The Express.
London, England, 1853-11-21 00:00:00

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TO CORRESPONDENTS.
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LONDON, MONDAY, NOVE.VBER 21.

FOR nearly six months it was stated day after day,
and week after week, that the apprehensions of a
War in the East kept our Funds down. Consols, in
the beginning of October, under the influence, as was
supposed, of this apprehension, were depressed to 91.
Now the apprehensions are realised—the war has
been begun—and to the public astonishment Consols
have gone up to 95. The fact does not square with the
theory. Why the apprehension of war should beat
Consols down to 91, and why the war, when actually
begun, should be accompanied by a rise of Consols
to 9.1, are facts which require explanation.
The present rise has not been caused by the
success of the Turks, for Consols rose to above
9.5 on Thursday, Nov. 3, before the news had
reached London of the Turks having passed the
Danube, but after war had been commenced. We
have to look, therefore, for some other cause than
this apprehended and actual war for the variations
in the prices of Consols. The City correspondent of
the Times, who has sedulously inculcated the theory
that the apprehensions of war had a sinister influence
on the funds, explained the fact of the actual war
being accompanied by a rise in the funds in one
sentence on Friday, though he probably did not
comprehend the refutation it supplied of
statements continually repeated by him. The
Money Market, he said, is easy. That fast
is concurrently stated by all contemporary City
authorities. We know that the Money Market was
not easy in September and October, and it affords au
adequate and full explanation of Consols being now
at 95, when they were 91 in the week after the Bank
of England raised its minimum rate of discount at
the end of September to five per cent. The condition
of the Money Market, or the ease or difficulty in pro-
curing money for mercantile and other industrial
parposes,—u contradistinguished from the prices of
the public securities, which rise as money is easy,
and fall as it is wanted, this condition it is, and not
the apprehensionsfor reality of war in the East, that
is the clue to Consols having been 91 in the early part
of October and 9.5 in November.

The great fact of present ease in the Money Mar-
ket in its turn requires some explanation. How has
it been brought about ? Far several weeks a studied
attempt was made by the Times •to decry the trade
with Australia ; sad great losses, with masters
failures, were predicted. A kind of panic was=
rated. and people were told to look foe cosv
and bankruptcy similar to those of 1847. Whether
that were dune to serve the purposes of the
Bank of England or not, the Bank acted on the
supposition that trade was unsound ; it raised its
rate of discount to 3 per cent., mercantile paper was
discredited, and for a few weeks it was very difficult
to borrow on any terms. Facts have since shows
that the supposition was not well founded. Trade
wu not and is not to any noticeable degree aasouad.
Any failures which have taken place have been ea
the Stock Exchange, not amongst merchants. A
short harvest, a rising and high price of food, a
necessity to import unusually large quantities of
corn, gave a natural check to speculation in other
directions and in other commodities. The Strikes, or
Turnouts, stopped business and impeded consump-
tion. la conjunction with the high price of
food and the high rate of discount they
have added much to the difficulties of the
retail traders, of the wholesale merchants, and of the
master

yet no bankruptcy has ensued
amongst them. By that fact the soundness of trade is
demonstrated, and it is made clear that the condition
of the Bank of England, which might alarm its
directors, is no aloe to the condition of the mercan-
tile community. All their solicitude was naturally
directed to the condition of the Bank, and the solici-
tude of many public writers very unreasonably took
the same direction. There wu quite a screech of
alarm at the Bank losing its gold, though it went
into the pockets of the people. Trade was unreason-
ably discredited, enterprise was checked, the demand
for loanable capital was lessened, and as that is con-
tinually accumulating, money became easy as
enterprise diminished. Such is the explanation of
the present condition of the Money Market. It is
easy, because trade is comparatively slack.
A reverse apprehension from that which led the
Beak in September to act against trade begins to
prevail. Unexceptionable paper is now discounted
at 41 per cent. Bills are no longer sent up from the
provinces in large quantities to be discounted; the
market rate of discount is falling below the Bank
rate; the Bank is getting no bills, and the Directors
begin already to fear that they will not be able to
maintain the rate of 5 per cent. The Government is
helping to beat down the rate. The offer of the
Bank to make now the payments that must be made
to the dissentients from the conversion of the Scath
Sea Annuities in January, at a deduction of ealy $
per cent., though put before the public as congas
from the Bank, proceeds from the Government,
which is using somewhat unwarrantably the pro-
ceeds of the taxes, as a merchant urns hie
balances, to make, if it can, something !het mom
like a profit by its transaction. The merchant will
only employ his balances at the market rate;
the Government, as it cannot openly be a trader, has
only the alternative of allowing the balances in the
Exchequer to lie idle, or employing them at
any rate it can get. Hence it is now offering
to discount the bills on itself, due in Janu-
ary, at 2 per cent. below the market rate.
By now proposing to issue the public money usually
shut up in its cheat —or only lent by the Bank at this
period in common with its other deposits,—at a rate
of interest below the market rate, it is trying to in-
fluence the value of money. 'this is unfair to all the
dealers in money, whether they want to borrow or
lend, and, in conjunction with the action of the Bank,
helps to make unnecessary fluctuations in the Money
Marker.
l; is quite possible that the present ease in the
Money Market is only temporary. If the Strikes
should come speedily to an end, which may be ex-
pected; if core should fall somewhat in price, which
seems probable; if enterprise should be extended
to its forward movement at the beginning of the

year —and already the trade to Australia is reviving—
if fresh discoveries of gold, and the fell necessity of
increasing protluction and facilitating distribution,
by providing more railways and shipping, should
even stimulate enterprise, as is neither impossible
nor undesirable—if all these results should operate

to a greater extent in the beginning of 18.54
than in 1,45:1, thin will money increase again
in value, and we may have higher rates than
we have yet experienced. In Amine', the moat
prosperous of countries, the prosperity of which we
share and should like to equal, the rate of discount is
twice as high as in England. At one time, how-
ever, without much reference to the real state