The Sun.
London, England, 1858-03-15 00:00:00

THE SUN, LONDON MONDAY EVENING, MARCEI Ib, igNs.

mentary data long notorious in regard to the
cotton plant indigenous in Hindostan. Beyond
which it is especially worthy of consideration
that, in reference to strength and durability it is
considered adapted in every way for all yarns
under number twenty, in other, less technical
words, for about one-half of the cotton textile
manufactures of this country. Recollect, too,
that already now-a-days, and for some time past,
India cotton as at present transmitted to this
country is sold with a profit at 31d. per lb. in
the market at Liverpool. This, observe, being the
case actually when the ryots toil there after their
old slovenly fashion—looked after by careless and
incompetent chettys and wakaries, in lieu of in-
telligent and active overseers, American or
European. I❑ reality, the culture of the native
cotton plant of India being now literally in every
essential particular identical with that in vogue—

" . . . . Three thousand years ago
When the Memnoniam was in all its glory,
And time had not begun to overthrow
Those temples, palaces, and piles stupendous,
Of which the very ruins are tremendous."
That long stagnation of three thousand years
might surely with advantage be broken under the
guidance of the new Indian Government. An
achievement to be accomplished by better advised
experiments than those commenced in 1829, at
Apra, near Calcutta, or than those larger ones
attempted in 1840 at Bundelcund, or in the
Jumno-Gangetic-Doab—even, be it said, than
those carried out with less signal failure
at Guzerat and Tinnevelly. That this achieve-
ment away be accomplished—that sooner or later
it will be accomplished, we rest perfectly assured.
It is an exploit upon which among others the
new Governor-General may be well proud of
adventuring, be he Lard STANLEY or Sir JOHN
LAWRENCE, or the Earl of ELLHNBOROUGH.

We earnestly invite attention to a letter which
that consistent and indefatigable monetary re-
former, Mr. HAMER STANSFELD, has addressed to
the Editor of the Economist, and which will be
found in another part of our impression. It is
needless to say that whatever Mr. STANSFELD does
is well done. He thoroughly understands his
subject, and, :with a perfect knowledge of facts,
he possesses an enlightened mind that turns his
knowledge to the best possible account.
In his present letter Mr. STANSFELD refers to
the prevailing confusion between " money" and
" capital," " interest " and "discount." As we
have repeatedly 'pointed out,l they are very dif-
ferent things. " Capital " is actual value,
" money " merely its measure and repre-
sentative ! " Capital " may be compared to
the cloth in the mercer's shop. " Money " to the
yard, by which its length is ascertained, but if
that yard be rendered variable, if at one time it
is three-fold longer than another, it is obvious that
there must be great confusion, and that irreparable
mischief may be frequently anticipated. We trust
that the Editor of the Economist, now that he is
undisturbed by affairs of State, may respond to
Mr. STANSFELD'S request, and give further expla.
nation of the terms " money" and " capital,"
"interest" and "discount," clearly explaining
the real distinctions between what are generally
supposed to be synonymous expressions.

'His Excellency Baron Brunow, once more accredited
to the Court of St. James, as representative of the Em-
peror of Russia, will arrive in London to-morrow, to
re-assume his diplomatic functions. The Baroness will
continue her residence abroad for the present.
FRINOEI PASSTORTS.—From and after Saturday last,
the 13th inst., no person will be allowed to land at Bou-
logne, or any other French port in the Channel, without
a passport. This rule has not hitherto been acted on,
but it is now in full force.
HER MAJESTY'S TRZATRE.—There will be four per-
formances of opera at reduced prices which recently
prevailed, in the course of next week, at Her Majesty's
Theatre. Oa the Tuesday will be executed "La Tra-
-1 elate," for which every neat in the house in said to have
been several days engaged ; on Thursday " II Trova-

