cans.

veyance, by coach and horseback, is made once a month from the banks of the Rio Grande to those of the Missouri, about 2,000 miles, through districts till recently settled only by half-breed Indians and imbecile MexiFrom the latter point the post-riders again periodically take up the line of march another 2,000 miles over boundless uncultivated prairies and gigantic mountain ranges, rarely trodden except by the foot of the red man, to our remote possessions on the Pacific, fructifying the soil in their passage with the seeds of intellectual, social, and moral culture, as well as potently aiding to dispel the gloom of savage barbarity. The railroad and steamboat lines conveying the department's mails, if formed into a single route, would girdle the globe; and its ocean routes, if united in like manner, would nearly encompass it again. The tide of enlightened political sentiment wafted to the Old World by the latter promises a mightier influence in emancipating its masses from the thraldom of despotic civi! institutions than revolutionary bayonets or imperial armies ever effected.

The following table shows the amounts actually credited for the transportation of the mails, by States and Territories, and the amount of postages collected in the same:

2,843,752 06 611,420 06 1,629,292 45 5,084,464 57 4,199,951 68

The following table exhibits the number of miles the mails were transported in the several States, together with the cost in each year from 1848 to 1853, inclusive :—

RAILROAD SERVICE and cost FOR THE YEARS 1848, 1849, 1850, 1851, 1852, AND 1853.

Art. IV. FOREIGN EXCHANGES.*

EXCHANGE means, generally, the giving and receiving of one thing for another. When any article is said to possess exchangeable value, we mean that it can be given and received for something else. The general principle of exchange was well known and practiced in the earliest times. It is synonymous with barter-a system peculiar to the early condition of every country before the introduction of a particular medium of exchange.

That system of giving and receiving one article for another which is practiced by the inhabitants of any country among themselves, may be called their domestic exchange; and every banker may readily obtain a competent idea of this system of exchange, by attending to the daily operations carried on at his own counter. As the world grew older and society advanced in knowledge, and the inhabitants of one country became desirous of exchanging their products or manufactures for those of the inhabitants of another country, the system of dealing between these different countries acquired the name of foreign exchanges. Thus we had first the domestic exchanges, by which one thing was exchanged for another between the inhabitants of the same country, and then the foreign exchanges, by which the productions and manufactures of one country were exchanged for those of another or of other countries.

In addition to these two systems we have for many years had in active operation a third, and that is the exchanging of the productions and manufactures of one country for those of other countries dependent upon it, such dealings for instance as are in operation between the mother country, Great Britain, and her colonies in all parts of the world.

Foreign exchange is the system under which the inhabitants of one country exchange their productions and manufactures with the inhabitants of other countries. This has been often and clearly explained by different writers upon commercial, banking, and financial subjects, and those who wish to acquire a more extensive and thorough acquaintance with its various bearings than can be given in a paper of this kind, may consult with advantage the writings of Adam Smith, McCulloch, Gilbart, Tait, Waterston, and others, and the article "Exchange" in the Encyclopedia Britannica.

You will readily understand that if the commodities supplied by one

• We are indebted to the author, G. M. BELL Esq., Secretary of the London Chartered Bank of Australia, and the author of several valuable treatises on banking and kindred topics, for the following paper on Foreign Exchanges. It is part of an essay on "Foreign and Colonial Exchanges," which was read before, and discussed by the Banking lustitute in London, Mr. MCGREGOR, late one of the secretaries of the British Board of Trade, and now member of Parliament, in the chair. Among the distinguished financiers and bankers who took part in the discussion were JAMES W. GILBART, F. R. S., an able writer on Practical Banking, and the General Manager of the London and Westminster Bank, SAMUEL ROGERS, the banker and poet, Mr. ATWOOD, of the British North American Bank, and the chairman, Mr. MCGREGOR, all of whom paid a high compliment to the ability displayed by the writer of this article. Mr. BELL, who has kindly revised and made some verbal corrections in his essay for the pages of the Merchants' Magazine, will excuse us for omitting the part relating to Colonial Exchanges. The only apology we have to offer is, that it does not possess the same general interest to the American, that it necessarily must to the British merchant and banker. We need make no apology to our readers, as we are quite sure they will find Mr. BELL's definition of the nature and character of Foreign Exchanges at once clear and comprehensive.-Ed. Merek, Magazine.

