The Press.
London, England, 1857-01-10 00:00:00

PH* Market nab gitg

FRIDAY Evv:NrNo.
Tue. return of the Bank of England for the week ending
the 3rd inst. shows the following ci.augcs compared with
that for the week preceding
Increase in Circulation ..
Increase in Public Deposits
Decrease in Other Deposits
Increase in Government Securities 399,403
Increase in Other Securities
Decrease in Bullion 47,905
Increase in Rest
Decrease in Reserve
Bullion in Both Departments .... 10,18'2,406
Circulation, including Bank Post
Bills

The increase in the Bullion shown by this comparison
is unimportant. The amount in the Bank is still above
10,0:f0,0(s4., and it is about 250,000/. more than was held
in the corresponding week last year. Still the decline has
now continued for three or four weeks, and if it continues
the Bank Directors will at once extinguish the existing
hopes of money becoming easier. The Reserve shows a
large falling off, attributable partly to the addition to the
Private Securiti es, and partly, it may be presumed, to the
addition made to the Government Securities by advances
upon deficiency bills, the issue of which was indicated in
the revenue tables published last week. Both these items,
the reduction in the Bullion, and the falling off in the
Reserve, may therefore be referred to incidental circum•
stances. There is reason to believe that had it not been
for withdrawals to pay for silver bought upon the Con-
tinent, the Bullion would have shown a slight improve.
merit, as coin is now finding its way back from Ireland.
The other items in the comparison do not call for
observation.

The heavy demand fur money which prevailed last week,
owing to the preparations to meet the commercial accept-
ances at maturity on Saturday, and the settlement of
annual balances, has been succeeded in tho present week
by a period of perfect calmness. The market, indeed, has
been very quiet, and altogether things looked brighter.
On Monday there was a good deal of inquiry, but the
banking and discount houses were found to have good sup-
plies. The next day the best paper was freely discounted
at 5i per cent., and on Wednesday at 51 per cent., or be,
low the Bank minimum, while the applications at the Bank
were comparatively few. From this state of things, impres-
sions arose that the Bank, before long, would find itself
compelled to reduce the rate of discount; but on the other
hand equally strong impressions prevailed in other
quarters, that the commercial demand fcr money was likely
to become so active almost immediately, that capital would
maintain its present value. Both these opinions are still
held. Yesterday the payment of the dividends commenced

SATURDAY,

—__ -
but it produced no part iculareffect upon the market, as the
public received but inconsiderable amounts, while the re-
mainder was absorbed in repayments to the Bank of ad-
vances obtained during the shutting. But, although, as we
have previously stated, there is no expectation of money
Pilling below 5 per cent., we see no reason at present to
disagree with those who believe that the rates may shortly
be reduced from 0 to 5i per cent. The commercial de-
mand certainly is likely to become extremely active in a
few weeks, if not sooner; but we know some houses who
are abstaining as much as possible from applying for dis-
counts on the present terms, in the expectation that their
patience will be repaid by lower rates. Indeed, with the
dispersion of a sum of about 10,000,0001. during the next
six weeks, most of which will immediately seek profitable
employment and a large portion be applied to permanent
investments, it is impossible not to anticipate good reserves
in Lombard•street, which, again,must tell upon the discount
operations of the Bank, so that we look to the natural
effect of competition for a reduction, though we admit, that
the reduction when it does come must be small, and that
it may possibly be followed by a good deal of pressure.
To day the demand for commercial purposes was quiet,
and the supplies in Lombard-street and at the joint.stock
banks were more than ample. Rut a circumstance oc-
curred most unexpectedly, which may possibly neutralise
the tendency towards ease. The Bank Directors, without
previous intimation, and to the surprise of the Sock
Exchange, increased their charges for advances upon Go.
vernment Securities from six to six and a half per cent.
In the general money market this resolution produced no
effect, as it has no relation to discounts, beyond creating a
sensible abatement in the confidence of those who antici-
pated lower rates—among whom we reckon ourselves. As
no explanation has been vouchsafed by the Directors of
this proceeding, we can only give such as we have heard.
One is, that it was adopted in order to make an additional
profit out of those holders of stock who required advances
before the opening on the 16th. This explanation we
cannot accept. Another, and more plausible one, is that
the Directors were determined to counteract arrangements
which they were informed some days ago had been or•
ganised to borrow notes upon stock at one department, in
order to exchange them for sovereigns at another, and
then transport the gold to the Continent for sale. The
six-per-cent. rate would leave a trifling profit upon such
operations—operations which, it may be remembered,
were carried on upon a great scale in October last, and
only ended by the Bank refusing to lend upon stock, first
for periods beyond seven days, and next altogether. What-
ever was the cause for this policy, it was no doubt one of
an adequate character; and if this explanation, as sug-
gested to us, is correct, it will soon be thoroughly undei-
stood, and rather strengthen than weaken the Money
Market for all the purposes of legitimate commerce.
From France we have no great improvement to notice.
There is some, but it is inconsiderable. Hopes, however,
are felt, now that the disputed points with respect to Bel-
grad and the Isle of Serpents are settled, and the
Neufchatel difficulty is in a fair way for amicable solution,
that general trade will revive before spring. The Frenct
are really doing a great trade with all the world; but they
want to force it, anti hence the mass of the complaints
that we hear. They are certainly in want of capital; but
capital is the fruit of industry anti perseverance, not of
sudden coups. And what capital they have is very dear.
The Bank of France is still charging six per cent., anti re-
stricting its discounts to seveuty.live days' bills. Trade,
therefore, qua trade, has some reason to complain; but it
should be remembered that the Bank has to guard the
country, as far as it can, atzainst the evils of associated
speculation in its most dangerous form. If this element
were allowed free course, it would, in a given time, cause a
general collapse ; and, foreseeing evils of this character,
the Bank maintains the screw nearly at its extreme point.
In the meantime various expedients are being devised to
relieve commerce while restraining the mania for
gambling. Out of them something may possibly arise
before long; or perhaps the Bank may shortly feel itself
strong enough to attempt both operations simultaneously.
But in France, as in England, cheap capital is out of the
question.
The monthly return of the Bank of France was published
in the Monileur this morning. The commercial discounts
have increased rather more than ...1,10),(1001.—a fact which
confirms our preceding observations ; but the advances on
stock and bullion have been largely reduced. The bullion
is about 270,000/. less, having probably been paid away in
coin in the ordinary course of business. Altogether the
return is more favourable than was expected from the
nature of the reports by which its publication was preceded.
The specie imports during the week have been con-
siderable. They amount to rather more, than 070,0001.

JANUARY 10, 1857.