tore ; " on Friday, Balfe's opera "La Zingara " (the
"Bohemian Girl ") ; and, on Saturday, "La Figlia
del Reggimento." The performance on Friday night
will be for the benefit of that great artiste Signor
Giuglini ; and the public have already so eagerly re-
sponded to the call, that it is expected the theatre will
be crowded to the ceiling. And well it might, for such
a treat will not have been afforded to the lovers of
music, at such a price, since Italian opera was first
established in this country.
MISS GODDARD.—This accomplished tragic actress,
who has been playing with marked success at the Surrey
Theatre in the characters of "Isabella (" Fatal Mar-
riage"), Lucretia Borgia, in the tragedy so called, and
Mrs. Haller ("The Stranger"). appears this evening as
Lady Macbeth, and Tuesday as Romeo, to the Juliet of
Miss M. Eburne.
Miss M. Oliver, who is a universal favourite, takes
her benefit at Drury-lane on Saturday next, when
Coyne's " Love Knot" will be appropriately followed
by " A Roland for an Oliver."
There is no truth whatever in the report that Mr.
Alfred Wigan has taken, or is about to take, the St.
James's Theatre. Mr. Wigan is still recruiting his health
at Scarborough.
STRAND THEATRE.—As we last week stated, this
pretty little and comfortable theatre is to re-open on
Eater Monday, under the management of Miss Swan-
borough, assisted by Miss Oliver, Mr. and Mrs. Leigh
Murray, Mrs. Selby, and Mr. Young, all from Drury-
liane.

In consequenee of the excitement brought on by the
emotion of Orsini's trial Jules Fevre was attacked on
Sunday night, by an obstruction in the circulation of the
blood. Doctor Dumez, his physician, by timely bleeding
and stimulants, succeeded in recalling the patient to life,
but he still lies in a precarious state. The popularity of
the great advocate is clearly demonstrated by the num-
bell as inquiries made at his door by all classes of
Society.— Court Journal.
The Bank of England have just determined upon
some modifications of the practice which has prevailed
in respect of transactions between themselves and the
discount houses. Hitherto it has been competent for
the latter, if they were in want of money, to carry birn
to the Bank, and get them re-discounted. To say truth,
this is a practice of which [the leading establishments
ha►e thought it unadvisable to avail themselves, with
the exception, perhaps, of periods of extreme pressure ;
but there is room to believe that the less important
firma have very frequently sent in batches of bills for re-
discount'at the Bank. The Bank are apparently of
opinion that the operation of this system is less to their
Own advantage than to that of the discount houses ; and
they have just notified, that henceforward they will de-
cline to re-discount the bills of these parties, although
they will continue, when applied to, to make shirt loans
or advances upon such securities. The Bank doubtless
wish to render their own position as independent as
possible of the transactions of other dealers in money.
The effect of the decision now adopted will be to render
the discount firms, especially those possessing but little
capital, ,more cautious in proportion as the facilities
placed at their disposal by the Bank are circumscribed.

it is not by any means clear, however, that the pubic
will be the gainers if these houses are discouraged from
granting accommodation freely, especially in anxious
times. In a crisis like that just experienced, the effect
would probably be to stimulate the rush of borrowers at
the Bank, whose resources, as defined by statute, might
thus be exhausted with even greater rapidity than in
November last. The step now announced has also a
tendency to discourage the competition, by diminishing
the resources of the minor houses, and, in this respec,,
may prove advantageous to the great discount establish-
ment in Lombard-street, which, having a very large
capital at its back, is the least dependent upon extra-
neous resources, and the beat able, if need b ~ to keep
large funds in reserve. The Bank have a perfect right
to protect themselves, and to endeavour to obtain the
greatest possible degree of advantage from their eminent
position ; but whether the measure now decided upon
will tend to the greater accommodation of the public at
periods when that accommodation is most needed is
open to question.
THE DRAMATIC COLLEGE.—" A home for aged and
retiring actors and actresses from public servitude," is
now in course of formation,.and will shortly be prepared
to lay its prospectus before the profe-mion and the
public, from which quarters it is promised extensive
support. The object is to provide residences and pen-
sions for those whom fortune has not provided with suffi-
cient means to soothe the infirmities of age and sick-
ness. The merit of originating this laudable institution
rests with Mr. Jer wood, who, after hii strenuous and
successful exertions on behalf of the General Theatrical
Fund, may justly be sty:ed " the actor's friend." This
gentleman has, on the present occasion, not only offered
his gratuitous serviees to "the Dramatic College" as so-
licitor and treasurer, but has headed the subscription
list with the noble sum of 5001., whiah noble example
Mr. E. T. Smith, with his usual liberality, has equalled,
by putting his name down for another 501. Acts such as
these deserve publicity. Among the gentlemen who have
already consented to act upon the committee, we may
mention the following names :—Mr Frank Matthews,
acri
Mr Keeley, Mr. Buckatone, Mr. Alfred Wigan, Mr.
1 published.
Mayhew, and Mr. E. T. Smith. Mr. B. Web-
tter, it is hoped, \ will act as chairman, but at present he
I:°,=,
,ot is London. Designs for the buildings are in
ptiotreparation, and numerous donations and
sub
Is are already promised, and will be shortly

