The Sun.
London, England, 1866-06-19 00:00:00

CHELMSFORD HANDICAP.

Ostregor
Saccharometer

Tormentor
3
Raglan, Gulnara, Cadiz, Ambition, Forester, and
Iconoclast also ran. Betting-2 to 1 agst Saccha-
rometer, 5 to 1 agst Tormenter and Forester, 6 to
1 agst Ostregor and raglan. Won by three
lengths.

GALLYWOOD STAKES.

Catalogue
Miss Fanny
Viper

Betting-5 to 4 agst Catalogue, 6to 1 agst Miss
Fanny. Won by a length.

TOWN PLATE.

A. D. Wagner
Blue Mantle
Gold Pen
Betting—Even A. D.Wagner, 3 to 1 agst Tesane.
Won by two lengths. Six ran.

MARKS HALL STAKES.
Mr. R. Ten Broeck's Rose Nera (Fordham) 1
Mr. Thellusson's Miss Fanny (Deacon) 2
Mr. Hodgman's Arcadia filly (Heartfield) 3
Betting-7 to 4on Miss Fanny. Eleven ran.
Won by a length.

Cotton from America and Cotton from

India•

The disturbance of the cotton trade caused by
the 'War in America has been the main cause of the
financial difficulties in England. The reason being
simple, requires no profound reflection to elucidate.
When the Southern States ceased to supply the raw
material to our Manchester looms, that material
was sought for mainly in India and in Egypt. The
West Indies, Turkey, China, the South Sea Islands,
and even Australia, were invited to produce their
quota, but these supplies were mere adjuncts ;—on
India rested the hopes of our manufacturers, and
their efforts were almost wholly directed to our
Eastern Empire. To stimulate the production an
enormous price was offered, and agents passing
freely into the interior bid against each other for
every pound of the growing crops. " Promises to
" Pay" have little weight with the Hindoo culti-
vator ; they require hard coin, and millions were
poured into Bombay, and scattered broadcast by
these agents over Hindostan. The natives absorbed
the money as fast as it arrived, and it disappeared,
making little or no sign in the country, though in
the Presidency town the part that remained in the
hands of the merchants and exporters produced a
wonderful result. A sudden and unlooked-for in-
flux of money almost invariably produces a
like result—it is the old story of putting a
beggar on horseback. The affairs of the so-
ber citizens of Bombay became expanded with a
growing inflation, the wildest reclamation schemes
found eager supporters and were quoted at
extravagant premiums, financial bubbles arose with
the most alluring colours, and banking institutions
grew up like mushrooms, sufficient for the monetary
affairs of a mighty empire. We will take another
opportunity of describing Bombay under the forcing
process of the cotton demand, transferred by the
American War to that port from New Orleans.

What happened in England is our object here to
show. Cotton became the great medium of specu-

lation,—and Bombay and Alexandria became the
two great marts. It mattered little to the Liver-
pool speculator to what result his operations were
likely to lead ; his calculations were simply based
on the margin of gain to himself. Every steamer
to the East carried away vast sums of the precious
metal, and the Peninsular and Oriental Company's
steamers poured into Bombay nearly all the gold
of Australia. Thus England suffered from the
double process ; losing at the same time her own
whole currency, while the supplies from her gold-producing
shovelled
h coloniesoveli e were intercepteduntold thewas
d in
quantities into and
the same sink-.
For this money there was no return but bad cotton,
ill-dressed, ill-cleaned, and packed with dirt to add
to its weight. The Hindoo grew fat on the spoil ;
Bombay expanded like a balloon ; and the Liver-
pool speculators made rapid fortunes. The port of
Alexandria became thronged with Liverpool
steamers, trade with the East became brisk, and
great gains were realised out of the countless
thousands of English sovereigns. But in proportion
as the hoards grew large in the hands of the Hun-
doos and Egyptians, the bullion in the Bank of
England decreased, and the rate of discount rose.
Fluctuations in the value of money became violent,
and merchants ceased to be able to calculate
to what their commitments would lead. Under
the Bank Act of 1844, the currency of this country,
sufficiently restricted already, became totally un-
equal for the work of its gigantic and growing com-
merce. Thus, while the medium
on which we base
our barter was lying buried in far away villages
of Hindostan and Egypt, England
was passing
through a series of small panics,
to end in the Great
Financial Crash of May, 1866. The violent dis-
turbance caused by the d 811 den transition of the
trade .in this stele,
from the West to the East,
seems to have enriched few and ruined many. It
revolutionised the economy of our Eastern empire,
unsettled wages and the • price of commodities, pro-
duced two great panics in Bombay, and built up a
precarious and unstable trade.