AMERICAN STATE STOCKS.

THE political intelligence by the last arrival from the United States

is unaccompanied by any thing to warrant a belief in an improve- ment of their financial condition. Every account seems to indicate that the prostration of credit is more general at the present mo- ment than at any preceding time, and that the reaction so eagerly foretold during each month of the past three years has yet to be commenced. Discredit has extended from individuals to corpora- tions, from corporations to State Governments, until all confidence between man and man appears to have been entirely destroyed. Not only have nine out of ten of the banks, and other establish- ments with which the country was overrun during the period of in- flation, "burst up" in utter insolvency, but each catastrophe has usually been attended by revelations of long-continued fraud upon the part of Presidents, Cashiers, or Secretaries ; and as these events daily take place, the few institutions that survive the wreck are looked upon with suspicion as the next that are to fall. Hence the prices of Stocks and Shares, that may really possess intrinsic value, are reduced to the lowest point ; and personal property of most kinds—if we are to adopt the sound rule that the value of a thing is just what it will bring—may be regarded as almost entirely worthless. To add to the evils of the time, every new law that is passed by the various State Legislatures appears to have its origin in the desire to protect improvident, not to say fraudulent, debtors; and even the ordinary transactions of the police and criminal courts daily denote the existence of something like a popular sympathy for rogues.

For this state of things time alone can bring the remedy. The

Americans themselves adopt the approved custom of attributing it to improper legislation ; and each man may be heard to say, "If Congress would only pass such and such a law," every thing would come right ;—just as during the anarchy of the French Republic each man had his favourite " constitution " that was to be the pa- nacea for all existing ills. They will find, however, that disorders which arise from a corrupt state of the national mind are not to be cured by the magic of a few words engrossed upon a roll of parch- ment; and that it is only through the slow experience of suffering that they can rise to a better condition. During the last five years, the simple lesson that "Honesty is the best policy" has been forced upon them by the bitter consequences of an opposite course; and, although this lesson is not yet complete, there are indications, even during the present deplorable state of affairs, that it has not been read in vain.

In looking upon these results, we complacently trace the opera- tion of the law by which suffering follows as the consequence of a wrongful course. The American character is universally denounced, and the people whom a short time back it would have been " pre- posterous " to distrust are now without even the shadow of credit in any European city. But the distress which has fallen upon them, and which we so distinctly discover to be the appropriate fruit of their misdoings, has been shared by us, although in a different way, to a very considerable extent ; and the question oc- curs, Has the proportion of the suffering which we have been called upon to bear arisen from a participation in the evil courses whence it had its origin ; or is it as regards ourselves only an "in- scrutable" and as far as human observation goes an undeserved in- fliction? The former is palpably the case ; and although we may denounce the career of the United States for the past five years as an opprobrium to civilization, we are bound before we cast a stone at them to moderate our indignation by the reflection that we ourselves are not without sin.

No one meets with less sympathy than the experienced man of

business by whom a young and unscrupulous prodigal is tempted to draw upon deferred resources, and who at length through defect in his own calculations becomes involved in the embarrassment which ensues. He may have exacted no more than a lawful rate of interest, but if he be found to have placed unlimited means in the hands of a young adventurer without due inquiry into cha- racter, or as to the uses to be made of them—if he has looked to nothing else than that by thus lending his money he could obtain a good rate of interest, and that the borrower had " good pros- pects"—we feel entitled to reproach him for the selfishness of his course. There is no reason in all this that he should be cheated ; but if the party whom he has so imprudently trusted turns out to be improvident and unconscientions, he must not forget that an undue command of money is apt to beget these characteristics, and that, having fostered to some extent the very tendencies of which he is the victim, he is bound to exercise in his estimate of them no slight degree of forbearance.

In this relation stands England to America. Six years ago, in our eager pursuit of gain, unlimited credits were not only offered but pressed upon her merchants, and loans to any amount could at once be negotiated on behalf of her rising States. All this went on without any inquiry on our part other than that which was involved in the Lombard Street method of estimating the " resources " of the borrowing party. Your man of business is not prone to indulge in metaphysical subtleties. He divides mankind into two classes, the poor and the rich—the "safe" and the unsafe ; and it is not very easy to teach him that a better mode of classification might be I adopted. Experience of the American character was not wanting A people among whom it had become necessary to stimulate public men of both parties by the axiom " To the victor belongs the spoils," and whose watchword among the nations had long been recognized in the phrase " Our country, right or wrong," were not likely to exhibit any great amount of self-denial in those

times of financial difficulty to which every country must be occasionally liable. If those who pressed forward to offer loans, dazzled especially by the productive capabilities of the States in

the Far-West, had paused to inquire to what extent these Govern- ments, called into life from the outpourings of Europe and the

Atlantic cities, might fairly have been expected to develop that nice sense of morality, or even that true perception of their own permanent interests, which could alone render them worthy of con- fidence, it is certain that the " securities" with which we have since been flooded would never have attained a very high appreciation.

The great error of our capitalists, then, appears to have been, that they estimated only the physical condition and prospects of the country, overlooking entirely all considerations regarding the moral influences daily operating upon its inhabitants. As regards State Stocks, it may be affirmed that the value of them is intrinsi- cally greater at the present moment than at any previous time. The internal resources of the country are undiminished ; no convulsion has occurred to destroy the mines of Pennsylvania or the prairies of Illinois ; the value of this wealth has been increased by a rapid extension of population ; and, above all, the people have undergone the salutary discipline of five years of suffering, and are now sadder,

wiser, and consequently more honest, than before. If under this aspect of things the Bonds of some of the States are now regarded as worth only sixteen per cent of the amount for which they were originally issued, what a satire does it present upon the eager credulity of our lamenting capitalists !

