The Sun.
London, England, 1857-12-31 00:00:00

¶HE SUN, LONDON, THURSDAY EVENiNG, DECEATBER 31, 18N7

deposits would have been drawn on to an extent
far exceeding the amount of notes in reserve.
The letter of the 25th October was therefore
issued, and the Act virtually repealed.
Parliament was, of course, convened before
Christmas, in order to sanction the step taken by
Ministers, and a carefully selected or rather
packed committee was appointed to inquire
into the causes of the commercial crisis. It
was then that Sir R. PEEL for the first time de-
clared that to ensure "the convertibility of the
bank-note was one of the objects of the measure."
A doctrine carried still further by " Mercator"
in the Times, who declared that it was the sole
object, and that it was never intended or supposed
that it could prevent fluctuations in the value of
money, which were inevitable. Thus practically
abandoning the false and fraudulent pretext on
which the act was obtained. This was stage No.
3 in the money-lender's progress.
Again, a panic producing more disastrous re-
sults even than that of 1847 occurred. The
Ministers clung longer to the bill, and therefore
the mischief was materially enhanced. At length
they yielded for the very same reason that their
predecessors had in 1847—viz., to save the Bank
that must have stopped cash payment, notwith-
standing seven millions of gold lying in its vaults
—gold that was of no greater value than an equal
weight of paving stones. And now the mists
were at length dispelled, and the real object of
the "hard calculators" was openly and unblush-
ingly avowed. The Times complained of the re-
laxation, because it prevented the increase in the
value of what it was pleased to term " money"
prevented the rate of interest from spring-
ing up to twenty or thirty per cent., and
the " bard calculators " from obtaining pos-
session of the property of their softer brethren at
very inadequate prices. Parliament was again
summoned, and again the wooden dodge was re-
sorted to, of shelving the question, by referring it
to a select committee, which will doubtless be very
fudiciously chosen, and whose report may be re-
garded as a " foregone conclusion." This is the
fourth stage in the money-lender's progress, and
may be regarded as " the beginning of the end."
They have now reached sight of the goal, as
they fondly imagined. Already they grasp, in
imagination, the property of their neighbours,
but they may find the fifth stage very different
from what they picture to their fancies. The
commercial and manufacturing interests are the
geese that lay the golden eggs. They are being
rapidly destroyed, and when that destruction has
been effected, and the revenue of the nation re-
duced to comparatively slender dimensions, and
the ruined people are thoroughly exasperated,
shay may discover that they are not quite so
clever as they suppose, and that " honesty would;
after all, have been by far the best policy."

EXCHEQUER NOTES.

