The Express.
London, England, 1847-11-04 00:00:00

THE CURRENCY.

Slll,—The recurrence of periods of excitement in
eycies of ten years, has been noticed by an influential writer
on currency, but, strangely enough, this fact has not been
used as a key to detect the cause of their recurrence. Still
less has it been noticed that the crises have increased in in-
tensity, the tighter the shackles were forged around the banks
of issue. That such has been the case is evident from the
history of the last thirty years. The first monetary crisis of
surietude after the ceasing of the rastriction set of 1819,
took place in 1824, 1525, and 1828. The high price of
Consols in 182 i, when it reoehed 97, indicated a super-
abundance of unemployed capital. The rise had been,
as we have seen, from, 71 in 1820, to which figure
the price was depressed by the insecurity testified
by the readiness of parliament to legislate for a matter
that it could not judge of. Perhaps Si, the figure
they stood at in 1819, is a fairer point of comparison ; and
(reasoning in the dark as we unfortunately must) we may
assuine the rise to indicate an ',cumulation of earnings in-
vested in the funds equal to 84,000,0001., and that the total
accumulation iu the country was about 150,000,0001. By the
various undertakings of those memorable years amounting,
we are told, to 212,000.0001., about 30,000,0001. were at once
abstracted for foreign loans and mining compinies, and may
be asoumed to have been a total Ices ; at least nothing has
as yet been refunded, and on but lute has inti last been
paid. The remaining minine, gat, steam-boat, and rail-
road investments have yielded something. Some have done
well, and are now adding to our earnings; others
have done little more than pay wages; but that is
something. On the whole, the movement seems to have
been a natural one, but attended with circumstances worthy
of notice. The tendency to invest in foreign loans and mines
indicates a distrust of home speculations. How far this was
occasioned by a limitation of the currency and by forcing the
circulation to flow through certain channels thnt might not
always direct the stream where the demand was greatest, is
deserving of inquiry. The severe lesson taught of the inse-
curity of foreign investments was however not forgotten, and
at the next periodical excitement in 1834, 1835, and 1836,
home investments were at first those most sought. The
movement began with joint.stock banks, and proceeded with
railways, but not finding food with sufficient rapidity a'
home, again wandered abroad. and large sums were invested
in American b. ode and securities, which likewise since proved
almost a total loss. The home investments were generally good,
although then looked upon as the wildest of undertakings.
From inexperience in the founders, and strict criticism, and
is some instances, direct hostility manifested by older rival
establishments, some of the new joint stock banking com-
panies became disorganised, and stopped others have
continued, although long exposed to most illiberal treatment
on all sides, by which the public has been the greatest lour;
as their efficiency has been impaired, even where their exer-
tions were greatest. Of the precise extent of the new invest-
ments made at this epoch we bane no record ; but it was
very great. A crisis was hastened by a demand for foreign
corn in IS3B and 1839. for which a large exportation of bullion
became necessary. The issues became necessarily contracted
in consequence of the scarcity of gold, and fearful distress
arose. A financial operation of great delicacy with France,
undertaken by Messrs. Baring, Brothers and Co., turned the
exchanges in our favour, and the gold, to which we had tied
our credit, re.flowed.
Again, in 1344, 1845, and 1846, notwithstanding the in-
creased severity of the restrictions on paper issues contained
in the Bank charter and subsequent acts, the spirit of specu-
lation was excited. Railroads, first at home, and afterwards
(in consequence of the difficulties thrown in the way of these
useful home projects) in foreign lines, were the favourite in-
vestments. The greater part of the lines that have been
executed at home have paid remarkably well. The returns
from the continental lines are less satisfactory. But with
time and the extension of the nets, now executing every-
where in Europe, the value of this property will increase.
Still, a mumbn of wild projects, which the restrictions did
not repress, were started, and involved the sharekolders in
great responsibilities.
