level of the lakes is quite imperceptible, owing to the smallness of their area compared with that of the ocean. It also appears, from what has been stated, that, to the production of considerable undulations, capable of injuring marine works, or endangering their stability, three conditions are necessary. First, That the sheet of water acted upon by the wind shall have a considerable area. Second, That its configuration shall be such, that the wind, moving over it in any direction, shall act upon its surface extensively, both in the directions of length and breadth. And, third, That the depth of water shall be considerable, and unobstructed by shoals, so as to permit the undulations to develop themselves to a great extent, without being checked by the retardations caused by shallow water and an unequal bottom.

From my own observations, and from what I have heard regarding the form assumed by the lake waves, and the effects produced by them, I am inclined to believe that they bear a strong resemblance to the undulations experienced, during gales of wind, in such land-locked bodies of water as the Irish Sca, which, it is well known, are very different from the long swell met with in the ocean. In all land-locked bodies of water, the waves are short and sudden in their movements, proving very destructive to whatever obstacle is opposed to their fury; but there is a characteristic slow. ness in the long movement of the ocean's swell, which, it is generally ac knowledged, renders it less destructive to the marine works exposed to its action than the waves produced in land-locked seas. It is confidently hoped that the experiments which Mr. Russell and others are at present conducting, at the suggestion of the British Association, on the laws which regulate the undulation of fluids, may lead to some satisfactory results on this subject, so interesting in a speculative point of view, and so important to the engineer.

The great area presented by the surface of the lakes prevents any ma terial variation in their level from taking place, which, in small bodies of water, would be the necessary consequence of the torrents annually poured into them from the melting snow. It is stated that a periodical rise of about two feet on the level of the lakes occurs every seven years; but the facts connected with this singular phenomenon do not appear to be very satisfactorily established. The water of the lakes and the river St. Lawrence is remarkably pure and clear. Mr. M'Taggart mentions, in his work on Canada, that a white object, measuring a foot square, may be seen at the depth of forty feet below the surface. From my own observation, however, I cannot say that the American lakes are, in this respect, more remarkable than the Lake of Geneva, the waters of which are certainly very transparent.

The rigor of a Canadian winter, covering the face of the country with snow, and congealing every river, lake, and harbor, produces a stagnation in trade, which cannot fail to have a bad effect on the commerce of the country and the habits of the people, who are compelled to complete their whole business transactions during the summer and autumn months, and remain in a state of comparative indolence during the remainder of the year. Considering the lakes in a commercial point of view, it is impossible not to regret that their navigation is open for so very limited a period. For the space of at least five months in the year, the greater part of their surface is covered with a thick coating of ice; and the same sheet of water which, in summer, floats the vessel of 700 tons, and devastates the shores

with its waves, becomes, in winter, a highway for the Canadian sledge. The centre of the lakes, where the water attains a considerable depth, is not frozen every season; but a vast sheet of ice is annually formed round their margins, which almost effectually puts a stop to navigation. Mr. M'Taggart mentions that, in the year 1826, the ice at the margin of Lake Ontario was within half an inch of being two feet in thickness; and that, during the winter of the same year, Lake Chaudiere was covered with a coating which measured no less than three feet six inches in thickness. He also made several experiments to ascertain the densities of lake and river ice, from which it appeared that the volumes of six cubic feet of lake, and eight cubic feet of river ice, were each equal, when melted, to five cubic feet of water. The ice on the rivers and lakes does not long retain a level surface. Large flaws make their appearance soon after it is formed, and the whole sheet gradually splits into pieces, which, being united together in great masses or hummocks, resist the action of the sun long after the disappearance of frost.

The period at which the lake navigation closes, is generally about the end of November or beginning of December, and this interruption is never removed before the first week of May.

