The Express.
London, England, 1867-11-04 00:00:00

TRADE AND FINANCE.

(From the Dairy Neu.).

However much the various classes of bankers
may differ in opinion, it has always been admitted,
at least in words, that the one paramount considera-
tion is that of safety. The great problem has been
to combine safety with profit. Its solution was
thought to have been found in OVEREND, Guano',
and Co. The banks deposited their moneys at
call with this company, leaving the latter to
undertake all the risk of employing it,
while the former got the greater part of the
profit. As long as times were favourable
the transaction was harmless enough, although,
in some measure, unprofitable, since the
banks might just as well have used the money on
their own account. They found out their mistake
when OVEREND, GURNEY, and Co. stopped pay-
ment, but hitherto have only half used the know-
ledge they then gained.
One effect, nevertheless, has been produced by
the stoppage of OVEREND, GURNEY, and Co.,
which, according to the temper of the observer, will
be considered rod .
ce or had.! Whateverer Fatly be
the faults of this on pre-eminentcompeny in the
monetary world, it had at least the merit, which
few capitalists possess, of courage. Its managers
had no objection to run risks, provided the
object was such as to make it worth
their while to undertake them. Success seems
to have disturbed or perverted their calcula-
tions, and at last the ruin came. Still a void has
been left. Bankers complain that the only paper
offered them to discount are the ordinary trade
bills for inland commerce, and those of less amount
than in average years. The foreign demand is,
for all practical purposes, null. The late ship-
ments of gold have produced no appreciable effect.
If a million or two more were to be withdrawn
from the Bank, bankers would find it as impossible
as now to raise the current tale of discount above
11 per cent.
The crisis of 1866 is, as before, producing a
state of transition in the monetary world. The
I beaks have lost• a certain aid upon which they re-
lied, in the stoppage of OVEREND, GURNEY, and Co.
It was useful enough to do perhaps hazardous
business, which, however, was made perfectly
secure by the sanction of a good name. The in-
termediary gone, there is much perplexity and
trouble. Discounting capitalists, whether bankers
or private individuals, have now to judge for
themselves. Hence the timidity with which all
but first class paper is looked at. Houses of
established reputation can obtain as much as they
please, but merchants and shipowners in the lower
rank find it nu easy matter to obtain ordinary
accommodation. Partly from the remaining dis-
trust, and partly from the dislocation of the
general machinery of commerce, caused by the
events of 1866, trade is checked, and is likely to
be so for some time to come.

It is difficult to propose a remedy, but one at
least may be suggested. The collapse of OVEREND
and GURNEY have left the banks masters of the
financial position, but they hesitate to take the
advantage. The qualities required are not crest—
* little boldness and a little trust. Care not to
lock up too much money—an old banking axiom
—and what is of more importance, care not to
press upon clients, but to afford every indulgence.
Also, though hardly any have the courage to do
to be liberal when everybody is drawing in,
to discount freely s hen no one else will do so, to
lend money dear, and to care leas for the rates of
interest than to give each borrower the regular
advance that his position warrants.
In monetary affairs it is almost impossible to
give advice while that fossil institution the Bank
Act weighs upon modern progress. Every
one appears to dread a material change in the
Bank reserve. If it is an increase, the universal
opinion is that trade is languishing ; if a de-
crease, then a rise in the rate of discount and
general distrust. In these days we have no fixed
rule to guide us. According to our present legis-
lation opposite effects proceed from opposite
causes. It is to be hoped that the next session
will produce a change.

FAREWELL BANQUET TO Mg CHARLES