The Express.
London, England, 1861-04-08 00:00:00

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LONDON, MONDAY, APRIL 8.

I T is by no means surprising that some sensa-
tion has been occasioned by the evidence afforded
by the last Board of Trade returns of a great fall-
ing off in the export trade of the country. We
have been accustomed to see our exports mount-
ing steadily up, and we had gathered an impres-
sion that our business must constantly extend, no
matter what disturbance might arise amongst our
foreign customers. But the fact, shown in the
last returns, that the exports for the month of
February declined to the serious extent of more
than one-fifth (namely, 21 per cent.) compared
with the same month of last year, is calculated to
warn us that wo must not consider ourselves en-
tirely exempt from the effects of the vicissitudes
of trade. Our inimeiliate object is to cor-
rect what we think an error in the interpretation
generally put upon these trade tables. We hear
it said, " How very serious this falling off in the
" exports is ! At the same time see bow large
" the imports are—larger than at any former
" period. The result of this must certainly be an
" adverse balance of trade, which will cause gold
" to be draughted away from us in large masses,
" and will disturb the money market severely."
This may seem at first eight a very reasonable ap-
prehension. We are importing an increased
amount of commodities, and exporting less : what,
then, can prevent our being called upon to dis-
charge the heavy difference in specie 1 We think
we can prove that, although a long duration of a
one-sided trade of this kind would excite just ap-
prehensions, the falling off now suddenly wit-
nessed in our exports is likely to give, paradoxical
though the aseertion may seem, both relief to the
money market and a favourable impulse to the
current of bullion.

The immediate feature which puzzles many
reons—naniely, that of a large influx of gold

simultaneously with a heavy decrease in the ship-
ments of commodities with which we discharge our
debts to the foreigner in lieu of gold—is not now
witnessed for the first time. It will be recollected
that during the first six months of 1858 there was
a great decline in thu export trade, yet there was
also a remarkable index of gold, which, owing to
the stagnation of business, was stored up in the
Bank, causing the rate of discount to fall from a
panic range to a very low one. It might have
been argued then, as now, that, as we were parti-
ally suspending our shipments of goods, the ex-
changes would turn against us, and we
should not receive gold from abroad. Yet the
gold clime. The explanation is simple. Our
trade is more extended than that of any other
nation in the world. Our merchants and shippers
are acetudomed to watch the most distant markets
—those of India, China, and Australia—as
closely and familiarly as they do those of Ireland.
We have always an immense amount of transac-
tions open with those and with many other dis-
tant regions. At the same time, as befits oar
position as the great capitalist nation, we give
very large credits, both in point of amount and
duration. Indeed, as re cards a considerable por-
tion of our export business, it takes from six to
nine months before wo may get the returns.
Having given credit to remote countries for heavy
amounts, and having, perhaps, somewhat strait-
ened ourselves in paying, for the most part in
cash, for the raw material, labour, and
other costly components of the commodities with
which we have trusted them, it follows that if we
come to the determination to diminish our future

consignments to them, the returns must soon ac-
cumulate in such a manner as to add materially to
our home store of unemployed capital. In one
year, let us say, we have trusted India with twenty
millions of goods. We determine to trust her for
the following year with only ten millions. In duel
course of time, as the returns come in, we ought
to hold the other ten millions as cash in hand. It
is like the position of the banker who, having ad-
vances out to the extent of 100,0001., renews
them to onlythe half of that amount as Pity arrive
at maturity, and thus lets himself "run into
" money."

A sudden reduction in the amount of our ex-
ports from a high to a moderate point brings for
the time relief to the money market in several
ways. In the first place, we have been paying
the continental and other markets for raw material
calculated upon the necessities of an export trade
of say 140,000,0001. a year. When we reduce
our shipments to the scale of say 110,000,000/. '
a year, a proportionately Ices quantity of foreign
raw material is needed. The chock to our im-
ports of this gives an immediate tarn to the con-
tinental exchanges in our favour ; and at the
very time when we are feeling the benefit of the
change, the returns for our consignments to foreign
markets continuo to flow in upon the saws
scale u if we were still shipping goods
to the larger amount mentioned. In the
second place, there is a slackening of manufac-
turing industry at home. The workers by hand,
by machinery, and by steam are only partially em-
ployed ; less wages are paid ; lees currency is ab-
sorbed. In fine, less money is wanted both for
our home and our foreign trade, simply because
the amount of that trade is less.
Such is the explanation why a decline in the
amount of the export trade may be accompanied,
for the time, by favourable exchanges and an even
accelerated influx of gold. The ultimate effect
upon the general balance of trade as between
this and foreign countri.•s admits of no dispute
whatever : if the foreig:ier owes us twenty