The Sun.
London, England, 1841-11-16 00:00:00

NONEY MARKET and CITY NEWS.

LEON MORNINt: PAPERS OF VE4TERDAY.
POST.—It was whispered about, in the early part
0, rut week, that a money crisis in the manufacturing
districts of Lancashire was probably near at hand, and
there can be no doubt that considerable pressure has
again existed in those parts of the country. The
mismanagement of some of the large issuing joint-
stock banks, to whose proceedings we have not un-
frtquently alluded, is named as the groundwork of
this unsatisfactory state of things. It has all along
been sufficiently evident to those who are conversant
with mercantile affairs that the trade of Lancashire
Was very much interfered with and held in check
through the evil influence of hanks conducted upon
false principles : and the unreasonable length to
which some of them have ventured in the advances
mt cotton-spinners and manufacturers 13 now
beg. )g to le developed to the public by means of
the disclosures coosequent upon the bankruptcy exams-
nations that are going forward. It is found that the
depression of prices in yarns and manufactured goods
has been unduly aggravated through the continued sue-
plies furnished by. persons largely indebted to their
bankers, and who have been compelled week after week
so bricg them to market • aritUdispOse of them at any
sacrifice, in order to keep their isiarinfactories
The banks appear to be now allat once erring in an
almost equal degree on the side of caution. They aro
andeavouriog at length to rein in those of their custo-
mers whom they formerly encouraged in their headlong
progress, in a Manner that contrasts strongly and injuri-
ously with their past liberality. Accommodation is now
doled out with a most sparing hand,but this is,perhaps, to l
a great extent owing to the impoverished condition of i
the banks themselves. V are informed . that it is
with reluctance- three months bankers' dra •
- parties who had fts are at
_present taken
kivdiela• a large amenintt%f>.=etkrln sine
and
thereason is obvious
_hesitation In
enough, as, indeed, ,ifw 'sti:ined-
t..ill such devices for raising money
:Id, to fail. We callek at . the lima
a :etttrez in the
e
„ ntion of the public to •thsg ease of
the Ayr Bank. 01
referredt
which mention is made by, the cek.
d took upon ourselves to pee-
ls:rated Adam Smith,
er pirtially upon depended either . entirely
diet that any bank
suchwt
assistance must- eventually
sink.
We
regret' for
she
hat our anticipations in sake of the unfortunate
manufacturing population, t
this matter have bees but too
near the truth, for We.
have.reason to believe that the
(dim).
It is, on the
are actually in the course of reazd,
that
arrangements
other hand, with satisfaction we add,
are understood to be in progress, the object of which is.
to avert as much as possible, the Cumber
calamity that
ividuils who
was threatening to overtake a class of
.cle
have already suffered so much. Oat of the distressed
banks, a large and wealthy, but, until recently, misma-
nagedthat concern, has obtained in London 6
co-opera-
tion which will, it is hoped, go far to restore confliene
and to put thins on a more desirable footing.
'TIMES.—The observations in the annexed letter.
relative to the consequences to merchants arid others of
detainin7 the spurious Exchequer bills at . the 'Fret-
st!rY, are peculiarle worthy of attention. `niere can lie
00 doubt that inany.bouses, otherwise strong, might be
Drought down by this circumstance alone, and it is pe-
c6ils'lY import nit, from thr present difficulties with
which all classes of the trading interest are struggling,
that-thispoint tthonid have the ful:est and most anxious
consideration with the Government
.
TO Tlik EDITOR. OF TUE
Mark-lane, Nov. 1841.
"Sta,—l have read the letter in your journal of this,
day, signed A Constant Reader:: by which it, would
appear the writer defends the Treasury for im-
bndieg the '.defective' bills. Perhaps he may not
e acquainted- with the variety of reasons which
work in a merchant's mind to evidence the utter
ruin that might attend
man in business, through the
Government withholdii
arc his securities, such as they
may be : posaiblyit la
said,, the bills being spu-
rious, of what . vatusae ..strA,ll4
.auswerv-. this is a
matter of. opinion in 'ma.
-eyes: orn e...rkin;-rood for
nothing in ate -utilisation of another, as regards the

