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

was a time when less was known with reference

the bullion resources of the Bank of England, Oa
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 ef

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 proms'
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, oar,
monetary difficulties would be of a directly opposite
character. Reasoning from the analogy of the
acquisition of the mines of Mexico and, Peru 11
Spain, it was confidently believed that the largo
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 an'
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 °f
gold and the belief in its tendency to produce a
plethora of the precious metals, stimulated ea
enormous amount of manufacturing industry and
commercial enterprise, which, in themselves, ab-
sorbed a vast amount of the additional gold, and
found employment for theincrease of coined money-
In the next place, the newly-adopted commercial
policy, known as Free Trade, stimulated imports'
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- hi'
creased our- exports anti 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 Ilea
every wind in its favour, and yet has barely escaped
shipwreck;- our comparative freedom from moue'
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. But taking all these circumstances
into account—the continuous supplies of gold ; a
maintenance of exports—the amount in 1854 toeing
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 in"
portant consideration is as to the best means by
which it should be effected. Much time and
genuity have been wasted in ingeniousdisquisitionS
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 Bla,ekwoods
Magazine,. on " the influence of gold upon tilp,
commercial and social condition. of the world.
The writer seems fully aware of the difficultieS
with which the question is beset,. and points at 1:4
removal of the restrictions imposed by the Bank
Act of /844 as indispensable; in, order to obtain
an effectual remedy. He shows clearly the obliga"
tions of the Bank Directors te restrain accomroa.
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 maximal
strength, to enable the community to meet the addition
load of taxation which it will be called upon to bear ;
we•cannot submit to enter upon such a struggle with ous
enterprise fettered, and the hands of industry paralls,
by a currency which has already been found to be of
restricted for the ordinary transactions of a period
universal tranquillity."
The remedy here alluded to would, howevers*
open a wide field for discussion with very little
hope of obtaining a satisfactory solution of the
question. There are many who would wish t(i
undo all that was done by the Currency Act °f
1819 ; but we believe that the majority of ene
legislators are in favour of preserving the princiPll
of a metallic basis as the only real security again%
monetary panics, which are usually the result e'
rash speculation, induced by the facility of obtablinge
accommodation. There is, however, the existit
difficulty to, deal with, and perhaps the best eec,
is to adopt a medium between the two parties,ad%
ting the principle of the metallic basis,.but at kit
same time extending more widely its operation-0'
will be remembered that, by the Act of 184 01.
issues of the Bank of England were fixed at the
aebt
trary sum of fourteen millions, or the amount of
owing by the Government to that corporation, fink
be exceeded only by the stock of bullion in the ng
coffers. As the amount of notes in circulatloll°,
ordinarily about twenty-ono millions, this offal: 7°
meat pre-supposed a permanent stock of bullitua
the extent of seven millions, leaving all above that
as as a kind of floating capital to meet contingenclop
and forming what is called in the weekly ratilf
Bonk;the amount of reserve notes belonging to the
ing Department. So long as this reserve reach l:
what is usually considered a safe amount, ne ha„t
was done ; but, in 1847, it was reduced so low h
the country was on the eve of a panic, fromw
itto wthaes
Bonianky sppairreecdtobrys,aaultehttoerrisifnrgomthtehn: rf:ectissthsfeei;
gard the Act of Parliament, and exec of
qUeStlOl.
authorised issues. It was more a
almost
feeling than of fact, for the effect Was
et.eusioni ionfslitacnentasneehouaysin.
gTbheeenansnenoutnaclelmayeendt
aopfprthue
letter
lated. Subsequently the stock o
and the requirements of the A
and Australia
and as the supplies from California
two-and-ahalf peri
discount was reduced totwo or
caret,
cftbuwueiroen nheivereerasvieue:
cent., andthe dream ofwealth As
poured in it became so abunidnaenxht
atuhsattibtihe eaprpote of
about to be realised. Then came the
the excessive lin°
the demands of commerce, and
c.
Free-trade, reduced the ste K
ports, induced by rariv
th
pressure was applied, the rate of interest
re.action.