ECONOMICS OF THE UNITED STATES.

[With the following analysis of the condition of public affairs in the United States we have been recently favoured by an Englishman in that country at the time, on an important mission. Our correspondent occupies a station which enables him to take his survey from a commanding position ; and he possesses a mind which for statesmanlike breadth of view and grasp of understanding could be equalled by few men in our own Senate. Mr. JEFFERSON predicted that the ungenerous commercial policy of England would recoil against herself; and it will be seen that the day has arrived when the worst consequences of that policy are imminent, though possibly not yet irretrievable.] Baltimore, 14th January 1841.

The election of General HARRISON, as President of the United States, by so large a majority, has surprised even his warmest supporters ; and no stronger evidence need be adduced of the entire control exercised by the people of this country over the Government. It evidently shows that the result has arisen from the determination of the masses, and not from the agency or influence of those whom, in English parlance, we must call their leaders, but who are here rather shoved forward than followed, and are honoured only with the privilege of providing the machinery and defraying the expenses attendant upon all popular elections.

A short period only has elapsed since the popularity of the JACKSON

and Vex BUREN party seemed established on the firmest foundation : their leading measures had, in fact, been submitted to the verdict of the people prior to the retirement of the General, and were decidedly stamped with their approbation in the election of Mr. VAN BUREN, whose principal qualification was his pledge to walk in the footsteps of his predecessor. This sudden revolution, therefore, in public opinion, can only be ascribed to the universal dissatisfaction arising from the present prostration of commercial business, the consequent reduction in value of the staple productions of the country, and a general opinion that the course of the present Administration has not recently exhibited such indications of intelligence as seemed to promise a remedy for the evil. The most extraordinary problem for solution is the cause of this wide-spread dissatisfaction. It is not physical distress, for pauperism and destitution are unknown in the country. Harbours, rivers, and the whole surface of the earth, have been fast bound in frost from Washington to the extremity of Maine; yet no groups of mendicants are seen, no processions of frozen-out gardeners, or watermen making a parade of their suffering and imploring charity. Six-and-twenty independent Legislatures are now in session ; as many messages have recently been delivered by their respective Governors, touching on every possible subject or sore which can interest or affect any portion of the community : but there is not to be found in one of them a recommendation to raise funds for the relief of a single district. Search the calendars of the county and petty courts : numerous cases of larceny occur for stealing coats, shawls, ear-rings, and watches—articles of dress and luxury ; but a conviction for taking a loaf of bread or piece of meat is not to be found on the record. In fact, provisions of every description are at this period of general dis- content cheaper than they have been for years past. No one complains that the necessaries of life are beyond his reach, but that trade is ruined. Is it possible that this entire nation can consist of small capitalists ? Every symptom around would seem to indicate it. When a people rise en masse and turn out their officers because commodities of every de- scription are depreciated in value, it is evident that each individual has more of them than he can consume, and a surplus to dispose of. The large loans made by England to the United States, and the sums which the latter will continue to require for her gigantic internal improve- ments, by no means invalidate this supposition ; for capital in this country is too much subdivided to suit the convenience of borrowers. Each individual is connected with a portion, for which he has profitable employment, and will not part with it for a moderate rate of interest. Contractors for money, as for other commodities, seek the largest mar- kets, and will go in preference where wealth and population are to be found in distinct masses. Great Britain, consequently, will be their resort.

The successors of the present Administration will have no easy task to accomplish. During the contest they freely and loudly denounced the measures of the Government as directly causing the commercial and pecuniary difficulties of the nation. In this opinion they may have been sincere, but they cannot so far delude themselves as to suppose that a simple reversal of those measures will produce returning pros-

perity. As yet they appear to have come to no understanding or agree- _matt with respect to their future course; which may be, in fact, a work of no small difficulty, for it must not be imagined that the victory has been achieved by a homogeneous body entertaining similar views : on the contrary, every class of the discontented were ranged under the Whig banner, and to prevent disunion in their ranks during the contest, it was evidently deenied prudent to abstain from announcing distinctly their future policy. And it yet remains to be seen how far and in what- respect it will differ from that of their predecessors.

