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charged by dealers on what has always been counted perfectly good paper ia 12 to 15 per cent . ; for inferior paper there is no market whatever . Oar readers will naturally look to us for Koifie eiyoaition of the causes that have proiJuced the present state of affairs , and tlie probable turn thai ; they may be expected to 'take . / tnoW /> Ayi . f \ w ^ J ^ vaI ^ lw ^ . _ ¦¦ T : ¦ _ i ^ ' *
According to the Bank return made up to the 4 th inst ., the amount of notes in the till of the Bank of England was then 2 , 155 , 315 ? . This , with 550 , 720 ? . in gold and silver , making together 2 , 706 , 035 ? ., was all the ready money they had against deposits amounting to 17 , 595 , 8112 . They had no other funds but this 2 , 706 , 0352 . to meet the demands of their depositors , and to discount any bills that ^ were offered to them . And this at a time when our mercantile community , deprived of their usual remittances from the United
States , -were urgently in . need of accommodation . The amount in the till being so small , and the demand for discounts out of proportion large , money naturally rose in value according to the unerring laws of demand and supply ; and so the Bank Directors first raised the minimum rate to 9 per cent , on the 5 th , and then to 10 per cent , on the 9 th . This simple statement will , we feel persuaded , offer an easy explanation to the inquiry why the rate of interest is now so high .
" We have now to take another step , and endeavour to ascertain how it happens that our Bank Till is so low—so ill-provided to meet the pressing wants of the commercial world . As we have stated above , the Sank Tijl contains only 2 , 700 , 0002 . in notes and bullion to meet all its engagements , and to serve as a fund out of which to make advances to the mercantile world . Four
months ago—viz ., July 16—the till contained 6 , 104 , 9452 ., or two and a quarter times its present amount . The rate of interest -was then 5 £ per cent . Since that time we have had numerous arrivals of gold from Australia and elsewhere , but the precious metals have passed away far more freely than they arrived , until we are reduced to our present figures . It is not difficult to ascertain at least aoii-ie of
the causes that have produced this result . For many mouths a continuous drain of the precious metals has been going on regularly to China and India . We have been purchasing most extensively silks and tea of our ' enemies ' the Chinese , who have taken few goods in Teturn— -the balance has been paid in silver . A similar state of things has been going on in India , where , -with English money , some hundreds of miles of railway are now iu course of construction .
" Within the last few years English capital has been largely expended in the construction of railways in France , Austria , and Belgium on the continent of Europe , and in Canada and the United States in the Western World . Concurrently with this distribution of British capital all over the world we have seen the most extraordinary development of our trade generally , evidencing itself iu the fact that from the year 1844 to 1857 the figures have increased from 45 , 000 , 0002 . to 120 , 000 , 0002 .
Taking these matters into consideration , ia it a matter of surprise that the value of money should be extremely high ? Is it a matter of surprise that money should be scarce when our principal debtor , the United States , with whom we transact tft least a fourth of our whole foreign trade , is for the time being in embarrassed circumstances and compelled to stop payment ? Is it a matter of surprise that 10 per cent , should be charged by the Bank of England , when money can be readily employed in New York at rates varying from 24 to 60 per cent . ?
The question has no doubt passed through the minds of some of our readers—How long is this state of things to last ? Is there anv remedy for our present distress ? We venture to suggest one or two considerations , which may tend to remove any undue anxiety . The very fact of the high rate of interest will lead men in business to diminish , their engagements ; with a diminution of business will come a diminished demand for money ; as money becomes less in demand the rate of interest will of course fall
These causes are already in operation . Our exports are greatly diminished ; the New Xork merchants are sending back goods most recently shipped to their port , and our money dealers are avoiding , as much as possible , all new advances , even at the present extravagant rates . There is one circumstance that is very encouraging in the midst of this emergency , viz ., the absence of panic in the City . It is this great fact that distinguishes the pressure of 1857 from the disastrous crisis of
184 < 7 . In spite of numerous mercantile failures—in spite of the stoppage of the Liverpool Borough Bank—and , still more—of the Western Bank of Scotland and of the City of Glasgow Bank—with their hundreds of branches and millions of deposits , the commercial world pursues its ordinary course , not without deep anxiety and the most cautious watchfulness , but calmly , steadily , as threatened by a great calamity requiring the exertion of all its energies to ward off , and conscious that an unwise fear is the means
m . O 3 t calculated to hinder the exercise of the cool , calm judgment which alone can carry it through , any period of political or finaucial difficulty . One other fact seems worthy to be recorded with reference to the present state * affairs . The very morning that the newspapers announced the stoppage of the Western Bank of Scotland , the funds rose ^ per cent . This result surprised many , but it is not difficult of explanation . The failure of banks whose leading principle it is to receive money at a high interest from all who will deposit it
with them , has induced many persons to place their ready money in the funds , rather than expose themselves to the embarrassments that ¦ would follow from further hanking difficulties . The public are beginning to understand that it is better to invest at the present low prices in a Government security ; first , because their money is there perfectly safe ; and secondly , because it will probably in the end pay them better than even the 8 and 9 per cent , of the joint-stock banks .