The only other body of fresh water in North America demanding attention, is Lake Champlain, which lies nearly north and south, dividing the states of Vermont and New York. It is about 150 miles in length, and measures fourteen miles at the point where it attains its greatest breadth. The banks of the lake are in general low and marshy, and for about twenty miles at its southern extremity, it assumes the appearance of a river, hardly affording sufficient space to permit a vessel to turn. This lake is navigable throughout its whole extent for vessels drawing five feet of water, and several fine steamboats ply on it while the navigation is open. The principal towns on its shores are St. John's, Plattsburg, Ticonderoga, Whitehall, and Burlington, at which last place the steamboats for its navi. gation are built. It is connected with the river Hudson by the Champlain Canal, but it discharges its surplus water into the St. Lawrence by the river Richelieu, called also the Sorell, on which the towns of St. Dennis, St. Charles, and Sorell, are situated. The chief trade of Lake Champlain consists in exporting iron ore and timber; the iron is sent to New York by the canal, and the timber to the St. Lawrence by the river Richelieu. Its waters are exceedingly pure, and are subject, during the wet seasons of the year, to great augmentation. The captain of the steamer by which I travelled informed me that, in the spring of 1816, when the snow was leaving the ground, the surface of the lake rose to the height of nine feet above its summer water level. Its navigation, like that of the other lakes, is suspended for five months in the year by ice, and transport is carried on during that period by sledges, which run on its surface.

COMMERCE OF THE LAKES.

The following passage is extracted from Captain Marryatt's new work :-" How little are they aware, in Europe, of the vastness and extent of commerce carried on in these inland seas, whose coasts are now lined with flourishing towns and cities, whose waters are ploughed with magnificent steamboats, and hundreds of vessels with merchandise! Even the Americans themselves are not fully aware of the rising importance of these lakes, as connected with the west. Since the completion of the Ohio canal, which enters Lake Erie at Cleveland, that town has risen almost as rapidly as Buffalo." VOL. III.-NO. III.

29

ART. IV. CAUSES OF UNSTEADINESS OF THE CURRENCY, AND THE REMEDY THEREFOR.

RESTRICTIONS UPON THE TRADE IN MONEY.-FRANCE, GREAT BRITAIN, AND THE UNITED STATES.

NUMBER FIVE.

WE come now to inquire, "Why is it that so large an amount of capital seeking investment, should exist in France and England, while so small an amount is to be found in New England; and why is it that the amount in South Carolina and Georgia should be greater than in Massachusetts or Rhode Island ?"

In the early period of every community, those who have capital which they cannot themselves employ, experience much difficulty in placing it where the security is perfectly satisfactory; and those who wish to borrow, experience equal difficulty in finding lenders. A desires to lend $500, but those who would borrow want $750 or $1000, and his capital remains idle until he can find some one who wishes the exact sum that he has to lend, and can offer the proper security therefor. B could use $1000 advantage. ously, but, on the other hand, he can do nothing with the $500 of A; nor, on the other, does he desire to borrow $1500 from C. Lenders and borrowers lose their time, and their capital and labor remain unemployed. They are in the same situation in regard to money as they would be in regard to shoes, if each journeyman shoemaker were to travel up and down the street until he could find some one whose feet would fit the shoes he had made, and who desired to purchase. Many would go barefooted because of the difficulty of finding shoes to fit their feet, while the shoemaker would starve because of the difficulty of finding feet to fit the shoes. In both cases, the difficulty would be removed by establishing a place of exchange, called, in one case, a shoe shop, and in the other, a bank, to which persons would bring the shoes, or the money, they desired to part with, and at which those who desired shoes, or money, would make inquiry, bringing their feet and their securities to be fitted.

In some countries, men establish shoe shops, or money shops, when and where they please, and they regulate with their customers the terms upon which they will trade together. In others they are not permitted to open such shops except in certain places fixed upon by government, nor are they permitted to arrange with their customers the terms upon which they will do business, they being established by law. It is a well-established fact, that regulations and inspections tend in all trades to produce unsteadiness, and if such be the case in regard to flour and fish, it is not probable that it could be otherwise in regard to the great standard of value. The disadvantage resulting from such regulations, in regard to any com. modity in general use, is considerable, but that which results from restrictions upon the trade in money, is as much greater as the contracts for the delivery of money are greater than those for the delivery of any other commodity, being, as they are, equal in amount to the contracts for the delivery of all other commodities, including houses, lands, stocks, and property of all descriptions. We shall now proceed to examine the banking systems

of France, Great Britain, and the United States, with a view to see if we can find in them the cause why unemployed and unproductive capital abounds in England and France, while in Massachusetts and Rhode Island there is scarcely any that is not directly invested for the benefit of its owner. If we find that, in the first, legislative interference forbids the investment of capital, and causes it to accumulate in the form of currency, while in the latter a high degree of freedom tends to promote its prompt and permanent investment, and forbids its existence in that form, we shall then be able to see that the remedy is to be found in the abolition of restrictions, and in the establishment of perfect freedom of trade.

