Let us turn to another point of view, in estimating the commercial value of the two sections relatively to each other, viz. railroads, more especially interesting in the country which owes its physical power and position mainly to their development. The account stands somewhat thus:

If the South has not built as much tonnage as it required for its business, allowing the North to carry its produce, it has not been behind in the building of railroads. It has built them, however, with its own capital. The effect of this large construction at the South, was to absorb the capital which, earned by cotton, had of late accumulated, and prevent it from going more into manufacturing. It will be observed that the South built more miles of rail in the six years to 1860, than did the West; but they did not exhaust their means in so doing. The West is prostrate under the effort, while the South was never more solid. It has now before it the roads to assist in an active development of other interests of the cotton proceeds.

The sugar, cotton, and tobacco, finds its way to a considerable extent across the country into the West States, and these roads have been built in the West section to a very large proportion with borrowed money. They have consequently been built expen

sively; far more so than those of the South. The aggregate length and cost of railroads has been as

We

These returns for 1853 are from the census returns, and for 1860 are from the "Boston Railway Times," compiled by an eminent engineer. have then the fact that the South has as many miles of railroad as either of the other sections, and that they cost per mile less than half the cost of the North roads, and two-thirds the expense of the West, a fact which shows the economy with which the South roads were built. We now take from "Stone's Railway Annual" the roads delinquent on interest of bond:

The business of the South has, it appears, paid the cost of 9053 miles of road, when the North has been unable to do so; and the West has shown still less ability to sustain that length of road. The capital supplied to the latter section for construction came from England and the East States, and was expended in a lavish manner, stimulating business and speculation, which has fallen through, leaving a disastrous condition of affairs in all that region. The roads themselves show in the declining revenues the fact that they owed their former prosperity less to the effects of free labour than to the factitious activity caused by a passing speculation. The crops of that region are not like those of the South, in constant and active demand, pressing always by the shortest road to market; they depend for realisation on short crops abroad. In ordinary seasons the price will not pay for transport by rail, while the South becomes an active competitor with the West for the supply of the North and East States by water.

The rapid circulation of the commercial value thus tells upon the banks at New York, which absorb largely the profits of the Southern trade:

The concentration of capital at New York promotes its own development, or "makes the meat it

feeds on." The manufacturers of Europe and of the East, and the agriculturists of the West and the South, all send their capital to New York on credit, and, singularly enough, to obtain credit. All Europe contributes to her apparent capital, and swells the deposits in her banks. The process is a very simple one. The European manufacturer ships to a New York factor dry goods, consisting of silks, laces, &c.; he is apprised that long credits must be given to insure a sale of these goods, say eight to twelve months from day of sale. The factor disposes of these goods to the jobber, taking his paper in settlement. This paper is generally at once placed on the market, and sold at market rates for money. Thus the factor is at once supplied with money, belonging, in fact, to his European correspondent, which he can use in any way he thinks proper, only taking care to be able to transmit money to Europe at the time that the notes taken for the goods fall due. The wholesale jobber repeats the same operation in his sale in like manner to the wholesale and retail merchant. Their paper is at once turned into cash, giving to the jobber great appearance of strength at his bank, and also a large cash capital, to be invested in stocks, or shaving paper, or any other manner fancy or judgment may dictate. The

wholesale merchant sells in like manner to country merchants, whose paper is also thrown upon the market, where it is saleable. Thus the same article, sold successively on time, furnishes the appearance of real capital to several different merchants. The same operation is repeated in the sale of the various other articles imported from Europe to this country. In like manner the manufacturers of New England furnish capital to New York. They consign their manufactures to a New York agent, and have a time draft on him discounted at their own banks. If the agent succeeds in selling the goods promptly, he has the use of the money till the maturity of the draft. Again, the money to buy this paper is not by any means contributed alone by New York capitalists. Some of the banks of South Carolina are charged with buying up the paper of Southern men through their agents in New York. Large amounts of capital are known to be sent on from Virginia and other parts of the South for the same purpose.

With the Southern banks, a preference is given to a four months' note on personal security. The manufacturers of tobacco are compelled, in order to raise money to carry on their business in Virginia, to have a Northern correspondent, upon whom they draw these bills, and to whom their tobacco must be