control were exercised over the issue of private
and joint stock banks. It was accordingly pro-
tided by the Act of 1844, " That no person, other
than a banker, who on the 6th of May, 1844, was
lawfully issuing his own notes, shall make or issue
bank notes in any part of the United Kingom."
The privilege of those issues was continued to
those persons; but the amount that may be issued
in each case, was restr;cted to the amount which
constituted their actual issues ripen the average of
the two preceding years."
The notes not exceeding 14,000,000 might be prac-
tical, but the issue on the bullion is the qu
able part of this act. Its advantage to the Bank of
England is undoubted, because it gives the Bank
a double power over the r..st of the nation, their
power of expansion is thus made doubly iapid,
but their power of contraction is equally so,
which is the very reverse of that which should
be beneficial to the nation. Of all things, to make
a law of such importance to be under the control of
one body corporate, is an evil of such magnitude,
that not a week ought to be allowed to pass with-
out its alteration. At the very time when gold is
wanted, notes are wanted still more, yet, by this
act, at the very time gold flows out of the coffers of
the Bank, notes are withdrawn from circulation to
just that very amount—at the very time they ale
most needed they are taken away, as if by a con-
catenation of perverted ingenuity. The worst system
seems to be made the law of the 1 tnd that could do
that land the most injury.
It might be thought, superficially regarded, that
the Bank would suffer the most, since her issue to
work with is doubly lessened and her means of
discount equally shortened,but that is no injury to
the Bank, since she can double her interest as
rapidly as gold diminishes from her coffers,
even in considerable anticipation of it, cau she
benefit, before the gold is parted with, by raising
her rates as a precautionary measure. Not so with
the country merchants, manufacturers, and
agricultural producers, they have, during this
lessening of the means of coeducting business, been
paying for their castigation, they are not only
made to pay the flagellatur double ; the farmer
getting but half the price of his produce, the
labourer thrown out of work, and all for what
Not because there is less wealth and worth in the
nation, unless, by-the-bye, the Banked England send
it out in bars of gold without a quid pro quo
(a thing they are not quite in the habit of doing)
not because the merchant is overtrading, but, the
truth must come- out, because the bankers find it
:Dore profitable to be receiving high rates than low
rates of interesr. Men of paper and nothing else
are encouraged, because they can get off a large
parcel of discounts, or can pawn thAt consignees'
dock warrants to within 15 per cent. of actual
value. The high rates of interest tempt the
bankers to extend accommodation beyond prudence,
as it tempts them also to use deposits beyond the
limits of prudence and caution. But for whom is
all this kindness on their part ? Not for the honest
sons of toil, but for tee fast stag, the go-ahead
man, caring but little what he pays, the large
supplies of accommodation suit him and the
banker together.
The Government overlooked, or winked at the
fact, that by allowing gold to regulate the addi-
tional issue, they leave a power in the bankers' and
Bank of England's hands to cause a pretext for
raising discounts whenever they like. The Bank
has only to treat for large loans to Russia, Austria,
East India Company, or Sweden and Norway ; the
gold they themselves thus send from teeir coffers
by millions, whenever in-ereA is like!y to become
below their favourite price, is—the vely facility
at the same time for raising rates—the high
pressure valve, and is seen to work and indicate
danger. No matter ; before the Bank fail, the
Government and the country must. No matter
who sinks, they swim. Rates of interest roust be
buoyant, uniformly high. Low rates now are only
exceptional. So says the Bank ; or, so acts the
Bank, at all events.
Tne crash of the banks of 1825 to 1826 was not
owing to the inability of the banks then, but to the
monetary laws. Sir H. W. Ridley declared, en 3d
June, 1828, in thejlouse of Commons, " that in
1825 and 1826 there were 770 country banker-,
and of these 63 had stopped payment, out of which
23 had resumed their payments of 205., and 31
were making arrangements for the pas went of
their debts. The country bankers, at all everts,
paid on an average 17s. 6d. in the pound. It is
