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

BANK OF ENGLAND.

In October, 1839., the Bank of England was saved
from bankruptcy by a loan of 2,000,0001. From
the Bank of France, and the bullion in the Bank
coffers was diminished during the period from
January to October, 1839, from 9,336,0001. to
2,545900/. Mr. Horsley Palmer told the Com-
mittee on Banks of Issue, " that the transmission of
bullion, and the use of a credit by the Bank of Eng-
land upon Paris, amounted to fully 10,000,0001. stir-
ling betmeen January and October" of that year. On
being asked " to what causes do you attribute the drain
of bullion which took place in the year 1839 ?" be
said, " I attribute it principally to three causes.
The first cause I take to have been the very
large amount of American Securities that was
sold, or for which credit had been given
in the year 1838, and to February 1839, which
increased considerably the bills upon London in the
continental markets. The second cause I attribute
to the unprecedented extent of the purchase of
foreign corn towards the end of 1838, and almost
through the whole of 1839 ; and the third cause
from the doubt existing upon the Continent after
May and June, 1839, of the ability of the Bank to
maintain specie payments." Here, then, we have
the origin of the drain upon the Bank explained by a
lending authority and eminent Bank Director, and a
most influential city monopolist. This evidence
can not be repudiated by the monopolists,
for it emanates from one of themselves,
The extent to which the sale of American securities
aided in carrying off the gold during the period
referred to was limited, for laying out of view the
1,371,957 quarters of foreign wheat imported in
1838, no less than 2,862,680 quarters were imported
in 1839 ; and if we say that the price paid the foreign
merchants was but 50s. a quarter, while the average
price of British corn was 70s. Bd. per quarter, we
have in round numbers 7,000,0001. as the price paid
at the expense of the Bank coffers in that year, which
fully accounts for the drain from 9,300,0001. to
2,500,0001., shown by the Gazette returns during the
period in question. Not only is this fact established
by the evidence of Mr. Horsley Palmer, but we also
see that doubts were in consequence entertained on the
Continent "of the ability of the Bank to maintain
specie payments," which added to the pressure by
throwing all long dated 11013 upon this market for im-
mediate discount, and nothing but the pawning of the
" dead weight" to the Bank of France for an
immediate advance on loan saved this country
from the shock and convulsion to public credit
which must have followed from the bankruptcy of
the Bank of England. Although that misfortune itself
was averted by the means above mentioned, by raising
the rate of interest, and by the sale of Exchequer
Bills and Stock of the Funded Debt, yet the conse-
quences that did follow from that crisis, and the
crippled position of the Bank of England, are
now developed in the pinching necessity of money,
ruinous depression of prices, want of confidence, and
lamentable wide-spread stagnation of trade. The
Bank Directors were compelled, in self-defence, to
diminish and curtail their circulation and discounts,
to sell securities, and to increase the rate of interest.
The same course was followed by the other banking
establishments throughout the country. The change
was brought about, too, with great violence and ra-
pidity, because it was left undone too long and done
too late ; for although the deficiency of the har-
vest of 1838 was well known in August of that year,
the first measure by the Bank for stopping the
export of bullion (with the exception of a sale of
260,0001. Exchequer Bills and 500,0001. stock
3i) did not take place until the 16th May, 1839.
The re-action, therefore, operated with great force and
power, and being unexpected, it had the effect of re-
ducing many persons engaged in manufacturing spe-
culations, from the refusal of the usual banking ac-
commodation, to an immediate condition of insol-
vency. In some cases, again, the banks who had
made advances to their customers of that descrip-
tion continued, and even increased them, in the
hopes that things would come round ; instead of
which, owing to the unsettled state of our foreign
affairs, trade became worse, and thus the mischief
was extended, and only put off for a time to act in
the end with the increased energy upon all concerned.
This is the true history of the " over trading" and
" over banking," upon which the monopolists de-
pend so much. It is a mere part of the effect of the
disturbing influence of the Corn-laws upon the
currency, and in no degree can it be looked
upon as a cause of the existing distress.
Sir Robert Peel is reported to have said in his speech
on the amendment to the address, that " if he could
believe that the alteration of the Corn-laws would
cure the lamentable distress of which they had heard
so much, he would recommend to the land-owners,
for their own sake, to make a sacrifice." This
is a most valuable concession from the bead of
the Government, and ought not to be lost sight of for a
moment. It says, " Prove to me that the Corn-laws
are the cause of the existing distress, and I shall
do my best to remove the cause." Meeting him in the
same fair and moderate spirit, we have traced that cause
to the drain of gold upon the Bank in 1839, and that
drain we have shown by evidence, which he cannot
deny, to have been occasioned by the unprecedented
extent of the purchase of foreign corn in almost
every continental port towards the end of 1838,
and through the whole of 1839. That purchase
reduced the Bank of England to the very verge
of bankruptcy. With 23,367,0001. of liabilities,
it left her with only 2,500,0001. of bullion. From
that moment to this the Bank of England has been in
difficulties, struggling with an unfavourable state of
the foreign exchanges to get back her gold by keep-
ing money tight and prices low, and all that she has
yet accomplished is to increase her gold to 5,000,0001.
which is just about one-half of what it ought to
be, to place the establishment in a sound posi-
tion. From that moment to this also the manu-
facturing interests have been in a depressed and
stagnant condition. Prices at the lowest ebb, and
production at the same time very greatly diminished.
The country has, in fact, been suffering under great
distress since the year 1839, and the currency has been
diminished 3,300,0001. since July of that year.
The monopolists cautiously avoid this topic. It
seems to have been elegantly understood to be
tabooed" amongst them ; but they will be com-
pelled to discuss it when Parliament re-assembles ;
for, exclusive of other reasons, the whole question
of the renewal of the Bank Charter must then be
thoroughly investigated. It must, then, be seen, that
if the same demand for foreign corn should occur
again as was experienced in 1839, the same drain of
gold would ensue, while the Bank has only half the
stock of bullion on hand that she had on that occasion,
and thus only half as well able to encounter the storm,
so that a suspension of specie payments would inevit•
ally follow. Surely, then, it is demonstrated that an
alteration of the Corn-laws, and an approximation to
free trade, so as to induce the exporters of foreign corn
to this country to receive payment in British manufac-
tured goods, instead of gold, would relieve the country
from a constantly impending risk of national bank-
ruptcy at every bad harvest, and would, at the same
time, revive our export trade by opening new markets,
and thus give new employment to the starving opera-
tives in our great manufacturing districts. An altera-
tion of the Corn-laws would, therefore, " cure the la-
mentable distress of which we have heard so much,'
and therefore we call upon the Premier in his own
words to recommend to the landowners " for their own
sake to submit to a sacrifice."

