The Express.
London, England, 1866-06-18 00:00:00

(THLS DAY.)

Arasouon the worst effects of the late crisis
have passed over, the Directors of the Bank of
England appear to have no objection to the pres-
sure continuing in its present modified form.
Doubtless a more or less considerable profit is
made out of it, and the fortunate holders of Bank
stock will get an increased dividend next September.
Looking at the question as simply a matter of
business, the Bank is right to maintain its rate of
discount at 10 per cent. The advantages are
obvious. First of all, it perpetuates the uneasiness
of the public, creates a corresponding indisposition
among other capitalists to lend, and therefore
diminishes competition. Secondly, since the
Government letter absolves the Bank from
keeping any reserve whatever, they can trade
with safety to their last shilling —an
advantage which no other bank in the country can
possibly possess. Thirdly, since to make use of
the powers allowed by the Government would
only tend to lower the rate of discount, the step,
whatever profit might accrue, would not be to the
benefit of the Bank. And if it is the sole, or
even the main object of a public company, in-
vested with the rank and privileges of a national
institution, to make all the profit within their
power, the Directors of the Bank are acting wisely.
Cho public, however, are not so easilysatisfied. The
charge that the Government letter of license has been
adroitly converted from a public aid to commerce into
an instrument for increasing the corporate gains of
the Bank has become too serious to he overlooked.
A national establishment like the Bank of Eng-
land ought never to be exposed to such a reproach.
We are ready to believe that it may be unjust,
but in that case the Directors cannot be absolved
from the charge of incompetency. There is no
question, discarding the previous hypothesis, that
the authorities of the Bank have proved un-
able to deal with the difficulties of the time.
Almost at the moment when the suspension of the
Act of 1844 was felt, by the unanimous consent
of the commercial world, to be vitally necessary,
the Governor and Deputy-Governor expressed a
contrary opinion. It was fortunate that the
CHANCELLOR of the EXCHEQUER did not rely
entirely upon their advice, for the Bank
of England must in that case have been
in imminent danger of stopping payment
twenty-four hours afterwards. Since then
the management of the Bank has been character-
ised by the same want of a comprehensive grasp
at the exceptional circumstances of the time. It
may seem strange that a body chosen from the
first merchants of the world should prove inca-
pable, even when armed with full powers, to deal
with a commercial crisis, and the event is certainly
rare. It should be remembered, however, that if
trade tends to expand some minds, it narrows
others, with what result we now see.
There can be no doubt that the maintenance of
the Bank rate of discount at 10 per cent. has
been a grievous disappointment to the mercantile
community. At present the great object to
be attained is the revival of confidence,
and nothing can act in that direction with greater
force than the reduction of the rate of discount
from the present almost panic point. An able
contemporary has put forth the view that until
credit returns it would be better for the Bank to
defer any change. But this argument is entirely
wide of the question. The mere fact that the
rate is as high as 10 per cent. at once discloses the
chief obstacle to placing general credit upon its
ordinary footing. It is not the first time, as we
have had too often occasion to show, that the effect
of putting extreme pressure upon the money
market, instead of obviating a crisis, is equivalent to
intensifying it or causing it altogether. In all these
questions sufficient attention is rarely given to the
moral influence produced by what are usually
termed restrictive measures. At certain times it
may be necessary to curb speculation as
much as possible, and to adopt every
available means for that purpose. But the
remedy is not one of unfailing application. The
corrective frequently turns out to be as mis-
chievous as the evil,when a legitimate expansion of
trade is confounded with over-speculation. It is
not pretended that our existing trade is carried
beyond the strictest limits of prudence ; in fact,
hardly a day passes that we are not congratulated
upon the sound position of commerce. All that is
wanted is simply a completer restoration of credit,
a cessation of the excessive distrust invariably at-
tending a pressure in the money market, real or
artificial, and a general return to that mutual
confidence, which is the life and soul of trade.
As long, however, as the rate of dis-
count is kept up at 10 per cent.—far
higher, by the way, than in any of the
countries threatened by the war in Central Europe
—the public cannot help feeling alarm. It extends
to all classes, from the depositor of 1001. in a joint
stock bank to a great firm whose transactions are
reckoned by millions. If the full truth could be
arrived at it would be found that the Bank'notee
withdrawn during the crisis by mercantile houses
and locked up in their safes for fear of accidents
amount to an cnui moua total. As long as distrust
continues these sums remain unavailable, and