chances of success against the Government worth
something, and this something, as a collateral security,
might save a house at a pinch. I will suppose the
case of a foreign merchant, of limited credit, hard
pressed for cash by the non-arrival of a packet ; be
goes to his banker and shows his last letters received,
by which it is made clear be has the moral certainty of
having ample remittances by the expected packet to
meet his present urgent wants. Bankers very properly
keep in mind the adage, There's many a slip between the
cup and the lip ;' still, in such a case as I have set forth,
rather than let a customer fail, on very slender security,
they would make a moderate advance. It is no uncom-
mon thing with prudent men to keep Exchequer bills
by them, to guard against contingencies ; and if such a
person had his bills, though spurious, kept from him
by the Government, he might in consequence be forced
to stop payment, having no security to offer his banker,
and I think be would have just grounds to bring an
action against the Government for the ruin brought
upon himself and his family. Why not stamp the
spurious bills with the word forged,' and return them
to the holder thus defaced, to use if be can? Two men
differink with respect to a bankrupt's estate will some-
times buy and sell the acceptance to a bankrupt ; the
holder, wishing to- avoid trouble, and having no desire
to make a good bargain; will sell a bill over due, with
the notary's ticket in the corner with the word bank-
rupt' written thereon, for more perhaps than the estate
ultimately pays. So much for opinion on such matters;
but opinion could not be exercised if the Commissioners
were to impound all bills at the time of proving against
an estate.
" With respect to the responsibility of the Govern-
meat in the present case, it appears to me the safety
of the bona fide owner cannot be doubted, especially
those who were so over cautions as to take the bills to
the Exchequer bill-office for approval, before-they would
receive them as a security ; the case being, the chief
clerk of the Exchequer bill-office gives to a third per-
son an Exchequer bill, struck from the gOvernment
plate, on Government paper, numbered by the chief
clerk, and signed by a third person, whom the chief
clerk subsequently, by telling the bolder all was right,'
in the name of the Government, in every sense of the
• word fathered on Government account ; and thereby
induced the bolder to give his gold forthe bill. F. L."
The " innocent holders" of the spurious Exchequer
bills must feel rather gratified than otherwise at the
position taken by the advocates of Government irre-
sponsibility, as it is evident that the course adopted is
not so much a meeting of the subject in all its bearings.
a patent investigation of the equity of the holder's
claims, as an attempt which, having begun in
casting aspersions on the rectitude and character
of the holders, would now extend a sort of moral
culpability even to those who think that their case
is at least deserving of consideration, and express
that opinion. An impartial inquiry into the claims
of the unfortunate and innocent holders, the publi-
cation of the arguments in their favour, is now spe-
ciously called " a defence and promotion of forgery."
All this endeavour to vilify the bill-holders, and those
who feel for their situation, argues but ill for the
soundness of a cause which requires to be supported
by such miserable expedients.
As an additional proof that by refusing payment of
all spurious bills justice would not be done, it is gene-
rally remarked that those who but lent their money on
the deposit of the bills at a high rate of interest have
for the most part got rid of their very questionable secu-
rities, while the generality of the present holders have
lent at oo higher than the Bank rate of interest, so that
they cannot be charged with having allowed themselves
to ie misled by a prospect of extraordinary gain. If
this be really the case, as is now generally believed, a
refusal on the part of the Government to acknowledge
the bills would be causing the innocent to suffer for
those who may be supposed to have had some cause for
suspicion, without punishing the latter at all.
C HRO NIC L E.—The Morning Post is very angry
with us because of our advocacy of the claims of the in-
nocent holders of the spurious Exchequer Bills, and
takes special praise to himself for having, single handed,
denounced the conduct of Rapallo in the affair of Louis
Napoleon. Had his efforts in exposing the practices of
those engaged in Stock Exchange speculations at
that period been supported by ourselves and others,
the Post conceives that all the embarrassment
produced by the operations of Smith would
have been avoided. Our Contemporary has sig-
nally failed in his endeavours to disparage the
claims of the bone fide holders, which have
now been so fully discussed, that very little,
if anything new, can at present be said about them.
We can only urge their justice on the Government, and
call upon the Treasury to proceed without delay to
dispose of the impounded bills. We have shown the
gross injustice of the impounding, and that the whole
cads of justice would have been served by returning the
bills that did not suit the counterfoils, branded on the
face with their dishonour, so that the innocent holders
might use them in relief against their authors. That is
the course adopted by the Bank of England in the case
of forged notes which fall into their hands, and any
risleof the desiruetion of the spurious bills might have
been guarded against by taking bond from the holders,
that they would be answerable for their produCtion,
whensoever they .night be called for by the officers of
the Crown.