The Sun.
London, England, 1854-05-12 00:00:00

BA

rNT.,

The Bank of England yesterday raised their rate of
ount from 5 per cent., at which it had stood since
the 29th of September, to 51 per cent.
This measure would have been fully anticipated but for
the favourable turn observable during the past week in
the foreign exchanges, coupled with the impression,

which has this afternoon been realised, that the Bank of
France were about to reduce their rate to 4 per cent.

Although, under these circumstances, it took the public
in some degree by surprise, no question is raised as to
the propriety of the step, and the general relations of
trade are still so healthy that it has not awakened appre-

... .. _ _
'hension in any quarter. Instead of the movement being
regarded as premature by those who have watched the
efflux of bullio❑ since September, it is seen that an

unusual delay has been practised. While the drain of
gold during the past 16 months has been to the extent
of 7,611,7361., and the attempt to arrest it has caused
six alterations of a half per cent. each in the rate of dis-
count, nearly 3,000,0001. of the loss has occurred sub-
sequently to the last advance. The public, therefore,
after noticing the conditions which had necessitated the
preceding- alterations, had every cause to be prepared
for an additional one, and the sole reason for its not
having been adopted at an earlier date would appear to
consist in that, owing to the contraction of business
consequent on the war, a large diminution of the circu-
lation has been compatible only with a moderate increase
in the demand for money.
It is true that all the considerations that could warrant
a fresh movement to-day existed apparently in greater
force a week or two ago ; but it is not upon a question
of a fortnight one way or the other that the policy of
the measure turns. It has been believed for some time
to have been under serious discussion, and the presump-
tion may be entertained that the latest signs with re-
gard to the stock of bullion, and the applications for ac-
commodation, have been such as to influence the de-
cision now arrived at. Unless some decided check to
the drain had become manifest, further hesitation could
not have been justified by the recent improvement in
the foreign exchanges, which may prove as transient as
that which occurred a few weeks back. It is also to be
borne in mind that the late large arrivals of grain have
failed to produce any -very serious depression on the
corn-market, and that the country is wholly in the dark
as to what will yet be required before the harvest, while,
at the same time, the last telegraphic quotations by the
overland mail will show that the Eastern exchanges are
still far from satisfactory.
Hence, although there is ground for anticipating
that a more favourable, instead of a more adverse state
of affairs, may be at hssnd, there are too many elements
of uncertainty in the immediate future to render it de-
sirable that any precautions should be neglected. It is
possible that much of the demand for discount at the
Bank within the current week may have been of an arti-
ficial character, from th e expectation of a further rise,
and it seems unlikely that, in the present intimate busi-
ness connexion of the two capitals, a difference of 11
per cent. can long prevail between the rates at London
and Paris. If these suppositions should be correct, the
Bank will of course soon cease to find customers, and a
return to a lower charge will take place, no harm having
meanwhile been caused, since the commerce of the
country is free from all unhealthy sensitiveness.