The Express.
London, England, 1862-02-03 00:00:00

'Mr •flflt.

TO 002.11111PONDE7T9.
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NATNAZZIT.
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—And Till CLOCK ON 17L1118.—Coorrimilly.

NMI WAIF= AT LONDON ALMON
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LONDON, MONDAY, IEB. 3.

Sons attention kw been directed during the
het few days to the renewal (A the flow of gold
num Loll4oll—and, what la .---- :-1—..141,1 "on,
the Bank of E.4o.agl—to Freon. It need not be

repeated here that for gold to pass through this
eountry to the Continent is quite in the natural
course of things. This is the greatest bullion
market and banking-house in the world. To it
converge a large number of ocean steam lines,
forming the most perfect system of communication
ever known. Through our medium a vast number

of balances due bet;seti distant places arestruck

and liquidated. For example, it is through Eng-
land that America pays India for her indigo, and
China for her tea and silk. Again, the treasures
of our rich colony. Australia, are distilled through
the mother country before they are spread over the
surface of the earth, to fertilise it and to
stimulate both production and consumption. The
same is the ones in no small degree with the golden

produce el California. Occanonally, when the
general balance of trade is in favour of Ezsgbind,
and the exchanges amend to a high level, we retain

the whole of the gold imported. This state of
things produces a rapid accumulation of gold in
the Bank, and an easy money market. Why
money should be abundant under such circum-
stances it is very may to understand, since for every
million of gold that puma into the " Issue Depart.

meat " of the Beak of England, a million of
Reid( noted aro created, forming an absolute addi-
tion to the amount of the circulating medium._ It

was only • few weeks back that nearly half a
million of gold arrived from Australia in
a single bottom. Two or three days
saw it consigned to the bands of the Bank of
England, our great bullion depot, which takes
custody of the gull, and issues warrants against it.
This half million of notes or gold-warrants immedi-
ately entered into competition with the rest of the
money in existent*, seeking employment, and tend-
ing to cheapen the rates of interest. When gold
leaves the Beak, as it is doing now, a precisely
contrary effect is produced. On Thursday last,
for instance, 130,0001. in gold was taken from
that estabbihment for despatch to the Continent,
and on Saturday a further sum of 110,0001. As
a matter of course we have in some form the full
equivalent of this MIS of treasure, it matters not
whether in French goods, in public securities, in
grain, cotton, silk, or any other of the num,-
raw articles from all parts of the world, the settl►
runt for which is embraced in the astonishingly
wide scope of the exchanges. But what is most
interesting to remark at the moment is, that u this
treasure left London there was an extinction of
currency to precisely the same amount. There are
now 240,0001. lees of Bank of England notes in
existence than before the operation was effected.
Leas money being in existence, it is natural the
the remainder should command • somewhat better
price or rate of interest. Considering the meg.
nitudu of our present stock of gold, end
also the damn' of trade, which tends to
built the erettion of mercantile paper requiring
discount, it will, of course, bo some time before
the efflux of gold—or, in other words, the extine-
tion of currency—will exercise any material effect
upon the money market, where the surplus ap-
pears still to be very large. But it needs se
prophet to foretell that a continuance of the per
aces„ oven at the moderate rate experienced during
the past week, would ultimately, in the very
nature of things, enable capitalists and holders of
money to get a better price for it.
It was of course known that we could not go on
accumulating gold for ever, since the mere fact of
the rate of interest falling gradually to a point
below that current in most of the markets of the
Continent would cause houses possessing foreign
connexions to endeavour to avail themselves of the
more remunerative rates obtainable abroad. Am
oordingly, in proportion as the value of mosey
here fell, the exchanges gradually went to • lower
level. They are now at rates at which, though
there may not yet be any profit worth mentioning
on the exportation of gold as • mere exchange
operation, bullion is nevertheless a more advan-
tageous moditun of remittance than bills. That it is
tho more advantageous medium is proved by the
very fact that it goes. People don't send gold to
Paris to make a loss upon it, or for the pleasure of
the operation. Towards the latter end of Decem-
ber the London "short " exchange on Paris was
quoted 25.271 to 25.32 i, and all the gold im-
ported remained here. Last Friday's lists quote
the exchange 25.121 to 25.171, and gold goes out.
Some reports put itas low as 25.10 to 25.15. The
decline is quite sufficient to account for lie move-
ment now witnessed, without any of the special
explanations attempted by a contemporary who has
been characteristically unfortunate in his selection
of a date for a reduction of the Bank rate of dim
count to 2 per tent. Neither political considera-
tions nor M. Fould's Budget have had anything
to do with Use decline which has been going
on in the exchanges during the last two
meal's, and which has arisen partly from the
relatively lower value of money in this country, as
compared with that current abroad, ash partly
from the fact that trade balsams have sewed fu
favour of the foreigner. Them has bars irelia
hitherto of any of those exceptional paper ope-
ration., by means of which French daaaaisio,