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April 21, I860.] The Leader and' Salti7*...
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THE BANK AND THE DISCOUNT BROKERS. TH E ...
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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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The Price Of French Aip. E Yent Christia...
any other coalition that would prove available for good . It Is ' remarkable to notice how unreservedly Sardinian statesmen speak of the existing peace as only a truce , and yet we do not get a glimpse of prudent foresight on the partof the chief European Powers . The annexation of Nice and Savoy alarms Prussia for the safety of her Bhenish provinces , but the benighted Government of Berlin , revelling in all that stupidity which the IIumbolut correspondence has disclosed , seenis determined to help the schemes of Francs , and annoy the Khinelanders by oppressive taxation , vexatious meddling , ami billeting of soldiers on private families . The German Governments will not sse that their safety consists in making their people thoroughly contented , and establishing a system which will contrast favourably with the clever though unscrupulous despotism of France .
" We . do ' not wish to isolate England from other Powers , if a just and useful common ground of action can ba obtained ; but ifthese Powers will . not concede thus much , we must be content to stand alone as the supporters of sound princip les and the most industrious'manufacturers of Armstrong gun . ? . ¦ Let us , however , while we blame our ' . neighbours for causing their weakness , not forget that the want of reform in our naval administration deprives . us of our natural strength . Even Sir Charles Napier ,. though a pertinacious stickler for flogging , lias , at . last , found himself obliged to . surrender at discretion , and he has plainly pointed out to the House and to the country the changes that " must take' place before manning our navy can ba successfully carried o ; i . Were the right changes introduced , the
last hope of competing with us at sea Would be destroyed , and our . Statesmen would find ' that greater deference would ba paid to . their advice , whether it bs given in congress or addressed to an individual state .
April 21, I860.] The Leader And' Salti7*...
April 21 , I 860 . ] The Leader and' Salti 7 * day Analyst . 369
The Bank And The Discount Brokers. Th E ...
THE BANK AND THE DISCOUNT BROKERS . TH E Bank of England has again raised the rate of" discount . It is now 5 per cent . The dividends have been paid ; the money has been taken from the Bank for most of the public salaries j and the public deposits are reduced to an approximation . the normal sum . They were £ 10 , 38 1 , 110 on March 28 , and £ 5 , S 73 , 135 on April 11 th . £ A , 5 . 0 » ., 975 of money paid into the Bank on account of Government has boen sot . free . Nevertheless , there is not . eascj in the Money Market , such as usually follows the payment of the dividends . This is a curious circumstance of wludi it is needful ' to give a brief explanation .
We put forward as the prominent features of the case—1 st , I lie fact that the bulk of our trade is carried on b y credit ; 2 ml , Tliat this sort of business can no more be settled without small change or credit , notes , or sovereigns , than a ; retail trade can be carried on and settled without ¦ ¦ . shillings , ' sixpences , and pennies ; and , 3 rd , That the State has taken on itself , in order to give security to trade , to supply such . ' a ' small credit-currency , making it a legal tender , the amount of which it regulates and restricts . Without this legal tender , few or no bills can bo cashed , no balances liquidated , no ' pecuniary obligations finally discharged , and therefore it is clearly of first-rate importance to consider the amount created and in circulation , in connection with the amount of business to be done ,
Our trade seems to have returned to its normal state , from the convulsion of 1 S 37 , about the beginning of 1859 . Then > vhat may now be called the customary and progressive increase of trade had again begun and was going on ; and then the notes issued by the Bank of England , or tho amount of legal tender authorized by the law , was £ 33 , 013 , 1350 , and of this , 61 ^ , 101 , 000 reauiined in the Bunk . ; the other part , with u small addition pi ' Bank . , post-bills , making together £ 21 , 70-1 ,, 043 , was in tho hands of the publics , or constituted the circulation . The Bank cent 1850 tho
minimum rale of discount was then 2 J- per . In , vnluo of our exports , which wo refer to as an index to our whole trade , was JBJLSO . -i 1-0 , 437 , against £ 110 , 008 , 750 , in 1858 ; in 1 $ 5 J , tho value of exports had increased £ 1 . 3 , 831 , 071 . This is equivalent to an increase of 20 por cent ., which wo may assume to represent tho increase of business in society . In tho present year tho value . of tho exports for two months was je 20 , 0 S 8 , ' 437 , against £ 19 , 207 , 500 in the corresponding months of 1859 , indicating increasing activity of enterprise , and u further extension of trade .
At the commencement of this year , howover , tho amount , ol Ugnl tender issued was only £ 30 , 890 , 085 , and of f \ ii * £ 8 , 1 , 05 , 590 wns in tlio Bank , and £ 23 , 030 , 090 with Hank post bills , in the hands of tho public . Tho Bank minimum nitu of discount remained lit 3 , i per cent , ( f £ 33 , 0-1 , 3 , 350 wore not too mueli Idft-al tender in 1859 , £ 30 , 39 , 0 , 035 was at lousjt £ 3 , 000 , 000 too little in 1800 . If a reserve of notes in tho Bunk of £ 13 , L 0 . 1 ., 000
was not too large in 1859 , a reserve' of only J & b , 4 Ga ., 590 was too small ,, iu 1800 . - At the same time the increase , of the circulation showed that the demand for money had increased . The public saw how much the legal tender was curtailed , while the business : was increased , and necessarily anticipated that it would becoms dearer . A commodity in universal demand was supplied , by comparison , in insufficient quantities , ami rumours announced an increase in the Bank rate of ''
d-iscount . Accordingly , the dividends on the debt were no sooner paid in January than the B : mk raised the rate of discount to 3 per cent ., at which nobody , who . looked at the facts , even grumbled . In a fortnight it raised the rate , to 4 per cent . ; then , at the end of March , to 4 Jr ; and hist week again to 5 per cent , Arise from 2 h to 5 per cent , in ten weeks recalls periods of commercial distress and convulsion , and excites some consternation as to what is next to happen . Political disquiet is not so fatal to trade as a rapid rise : in the value of money .