POLITICAL CHARACTER OF
THE DUKE OF WELLINGI ON.
From the Duke of Wellington we expect no legis-
lative good. He does not comprehend—and at his
advanced age it is impossible he ever ran comprehend
—the genius of the British Constitution. He reads
the provisions of that Constitution in precisely the
mme- spirit as he would pen the order of the day in a
military campaign. All the attributes of a dictator
are inherent in his nature ; and if too old to exer-
cise the functions in his own person, he would be
content to delegate them to some one else. He
would be satisfied to govern by proxy. And Peel,
he knows, would, with a little amount of manage-
ment, be just the man to serve his purpose. Every
word the Duke ever uttered, every action he ever
performed, has had more or less in it of the
essence of despotism. Who W 35 it that in 1829 ren-
dered himself so odious in public estimation, by a course
of despotic practices, as that he dared not venture into
the city of London, lest his presence should lead to au
aopalling breach of the public
peace ?—The Duke of
Wellington, Who was it that, in the ardour of his ad-
miration of that boroughmongering system of represen-
tation which enabled any Minister of the day to prac-
tise whatever oppression he pleased—who was it that
pronounced this rotten-borough system to be the very
perfection of human wisdom, and resisted with
all his might every attempt to popularise it ?
The Duke of Wellington. Who was it that,
in the unrestrainable intensity of his hatred
to popular principles, virulently assailed the
character of Earl "Grey, immediately after that
venerable man, in one of the most affecting speeches
ever delivered, within, the walls of Parliament, had re-
signed the office of Premier, and withdrawn from pub-
lic life ?—The Duke of Wellington. And who was it
that, in the course of the discussion in the How e of
Lords on the amendment to the recent Address to her
Mak,sty, insulted the Ruff:ring and starving masses in
the manufacturing districts, telling them that every
industrious man in this country
might rise to compe-
tence, if not to effluence—who was it who at this
period of deep and deplorable distress, when all the in-
dustry in the world could not procure a morsel of
bread for famishing families, had the heartlessness and
the wretched taste to give utterance to such language
—who, but the Duke of Wellington ?—Advertiser.

i
A person died n the Far West last fall who
Was so excessively good and pious, that it took a whole
churchyard full of tombstones to contain his epitaph.
Missouri Gazette,