WILL THE LOW RATE OF INTEREST
LAST?

--+-

TO THE EDITOR OF THE ECONOMIST.
Sir,—ln discussing this question in your im-
pression of the 30th January, there is an absence of
that perspicuity for which your articles are gene-
rally
to be
lysodliosotiknegrusphetdo by the commercial commn-
, and. which justly entitles
nity as a guide on the subject of money. Provin-
cial editors in general, with some rare exceptions,
are dumbfounded on the subject ; and it becomes,
therefore, the more desirable and necessary that
light should be thrown upon it from the metro-
polis, the centre of the monetary world. I may
be mistaken, but the article conveys to my mind
the impression that the writer uses the terms
money and capital, and also interest and dis-
count, as synonymous. If wrong in this inference
I shall be glad to be set right ; and if the following
definition of those terms be unsound, to be cor-
rected. I understand

Capital—to be services and commodities used in
production.
Money—to be the measure of value, the medium
of exchange, and the universal equivalent ; but,
more practically, the means of obtaining capital,
and the only means of paying for capital previously
obtained on credit to be virtually a security for ob•
taining its equivalent value in capital.
As an illustration of the difference between
money and capital, if two persons enter into part-
nership in the cloth trade, engaging to provide each
2,0001. capital, and the one brings in that value in
wool, he brings in so much boßa fide capital, and
should the other bring in the same nominal value
in bills and bank-notes, he would bring in money
—the means of obtaining capital ; but should the
bills and banknotes turn out to be bad he would
neither have brought in capital nor the means of
obtaining if. Commerce is the exchange of capital
for capital through the medium of money, and the
contract being fur the medium—money alone can
satisfy the contract and discharge the debt. In
selling, one kind of capital is disposed of for a
security (money) for obtaining its equivalent value
in any kind of capital. I understand interest to be
th• consideration given for the loan of money.
If the money be borrowed for the purpose of
procuring capital, then the consideration given
is a remuneration for the use of the capital
(raw materials, labour, merchandise, &c.) which
it obtains. If borrowed for the purpose of
discharging a debt, fcr paying for capital previously
obtained and used, contracted to be paid for in
money, then the consideration given is for the use
of money itself, and in this respect interest and
discount are similar.

I understand discount to be solely the remu-
neration for the use of money itself, for con-
verting credit money into ready money. A good
bill gives the same command over capital as batik
notes, minus the charge for discount ; and. bills
are discounted for the purpose of obtaining money
of a Blare convenient denomination for wages and
small cash payments, or to meet larger engage-
ments falling due ; and also for the advantage to
be gained when ready money can be had by dis-
counting at a lower rate than 5 per cent.—the
usual allowance made for cash.

The main object, however, in discounting is to
obtain legal tender money, absolutely necessary to
discharge money contracts coming due, and this
supports the position I have long taken, that the
rate of discount in this country depends fundamen-
tally upon the demand and supply of legal tender
money, and the supply being restricted by the Bank
Charter Act of 1844, that the unusual and unnatu-
ral high rate of 5 per cent is to be attributed to the
operation of that act.

