Northern Times.
Liverpool, Merseyside, England, 1857-11-02 00:00:00

THE PRESENr FINANCIAL CRISIS..

It world perhaps be too much to say that the present
financial crisis is equal to that of 18i7, although, in a
great measure it resembles it. The real difference is,
that whilst in 1847 our financial difficulties were eroduced
by inordinate speculation at home and -by over.trading
abroad, in the present instance it is produced by the
speculations-of our continental and transatlantic brethren.
In 1847 we saw firm after thn, which, previous to that
period, were considered almost "as sae as the hanky"
rumbling to pieces, and the result was a general panic:
Bet still, such was the general so ndness of car commerce,
that not a single bank was obliged to stop payment,
although there were several who were regarded as being
in a very ticklish position. The panic of 1847, may,
therefore, be favonrably compared with, the panic now in
operation in America. In that country, with one or two
exceptions, the whole of the banks have stopped, or
rather have refused to pay specie. This is, by the
majority of perseme, regarded as sound pol!cy, and as the
only means of preventinp, absolute-ruin. But the conse-
quence to this country cannot fail to he very disastrous.
When the enormous amount of our commercial transac-
tions with America,. the almost fabulous amounts of our
exports to that country, come to be considered, our
manufacturers must be expected to suffer severely The
long list of failures that is brought by every mail is onoceh
to frighten even the- most prosperous firms, and, as a
consequence, numerous failures may confidently be
expec ed, so intimate are the connections between firma
in Boston and New Fork on the one hand; and Liverpool,
London, Glasgow, and Belfast on the other.
Nor will the embarrassments be exclusively confined to
the American trade. The present high rates of money
must produce embarrassments among smaller houses in
other departments. anti the pressure is at this moment
being most unmistakably felt in the textile manufacturing
districts in Lancashire and Notting;iarn, and in the
hardware districts of Birmingham and Sheffield. In fact,
all branches of trade must, be large sufferers, ant, as a
consequence. the working classes cermet but Cel the
effects of the general depression during the next few
mouths. Such is now the d,strust that naturally exists,
that few of our manufacturers care to consign their goods
to firms in America, who, for aught they know, may next
day stop payment. Te carry on the manufacture of
goods for which there will really be no market-for the
next six months, would be suicidal folly ; and yet for
manufacturers to close their; mills is almost equally
disastrous, as they cannot afford to allow their capital to
I remain idle. Of the two evils, however, the latter is
evidently the least. But, although the prospect for the-
next few months is gloomy enough, yet there are strong
grounds of hope for the future, especially as regards this
country. Had p ayments still continued to be made hr
specie, a very large amount of the precious metals would
have been drained from England, attracted by the!, high:
prices. The present high rate of interest in this country,
together with the non-specie payment in America, will,
however, petty nearly put a stop to this, because our
capitalists will prefer taking se.eu per cent for
aide money at call, than running the risk of sending
it to America. But, althoegt, there wdl not he that drabs_
that was anticipated some three weeks since, yet sr&
must be prepared to see a certain amount of English
capital finding its way to ..Annerica. owing to the great
depreciation of almost all the really good securities, some
of them having fallen as much as fifty per cant. Thee e
off. r very alluring baits and cannot fail to attract many-
of those who have any spare capital. As yet it is
satisfactory to find that so few houses in this country
have succumbed, and that only one bank has. up to tht3
time, been compelled to step payment, although a certain
amount of uneasiness is felt with respect to one or
two others. The present high rate of discount would, at'
first sight, lead many persons to believe that these were
the most prosperous times for the banks ; but they lose
sight of the fact. that in order to realise these large
profits they are compelled to run great rusks, inasmuch
as the paper, which in prosperous times would be con-
sidered as safe as a balk note, may -now at any moment
become almost valueless, and this not from any fault
--hants but from the misfortunes of those
on the other side ot the water. ine oantcs,ti
are obliged to, use every possible precaution ; but even
then they cannot hope to come off scatheless, because
several of them are known to hold considerable amount
of American paper.
There is also this additional cause for fear for some or
our banks,. especially in the metropolis. Daring the last
two or three years the competition amonest the banks
has been very great. The high • rate of dividend which
many of the old banks paid called several new banks into
existence, and, in order to keep up their business to their
old standard, the old banks have been compelled to en-,
large their sphere of operations, and to run greater risks.
At the same time the commercial public may be pretty
well satisfied that, supposing any great pressure was to
fall upon one of the London
.banks, the others would do
all in their power to assist it because, if once a feeling
of insecurity were to arise, it would be imposs'b'e to sayer
where it would stop. In the midst of all this trouble and
uncertainty, however, we have the inestimable blessing
of food at a cheap price. Vineat is now lower than it has
been for the last five years, and there is every probability
of its being still lower. Meat is also falling, and these
two circumstances will do,much to alleviate the misery
• which the financial crisis would otherwise infallibly have
produced.— Observer.