32 G. S. CALLENDER 



of it; but the difficulty in finding a new market for a rapidly 

 increasing product placed a stubborn limit to their rate of 

 expansion. Conditions were still more unfavorable in agri- 

 culture, where landlords and farmers were unable for many 

 years, even with the assistance of corn laws to earn a fair 

 profit on the capital already sunk in improvements. The 

 canal system of the country was nearly complete. All the 

 leading centers of industry were connected with each other 

 and with the seaboard. Turnpike building progressed but 

 slowly. Until the railroad should be introduced, the trans- 

 portation system could absorb but little additional capital. 

 Under these conditions the rate of interest must inevitably 

 fall; and, to escape that fall, those who had savings to invest 

 would be forced to turn to highly speculative investments at 

 home or to lend their capital in foreign countries. 



A number of circumstances recommended the United 

 States to English investors. In the first place the rapid pay- 

 ment of the national debt and its final extinction in 1832 

 strengthened American public credit as hardly anything else 

 could have done. No other country had ever paid off a na- 

 tional debt, and it was felt that there could be little risk in 

 lending money to a people whose resources were so great and 

 whose disposition so frugal. Moreover, the enterprises for 

 which capital was required in America were favorably regard- 

 ed by the English public. From the point of view of the 

 investor, canals in England had been very satisfactory. 

 Eighty companies, with a total capital of $150,000,000, re- 

 ported in 1825 an average dividend of 5f per cent. Ten of 

 these paid from 20 to 28 per cent dividends; and the stock 

 of thirty three companies, representing one-third of the total 

 mileage, was quoted at prices ranging from $1,000 to $1,500 

 per share, and a few as high as $3,000 and $4,000. American 

 canals could hardly hope to prove as profitable as this; but 

 they did not seem at all visionary enterprises, and the finan- 

 cial success of the early ones created great confidence in them. 

 Towards the banking enterprises of the southwest English 

 capitalists were equally well disposed. England was inter- 

 ested in securing a steady increase in the supply of raw cotton, 

 and in making loans to the southwest for banking purposes 