The published lists of issues both of the Bank of England
and of the ,point-stock banks clearly demonstrate that these
issues had little or nothing to do with the speculative mania
or the panics of these periods. They can clearly be traced
to an accumulation of profits and growing demand for invest-
meats that require intelligence, activity, and good govern-
ment to secure. It is not here the place to review the
course of our foreign policy, and ask wkether a proper
knowledge of the languages, interests, and resources of the
different countries with which we trade should not be de-
manded of tho diplomatic servants of the nation, and of
all connected with the management of foreign affairs.
We cannot, however, disguise our conviction, that
had such knowledge prevailed in the officers en.
trusted with the responsible task, more might have been
done by protecting Spain in 1825, Poland in 1830, and
South America at a later period, from war and internal
troubles, to render the foreign investments of our capitalists
secure. A little more hesitation in undertaking the manage.
ment of trading and banking matters on the part of our
home ministers, would very much have favoured home in-
eestments. These it is desirable to see take place gradually,
and not by fits and starts. Education duly spread ought
to bring the aid of every man in the nation to the common
cause. A government that fixed its attention to these, the
legitimate concerns of the executive, would be unwilling to
vote millions to West India slave-owners, and Irish or Scotch
landlords who wish to improve their estates. It would not
give away colonies like Banat to soothe the fears of
Cornish miners, nor would it wink at a system
of revenue in our Eastern possessions which threatens
to exterminate the growth of one description of pro-
duce after another. :to suit the ease of the princes of
Leadenhall-street. Were our foreign investments duly pro-
tected, by promoting the prosperity of the countries holding
them to the extent of our power, a revenue of enormous
amount would now annually flow into this country from all
the world, and swell the sum of earnings which forms the
security of our national creditors. Had an open trade in
corn not been prevented, the periodical exportation of large
sums for grain, on the recurrence of bad harvests, sod all the
distress that accompanied such drain., would have been
avoided. But our subject here is more immediately the
bearing of the state of the currency on the national losses.
We can trace the restriction legislation to two distinct fal-
lacies. One is the notion that, by the aid of these laws, the
capital value of the fundbolder's claim on the nation can be
forced up to double or treble the sum originally advanced by
him. In the hot pursuit of this rich spoil, a large portion of
our monied community has evidently neglected their duties
as statesmen and violated the constitutional rights of their
countrymen. The scheme fails through the speculative
mania which breaks out the more wildly for being repressed,
and carries that capital out of the country for which there is
not unrestricted choice of investment at home or in the
colonies. The second fallacy is, that it is possible to raise
the interest of money permanently without affecting the
value of the monied capital of the country, and with it of
the national debt. The experience of this week shows that
80 is too high a figure for Consols if the rate of discount is to
exceed 8 per cent., and the originators of this notable scheme
will now see the wisdom of abandoning it.
In short, there is no royal road to wealth, even for the
man who can show the possession of half a million in one
description of stuck. The fundholder, whose only security
lies in the success of the national industry, must be con-
tented to stand or fall by it. He will act wisely in pro-
moting it to the utmost of his power, and may take his
choice in doing so of a poet at St. Stephen's, in Lancashire,
or in the city. There is but one way of forwarding his
object is thou three places. SCILI:TATOIL

THE CRISIS.—THE PROVINCIAL PRESS.
The London Times, a few days ago, taking its text
from a statement made to ministers by a deputation from the
operative classes in the manufacturing districts, adminis.
terci to the broke-s and merchants of Liverpool what that
journal doubtless considers a merited and severe castigation,
with respect to the mode in use of transacting the business
of this oort. The deputation complain—and their complaint
is barked by some of our contemporaries in the manufac-
turing districts—that the brokers and importers of cotton
are in the habit of furnishing to speculators the opportunity
of laying hold of that raw material, and thus intercepting
its transit to the spinner and manufacturer, except at
such enhanced prices as they choose to dictate. The process
is said to be somewhat lice the following :—A, the importer,

or B, the broker, has a parcel of cotton to dispose of, the
present value of which is, say 10,0001. C, a speculator,
steps forward and says, " I will pay you down in cash 1,000/.
or 2,0001., according to the estimated ezteat of risk of depre-
ciation to be run, and accept bills for the balance ;" and in
the event of the offer being accepted, the merchant or the
broker holds the cotton, with power of re-sale, as a security
for the repaymout of the acceptanaes given. Such a trans-
action the Times maintains is illegitimate ; and argues, on
the part of the commercial community of Liverpool, a dis-
position to foster an unbounded spirit of speculation, which
ought to be discountenanced, and, if possible, put down.
