In a commercial point of view, California must be regarded as a foreign country. If she takes our products to the amount of the gold we receive from her, then according to the recognized principles of commerce, we may safely export this gold to other countries, in exchange for foreign merchandise; otherwise, we cannot export the full amount received without incurring a debt in some quarter. This, we think, is the true light in which the subject should be regarded. And we respectfully submit these views to the consideration of our readers with a hope that they may counteract, in some degree, the broad and unqualified doctrine of the eastern economists, who seem to regard the extension of foreign commerce as the chief end for which all men should labor, and the only object worthy of American enterprise.

Recurring to the present state of our foreign trade, it is to be observed that although the account with foreign countries was upon a better footing at the close of the last fiscal year than at its beginning, yet, the payment of the balance, amounting to more than twenty-two million dollars, which stood against this country on the 30th of June 1850, added to the excessive importations of last year, has occasioned a drain of money from the western States, that is severely felt in every department of business. From what sources, and when, are the channels of circulation, thus drained, to be replenished? Labor and machinery, operating upon the soil and raw material of the country, constitute the legitimate and principal source to which we are authorized to look for permanent amelioration of our present condition. But even this must fail without the adoption of more enlightened views of political economy than now prevail.

It may be said of men engaged in commerce that, although intelligent and honorable as a class, yet, owing to the nature of their Occupation, they are prone to enlarge their business beyond the legitimate resources of the country in which they operate. And, hence, instead of conforming to the law which regulates consumption by the standard of production, it is the nature of trade to expand with each successive expedient adopted by the consumers. Consequently, all expedients designed to sustain a community in consuming more than it produces, or in buying more than it sells, tend to aggravate the evils of overtrading.

But the present condition of the country requires no temporary expedients: a return to sound principles of private and public econ

omy is all that is needed to insure the most exalted degree of prosperity. A variety of elements, now in active operation, all conspire to produce this end.

Gold, to the amount of $50,000,000 per annum, is flowing in from California; foreign immigrants bring $10,000,000; and the accumulation of the precious metals, and political inquietude in Europe, may cause $10,000,000 to flow thence to this country for investment-swelling the annual increase in the States East of the Rocky Mountains to $70,000,000.

These are legitimate resources. But, how is this accumulation of the precious metals to be appropriated so as to promote the greatest good to the greatest number? This problem is now presented to the American people for solution.

It would seem to be the opinion of the eastern economists, that the best course to be pursued in respect to this accumulating volume of gold is to ship it to Great Britain and other parts of Europe as fast as it arrives, and exchange it for foreign merchandise; and, should we afterwards discover that we could apply it to any valuable purpose, we may then borrow it at a low rate of interest. This policy has been pursued for three years, and its fruits are in an advanced state of development throughout the land. But, in vain have been the toils and privations of the diggers for gold; vain the expectations of those who have looked to its production. as the means of promoting the general prosperity of the country; and the acquisition of California must be regarded as a misfortune and a snare, if, by reason of our folly, we should be compelled to pay interest to foreign nations for the use of gold, extracted by the labor of American citizens from our own mines.

We are persuaded, however, that the laws of trade, modified and controlled by the intelligence and enterprise of the American people, will, in due time, give a new direction to at least a portion of the gold that shall hereafter arrive from California. The scarcity of money in the interior is operating as a check upon the consumption of foreign merchandise, and as a consequence, the amount of importations must be reduced to the standard of legitimate exports. When that point shall have been attained, the excess of gold will be thrown upon the American market, and taken up by those engaged in the construction of railways and other works of public improvements. From them it will pass into the hands of the laborers, provision growers, manufacturers, and handy-craftsmen of

the interior, and thus the channels of circulation, now so nearly exhausted, will be replenished, and a new impetus given to industry in all its departments. Then, the quantity of money in circulation will depend less upon the amount of our exports, than the amount of commodities produced and consumed in our midst. This is a state of things, resulting from the laws of trade, that may be looked to with confidence, provided the production of gold continues without abatement; but it is a state of improvement which cannot be suddenly produced, especially in the western States.