Affairs are , at present , somewhat more complicated than usual by a difference which has arisen between the Bank of England and the bill brokers . We have no inclination to take the pail of either , but we have a strong wish to . iri . iko the public awaiv-of the circumstances which have led to it . Of course the convulsion of 183 7 , the consequence of too much credit , manifested itself in part through the bill broker ,- ?; ¦ an d their demands Tor discount at the . Bank brought it into -tlw condition of . requiring , the law to -W . suspended . __ 1 n consc'qucnc .-of this , the Bank of England , aft ^ r much deliberation , came to a resolution in 185 S , that no discount , broker should have a discount account at the Bank . This resolution was-remonstrated against ; at . the time . On tli 3 one hand , it was Said that- th-3 Bank was fully at liberty to choose its own . ¦ ¦ customer ' s , and that it did right in excluding rivals from access-to its resources , who used them to enrich themselves and . 'i ' pster unwise speculation . 'Admitting / the liberty of the Bank , it was stated , on the other hand , that this resolution was a great injustice anil injury to one class of dealers . The Bank , at once the . instrument . for creating legal tendor and the banker of . the ( Jovernnient , did- ' wrong , it was asserted , by excluding : one class of dealers from a lair-share ¦ of the accommodation , which it isaccustomed to give , the public towards the elo . se of every quarter . By giving this auL-o-ininoda-:. tion , it wisely neutral i' / es tjia injury , done to commerc ; by the abstract roil- quarterly from its us .- of a quantity of ; Legal , tender varying fro . n ¦ . ij t . OlJO . OO'U t : > t !> , OI ) 0 , 0 !) 0 , and lo . lg ul by tlu ; G-overninsnt in tin Bank to pay . ¦ dividend * and'other charges . This argiim . mi , however , had no elf .-ct on tli-y ' lVmk . It ; stucl-c to its resolution . From th . T tinu-of passing it , in ISStt , to th-j ' coinmonneinent of the present year , legal tender continued abundant . The rate . of discount continued low . In the . beginning . of thi ! year the for in . !»•• had diminiski'd , as compared to January lSr > 9 , by £ 3 , 752 , 505 . Tin ; rate ol' discount was . then raised , and ever sines ' legal tender has been scared , and the rate ol" discount has continued to riso . Solar as the climax of scarcity has yet been reached , it was attained just before the dividends were paid . in , the week ciuL'd April -Hli , whon the private securities or advances nudi ; by tho Hank reached £ ^ 5 , U 0 l ) , 0 'J () , a siiiu alin'Ht unexainpliid , oxcopt in a . season of great ; exdtuiiutiit and great speculation . Only now , therefore , oivsiuej January , and in the cpiartcr just . expired , have the discount , brokers sullVred much iiHiimveniriiir . by being t-N-eliuled from ¦ ¦ disuoiinking with l ; hi ! Bank j ( Uid they felt the " inejnvenieu ( H ! more and more severely as the (| uiuitity of U'v ; a \ tendt-r b . uMino more and iihmv ciurtailcd . In sjjili ; of repeated applications tho Hunk continues to exclude , them , and now they Jmvo removed , as t . hey have a ]) i : rl ' ecL right to do , their doposits ' from . tin ) Bank , which , with a very unusual niuss ol : ^ oourittes in its possession , lindi itsulf with a very smull n-varvt ; . Tho public id threatened , should any demand ari . se for bullion — should th « eJvohan ^ - ' .-J , by the mjcussity to pureha . so corn , turn against us— with auoUier Bank Sii 3 |> en- * ion . ¦ liy Uie ( jimrrrl butwi \ . t tin ; groat niunicd powers of tliu nmtropolin , tlio iiioiicv market , ia deranged , mul alunn provails . There looms , throujjl ^ tho small rawvva in tlio JJunk , and the cliaiinishmg qiiuntilv «> 1 li' «> -al Lendor , dillioultiud in tho dUluiiue for coinmerco , winch have already seriously , chocked ' critcrprho iu < lllJ manulactnnng districts . AVe shall mnko tho loatling l' » ot » of tho man inoro apjuinmt by placing thorn bol'oro tlio roador in n tabular form . lho notes issued by the Bank eou . st . ilnto tliu total amount ul . iiidispousable legal tendor created by the diroetion of tho J ^ gislature for the us « of ooiuineruo ; fuui this is , suo , with tlio vutforvu ot the Bank , the notes in tlio hands of tho public ,- tlio pub ho deposits , and the private soouritiiw on advances miulc h , v the Bank , wore , at tho coinuHinooinont of January , 1 W ) , ixxul ol Jununry lust , nml l ) y tho Luot returns , im follows : —
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Citation
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Leader (1850-1860), April 21, 1860, page 5, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/cld_21041860/page/5/
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