evident they were perfectly solvent when the crash
commenced. It was brought about by the drain
of specie, and it might have been entirely avoided
by permitting the issuing of another species of pro-
perty to sustain the currency when the one on
which all depended was withdrawn." Exchequer
Notes would do this.
One question 1 ask in all sincerity—Are the men
that are so iu the habit of gambling on the Stock
Exchange day by day, jobbing and tricking in
inonttary practices, till trick-my-neighbour h s be-
come the familiar object of their embrace, are they
being educated in a fitting way on points of virtue,
sufficiently to become bankers for the world ? Are
they men to be held paratnvuut to All else—superior
to the producers of the earth, teat yield yearly
300,000,0001., nearly twice as much as all
trading and manufacturing classes put together,
which in 1845 reached 180,000,0001.1 Are laws
ever to be made especially to favour these sordid,
self-seeking, huckstering, money traffickers at the
expense of the whole melon besides ! Tue world
Mot excluding Since the Bank of England has
forgotten the excessive advantages they enjey
over all else to the extent of 14, 000000/. of issue.
Since they have converted that nationality into
personality, selfishly appropriated, let a check be
placed over them. Are principles entirely to
be ignored in legislation, and secular principles to
be raised up as a standard of action 7 For what,
then, have we a Government, if it but encourage
the secular and the vicious? As well might man
question his Creator as question first principle,. Let
Sir Robert Peel's Bill of 1844, and his expediency
also, be hurled together into oblivion before secular
motives of action become the rulingpower of t e day.
Lord Palmerston might have been entitled to
the best thanks of his country while the war lasted,
that might have bten his mission then to b.: Pre-
mier ; but now that the war is over, him not
touch the currency, for as sure as he does he will
do harm--that is nut his forte. It would be hon-
ourable in him now to resign and give place to
one that should be as efficient in currency as he
was in the War Department.
Now the remedy in the Bank Act of 1844 is to
be founded in this. Since a cheek to the Bauk is
found to be more and more necessary every day, let
another issue replace the issue withdrawn when
gold goes out of the Bank ; as gold is withdrawn
make Exchequer notes constitute the issue up to the
amount of bullion withdrawn from t e Bank.
These Exchequer no es always payable in taxes
and duties, the interest of the issue of which take
care is reserved for the Crown. The Bank clarinet
complain of such a modeof stopping the fluctuations
and monetary convulsions that are now so dread-
ful to bear. This will prevent the sudden reduc-
tion of issue and gold at the same time, and keep
in circulation a steady and even supply of currency;
will endanger no inconvertibility, since no more in-
convertibility will exist then than now, all exche-
quer notes being convertible into taxes and duties
to the amount of the debt of 11,000,000/. The
Bank would have no inducement to advance larger
loans to Sweden and Denmark, nor to Norway, be-
cause by parting wi h money they would not have
the same power of raising discounts on what is left
behind at home as now. The pressure would never
be so great ou the Bank fur gold when another
convertibility was adopted, such as taxation, be-
cause fear and mistrust of the ultimate results of
stoppage in the Bank of England is now out of the
question, whether she can pay in gold 10k at one
time in the pound, or 10 at another. She is
always solvent, and no loss can ensue to the coun-
try uitimately. With a capital of such magnitude
she is always safe, but that is no guarantee that
she intends to keep to an uniform low rate of
discount under 5 per cent. ; au contraire par Welt.
I have taken great care not to be chimerical, and
have tested my views by introducing the best autho-
rities on the currency.
In concluding this letter, I quote Alison upon
the encouragement given to speculation :—" To
make paper plentiful when gold is plentiful, and
paper scarce when gold is scarce, is not only a dan-
gerous system at all times, and under all circum-
stances, but is precisely the reverse of what should
be established. It alternately aggravates the dan-
gers arising from over speculation, and induces the
distress consequent on over contraction. The true
system would be the very reverete and it would
prevent the whole evils which the preceding pages
have unfolded."