That we may arrive at reasonable conclusions respecting any improvement that may take place in the financial condition of the country, during the current year, we must recur to the state of our foreign commerce, at the close of the fiscal year ending 30th June 1850. At that date, according to the report on "commerce and navigation," emanating from the Treasury Department of the United States, the balance against this country was $26,239,598. The balance in our favor for the year ending June 30, 1851, including specie exported, is $1,791,135, reducing the balance on the export and import account for the two years to $24,448,463. We have no means of ascertaining the precise state of this account for the current year: but from the data before us, we conclude that the exports and imports, since 30th June, 1851, have been about equal. And it is fair to suppose that a considerable portion of the balance against this country in 1850 has been adjusted by the sale of bonds and stocks, which will probably place the account between this and foreign countries, as before remarked, upon a fair business footing. It is to be observed as an important fact that, judging from the receipts of foreign merchandise at New York, since June 1851 a salutary check has been given to importations. The amount entered at that port for the last six months of the year being less by about $10,000,000, than during the same period of 1850. And if a corresponding reduction should continue through the balance of the fiscal year, the imports will probably fall $25,000,000 below the amount of the year preceding; a sum which will nearly correspond with the depreciation in the value of the cotton crop now going forward. And although this leaves the difference between the amount of our imports and exports of domestic produce about the same as it has been for two years past, yet, if, as we have supposed, there should be a disposition on the part of European capitalists to transfer their means to this country for

investment, there will be less export demand for the precious metals, than existed during the last year.

The precious metals are now more abundant in this country than at any preceeding period of our history; for notwithstan ling the large amount exported during the last year, the increase since 1848, coined and uncoined, cannot be less, we think, than $50,000,000. And if importations of foreign goods should not increase during the present year, the intense demand for money, which has long existed, for commercial purposes, will relax; and we may reasonably expect it to become more abundant at the East than it has been, perhaps, for many years.

Having arrived at this conclusion, we proceed to inquire into the benefits which we, of the western States, may expect to derive from an abundant money market in the East. And here we may remark in advance that, except the temporary relief which it may afford from the present want of a circulating medium, we can derive no permanent benefit, only so far as it will enable us to increase our productions. No matter how we obtain it, it will not remain, unless we make it productive. But we have legitimate uses for an unlimited amount, which if wisely appropriated, will remain permanently with us. The construction of rail-ways and other public improvements will require an amount of money which will afford an abundant circulation during their progress; and the impulse which these improvements will give to agriculture, mining and manufacturing, will so far develop our resources as to enable us to retain at least a portion of the money employed in their construction. It is through this process, chiefly, that the circulation of Missouri and other western States can be increased beyond its present volume, during the current year. But if the public works which have recently been projected in Illinois, Missouri and Iowa, should be prosecuted upon a liberal scale and with energy, they will be the means of putting into circulation an amount of money that will relieve the people of these States, in a good degree, from the inconveniences which they now suffer from the want of a circulating medium.

While contemplating this branch of our subject, we experience a profound sense of the good fortune that has led the people of the West to enter upon an extensive system of public improvement, at a time so propitious as the present. Without the prosecution of these works, we could not expect to receive and permanently re

tain any considerable portion of the precious metals beyond the value of our exports, after deducting the amount of imports. While on the other hand, if the influx of gold continues without abatement, as we have good reasons for supposing it will, for many years, our public works may be accomplished without producing revulsions in commerce like those which have occurred in other countries where extensive public improvements have been made. Indeed, in view of the present state of things, we regard the prosecution of public works in the new States as the best means of preventing excessive importations, and of limiting the operations of trade to a steady and healthy course. These works will serve as reservoirs to draw off the accumulating capital from the great commercial cities, and counteract the centripetal force of

commerce.

Having taken a glance at the financial condition of the country, and the elements in operation, we may observe, in the conclusion of this article, that the people of the United States have hitherto resisted the intoxicating properties of California gold with a degree of firmness, that few anticipated. Thus far, nearly all, we believe, have been disappointed in the results.

The attractive properties of the work-shops and machinery of Great Britain were not comprehended, nor even suspected, by the people of this country; and, consequently, they never imagined that $50,000,000 could be drawn thither from California in one short year without stopping longer on its way than the time required to change the dust into coin. But this was in strict obedience to the laws of production and trade. And had we prevented the operation of those laws, we should have incurred the penalties of speculation which would have been far worse, perhaps, than those which we now suffer from excessive importations. But even the workshops and machinery of Great Britain will not always continue to absorb the entire products of the California mines. Hence, we may begin to look for a reflux of the precious metals from that country, and with it a tide of unparalleled prosperity, provided we resist the spirit of speculation, and apply a just proportion of our means to the construction of public works, to the opening of mines, and the establishment of manufactories.