The Express.
London, England, 1864-10-17 00:00:00

effect.

The most noteworthy feature in the last Bank
return was the small increase in the bullion, only
about 8,0001., while 176,000/. was known to
have been taken to the Bank during the week.
It thus appears that a remarkable absorption of
coin is still going on among the public, though for
what purpose it is hard to discover. The moat probable
conjecture isthatthe country banks, alarmed by the
failure at Leeds, and apprehensive of a pressure
from their more timid customers, are strengthening
their position by increasing their specie reserve.
At first sight it would appear that this conclusion
does not tally with the large augmentation in the
other deposits, but it should be borne in mind
that the balances of country bankers are chiefly em-
ployed through the discount houses, and would
not, therefore, materially affect the latter item.
Again, notwithstanding the revulsion in the cotton
market, the trade of the country continues large
and extending, and necessitates the use of a cor-
responding increase in the circulation. Altogether
the slow recovery in the bullion at the Bank
affords no cause for uneasiness, although, un-
fortunately, it forbids the hope of an early
reduction in the rate of discount. It should
not be forgotten that under the present law the
rates of discount are regulated, not by the amount
of gold held by the nation, but simply by the
small portion possessed by the Bank. In ordinary
times this system acts fairly enough, but in periods
of disturbance it gives to a few establishments the
power of exercising great pressure upon the general
community.
By the last account the reserve of the Bank of
England showed but a very partial recovery from
the previous heavy decline, owing to the increased
demand for money. The public had evidently
taken alarm, and unable to obtain accommodation
freely elsewhere, on the anticipation of an almost
immediate rise to 10 per cent., had msde large
applications at the Bank. It was clear, however,
that the money thus drawn out was not really
wanted, a considerable portion returning to the
Bank through bankers' balances. Fortunately no
adverse circumstance occurred, such as an im-
portant failure, or exceptional withdrawal of gold,
or the alarm might very easily have degenerated
into panic. It cannot be too often repeated that
the prominent defect of our present law is its ten-
dency to excite distrust and apprehension, unwar-
ranted though they be by any substantial ground.
This pointwas clearly shown by the events of the
past week. The fact that from various causes the
public had required a larger amount of notes to be
in circulation than usual, although harmless
enough in itself, sufficed for some days to place
the money market in a somewhat critical position.
It is true that there has been a speedy reaction,
but it would have been much better if neither the
adverse movement nor the recovery had occurred
at all.

It is a matter for legitimate congratulation that
the commercial failures that have lately been an-
nounced comprise hardly any houses who have
been obliged to succumb to the pressure of the
times. The disasters in the North are readily
traceable to the break down of the Leeds Banking
Company, and those in the cotton trade are easily
accounted for by the fluctuations in the Liverpool
market. It was generally understood that the specu-
lative advance in the price of cotton could not ulti-
mately be maintained, the only question being where
it would stop. Everybody appeared anxious to buy
on the chance of re-selling at an improvement, and
thus, although the market price of the staple
was unduly enhanced above its intrinsic value, the
rise continued for some time. At last came the
reaction ; the markets fell, and with them a num-
ber of weak speculators who had contrived to do
a large business with scarcely any capital. It wee
perfectly well known that a fall in cotton was cer-
tain to be followed by some failures at least, and
hence their announcement ham created comparatively
little surprise or harm, Of the London establish-

THE

ments that have stopped it would aspegeifrom the
state of their accounts that in raliat ciTseitteir
position was, to say the least, exceedingly weak,
or that they had experienced such exceptional
losses as might have occurred at any time. The
most satisfactory feature is that nothing has
hitherto transpired to show any radical unsound-
ness in trade. The absurd and chimerical fears
that in the commencement of the year appeared
in a port lint of the press have been abandoned even
by their authors, and we hear nothing more of
the " junior clerks " who by the competition of
the new banks would be able to cause
a crisis. The " competition " theory has also
lost favour, since it is rather difficult
to prove that undue banking accommodation exists
when the rate of interest is as high as 9 per cent.,
notwithstanding the increased supply of capital in
the discount market For the moment, commer-
cial affairs appear to have rallied from the dis-
turbance of last week ; but whether there Ism
been any permanent improvement it is as yet
impossible to judge.

rbt Court.

BALMOItAI.. Ocr. 14.

The Queen, accompanied by Prince Arthur and
attended by Lady Augusta Stanley and the Hon. Emma
Lamellas, drove yeet.erday to the Lynn of Mut*.
The Dean of Westminster left the Castle in the morning.
The Hen. Sir Frederick Brine arrived at the Castle in the
evening. ...

Om. 15.

The Queen, attended by lady Augusta Stanley, went out
yesterday morning ; and in the afternoon her Majesty went
out driving, accompanied by Princess Helens and Prima
IwoPold.
Visootuatess Jocelyn arrived at the Castle as lady in
Waiting upon her Majesty.
Sir Gauge Grey had the honour of dining with the Queen
and royal family.