The Sun.
London, England, 1864-09-19 00:00:00

The Rate of Discount,

.~

The Presse, without entering into the question ()1
the causes which may have led to the recent rise to
the rate of discount in England, gives some detail
of interest on the situation of the Bank of Engl-ttnc
during the present year. It says :—" This crisis 11
not, as is generally supposed, a mere passing event
for it began as far back as last year. In fact, if wf
consult the table of the variations in the rate of
discount at the Bank of England, we shall see Ilia'
the year 1861 opens with the discount at 7 Per
cent.; that on the 20th January, it was raised to
that it fell to 7 on the 11th Feb., and to 6 on all
2,Cith Feb., it again rose to 7 on the 16ili April
to 8 on the 30th, and to 9 on the 2d May ; and thal
after again falling to 8 on the 19th May, to 7 et
the 26th May, and to 6 on the 16th June, it vv (11
suddenly raised to 8 on the 4th August, and to
on the Bth Sept. In seven months the rate of dis
count at the Bank of England has varied elevet
times. Nothing more is required to show that thee
is some organic defect, which, though it manifest
itself by tits and starts, has nevertheless an indo'
putable character of permanence. England Is
however, the country which best knows how tc
attract the precious metals. Why, then, are crise
so frequent there ? Most people would be incline(
to seek the reason anywhere than in the sin3Pll
fact that the English look on bullion chiefly as at
object of commerce, that they treat it just the saw(
as merchandise, that they have long ceased
regard it as a national instrument of exchange, an(
that they will send it to any place where
highest price can be obtained for it."

Turning to the situation of France, the article
observes :—" The stock of specie held by the Banit
of France has maintained during the last mono
nearly the same level as in the two previous ones
it may even be said to have attained its highest
figure; it was 266 millions on the 14th July ; an
on the Bth September, 281 millions—being an la'
crease of 15 millions, an amount not to be disdained,
especially when we see the alarm of the financis'
world at the possibility of a decrease of 8 or 1(
millions in the next return. (That just published
is meant.) The variations in the stock of specie
cannot have had any great influence in determiw
ing the Bank to raise the rate of discount, as the
changes for some weeks past have been trifling
the stock was 280 millions on the 25th Aug., 279
millions on the Ist Sept., and, as already stated
281 millions on the Bth Sept. It is said that al(
Bank has only kept up its stock to that amount 14
purchases of bullion. We are perfectly satisfied it
it is so; but we find nothing in the discount dc'
commodation and issue of notes to justify such ne
operation and render it indispensible. The amount
of bills discounted has been progressively diminish'
ing for two months pasta fact sufficiently explained
by the dulness of trade. From 676 millions on till
30th June it fell to 642 millions on the 28th July;
on the 18th Aug. it was 627, and on the 25th 612,
O❑ the Ist Sept. it was barely 616, and 618 on the
18th September, The diminution since 30th June
is therefore 58 millions. It is pretended that the
Bank has made greater difficulties about discount,
ing, and been very particular as to the bills it re'
ceived. That was the means it iormerly employed
to render the public consenting to an increased rate
of discount. It is about to return to the sole
system. The amount of notes in circulation haB
varied but little; the average is 790 millions; but
the amount was only 752 on the Bth Sept. In short
the returns of the Bank for the last month appeal
to indicate that, in order to keep the rate of discount
below that of the Bank of England, there has heel]
a return to old courses which the public had reason
to think definitively abandoned—the Bank would
seem to have purchased bullion and restricted the
issue of notes. We do not mean this as an expreSi
sion cf blame; we merely note a fact."