the great difficulty is in making an application of this principle of policy. The sagacity and the enterprise of self-interest are in general so ready to engage in any kind of business which eventually promises success, that legislatures ought to exercise this power of temporary protection with extreme caution. They ought to be well satisfied of the circumstances in favor of the manufacture seeking protection, and that its impediments to success would finally yield to encouragement, though they would endure for an indefinite length of time without it, and that the manufactures would be at length able to flourish without the aid of protection. No stress ought to be laid on the fact that this exception to the principle of free trade is not mentioned by Adam Smith; for in a country abounding in capital, manufacturing enterprise, and above all, practical skill, it was not likely to have occurred to him that any branch of manufacture or trade would require temporary protection for its success. Her circumstances are somewhat peculiar, in her ability to engage in any branch of manufacture or trade which would eventually prove profitable, and an exception, scarcely deserving notice in that country, may well deserve consideration in others. The third exception is, where impositions or restrictions are laid on our ships or products, it may be advisable to lay correspondent imposi tions or restrictions on theirs. This is one of the exceptions to free trade acknowledged by Adam Smith, but he qualifies his admission by limiting retaliation to those cases in which "there is a probability that it will procure the repeal of the high duties or prohibitions complained of." Though we must assent to his reasoning, as to those reciprocal restrictions on the different products of different countries, it has no application to those on our ships; for when an imposition is laid on them by foreign nations, whether in the form of tonnage duty, or of additional duties on their cargoes, or of port charges, if we did not retaliate by correspondent restrictions, our ships may be excluded from all share of our foreign commerce; whereas, by subjecting their ships to the same burdens as those to which they subjected ours, we are likely to regain the same proportion of trade which we should have if it were free; and although commerce would no doubt be more flourishing and considerable if it were altogether exempted from these fetters, yet, by the system of mutual and equal restrictions, the nation which can transport the cheapest, would thus secure to itself the chief part of this advantage, which, without such retaliation, it might lose altogether. But whenever a foreign nation imposes a duty on such products of ours as we can supply on better terms than she can produce them, by laying a retaliatory duty on some of her products, we aggravate the evil. Thus, while we are losers by the exclusion of our grain and flour from the British markets, we are no less losers by our protecting duties on such articles as we could buy of her cheaper than we could make them. The only ground on which this policy can be justified, is, as Smith properly observes, when there is a probability of success; that is, when the foreign nation, whose restrictions we would retaliate, being thus made to feel the inconvenience of its own policy, would be induced to retrace its steps; and also, when all nations, seeing that if we had received an injury, of whatever kind, we would retaliate it, even though we also inflicted injury on ourselves, would be induced to abstain from a course so likely to prove injurious as well as illiberal. There are two of our great staples which are materially affected by such restrictions. These are, bread-stuffs and tobacco. As England is the only part of Europe that, in ordinary years, would furnish a market for our flour, her system of corn laws, by which our provisions are excluded, except when she has a dearth, alone call for any retaliation on our part; and we might easily subject such of her manufactures as would be most affected by it, to a heavy duty, so long as she excluded or heavily burdened our flour. The policy would certainly be advisable, and might, eventually, be productive of benefit to indemnify us for the cost in the mean while, but for one consideration. It so happens, that the landed proprietors, who have a direct interest in keeping up the corn monopoly, have a predominant weight in the legislature. This class compose the whole of one branch of the legislature, and the greater part of the other. But it is the manufacturing classes, on whom our retaliations would directly and principally operate, and not upon those who at once profit by the corn laws, and have the power of repealing them. It is, therefore, not likely that our retaliation would be attended with the desired effect, so long as the great mass, both of the consuming and the industrious classes, constituting a majority of the nation, have not their fair weight in the legislature. This view derives strong confirmation from the fact, that when there were two successive short crops, in 1838 and 1839, and when nearly the whole weight of the ministry was in favor of the repeal of the corn laws, they were not able to get a majority, even of the house of commons, to vote for their repeal. Our tobacco is subjected to a very heavy internal duty, in every part of Europe where it is extensively consumed. In England, the duty is about $70 per hundred pounds, (three shillings sterling per pound,) which is, on an average, about ten times the price we get for it, and the consumption is no doubt greatly diminished by so high a tax. As this also favors smuggling, and as the landed proprietors have no particular