62 



NEW ENGLAND FARMER, 



Al'G. S6, 1840. 



AND HORTICULTL'KAI. Rl CISTKR. 



Boston, VVBDSESDAy, Anousr 26, 1840. 



BANKS AND THE CREDIT SYSTEM. 



No. (. 



In the condition of llie cnrrenry no class in tlie roni- 

 munily haven more direct iritHreJit than the aiiricultiiral. 

 We have been repeatedly cliarged with hoMing npin- 

 iftns on the sulijict of banlis and credit of an heretical 

 character. We shall therefore tuhe the ltl»erty of mak- 

 ing some remark.s on these sulijecls. These may go for 

 what they arc worth. VVe do not regard the opinions 

 of an humble individual like ourselves, of much impor- 

 tance to any one ; and, on a subject in a degree foreign 

 from our general piirsuits, we should be among ihe last 

 to assume an oracular authority ; but every man ou'rht 

 to have a reasonable concern tor his own consistency ; 

 and if the soundness of his opinions is called in ques- 

 tion by any one, he should be ready to maintain or re- 

 nounce them. We shall allude to Ibis subject without 

 any pariy or political reference whatever. To do other- 

 wise would be incompatible wilh the neutral character 

 of the New England Farmer. 



Banks are of various characters. The bnnlis existing 

 among us are those of discount and loan; and it is to 

 these we shall refer. Capital is the surplus accumula- 

 tion of labor. It consists of whatever vie call property ; 

 nnd productive capital is that which in one form or anoth- 

 er, or in any form may be applied to the increase of 

 property or wealth ; or as it is said, of what has value, 

 whatever may conduce to the subsistence or comfort or 

 improvement of human life and the human condition. 



Capital is not in ilself productive. It will not increase 

 by any intrinsic principle of vitality or growth. A hun- 

 dred dollars in gcdd or silver deposited in a man's chest, 

 will remain a hundred dollars at the end of the ycai. — 

 A farm or tract of land Mot cultivated will produce noth- 

 ing. A ship lying at the wharves — or a factory, lei its 

 machinery be of the most perfect character, will givo no 

 return, unless the one is freighted and sent upon her 

 destined voyage, .Tnd the machinery of the other is made 

 to perform its proper office under llu: due and diligent 

 application of skill, intelligence and labor, and the suffi- 

 cient supply of the raw material. For all these purpo- 

 ees capital is indispensable. The means must be at 

 hand to purchase the implements and to pay the labor 

 of cultivating the land; to hire hands, and to furnish a 

 cargo for the ship ; and to employ laborers and superin- 

 tendants, and to furnish the material for the manufactory. 



The individuals in these i ases, who have Ihe skill 

 and labor, and the good will to apply the skill and labor, 

 have not always the capital which will enable them to 

 do it to advantage. A single pair of hands in most ca- 

 ses ran accomplish very little; and in many of the most 

 important and useful arts of productive industry would 

 be wholly impotent. Here comes in the necessity o 

 capital; and in his case of course the necessity of cred- 

 it, by which he would he enabled to procure the means 

 of managing the concerns, and rendering the tiadc, the 

 farm, the ship, or the factory productive. 



To rely u|ion the credit of the individuals employed, 

 and obtaining their labor with the condition of paying 

 for it at the close of the operation, would be attended 

 with innumerable inconveniences; and certainly is not 

 practicable on any extensive scale. In general the la- 

 borers themselves could not be found to do it, as they 

 require quick returns, that they may obtain the daily 

 bread for their families. To rely upon the aid of insu- 



lated individuals lt>r the means ol conducting these ( on- 

 cerns, is liable lo many evils and disappointments; and 

 though there are cases of small opeialitm, in which it 

 might be the most eligible mode, yet it would often re- 

 sult in disappointment; and expose one to extortion 

 and oppression. Hanks f»f loan and discount here fur- 

 nish Ihe remedy, and the iilentiral means wanted. 



'J'he proper design of banks is to ccdlect such capital 

 as may have been accumulated in the community, for 

 the pur[»ose of loaning it in such sums as may bu need- 

 ed for the encouragement of honest trade, useful Indus 

 try and the various productive arts of life. They offer 

 this advaiita^'C to capitalists of small means, that they 

 can place these small means, which perhaps they them- 

 selves are incapable of using wilh advantage and safely, 

 where certainly they ought to be safe and Tiake a fair 

 return. These nils being turned into a common stream 

 the mass is firmed. 



It is obvious that if the hanks were allowed only lo 

 loan the exact amount which they receive at legal inte- 

 rest, nothing would remain for the payment of the nec- 

 essary erections of buildings and vaults; and of the per- 

 sons emplovd to keep the books and lo manage the con- 

 coins of the institution. The State therefore, in the in- 

 corporaliim of a bank, allows it to loan not only to Ihe 

 full amount of its capital paid in, but likewise half as 

 much more ; so that a bank with one hundred thousand 

 dollars capital may loan to the amount of one hundred 

 and fifty thousand dollars ; and it is from this source, 

 from the anticipation of interest, when notes are dis- 

 counted, and from the wear and tear of bills, which are 

 consequently lost and never returned lo the bank ; and 

 from the use of deposits which are made in the bank for 

 a longer or a shorter time ; and in some cases from the 

 negotiation of exchanges wilh distant banks for which a 

 small commission is charged, that the profiis of a bank 

 are derived and its expenses paid. These certainly are 

 all honest sources of income ; and of which the public 

 have no right lo complain, since they received much 

 more than an equivalent in ihe pecuniary advantages of 

 ihe institution. Now an insliintion of this character 

 lioneslH managed, may be of signal advantage ; and es- 

 pecially lo a new community, where more than any 

 thincT else capital is wanting for the encouragement of 

 labor and enterprise. 



