The Express.
London, England, 1865-12-18 00:00:00

rOHN BROGDINS GOLD CHAIN&

JOHN BROGDEN'S GOLD GU AHD CHAINS.
jOHN ItROODEN'SGOLD ALBERT CHAINS.
jOHNDROGDIN'S GOLD BROOCH CHAINS.
M
IMI& WATHERSTON and SON,
fjoidamithe and Jewellers.
Mee Beady for Impaction • Oreat Variety of JEWELLER% ,
CaßlSTlllth;ll%3EXTtest B
and suitable for
GIFTS.
12, Palldiall leak S.W.

OVERCOATS of the BEST
WINTIURTERIALS ar kept for inamtioa or este at
HAMILTON sod HMSO:M.
Tailors sad Overcoat Halms,
106, STRAND, apposite Easter Hell

LONDON must have a SUPPER and
me MUSIC
ZOOM fa Gentlemen.—Remember, we wan You et
.=VANS." alter the Covent-garden Opera, •ted the Theatre'.

Bite erpreOgi.

TO cOUPONORNTO•
advarnasawas Mantled for " The dams" London Moan
, must be at Ida oft" 10, Lone by TWO
reCk on Uts day ad pablkatten.

HAVILARK ET.
THIS VINO% THE OVERLAND
daROUTE.
MMama. Buck-
stone, C. Mathews. awl Compton Easmes athews, S now-
don, BM and Wrlight.—WHO KILLED COCK ROBIN
lira. C. Maibeara.-And YT HUSBAND'S GHOST. ? Mr. and

PRINCESS'S.
TEM viEnee, QUIRT LODGINGS.—Attar which IT IS
RSV= TOO LATE TO MIND. Maws. Vining, O. Site Mlle,
Slur-
T. Read, D. Murray, b. Wham. F. Vilna's. J. G. Shore, O.
m, and L cathwrs : mum L. moors and X. Rodgers.

DIOR WATT.' AT LONDONBREDOL
TIN DAT Manta& th. AMMON'. 211. =I a.
400..... AR
TO-1101110W •••• Moraims, 21L ARC. lb. OWL
____

LONDON. MONDAY. DECEMBER 18.

THE Money Market has spin experienced one
of those temporary though hurtful disturbances
that have so constantly happened during the past
two years. Only three weeks ago the Bank rate
of discount was lowered from 7 to 6 per cent, and
according to the indications then prevailing a
further reduction appeared to be at hand. The
position of affairs, however, has quickly changed.
Nearly every day for the last fortnight with-
drawals of gold more or less considerable have taken
place from the Bank, and the belief was universal
that last week the rate would have again been put
up to 7 per cent. Much surprise was indeed oc-
casioned by the fact that the usual day for
making these changes had not been antici-
pated, and that prompt action had not been
st once adopted. The state of the accounts pub-
lished on Friday, and the comparative steadineu of
the foreign exchanges, doubtless explain the rea-
sons of the Directors for not venturing upon any
perhaps premature movement, especially since they
are well aware that nothing unsettles trade more
than sudden fluctuations in the value of money.
According to precedent the withdrawal of bullion
would necessarily be followed by a rise in the rate,
since every farthing of specie taken from the Bank
so far diminishes the reserve. This is the chief, if
not sole, point by which the policy of the Bank is
usually considered to be guided, but it way be rea-
sonably inferred that on this occasion the Direc-
tors have taken a wider view of the present con-
juncture, and have refrained from tying themselves
down to the exclusive calculation of one single item
in their accounts. The public may be congratu-
lated on the fact, that for once old prejudice,
have been disregarded, and that an increased at-
tention has been paid to the general interest,
which could never have been possible with a blind
adherence to an exploded law. In some quarters,
indeed—and those of the best informed—the de-
cision of the Directors to maintain the present rate
has been received with a congratulation strongly
admixtured with astonishment at their boldness.
This is a hopeful sign. It implies that the expe-
rience gained in 1864 and 1865 as to the working
of our currency laws has not failed to produce its
legitimate effect, and that the whole subject must
before long be thoroughly reconsidered. It is pe-
culiarly fortunate that at the meeting of a new
Parliament the proofs of the inadequacy
of the existing system—especially exempli-
fied through the recent revival of trade—
should be brought so immediately before the eyes
of the public. The events of the last quarter of
1865 cannot be disregarded or explained away, and
they conclusively prove that there is no argument
left for the apologists of the Bank Charter Act of
1844. None of the evils which it was the especial
province of this measure to counteract were in
existence when the Bank rate of discount was
raised from 4to 7 per cent. Singularly enough, •
drain of bullion abroad was not proceeding then,
but on the other hand it is now. Yet the rate of dis-
count was advanced when this predisposing cause
did not exist, and is left unaltered when the drain
is really in operation. The contradiction is too
patent to escape even the most casual notice.
The chums for the exportation of gold to the
Continent are readily stated. They arise entirely
from the sudden and important revival of trade,
especially with the United States. An increased
demand for cotton manufactures can, of course,
only be satisfied by • corresponding augmentation
in the supply of the raw material. Notwith-
standing the re-opening of the ports of the I
Southern States, we must be content for the pre-
sent to rely chiefly upon the produce of
India. The native growers, however, will not in
a great degree exchange their cotton except foe
silver. To obtain this silver we are obliged to
buy it on the Continent with gold. Hence the
present exports. For a time the advance in the
rate of discount had the effect of temporarily post-
poning these operations, but in any case they would
be sure to occur sooner or later. The question is
entirely one of a margin of profit. A trader may
find it well worth his while to export gold, even
when money is at 10 per cent., if he can safely
calculate upon a return of 12 per cent. by the sale
of his imports. This is precisely what is happen-
ing now. The demand from the United States, and
from other countries generally, for cotton goods
has given a strong impulse to the importation of
raw cotton, sod a corresponding export of specie.
It is true that in the end the nation will be richer,
since the return must be greater than the outlay.
Unfortunately our present outlay must consist of
gold, and hence every consecutive withdrawal from
the Bank contributes to disturb the money market,
although in fact it simply represents an amount of
capital advantageously placed for a short period.
The anomaly of our present system is that its re-
strictions press chiefly upon that class which have
the least share in rendering them necessary. Thus,
while the East India merchant finds for an increased
charge for discount a more than corresponding
advantage in his profits on cotton, the general
trader feels the whole weight, without having any
of the compensation. It should always be remem-
bered that a mere calculation of the diminished
profit involved by a rise of the rate of discount by
no means measures the entire loss. When the