The Sun.
London, England, 1857-11-16 00:00:00

LONDON, MONDAY, NOT. 16, 1857.

If, after the publication of the Bank returns in
Friday evening's Gazette, any doubt could have
been entertained respecting the real motives of
the Government in relaxing the Bank Charter
Act, it would be removed by an article which
appeared in the Economist of yesterday, and
which may be regarded as of a doubly-official cha-
racter. Mr. JAMES WILSON is justly considered
the financial authority of the Ministry. He un-
questionably understands far more on the subject
than any other Member of the Government, and,
if unencumbered by office, we have no doubt that,
notwithstanding his bullionist tendencies, he
would be found one of the most uncompromising
opponents of the iniquitous act that has created
so much misery and disturbance throughout
the entire kingdom and that he would fearlessly
expose the ridiculous theories on which it was
founded. It was by his speeches in the currency
debates of 1847-8, and his shrewd and searching
interrogatories in the Select Committee, that he
convinced the Government of the day of the
prudence of disarming so formidable an adversary.

But now,

" Quantum =talus ab illo Hectore,"

he is fettered in trammels of red-tape—his genius
is "cribb'd, cabined, and confined," and he must
not only in his place in Parliament, but also in
his weekly journal, support the measures of his
official superiors. We may, then, receive his
acknowledgements—or rather his confessions—
without hesitation ; but treat his arguments in a
very different manner, regarding nem rather as
those of the advocate instructed to support an
untenable cause, than as the expression of hii
own independent and unbiassed opinions.
Mr. Wimow, however, clearly shows, not only
that the Government could not possibly help itself,
if it desired to avert areal suspension of cash pay-
ments, but that it persisted too long in its per-
verse course. On Wednesday evening the entire
reserve of notes, not only for the head office in
Threadneedle Street, and the various branches in
town and country, amounted to but 957,710/.
of notes, and 504,4431. of coin, although the depo-
eitF, which might be withdrawn at a moment's
r.otice, were no less than 18,250,0001. An im-
portant item was omitted in that calculation.
The 7 day and other bills amounted to 853,975/.,
and if, in addition to this, we refer to the
14,475,000/. of notes issued against securities for]
which there was not a single ounce of gold depo-
sited, we find the liabilities for which there was
no bullion reaching the gigantic sum of nearly

33,500,0001., against which there were notes
and coin amounting to some 1,460,0C)0/., or
something like 103. in the 11. Nor was
this all ; there had been large sales., on
Thursday, of Government Stock, with the
avowed intention of exchanging the proceeds for
gold, in order to transmit it to Scotland and Ire-
land, where the absurd and uncalled-for regulations
of the Acts of 1845 had occasioned difficulties,
where none would otherwise have existed. We
now learn from the Economist, no doubt on authen-
tic grounds, that the paltry reserve had been
reduced on Thursday to little more than a half of
what it stood on Wednesday evening. It is,
therefore, manifest that, but for the Government
letter, the Bank must have closed its doors ere
this, or imitated the conduct of the American
banks in refusing to pay sterling coin in exchange
for its paper issues. And thus the very means
adopted for the purpose of ensuring convertibility
under any circumstances, would have produced
inconvertibility. What, then, can be said on
behalf of the " self-acting regulator of the cur-
rency," for that brilliantly contrived automaton
action that was to supersede the necessity of any dis-
L cretion on the part of the Directors assembled in
'solemn conclave in the Bank Parlour? Why, but
for the tardy interference of the Government, we
doubt if the forced liquidation of the quasi Na-
tional I 3 wk would have been equal to that ten-
dered to the creditors of the Royal British Bank !
The comparfoon instituted by Mr. JAMES WIL-
SON between the state of affairs on the 23d Oct.,
1847, and the 11th .Nov., 1857, shows how
much worse the condition of the Bank was at the
latter than on the former sCupension. We had
prepared a similar table, which was easily made
from the returns of both periods, 0.0 one having
been referred to and criticised in the report of the
Lords' Committee, and the other appearing by
the ;Bank returns. But fas est ab hoste doceri,
and therefore we prefer quoting that compiled by
Mr. WILSON. It is as follows—and we annbx
the observations of the financial Secretary of the
Treasury thereon :
" BANK RETURNS FOR 1847 AND 1857.

