The Express.
London, England, 1866-06-04 00:00:00

THE EXPRESS, MONDAY

JOHN BROGDEN.

RIGINAL GOLD CHAIN MANUFACTORY,
,I 1 .1 16, HINDIMA-ISTILUT, COVINSOULDIN.

JOHN BROGDEN'S 18-carst GOLD CHAINS.

JOHN BROODEN'S GOLD GUARD CHAINS.

-TORN BROODIEWEI GOLD ALBERT CHAIM.
,
•

``~H

BROODMiI GOLD BROOCH CHAINS.

TIIRTLX TURTLE, TURTLE.
mar mod Invalid TURTLE 80UPS ohms rawly.
a. JAIME- =mar-smart PIOCAIALY.
11111. DONALD. Proprietor.

VWEST-END DINERS. —The WELLING-
IDIC, et. James's-street, Piccadilly. UAW Saloon
Dining-room on the Ira floor. me subscription rooms ate now
open. INirese, twelve months. LI 114 ed.; six months, el IL
Aped; to D. 0131111011, 49, St. JameeLLtreet.

LONDON must have a SUPPER and MUSIC
10011 toe Gentisteen.—Yeaserober, we wait for you et
"WAYS," after the Coyest Garden Opals and the Theatres.

gite erprefiL

TO CORZWIPONDCMTIL
Avertisameals Wended for "She lepreee," London livening
erVmast be et the Moe, 10, Bouvertautreet, by Two
ic on the da of publication.

HAYMARKET.
TED xvionvo. A ROMANTIC ATTACHMENT. Mr. W.
Yarn% Mae Ada Cavendish, &c.—THE FAVORITE 01 Fos-
TUNE Mama Raeketone, eldppendate, and Sotbern ; Mrs.
adppraviale, in —And TL MING TIM TABLES. Mr. Compton.

PRINCISSII.
Tins VII2MIO, A LUCKY NlT.—Attar which LOUIS XI.
Louis, Mr. Marlin Kam : Mardis, Mrs. Charles lE4:att.—To
cowhide with `QUILT LODGING&

BiarAintu.
TRm EVVFING, RICH AND POOR. The Hungarian Dancers.
BELPHYGOR, THE MOUNTEBANK. Mims Clara BS Caw,
Yrs. S. Lane: Master E. Sanders, Mews. Bigwood, LBW.
Blew, Re.—With TICE BLACK GONDOLA.

HIGH WATER AT LONDON MIDGE
t DAT —Morning, fik. Tim Afternoon, EL 60131.
TO-MORKOW—Morning, Bh. Um Afternoon,

LONDON, MONDAY, JUNE 4.

