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Leader (1850-1860), 7th May 1859, Edition 1 of 2, Page 594, Untitled Article

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      see the uses to -which national banks are put we may congratulate ourselves that we have not gat one— -at once to advance 4 J 14 , € » 00 j 000 . To enable the National Bank to comply , with its demand , it has authorised the Bank to withhold payment of the notes it ^ issues , by promising to pay which it borrows the money of the people . At onCe , therefore , the Austrian Government suspends cash payments , and adopts a measure which should be one of the last resources of despair ,

      though it is sometimes one of the first , when voluntarily and generally adopted—as in the United States at their revolution—of ardent patriotism . It begins by an act of bankruptcy , and before it has finally recovered from former insolvencies , it again contracts engagements which it avows itself unable to meet . The notes issued by the Bank will gradually displace so much coin , which will find its way from the Bank to the Government , and thus the Austrian Government begins the

      war by a forced loan , to be expended in maintaining oppression in Italy . Unfortunately , if the cause of the Sardinian Government be better than that of Austria ,.. it takes similar improper means to uphold it . The National Bank of Piedmont has been authorised to cease from paying its notes in cash , and to issue notes of 20 francs to the amount of 6 , 000 , 000 francs . The Bank is accordingly to advance jei , 2 O 0 jO 0 O to the Government . The sum is not large ; the principle involved in the measure is very important . To carry it through the Government has found it necessary to amend what it

      formerly established as a safe law of banking , and has authorised the Bank to diminish its assets of the precious metals in proportion to its liabilities . The Government then at once vitiates the security of the bank , and disturbs all banking business , while it furtively taxes or plunders the people . It will divert to its own purposes the spare funds of the Bank , as well as-the gold and silver the Bank may collect from the people by a forced issue of notes ; but to obtain fhis little assistance it violates princi p les which mojlern experience has taught mankind cannot be held too sacred .

      The French Government is also beginning the war by a loan . At present its conduct is less objectionable than that of the other Powers ; but that it will not appropriate the funds of the Bank of Trance , authorising it in turn to withhold the money of the people , should dijfficulties arise , is very doubtful . The war , however ,-which is nominally to bestow freedom on Italy , will crush the future industry , of France , and make a long cession of fiscal extortions and fiscal restrictions essential to redeem the obligations he is at present allowed by the nation to contract in its

      To alter the measure of length or of weight could not be more troublesome or disastrous . In former times the sovereigns of Europe , who claimed the prerogative of coinage , debased the coin , while its denomination was unaltered , and so furtively plundered their subjects , while they ignorantly caused inconceivable mischief ; but , s ? nce bank notes came into use , they have played the same unhallowed pranks with them . Between 1793 and 1815 they flooded Europe with a . forced paper currency , for greater in amount than the value of all the gold yet obtained from Australia and ' California ; and the paper money of Austria and other countries -was , as much debased in a few

      years as the French livre or the English pound by the successive corruptions of several sovereigns , in barbarous and ignorant times , through many ages . Austria has not yet finally restored her currency to truth and honesty . _ All her people yet suffer from the former swindling of the government by forced paper issues ; and yet , at the very first pressure , she enters again into the same degrading , ruinous , and reprobated course . In small things , if this be a small thing—as in great things , if the oppression of nations be a great thinsT , she has learnt nothing , and seems doomed to learn nothing . She is therefore doomed , we think- ^ at least tie government of Austria is dcomed—to destruction ..

      She is now violating all contracts . She is secretly raising the prices of food and clothing , and debasing the wages of labour . Furtively , she is plundering her own creditors by paying them in a currency which , will be less than its nominal value . ' She is doing all this wrong while scientific writers are insisting with great energy on the injury which may possibly accrue to creditors from the influx of a little additional gold into the circulation of the world , A forced paper currency may be indefinitely extended , and its value , indefinitely debased , and the governments of Austria and Sardinia have besrun . the work .

      Some coin may be hoarded in those countries , but the general effect will be to banish the precious metals from circulation there , and increase in other countries the effects of large supplies of gold , against the , consequences of which scientific writers are now warning the world . Some of the first fruits of war are' confiscation , the violation of contracts , and of all the principles of property by those whose great duty it is to enforce on other men the observance of them .

      They have in their zeal , as they say , for order , let loose the dogs of war . What blood will be lapped , what bones crunched , what hallowed places desecrated , cannot now be known ^ but all the past is a warrantry that the human race in increasing freedom will continue to expand and flourish ; and if sovereigns , by falsehood and vile ambition , and profligate diphonesty , stand , as they now seem to stand , in the way of progress , they most surely will be destroyed .

      name . The measures of all three Governments are condemned by science , and those of Austria and Sardinia are direct violations of honesty . The public has lately been reminded by Mr . Cobden , and , those journals which have quoted his remark , that Sir Robert Peel , when he introduced the resolutions for altering the Bank Charter in 1844 , dwelt very emphatically on the vast influence over contracts , public and private , of even small alterations in the amount of paper currency in circulation . " There is no contract , public or private , " ho said , " which is not affected . The

      enterprises of commerce , the profits of trade , the wages of labour , pecuniary transactions of the highest amount and . the lowest , the payment of the national debt , the provision for the national expenditure , the command which the coin of the smallest denomination has over the necessaries of life , arc all affectod " by bank regulations , which could at the utmost only oause variations in the currency to the extent of two or three millions . These emphatic words are now quoted by soicntifio writers to warn the public in time against

      the possible effects of the depreciation in the value of money likely to result from the gold discoveries . In spite , however , of those , and in spite of the move emphatic teaching of much experience- —when the nations of tno Continent , and especially Austria , witnessed a confusion in i&e social anii pecuniary relations of the people *—a . suspension of business , a stop to enterprise , a Universal destruction ' of confidence , that were more disastrous than war itself-Hun spite of all this Austria is now , on a great scale , and Sardinia on a less scale , beginning the ¦ war by tampering with the currency , and altering the measure of value .