(FROM A CORRESPONJANt)
It appears that authorities upon the present
system of currency are somewhat at a discount when
such journals as the Times and Daily News seek con
roboration from the exemplary elect perpetrator of
slavery in order to justify their crotchet 011844.
President Buchanan, the advocate of slavery, fur-
nishes these journals (at his eleventh hour of na-
tional calamity) with a grand secpe for congratula-
tion, as if it were a new enunciation that banks
ought to be held responsible for their issue. These
journals exult over the triumph they have achieved
in finding the cowhide gentlemen proscribing the
banks of the United Sta'es unless they retain a
th rd of bullion to their issue. Do we require to go
so far to find advocates of sound principles, or must
we seek them only among the pro-slavery Presi-
dents of America ? I have no doubt in a year or
two we shall find these journals bolstering up their
usurious fraternity by referring to their much-
respected King of Oude, or some new King of Delhi.
After all, had the banks of America reserved only
one dollar in seven to their issue, upon bullion and
deposits, it would seem not to have much exceeded
some of our English and Scotch banks.
The whole of this loose system is to be repudiated
both here and in America. The advocates of an
alteration in the circulation are not to be associated
by these journals with the abuses of either America
or England. Certainly, they can form no connec-
tion with either, but they can deplore the ignominy
of both. All these disgraceful disasters have taken
place unconnected with our advocacy. The panics
and calamities have all taken place with the pre-
sent laws, whit I, for one, repudiate and de-
nounce as impracticable and unjust.
It does not seem to answer the purpose
of certain journals to distinguish between
the advocacy of an extension of currency
and that of inconvertible issue. It would be an
insult to these journals to assign inexperience or a
want of knowledge of sound principle of action
for not acknowledging that an insufficiency of cur-
rency has at all times, and ever will, produce low
prices, and high rates of discount with the absence
of the usury laws.
It is an old editorial trick, practised now 89
often, that the motive and object become promi-
nently evident, when leaders of certain interests
associate something low with any principle in
which they do not find their present interests up-
held. It is a trick that comes from the bar.
It is quite evident that those who attribute the
evils of this crisis to what Mr. Buchanan c died a
"vicious system of paper currency," like him
must have some sinister motive, for it is not true;
neither England nor America have increased in
paper currency ; the weekly returns of the proceed-
ings of the Bank of England prove the contrary
with regard to us, as do the accounts just received
prove the contrary in America. In 1852 the circu-
lation of America was in June 27,910,000 dole. ;
in September, 1857, it had diminished to
27,122,000. But between those perio is we find
the capital of the New York banks had increasof
from 59,705,000 dole. in June, 1852, to
107,507 dole, in September, 1857, aving very
nearly doubled itself within live years. Specie
has also increased from 13,304,000, in 1852, to
14,321,000 in 1857, Deposits have increased from
65,634,000 in 1852 to 84,527,000 in 1857, whilst
their loans and discounts will be seen to have in-
creased only in proportion to the increase of their
capitaland specie, leaving their deposits untouched.
A sounder condition a country need not wish to be
in ; a panic need no more take place there than
here. England at the present time will be found
to present a more sat,sfactory state of things ; and
nothing justifies the panic of 1857 which has arisen
not from want of wealth, nor on account of an
excess of issue, but because of the reduudance of
acoumulatiou of wealth on our part, it having accu-
mulated into too few hands, by which monopoly
can be exercised to their own advance neat at the
expense of mercantile interests ; also because of
the bill of 1844 contracting theissue simultaneously
with the contraction of bullion, the working of
which I shall illustrate more tally shortly.
Bankers and money-lenders are the only inte-
rests some journals now openly advocate, as
if they felt quite secure in the continuance
of the plodding merchant, whose everyday toil
leaves him little time for reflection. But
when this journal finds its circulation growing
beautifully less, that it is forbidden to be brought
into their counting-houses, let them learn that the
Brit'sh merchant is aroused.
One article in the Economist last week, 26th
inst., is characterised by a much sounder tone,
more in keeping with the principles of the respected
Mr. Lzike. In an article, under the heading,
"'The American President on the American Crisis,"
it does not fall into that wrong but popular error
that the evil of this panic was that which Mr.
Buchanan declared to be the " extravagant and
vicious systems of paper currency," -while the
Economist shows that the real clelihquenis are in
the back-ground screened from public gaze. But
it admits that when the act of I R 4-1
--- was suspended
in 1847, Sir Robert Peel acknowledged " that for
the object of checking comm-rcial speculations the
act of 1844 had failed!' Unfortunately for the
country the cure was not then provided.
It would then, as now, be found in the re-
adoptiou of the usury laws limiting the interest t, 5
per cent., or in a check to excessive rates of discount
by the issue of Exchequer notes up to the exact
amount of bullion going ou t of the Bank, which would
have a similar effect on the rate as that of the
Usury Law would, i.e.., the effect of keeping rates
low and more uniform, simply arising out of this
fact, that the country would not suffer from a loss
of circulation ; as bullion went out of the bank. No
greater demand would arise, because no depre,sion
would be felt ; since none would exist, no rise of
rates could take place. This would prevent
gold going out into other countries. So much to
our inconvenience at home, because then as gold
went out Exchequer notes would go into circu-
lation, and would keep down rates of discount.
High rates of interest will always give Ilse
to excessive speculation, just as it assumes
the appearance of stopping it. The Bank's
putting up the rate of interest is only enabling ht r
paper. High rates tempt the
to
bankerdi discount ut
on t
do doubtfuldoubtful
he would not think of. It answers the purpose
bills, which at 3 per cent.
Jec., and to rase discounts
aletnhdomgoel;dbutot a
uScwheddnoeub,
double policy is England's double
loss,