ALTHOUGH confidence appears to be steadily re-
viving it is reviving very slowly. The severe
shock to credit given by the events of the last
month is not lightly got over. The difficulty has
been the greater since, unlike the two last crises of
1847 and 1857, the banks have been chiefly in
danger. Although the purely mercantile failures
have been neither few nor unimportant, they have
barely exceeded the average in what may be termed
ordinarily bad times. The suspension of a pri-
vate merchant necessarily affects a comparatively
small number of persona ; but when a
bank stops, the inconvenience, discredit,
and ruin extend over a wide area.
Now that the crisis has fairly passed by,
we can look back to the immediate consequences
of the suspension of Ovrausen, Griller, and Co.
with a certain amount of thankfulness, if not
without terror. On that memorable Friday,
which no one who witnessed it can ever forget,
scarcely anyof the banks did not experience a run
of more or less magnitude. It is impossible to
overrate the danger that would have been caused
by a spread of distrust, of which this ominous
movement was the first indication. So powerful
was the effect of the failure of but a single mone-
tary establishment, though that one truly enjoyed
pre-eminent repute. Most fortunately the evil was
nipped in the bud. Since that period of universal
fear, two second-class banks have succumbed,
chiefly from want of skilful management, and in
one case it is averred from mere inadvertence, but
the larger establishments have fortunately escaped
all danger.
This result may be mainly ascribed to the cou-
rage and ability with which the storm was met.
It cannot be denied, however, that
our banking system has in modern times
become in some respects faulty. Draw-
backs' small in the commencement, but gradually
becoming larger, have been allowed to creep in.
The plan, for example, of taking deposits at call
and short notice, and allowing a rate of interest
but little below the terms for discounting three
months' bills, is demonstrably wrong. The banker
must, of course, use this money to b-ing him a
profit, and to do so he is obliged to leave himself
practically without any reserve. It may be said
that the reserve lies in his paid-up capital, but
this is a fallacious trust. Take a practical instance.
A bank has 100,0001. paid-up capital, and
500,0001. deposits on which 4 per cent. is al-
lowed, the Bank rate of discount standing at 5.
By lending out the whole of the 500,000!. of de-
posits, a profit is made of 5,0001. But that
would be precisely the case if the 100,000/. capi-
tal alone had been lent out. In both opera
time the gain is equal, but in the former
the bank is liable for 500,0001., with
100,000/. lying idle to meet it ; in the latter
it has no liabilities at all. We need say nothing
of the difference in cost of carrying on the busi-
ness, the increased danger of bad debts in dealing
with the larger sum, and other technical points.
It is perfectly clear that in practice little or no
reserve is kept to meet the deposits held at
interest out of those deposits themselves. The
whole, or nearly the whole of these sums must
be lent out if the banker is to gain any profit,
and thus a serious liability is incurred of having
to meet demands which may be made in a week,
with only resources in hand that will not mature
for one, two, or even three months.

It is impossible that so glaring a defect should
not strike the experienced bank managers of the
day, and to obviate it they adopted a practice
which we suspect is not likely to be continued.
They came to the conclusion that if a bank could not
safely lend out its own means in direct discounts,
it might do so indirectly by lending them to a dis-
count house. To repeat our previous illustration of
the 500,0001. deposits and 100,000/. capital:—
instead of keeping the latter amornt ready in
band to meet current demands, the banker placed
his capital at call, so that instead of obtaining a
single return of 5,000/. on his deposits of
500,0001., he also obtained the usual 4 per cent.
allowance from the discount house, or 4,000/. in
addition. The calculation usually made was
that if the banker, from unforeseen causes,
required his money at a moment's notice,
he could call it in at once, while at the
same time he enjoyed a considerable profit
by leaving it out as long as he conveniently could.
Now, it is perfectly evident that, attractive
as this plan seems to be, it is suitable only for
fair weather times. Like the Bank Charter Act,
its weakness is roughly exposed in the first
moment of difficulty. It is then that a banker
has most need of his reserve., and that he is
obliged by the general pressure to get back from
the discount house his deposit at calL But the
discount house very probably finds itself unable to
meet these demands in cask, although, as regards
assets, it is more than solvent. While the banker
has been employing the deposits of his
customers, the discount house has been em-
ploying the deposits of the bankers. The
slightest consideration of the subject will
show what the eventual end must be. The chief

