The Sun.
London, England, 1841-04-09 00:00:00

LITERATURE.

THE FLUCTUATIONS OF TRADE; or, the
Secret of Foreseeing when Prices are going to Rise or
Fall, with an Exposition of the Power and Workings of
the Bank o/ England in reference to those important
subjects. By IL J. WRIGHT, Esq.
If this pamphlet completely answered its title
page it would be invaluable. The faculty of fore-
seeing when prices are going to rise or fall, if
possessed by a few, would be to them a mine of
wealth. Mr. Wright is of the same opinion, and
he discreetly recommends his readers not to
use the knowledge he conveys to them with the
hope of making inordinate gains, but rather as a
means of protecting themselves. He discourages
avarice, while he instructs the world how to grow
rich. But we are bound to say that Mr. Wright's
lore is of a very limited nature, applied mainly to
the effect on prices of changes in the quan-
tity of the currency, and, Ca particular, to
changes in the currency of the Bank of England.
To such causes of a rise or fall in prices, or a
scanty or abundant harvest, a new invention or a
new market, Mr. Wright does not advert. Of
course there is nothing novel in his teaching that
the contraction and expansion of the currency will
cause a fall or a rise in price, and the only secret
worth knowing is when that expansion or con-
traction is about to take place. We will inform
Mr. Wright and the public of a short way to get
at this great secret. Let him obtain a seat in the
Bank Parlour, let him if possible become Go-
vernor or Deputy-Governor, and he wilt learn
more speedily than by a thousand indications
when the currency is going to be expanded or con-
tracted, and he might buy or sell accordingly.
Here, however, are some of the indications, which
are probably made known to the public when the
Governor, Depu overn or, and Directors have
made their bargains

When the Ba,,kof Ergland increases its issues it em-
ploys some or al of the f lowing means for that purpose:
it lowt rs the rate of interest, discounts merchants' bills of
exchange more f. eely, accommodates the public with loans
of larger sums of money on the deposit of Exchequer-bills
. and India bonds, and buys Exchequer-hills, stock, and other
securities. The London and country bankers speedily fol-
low its example. The bill broker, in like manner, be-
comes more literal, and the merchant, in his turn, eves
more extensive, if not longer, credit ; a spirit of con mer-
cial confidence is thus diffused. the facili ies of obtaining
money are increased, private hills of exchange get into
more general circulation, more checks are drawn, and
prices advance. When the Bank of England pursues an
opposite course, the withdrawal of a portion.ef its notes
mates a partial void in the London circul.tion ; the
country banker's paper flows up to the metropolis to
supply its place, a here it is presented to the London
ngent. for payment ; the country banker's balance de-
creases in his agents' hands, and he is called on to supply
additional funds, or rec ivis a hint to curtail his i-sues.
This reduction of its paper by the Bank of Engl.nd is
usually accompanied to, a cont' action of its ciscounts and
a raising of the rate of int...rest : the same t• ing is
done b 1 the HI breke.s and London and co .ntry
bankers ; fewer bills of exchange are now discounted, aid
tame at a higher rare of iaterest ; the inferior descript,ons
arc rejected ; 'no overdrawing of accounts is permitted ;
money becomes scarce ; goods are forced into the market
to enable the holders of them to meet their engagements;
bankruptcies ensue; confidence is shaken; trade is at a
stand-still, and that which before had b. en considered us
legitimate trading, is now sivisatized by the appelLttons
of "..vertrading" and "excessive speculation,"

•
After an attentive perusai of Mr. Wright's
pamphlet, we have not learnt from it the art of
foreseeing when prices are to rise or to fall, but
our mercantile readers may find out a secret that
is hidden from our unmercantile eyes. Mr.
Wright, like all other persons who have investi-
.

Yatea the matter, does not approve of the con-
duct of the Bank, as he tells us that the quantity
of paper put into circulation is more likely to
decrease than increase. Tuat is bad news,
if true, for Bank Stock holders, whose gains
arise, in a great measure, from borrowing a
sum from the public at no interest which they
lend to individuals at a high rate of interest. On
theii promises to .pay on demand, they borrow
sixteen or eighteen millions sterling from the
public, for which they do not pay a farthing in-
terest. It may even be supposed that the public,
by destroying the promises of the Bank, and so
releasing the Bank of its obligation, almost pay
all the expenses of lending their money to the
Bank. By that means the Bank gets rich, and
the greater the sum it can borrow by issuing
its notes, and the higher the interest it
charges to the individuals who borrow it 3 credit,
the greater will be its annual gains. By what
right the Legislature confers on the few hundred
or thousand gentlemen and ladies who own Bank
Stock the exclusive privilege of borrowing with-
out paying any interest, we know not. It is one
of those inscrutable mysteries of legislative au-
thority which we are bound to believe, like all
its other decrees, benefits the public, while it
enriches the Bank Proprietors.