30 G. S. CALLENDER 



significant that this period marks also the rise of commercial 

 banking as well as of marine insurance in this country. The 

 growth of our merchant marine, the numerous small manu- 

 factories which sprang up after the embargo, as well as the 

 beginning of turnpike and bridge building, all indicate the 

 progress which was made at this time in the accumulation of 

 capital. 



Still another circumstance contributed to the increase of 

 our resources during this period. The rapid payment of the 

 national debt, both before and after the war of 1812, had the 

 effect of augmenting the capital available for investment. 

 Between 1815 and 1830 the government collected in taxes 

 $123,500,000, and paid it over to the owners of its bonds. In 

 this way small sums were taken from many individuals, and 

 put into the hands of that class in the community who are by 

 nature and habit disposed to save. If these small sums had 

 remained in the hands of the people, they would, for the most 

 part, have been spent, especially since the machinery for col- 

 lecting small savings of large masses of people, such as is 

 provided by the savings banks and life insurance companies, 

 did not then exist. Of course, so far as the national debt was 

 owned abroad, its payment would not have the effect of in- 

 creasing capital. On the contrary, it might have the opposite 

 effect of driving capital out of the country, unless other se- 

 curities could be furnished, which the foreign investor would 

 be willing to purchase. Such securities were provided by us 

 during the period we were paying off our national debt most 

 rapidly ; and little, if any, foreign capital was lost by the pay- 

 ment of the debt. 



It is evident from these facts that after 1815 this country 

 had a considerable fund of domestic capital available for con- 

 structing its public works. In the newly settled communities 

 of the west and southwest there was little or no such fund; 

 but in the east, especially the southern New England and 

 middle states, and, to a less extent, in Virginia and South 

 Carolina, it was possible to raise quite large amounts, enough 

 probably to construct the more important works required. 

 Certainly this was the case in New York, where the canal 

 commissioners reported in 1817, that they entertained no 