In RHODE ISLAND, at the date to which we have referred, the trade in money was almost perfectly free. Those who desired to lend out their capital were at liberty to associate for that purpose, and they appointed agents to attend to their business. After complying with certain forms, the object of which was the insurance of publicity, they were free to trade with their neighbors on such terms as they might mutually deem most advantageous. They could say to those who traded with them, "You may deposit in our hands whatever surplus money you may have, and our joint capital shall be responsible to return it to you, or to deliver it to your order; or we will give you in lieu of it our notes, with which you can pay any demands that may be made upon you. We will afford you all these facilities without charge of any kind, and we will be content if, from the use of the capital you deposit with us, we can derive as much interest as will pay the expenses of management. All that we expect to get is simple interest for our own capital."

The consequence of this entire freedom was, that in no community that ever existed has there been, at any one time, so little capital seeking investment. Any attempt at overtrading on the part of the banks would, of course, produce an increase of the currency, and an increased difficulty of making investments; but the remedy was so prompt and so readily administered, that the capitalists could at once check it. They could say to the bankers, "You are overtrading, and the consequence is, that we can no longer obtain the usual rate of interest. You are trying to make 8 per cent by making money' plenty,' and 'cheap,' and by the same measures you are forcing us down to 5. It would be perfectly in your power to do so, if hedged round by legislative restrictions; but such is not the case. We are all now equal. If you possessed exclusive privileges, you could force us to pay 20 or 30 per cent advance on cost for a share of bank stock, giving us our choice to do that or go to Vicksburg, or New Orleans, seeking employment for our capital. Your rights and ours are the same, and if you can lend out our capital for your benefit, we can as well lend it out for our own. You have a quantity of our money in your hands, producing us nothing while it yields you 6 per cent. We offer you the choice of three methods of proceeding: first, you may hand us over the notes purchased with it; second, you may retain it as an addition to your capi tal, giving us certificates of stock for it; or third, you may return it, and we will open a shop next door, at which we will lend it out for our own profit. In the latter case, you may, and probably will, find that in forcing us to open a money shop for ourselves, you are making a rival, and that

The application to the legislature was little more than a form, the charter being granted almost as a matter of course.

time will prove to you that there may be too many such shops for the busi ness to be done, as there may be too many shoe shops."

Were capitalists perfectly free, such would be their universal mode of action, until banks learned that their own interests required that they should not increase the inducement for the establishment of rivals. Under a sys. tem of perfect freedom, the traders in money would be as unwilling to do any thing tending to increase the number, as would the traders in shoes or hats. If they did, the capitalist would apply the remedy, and speculation would be checked instantly. There would then be no inducement to create houses or ships, roads or canals, in advance of the demand. The power of banks to overtrade would be diminished, and the necessity for reduction never could arise.

The gradual manner in which capital finds its way into any trade, when free to do so, is finely illustrated in this state. The annual report on the banks contains a column headed "increase of capital since last return," and in that column we find one bank adding $300, a second $500, a third $26,750, a fourth $60, a fifth $15,000, &c. In this manner capital is permanently invested as it is accumulated, instead of being left uninvested to produce disturbance and agitation. Under a system like that of Rhode Island in 1830, currency can never exceed that amount which is indispensable for the transaction of business, and it can never be more than is barely sufficient to enable bankers to pay their expenses by the interest derivable therefrom, because whenever capital employed in banking will yield a fraction more than the usual interest, a portion of the deposits will be converted into bank stock, by which operation the profits derivable from the currency will be diminished, while the amount of capital entitled to a share of it will be increased.

It will be observed that our remarks apply to the system that existed in 1830. Some years thereafter the legislature imposed restrictions upon all future associations for the purpose of trading in money, and the consequence is that the system is less sound, and more expensive.

In May, 1838, the following was the condition of all the banks:

The currency is 140 per cent greater than it was in 1830. The liabilities of the banks have grown from one and a half millions to three and a half millions. Many of the owners of bank stock now receive 7 and 8 per cent, while the owners of the capital upon which they trade, leave it on deposit returnable on demand, yielding no interest, or returnable at short notice, yielding 4 or 4 per cent. Security, steadiness, and equality, are dimin ished by law.

In MASSACHUSETTS, we find almost perfect freedom, except the imposition of a tax of 1 per cent on banks, which forbids the application of capital to that trade until it will yield a gross profit of 8 per cent, to be thus divided