The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1848-12-05 00:00:00

makir

.?, great

depreciation which has taken place in the price of
railway property : and here we approach to the key
of the mystery. We may some of us have mis-
calculated the value of such property. A. may
be poorer to-day by half his fortune than he was
yesterday ; but B. will have got the property of A.
for half what it cost. As a nation we are no poorer
than before. The railway is of the same public
utility as before. But it will not sell for so much
of the conventional representative of value, money ;
and here is the pinching point of our difficulties,
so far as railways are concerned. A., having in-
vested a temporary surplus of, say £lOOO, in a
railway, requires it back again for his ordinary
business. In the meantime, however, we have had
a monetary panic; and as the result, his £lOOO is
only worth £5OO in the same conventional article,
money, and, to some extent, in commodities. Hence
A. cannot pay his Christmas bills so readily; and,
perhaps, may have to discharge a servant, or to
limit his business operations, which in the ordinary
nature of things would lead to the increase of a
neighbour's, who has been more fortunate.

But, what was the cause of the monetary panic ?
is the question. What is the nature of the myste-
rious operation by which half of A.'s £lOOO has
been lost ? We will endeavour to give an ex-
planation, which shall be intelligible ; and, if in
doing so, it may appear to any of our readers that
we are stating matters which are well known to
them, we must remind them that we are appealing
to parties who are not so well informed. When A.,
then, invested his £lOOO in, say London and North-
western Stock, at £2OO per share, and paying ten
per cent. dividends, the return which he could have
had for that money, placed at call in his banker's
hands, or employed in the discount market, was
from 2 to 21 per cent. The railway was, there-
fore, even at £2OO per share, his best investment.
But when A. had to sell, money was worth 10
to 121 per cent. interest in the discount market;
and the security which only returned 10 per cent.
on £lOO, became worth something less than the
£loo—which then would produce £lO per
annum in that market. But how did it occur that

amount

money—currency—a mere vehicle for transferring
commodities from one man's hand to another—had
become worth 121 instead of 21 per cent ? Be-
cause we have a monetary system, the essential
feature of which is, that when the Bank of Eng-
land parts with a few millions of gold, she is com-
pelled to withdraw from circulation the same
number of millions in paper, thus withholding from
the community 4-1 ' • by h

tine vehicle in question, -1C
the interchange of labour and commodities for
commodities is effected. We had this drain of
gold last year to pay for our heavy imports of
breadstuffs, and a the consequent contraction of our
currency; and the effect is before us, in the
stagnation which we have been experiencing in the
commerce and industry of the country, and in the
decline in the marketable value of every description
of securities and tangible property, estimated to
amount to at least five hundred millions sterling.

We ask of our fellow-townsmen to reflect upon
this strange state of things, existing in a nation
which boasts of its advancement in civilization.
The question is not the difficult one which it is
said to be. It is a plain matter of fact affair,
which requires only common sense to understand.
If any of our readers had a pair of boots which
grew tighter every additional mile he had to walk,
or a poker which went out of the way every time
the fire wanted stirring, and compelled him to
break up his tables or chairs to perform that
necessary

_ operation, he would speedily arrive at
some correct notions of this very complicated
stion.

-ncv al

WANT OF CURRENCY, NOT WANT OF CAPITAL,

enting to his readers a tabular statement, shew-
ing the fluctuation which has taken place in the price of
Consols and railway shares during the month of Novem-
ber, the London Times remarks :

THE CAUSE, OF LOW PRICES,

In pre

took place on the 2d inst., Consols, it will be observed, have
advanced nearly 2 per cent." _

So far, the adrilisiion is a welcome one, The abundance
or scarcity of currency, not of capital, determines prices.
A high or a low rate of interest determines the exchange-
able value of securities. But the Times might have gone
on and noticed the fact that, under the operation of this
increased abundance, or cheapness of money, nearly every
sort of property has advanced in marketable value ; and
that an increased portion of the labour of the country has
been placed in active employment. The cause of our re-
cent difficulties then, has not been the conversion of our
capital into railways or anything else, but simply the fact
that the Bank could not accommodate with currency at a
fair rate, combined with the general want of confidence

arising out of tl

recent commercial crash, caused by the
e Bank to afford us any currency at all, ex-

Ray of tY

Our contemporary goes on to contrast the rise in the
price of Consols with the position of railway property
which he says, in the majority of stocl

they are made by our

the table

liew-a

rary contradi

s his assumption

—Of the capital embarke

_
illionists to bear ! Un-
given by our contempo-
The mass—in amount

having d