Entertaining these views of the meaning of the
terms money and capital, interest and discount, the
object of the inquiry seems to me to involve two
questions instead of one :-
Ist. Will the low rate of interest last ? The an-
swer to this will mainly depend on the supply and
demand of capital, and as the supply of capital,
other than services, depends chiefly on good or bad
harvests—upon large or small crops of pro-
duce • and as the last harvest throughout the
world was good and crops abundant (exhibiting
the coincidence of a plethora and a low price of
capital with a dearth and high value of money,
manifesting clearly their difference) a low rate of
interest may be expected until the result of the
next harvest can be estimated.
2d. Will the low rate of discount last ? The
answer to this question will depend upon the sup-
ply and demand of money, and iu making an
estimate we must take into consideration, not
only the circumstances affecting more particularly
our own country, but also those bearing upon the
demand and supply of money throughout the
world ; and when we consider the following causes
in operation we are disposed to answer the ques-
tion in the affirmative.
That the reduced price of services and commodi-
ties (capital) will require less money to circulate
them.
That trade being prostrated, will, so long as the
stagnation lasts, absorb less money.
That the money of the world has increased, is
increasing, and will increase ; and though self-
interest will lead to its employment in the
circulation of capital, sooner or later, in one
way or another, yet after such a panic and
prostration of trade, it will be some time
before the great wheel for circulating capital
can be in full work again. The quantity of money
has been increased by the gold discoveries in Cali-
fornia and Australia, the greater portion of which
has been converted into coin ; and the quantity of
gold, the basis of our money, will probably con-
tinue to increase at the rate of 30,000,0001. a-year.
The quantity of money has also been increased by
the United States issuing paper money to the
amount of 4,000,0001., and by the Bank of
France being permitted to issue notes of as
low a denomination as two and four pounds.
Further, as the substitution in France of gold
fcr silver in the coinage (which has been the
principal means, hitherto, of 'absorbing the new
discoveries of gold) must be approaching its comple-
tion, particularly as less coinage will lee wanted for
a stagnant trade and reduced prices, we may ex-
pect, ere long, than our fixed prices of
31. 17s. 101 d. an ounce will attract the gold
here. We come, then, to the conclusion that
the low rate of discount, other circumstances
remaining the same, will continue for some years.
And should the restrictive clauses of the Act of
1844, on the issuing of convertible bank notes, of
bona Ale money, be repealed, and provision be
made for sueli a surplus stock of gold as will
counteract the evil of its export as a commodity, the
rate of discount need never exceed 5 per cent.
under any pressure, and a panic from an
apprehension of a deficiency of legal tender
money could never occur. A close resem-
blance exists between the rate of freight and
the rate of money ; for although the market value
of all things is determined by deinaud and supply,
yet the analogy between these rates is more espe-
cially strong from both being equally a means for
the transfer of capital. The rate of freight depends
upon the proportion of goods seeking ships to trans-
port them, and the number of ships wanting
freights ; and the rate of money on the quantity of
capital seeking to be exchanged, and the amount
of money wanting to be employed. Would it not
be, then, as unwise to limit the number of ships to
be built, and consequently to raise the rate of
freight, and give a monnpoly to the present ship-
owners, as to restrict the supply of good money,
raise its value, and give a monopoly to the present
money-holders t As a constant reader of the Econo-
mist from the first, I shall value your further ex-
planation of the terms money and capital—interest
and discount, and am, sir, your obedient servant,
HAMER STANSFELD.
The Grange, Burley, near Otley, Feb. 22, 1858.
P. S. If the rate of interest, it may be asked, de-
pends mainly on the demand and supply of capi-
tal, and the rate of discount entirely on the
supply and demand of money—two very different
things—how comes it that the terms interest and
discount, and also capital and money, are so inti-
mately connected in the public mind as to be con-
sidered respectively the same thing ? Is it not
that capital is generally the foundation of
constituting the great bulk of the monies used in
the wholesale trade ? Alinost every sale of capital
on credit gives rise to a bill of equal value,
and frequently the same transaction to
many bills, so that in ordinary times of cre-
dit the value of capital in circulation on
credit and bill-money is wady the same. Aft-r
goad harvests capital is plentiful, credit is generally
good, money abundant and cheap. After bad
harvests the reverse is the case ; and sometimes, as
in the late panic, a collapse of credit tales place in
spite of good harvest, when, coincident wills a
pletin ra and low price of capital, there exists a
dearth and a high value of money. Does not
the intimate .connection existing between money
and capital, and also between interest and discount,
through the mystical influence of credit, lead to
the erroneous impression that these are respectively
the same things

