The Sun.
London, England, 1854-10-03 00:00:00

hamper the increasing capital of the country, But Ist
terly some events have happened in both countries—and
there have been none similar that we are aware of on
the continent—which have tended very much to weaken
or destroy confidence, and are the sources of the difficul-
ties experienced in England and in the States.
In the long run it is quite certain that the quan-
tities of commodities to which political economists
chiefly direct their attention determine the whole
extent and profit of trade—they determine, in fact,
the amount of population as well as the amount
of exchanges, and prescribe by inexorable laws the
total amount of business which can be done. But as
one great element of all production and all exchange
is confidence (for if one man were not assured that an-
other is providing food for him, he must provide it for
himself—a principle which pervades all society, without
which there could be no division of labour)—the moral
quaiities of men determine at every period the distri-
bu-ion of commodities ; and, for the moment, even more
than the element of quantity may cause a scarcity or
abundance. How apparently abundant was capital in
1845—how apparently scarce now. Yet there can be
no doubt that in relation to the wants of the people or
the work t . be done, capital is really more abundant
now than it was then. We shall find, therefore, in the
events that have lessened confidence in both countries
the explanation we seek.
Within the last few months a most extensive falsifies.
tion of dock and delivery warrants has here been brought
to light. By that falsification several discount houses
and banks have suffered, and the losses of one firm are
variously conjectured at between 80,0001. and 200,0001.
In it several persons were implicated, some of whom pre-
viously bore a very high character, which gave a great
shock to confidence. Discount brokers, deceived by
men they had implicitly trusted, became generally suspi-
cious, and until the quantity of capital accumulated so as
to be inconvenient they were disposed to refuse accom-
modation to all their customers. The falsification discre-
dited for a time a large and very important class of se-
curities, and was equivalent to the depreciation of this
kind of property. It compelled those who relied on
warrants for advances to forego them, or to substitute
bills, and in various ways tended to lessen credit gene-
rally and enhance the rate of discount. What happened
in the States was similar, but the class of securities was
different. There Mr. Schuyler and others falsified rail-
way shares, and throwing for a time complete discredit
on this large mass of securities, took so much property
out of the market. By the last accounts from the
States, while good commercial paper was done at 12
per cent., advances on railway paper were not made on
less than 14, and were as high as 20 per cent. We cannot
specify exactly the amount of property temporarily depre-
ciated, and so fp: destroyed by the falsification of delivery
warrants here, and railway shares there, but it amounts to
a very enormous sum ' • at the same time the cargoes and the
railways represented by these securities are not intrinsi-
cally iess valuable and less useful than before. All the
property remains, the quantity is undiminished, but
confidence in large classes of men hitherto highly re-
spected, has been weakened and overthrown, and the
whole of them, indeed the whole community in both
hemispheres, by a temporary derangement of business,
severely injured by the fraudulent proceedings of a few
individuals. The discovery of fraud where it was wholly
unexpected has become the parent of universal sus-
picion. Hence, while the quantities of commodities
have undergone no diminution—while, on the contrary,
the large harvest of Europe is an unusual increase of
them—there is a great difficulty in borrowing, and
those whose character and means really exempt them
from all suspicion share in the difficulties brought on
by the dishonesty of some trusted individuals.
These circumstances explain in a great measure the
difficulties at present experienced in trade ; but at the
same time it must not be overlooked that the bulk of
commercial men both here and in the States, and espe-
cially in the States, have been too eager to make money.
They have all shared in the desire, and most of them
have cherished it too much, which, in the Campbells, the
Coles, and the Schuylers, have led to flagrant deceit.
They are generally in fault, and consequently suffer.
Besides the action of commercial men on the money mar-
ket, however, there is now a much more extensive action
of Government than usual, which we must not overlook.

Commerce as the rule replaces the capital it employs
with a profit, but Government consumes without re-
producing. It is quite plain from the increase of ca.
pital during the war which finally ended in 1815, that
this action of Government is not so destructive as is
generally described ; that much Government expendi-
ture replaces with a large profit the capital of the indi-
viduals it employs, and that what war really wastes
and misapplies destructively is merely the quantity of
labour embodied in its soldiers and eaib,rs, and the de-
struction they cause. It is equally plain from the im-
mense mass of capital applied within the last 20 years
to the construction of railways—nearly 300,000,0001.,
and often misapplied without a very serious injury to
the nation—that the sum now required or likely to be
required by our. Government for the present necessary
war, is a mere trifle of the national resources, and if only
properly applied can be easily as it will be cheerfully
contributed. .Nevertheless, the destructive action of
Government, the loans for France and Turkey, the in•
creased taxes and the temporary loans raised by Exche-
quer debentures at home, with a probability of this
action impeding production in the countries more imme-
diately the seat of war, is not without a considerable
present and prospective influence on the money market.
The war will of necessity increase the demands' of Go-
vernment—at least, so monied men calculate—and capi-
talists, therefore, will less readily lend to the merchant
at a low rate of interest as long as the conviction is
entertained that Government must, in some way or
other, be constrained to borrow. Both the action of
Government and the somewhat too active pursuit of
wealth by commercial men now conspire to produce a
strain on capital, and increase the rate of interest.

. -
The last returns of the Bank of England, taken as an
index to the general condition, supply evidence of this
strain from both causes. When the resources of our
own Government are somewhat low, those of the French
Government, we may conclude, are not in excess. When
the private deposits in the Bank of England are small,
we may infer that the depcsits of individuals in the hands
of bankers, most of whom hare accounts at the Bank,

are also small. The bankers are, in fact, said to be ♦ery
bare of money. A comparison of the deposits in the
Bank of England for the third week in September for
fire consecutive years, as an index to the strain now

general on the money market, shows the smallness, at
present, both of public and private deposits.—Daily
News.

.RAILIVAY INTELLIGENCE.

STIRLING AND DUNFERMLINE.

The half-yearly meeting of this company was held at
Edinburgh on Friday afternoon, Mr. Austruther pre-
siding.
The CHAIRMAN said that when he had last addressed
them he informed them that the accounts for the con-
struction of the greater part of the line had been lodged
with the statutory auditor. He then expected with
confidence that before he again met them those accounts
would have been audited, and the amount fixed upon
which the Edinburgh and Glasgow Company would have
to pay rent. It had turned out, however, that before
proceeding to audit the accounts the auditor had allowed
the lessees to inspect them, and to state any objections
which they might entertain. It was only on the 14th
of June that the lessees gave in a paper of general and
special objections, which were answered by the Stirling
and Dunfermline Company. Upon the 10th of August
parties were ordered to revise their papers, with a view
to closing the discussion ; but the time was prolonged
at the inqance of the lessees. It was about to expire,
and the directors of the Stirling and Dunfermline Com-
pany intended to apply to the auditor to carry his order
into execution. The chairman concluded by moving the
adoption of the report.
Mr. JOHNSTONE, M.P., seconded the motion.
In reply to various questions,
The CHAIRMAN stated that the amount of arrears due
to the shareholders of the Stirling and Dunfortnline line
was about 70,0001., on which interest at the rate of 5 per
cent, was paid ; that the outstanding claims against the
company amounted to probably 50,0001., and that this
sum must either be paid out of the arrears due, or out
of an increased capital, to be authorised by Parliament.
Which of these two courses should be adopted had not
yet been considered by the directors.
The report was then adopted, and the proceedings
terminated.