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      THE ITALIAN MOVEMENT . fSPECIALLT COMMUNICATED . ] War has " begun . Casale , Novnva , Vercolli arc occupied by thcAustrians . Turin nnd Alexandria are centres of operation for the Picdniontvse and French armies . One hundred and thirty thous and German soldiers tread the Piedmonlcse soil , inc army of Victor Emmanuel retires , doubtless to offer a field day to Austria , in the hopo , it ¦ -micccmful , of cutting to pieces or taking prisoners ttoc whole of the advance corps : if overcome , oi recruiting , either nt Alexandria . or Ooiioa , nnu formerltrace

      adopting the same strategetio line y " by the conqueror of Marcngo . Fnmihav ns 1 on with the site of the present war , m ^ T ,, ' fl honourable scars gained . on the field ol , """' thoroughly initiated in the school of noluiea ™ J . military tactics , my opinion will be iult to bow wcightf and will bo snared by all vho kno v the fact ! of the case , A victory and n defeat y U clc cide the war of Italy . A victory and n del * J oblige Europe to decide for either war pi ego . A vfotory ami a defeat will oblige Napoleon UJj to moke' a declaration which the woalcm . ¦ . and imbecility of the men who have tho direct on oi foreign AflFhirs in this vast metropolis jo pic vented them from understanding , much less anw

      OI DoSs ° Napoleon in . fight aga « . t Au-uwjj-Piedmont and Italy or not ? Does tin- « JJ whoso only true virtue is the accrocv w h wh en ho can veil his intentions , dosiro , »« ^ Blfll " g \> or Emmanuel , to render Italy free and a not . on ru does ho aim at the realisation of f ° jgh scheme . of tho greatest . genius of ^ "J Xfti century—the division of Europe into two P " ^ states / and tho suppression or neutralisation oi w

      Untitled Article

      They are not exactly hoarded , but they are guarded m the tills and strong boxes of trades Ihen there is the additional demand ' occasioned by the war for services in the field &c sn that the Bank , which has of late experienced , continual efflux of bullion , is likely to experience n similar efflux infuture ; and to- provide against it the Bank compels all who wish to ' -borrow capital to ¦ pay a higher rate for it . . From ' a . banking point uf view , considering only the interest of " the Bank there can be no possible objection to its .. course . It is what every prudent banker when he experiences the . commencement of a

      run , might be expected under similar , . circumstances to do . But the Bank of England is a national institution . It is not merely " a bank it is the authorised regulator , under the law oi the currency . It is the recipient , also , of the taxes , and may have as much as nine or ten million of the public nioney in its coffer . s . The rules for its conduct , therefore , should be somewhat different from those of a private bank , and we rather demur to its reaping the . advantages at once of a commercial establishment and r . 'government monopoly . In the latter capacit y rather

      than the former , while it carries out in spirit the old regulation of fixing by law the rate of interest it now declares a minimum rate of discount ; and this is made in a great measure , by its possession of the . public resources , the general rate throughout the country , whatever may be , and . oujrht ? o be , the value of capital in peculiar localities . In London , the joint-stock banks , and i ! . e great discount houses have immediately altered their terms for taking in deposits , and making loans in the sense of the Bank alteration ; and they will induce a similar rise throughout the country . On six months' bills the Bank is to make ad

      - vyii qia muiituo uius tut j-iciiiA . ja tu JiitlKg clUvances to its customers at 5 £ per cent . , and as such bills are common in all extensive traffic , that is already the rate at which many traders ' can borrow . A serious check is at once put en peace- ? ful enterprise , which is impeded to supply Governments with the means of destroying human welfare . As pur argument elsewhere , relative to the price of securities , rests on the increased demand for money , and its . rate in . the market , we cannot but remark that the fresh rise ih'tha Bank rate is a confirmation of our statement * . The

      FURTHER RISE IX THE RATE OF DlSCOUNt . We stated last -week , in the article which recoi'ded the rise in the . , rate of discount , that we anticipated a further rise in tho value of money , and a further fall in tho value of securities . We stated , too , that a general rise in tho rate of discount throughout Europe ,. to' 6 per cent , was expected . The former prediction has been verified , and the latter is in progress of realisation . On tho Continent the rate of interest has been generally raised , and on Thursday the Bank of England again raised its minimum rate of discount 1 per cent ., so that it now stands at 4 & . Tho immediate and practical reason for this step wns , no doubt , tho continued

      efflux of bullion from tho Bank , and tho continued transmission abroad of all the bullion which arrives from Amerioa and Australia . It may be expected , perhaps , that tho bullion which , flows from the Bank would now into the coffers of foreign banks , but this is not so . They are losing bullion as well as the Bank , or they would not raise the rate of discount . Abroad , as well aB hore all persons engaged in business who carry on their operations partly on credit , are noiy extremely desirouu to bo , as well as possible , provided with the preoious metals to meet their engagements . Tho desire is probably more potent abroad than hero , and hence there may be said to be a universal demand for the precious metals by p * rlvftto men as contradistinguished from lodging them in the hands of bankers .

      sudden fall might be due to the news , true or false , of the Russo-Franco treaty . 3 ts suddenness may have helped the ruin , but the fall in the value of securities ' , and tho ultimate loss by those who had speculated for-a rise wore inevitable , however easy they might have found it to get over the fall , had it been spread over a longer period .

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      m ± THE LJBADEB . 1 ^^ 476 , 3 far 7 .-1 a ? av

  • Citation
    • Leader (1850-1860), May 7, 1859, page 594, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/vm2-ncseproduct2293/page/18/