America and France seem to have discovered,
,hat it is better to tempt the old lady by high rate.,
and to get the gold from her, than allow England
to use it at home. Alert they have obtained which
they can be the first to relax the pressure, as they
have done, reduce the rates in their own countries,
whi'e misery and ruin, dreadful to centemplate, is
protracted here in England ; even during this
Christmas season when all should be joyous. For
the eleven months of this year the excess of imports
over exports of gold in France was 16,625,4241.,
that of last year, 13,470,0001., and in 1855,
8,041,644/.
In the same article in the Economist it will be
seen that the abuses that exist have no connection
with any excessive issue of notes, corroborating all
my preceding remarks. "The error of confound-
ing capital with currency throughout all these vari-
ous efforts of legislation is now well understood.
Imprudent and extravagant credits which end in
ruin to all connected with theta are at length seen
to have no connection with them, and entirely un-
aided at any particular time by excessive issues of
notes;—it is seen that in places where the banks of
issue exist, and that with regard to banks of de-
posit only, the chief abuses have existed, and that
in Hamburg, where a purely metallic currency only
is in use, the crisis has been more severely felt than
iu any other placs ; and now, at last, we are likely
to have a more searching scrutiny." Much
as I find the above remarks in accordance
with my foregoing letters, I am sorry that I
cannot ray, " the Bank has been perfect,"
nor that we may expect more practical conclusions
from our closed doors instead of an open house.
We know an Act was passed in 1844 renewing for
ten years the chatter of the Bank of England, but
as the particulars of the Act might not be quite
familiar to all, I will here adduce them, in order
that we may be agreed upon the principles.
"The privilege of issuing paper money within a
circle of sixty miles radius round London, was con-
tinued exclusively to the Bank of England, but
with the following restrictions :—The establish-
ment was divided into two departments wholly,
distinct from each other, placed under sepa-
rate officers and keeping separate accounts.
One for the ordinary purposes of banking,
the other for the purposes of regulating
the issue of note') the amount of which was
never to exceed fourteen millions, in addition to
the actual amount of gold and silver lodged
by the b-trikinl department in the diTartment of
is me. This 14 millions is made up of 11,000,000,
the amount; of capital which has been lent per-
manently to Government, at 2 per cent. interest,
and 3,000,000 of public securities, bearing interest
which the bank of issue is empowered to hold for
that purpose. Porter himself could not refrain
from remarking, "It remains, however, to be
proved whether, under all circumstances that may
arise, the seem ity of the public is thus equally well
attained. As respects the management of the cur-
rency, and there are not wanting men of great
practical experience in such questions, who have
expressed doubts upon this sittject."
It must be evident that any attempt to regulate
the currency by controlling the issues of the Bank
cf England, must fail of its object unless an equal