The principal measures which appear at present most powerfully to occupy public attention, and some of which are already under discus- sion in Congress, are the following, the repeal of the Sub-Treasury Bill ; the establishment of a National Bank ; the future appropriation of the- proceeds of the Public Lands ; the arrangement of a new Tariff of Duties.

It is impossible here to avoid pausing to reflect upon the happy con- dition of a country, where, in a season of difficulty and distress, sup- posed to be sufficiently great to warrant an entire change in the govern- ment, no more serious subjects of difference are found to exist than the foregoing catalogue embraces. Here are no fierce contentions respect- ing suffrage, class-legislation, or the unequal distribution of the public- burdens ; none as regards the foreign policy of the country ; none about religious doctrines or establishments ;—all subjects which is some shape or other threaten from time to time to jeopardize the stability of every state in Europe.

The Sub-Treasury is simply an office, under the control of the Exe- cutive, for the receipt and disbursement of the public revenue ; which was formerly deposited in the National Bank, and on the non-renewal of its charter distributed in State Banks in various parts of the Union, and there found to be so insecure that the Sub-Treasury was established by the present Administration for its safe custody. This appears to be a natural ccurse of proceeding ; and an impartial inquirer cannot easily understand why the office should not be allowed quietly to continue, at least until the question of the reestablishment of a National Bank is finally decided : but from the beginning it has been made a violent party question, and the most exaggerated importance attached to its advantages and defects. A bill for its repeal is now before the Senate; and having originally been passed with difficulty by small majorities, it is probable that its existence will be short, if any feasible plan for the custody of the public funds can be devised by its opponents as a sub- stitute.

It is not so easy to form an ,opinion with respect to the reestablish- ment of a National Bank, should the HARRISON majority be able to agree amongst themselves to propose it. The existence of any banks is an anomaly in a community which abhors monopolies and exclusive- privileges, and is sensitively jealous of all concentrations of wealth and power. Nothing but the accommodation they afford, in agriculture as well as commerce, to the enterprising and speculative, which constitute- the great majority of the nation, could ever have so far neutralized these feelings as to have permitted their incorporation. Still, though neu- tralized, they are never eradicated. In proportion as the pecuniary

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wants or the jealousies of the community predominate, the banking sys- tem is alternately favoured or discouraged ; and under the effects of this oscillation of public feeling, a National Bank has been twice established and twice put down since the formation of the Federal Government. The extent of commercial distress existing at the present moment, added to the intolerable difference in exchange throughout the States of the Union, would seem to warrant the expectation that a National Bank will again be resorted to as a remedy ; particularly by the men who have so strenuously accused the present Administration of having caused all these evils by their hostility to the banking system. But the probability is, that they never believed in their own charges to the extent at least to which they found it convenient to urge them ; and it is certain that amongst the most intelligent of the party a growing opinion prevails, that however useful banks may be when well and properly regulated, it is almost impossible in our present ignorance of the bewildering subjects of bullion and currency to restrain them by legislative checks within safe bounds, and that the advantages they af- ford are always liable to be counterbalanced by the mischiefs they create. Under these circumstances, it is doubtful whether any Admi- nistration in this country will again venture-to propose the establish- ment of a National Bank similar in functions and powers to the last, unless urged forward and supported by the strongest expression of po- pular feeling in its favour ; and even then, it is not hazarding much to predict that its term of existence will not be more permanent or ex- tended than that of its predecessors.

