consigned. As the bills are drawn on the consignment of tobacco, that must go forward, no matter what is the state of the market in New York, and no matter how much depressed the article may be by reason of want of demand, or a glut in the market.

When the tobacco arrives in New York, the agent there sells the tobacco as soon as he thinks proper, generally for an eight months' note. He immediately takes the note, places it in the hands of a broker, who sells it at the current rates for similar paper. The proceeds, less the commission and a share, are returned to the agent, who uses it in paying other acceptances falling due, it may be to other parties, or he applies the money to purposes of private speculation, thus being supplied with capital by the Virginia banks. The value of the manufactured tobacco is estimated at $15,000,000.

A planter in the South cannot borrow money from the bank upon a pledge of his land and negroes, or on good personal security, or even upon a promise to turn over to the bank the proceeds of his crop when sold. He can, however, borrow, by drawing on his factor, who sells his cotton. These drafts, from the nature of the case, fall due during the early part of the crop year. In like manner,

the shipper of cotton to England cannot obtain money except by drawing a sterling bill, which is a bill payable sixty days after sight. Formerly, an advance to a planter really meant what it purports to be. Now an advance consists in the acceptance of a draft, and if the planter's cotton is not in time to protect it, long and loud are the complaints against the dishonesty of planters in withholding their crops to meet their just debts. It is easy to see how this mode of banking affects the price of cotton, and depresses it beyond its true value. No one expects to obtain anything like full value from a sale by a pawnbroker of a watch pledged for a debt, even in prosperous times. Of course, when times are bad, the sacrifice is much greater. But the Southern people have made the movement of the sale of cotton dependent, in a great degree, upon the condition of affairs in New York, caused either by their want of ability, or willingness, to pay their debts to Europe; then the Southern banks cannot buy sterling bills, and the shipper cannot buy cotton. Even when cotton is bought and shipped, either to New York or Europe, it becomes completely in the power of the buyers to control the price of cotton. The banks, refusing to give the acceptor of the bills any accommodation, necessitates

the sale of the articles pledged on arrival to meet the bill at maturity. However honest he may be and anxious to promote the interest of the consignor, necessity having no law, he is compelled to sell at prices dictated by the buyer.

The capital of all sections, in all shapes, is thus poured into New York through the hands of the bankers, and becomes the means of floating a large amount of securities of all description. The Southern produce which comes there pays a large profit to agents of all kinds, through whose hands it passes, and the goods which come there are, to a large amount, sold to the South on credit, on which Southern money lying in New York is advanced, to be used in such purposes of speculation as frequently bring on a panic, and depress the price of both bills and cotton. The summer is the season when the largest supply of Southern funds becomes apparent, and it is then the banks are most anxious to make it draw interest. They lend it upon stocks, and cause an inflation by speculators, who bid high for money. In the fall, when those funds are again wanted for their legitimate purposes, they cannot be recalled from speculation so readily, and the notes of the mercantile people are thrown out rather than that the paying

loans to the speculators should be disturbed. The pretence is that specie is going abroad, and that it is the importers who send it. Their paper is consequently thrown out, preventing them from buying bills. By the same operation the price of cotton is depressed. Thus at the same time the value of bills drawn against cotton is depressed at the same moment that the price of the article itself falls.

The produce of the country is shipped and drawn against supplying, in round numbers, $350,000,000 of exchange. Nearly the whole of this amount is sold to banks and bankers, who hold it as a sort of monopoly, awaiting the demands of merchants who, having imported $330,000,000 worth of goods, must pay for them. There are also $20,000,000 to be remitted for interest on debts, public and corporate, and probably $30,000,000 more as the expenses of Americans travelling abroad. Now the only mode for making these remittances is to buy bills, and the remitters must pay the price asked. In all the cities of Europe there is a variety of counter-exchange, by which the merchant may arbitrate his remittances as he pleases. If in Paris he wants to remit to London, he may buy a bill on London, or may order his creditors in London to

draw on him; or he may buy a bill on any other city, to remit or order a draft on any other city to be sold. Twenty combinations may be calculated, and the cheapest acted upon. The American merchant has but one choice. He may give the banker his price for a bill or remit the coin himself. The effect of this monopoly of the exchange market by the banker, aids the concentration of money in New York, and in a similar manner the internal exchanges are more or less controlled. The rate is always at a

that frequently when

premium in New York, and New York is in debt, the real rate of exchange being disguised in depreciation of local currency. The Southern banks having large deposits in New York drawing interest, do not sell exchange against those funds, but in some cases buy commercial exchange for depreciated notes, and then supply the market only as it will bear a premium. If their funds did not draw interest at the North, and their own paper was payable on demand, actually as well as nominally, the exchange rate would be as often below as above par. At bottom, the same system exists as with the external exchange, viz., always to draw, and never to be drawn upon.