Exchequer notes should be based on the principle
of making paper a supplement to the: metallic cur-
rency, and a substitute for it when required, not a
representative of Alison further says :—" Thus,
over speculation.at one time, and monetary distress
at another, would be alike avoided, and an equal
circulation would naliatain the health of,the social
system, as it unquestionably does of animal life."
The important current of events or the past
week calling forth so many remarks, precludes the
possibility of my enteribg upon the statistics Allu-
ded to in my last.

DANGERS OF TUE RED PETTICOAT,—Three ladies were
last week walking on the Newmarket-road, two of
• hem exhibiting the favourite under-garment of the
day, when the ire of a passing bullock was excited by
aieglar:ng colour,'and he made a dash at the party. The
offending ladies succeeded in evading him, but their
companion, though in a more sombre garb, was lifted:
upon a gate by the beast, but sustained no injury beyond
the fright.—Bury Post,

LATEST NEWS

Ad vices from Alexandria state that negotiations
entered into by the English representative with
the Chinese government have failed. The perse-
cutions of the Chinese against the Christians were
increasing, and several of the latter have fallen
victims. Commodore Read, the American envoy,
had arrived at Hong Kong.

The English steamer Abeona, with the 94th
Regiment on board, destined for India, arrived at
Malta on the 24th inst.

FRANCE.

PARIS, WEDNESDAY EVENING.
Important despa,tchea have reached Paris from
China. The authoriti,,s of Canton are preparing
for a defence. Proclamations have appebr«..d order
ing "all Christian and foreign dogs to be killed."
It is now said that the Conferences will not
take place in Paris before February. There are
many preliminary difficulties to set le, especially
about the n svigati, n of the Rill vibe.
The Governor of the Credit Fancier of France,
M. L. Ftemy, announces to the shareholders the
payment of a provisional dividend of 6f. 25c. per
share for the second six months of 1857, which is
equivah-nz to 5 per cent. on the sum paid up.
"The final dividend for 1857, will he fixed at the
general annual meeting in the month of April next.
Toe payment of 6f. 25c. per share will take place
at the office of the Socie y, 19, Rue Neuve des
Cspuciens, after Monday next, the 4th January."
The Moniteur contains a decree appointing a
umarnission of inquiry into the organisa,ion of the
Irupelial library. MM. Merimee, General Allard,
Lehut, of the Institute ; Maichaud and Chaix
d'Este-Ange, Councillors of St tte, an L six other
savants, ar,t named as members of the commission.

-----------•
The ceremonial of the Imperial receptions, on
the occasion of the Jour de l' An, are given at
length in the official paper.
The French papers contain the following facts :
"An affair, in a slight degree similar to that of
Jeufisse, has just taken place at Hs.bouvilie, in the
Moselle. A young man, n••wed Basset, nut quite 18
years of age, made Forn e time ag.) the acquaintance,
in a wood, of Mlle. aged 16, daughter of the
mayor of the village of Saint-Ail, who ►esides at Habou-
villa. They had frequent meetings in the wood, and
.at length, in October last, the girl began to admit Bas-
set to her chamber of a night. The c nnexion between
them continued unknown to the girl's parents to the
25th, when these latter were toll of it by two of their
nieces. The father said nothing; but at night, when
the hour for retirin4 to rest had arrived, he told his
daughter to go and sleep in her brother's chamber, and
the brother to sleep in his sister's room. She obeyed,
and he then went to the son, and ban ling bioa a
double barrelled gun which was loaded, told him
that his sister was dishonoured, that the man who
had ill-treated her would perhaps that very night
attempt to enter her chamber, and that if he
did so, he (the brother) must fire at bius, The, young
man placed himself is the watch, and alter a little while
he huarti a noise as of a wan ciinabing up t.) the window
by means ~of the shutters ; prese,.tly he saw a wan
standing on the shutter at the win io-w,; ors which he
open'-d the window, fired, and the man, who %las Ba-se ,
fell dead The father at once sent for the gendarmerie,
and calmly related to them the preceding circumstances.
He was surprised when tie gendarmes proceeded to
arrs-t his s, n and himself."

BOURSE, Dec. 30.—The money market con-
tinues buoyant, and securities were in demand at
the opening. After a slight reacdon produced by
reallsations, the tendency again became favourable,
though the English Consols had arrived with a tall
of Z. Threes have been done at 68f. 35c. to 68f.
55c. ; Mobilier improved to 855 and 860 f. ; Aus-
trian, 745 f. and 750 f. 50c. ; Lyons, 880 f. ; Or-
leans, 1,3801. ; Southern, 560 f. ; Northern, 9651. ;
Eistern, 792 f. 50c. ; and Geneva, 700 f. The up-
ward movement continued with increased rapi
just before the cl 'se, when it was checked
by sates for realisation, prices, however, closing
firm.