The Express.
London, England, 1864-09-12 00:00:00

PRINCFS3 &

TEte Brum°, BORN TO GOOD um -Mr. D. Murray.
And THE STRICETS OF LONDON. Messrs. J. W. Ray, David
Fisher, D. Murray, J. Nelson, L. Forrester, and H. Mellon;
btn H. Marston, Misses Barnett and Gwynne.

BRITANNIA.
TRIM RVINING, THE HARLOTS PROGRESS.- Singing by Mr.
H. Clifton and Mr. J. 11. Stead; Madame Plena—Mr. G. W.
Jester.—Concluding with THS MUTINY AT Tan NUKE

MGR WATER AT LONDON RILTDOI.
THIS DAT Morning, 103 lilm.....Abenkoco, 103 LBIN.
To Kowtow —Ma lan& nix RkA•••••RWlnwak 00. OW.

LONDON, MONDAY, SEPTEMBER 12.

Tue London money market has experienced afresh
spasmodic movement, which has taken the general
public entirely by surprise. On Thursday last the
Bank rate was moved up from 8 to 9 per cent.,
although there were so few indications of pressure
that the bullion in the return for the week was
almost stationary, while the reserve had declined
to an unimportant extent. Still there was a
decline, and considering the period of the year,
the Directors, doubtless, thought it desirable to
strengthen their resources as far as practicable.
In another sense they are fully justified in making
the largest profit they can for their constituency,
although it should not be forgotten that, apart from
their private capacity as representatives of a body
of shareholders, they have also essentially public
duties to perform. Owing, however, to the pre.-
sure of the present law, they possessed no alterna-
tive but to protect the Bank to the best of theirpower,
or otherwise it might have been doubted whether
they had acted well on this occaaion. To raise
the, rate from Bto 9 per cent. is a serious step—
one which is far different from a rise from 4 to 6.
Its effect, except in extreme cases, is generally to
heighten alarm to a far moredangerous degree than
will be compensated by the benefit which may
accrue from the expected increase in the Banks
reserves. Up to a certain point, therefore, a rise
in the rate of discount defeats its own object.
The public see, under the pressure for money, the
reserve, that " writing on the wall," steadily de-
creasing, and that the demand for discount is only
stimulated by each successive advance in the offi-
cial charge. The amount of available money is
fairly set before their eyes ; they know that they
have at command only a certain amount, which is
daily diminishing ; and hence there is a natural
feeling to obtain accommodation at any cost while
it is yet procurable. In other words, precisely
those movements take place that are incidental to
the commencement of a panic.
If there is one point upon which the soundest
economical authorities agree, it is upon the inuti•
lity and positive mischief of hoarding. No course
appears more absurd to intelligent men of business
than to adopt the plan of the miser, who buries a
quantity of gold 3r silver, and thus renders
absolutely unproductive that which, judiciously
employed, would benefit both himself and others.
But it seems hardly to be perceived that hoarding
may just as well be practised with Bank notes or
any other representative of wealth as with actual
coin. It is a noteworthy circumstance that although
it is now difficult, if not impossible, to get dis•
counts under 9 per cent., the supply of money is
everywhere larv. The bankers hare considerable
resources at their command, but prefer to keep
them either altogether locked up, or let out only
from day to day. This circumstance of course con-
tributes to augment the demand at the Bank. It may
be asked why, whensuchextraordinarilylargeprofita
can be realised, bankers and other capitalists
should hesitate to take advantage of the opportu-
nity. The answer is easy—they also see the
" writing oil the wall ;" they know that as the
reserve of the Bank decreases, the more intense
becomes the desire of the public to escape being
the last provided for, and that the consequent
pressure must sooner or later inevitably react upon
themselves. Hence, for their own protection,
they hoard their resources with the same sort of
vague apprehension that induces a Hindoo to bury
his few rupees in silver. In our present system
of complicated credit this apparent precaution is of
course of no use whatever. With liabilities of
millions it is of little advantage to accumu-
late hundreds of thousands. In these days
it is impossible to expect a banker to hold cash
equal to his deposits, or one half, or even a fifth,
and the mere fact of his keeping twice as many
bank notes unemployed as the amount known to
be required in ordinary times does not materially
strengthen his position. If his general business
goes on as usual, the over-supply is more waste ; if
there is a run, the additional sum is so inadequate
to meet the crisis that it is not worth keeping.
As long, however, as things do not get too far, it
is manifestly to the immediate interest of the capi-
talists to keep the money market in as great a
state of tension as they can. Hence it can hardly
be unjust to suppose that by some tacit and un-
acknowledged course of action they contribute to
bring about that state of affairs that brings in to
themselves the greatest amount of available profit.
We have no wish or intention to cast
any aspersion upon a class of houses without
whose aid it would be impossible for trade to
exist, but simply to point out the inevitable
tendency of the system. A capitalist, in fact,
stands in the singular position of drawing an equal
profit from certainty and uncertainty. On the one
hand trade will be brisk, bills numerous, and dis-
counts in fair demand ; then comes the period of
peril, money becomes tight, the rates of interest
rise to an inordinate extent, and so long as there
is no panic everything goes well. But it is almost