country to another be equal in value, the exchange between those two countries must then be at par or equal; the transactions are balanced and adjusted, and nothing remains due from either side. This is in fact what is understood by the par of exchange, or by the exchanges being at par. Or, in reference to money, when for a sum of money paid in England, containing, according to the English mint, a certain number of ounces of pure sil er, you obtain a bill for a sum of money to be paid in France, containing, according to the standard of the French mint, an equal number of ounces of pure silver, the exchange is said to be at par, or equal between France and England. In other words, when the exchanges between any two countries are said to be at par, it is a sign that the debts due by the one country are compensated by those due to it from the other. But, I may remark, that this is a condition of affairs very rarely witnessed; and you can easily comprehend that in the extensive mercantile transactions constantly carrying on between one commercial country and another, the chances are very faint of the exchanges being at any time entirely at par. On the contrary you can readily suppose that they must frequently diverge more or less from this point of equality. The cause of this divergence lies in the respective operations of these countries. If the one country exports a larger amount of goods to the other country than it imports from that country, then the exchange is in favor of the exporting country-that is to say, it is a creditor to the amount of the surplus of its exports over its imports. It has this difference to receive, and having a sum to receive, the exchange is to that amount in its favor. Now where there are a great variety and amount of transactions constantly taking place between any two countries, though it rarely indeed happens that the exchanges are at par, yet there is a constant tendency to an adjustment of balances, and in this way the exchanges come in ordinary times to acquire something like a fixed rate between one country and another, equivalent in most cases to the expense of transmitting gold. Experience also shows that with every increase in the facility of intercourse and exchange, there is a tendency to an equality and steadiness of value, which becomes more and more uniform year after year, and is very much more so now than was the case fifty or a hundred years ago.

Now the most important instruments we possess for carrying on trade between foreign countries, are bills of exchange. They are called bills of exchange because they have their origin in Commerce, and are intended to represent the value of commodities passing or which have passed between one country and another. They are said to have been invented by the Jews or the Lombards for the purpose of withdrawing their property from countries from which they were expelled. They were not used in England until 1307, in the first year of Edward II. and in the fifth year of Richard II.; they were the only method allowed by law for sending money out of the kingdom. The manner in which bills of exchange were first indentified with Commerce, has been supposed to be this:-The drawer and acceptor were persons respectively residing in different countries, and the bill was an order in writing, delivered to a third person, who was about to visit the country where the debtor resided. It might happen that this person was not going to return. In that case he might advance the amount of the order to the creditor, and receive the money from the debtor when he arrived at the end of his journey. In the event of his only going part of the way, he might meet with another party who was going the rest of

the distance, who would advance him the money for the order received from the creditor, which would then be transferred. In this way it would be found that an order of this kind might be transferred to a fourth or fifth, or indeed to any number of persons. To effect these operations each party receiving the order or bill must be considered to have confidence in the drawer, or some one or more of the indorsers, and also to receive some compensation for his trouble. If the order was payable at a certain number of months after date, his compensation would be increased by receiving interest for the time the bill had to run. The progress of Commerce and civilization have led to improvements in the form of bills of exchange and the manner of negotiating them, or passing them from hand to hand; but the original principle remains the same at the present day.

Bills enter largely into the system of the foreign exchanges. When there is a balance due from one country to another, if not adjusted by a remittance of goods of some kind, or bills of exchange, it must be adjusted by that which is the medium of traffic between individuals as well as nations -that is gold! As the precious metals are the only satisfactory medium for squaring up the difference between the debtor and creditor side of an account among individuals, so they are the last and best adjustors of balances among nations.

In modern Commerce, it is the practice of merchants when they have made a shipment of goods, to draw a bill upon their foreign correspondents for the amount; and it is the practice of the parties on the other side to act in the same manner; and thus it happens that if the amount exchanged between the two countries is the same, the demand for bills and the supply of bills will be equal. The exchange, as before said, is then at par. But if the balance is more on the one side than on the other, the difference may probably be adjusted by transmitting gold. The expense of freight and insurance for transmitting gold is of course considerable; and if a merchant can obtain a bill to remit to his creditor for a little more than the amount of his debt, and less than the expense of sending gold, he will send a bill; but if sending a bill would cost him more than the risk and expense of sending gold, then the gold will be sent. So thus in point of fact, the expense of freight and insurance in sending gold from one country to another constitutes the true difference of exchange between the two countries. But from this point the exchanges will sometimes diverge so as to be a little more or a little less. This is occasioned by variations in the demand and supply of bills of exchange. Thus in the cases of London and Paris-If you can sell a bill in Paris for more than the amount for which it is drawn, the course of exchange is said to be against England and in favor of France; but, if on the contrary, you are obliged to take less for your bill than the amount for which it is drawn, then the exchange is said to be against France and in favor of England. The price of bills is fegulated like that of most other articles-by demand and supply; and these, again, are regulated by the state of trade between one country and another; the exchange being said to be favorable or unfavorable to any particular place, according as a larger or smaller amount of the currency of that place is required to discharge any given amount of foreign payments.

I have alluded to the sale of bills. This leads me to observe that the selling and negotiating foreign bills of exchange is a branch of business which, in England at least, is independent of banking. English bankers do not engage in this sort of traffic. It is carried on by a distinct class of