The Liverpool Standard, and General Advertiser.
Liverpool, Merseyside, England, 1854-12-12 00:00:00

dually, but surely, diminishing, so that every coin

parison with the corresponding period of the pre-

vious year shows a considerable decline

There

was a time when less was known with reference

the bullion resources of the Bank of England, and
less attention was consequently paid to the subject;
but, by the act of 1844, weekly returns were
ordered to be published, and as the issue of notes
is based on this foundation, and the capability of
increasing the issues may determine the power to

extend accommodation to the commercial world,
the subject has acquired a degree of importance
which it did not before possess ; and as the provi-

sions of the Bank Charter, with reference to its

renewal, or revisal, may shortly come under public

discussion, the importance of a correct understand-
ing of the question becomes still greater.
It is a singular fact, that the steady decline of
the stock of bullion occurs at the very time when

it was predicted that, owing to the enormous sup-
plies of gold from California and Australia, our
monetary difficulties would be of a directly opposite
character. Reasoning from the analogy of the

acquisition of the mines of Mexico and Peru by
Spain, it was confidently believed that the large
addition to our annual supplies would operate in a
similar way, and enhance the value of other commo-
dities to an extent which would completely un-
settle all monetary arrangements. It has been

seen, however, that this has not been the result

and the cause is to be looked for in counteracting

influences, of which two stand forward the most
prominent. In the first place, the discovery of
gold and the belief in its tendency to produce a
plethora of the precious metals, stimulated an
enormous amount of manufacturing industry and
commercial enterprise, which, in themselves, ab-
sorbed a vast amount of the additional gold, and
found employment for the increase of coined money.
In the next place, the newly-adopted commercial
policy, known as Free Trade, stimulated importa-
tion to an immense extent, so much so, that the
balance of trade was considerably against this
country, and a large amount, year by year, had to
be paid in specie. Had this state of affairs been
unaccompanied by the gold discoveries, which in-
creased our exports and afforded us the means of
paying for imports, while it diminished the balance
to be so provided for, this country would have
been, before this, suffering all the horrors of a
monetary panic, far more disastrous in its effects
than any previously known. Free Trade has had
every wind in its favour, and yet has barely escaped
shipwreck ; our comparative freedom from mone-
tary difficulties at the present time being chiefly
attributable to the late abundant harvest, which
has had the effect of putting a stop to excessive'
importations. Hut taking all these circumstances
into account—the continuous supplies of gold ; a
maintenance of exports—the amount in 1854 being
fully equal to the previous year, which was one of
unexampled activity ; and the decline in imports.
there is still a decline in the stock of bullion, with
an apparently progressive diminution, which de-
mands the serious attention of the commercial

world.
The necessity being admitted that something
ought to be done in order to place the monetary
affairs of the country upon a healthful basis—and
this the more urgently, owing to the increased de•
mands upon our pecuniary resources to provide for
the exigencies of the war, the question for im-
portant consideration is as to the best means by
which it should be effected. Much time and in-
genuity have been wasted in ingenious disquisitions
upon abstract theories of currency with which We
shall not weary our readers, but we will content
ourselves with referring them to an ably-written
article -in this month's number of Blackwood's
Magazine, on " the influence of gold upon the
commercial and social condition of the world?'
The writer seems fully aware of the difficulties
with which the question is beset, and points at a
removal of the restrictions imposed by the Bank
Act of 1844 as indispensable, in order to obtain
an effectual remedy. He shows clearly the obliga-
tions of the Bank Directors to restrain accommo-
dation at the time, perhaps, when it is most *needed,
and concludes by saying—
" It is certain that we shall be called upon to put forth
our commercial and industrial enterprise to its maxitnuln,
strength,, to enable the community to meet the additional.,
load of taxation which it will be called upon to bear ; and
we cannot submit to enter upon such a struggle with our
enterprise fettered, and the hands of industry paralysed,
by a currency which has already been found to be too
restricted for the ordinary transactions of a period of
universal tranquillity."

The. remedy here alluded to would, however,
open a wide field for discussion with very little
hope of obtaining a satisfactory solution of the
question. There are many who would wish to
undo all that was done by the Currency Act of
1819 ; but we believe that the majority of our
legislators are in favour of preserving the principle
of a metallic basis as the only real security agalll4,
monetary panics, which are usually the result ot
rash speculation, induced by the facility of obtaining
accommodation. There is, however, the existing
difficulty to deal with, and perhaps the best course
is to adopt a medium between the two parties, admit"
ting the principle of the metallic basis, but at the
same time extending more widely its operation.
will be remembered that, by the Act of 1844, tir
issues of the Bank of England were fixed at the arbi:;
trary sum of fourteen millions, or the amount old%
owing by the Government to that corporation, an
_1.`1%
be exceeded only by the stock of bullion in the IPIL
coffers. As the amount of notes in circulation P•
ordinarily about twenty-one mi lions, this arrang;
meat pre-supposed a permanent stock of bullion It
the extent of seven millions, leaving all above the
as a kind of floating capital to meet contingoneie,s'
.and forming what is called in the weekly returicD:
the amount of reserve notes belonging to the Ben
ing Department. So long as this reserve reach
what is usually considered a safe amount, no bar-
was done ; but, in 1847, it was reduced so low that
the country was on the eve of a panic, from whit
it was only spared by a letter from the TreastueJ,
to the Bank Directors, authorising them to &sr
Bard the Act of Parliament, and exceed their
authorised issues. It was more a
almost
feeling than of fact, for the effect was
letter
instantaneous. The announcement of the le
rehension,
of license having been sent- allayed app
never „
never vie
and the requirements of the Act were
"ncreased,
lated. Subsequently the stock of bullion
• d Australis
and as the supplies from California an
t that the rate of
poured in it became so abundant
d a-half per
discount was reduced to two, or two-an -
question 01
esswe iro-
caebnotu.
t, atnodbt he e
realised.dream
Then
hoianme xehtahuesrt ieb. laec
taipopne• a
the demands of commerce, and the exc
pporretess,uirnedwucae
sdabpyp
lFi
erde,e -
thet ad er,art
late red d uofc e
idn thet ere
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