An industrious and honest young man, who has spent 

 a Ion" ap[)renticeship in acquiring a trade, finds himself 

 when ready to enter upon business, perhaps without a 

 dollar to purchase his tools and materials. Credit to 

 him is indispensable. A tradesman, wishing to com- 

 mence a business, which under a careful, frugal and at- 

 tentive management, may yield a fair profit and furn sh 

 ihe honest means of suircess and wealth, is withoul the 

 means of commencing it : to him credit is indispensa- 

 ble. A merchant's means are too limited for him to 

 prosecute a foreign trade, for which he is well skilled, 

 to advantage, without the aid of capital, which he can 

 only procure upon credit. A manufacturer or an asso- 

 ciation of individuals, intelligent, skilful and enterpris- 

 ing, and disposed to engage largely in a useful and profi- 

 table »)aniifacture, and to put many wheels and many 

 hands ill motion, cannot do this withoul a larger capi- 

 tal than their own funds will supply; they therefore re- 

 quire cridil to pursue their operations to advantage. — 

 That is tlipy require capital which they do not possess, 

 and which they can only obtain by borrowing, until 

 till ir ind'istry, or labor, or skill shall put them in a con- 

 dition of returning it. Banks furnish these fic lilies. 

 They furnish iheiii to a much greater advantage than 

 iho same facilities could bo obtained from individual 

 capitalists ; and these institutions among us, under 

 proper management, have been of the greatest benefit. 



They have improved agriculture. They have expand- 

 ed ihe wings of commerce. They have quickened trade 

 and industry ; and they have carried ihe manufacturing 

 and mechanic arts among us to a perfection and extent 

 which are justly the pride, and the foundation of the 

 wealth ol this busy hive in which we live — happy and 

 privileged, though too often disdained New England. 

 Banks are an essential part of ihe system of credit It 

 used to be a proverb to say of a man, he is as sure as 

 the bank ; wiiich meant that his [troinises and eiigage- 

 mrnls might be relied upon with absolute confidence. 



H. C. 



JVlassncltiisetts Horticultural Society. 



EXHIBITION OF FLOWERS. 



Saturday, August 22, 1840. 



The contilbiitions offiowers by our friends were libe- 

 ral, and some of the specintens very beautiful. We no- 

 ticed among them some choice Asters and Balsams, 

 from the garden of Mr VVm. Bacon, of Roxbury. Bal- 

 sams by Mr Jones, of Brighton, and Mr S. R. Jidinsot^ 

 of Charlcslown. 



E. H. Derby, Esq , of Salem, presented some very su- 

 jjerior specimens of Nemphoea odorata. 



Dahlias, by Messrs Wilder, Siickney, Low, Golder- 

 rnann, Mclntire, Sprague, Barnes, Howe, Hovey &. Co , 

 Warren, A, II. Hovey, Jno. Hovey and S. Walker. — 

 The specimens of Ne plus Ultra, by Col. Wilder and 

 .Mr VVm. Meller, were very fine. Mrs Bucknall, by 

 Mr l.'ariics ; Unique, by Mr Sprague; Striata formosis- 

 sima, by Mr Mclntire ; Marquis of Lothian, bv Mr Low, 

 were extra specimens. 



Bouquets, by Messrs W. Kenrick, Jno. Hovey, R. 

 Howe, Hovey & Co. and S. Walker. 



Eighteen varieties of Verbenas, Phlox Drummondii, 

 Salvia Penorie, Eryssimum Peroffskyanum, Gladiolus 

 floribandus and D;ifilias — from Hovey *& Co. 

 For the Conimiitee, 



S. WALKER, Chairman. 



[CrAt a meeting of ihe Flower Committee it was vo- 

 ted—That the exhibition of the Dahlia for premium, 

 shall lake place at lire rooms on Wednesday and Thurs- 

 day, 23il and 24th of Septemtier. The flowers for pre- 

 mium must be in the stands before 10 o'clock. After 

 the judges have awarded the prizes the room will bo 

 opened for exhibition with the names of the successful 

 competitors attached. 



■ S. WALKER, Chairman. 



EXHIBITIOW OF FRUITS. 



The display of fruits this day was principally from S. 

 Pond, Cambridgeport, who exhibited twenlyeiglil dish- 

 es of very fine peats and plums— among them we notic- 

 ed two magnificent Birllett pears, on one branch, taken 

 from a tree the slock of which was only four years from 

 the seed ; and the branch the second year's growth from 

 tlic insertion of the hud. Other specimens of the Bart- 

 lelt were also very line for the season ; also Julenno, 

 St. Ghislaiu and Cushing pears, and the following vari- 

 eties of plums ; Smith's Orleans and Duane's Purple — 

 very large and handsome; Prince's Impoiial Gage, Bing- 

 ham, White Gage, and Bolmer's Washington. 



By the President, Hon. E. Vose ; very large speci- 

 mens of the Large Red Sweeting apple, also the St Law- 

 rence Apple, f:oni scions presented by Mr Corse. 



Rev. Gardiner B. Perry, of Bradford, exhibited beau- 

 tiful specimens of a sweet app'e. The scions, Mr Per- 

 ry informed us, were taken from the original tree in 

 Kingston, N. Y. Those presented' were large and very 



