The Express.
London, England, 1864-01-04 00:00:00

TRADE AND FINANCE.

(From the Daily &Urs.)

Tuts indications of returning stringency in the
money market are plain and distinct. The drain
of bullion towards Egypt has never been arrested,
and we learn that the Bank of France is constantly
being coin, and that its specie reserve is now re-
duced below 8,000,0001. sterling.
The continental exchanges, which rallied mo-
mentarily under the efficacious measures of the
Bank of England, and the fulness of the money
reserve which apprehensions as to the futare bad
induced most of those engaged in mercantile
affairs to provide, contributed greatly to the
somewhat delusive subsequent appearances of ease. ,
A week ago general expectation was in favour of
a further reduction in the rate of discount, while
now the steady course of events leaves little pro
spect of delay in the resumption of a higher quota-
tion. The widely-spread effects of that great re•
volution in trade and commerce to which Europe
and the world have been subjected by the Ameri-
can war, became immediately evident on the re-
duction of the Bank rate of discount to 7 per
cent. The exchanges began to droop on the
inquiry for continental bills; and the additional
political disturbance in the north of Germany has
added a complication to the movement engendered
by the reviving silver demand. Those who had
sent money to this country in anticipation of
receiving 0 or 10 per cent. interest—those who
bad dehiyed their payments abroad under the
influence of the same hope—and those who I
seek to take advantage of the present moment
for silver remittances to the East, suddenly
checked a short time back, are now all intent
on completing the engagements that then were
temporarily suspended.
Nothing is more easy than in a time of pres-
sure to rally resources where resources are abun-
dant. Financial resources abound in England at
the present time ; but it is infinitely more ad-
visable to take a calm and deliberate view of our
position than to submit ourselves again to that
spasmodic action producing alarm, and, almost
immediately afterwards, wonder that such alarm
should have been experienced.
The consumption of cotton, which has steadily
increased in spite of the enormous advance in
price, and notwithstanding the substitution of
other manufactures, was sure to give rise to those
efforts owing to which the plant is now growing
under every propitious clime, not only in Asia,
Africa, and more distant parts, but in Europe
itself. It need hardly be repeated that every
great change must make itself severely felt in
some part or by some class. Even railways, while
they have quintupled the resources of civilization
and reduced the prices of provisions in such a
degree that the depreciation in the value of gold
itself has been in van neutralised, have yet occa-
sioned the ruin of a numerous host of individuals,
whose decadence followed that of tho system on
which they were dependent. In the case of cotton,
distress has, so far, fallen almost exclusively on
the wortzpeopie employed in the manufacture of
the fibre ; it is for the future to show whether
distress may not extend to other classes ; but it is
for the present to decide whether its course shall
be arrested or continue.

The evil to be apprehended from serious fican-
eial disturbance on this account lies within small
space. It is simply that of facility for 1. mist
speculation in cotton. It is sufficiently clear
from the comparison that has been previously
given, as to the prices at present and last
year, and the stocks of cotton then and at
present in hand, that little evidence exists of im-
proper speculative movement. The state of the
returns front the manufacturing districts confirms
this view. The employment for the population
in on the increase ; and some of the beat kinds
of cotton are fairly warked out. Here are all the
incentives to au extended search for cotton, not-
withstanding the unceasing and widely-spread in-
quiry already set about.
So far as capital is concerned, the time
is singularly propitious to speculation. Cir-
cumstances, often discussed and reviewed, have
favoured the establishment of banks and credit
institutions in unusual number. The ideas of
projectors have grown with the times ; and enter-
prise, become too vast for the fortunes of the
individual magnates of an age when courage,
genius, and chivalry alike enter the lista in the
contest for the prize of wealth, enlists an army of
names illustrious in commerce, to conquer mil-
lions, and to direct a new Gulf stream which is to
♦ivify with tropical warmth regions distant as the
poles, and where trade has been as little known
as the milder influence of civilization herself.

It is possible that one great reason of the spas-
raodie action of the money market—those great
throbs of the arteries of supply lately witnessed—
may lie in the change of hands which a large part
of the floating capital iu London has during the
past year experienced. The temptation to write
for shares in new banks and credit companies
Las been too great to admit the conclusion
that very many in the mercantile community have
resisted its seduction. It must not be forgotten
that every pound sterling withdrawn from private
Lands and confided to those of a company has been
the reduction of 69 much of provision against want
on the one hand, and so much premium offered to
speculation on the other. An individual whose
diminished trade has admitted of tho employment
of his capital in other directions, must recall his
loans whenever returning activity may warrant the
faller resumption of his own business ; and this is
what is actually taking place. The increasing em-
ployment in the manufacturing districts occasions the
recall of amounts that had been temporarily loaned
in London, and the impetus given to commerce
generally also calls for additional means. Meantime
the borrowers have subscribed to companies of va-
rious kinds ; and, as the money has not passed out
of the country, but is merely in other hands, those
called upon to r, pay advances are compelled to bor-
row for the neces.saryprovision they must make. As
this happens at a time when the legitimate engage-
satihts entered into in connexion with our eaten-
sive cotton search have to he met, the very denu-
dation of resources by individuals, who, like the
streandeta into an inland lake, have been draining
themselves to create one great reservoir, leads to
an application to that one treasure slot where its
own terms can be- imposed ; and, when every tem•
porary want has been supplied, satiety very natu-
rally results.
So far, then, the danger possible, apart from
political causes, is in the facility afforded by the
concentration of large means in the hands of new
companies and credit establishments, intent on
securing unusual protita, the prospect of which is
greatly favoured by the moat exceptional array of
events. No amount of warning will at every time
muffice to ward off all disaster, but if a timely sketch
of probabilities be presented, it may at least serve
eis binder the embarkation of some adventurers in
dangerous• undertaking, and to preserve fortunes
that might easily be involved in the indiscriminate
mil for an illusive prize.

Sooner or later the precious metals exported

and in course of e..port innAt return to Europe.
L Egypt, which is after all • small and quiet