It is not, however, our purpose merely to utter reproaches for folly which every one can now perceive ; but rather to say a few words regarding the prospects of those who are suffering from its effects. The total of the debts of the various States of the Union amounts to upwards of 200,000,000 dollars ; and although no estimate can be legitimately formed of the proportion held in this country, it is well-known to be large, and that unfortunately it chiefly consists of the Bonds most in disrepute, those of the better class having been pretty extensively adopted for home investment.

It may be urged that it is unfair to charge the people of the United States collectively with a want of integrity, when, although a large proportion of the States have become defaulters, three of them only can be accused of an attempt at dishonourable repudia- tion; that these three—Arkansas, Michigan, and Mississippi—are among the youngest and most remote; and that not one of them has so many White inhabitants by more than 100,000 as the city of New York alone, while all of them put together have only about the same number as one of the eight Senate districts of the "Em- pire State." But although repudiation has not been put forward openly in the other States, the general conduct of individuals and of corporate institutions has been such as to intimate that the people have been nearly ripe for a declaration of the kind; while the indifference everywhere manifested towards any serious effort to provide for the payment of dividends, shows a passive dis- honesty, very little removed in point of moral turpitude from the unsophisticated repudiation of the Far-West. There is not a State in which the imposition of a trifling tax would not be sufficient for the maintenance of public fidelity. The delay in adopting it, and the shameless evasion on the part of assessors and others by which it was met in one instance where it was attempted, must certainly be allowed to reflect upon a country which boasts of having "no poor," disgrace of the deepest kind.

But, although it is clear that the people of the United States are deficient in the feeling of conscientiousness, and that the chance of a liquidation of their obligations from an intuitive sense of right is somewhat weak, there are other peculiarities of the national mind which may be regarded as likely to impel them to a proper course. The pride which has prompted them ever since their existence as an independent community to put themselves forward as the leaders of modern civilization, too deeply seated to be extinguished by temporary disasters, will still seek for gratification, and will induce sacrifices which we might in vain look for at the shrine of duty. The dream of every American from infancy to old age is to

see bis country " go ahead" of all other nations of the earth. He

possesses, moreover, qualifications which give some colour of reason to the aspiration. Put a check upon his " progress " and you de- stroy for him all the charm of existence ; and since in these days, when the destinies of nations depend no longer on war but on the healthfulness of their economical relations, all progress must cease when credit wanes, we may feel assured that the people will never rest until they have succeeded in regaining their lost position. Towards this object they will probably try all sorts of expedients-7 many tricky manceuvres ; but as these fail one by one, they will find themselves forced at last into the rigid course, the adoption of which at the beginning would save them from years of humiliation. Another source of encouragement is to be found in the circum- stance that the defaulting States are daily shamed and stimulated to honest efforts by the neighbourhood of Governments which still maintain their faith. The spirit of self-exaggeration which induces the people of the Union to aspire to superiority over the countries

of the Old World, exhibits itself to a modified degree in creating a strong feeling of rivalry between their separate States ; and heFer the fact that some States have continued up to the present time in the faithful discharge of their obligations, "presents the beet guarantee that the others will ultimately be aroused to vigorous efforts. The competition, for instance, existing between New York and Pennsylvania is well known ; and when we observe that the former has not only hitherto kept her course, but that with the increasing revenues of her gigantic public works she is likely to sustain herself, we can understand that the humiliation of the latter must be rendered more severe by contrast with the position of' her rival. Thus, for the future, the struggle—perhaps, speaking of this excitable people, we might say the fashion—will be to regain lost credit ; and as one by one the soundest States recover, an immense force of public opinion will be brought to bear upon the few re- maining delinquents, which must inevitably drive them to an honourable arrangement. In these considerations we do not forget the extent to which the half-yearly accumulation of over-due in- terest must aggravate existing difficulties and augment the incen- tives to repudiation. It is evident that the increasing power of the various States will more than keep pace with any additional liability to be apprehended from this source. Among the panaceas proposed by the holders of State Stocks, the one most in favour appears to be an issue of Bonds by the Federal Government, to be secured by the public lands, and to be distributed in due proportion to the respective States, by whom they might be offered to creditors in exchange for Bonds at present held. There is little probability that this will ever be adopted; and to us it appears by no means a desirable scheme. The Federal Government is at this moment in a bankrupt con- dition; and if the debt of two hundred millions had been due from the Union, instead of from a variety of States, the result would have been, that long before this the dividends would have been suspended on the entire amount. A similar state of things might recur at a future time : and when it is remembered also that the engagements of the General Government would be rendered insecure by the possibility of a dissolution of the Union, and by one or two other causes to which the securities of an individual State would not necessarily be obnoxious, we shall arrive at the conclu- sion that the proposed arrangement would not add to the value of the pending claims. It is vain to look for permanent relief from any sweeping measure of the kind. We have attempted to point out the sources whence it must be anticipated; and although we believe that it will eventually arise, and that it will be accelerated by the effect of the ASHBURTON treaty and by the operation of our new Tariff; it is to be feared that it must nevertheless be preceded by a severe trial of the patience of those who have been so rudely aroused by the events of the last few years from golden dreams of re- sults to be attained by the development of American "resources."