The Sun.
London, England, 1845-10-18 00:00:00

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f,ONDON, SATURDAY, OCTOBER IS. 1845

Being of their opinion who hold that " to be wise in time
is to be doubly wise,"—and that there is a philosophy in
CAMPBELL s axiim, that " coming events cast their shadows
before them," which is applicable to all times and all cir-
cumstances, we entreat attention to a significant announce-
ment just issued by the Bank of England. That great. Com-
pany have issued a notice, long expected, of their determina-
tion to raise their rate of discount on bills and notes to 37.
per cent. It is very true that as compared with former years
when its ordinary rates varied from 4/. to '6/. per cent., this
is still a moderate scale, although it is advanced from
two-and-a-half per cent. But it must be recollected that
the affluence of money into the market has been for some
time past so extraordinary, as to take the last year quite
out of any fair analogy or comparison with its predecessors
The enormous aggregate of previously inactive capital which
the fervour for railway investment and speculation has
unlocked in all parts of the kingdom, in addition to the
still more extensive masses which it has diverted
from other sources of appropriation that bad previously
absorbed them, had the effect of gradually, and for
a protracted period, reducing the current value of money
for discount. The activity of the Railway Market has
hitherto received no check from any sudden panic, or from
untoward disclosures affecting the character of any specific
stock of that description which bad been previously in
request. There has consequently been no reaction
adequate to produce the effect of a sudden contraction of
the enterprise which has long communicated, and still im-
parts, so much vivacity to the Share Market. There is no-
thing in the aspect of the Public Funds to withdraw
floating capital to any noticeable extent from that
channel of employment in which it has manifested so
remarkable a tendency, of late, to flow. The Railway
Aarket, indeed, is at least as buoyant as ever, and it would
be strange if it were not so. Hitherto, there has been no
reverse to mar, or seriously impede, its upward movement-
But, week after week, the bullion stores of the Bank of
England have been diminishing. The weekly circulation,
ndeed, of Bank of England paper has not been materially
sontracted as yet, though very intelligible indications may be
letailed of its advent, and feelers may be observed to have
'keen put out for some time past, like the pennce of the nautilus,
•..o ascertain whether the temperature is becoming so stormy
4s to require it to strike sail and narrow its sphere of move-
ment. A rise in the rate of Bank discounts, coincident
with a decline in its bullion reserves, and a slight but
gradual decrease of its paper circulation, is a beacon
which they will not neglect who desire to escape dangers
chat do not yet present themselves above the surface of things,
iut are not the less fraught with certain destruction to those
who still unadvisedly remain too long within their scope.
ii. bad grain harvest, below the average in quantity, and ex
seedingly deficient in quality, aggravated by the almost total
failure of the principal bread - stuffs of the season,
are portentous adjuncts to these evil influences. But
the two great elements of mischief of which the
development and evolution require to be most assiduously
-vatched are—the price of gold, and the share transactions
-ialancing, upon the settlement of the first calls for those con-
terns which are in an advanced stage of preliminary action.
ret us see how these elements of mischief, if happy accidents
.r wise counsels do not previously control their operation and
vent the mischiefs which may be produced by it, are likely
~o display their fatal energy.
It is admitted on all hands that the larger proportion of
he demand for works and wages, on those numerous
foreign railways which are sustained and worked by Eng-
lish capital, must be paid by this country, ultimately, in gold.
It is more doubtful whether any very important amount of
our gold is likely to be drained by payments on account of
large imports of foreign corn, to supplement our own deficient
return. And it is true that the large corn imports of last
year, which were, to so great an extent, transferred to the
QUEEN'S warehouses, on account of the unprecedentedly
ample product of our own harvest, realised in a
month or; two afterwards, may, for some time to come,
prevent the evidence of the scarcity of this year being
fully manifested, and may, therefore, have withheld
orders for foreign consignments, and restrained the
influx of large stores of Baltic wheat, 81::•., into the home
market. But every day brings us bad accounts from those
extensive districts of the north, where large breadths, the
product of which had entered into previous calculations of
the probable average for the year, have not yet been carried,
of heavy rains, destructive floods, and even early frosts.
Of the harvest actually garnered a large amount is stated,
in other quarters, to be so soft and immature as to be scarcely
convertible into flour without an unusually large ad-
mixture of old and foreign grain. Let us imagine a
demand for two millions of quarters, or even for one, at
the present rising prices, of Prussian or Polish grown corn,
and see whet an enormous draw they must establish on our
diminished gold currency. Let us contemplate the rising
interest of money and the weekly enhanced value of gold in
the foreign markets, at Hamburgh, Paris, Bremen, and
collate these appearances with that of the declining bullion
stores of the Bank—and consider them, altogether, in the re-
lations as to which they are affected by Sir R. PEEL'S
monetary legislation, whereby every note issued by every bank
in the kingdom is convertible into gold, in fact, on demand. Let
us then contemplate the enormously expanded scale of
our money and commercial operations in relation to the
almost incalculable operations of the Railway Share Market ;
and thus reduce the various conditions of the calculations we
have to make to the simple juxta-position of, and compari-
son between, the aggregate of the demands for CIRCULATING
CAPITAL, which we shall presently have to meet : and the
amount of gold currency (in which, under the existing. Acts
of Parliament, the paper that the balances on these transac-
' tions may be discharged, must be paid in), there will remain
to us, with its Mint orb issuable valuable definitively fixed at
the price of 3/, 17e. 10. per oz., while ita market value may