were added up, and the balance sheet struck between that and the loss at the explosion, the advantage gained by the credit system would still be found to be great. The advancement of America depends wholly upon it. It is by credit alone that she has made such rapid strides, and it is by credit alone that she can continue to flourish, at the same time that she enriches those who trade with her. In this latter crisis there was more blame to be attached to the English houses, who forced their credit upon the Americans, than to the Americans, who, having such unlimited credit, thought that they might advantageously speculate with the capital of others.
One of the most singular affections of the human mind is a proneness to excessive speculation; and it may here be noticed that the disease for (such it may be termed) is peculiarly English and American. Men, in their race for gain, appear, like horses that have run away, to have been blinded by the rapidity of their own motion. It almost amounts to an epidemic, and is infectious—the wise and the foolish being equally liable to the disease. We had ample evidence of this in the bubble manias which took place in England in the years 1825 and 1826. A mania of this kind had infected the people of America for two or three years previous to the crash: it was that of speculating in land; and to show the extent to which it had been carried on, we may take the following examples:—
The city of New York, which is built upon a narrow island about ten miles in length, at present covers about three miles of that distance, and has a population of three hundred thousand inhabitants. Building lots were marked out for the other seven miles; and, by calculation, these lots when built upon, would contain an additional population of one million and three-quarters. They were first purchased at from one hundred to one hundred and fifty dollars each, but, as the epidemic raged, they rose to upwards of two thousand dollars. At Brooklyn, on Long Island, opposite to New York, and about half a mile distant from it, lots were marked out to the extent of fourteen miles, which would contain an extra population of one million, and these were as eagerly speculated in.
At Staten Island, at the entrance into the Sound, an estate was purchased by some speculators for ten thousand dollars, was divided into lots, and planned as a town to be called New Brighton; and had the whole of the lots been sold at the price for which many were, previous to the crash, the original speculators would have realised three million of dollars. But the infatuation was not confined to the precincts of New York: every where it existed. Government lands, which could only be paid for in specie, were eagerly sought after; plans of new towns were puffed up; drawings made, in which every street was laid down and named; churches, theatres, hospitals, rail-road communications, canals, steam-boats in the offing, all appeared on paper as if actually in existence, when, in fact, the very site was as yet a forest, with not a log hut within a mile of the pretended city. Lots in these visionary cities were eagerly purchased, increased daily in value, and afforded a fine harvest to those who took advantage of the credulity of others. One man would buy a lot with extensive water privileges, and, upon going to examine it, would find those privileges rather too extensive, the whole lot being under water. Even after the crisis, there was a man still going about who made a good livelihood by setting up his plan of a city, the lots of which he sold by public auction, on condition of one dollar being paid down to secure the purchase, if approved of. The mania had not yet subsided, and many paid down their dollar upon their purchase of a lot. This was all he required. He went to the next town, and sold the same lots over and over again.
To check this madness of speculation, was one reason why an act of Congress was passed, obliging all purchasers of government lands to pay in specie. Nevertheless, government received nine or ten millions in specie after the bill passed. Now, when it is considered what a large portion of the capital drawn from England was applied to these wild speculations—sums which, when they were required, could not be realised, as, when the crisis occurred, property thus purchased immediately fell to about one-tenth of what was paid for it—it will be clearly seen that, from this unfortunate mania, a great portion of the present distress must have arisen.
The attempt of General Jackson and his successors, to introduce a specie currency into a country which exists upon credit, was an act of folly, and has ended in complete failure.4 A few weeks after he had issued from the Mint a large coinage of gold, there was hardly an eagle to be seen, and the metal might almost as well have remained in the mine from whence it had been extracted. It was still in the country, but had all been absorbed by the agriculturists; and such will ever be the case in a widely extended agricultural country. The farmers, principally Dutch, live upon a portion of their produce and sell the rest. Formerly they were content with bank bills or Mexican dollars, which they laid by for a rainy day, and they remained locked up for years before they were required. When the gold was issued, it was eagerly collected by these people, as more convenient, and laid by, by the farmers’ wives, in the foot of an old worsted stocking, where the major part of it will remain. And thus has the famous gold-currency bill been upset by the hoarding propensities of a parcel of old women.5
Volume One—Chapter Three
Fifty years ago, New York was little more than a village; now, it is a fine city with three hundred thousand inhabitants. I have never seen any city so admirably adapted for commerce. It is built upon a narrow island, between Long Island Sound and the Hudson River, Broadway running up it like the vertebrae of some huge animal, and the other streets diverging from it at right angles, like the ribs; each street running to the river, and presenting to the view a forest of masts.
There are some fine buildings in this city, but not many. Astor House, although of simple architecture, is, perhaps, the grandest mass; and next to that, is the City Hall, though in architecture very indifferent. In the large room of the latter are some interesting pictures and busts of the presidents, mayors of the city, and naval and military officers, who have received the thanks of Congress and the freedom of the city. Some are very fair specimens of art: the most spirited is that of Commodore Perry, leaving his sinking vessel, in the combat on the Lakes, to hoist his flag on board of another ship. Decatur’s portrait is also very fine. Pity that such a man should have been sacrificed in a foolish duel!
At the corner of many of the squares, or blocks of buildings, as they are termed here, is erected a very high mast, with a cap of liberty upon the top. The only idea we have of the cap of liberty is, the bonnet rouge of the French; but the Americans will not copy the French, although they will the English; so they have a cap of their own, which (begging their pardon), with its gaudy colours and gilding, looks more like a fool’s cap than any thing else.
New York is not equal to London, nor Broadway to Regent Street, although the Americans would compare them. Still, New York is very superior to most of our provincial towns, and, to a man who can exist out of London, Broadway will do very well for a lounge—being wide, three miles long, and the upper part composed of very handsome houses; besides which, it may almost challenge Regent Street for pretty faces, except on Sundays. (On Sundays the coloured population take possession of Broadway.) Many of the shops, or stores, as they are here called, (for in this land of equality nobody keeps a shop), have already been fitted up with large plate-glass fronts, similar to those in London, and but for the depression which has taken place, many more would have followed the example.
Among the few discrepancies observable between this city and London, are the undertakers’ shops. In England they are all wooden windows below and scutcheons above; planks and shavings within—in fact, mere workshops. Here they are different: they have large glass fronts, like a millinery or cut-glass shop with us, and the shop runs back thirty or forty feet, its sides being filled with coffins standing on end, mahogany and French polished. Therein you may select as you please, from the seven feet to receive the well-grown adult, to the tiny receptacle of what Burns calls, “Wee unchristened babe.” I have, however, never heard of any one choosing their own coffin; they generally leave it to their relatives to perform that office.
I may here remark, that the Americans are sensible enough not to throw away so much money in funerals as we do; still
One single proof may be given of the ruinous policy of the Jackson administration in temporising with the credit of the country. To check the export of bullion from our country, the Bank of England had but one remedy, that of rendering money scarce: they contracted their issues, and it became so. The consequence was, that the price of cotton fell forty dollars per bale. The crop of cotton amounted to 1,600,000 bales, which, at forty dollars per bale, was a loss to the southern planters of 64,000,000 of dollars.
A curious proof of this system of hoarding, which immediately took place upon the bank stopping payment, was told me by a gentleman from Baltimore. He went into a store to purchase, as he often had done, a canvas shot-bag, and to his surprise was asked three times the former price for it. Upon his expostulating, the vendors told him, that the demand for them by the farmers and other people who brought their produce to market, and who used them to put their specie in, was so great, that they could hardly supply them.