" Oct. 23, 1847. Nov. 11, 1857.
" Bullion £8,313,000 £7,171,000
" Reserve of notes in
banking depart-

ment
" Reserve of coin 447,000 504,443
" Deposits, private 8,580,000 12,935,000
" Private securities 19,467,000 26,115,000
" At the close of business on Wednesday night
last the amount advanced by the Bank to the
public was 26,115,0001., as compared with
19,467,000/. at the height of the panic
in 1847. These additional advances wore
rendered possible in a great degree by
the enormous amount of private deposits
placed in the Bank, which on Wednesday last
amounted to 12,935,0001. against 8,580,0001. in
1847, being an increase of liabilities under this
head of no less than 4,355,0001. But against
Ithis increase of liabilities how did the reserve of
the Bank stand ? The bullion on Wednesday
nigh t was less by 1,142,0001. ; the reserve of
notes was only 957,0001. against 1,547,0001. in
1847 ; and the entire reserve of notes and coin
together was less by 532,000/. Whatever reasons,
therefore, there were in 1847 for the policy then
adopted, the reasons for taking a similar course
on Thursday were much stronger,—and it will be
impossible for any one who acquiesced in that
course at the former period consistently to object
to it now."

From the above it follows that the suspension
was a matter of inevitable necessity, and that the
Government was not entitled to the slightest
thanks cr gratitude for what was pompously put
forward as " a concession in favour of the com-
mercial interests of the country l" but which was
only adopted for the benefit of the Bank itself,
and the moneyocracy who should have fallen along
with their idol—whose head might have been of
fine gold, but its extremities of vilest clay.
Mr. WILSON tells us, for we treat the article in
the Economist as his own, that the issue
of 11. and 21. notes was well consi-
dered, and there is no doubt that it
would have been adopted, if practicable, but it
was simply impossible. The Bank had no plates
prepared, and therefore could not have issued
these notes for some weeks, while a few days
would have sealed their fate. We all know that
the box of 1/. notes, which saved the " Old
Lady" in 1825, was discovered by mere accident.
Thus the ordinary foresight, that should have
been prepared for any contingency, was wanting.
What would be thought of our Generals if they
exhibited similar imbecility in the hour of trial ?
It is manifest that the Directors should be
classed with Ilmverrx and LLOYD, the obstructive
Generals in our Eastern difficulties. We again
quote Mr. WILSON' on these points. He says
" With regard to the other remedy suggested, the
issue of 1/. and 2/. notes, which we have reason
to believe was well considered, we are entirely
agreed that it would, if it had been practicable,
have been a more perfecb remedy than a further
license to issue notes of 5/. and upwards, inas-
much as notes of a lower denomination would
have answered all the purposes of gold coins both
in England and Scotland, and thus have led t 3
the return of large quantities of bullion to the
Bank of England much sooner than it will
otherwise take place. In the first place,
however, that course would have equally been a
suspension of the Act of 1844 ; for that Act
prescribes a limit to the paper circulation of the
Bank, and it would have made no difference in
what denomination of note an excess of that limit
took place. But, in the next place, the issue of
1/. and 2L•notes was simply an impossibility. No
plates were ready, and no preparation had been
made ; and before the mere physical difficulties
could have been removed, the remedy might have
been too late. In principle, however, an issue of
such notes would have been exactly the same as
the measure which has been adopted."
Would wo could stop here ; but it is with in-
tense disgust that we have read the concluding
passage, protesting against
,the step being regarded
in the slightest degree as a concession to the views
either of those who believe in the efficacy of a
paper circulation to supply indefinitely the place
of capital, or of those who think it the duty of
the Government secure to the country what is
called cheap money. Ai we, in common with a
large proportion of our countrymen, believe in the
efficiency of paper money, and feel that the pro-
duction of cheap money is imperative on the Go-
vernment, we regard these assertions with deep
regret--proving that a very severe " pressure
from without is still necessary to bring
Ministers to their senses." It is obvious
that, although we are toll " tae panic
not
asufficientaycheck
heis subsiding," the measure now adopted is
to restore permanent confidence
It
nob check the silveprandicra
or that of gold to the Cioln.onra
ttinentltinmdoerilthboeurtUCinthiitlnveiadi'l
States. These will continue with unabated force,
and as soon as the Seven Millions of Specie are
nearly exhausted, and they cannot last long under
the circumstances, the panic will revive with ten-
fold intensity ; and a much worse state of affairs