A considerable portion of the forty millions that figured in the last-published balance-sheets of these establishments has been transferred to the Government funds , otherwise it would be impossible to account for a rise in the price of stocks in the face of large sales made within the last few days to provide for the necessities of the Scotch banks . Lord pAiiMEiiSTON has acted in 1857 precisely as Lord Johk Russell did in a similar emergency in 1847 . He has authorized the Bank of England to issue , if necessary , notes iu exces 3 of the amount fixed by Peei / b Act
of 1844 . He sees that what the public require is not so much money , as the conviction that they can , if necessary , raise money upon the deposit of good securities . Bankers and raoney-dealera generally have been holding large sums of ready money , far beyond their actual requirements , but simply that they might make themselves secure come what may . They have been unwilling to do any business that they could fairly avoid , or to contract any now engagements until the heavy threatening cloud of disaster had cleared off .
It is no doubt mortifying to Lord Oveb .-stoke and the staunch supporters of Peel ' s Act to see their principle even nominally violated ; hut it would be a great satisfaction to the friends of the measure if ifc should prove , as was the case in 1847 , that the Act was not actually infringed—that the Bank were ^ not compelled to avail themselves pi the license allowed by the Premier ' s
communication , and that not a single note had been issued in excess of the statutory limit . In 3847 the Bank Till began to improve as if by magic immediately the Treasury letter was issued . The same iiecessitv existed then that is now felt ; what is wanted is not the issue of more notes , but the circulation of those already issued—not capital , but confidence .
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INDIAN MILITARY PROSPECTS . The most welcome event announced by the incoming Indian mail is , doubtless , the relief of Lucknow , —a relief , indeed , to the anxious occupants of many an English hearth . The course of previous intelligence had rather led us to anticipate , with all but certainty , the glorious result now formally notified ; and althoug h our too sanguine expectations had well-nigh encountered a terrible rebuke—so
imminent was the danger of the beleaguered garrison—we may well be permitted to rejoice that all has ended happily . Yet , even in the height of our exultation , we find serious cause for mourning . The gallant Havelock and his band of heroes have added fresh laurels to formeT well-earned trophies ; but in the death of the intrepid Neill we are compelled to lament the removal from amongst us of one whose late brief but splendi d career had rendered his name a household word .
Turning again towards Delhi , it is with deep regret that we notice the death , at the early age of thirty-five ( from the effect of-his wounds ) , of the brave and highly-gifted Nicholson ; whilst an attack of cholera has cut off , in the midst of his valuable career , the energetic Commissioner Grea . tii : e » ( Bengal Civil "Service ) , whose name has been , from
the first , so intimately associated with the operations of the besieging force . AVe find , too , that the genera ! expenditure of life in the recapture of the Imperial City has far exceeded the original estimate . Sixty-one officers and eleven hundred and seventyeight rank and file are now reported to have been lulled and wounded on the occasion of
the storming alone , and we arc left to believe that the succeeding six or seven days' fighting must necessarily have involved ft long list of supplementary casualties . At Delhi , indeed , the mutineers seem to have fought with all the more obstinacy as hope abandoned thorn . Theirs , it is true , was an essentially desperate case . But even at Xjucknow , under altogether
different conditions , the resistance offered by the rebels was evidently of tho most determined nature ; and this—notwithstanding that the catastrophe at Delhi must have been perfectly well known to them at the timethis does not look as if the game of mutiny was yet played out , in the opinion , at any rate , of those moat deeply interested .
We have said "before , and in our earnestness to escape any such imputation , venture on repeating , that ' -vve aro no nl « rmiafca . But as , at tho very outset of this uuhappy insurrection , there were thoso ( ay , nnd men high in office too ) who pronounced tho discontents to have been terminated ( by the astute diplomatist , Colonel Bmoii ?) ore they had well como to a bead , so it will be no great matter for surprise if the sanio interested parties should persuade themselves , and try to persuade others , that' Iniquity was struck down like an ox' with a single blow : and that tho
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1092 THE LEADER . fNo . 399 . *„***** . 1 a ' . i ^ - ^^^ ——^ _ 1— _— . — - —* - ' - - ¦
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Citation
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Leader (1850-1860), Nov. 14, 1857, page 1092, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/vm2-ncseproduct2217/page/12/
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