is a way; and if interest could be abolished, (which it never can,) the same tax would be paid under other names, so long as money could be employed with profit.

The object of government is to protect every man in his "life, liberty, and pursuit of happiness;" preventing him only from interfering with the same protection granted to his neighbor. Now this protection was doubtless extended to all parties in every transaction by which Mr. Astor enriched himself. True, some of them may have been hard bargains-others mistakes, subsequently regretted-such things happen to all. But will any one pretend that Mr. Astor ever compelled or frightened people into borrowing his money, or buying his goods, or selling him their own? I trow not. His property, then, was acquired by the voluntary concessions of his fellow men. If justly, he had a right to it. If unjustly, there are thousands of similar cases occurring every day, which human laws cannot reach, and which Mr. Kellogg and ourselves must be content to leave to the retribution of a higher power.

There is much injustice and misconception in the popular idea of capitalists. Not that they are usually by any means models for their fellow men.