repository for these sums
this
been the cash reserves of this
vincial bankers, was Ovratawn
Pressed upon all sides by essinkicies deb
satisfy immediate liabilities whirl} they lad pulp
prospective assets to mart, a -sespinaion cid Par
ment was inevitable. The bankers now find that
cash at call means nothing more nor lees than a
short loan depending upon the solvency of the
debtor, and is entirely distinct from cash in hand.
This is by no means the first time that the dif-
ference has been pointed out, bat it has now the
advantage of a positive illustration which cannot
possibly be misunderstood. The bankers, who cal-
culated upon having no small portion of their
ordinary reserve available on demand, thus find
themselves suddenly transformed into the position
of single creditors. In little more than a month's
time the periodical accounts of the joint-stock
banks will be submitted to their shareholders, and
it will only be right that the plan of lumping
money at call with the amount in hand and at the
Bank of England should be discarded for good.
The proper heading under which this item should
figure would be that of loans and advances.
We have no desire to condemn the system of
business of a discount house generally. Under
proper restrictions it can be almost as valuable to
commerce as that of banking. The use of it has
the advantages of economising the employment of
capital ; the abuse leads to the indefinite locking
up of resources which should at all times be im-
mediately available. A merchant or private per-
son may, and often does, find it well worth his
while to deposit for a time a few thousands of
pounds which can be productively applied until
the necessity arises for the withdrawal of thesum.
Such cases occur every day. Latterly, however,
the system has been expanded into the holding of
bankers' reserves, with what result we are now
only too familiar. No possible objection can be
found against a bank lending a part of its avail-
able cash to a discount house. It is simply a grant
of credit to an establishment of undoubted soli-
dity. The fault, however, rests in making a loan
of those sums which should properly remain in
the bank's till. It has been shown that the pri-
mary cause of this practice lies in the allowance
of interest on deposits except for fixed periods ;
but this is a subject of too much importance to
enter upon now. Whatever opinion may be
formed upon the system, it is subsidiary to that we
have immediately in view. A great crisis has
passed, one exclusively threatening—at least, in
the fiat instance—the position of our banking
community. At a moment of supreme difficulty
the failure of OVZHEND, GURNLY, and Co. de-
p ived them of the immediate command of re-
sources upon which they lied all along relied. The
lesson is obvious, and not likely to be speedily
forgotten.

OUR CONTEMPORARIES.
(THIB DAY.)

Mr WORM BILL—Taz ILIFICIRD DIVISION TO-MIGHT.

The Times reminds its readers that even if the

government succeeds in defeating Captain Hayter's amend.
meet there will still remain four.other amendments—some
of them involving important principles—to be disposed of
before the Reform Bill can be considered in detail, and
once in committee, the subj►cts to be discussed are mul-
tiplied more than ever. No one, indeed, can glance at
the order-book of the House of Commons without seeing
the impossibility of carrying the bill this session. If it
could be said that this flood of amendments were the
device of factions opposition the ministry might be justi-
fied in persevering ; but the Times thinks no candid man
can admit so much. The government itself is primarily
responsible for the present block. In such a position there
is only one step which can be taken consistently with the
mutual respect which ought to exist between the
House of Commons and the government. There ought
to be no division to-night. The House of Commons
cannot be expected to proceed with the bills. The govern-
ment could not retain office were Captain Hayter's amend-
ment carried. No one, however, could object to its being
negatived without a division, supposing it to be under-
stood that the scheme of reform will be reconsidered
with a pledge to reproduce it in an amended form next
session.

There is no use, says the Daily News, in cherishing any
illusion upon the fact that in the division of to-night the
existence of the government is at stake. The section of
the Liberal party of which Lord Echo is the spokesman,
are alarmed, and seek to induce the ministry to abandon
the bill, but the Daily News has faith enough in the poli-
tical and personal honour of the leaders to feel confident
that they will not think for a moment of entezing into so
corrupt a bargain, and follow a course which would be
to admit the justice of the censure conveyed in the ob-
noxious resolution. It would amount to an acknowledg-
ment that legislation during this session, which they have
declared to be desirable, and even necessary, is impossible,
or inexpedient; and to • condemnation of their ow .z
scheme as inconvenient, inequitable, and immature, to a
degree which renders it unfit to serve even as the basis of
a satisfactory measure. The worst of culprits are not
asked thus to criminate themselves. An adverse vote,

