The Express.
London, England, 1862-01-20 00:00:00

INN WATER AT teliDON lams

CUL
TOASSIOW —ltaralog, 616 kftellboo6. 54. Ifts.

LONDON, MONDAY, JAN. 20.

the Monday last, reviewing the financial con-
ditions of the civil war in America, we pointed out
that the time had arrived when an ordinary system
of finance would probably be supplanted by an
extraordinary one, when the ordinary resources of
loans and taxation would be considered inadequate
to the national emergency, and when bold
financiers, such as the United States unquestion-
ably possess, would probably strike at once for the
plan which has been adopted on occasions of
crisis by nearly every nation of the world. This
anticipation proves to have been well timed, for
the most prominent feature of the past week's
financial news bas been the suspension of specie
payments by nearly the whole of the New York
and other American banks, as well as by the
United States Treasury, as a preliminary to the
issue of an irredeemable paper currency. It is of
course easy to declaim in rounded sentences against
• step of this sort. Not much skill is required to
prove that its prospective evils are great, and that
it marks a serious descent on the part of any
State that adopts it. In our opinion the greatest
of its disadvantages is one to which attention dot*
not seem to have yet been turned—we mean the
carelessness with which so dangerous a weapon is
apt to be used. With a resort to paper money an
important guarantee of prudence and foresight dis-
appears. As long as it was necemsry for the Secre-
tary to the United States Treasury specially to
consult the bankers and capitalists as regards each
individual sum that he needed, it was necessary
that the financial plans of the Government should
be moulded in accordance with the genes of the

businesscommunity. It was rsquiailatoiaakamatters
pleasant and reasonable in the utile' Mien of
those practical financiers who, in every country,
exercise a salutary cluck upon the flights of
Finance Ministers. It has been another source
of consolation to well-judging Americans that
the additions ti the national liabilities which
have been necessitated by the war, though huge in
amount, have been individually and closely
scrutinised by the legislature. We are of course
aware that to the elaboration of Mr. CIIASINI new
scheme the sanction of the legislature is indispen-
sable, and the good opinion of the bankers an im-
portant auxiliary. But we would point nut that
neither the one power nor the other has any longer
the old control over the course of the Treasury
Department now that normal plans of finance
have been abandoned, and that the principle of an
inane of irredeemable government paper to an inde-
finite amount has been accepted. It is exceedingly
important that an engine of this immense power
should be worked with the greatest possible care,
since otherwise it may precipitate all the material
interests of the State into ruin. There is some-
thing perilously seductive about the issue of a
currency of this kind. Even a factitious pros-
perity may fur a time be produced by it. Holders
of produce, public curities, and other commo-
dities may at first view it with complacency, find-
ing that, uuder its influence, prices rise, and for-
getting that the paper produce of their conuno-
ditice will itself not possess a purchasing power
equal to that of specie or of the standard cur-
rency hitherto prevailing. There is now, more-
over, far too great a temptation to slight such
difficult and disagreeable questions as that of the
proportion which the produce of taxation ought to
bear to the produce of this most easy and dan-
gerous form of loan raising. In fact, there is a
fatal temptation to disregard the levying of taxa-
tion altogether, and to rely implicitly upon the
resource new adopted. The present is a time
when every American citizen, unifies he is pre-
pared to confess his willinviees to let the
Southern Slave Confederacy have its own
way, ought to offer up the tenth of his posses-
sions on the national altar; that is to say, he
ought, if he is sincere, to welcome a pro-
portionate amount of immediate taxation. Should
the people endeavour to shirk this obligation, and
to cast the burden upon the future, by creating
an irredeemable currency in amounts only limited
by the large necessities of the war, we confess we
shall feel deeply disappointed: at the rime time we
cannot help acknowledging that a deliberate adop-
tion of the higher course would argue that the
moral sentiment and public feeling of Antrim

rank higher than those of Europa. The finances
or England, France, Austria, Russia, and most of
the other countries of the Old World, (Writing to be
the most advanced in civilization, have at some
period of their history passed throwalt the phi'
upon which the finances of America are now me-
tering. At a time of national trial even Great
Britain suspended specie payments. When she
had passed through the ordeal she redeemed all
her engagements. We see no reason to doubt
that as America follows the example of the
old country in one respect she will do so in
the other. We think, however, that those who
imagine they see in the past week's news an indi-
cation of the impending exhaustionof the financial
resources of the Federal Government, and of a
probable end to the war, are deluding themselves.

We have on former occasions drawn attention
to the depressing influence which is permanently
exercised upon the market value of the English
Three per Cents. by the creation of other com-
peting securities. The effect is illustrated more
clearly than ever by recent events. If the funds
were low, it might have been objected on former
occasions that the cause was to be found in the

prevalence of a high rate of interest, in the dis-
turbed state of the Continent, or in the apprehen-
sion of war with America. But (to invert the
order of these objections) the American Govern-
ment
have shown that war with England is the
last of their thoughts ; the sounds of alarm from
the Continent are unusually few and far between ;
and the rate of interest has fallen to
2} per cent. at the Bank of England, and
to 21, or even 2, in Lombard-street.
Yet Consols are trembling at 93. In
a similar state of the money market in
times not far back 97 or 98 would not have been