interest in supporting this tax, the government may be induced to moderate it, though probably no further than it could be done without sensibly diminishing the revenue. Both with Great Britain and France, and some other parts of Europe, these restrictions seem to present fit subjects either for negotiation or counter legislation. Besides these cases in which protecting duties may be justified on their own account, they may sometimes become necessary, because the third class of articles (those furnished wholly from abroad) may not afford a sufficient revenue. In that case, it may be better to supply the deficiency on articles of the second class, than to resort to direct taxes; and in this case, as well as the three other cases of justifiable protecting duties, every enlightened and patriotic mind will recollect that the manufacturing skill of the country will be increased by the further employment given to it; and that an increase of such skill as effectually adds to the sources of the national wealth, as any improvement in its agriculture, or any extension of its commerce. In considering the subject of import duties, with reference to the United States, the principal points which I have endeavored to establish, because they are the conclusions to which my mind has been irresistibly led, are as follows: 1. That a revenue raised by duties on imports, properly selected, would be far more economical, as well as convenient and easy to the people, than one raised by direct taxes. 2. That for such duties to fall equally on the different states, they must be laid exclusively on such commodities as are wholly supplied from abroad. 3. That protecting duties do not merely transfer money from the class of the consumers to that of the manufacturers, but annihilate a part of the money drawn from the first class. 4. That such duties injure the citizens of the agricultural states, only as consumers, and not as the producers of the exports-the fallacy of the "forty bale theory" exposed. 5. That duties confined to articles supplied wholly from abroad, and laid with moderation, do not diminish the national consumption. 6. That duties on imports do not necessarily diminish, or tend to diminish exports. 7. That protecting duties may sometimes be justified for the purpose of aiding new branches of trade or manufactures, to overcome their first difficulties. 8. But that they ought never to be resorted to for such purpose, except when the legislature has a confident expectation, that by reason of such protection, commodities will be furnished at a lower price than they would have been without such protection. 9. The reasons against the policy of retaliatory restrictions, do not apply to foreign restrictions in our navigation. In the preceding views of the effects of duties on imports, in all their important bearings, I have endeavored to keep myself above all local interests; but though decidedly an advocate for free trade, as a general principle, I have not sought to support it by fallacious arguments, and have endeavored to do justice to those qualifications of the principle which seemed to be entitled to respect. A more undistinguishing support of the principles maintained by one side or the other, might be received with more favor; but truth, and truth alone, should be the object of the scientific inquirer. ART. III.-PLAN OF A NATIONAL BANK.* THE bank proposed by the writer of this article, if adopted, would doubtless have the ability to equalize the exchanges, restore the public confidence, and the metallic currency to the country. It would, by its legitimate action, necessarily prevent overtrading by the merchants, the manufacturers, and all other classes of citizens, and prevent the state banks from issuing more paper than they could redeem in legal coin; it would, moreover, give to all classes confidence and stability in their respective * The plan of a national bank proposed in this article, was drawn up by a highly respectable and influential merchant of New York, who has been extensively engaged in foreign trade and exchanges, and has resided in several of the principal commercial cities of Europe. We are authorized to state that the writer is prepared to meet any objections which may be offered, having carefully investigated and considered the subject in all its bearings.-Ed. pursuits, and it wou.d insure to them the profits of their industry and economy; and it would enable the general government (if they should deem proper to make the bank its fiscal agent) to collect its revenues, and disburse them at home and abroad, free of all risk and expense. Besides these very important benefits to the people and government, it would establish a general credit for the merchants, and particularly for such of them as are engaged in foreign commerce-to them and to the people of this country, in every point of view, of vital importance; indeed, it would place the credit of the American government, and its merchants, on a par with that of the British government, in all parts of the commercial world. The gain in the exchanges, and the facility of negotiation, would be, in a pecuniary point of view, a saving in process of time of hundreds of thousands, if not millions of dollars annually, to the American government and people; and it would enable the agriculturists, the manufacturers, the mechanics, and merchants of this country, to compete successfully at home and abroad with the same classes of other nations; and it would give, particularly to the commerce of this country, a decided advantage over that of every other nation; and this is, decidedly, what ought not to be overlooked or neglected. It is well known to the practical merchant, that the smallest per centage