The future disposal of the proceeds of the sales of the Public Lands is a subject which now engrosses much attention. Being no longer re- qnired, since the extinction of the Federal Debt, as a fund for its liquida- tion, the State Governments seem determined to appropriate the amount to their own use, particularly since the establishment of the rule that "the Federal Government shall in no way assist in the promotion of in- ternal improvements. A bill to this effect was brought in by Mr. CLAY in 1833 ; which failed through the opposition of General JACKSON, although it had passed both Houses of the Legislature. By its provi- sions, the proceeds of the sales were to be divided annually amongst all the States, in the ratio of their population, to be applied either as a fund for education, or the colonization of free people of Colour, or to the payment of debts and expenses incurred for internal improvements. Some similar bill will no doubt be again introduced, although the objections to it are weighty. In the first instance, it is at variance with the conditions under which these lands were originally ceded by the old States, which expressly stipulated that the proceeds should be held as a common fund for defraying the general expenses, as well as discharging the debts of the Government ; and in the next place, it is considered unconstitutional, Congress having no authority to place the public money under the control of the State Legislatures, to be expended in the exercise of powers which have been expressly and exclusively reserved to the States alone by the Federal constitution. To the uninitiated thele difficulties would seem to be of easy solution, by dispensing with the bill altogether, as an unnecessary measure. For if these funds are given away by the Government for State purposes, it must raise an equal sum for Federal purposes ; and in either case the same amount will be taken from the pockets of the people. But there is a mo- tive for the plan proposed, never openly stated, but which is, in fact, at the bottom of the whole proceeding. It arises out of the different modes in which the revenues of the State Governments and those of Congress are raised. The latter alone has the power of laying duties on imported goods ; and by giving to the States the proceeds of the lands, they will be relieved from the necessity of raising the same amount by direct taxation, which from its unpopularity they are all disposed to avoid, and might in some cases be unable to effect. One great point would thus be gained, and another equally important to many parties would necessarily follow : for the Federal Government, when deprived of the land-fund, must inevitably increase the duties on customs,—which would greatly favour the commercial policy now intended to be pursued, as will be explained under the head of the Tariff of Duties. These combined inducements will most probably turn the scale against the legal and constitutional objections ; and General HARRISON, being presumed to be more obedient to the will of a majority than General JACKSON, a bill similar in its features to that of 1833, it is supposed, will be eventually passed. Several of the Western States, nevertheless, in which these lands are situate, have set up a counter claim, on the ground of the sove- reign jurisdiction which they exercise over them. Mr. CALHOUN, the great rival of Mr. CLAY, is at the head of this movement ; and a bill prepared by him is already before the Senate. It gives up the whole of the public lands to the States in which they lie, and provides that one-half of the proceeds of the sales shall be paid to the Federal Government, for the general expenses of the Union. But in this shape it is as much at variance with the original compact as Mr. CLAY'S bill, and equally unconstitutional, besides being outrageously unjust to all the Atlantic States, which under this arrangement are only offered a pro rata share with all the rest in one-half of the proceeds ; which one-half, it is well understood, would never be paid at all, and thus the whole would be lost to the original owners. This bill has, therefore, little chance of passing at the present day ; but threats have been thrown out of postponing a settlement of the question until the rapidly-growing population of the Western States shall give them a decided majority in both Houses of Congress ; which is now reduced to a simple calculation, and has been fixed at about the year 1850. But fortunately for the old States, their opponents cannot afford to wait so long, being at this mo- ment particularly embarrassed by the large amount of interest payable on their heavy debts for internal improvements, which render the pos- session of an immediate fund, obviating the necessity of internal taxa- tion, essentially necessary. A bill, therefore, similar to Mr. Cray's, it is expected, will ultimately command, as before, a majority in both Houses, in spite of Mr. CALHOUN'S opposition, but not without a fierce contest, in which the whole theory of State rights, a subject here of profound and important study, will be fully and ably discussed.

