The Express.
London, England, 1853-07-18 00:00:00

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LONDON, MONDAY, JULY IS.

Tr.rrif and justice require us to separate our pre-
sent great prosperity from the acts of her MAJESTY'S
Ministers. In fact, the temporary embarra.sment
which the projects of both Mr. DI.RAELL and Mr.
GiostillONE have succ.sively caused to trade is not
yet fully compensated by the reduction of the tea
duties and the abolition of the soap tax. At the same
time those much-lauded boons the reduction of the
advertisement duty and the use of a promised
peony receipt arc t withheld, and business
is thus rather impeded than promoted by the CHAN-
CELLOR of the Excitriar La. Not one of our lead-
ing statesmen, as fur as we can recollect,
was the voluntary, the consistent, the strenuous, ad-
TOCate of perfectly free trade, or promoted it to any
extent till circumstances forced it on the Ministry
of the day. Even yet, in spite of experience, the
Whigs are said to be believers in the justice of a tixed
duty on corn. The public, therefore, do injus-
tice to themselves, to their own enterprise :tad exer-
tions, when they ascribe existing national prosperity
to the Ministers, and allow Ministerial advocates to
claim for the Coalition the merit of extended trade and
the consequent increase of revenue.
In the present session much time has been em-
ployed in licking Mr. GLADSTONE'S financial mea-
sure. into shape ; and much credit has been given
him for the savings he has effected, and is to effect.
But his projects for the conversion of the debt bare
been a complete failure,—and our journal on
Saturday supplied a conclusive proof of the fact.
The Bank accounts, which we then published, show
that in the week ended on the Itth instant the Go-
vernment Securities in the possession of the Bank
had augmented by the sum of 1,340,336 L As the
Bank, which charges 31 per cent. foe loans, has ems
thinly not been a buyer of Exchequer Bills at an in-
terest of 1 per cent.,—however strong might be ils
desire to bolster up the falling securities of its greet
client,—we may be quite sure that this increase of
securities is an amount of deficiency bills which the
Government has created, and on which the Bank
has advanced its money. The result of Mr. GLAD-
gromes scheme is to make the Government
a borrower, in order to carry on the cur-
rent business of the country. Last year, the
Government had in the hands of the Bank on July
3rd, ready to meet the payments of dividends and
salaries which then fell to be paid, 7,847,4701.; on
July 2nd in the present year, it had only 5,615,362/.,
or 2,032,1111. less, and it has been obliged to make
up some of the deficiency by a loan of 1,300,0001.
It is, we admit, not advisable that the Government
should collect large sums from the public to place
the money in the Bank, which allows no interest on
the deposit, while it charges a very high rate of
interest on any of the Government money it lends; but
the Government should hare enough to meet ex-
pected or certain contingencies. Sir ROBERT PEEL
condemned very energetically the practice of bor-
rowing from the Bank on deficiency bills, and
framed his financial system on the principle of
patting an end to it. What he found objectionable
Mr. GLADSTONE cannot defend, and the necessity
which compels him to have recourse to it is the
condemnation of his schemes. He will have to raise
money next year to pay off the holders of South Sea
Annuities, and at what rate of interest he will dun
be able to borrow, making his conversion scheme a
loss or gain, time only can show ; but be
got over the difficulty of having to pay off up-
wards of 3,000,0001. of Exchequer Bills, by taking
that sum from the Exchequer balances. It must,
however, be noted that the Exchequer Bills he
paid off bore interest at the rate of 21 per cent., and
might have been all kept afloat at 2 per cent., or It
What rate of interest he will pay the Bank on de-
ficiency bills we know not, but when the Bank will
only lend to its other customers at 31 per cent., it
must favour the Government very much if it lend at
a lower rate to the CHANCELLOR. The sum which
the Government will lose by being obliged to borrow
on deficiency bills must be set off against its gains
from liquidating 3,000,0001. of Exchequer Bills, and
will make the balance, if any, a mere trifle
in its favour. At the same time, an open,
avowed, and well-accredited mode of raising
money, not unfavourable to commerce,—that of Ex-
chequer changed for a mode secret, irre-
sponsible and discredited. It is very convenient un-
doubtedly for the Government, like other spend-
thrifts, to raise loans on its accruing revenue, but the
practice is nut honourable. The Government must
have the power to borrow from the Bank ; but it is
the unanimous opinion of all who have considered the
subject that the power is dangerous, and should be
exercised as sparingly as possible.
Mr. ULADITIONZ.S advocates will and do refer to'
the political occurrences in the East, which no finan-
cier could be expected to foresee as his vindication.
Their argument is unfounded. It was stated more
than once in this journal before there was
any alarm about Russia and Turkey, that
the rise in the rate of interest consequent
on our very extended enterprise would prevent the
success of Mr. GLanevoNt's financial projects.
Hitherto the alarm has operated in his favour. No
demand has yet ensued for capital to set armies in
motion, but trade has been suspended and enterprise
ehecked by the policy of Russia. For temporary
purposes money was a little more in demand last
week than the week preceding, but in that week to
which the Bank returns refer, the large increase of
private deposits (1,003,9931.), and the decline in pri-
vate securities to the extent of 692,1281., show
that when the Government borrowed the mosey
there was no want of money for trade. fit
is now six weeks since the Bank raised its rate of
interest from 3 to 31 per cent. Money was then
rising in value; but it has not continued to rise, and
the rats in the market remains below the Bank
rate. The best bills are still discounted in London
at 3 or 3', per cent. According to the circular of
J. H. Li ret.t:Date and Co., of Liverpool, dated the
oth inst.,

The advance in the rate of discount by the Baok of
England, on the 2nd June, has had little or no effect either
in the produce or money markets ; the demand continues
large, but the supply being equally so, no change can be
quoted in the rates, 31 to 31 being the current price, accord-
ing to the date of bills. The cly,ck to operations at home
and lot export, as well as in foreign loans and schemes, by
the lung-pending itusso-Turkish disputes, will make money
mare plentiful.

There is quite proof enough in that quotation
alone that Mr. GLADSTONE has failed,—not because
the Emperor of Resat.► has become fanatical, as well
as ambitious, but--because he misapprehended the
condition of the Money Market and the circum-
stances which influence it. His failure, like
most of the failures of statesmen, is the consequence
of his guiding his conduct Ly It.oking at the past
instead of at the present, and inferring the future
to which all legislation relates. He took counsel