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them to divide eight per cent. on ten millions, or eight hundred thousand dollars, which is five and one third per cent. on fifteen millions.

The expenses of the new institution, and its branches, would scarcely be greater. Consequently, if fifteen millions, employed in discounting, yielded annual dividends to the amount of eight hundred thousand dollars, forty-five millions would yield two millions and four hundred thousand dollars: which would bring a revenue to the general government of one million and two hundred thousand dollars annually.

We must moreover observe, that, after the new plan of discounting with national notes has been once introduced by the branch banks, all the incorporated banks, now existing, will gradually fall into the same plan, prompted by their own interest, because they will find it more convenient, more safe, and cheaper. If the terms of their charters present at first a difficulty—they will cause them to be modified. They will then apply to the national bank for their notes—because they will find this more suitable than to purchase them for specie—which the national bank will furnish, either by discounting their promissory note at twelve months, drawn in their corporate capacity, or on some other expedient plan, that may be devised; and the national bank will thus have an opportunity of employing all the national paper it can with propriety issue!

We have yet to say a word on public credit.—Its elements are, an ample revenue, and an inviolable observance of good faith. To these an additional support has been added in modern times; called a sinking fund, which, under the steady form, which the new sinking fund has assumed in England, since first proposed by Mr. Fox in 1792, is nothing else than a regular provision for the gradual discharge of a public debt, coeval in its operation with the creation of the debt itself. Each contracted portion of debt, acquires, thereby, a fixed term of extinction, like our late six per cent. stock.

Viewed on general grounds, this is certainly an admirable arrangement; because it exempts the discharge of public debts, even from the possible capriciousness of legislative appropriations. Every contrivance, which gives steadiness to the operations of the government, is, for that sole reason, highly beneficial, and approximates its character to the wisdom of nature.

When, therefore, the Secretary of our treasury observes— ** No artificial provisions, no appropriations or investments of particular funds in certain persons, no nominal sinking fund, however constructed, will ever reduce a public debt, unless the net annual revenue shall exceed the aggregate of the annual expenses, including the interest on the debt,"* we agree with him in the general correctness of the sentiment. There is no real amelioration of circumstances, no general reduction of debt, as long as the new loans contracted, must be proportionably larger, on account of old loans paid off. On the face of the case, it would have been as well to pay off less, and to borrow less.—But, if he concludes from this, as we must suppose that he does, since no provision for a sinking fund has been attached to the contemplated loap, that sinking funds are useless, we cannot help thinking, that he errs, and that he pays too little attention to general principles, and to the vast political importance of steady measures.

Believing ourselves that sinking funds are of great importance, and that their establishment, or, in other words, the establishment of legislative provisions for the steady, and gradual discharge of public debts, coeval with their creation, should become a fundamental law of the financial code of the Union, we could still wish the following regulations to be incorporated with the law creating the national bank.

Government, by the tenor of the constitution of the national bank, should be debarred from ever applying the annual amount of its dividends, to any other purposes than the discharge of the principal of the public debt, in conformity with eventual legislative provisions to that effect.f

When not so applied let the institution be bound to invest the amount in gold and silver, to be retained in their vaults, the more to increase the solidity of the establishment.

Finally, it would be expedient to enact, that the rates of discount shall be lowered, agreeable to a certain fixed ratio, in proportion as the unappropriated funds of government, in the national bank, accumulate.

With a system of taxation, that could never fail to be productive, such as we have proposed, gradually introduced; with a currency—convertible, abundant, and of general circulation; with a pre-organized, constantly augmenting sinking

• See the Report of the Secretary of the Treasury of the 10th January. 1812.

f Dividends, to the amount of one million of dollars per annum, thus applied, would extinguish in twenty-one years, forty millions of- debt at fti^ funded at six per cent., and the interest payable yearly. If payable every «* months, or quarterly, the process of extinction will be more rapid in proportion.

fund; with unbounded credit—such as must necessarily result from the above circumstances, and moreover supported by a well-constituted, national bank—what might not be our financial power? With our customhouse duties annihilated; our resources of whisky taxes, &c. &c. untried; our public credit, equivocal; holding sinking funds, in contempt; deeming a national bank unnecessary, and, therefore, unconstitutional; so circumstanced every way, that even a successful loan may enrich us only with a debt, and leave our hands as empty as before—how great is our financial impotence!