The subjects which have been considered are all strictly American, being local and national in their objects and consequences ; but the Tariff of Duties is as much a European as an American question ; and the mode in which it may be ultimately settled will have a most im- portant influence upon the future prosperity of all manufacturing states, and particularly on that of Great Britain. We must not deceive our- selves as to the extent of American intelligence on fiscal subjects. Our pure economists can teach them nothing. No people existing have adopted first principles to so great an extent in constitutional legislation, and they are equally disposed to do so in regulating trade with foreign powers when they meet with corresponding liberality. But in settling the question of the Tariff, they will consider it with the views of states- men giving first principles due weight, and adopting them so far only as they may appear (not unfavourably) to operate upon American in- terests when brought into collision with foreign pretensions.

The violent dispute which arose between the Northern and Southern States in consequence of the high tariff of duties established under the administration of Mr. Anams, and which seemed at one time to threaten the existence of the Union, is too well known to require recapitulation. The compromise effected between them in 1833 by a gradual reduction in the scale of duties, will have run its course next year ; when both parties will be at liberty to make a new adjustment, more suitable to the exigencies of the present period. The inter- vening time seems to have been well employed in temperately con- sidering the causes of that dispute, with the intention of so modifying their respective claims as may lead to an amicable cooperation for the future ; and it may be considered now as a settled point that the manu- facturers of the North and the planters of the South are prepared to agree together as to the terms of a new tariff, which will be so arranged as to protect their respective interests at home, whilst it tends to enforce the commercial policy of the country abroad. One material difficulty in the way of this agreement has been removed by an under- standing amongst all parties that the amount of import-duties levied shall never in future exceed the necessary expenditure of the Govern- ment, but that within that limit they may be applied as a protection to domestic industry, selecting preferentially those articles which are most essential to the national strength and defence. These provisos, however, are not so restrictive as at first sight they ap- pear to be ; for the concession of the land-fund to the States will render a large amount of import-duties always necessary : and this explains what was before stated as to the disposition of various other parties to favour Mr. CLAY'S bill And a heavy duty on cotton goods imported will be considered by all as necessary to the national defence against those powers whose fiscal policy presses most injuriously upon their great staple productions of corn and tobacco. Neither can the limitation in the amount of the revenue to be raised interfere with the efficiency of this scheme as an instrument of coercion ; for it will be applied in the shape of a discriminating duty ; and the highest rate being levied only on the goods of those States which refuse to modify their restrictive system, whilst the manufactures of the powers which accede to the arrangements proposed will be admitted at the lowest, it cannot lead to any increase of the revenue. It is generally understood here that some of the Continental manufacturing States, particularly Belgium, are disposed to meet these views by a reduction of their present duties on American staples ; and it is believed that their concurrence will be sufficient for the purpose required, as they will be able to furnish all the finer cotton fabrics which the domestic industry of this country cannot as yet supply. Little weight may be attached in England to these apprehensions, because the public press here is not so loud upon the subject as it generally is upon moss national topics. But on subjects of foreign policy, as has been stated, almost all parties agree, and there is consequently no room for noisy discussion. As early, however, as 1837, the Legislature of Maryland instructed their Senators and Representatives in Congress, " to oppose all and every adjustment of the present tariff without obtaining for the tobacco interest a fair- and equal participation in the benefits to be derived from such adjust- ment." And in a numerous convention of planters from the tobacco- growing States, recently held at Washington, the following resolutions were unanimously passed- " 1st. Resolved, That the only effectual remedy for the evil the tobacco interest labours under from the high duties imposed by Great Britain and the monopolies of France and other nations of Europe, is to be found in the action of Congress by countervailing duties ; and the convention relies on the wisdom of Congress in discriminating between those governments which have and those which have not manifested a disposition to abandon or modify their present op- pressive duties and restrictions imposed on tobacco from the United States. " 2d. Resolved, That it be recommended to the Government of the United States, that the treaties now in existence with foreign countries, which contain no stipulations for reciprocity in duties on their respective products, be not renewed."

