494 MONTHLY JOURNAL OF AGRICULTURE. 



proceed to show iliat the facts to which you refer as existing in Western New 

 York, are in direct accord^iiice with it. 



By reference to the Merchants' Majjazine for the present month (March), you 

 will see, at pa^e 205, a comparison between eight of the principal counties of 

 the Genesee Country with a similar number of counties in Michigan, showing 

 that while the population of the former diminished, between 1840 and 1845, from 

 321,538 to 317,613, the latter grew from 109,183 to 141,247 ; and that while the 

 product of wheat in the former remained almost stationary, its advance in the 

 latter Avas enormously great. From these facts, it is obvious that the emigration 

 from Western New- York exceeds the immigration, and that there must oe more 

 sellers of land than purchasers — a state of things that will account for the dete- 

 rioration of appearance to which you refer, always a certain sign of diminished 

 population and wealth. 



Why do people leave New-York for Michigan ? To answer this question re- 

 quires local knowledge that I do not possess, and you must seek the information 

 elsewhere. When you can obtain that, you will understand the cause of the 

 state of things you have noticed. 



Your friend attributes the state of things which you describe to the high legal 

 rate of interest, by means of which capital is attracted from the country to the 

 city ; but the rate is the same in both, and, if the existence of such a law tends 

 to produce that effect, why do not both country and city equally attract it from 

 other quarters where the legal rate is lower — as, for instance, Massachusetts, 

 Connecticut and New-Jersey, where it is only six percent.? Why is it that 

 those States retain their capital, applying it to the fertilization of their soil, the 

 extension of their manufactures, and the improvement of their communications, 

 under a six per cent, law, while Genesee is unable to retain hers under one that 

 allows the owner to demand seven per cent. ? Could this happen unless there 

 were local causes tending to produce it ? I think not. The question now arises. 

 Does any large amount of capital from Western New-York seek permanent in- 

 vestment in the city ? It appears to me much more probable that the tendency 

 is toward Michigan, where capital is Ics.'! abundant than in Genesee, rather than 

 toward Nev/-York, where it is 7nore abundant, and where it must always come 

 into competition with that of the adjoining States, in which six per cent, is the 

 usual rate. Population and wealth are, I think, both traveling from Western 

 New-York to a region farther west, in which labor and capital can be made 

 more productive. Such being the case, a reduction of the rate of interest would 

 only accelerate the progress of expulsion, and increase the downward tendency 

 of which you speak. 



Every increase in the freedom with which capital may be applied tends to 

 cause it to flow inward, and to produce equality in the supply and steadiness in 

 the price. Every restriction tends to force it out, and to produce inequality and 

 unsteadiness. In New- York, contracts are legal up to seven per cent., and there 

 is, consequently, more freedom for the exercise of individual Avill, as regards its 

 application, than there is in New-Jersey, where six per cent, is the limit. There 

 is, therefore, a tendency to the transfer of capital to New-York from the latter 

 State; but, if the rate be reduced to the same standard, every Jcrseyman will 

 prefer invesimi^nts at home to those abroad, and the power of employing labor 

 in the first will be diminished, while it will be increased in the last. In Mis- 

 souri, freedom of action in regard to the rate of interest has existed, up to the 

 point of ten per cent. ; and that State has, in consequence, attracted large 

 amounts of capital from the East. It is now, hoAvever, about to reduce the rate, 

 the effect of which will be to cause llie holders of mortgages to convert them 

 into money to be drawn home, and thus the State will suffer from diminution of 

 the right of individuals to judge for themselves of the terms upon which they 

 will trade with each other. Every step in that direction is wrong, and tends to 

 the expulsion of labor and capital ; and every step in the opposite one — whether 

 by removal of restrictions on the rate of interest, or on the right of individuals to 

 associate together for banking or other jiurposes, and to determine for themselves 

 the terms upcn which they will trade with the public, whether of limited or 

 unlimited lialtilily — tends to promote the influx of wealth, the increase of popu- 

 lation, the rise of the value of labor, and the advance of improvement— physical, 

 moral, intellectual and political. There is more freedom of association in Rhode 



