The Sun.
London, England, 1840-10-16 00:00:00

EVENING IMITIoN.

MONEY MARKET and CITY NEWS.

(TIIIIRSD•Y EVENING.)
CHRONICLE.—Instead of raising the rates of
discount, it will be seen that the Bank Directors have
decided on limiting the circulation, by refusing to dis-
count paper having more than sixty-five (say two
months) days to run, but still keeping the rate as
formerly, at 5 per cent. The important measure thus
adopted is approved of generally in the City, and looked
upon as a much more searching and efficacious one than
that of raising the rate to 6 per cent. The step now acted
upon cannot fail to produce a powerful stringent effect,
stopping speculation, and forcing down prices, so as
to operate favourably upon the Foreign Exchanges.
If the rate of discount at the Bank had been only in-
creased one per cent., and bills discounted as formerly
at more than two months to run, speculators who ex-
pected to realise fifteen per cent. in a few months, would
not have hesitated to pay the price ; but by limiting
the running of discount paper to sixty-five days, the
range of time becomes so seriously diminished, and the
necessity of renewal so frequent and onerous, that much
more consideration will be used before embarking in
mercantile adventure. The immediate effect on the
London Money Market will be to throw an immense
deal of additional business to the discount brokers, who
will negotiate sixty-five days' bills probably at five per
cent. and + commission (equal to 6} per cent.), but will
exact much higher terms for paper drawn at longer
dates, or having a longer time to run. Operations con-
nected with the trade and commerce of our Indian
empire and colonial dependencies will be severely
cramped.
Large amounts of paper, drawn from different quar-
ters of the world, now in transitu, will,meet with con-
siderable difficulty of negotiation, and some portion of
of them perhaps returned, while all of them will be sub-
jucted to higher rates, according to their proximate po-
sition towards maturity. But, notwithstanding all these
inconveniences, the measure cannot be condemned under
existing circumstances ; and it has the advantage of
not only being based on successful precedent, but it is
in fact a return to the old rule of London business,
whereby by bankers' bills were never drawn at more than
sixty days, just because that was the rule of discount.
by the Bank of England. The rule of relaxity, we
believe, took place about nineteen or twenty year.,
ago, through the instrumentality of a leading bank-
ing firm, whose weight and authority have been long;
feat and acknowledged. Regardless of the fear which
actuated more timid men, that firm broke through the
ancient principle of time, and, confident in their own
strength and resources, the Bank parlour was com-
pelled to yie!ti to the innovation. The Directors have
now retraced their steps, in order to assume the status
(pc), and they have the strength of public opinion ge-
neraly in their favour. The Bank of France have
aiwayi iaawed the same plan with success, and it is
certainly a simpler and less startling measure of strn-
gency uian the advance of the rates of discount. The
an::;,uocement, however, of the measure will be re-
c.:ived with some surprise throughout the country, and
must touch ~vith severity upon various branches of our
in!.:nd trade, nor will the continental trade escape its

ef::.,

H ER ALD.—Aecording to private letters from Paris
inorning, one of the caues which had led to the
iinprovemmt in prices there on the preceding
day was the circumstance of buying in a large bear
aceount for a very extensive operator well known in this
country, who having failed to covar his broker in the
resulting against him, this proceeding in the
n-u ti course wa, resorted to, and is called there "exe-
eutitg" an unlucky speculator. At the same moment
another sp,eulator for the tail to a lazge amount com-
menced buyn,t7, io his accouat also, which necessarily
,;:;,Mt-.•(1 prices inateriaily. Toe opinion generally on
Ow Paris 3-Jurso was in favour of peace.
rue notive of the li.mk referred to above created
rnation in tie City, where nevertlich•ns
so:r. e struigent course of action on the part 5,1 the Batik
lwen looked far d•irine• some time past.

CO.

Llatil better advised, it would be improper to enrn
to a hasty decision of the imperative reasons which
may have urged this course on the Batik, which it is
clear must have great difficulties to contend with in
tee face either of an impel:due.; war, or of what is
e.pavalent to it, of general report and i.dief
Continent of Europe that such is the faut. The Bulk
nee:awhile is endeavouring otherwise to stronetlien
position by calling in its loans to a large extent.
one very extensive firm in the discount line ties
summons for repayment wtil, it is seide act to the (in-
tent of a refunding of advances to the amount of Ab,:ut
one stt rlitlg. It is greatly to be regretted, aod
ileleed it is felt to be a serious inconvenience that no
'mans are afforded by the Board of Customs, whin seems
to be the proper authority, fur ascertaining in anything
into a correct manner the real exports of gold cod
s'aeer from the outports generally. At present no
re-
turns are presenteJ or published but those of the port
of London, whilst it is notorious that exports es
as imports in consid,rahie quantities must be g,oing on
at the ports of Liverpool. Bristol, and elsewbe!rc, hut
above ail at the port of Dover, from whence the exports
of gold, when exportieion is prefitab!e and in cer-
tain states of the foreign exchanges, must far exceed
tnose of all other of the outpoies, including Lon-
don, takea together. Tee exports of gold and
silver coin and bullion from the Custom-house here,
Lis reported in the Trade List and copied into the
daily journals, are exceedingly ineomplete material; in
thee shape of information, or on which to ground ant
oi-,in;on, and it is from the convic.Lion that they wouhi
lead ;o erroneous inferences rather then otherwise, or
at be are valueless in the absence of more weighty and
EA.:zit-tit data, that they are never given under this bead,
although so readily accessible. It is high time, butts
for the .cake of bankers and merchants, that this noto-
rious deficiency should be made good by those more
especially in charge of the Customs department. As a
guide to the couatry bulldog- interests it would be in-
valuable, tor it is impossible as the case stands that they
!::113 possess any information by which to regulate their
issues and business, in respect of the abundance or
scarcity of the precious metals, excepting such as may
be taenily made known to them by the curtailment of
discouate, the advance of the rates of interest, or some
other equally significant and extreme proceeding of the
Bank of England, which gLnerally is not resorted to
until the pressure in money affairs has already become
of great gravity, whilst of its progress and causes those
at a distance most nearly concerned are kept in com-
plete and most unfortunate ignorance.

Spanish*Actives left off at 218, Portuguese New Five
p'r Cents. 32, Brazil Stock at 74, and Dutch Two-
and-I-Half per Cents. at 48i.
The Share Market was more active, but as the
sellers predominated, prices all receded slightly.