The tobacco-planters, as a body, have taken the lead in urging this policy, because the districts in which tobacco is produced are more

concentrated and nearer the seat of Government. But the corn- growers are universally animated with the same spirit. The Go- vernor of New York, in his late message to the Legislature of that powerful State, has called their attention to the subject as de- serving their serious consideration. The mercantile classes feel, if possible, sorer on the subject than the agriculturists ; with large balances due in England, they find their staple products virtually refused admittance. The finest flour, now to be purchased at four and a half dollars per barrel, or one penny one-eighth per pound, cannot be received in payment by their creditors. The only alternative is to ship off their gold and silver, precisely at the period when their banks are struggling to resume specie payments. Yet, if under these circum- stances they hesitate, their mercantile faith and national honour are im- pugned. Every interest in the country feels aggrieved, when insult seems thus blended with injury, and a firm determination now prevails to find a remedy for the evil. Even the Nullifiers of Carolina, who would oppose as strenuously as ever a high tariff of duties, will heartily join in the adoption of a discriminating policy, which will tend gradually to divert the cotton-trade into a new channel. The South cannot easily

forget the operations of the Bank of England in 1836, directed as they were especially against the cotton-importers, and which effected so

sudden and severe a depression in the value of that article. The loud and continued bravados of our Abolitionists, threatening to supersede the American supply of cotton by the production of India, have also their effect in convincing them of the impolicy of depending as they do at present so much upon one wealthy, powerful, and reluctant customer, who deals only at their shop until he he can provide himself with another. They will hail therefore with pleasure the opening of new Continental marts for the exchange of the raw and manufactured article ; and having discarded much of their old feelings ofjealousy towards the manufacturing interest of the North, are disposed now to favour the increase of their own domestic fabrics, as affording a sure vent for their staple product in spite of our future operations, agricultural or belligerent. It is impossible to look around at the state of affairs and of public feeling in this country, without noticing a gathering storm of dissatis- faction brewing up against us—which must chiefly be ascribed to our fiscal policy and commercial restrictions : and should no general break-up of the armed peace of Europe shortly occur to turn the current of public attention in a different direction, we must prepare for another war of

customhouses, as extended and as bitter as that which prevailed under the Presidency of Mr. ADAMS. The veteran is still indefatigable and

in the field; and whatever difference on other subjects may subsist

between him and Messrs. CLAY and WEBSTER, they will be found united on the questions of the Tariff and resistance to our maritime

code. Higher ground and a loftier tone than have distinguished the present, will be assumed, it is said, towards us, by the coming Adminis- tration ; and of their ability to maintain it, no one here at least seems to entertain the slightest doubt : unfortunately, we are too apt in Eng- land to delude ourselves into the belief of that which best suits our views and wishes. In this way, an idea has been recently cherished, that the two nations of Anglo-Saxon race inhabiting England and America are approximating in friendly feeling in proportion to the growth of their commercial intercourse, and that the time is fast ar- riving when a war between the two countries will be impossible. Not the slightest foundation exists on which to establish such an opinion. A strong friendly feeling, no doubt, prevails among the merchants and money-dealers on both sides, but the commercial classes have little or no political weight in either country. In England they are neutralized by party divisions, and swamped here by universal suffrage. It is the land tilling democracy of America and the land-owning aristocracy of Britain that sway the affairs of both nations ; and between them there is not one idea in common, nor a single congenial feeling. Men of equal rights, of universal suffrage, and of responsibility from the highest to the lowest—who spurn at hereditary claims, and have little faith in the wisdom of their ancestors—can never harmonize with us.

Their legislation and their foreign policy are drawn from totally different sources. Their diplomatists and ours have been taught in opposite schools, and when they meet can with difficulty comprehend each other. In the elements which compose the two governments there is not the slightest affinity. But their policy is eminently pacific ; and they will, if possible, avoid war with all nations : yet if war must be, with none would it be waged with greater energy of purpose or inveteracy of feeling than with Great Britain.