The Express.
London, England, 1861-02-18 00:00:00

rup►xWlL,

THiq ETINFINO, THE 1114471:1, POLDITJL—And THE
Nil Nei: AND TIE neat /Serra Pitt, Parry, Jess Louis,
w.l Na.ltat:lris C. Illeplima, Mr A. Deinalai,
W. Crautur.

BIOS WATIR AT LONDON BRIDGE
Tall MIL NM.... Aherne" 1341.
To4ll•llaoW—Manieg. Th. Ha.— Aftersoce. el lam.

LONDON, MONDAY, FEB. 18.

Tun rise in the rate of discount at the Bank of
England to so extraordinary a point as 8 per cent.
forms a serious feature of the past week. The
circumstance that the measure was suite unex-
pected has contributed to rivet public attention
upon it with a degree of earnestness not often
observable upon these occasions. When such a

measure is rendered necessary by • cause evident
to everybody, for example, • foreign drain of
bullion, the sense of the commercial community is
quo k enough to anticipate the action of the
Bank. We know well the correctives pre-
scribed for such an emergency, and, ordi-
narily, there is scarcely a murmur in any quarter
when the Hank charge is advanced. This has
been practically exemplified during tho last trying
four months. Between November and January
the Bank rate had been raised from 4 to
per cont.—an increase of 7:i per cent.—
yet no ow complained, for the causes of the
movement were apparent to all. They were,
mainly—l, the large importations of grain,
caused by our deficient harved, and occasioning
an efflux of gold ; 2, the dislocation of trade
with America, and the flow of gold to that quarter ;
and 3, the drain upon the Bank of France, which
soon affected our market. But the cause of last
week's rase at the Bank from 7 to 8 per cent. is
not to be gathered front the considerations patent
to the public eye. The continental exchanges are
in a satisfactory position ; and although the reco-
very in the American exchange is only gradual,
it appears to bo sure, for there has hitherto been
scarcely any reaction. The situation is sum-
marised in the fact that the Australasian took on
Saturday for New York only 10,0001. in specie.
It is true there is a somewhat increased demand
for silver for the East, which has led during
the past week to the withdrawal of about
400,000/. of this metal from the Bank of England.
The demand for India arises, however, from causes
of • purely commercial order. It is not influenced
either by • sudden political and financial panic,
such as has been witnessed in America, or by the
efforts of • great Bank to keep afloat an unduly
large paper circulation, as we have seen
in France. The drain of silver to the East
has at various times caused tightness in
our money market, but it has never caused
panic, simply because we know it is completely in
accordance with the natural course of trade. Had
it not been for the demand for silver for India,
there would have been an increase of 140,0001.
during the last week in the Bank bullion.
This is indicated by the fact, that of
the 400,0001. in silver which has been
parted with, 140,0001. has been replaced by
gold imported from Australia. There is no longer
any profit on the exportation of gold to the Conti-
nent. Indeed, the continental exchanges are now
at such a point that there is • fair prospect of
gold being remitted hither. Already some not
inconsiderable amounts of continental capital have
come forward for investment here in good bills
under the stimulus of our high rate of discount.
The capitalists of Frankfort and Hamburg, where
money is " a drug," are glad of the opportunity of
sending over their surplus funds for employment
here at 7 and 8 per cent. in excellent securities.
This is au operation which will of course tend still
further to put the exchanges in our favour for the
present.

The Banks of England and France being in
the habit of exchanging information and other
civilities, the Directors of the former must have
been well aware on Thursday last of the great
improvement which has taken place in the position
of the latter. Considering how short a period
has elapsed since the French Bank were subjected
to a very active drain, it would have been unrea-
si n tblo t 3 expect so satisfactory a return as that
just issued. The enormous decrease-5,400,0001.
—in the discounts shows to how great an extent
the motive power for the recent draughts upon
the French specie reserves was supplied by the
Bank of France itself. The demand upon it for
accommodation, and the demand for gold, for de-
spatch abroad, have dwindled away together.
There can be no doubt, too, that the high
value of money has given a check to
French trade, and has reduced the amount of corn '
menial paper requiring encashment. So sensible
are the Bank and the Government of the discou-
ragement which the present condition of the money
market inflicts upon commercial enterprise in every
form, that it is fully understood the rate of dis-
count would have been lowered from 7 to 6 per
cent. on Thursday last but for the unexpected
news of the rise in the rate of the Bank of Eng-
land to 8 per cent., which was communicated by
the latter establishment to Paris by electric
telegraph.

ender these circtunstances we cannot feel our,
prised at the flood of inquiries which have come
pouring up from the country to every banking
house in London. " What is the cause of the
" rise at the Bank T " is the question put on every
aide. We notice that some of tho most uncom-
promising advocates of the Bank of England and
of the Act of 1844 have upon this occasion been
surprised into an expression of dissatisfaction. It
has often been affirmed that the Bank have no
special power— no peculiar control over the money
market. The assertion does act at all harmonise
with the experience of the past week. On Wed-
nesday the Bank accommodated the public at 7
per cent, and 7 per cent. was also the rate for
good bills in the general market On Thursday,
the position of financial affairs having undergone,
in reality, no change, they intimated that their
charge would henceforward be 8, and instantly,
the rate throughout the market became 8. An
apter illustration was never furnished of the power
actually wielded by the Bank in their threefold
capacity—firstly, as the largest joint-stock