The Press.
London, England, 1856-02-16 00:00:00

41nnel alarket anb tit

FRIDAY EVENING.
THE return of the Bank of England for the week
ending Feb. 9, shows the following changes com-
pared with that for the previous week :
Decrease in Circulation X 135,109
Increase in Public Deposits
Decrease in Other Deposits
Decrease in Government Securities 669,940
Decrease in Other Securities
Increase in Rest
Decrease in Bullion
Increase in Reserve
Bullion in Both Departments
Circulation, including Bk. Post Bills 19,801,406

This comparison does not show any very material
changes, though some of them involve considerable
amounts. The Government are repaying the ad-
vances made by the Bank, but, on the other hand,
their floating balances are reduced nearly 100,0001.
The Private Deposits show a large diminution. It
is probable that a portion of the amount has been
applied in liquidation of loans on private securities,
and it is also probable that another cause of the
reduction is the transfer of a portion of the balances
of the Turkish Loan. The decrease in the amount
of Private Securities suggests an inference that the
demands for money upon the Bank were small last
week. They were certainly less than in the previous
week; but it must be remembered that this account
includes the commercial bills which run off on the
4th, so that the decrease is not inconsistent with a
simultaneous demand for loans and discounts, such
as is known to have existed. The Bullion is still
under 11,000.0001., and the reduction in the week
approaches 100,0001. The position of the Bank, in
respect to its ability to grant accommodation, is im-
proved, for the Reserve is 423,103/. better than last
week ; while the addition to the Rest is unusually
large. The Bank is evidently deriving great profits
from its loan and discount ope; ations.
Owing to the continued belief in the favorable result
of the approaching conferences in Pans, the proba-
bility of a satisfactory termination in a short time to
our misunderstanding with the Government of the
United States on the Central American and the en
listment questions, and to increased activity in the
most important branches of general commerce, the
prices of almost all descriptions of Securities have
advanced since this day week, and the markets have
been supported with great firmness. A slight reac-
tion occurred yesterday in consequence of an extreme
pressure for money, and of a rumour that an exten-
sive funding of Exchequer Bills is contemplated in
order to prevent those Securities from further depre-
ciation after the liquidation of those about falling
due. But the reaction was not considerable ; it was
too sudden to be lasting; and whilst it was in pro-
gress there were occasional symptoms of a speedy
recovery. But, now that a rumour of this kind is
abroad, and it is absolutely certain that the Govern-
ment must do something to maintain the credit of
their bills, either by raising the interest, or with-
drawing a large portion, or by a combination of these
expedients, we may naturally expect a considerable
degree of sensitiveness in the financial world, which

163

neither improving commerce nor prospective peace
can wholly neutralise, seeing that the necessity
occurs at a period when the demand for money is
greater than the actual supply. At the same time
there is much elasticity in the market, and a disposi-
tion on the part of the publ;c to invest in tha Govern-
ment funds or in the best descriptions of railway
stock ; so that it is not at present probable that any
permanent reaction will set in; whatever may be the
temporary embarrassment felt by the Government in
making provision for the payment or renewal of the
March bills.

We had written the above this morning when the
following announcement reached the Stock Ex-
change :

Downing street, Thursday Evening,
Feb. 14, 1856.
Gentlemen,—l request that you will make it known in
the usual manner that, on Monday next, the lath inst.,
at one o'clock, Lord Palmerston and I will be ready to see
any gentlemen who may be willing to contract for a loan
for the public service, in order that we may afford them
information as to the amount of the loan, and the time and
manner of the bidding.
Lord Palmerston and I will at the same time communi-
cate to the gentlemen present the conditions upon which
we shall be prepared to receive offers for funding a portion
of the Exchequer Bills now outstanding.
I hope it will be convenient to you to meet those gen-
tlemen at the Treasury at the hour named.
I mu, Gentlemen,
Your obedient servant,
(Signed) G. C. ',swig.
To the Governor and Deputy Governor
of the Bank of England.
This letter took everybody by surprise, and the effect
of it, as described below, was very great. Various
rumours are abroad as to the extent to which these
operations will be carried; and the general opinion
is that the loan will be for 15,000,000/., and that bills
to the value of 5,000,0001. will be funded.
Money has been exceedingly tight all the week.
The demands upon the Bank have been to a large
amount daily, and the discount houses have found
profitable employment for all their funds. In the
Stock Exchange, owing in some degree to the railway
settlement which was completed to-day, and to pre-
vious loans upon Stock having to be repaid, the
demand assumed extraordinary proportions yesterday,
and the average rate for short advances was as high
as eight per cent. The number of country bills sent
up for discount is greatly upon the increase; and this
branch of business has for a long time been so pro-
fitable, that a new undertaking, with large capital
and an influential directorate, is in course of estab-
lishment, with a view to extend the joint-stock prin-
ciple exchu,ively to discount transactions.
The import of gold during the week has not ex-
ceeded 18,0001. The continental demand is still
rather active.

Consols, which closed last Saturday at 911 to 1,
opened yesterday (Thursday) at 92 to for money,
and for the Account at 921 to 4. They advanced to
921 to 1 for money, and 921 to f for the Account,
which were the highest prices that have been reached
for many months past. But the reaction referred to
above, which was in some degree accelerated by un-
favorable anticipations of the nature of the monthly
balance-sheet of the Bank of France, set in, and the
price at the close was 924 to for the Account, and
92 for money. To day, however, a most complete
revulsion took place, in consequence of the Govero-
ment letter. Consols opened at 911 to 92 for the
Account. and they immediately fell to 914 to i. But it
was noticed that before official hours, a jobber, who
is supposed to know the limits within which the
Government broker will deal, was selling a large
amount of Stock at rates below the then market price.
For example, when the official quotations were 911
to 92, be was selling at 914. These operations
caused a decline to 914 to 1 ; that was about the
price when the Government broker made his appear-
ance and read the Chancellor of the Exchequer's letter.
Prices immediately fell to 904 to 91, with a marked
tendency to go lower, and strong feelings of dissatis-
faction were expressed, both at the delay in making
the announcement, and at the operations which had
been effected previous to it. At length, a leading
member directly' accused the Government broker of
having made a previous communication of the im-
portant fact to the party whose operations have been
described, and the committee were called upon to
investigate the charge, and to hear the defence.
The inquiry was forthwith opened ; and, after having
occupied two hours, it terminated in an acquittal
of the Bank broker from the serious charge imputed
to him. The resolution was to the effect that the
committee had unanimously come to the conclusion
that Messrs. Mullens and Marshall were not aware
of the communication from the Treasury to the
Bank, and that consequently they could not have
acquired the information which it was alleged they
had communicated. The affair occasioned great ex-
citement while it lasted, and it temporarily put a
stop to business. Consols finally closed at 94
to 1, making a fall since yesterday of two per
cent.

Railways have not shown much movement during
the week, but the advance which took place simul:

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