Of course we are aware of the animus by which these oc-
maimed flings at the mercantile body in Liverpool are dic-
tated, so far as regards both the Times and the organs of the
manufacturing interest. We have never taken the diatribes
of the termer at more than their true value—never min-
gled amongst the crowd of Jews and jobbers, who pros-
trate themselves daily before the feet of the Gamaliel of
Printing house square, The animus of the latter is of a
more vulgar character. Manchester grudges us our freights,
our brokerages, our commissions, and every other source
from which the commercial greatness of Liverpool flows.
Her spinners and manufacturers would have us to be the
mere hewers of wood and drawers of water for their use—
the humble carriers of their staples and their wane. The '
merchants, the shipowners, and the brokers of this great
mart of commerce, are somewhat more than the characters
they would fain have them to sustain; and" hinr illee inv."
Let us, however, examine the nature of such a transac-
tion as that described, which the Thnes—with an 'mount of
ignorance of the ordinary nature of commercial affairs
which may will shake the validity of its opinions upon
matters recently treated of by it with such an air of tri-
umphant cleverness—considers so illegitimate and injurious.
The merchants of Liverpool, amongst other commodities,
import cotton. The brokers of Liverpool are in the position
of agents between the importer and the consumer or the
capitalist, who may wish to invest his spare money in some
commodity, from the sale of which he fancies that he seesthe
hope of a profitable return. The merchant wishes to realise,
and instructs his broker I. sell ; sod the opportunity to buy
is open, of course, to the manufacturer, as well as to any other
man—the speculator, for instance. The latter, however, sees
the manufacturer indisposed to buy other than—to use a
well-understood phrase—from hand to mouth. The manu-
facturer thinks that prices will come lower. He may be so
unreasonable, even, as to imagine that the article will be
held as long as be likes for his convenience, and sold u low
as he chooses for his profit. The capitalist, however, un-
connected either with the business of importation or con-
sumption, and hence called the speculator, hes made his
calculations ; has watched the amount of stocks on hand
and the prospect of crops to come, and instructs his
broker to buy at the price which the manufacturer has
shown himself indisposed to give. What has the world to
do with the terms of such purchase, as between the broker
and such a man ? As little as we have to do with the trans-
actions between the manufacturer ead the banker or wort
gagee, who has assisted him with funds fir erection of his
factory or machinery. Between the broker and his client
on the one hand, and the importer on the other, the trans-
action is an every day one ; no more peculiar to the cotton
trade or to Liverpool than it is to other branches of trade
and to other towns. The broker of C, the speculator,
pays A or 11, the importer and his broker, their elemaad
of 10,0001. Were the transaction a bargain made fur the
consumer, the only difference would be that, instead of a
margin only being paid in cash, and the broker of C re-
taining possession of the commodity on his security for the
remainder, the consumer would pay the whole amount pos-
sibly in bills, and himself remain the holder of the selfsame
commodity. It is a piece of consummate absurdity to sup.
pose that the stock of cotton in Liverpool, of which we have,
in ordinary years, from 500,000 to 600,000 bales, can remain
in original hands, unsubjected to the ordinary changes of
opinion which induce commercial men to realise or invest.
What other kind of produce is so dealt with ? If our Man-
chester friends think that there is any great amount of profit
in importing the raw material, and then holdinz it until it
is wanted, bale by bale, we have not ourselves, and few Liver-
pool merchants have, the slightest objections to their becom-
ing the sole importers, as well as the consumers.—Liverpool
Standard.