_ .
THE ARMY AND NAVY CLUB AND THE EMPEROR
NAPOLEON.—The Moniker of Saturday says :—" We
record with pleasure a fact which shows the hot ou able
sentiments by which the officers are animated is Eng-
land who stood side by side with our own officers in the
Crimean war. The committee of the Army and Na •o
Club in Lot don, being informed that som bo 'y bid
sent to officers of the French army a caricature, be
neath which were printed some offensive word,, with
a pretended message from the club, has offer,d a
reward of 501. to any one who will make known the
author of this deed thus showing how indignat t t
members of the club were at the perpetration of such
an unworthy insult."

COUNT I) ALEW SKI'S D.ESPATCH. -
Her Majesty's Government has received a de-
spatch from the French Ambassador, sent to him
by Count Walewski, the French Minister for
Foreign affairs,in reply to a despatch forwarded to
the French Government by her Majesty's Secretary
of State for Foreign Affairs, in reply to Count
Walewski's despatch of the 20th of January.
This despatch is couched in very conciliatory
language.

It commences by expressing " the satisfaction"
felt by the French Government that the now
Ministry, following in the steps of Lord Palmer-
ston, shows a willingness to cultivate cordial rela-
tions with France.

The despatch then expresses the regret felt by the
Imperial Government that the tenor of the de-
spatch of the 20th of January should have been
misinterpreted, and it appeals to the line of conduct
followed by the Emperor Napoleon 111. during the
last six years as a proof of the impossibility that his
Majesty should have asked anything which it
would have been inconsistent with the honour of
England to grant.
The Imperial Government (says the despatch)
never meant to imply that England favoured the
men who elevate assassination to a doctrine, but
simply that such persons were allowed to dwell in
England.

The Emperor (continues the despatch) was not
induced to call the attention of the English Govern-
inept to the above fact through any fear for his own
life, but simply on account of the strong feeling
which the attempt of the 14th of January had ex-
cited in the population of France, and which was of
a nature to require that the EngliEl, Government
should be requested to take some stronger measures
as regards refugees. The request was made by the
Emperor in the interest of the allianc 3 which exists
between the two countries.

The French Government withdraws from the con-
troversy, and declares that it makes no demands ;
it places implicit confidence in the good feeling of
the English people (il s'enrapporte a /a loyaute du
people A nglais.)
Both this despatch and that from Lord Malmes-
bury to Lord Cowley, to which that of Count
Walewski is an answer, will be laid upon the table
of both houses this evening.

RAILWAY INTELLIGENCE.

CA LEDONIAN.

The half-yearly meeting of this cum- pany was held on
Friday at Glasgow Mr. W. Johnstone in the chair. The
report, an abst►act of which has appeared in The Sun,
was held as read.