therefore, will be attended with the usual consequences
of a vote of want of confidence in the ministers
of the crown. To the conservative opposition this
will be a triumph, but the • " cave," which is
anxious that the bill should be thrown out, and
yet that the government should stay in, seeing the in-
evitable consequences of a government defeat, may well
reconsider the position they have assumed. Lord Echo
cannot be indifferent to the serious consequences which
are sere to follow the accession of tones to office during
the present critical state of Europe. According to the
latest intelligence, one of two things seems inevitable—a
great European war, commencing in Germany, or a great
European revolution, commencing in Italy. No govern-
ment which could be formed, out of the materials at the
disposal of Lord Derby or of Lord Stanley, is fit for a
moment to confront a contingency of this sort.
The Herald believes in the rumour that the government
ere seeking to recall the Adnllamites by a promise that in
return for their votes, should Captain Hayter's amend-
ment be rejected, the cabinet shall for a year at least post-
pone parliamentary reform. It is possible, though im-
probable, that the artifice may succeed ; but it is alto
gather impossible that any set of statesmen in England
could long continue, under such a tenure, to hold the reins
el government. The Herald continues to assert that all
the oratory, all the logic, and all the truth have been
against the bill.
If such a compact as the Herald alludes to has been
made, the Poet thinks it difficult to my which party plays
the more disgraceful part—those who, to save their plates,
propose such terms, or those who, to save the government,
are willing to accept them. That the bill must be with-
drawn is certain ; but let it be withdrawn manfully,
bravely, and let the government meet the obloquy of
having proposed so crude a measure.
In the opinion of the Star the course of the government
will probably be this—After the vote on the amendment,
and supposing it favourable to the ministry, the govern-
ment will as soon as possible get into committee and go on
with the franchise clauses. These once passed, the govern-
ment may not be unwilling to meet the wishes of the house
in any course which may be considered convenient with re_
gird to the redistribution clauses, and to make any changes
in the plan of grouping which might render it more prac-
tical and more acceptable to the constituencies without at
the same time interfering with the principle of the ma-
ture. Unless the Star is greatly misinformed, the division
to-night is likely to be much more favourable to the govern-
ment than that which took plain on Earl Groevenor's
amendment.

Without doubt, se the Telegraph views it, the decision
to-night will be in favour of government. The majority,
we may almost maim., will mach two figures, and will be
amply sufficient to carry the measure, with the impetus
of an acknowledged victory, into committee.

THZ OBOTACLI TO TILL COI

Dismisslig the rtipulaticets which Assitria has &demigod,
the Time deloaribse them am amounting in =Wanes to

this, that the Schleswig-Holstein question and the Italian
quest* are not owsetillas at s 1 Imif ghat 41111 g qgilbeeel
meg :one tide a*, that*, argefinedillatiself.
But Ws *pot bumble -ground, ~eitheilki matted is
meat wrikhitatter of gnst. MO W& *a herself callow-
-14441101 *the Duo** are deariglitriecen when
the l*lstrkingdom as formed,* saw wig" every-
one else that that kingdom would day be water-
minous with Italian nationality between the Alps and the
Adriatic. She ham acted on this conviction ever wino.,
and has not regarded Venetia as a province which
is a natural or integral portion of her terri-
tory. Very recently she permitted it to be under-
stood that she would cede it for a compensation in kind.
Under these circurnstanoes, Austria, though she may
uphold her own right to Venice, cannot with justice
maintain that the Venetian question is no question at all,
and that it is not so much as open to discussion. Austria,
by revoking the treaty of Osetein, and making Holstein
ever to the Band, throws down the gauntlet to Pt ass*
and by this challenge she at the game moment defies Italy
to amuses. Bach a course looks like a plain expression
al en equally plain policy—the policy of war. It would
seem to mean that Austria expects more from a fight than
a parley, and that she relies upon her military strength to
obtain better terms from her adversaries than a con-
ference might give her. But such a policy would be both
dangerous and inhuman.
The Daily Neva interprets this last proceeding of
Austria as signifying unquestionably her determination for
' immediate war ; and under the circumstances it seems