will turn the scales of the commercial world in favor or against this country. This bank might, likewise, be made very serviceable to the general government, (if deemed advisable,) by making it obligatory on the bank to provide bills of exchange on foreign cities, to be negotiated by the diplomatic corps and navy agents, when on foreign service. A bank in this country, to be popular, must necessarily be a bank of the people, devoted to their interest; and the gains, if any, over a just remuneration to the stockholders, for the risk and use of their capital, should go to them. This principle, if kept in view and acted upon with fidelity, will keep this bank always solvent, trustworthy, and serviceable to the whole country; and this fidelity to the trust reposed, would shield it in a great degree from the malignant influence of parties, corporations, money brokers, and individuals. The following are the outlines of the proposed national bank : 1. The capital of the bank should at the commencement be, nominally, 100,000,000 dollars, and the stock divided into shares of 100 dollars each, of which 50,000,000 dollars shall be called deposit stock, 30,000,000 dollars transferable stock, and 20,000,000 dollars government stock. 2. The proposed bank to guaranty to the holders of the deposit stock, the principal, and an interest of five per cent per annum on the amount deposited by them, payable semi-annually. The deposit stock to be for the exclusive benefit of widows, unmarried females of twenty-one years and upwards, and orphans of both sexes. Every $100 deposited by them, or their guardians, shall entitle them to one share of the deposit stock, and shall be by them held until the demise or marriage of the females; and by the males, until they become of age. Either of these events occurring, the certificate of the stock shall be surrendered to the bank on the first dividend day thereafter, at which time the bank shall repay to them in coin, or to their legal representatives, the amount of principal and unpaid dividends. All such certificates thus surrendered and cancelled, shall be immediately open to similar depositors, and thus to continue, until the expiration of the bank charter. 3. The transferable stock shall be open to the public, citizens of the United States, and may be obtained on payment in coin, at the time of - subscription, of one hundred dollars for each share of stock. Subscription books shall be kept open until the full amount of stock is subscribed. 4. The government of the United States shall have $20,000,000 of stock issued to them for their bonds of an equal amount, payable at the expiration of the bank charter, and to bear an interest of five per cent per annum. The difference between the interest on the bonds, and the dividends of the bank, shall be paid into the treasury of the United States in lieu of a bonus for the charter. 5. The president, directors, and all the officers of the bank, and branches that may be established by the bank, shall be remunerated for their services, but they shall be prohibited from all trading or dealing in the stock of this bank, (either buying or selling,) after acceptance of office; nor shall they ever while in office, as principals, endorsers, or otherwise, become in any way obligated or indebted to the bank. 6. Each state of the Union may, where the bank or branches are located, appoint one director to represent the interests of the deposit stockholders within their respective states. The collectors of the customs of the United States shall be directors ex-officio of the bank and branches in their districts, provided the bank have the public funds deposited with them. If at any place there should be a branch bank established, where no collector resides, then the marshals of the districts shall be ex-officio directors. If collectors and marshals should be objectionable, then congress may appoint four directors for the bank, and one for each of the branches. The transferable stockholders shall elect eleven directors of the bank, and three for each of the branches. The directors shall elect a president of the bank, and a president for each of the branch banks; the president always to have a vote upon any question submitted to the board of directors. 7. The government of the United States, should they deposit the revenues of the country in the bank and branches, it shall then be obligatory on the bank to make payments at the bank and branches, and provide for the disbursements of the navy, and salaries of the diplomatic agents abroad, free of charge or expense, when so required by the departments of the government. 8. The bank shall be located at New York, and branch or branches shall be established in any of the states of the Union, whenever required by the state authorities; not, however, more than two branches in any one state. The bank shall, on the first Monday of every month, announce in the public papers the amount of specie in its vaults, and amount of bills in circulation. 9. It shall be the duty of the president of the bank, every three months, and of the presidents of the branches, to forward to the honorable secretary of the treasury a faithful and true account of the situation of the bank and branches, with such remarks attached as shall enable the honorable secretary to see the true position of the bank and branches. These statements shall be signed by the presidents, and countersigned by the cashiers, bookkeepers, tellers, discount and deposit clerks of the bank and branches, in testimony that the items that have relation to their respective departments are correctly stated. It shall likewise be the duty of the president of the bank, at the opening of every session of congress, |