The CHAIRMAN, in moving the adoption of the re-
port, stated that it had been found that some of the
bridges along the line had been got up in such a tempo-
rary fashion that they we obliged to build new founda-
tions and arches. There were still some bridges to
attend to in this way, which would still further re-
duce the contingent fend. In regard to the revenue,
it had considerably increased during the last half-year,
while the expenditure was considerably reduced,
enabling the directors to offer what they comidercd
was a very fair dividend at such a time. (Cheers.)
Another ground for satisfaction was that, though they
had a large sum to borrow at Martinmas last, when
the rate of interest was so high, yet, notwithstanding
the stringency of the money-market three-fourths of that
was obtained at 4.1 per cent. for periods of three years,
and the remainder at 41 ; the result being that the
a rerage rate of interest on debentures had been reduced
a few pence during the half year. As to the Symington
and Biggar branch, described in the report, it would be
a gold feeder of the main line, and encourage further
traffic in minerals and farm produce. As to the
Carlisle, Langholm, and Hawick line, which was
b,iug opposed by the North British Company, he
hoped it would be sanctioned by Parliament.
He was glad to state that the arrangement between the
Caledonian, the Edinburgh and Glasgow, and Scottish
Central companies was going on satisfactorily. If the
agreement, however, did not continue to work well it
could be readjusted by the arbiter in September. The
branch to Grantors from Edinburgh was going on well,
the contractor promising that it would be open for traffic
in eight months at the furthest. He was aware that a
good deal had been said on the capital account. They
all knew that prior to 1851 the affairs of the Caledoeial
Railway were in a state of chaos, nobody knowing
what it was in a pecuniary point of view, while it
owed a sum of 400,0001. for plant, furnishings, &c.
Then the plant was not nearly adequate and the
line was in every respect incomplete the traffic
in consequence being only T,OOO/. a week, instead
of 13,0001., as at present. The state of matters was
Vie :—At Carlisle neither passengers nor goods stations
were completed, and new ones had to be made. At
Moffat a great number of workmen's and stationmasters'
houses required to be built instead of the wooden erec-
tions originally there. At Motherwell a bridge that
everybody was terrified to cross required to be super-
seded. A tunnel on the Wisbaw and Coltness line
was in a most defective state. The Gartoosh branch
was only partly completed. At Glasgow the goods
station was not completed. At Edinburgh there were
only wooden houses and but few sidings on any
part of the line. The Clydesdale line then was
far from complete, there being a want of stations
at Hamilton and along the line. Then, as to the
Greenock line, an arrangement was entered into with
that company for the purchase of the line, but owing to
the financial position of the Caledonian Company they
refused to hand it over, and continued working the line
for a time in the cheapest way, letting the plant go
down, as it was not their interest to maintain it. That
line, moreover, was not suited at first for the additional
traffic exae ed from it. The Barrhead Branch Company
acted in a similar spirit when the lint was first taken
over, that railway, moreover, having scarcely a station
on it complete. With such defects the present directors
when they came into office found it absolutely necessary
to take steps to develop their resources, and accordingly
applied to Parliament in 1853 for an act authorising
them to raise 50,1:100/. In 1854 they again went to
Parliament, and proved to its satisfaction that further
borrowing powers were necessary, and accordingly they
got power to raise 500,0001. This suns they had been
content to expend, not all at once, but year by year as
they saw they needed it, thereby raising the income
and diminishing the working expenses of the company.
They were not done with spending this money yet.
A completed station in Buchanan-street was neces-
sary, and they were getting in plans for it—a similar
necessity existed at Edinburgh. It was impossible to
shut the capital account, a gradual and judicious ex-
penditure being far preferable to laying out all at once
—a course which would probably involve many errors
arising from inexperience. He then adverted to the
additions to capital made during the last half-year.
For instance, Mr. Graham of Craigallion had received
11,0001. for land ; 4,3001. on workmen's houses at Car-
stairs (the rent from these making the money laid out an
excellent investment) ; while sums had also been ex-
pended on new works at various stages along the line,
One result of the improvements was that, while in July,
1855, 4,2761. was paid for the use of plant, this half-year
the plant was so complete, that instead of paying they
got 5001. back. (Cheers.) Of the capital raised by Act
of Parliament they had still 300,6001, which they could
raise whenever it was required.

The Secretary then read the resolution approving the
report, and declared a dividend at the rate of 5 per cent.
per annuli on the original stock of the company.
Mr. SALKELD seconded the resolution.
Mr. CoLQUHOUN submittei, as an amenc'ment, that
the words, "That the servants of the company be not
required to perform unnecessary work on Sabbath," be
added to the report.
Mr. N. STEVENSON seconded the amendment.
A show of hands being taken the original motion was
carried by a large majority.
The other formal resolutions were passed unanimously,
and a vote of thanks having been given to the chairman
the proceedings terminated.