THZ WAR.
The Times infers from the telegrams that the
Prussians have outstripped in the race their proverbially
slow adversaries, and have accomplished the conquest of
Saxony without striking a blow. However, we shall see
whether General Benedek has harboured some bidden de-
sign under his apparent tardiness. The city of Dresden is
certainly a noble as well as a valuable prize for the Prue.
miens ; but they would hardly have reason to rejoice at their
easy conquest if the Austrians were with equal facility to
overrun the much-coveted province of Silesia, and take up a
strong position there. Master of that ancient hereditary pos-
session of the Hapsburgs, the Emperor Francis Joseph
could well afford to pause in the fratricidal strife, and offer
to come to terms with Napoleon for the cession of Venice.
Still, whatever solution the fortune of war may bring.
there is no doubt that Prussia will always find herself at
the head of the German people. In the very vote of the
14th the free cities threw down the gauntlet for Prussia,
and only kings, electors, and grand dukes were in favour
of Austria.
The Daily News remarks that the policy of Prussia
seems to be to employ the interval before her army meets
that of Austria to strike terror into the smaller German
States, in order to decide es many of them as passible to
take her side. From Austria we get no information, the
only lines by which it could arrive being in the bands of
the government, which will allow no facts to transpire
that may be useful to the enemy ; but it is impossible to
doubt that the imperial troops are pressing forward to sup-
port their retiring allies, and that the Prussians will imme-
diately have to make good their pretensions against Mar_
shal Benedek. The Daily News characterises the Emperor
of Austria's manifesto as grave and earnest, rising in pas-
sages almost to eloquence. He is fighting in Germany for
the most just of causes, and it is certainly to be regretted
that before he was called to that conflict he was not ad-
vised to avail himself of the opportunities he enjoyed of
rectifying his position in Italy.
The Post draws a gloomy picture of the conflict which
has now began. Italy has already been drawn within the
vortex ; who knows whether France. Russia, and even
Great Britain, may not ere long be compelled to take part
in a contest in which the interests of every European

power will be more or less directly involved ?
The Herald summarises the late diplomatic and military
movements in Germany in a sense very unfavourable to
Prussia, whose attitudes described as insolent, provoca•
tive, and revolutionary. Enumerating the forces which
have joined the Austrian cause, the Herald finds it diffi.
cult to believe that Prussia has entered upon the war
without relying on other assistance than is promised by
the unaided strength of Italy.
The Telegraph recognises the historical correctness of the
statements in the Emperor of Austria's manifesto, and
says it is impossible to read that document without a
strong sense of sympathy for the unfortunate monarch
whom the persistent antagonism of one ambitious states-
man has brought to this hour of peril. Francis Joseph
now draws the sword with the avowed object of de-
fending the authority and rights of the Confederation,
which are menaced by a rebellious member; of supporting
his allies in that confederation who are threatened
with political extinction for their fidelity to the Federal
pact; of checking the spirit of lawless and insolent
aggression ; and of imposing terms by force on a reckless
disturber of European peace.
The Star recognises in the movements of Prussia the
same promptitude, daring, and singleness of purpose which
she showed in the seven years war. Hanover is not
likely again to escape from her determined grasp.
Prussia's chief strength, more than her needle guns and
her exchequer, or even the co-operating movements of
Italy, lies in the heterogeneousness of the Austrian
empire. Austria's fragments, more or less loosely banded
together, scarcely cohere through the wear and tear of
time even in peace. At the first shock of war they may
possibly fall to pieces.

1
ll'