The Express.
London, England, 1855-10-22 00:00:00

THE BANK OF ENGLAND AND THE BANK OF,

FRANCE.

, The Bank of England hu again rained the rate of
dimmest to 6 per cent. upon bills not having more thus
sixty days to run, and to 7 per cent. upon bills having more
than sixty and not more than ninety-five days to run :—for
longer dated bills no mioimum rate is fixed. The Bank of
France has also raised the rats of discount to 6 per ant
Theeechanges have taken place in the few of return
whisk would sppear fully to justify some action is that
direction. The monthly returns of the Bank of France
made up to the 11th inst. show a farther reduction is the
amens of bullion equal to 2,280,00 W. The bullion in the
Bask at Paris sad the branches amounts by that
return to 9,240,0001. The bills under discount show as
lacrosse of 2,000,0001., amounting to the sum of
19,200,0001. The weekly uterus of the Bank of Eng-
land made up to the 13th show a further reduction in the
bullion to the amount of 627,0001.; but the securities, both
public and private, show also a considerable reduction.
Thus, for two successive weeks, there ha now been a
decrease of private securities, which would indicate that
the pressure for advances hatelessoned.
The decrease of bullion, however, still continues steadily
week by week ; and it is understood that during the last
week aisles tissee—setaves were made up there his bun a
further diminution. There aro, however, reasons for be-
lieving that the recent demands upon the Bank have not
arisen so much for exportation as for home use. The
necessary accompaniment of scarcity in any article is a
disposition on the part of mummers and dealers to increase
their stocks, and to hold with greater pertinacity when
priers are rising. This Is peculiarly true as regards
money. If scarcity is apprehended and prices are
rising, every merchant and banker throughout the
country strengthens his mane, sad is less disposed to
part with whet he has. An mutual pressure from this
am is crested for discounts, in anticipation of the time
when the money will be wanted. More bask notes and a
larger stock of cobs are told by country bankers than usual,
and although the (screen of coin in each establishment is
not serious, yet, when we consider their number, the aggro-
gate effect upon the Bank of Ragland, the only source of
supply, is serious. There is no doubt, then, that the recent
pressure for discounts and demand for gold have both been an•
avoidably aggravated by ‘hose ceases. Another reason which
has led to the withdrawal of coin from the Bank is the
usual demand which is invariably experienced on the pay-
ment of the dividends. . . . .

It would thus appear that there have been two awes in
operation, one abroad and one at home, which have at least
considerably aided in producing the recent drain, but both
of which have been of an anticipatory character, sad which
are likely therefore to lead to some early, though perhaps
not very strong, reaction. The operations by which bullion
has been withdrawn to the Continent must have to • great
extent been performed either by collecting &relish bills for
the purpose, and thus treating a future scarcity when they
would otherwise have come forward in the ordinary course
of business, or by drawing bills expressly fur the purpose,
which might easily be done by the greet exchange bankers
without excidng much attention, and especially if they were
pat into circulation through indirect channels. To some
extent we have reason to believe such was done. But then,
as theirs bills become due, means must be found to provide
for them, end unless another set of bills are put in circuit'
tion to meet the first, and sent to the Bank for discount, a
considerable portion of the bullion must soon return. But
as it will be • matter of calculation of the cost, to some
'Etna, whether those bills will he redrawn, the obvious
tendency of the high rate of discount in London will be to
induce to the transmission of bullion. In whatever way,
therefore, the large amount of bullion recently exported has
been paid for, it is certain that sooner or later swat the
balsam be restored to this country. At the present time it
may be said to be represented by bills now under discount
in London.
Again, so far as regards the intent] causes of demand, if
beakers and others have strengthened their reserves, not
only will that operation not require to be renewed, but the
additional balances now held in *seas of the ordinary
amount will in the coarse of time And their way again into
employmsat, end lead to 'corresponding mein the demand
upon the Bank when such takes pleats.
We are is so way disposed to blame the Beak directors
for the sours@ they have adopted to meet the pressure upon
then by raising the rate of discount. It is the only legiti-
mate means by which a drain can be counteracted, and if
they had net dose so, it is certain that already large amounts
of apical would have found their way out of the country
for use abroad. Indeed, if we would blame the Bank at all,
it would be for postponing that policy so long. Having
reduced the rate of discount in Jane to 31 per cent. when
the bullion stood at 18,000,0001., they witnessed
a rapid reduction week by week, and took DO
steps to avert it, until, on the 6th of September, the bullion
having fallen to 14,217,0001., they raised the rate to 4 per
Dent., and then by rapid strides week after week, with
only two intermissions, until it reached the present high
rate, and thus naturally tended to create mush alarm sod
excitement. If they had began at least Ave weeks earlier.
when the bullion had fallen to 16,000,0001.,and raisedthe rate
of discount more gradually, not only would it have been
more 'factual for the object, but less alarm would have been
excited. While, therefore, we are rather disposed to find
fault that this course had not been taken earlier than that it
should to taken at all, we are at the same time anxious to
impress sport the public that, acting upon sounder principles
than at any former time, the Bank directors have taken
these stringent end precautionary measures at • period
when their resources are much less exhausted than they wets
in 1847, and that there is every reason to hope that the
coneequenc• will be to prevent any sash disturbance as then
took place. Just let us glum* at the condition of the Bank
sow and at that time. _ _

By the returns in the present. week the condition of the
Bank stands Si follows :

BANIC. OF SNOLAND.
Rates of discount, 6 per cent. and 7 per cent.
Bullion in the Bank £11.752.000
Private securities
Rogers@ of notes 4,657,000

On April 3, 1847, the bullion was reduced to 10,246,9001., '
the private securities stood at 18,136,0001., goo the reserve
of notes at 2,832,0001., sad up to that time the rate of
discount was kept at 4 per cent.
On the 10th of April the bullion had fallen to 9,867,0001.,
and the reserve of notes to 2,558,0001., cud the rats was
robed to 5 per cent ; and, without any material change in
the condition of the Bank, it stood at that rate till the 7th
of August, when it was raised to 5! per cent.
Oa the 18th of September the rate of discount was raised
to 6 per east. ; but at that date the bullion was reduced to
8,800,0001., from which it gradually fell to 8,313,0001.. with
• reserve of notes of only 1,547,2701, w►en the rate was
again raised to 8 per cent., and in the following week the
reserve was reduced to 1,176,0001.
Ls 1847 the Bank was justly blamed for not taking
stringent measures sufficiently early as the chief 1819011
why the monetary difficulties became so eggravated.
When the rate of disoount was then refold to 6
tee ant., the bullion in the Bank was reduced
below its present amount by about 3,000,0001. There is,
therefore, every lesson to hope that the earlier precautions
now taken by the Bank will keep the country secure from
the derangenteat which it suffered in 1847. 'bads is
sound; pekoe are high and importations are profitable, and
likely to remain so, stocks being solo+ ; and whether money
be a little dearer or a little cheaper is • matter of leas con-
sequence, 11 only credit besot dersoged.—Bccuomiet.