thought too high a price. Now, there is
727,000,0001. of the Three per Cent. Stocks
known, respectively, as " Consols," "New "
Threes, and " Reduced " Threes, and as five per
cent. on this amount represents no less than
36,350,0001. of comparative diminution in the
value of this one item of our invested capital, it
will be admitted that the subject is not a small
one. We have shown on former occasions how
steadily the funds have receded to a lower range
of prices simultaneously with, and evidently as a
consequence of, the creation of Indian Govern-
ment securities yielding much more advantageous
rates of interest. For example, against the Mem
tion of 4 or 5 per cent. in the value of the Wish
Three per Cents. shown by a comparison of therm
meat prices with those which prevailed at forme
periods of equal monetary ease, must be set the
rise in the India Five per Cent. stock to Re pre-
sent price of 106, or 7 per cent above that
which the last issue of this stock was negotiated.
It is impoSbis to deny that the latter fact goes
far to explain the former. The public, as yobs",
urged before, have bees taught to look for W#er
rates of intense the* those they were formerly
content with, sod the teachers from whom they
have learnt the Lam are those great proficient.
in the business of purveying securities yielding
high rates, the Indian Government. We are
quite convinced that, as long as the Indian Govern-
ment go on asking 5 per cent. stock in this
market, they will keep down, or fur-
ther knock down, our home funds. The
difference between five per cent. and three is so
great as to quicken the avidity of investors. Even
during the past week, when the market reporta
have described Consoler as " fiat," and have men-
tioned that " sellers have predominated," causing
a decline of I per cent. on the week, two of the
largest Indian railway companies have received
such an influx of subscriptions to their bonds that
they have notified that the amount required at
present is made up and the list closed. One of
these companies has just paid in another
600,0001. to the credit of the Suarrsav of
STATZ for INDIA in COllllea. Surely we need
not seek farther for the causes of the
" flatness " of Consols, remembering that
the whole of the Indian railway capital now being
raised enjoys a guarantee of 5 percent. from the
Indian Government. Nay, the Sxcairrsav for
bums is so generous as to offer the subscribers all
sorts of options, all against himself. If they find
hereafter that they don't like the security, or
think they see a better one, they have only to
take the debentures to him and they may receive
their money back. To explain : The new capital
which is now being raised takes for the most part
the form of guaranteed debentures, redeemable at
pas at the end of five years. In some owes
they give the holders the option of either taking
their money back at the end of that
period, or of going on for another term
of five years. Some debentures, including
those upon which the Madras Railway Company
have raised the bulk of the 600,0001. just paid
into the Indian Treasury, carry, besides the privi-
lege of being paid off at par, the additional option
of conversion into the ordinary stock of the com-
pany. Should the stock rise to a premium during
the currency of the debentures, the holder might
gain considerably. It is very natural that the
public should consider guaranteed securities with
such privileges an excellent investment, and that
the Three per Cents. should remain neglected.
The effect does not end even here, for
when the Indian Government, who are
permanent borrowers in the English market in
some form or other, bid 5 per cent. for money,
other borrowers are obliged to bid still more. For
example, the colony of Victoria, which has just
made its appearance with another request for
1,600,0001., is obliged to offer 6 per cent. The
terms of all loans sought here both by foreign
and by colonial States, as well as by public com•
panics, are, in fact, influenced, and—to bring the
matter home to every man's door—we are strongly
inclined to think that the rate of interest on the
great mama of individual transactions throughout
the country is affected in a degree not generally
suspected.

AMDINT TO SI JOHN PAKHOTTON,

litorrwicii,:lialunsar.—Aa accident has beadles the litight
lieu Sir John l'altiegtin, which for the present dooms,
bin to the house. The right hoe. baresek when asst.
Wintwood-park. is adjacent to this tows. was riding along
as of the roads in the vicinity of Westwood ea Wednesday
afternoon last, when his hone, it is sappeeed, hod upon a
Sees and falling, threw hi, rider heavily os the reed. Sir
John was of coons seek brained by the violas' of the
fall, and in addition to these injuries to noshed a kik to
tie back as he lay en the grand from the lone in tie
struggice to ries spin. We ere glad to add. however. fist
beyond these broker the right hop. baronet hes nodded
no serious injury, and to-day was reported as recovering
rapidly. Sir John as an ripen horseman, and we believe
the horse which threw him wee a favourite one.

Tu Oaarele.-.Load Paireseuten remaim at
he seek Dreslissels. Heels, "bee it is expelled tie
noble viscount be bemired with a Matt ia the timely
pirt of this week hen Ms Majesty Me Meg Ms Del-
shim King Lego& who mill be attessissi by Oeireel
count de Mocelosele aid Dr. will mho has
Buckingham Pala^ saddler levies boon ten et tbe
whin premier, it acpestedi Se pressed to
aeries residasise, Oslieses. Lk el Wight. Eul Ys} et
residing at Pembroke Lease, Ridgewood Park. Lord Gran-
Mile returned te Lewin siattlee beet a obit to the
Marquis et kilrabrisy. lie o•lnii (key remeies le lowa.
Mr. 11 doer Oh ea hes lilt Leeks fee his seentry seek
bet is expellee to return at the seermemenset et the week.
TM Dubs el Newieslis an* sase mmisses d fiss .bidet
ere est et Mew

LATEST INTELLIGENCE.
THZ PRIV4TERR SUMTER.
The Comeppendenciad Madrid, of the 15th, sop,
Yesterdegr ids men d the crew of the Sumter
deserted the vessel, and came ashoretp make their
submission to the Consul of the UniteliStates, who
begged the military governor of the place to take
them under his' protection. On the other head
the captain demanded that the men should be
given up to him as deserters. This the govern-
ment refused, on the grounds that Spain had not
yet recognised the independence of the Confederate
States, and that no treaty of extradition with the
United States existed."

(imunes Tzr.zowo.)
IILDBID, JAI. 18 (Emma.)

The Sumter, having today been ordered to leave
Wiz within six hours, quitted that port this even-
ing and proceeded for 01Inbar.