hardly worth while to trouble a number of respectable
gentlemen to leave their homes for the conference. The
plan with which the imperial government is said to have re-
cently toyed with of constituting Venice " a free city" is
futile and mischievous considered as a settlement of the
qnestion. Any renunciation at all events accompanied by
terms which would entail a union of Venetia with Italy would
be a source of danger. The step which Austria has taken
in Holstein is also inconsistent with the engagements of
the imperial government with that of Prussia, and by thus
rejecting the only apparent means of preserving peace
Austria is again putting herself gratuitously in the wrong
before Europe. The Deily News trusts it is not true, as is
reported, that Austria is relying on an alliance with
Russia. A league with the seal-barbarism of Eastern
Europe to perpetuate barbarous arrangements in the West,
would alter the character of the war, and could hardly fail
to bring into the field powers which are at present little
disposed to join in the *mullet. Without Russian inter-
ference it will be very difficult to circumscribe the war ;
and we can hardly imagine a termination of it which shall
give Austria reason to felicitate herself upon the course
she has now taken.

The Post instances the new turn which negotiations
have taken as additional evidence in support of the view
which it has expressed from the first that it was almost
impossible for half a doom statesmen to arrange the affairs
of Europe in such a meaner as to avert a conflict between
the great German power, or between Austria and Italy.
The Herald, the only journal in the daily press
which advocates the Austrian cause in Italy as well
as in Germany, looks now upon war as inevitable,
and adds that, whichever begins, the war will nevertheless
be a purely defensive one on the part of Austria. The
Herald applauds the refusal of the Emperor of Austria to
allow the question of Venetia to be discussed, and repre-
sents Italy as a garotter who is to be bought off by his in.
tended victim. It is extremely indignant with the Times
for turning round upon Austria and her Emperor, and for
making that gallant and cruelly-tried sovereign responsible
for war because he refused to purchase peace by dishonour
and disasters worse than the most unsuccessful war can
inflict upon him.
The Telegraph thinks that though the chances of peace
are slight they are not more so than they were a few days
ago, and that the situation is practically unaffected by the
declarations imputed to the government of Vienna, which
more or less indicate the reserves accompanying its readi-
ness to take part in an international council.

Id TOPICS.

The Tema remarks that the erasure by the Lords of
the clause of the new Capital Punishment Amendment
Bill is by no means fatal to the principle of the measure.
The difference is this, that instead of recognising two de-
pees of murder, the one capital and the other not capital,
Lord Grey's proposal, which the house has adopted, reeog-
nine two degrees of manslaughter, the one aggravated
and the other comparatively venial. At the
same time the mere nomenclature of our criminal
law is no trivial matter, and there is • good deal
in Lord Grey's objection that the word " murder" was to
be applied bylaw to crimes which had ceased to be capital.
Among other points in the bill which ought to be ma-
turely oonsidered, the Times especially mentions the pro-
vision that "express malice aforethought " should be
found by the jury as a matter of fact, the effect of which
would be to cast upon a jury the painful duty of going, as
it were, out of their way to find • verdict which must be
followed by • sentence of death.
The Herald agreed' with Earl Grey and Lord Romilly,
that it would be • dangerous precedent to admit in plain
terms, and with the deliberate sanction of legislative
enactment, that there may be murder which is no murder
or rather which being murder shall not meet, and does not
deserve, murder's punishment. The creation of a crime
of aggravated or criminal manslaughter will go far to
attach to this now too lightly thought of phrase its proper
weight and significance.
The St or expects that the disaster at Callao will not dia.
pose the Cabinet of Madrid to consider any terms of peace,
and meanwhile her dangers are increasing, for the quad-
ruple alliance which has been formed against her may pos.
sibly lead to the loss of Venezuela. If the allies can
carry the war there they will light a flame which
will take many admirals and fleets to quench, and added
to this is the possibility that the South American patriots
may make an attack on Cuba. When slavery died its
hard death in the United States, everyone foresaw that
the existence of that institution was doomed in Cuba ;
but it was impossible to tell from what quarter Nemesis
would come. If the blow should be struck by a gallant
race which, after having once achieved its own freedom
against terrible odds, is now again threatened with sub-
jugation by the old tyrant, the retribution would be as
just a one as Heaven ever inflicted upon • perverse and
=teachable nation.