The Sun.
London, England, 1839-05-17 00:00:00

MONEY MARKET and CITY NEWS'

TIME S.—The long-expected notice of an advance in
the rate of interest was issued at the Bank this morning,
and is in the following concise form :
" Bank of England.
" At a Court of Directors, held 16th May, 1839, it was
resolved—' That the rate of interest on Bills of Ex-
change and Notes discounted at the Bank of England be
5/. per cent. from this day.' "
No one objects to the course here taken by the Bank ;
on the contrary, all arc aware, from circumstances per-
fectly notorious, that they had no alternative, and the
only questions arc, whether they have begun early enough,
and whether the measure will be effectual for the purpose
they have in view. It will furnish a good plea for an ad-
vance in the rate of discount all over the country, but
as regards that !department of the Bank separately,
it' money is w anted, the terms will not keep out applicants,
and their functions as a bank of deposit, independently of
every thing else, will allow an increase of the circulation
by draughts upon them, over which they can have no con-
trol. The more likely too is this to happen when there
are other banks of good security, where interest is allowed
upon deposits. Their inevitable fate is, do whatever they
may to prevent it, to merge gradually into a bank of issue
only ; the exact period may be sooner or later, but it be-
comes a mere question of time, and then they will have ar-
rived at the proper functions which belong to them, which
must, under proper control, give as much steadiness to
the circulation as is compatible with the issue of paper at
all. At present the movements of the Bank of England
and the Corn-market have a close and most important
bearing upon each other. The harvest being so near, all
may still be right ; but in the city, as in Downing-street,
we are at the mercy of contingencies.
The sales of Stock on account of the Bank were con-
tinued to-day, and 50,000/. 3.12- per Cents. Reduced were
then brought to market by the Bank broker. But what
excites the most curiosity is the further sales on account of
the savings-banks, 15,000/. Consols more haring been sold
to-day. These, with the Bank notice for raising the rate
of discount, would have contributed in ordinary cases to
depress the funds considerably, but Consols left off at a
very alight depression, being 93 to for Money, and 931-
to for Account. Bank Stock was 195 to 6 ; India Stock,
255 to 6 ; Exchequer Bills, 335. to 355. premium..
HERALD—The above notice has created no surprise
whatever amongst] the monetary and commercial interests,
since the late evidences of the state of our money market,
which has for some time been labouring under au adverse
position of the exchanges with the Continent, as well as
other concomitant circumstances, have pretty well pre-
pared for it.
PO ST.---The commercial classes had been so fully
prepared for this advance by the statements which
have been made in the public Journals respecting the de.
mend for specie, and the fall in the Foreign Exchanges,
teat the appearance of the above announcement caused no
surprise among them. The rate previously charged by the
Bank was four per cent., and the change will necessarily
produce a corresponding rise in Lombard-street. The
private bankers and discount brokers have, however, been
lately obtaining full 4!-, per cent. on first-rate paper, and,
in some instances, we understand, as much as five per cent.
has been demanded and given.
The letters lately received from Liverpool represent the
Cotton Market there to be still extremely unpromising.
progress can be made in sales of the article, so that
prices are gradually declining to a lower scale, and are,
moreover, but little better than nominal. The American
houses are already speculating upon the probable effect
which this altered state of things may have on the New
York Money Market. It is considered that bills on Europe
Hill become very scarce again, the consequence of which
must be a corresponding advance in the rate of exchange.
The step taken to-day by the Bank of England—that of
making money dearer—necessarily tends to defeat the
views of the monopolists both in corn and cotton, and it
must, therefore, be regarded as one by which the country
at large will be most materially benefited. The Cotton
Market seems to have been upheld in a great measure by
the banking power of the United States, but, to add to the
embarrassments which the holders must experience from
the increased value of money here, they have, as we men-
tioned a day or two ago, to contend with the yet greater
disadvantage arising from a considerably reduced demand
for the commodity.
C HRONICL E.—No material effect was produced
upon the English Stock Market by this announcement ;
but Consols, on the contrary, continued firm, for the mea-
sure adopted by the Bank is considered more one of caution
than of absolute necessity, and the serious effects which
would otherwise have been produced by such a step are
not, consequently, apprehended in the present instance.
It cannot be denied that the Directors have acted circum-
spectly, for there never was, perhaps, a moment when
trade and commerce were in such an unsatisfactory state,
with so little appearance of amelioration, while thd
exchanges continue against this country, and the
exportation of bullion is going on to a great extent.
The stock of gold and silver at the Bank is conse-
quently reduced to a very serious extent—to less
than one-fourth of the circulation, we understand.
Under these circumstances, therefore, the general
opinion evidently is that the Bank has acted wisely, but
the tone which matters may assume from this proceeding
cannot, of course, be correctly ascertained for a day or
two. Consols, as we have already said, remain firm at
034 for Money, and 93f to 4 for the Account. Exchequer
Bills are 335. to 355. prem. ; Bank Stock, 195 to 196 ;
and India Stock, 255 to 256.
This was settling day in the Foreign market, and the
scarcity of money which has existed for the last few days
was particularly felt, as much as five per cent. being
given for loans upon the best securities. In other re-
spects the adjustment of the Account was unattended by
any remarkable feature. Most of the Foreign Stocks
were heavy throughout the day. Spanish Active left off
at 184- to 191; Portuguese Five per Cents., 354 to 4 ;
ditto Three per Cents., 211 to ; Dutch Five per Cents.,
410 to ; ditto Two•and-a-Half per Cents., 56 to 1;
Belgian, 1014 to 1021; Colombian, 30- to 31'; Mexican,
25i to 26 ; and Peruvian, 18 to 19.
In Shares there has been little going on, and scarcely
any variation in the prices has occurred. Birmingham,
(old) are 69 to 71 prem. ; ditto (new), 20 to 21 prem. ;
Southampton, 43 to 44 per share ; Great Western, 7 to
8 prem. ; Leeds and Manchester, 10 to 12 prem. ; Bir-
mingham and Derby, 15 to 13 dis. ; Gosport Junction,
2 to 3 prem. ; Brighton, 91 to 9+ dis.; Blackwell, 21 to
2 (Hs. ; Greenwich, 17 to per share ; North Midland, 4
to 3 dis. ; Glasgow and Greenock, I dis. to s prem, ;
and Eastern Counties, 6+ to 54 dis.

BRUSSELS, MAx 14.--The average price of
Wheat last week was 241. 13c., and of Rye 13f. 75c. Im-
portation is therefore still free of duty, and exportation is
prohibited.
General the Marquis of Anglesey, and the offi-
cers of the 7th Hussars, will give their annual grand dinner
at the Clarendon Hotel on Monday, the 17th of next
month.
The noblemen and gentlemen, members of the
Catch Club, give their annual entertainment to "the
ladies," at Willis's Rooms, on the 25th of this month.
Sir Robert and Lady Peel, accompanied by their
family, purpose leasing town in the early part of the ensuing
week, to pass the recess at Drayton Manot.