294

Memoir on the Affairs of Spain.

We are about to present our readers with a brief Memoir on the circumstances of Spain at the commencement of the struggle, in which she is now engaged. It was written in the autumn of 1808, by a gentleman, who had been an eye witness, of the transactions at-Bayonne to which he refers, and whoresided,—as well there as in Spain,—under auspices which opened to him the best possible sources of information. The most entire reliance may be placed on the facts he communicates. We have but to regret, that considerations of a private nature, have rendered it necessary for him, to suppress a multitude of others still more curious and important. The Memoir, even in its present shape, was not originally intended for the press. The manuscript in our possession is autographical, and of unquestionable authenticity. This document will be deemed valuable in an historical point of view, and we are anxious that nothing should be lost to the world, which can serve to throw light upon a subject destined, we have no doubt, to form hereafter, the most interesting and instructive portion of human annals.

We do not fully coincide with the author, in his enthusiastic admiration of the conduct of the Spanish nation, nor in his sanguine anticipation of the final discomfiture of her oppressors. Yet he is one to whose opinion we would readily subscribe, in any case where our own judgment was not almost peremptory, and we must confess that he has displayed a very imposing sagacity, in his predictions concerning the progress of the Spanish struggle, to its present stage. This is not the place for us to inquire into the aspect which it may hereafter assume. It would be now, after what we said elsewhere, worse than idle, as indeed it must be at all times on this subject, somewhat presumptuous, to attempt to draw back the curtain of futurity. If any positive prophecies are allowable, they are certainly those that accord with the vehement aspirations of every honest heart, and tend to raise the spirit of philanthropy which may be said, together with " the best hopes of our better nature," to droop and die away, under the prospect of a sinister dispensation of the Almighty Providence, in the case of the Spaniards. At every such cheering augury, coming from a quarter to which deference is due, we most heartily rejoice, and are ready to ejaculate with the utmost fervency of desire,—" quodfelix faustumque sit."

If any thing extraneous to the present Memoir, and more specific than the general act of the invasion of Spain, could heighten the horror which they are calculated to excite against the French government, in the breasts of our readers, we would remind them of the letter of Bonaparte to the prince of Asturias, published in the first number of our Review. There is also another state paper from the same source, and subservient to the same end, to which we would claim their attention. We allude to an official message of Bonaparte when first consul, addressed to the legislative body, and the tribunate of France, wherein he holds the following language, on the subject of the elevation of a Spanish prince to the dukedom of Tuscany. "After having," says this grateful ally, and disinterested champion of freedom, " restored the ancient limits of Gaul, it was incumbent upon the French people to restore to liberty, nations connected with them by a common origin, and by the tie of mutual interests and congenial manners. The liberty of the Cisalpine and Ligurian republics is therefore assured. The French people had yet another duty to perform, imposed both by justice, and generosity. The king cf Spain has been faithful to our cause, and has suffered for it. Neither our reverses of fortune, nor the perfidious insinuations of our enemies, have been able to detach him from our interests; he will meet with a just return: a prince oj-his blood is about to ascend the throne of Tuscany"

In another message, announcing to the same assemblies, the conclusion of the treaty of Luneville, there is a passage of a like tenor, which equally deserves to be quoted.—" The republic owed it to its engagements, and to the fidelity of Spain, to make every effort to preserve entire the territory of the latter. This duty she fulfilled in the course of the negotiation with all the energy which circumstances allowed. The king of Spain has acknowledged the fidelity of his allies, and in his generosity has made that sacrifice to peace, from which they laboured to exempt him. He acquires by this conduct new titles to the attachment of France, and a sacred claim to the gratitude ofEurope!/-/"

MEMOIR ON THE AFFAIRS OF SPAIN.

The affairs of Spain attract, at this moment, the attention of all Europe. They excite an interest, the more lively, the more it is attempted to envelop them in mystery. Besides, it was generally expected, that Spain would occasion no greater difficulties than Portugal; that the French government would only have to order its troops to take possession, in order to acquire an absolute sway over this fine country. The situation

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