The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1842-01-11 00:00:00

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REVIEW OF THE STATE OF TRADE

(From Yesterday's Times)
The mercantile circular of Messrs. Trueman and Cook, of
London, and the mercantile circular of Messrs. Buchanan
and Co., of Liverpool, in reviewing the state of trade during
the past year, agree in most points as to the causes which
have made it one of so little rrofit to those engaged in b
ness. Both firms appear to carry their observations back to
the date of the establishment of joint-stock banks, and the
redundancy in circulation created by their reckless advances
of monies, as one of the chief causes which have produced
the late extreme depression of trade. These advances, they
say, called into exi.tence mills and machinery to an extent
which carried production far beyond reasonable bounds. A
succession of bad harvests is also quoted as having had a
powerful influence in bringing about so much derangement ;
for the quantities of foreign wheat and flour on which duty
has been paid for consumption in the United Kingdom
were, in 1838, equal to 1,834,453 quarters ; in 1839,
2,681,390 quarters; in 1840, 2,436,665 quarters; in 1841,
2,413,216 quarters; making together 9,3b5,724 quarters in
four years, for which little short of X 20,000,000 were paid to
exporting countries, whereas in the four preceding years the
amount in value was not more than £500,000. Reference is
also strongly and pointedly made to the suspension by the
American States, and the failure of houses in that trade,
which, having a large amount of capital looked np on the
other side of the Atlantic, have been reduced to the neces-
, ' -

the derangemen

sity of winding up tit,
while also the state of our foreign relations is indicated as
having pressed heavily on business in all departments. With
respect to, the future, Messrs. Trueman and Cook write—
" It is highly satisfactory to observe, in regard to the position

of our monetary affairs, upon which a return to prosperity
much depends, that the year commences with a change for
the better, so decided as to form quite a contrast to what has
been long experienced. The Bank of England was never
more at ease, for bullion is flowing in from all quarters ; and
their stock in about two or three months has increased
£2,000,000, being now £6,000,000, and even allowing for
some check from further imports of corn. it is not unrea-
sonable to expect that by the month of April, the accumula-
tion will have reached at least £7,000,000.
Messrs. Buchanan and Co. take much the same view of
the effect cf the late large influx of specie upon the stock of
bullion in the bank, although they hardly gave so high an
estimate of the amount by nearly £1,000,000, and form a
similar opinion as to a favourable return in business, if it is
followed with prudence and caution. On the subject of
foreign investments they state—" Previous to this period
(alluding to about eleven years ago, which was the period
when the disposition sprang up to seek a new system for the
employment of capital) surplus money had been very generally
lodged in the hands of experienced private bankers at a
moderate interest, and was employed by them with prudence
and judgment, the more so because it was loaned on their
individual responsibility. So soon, however. as the various
foreign and domestic joint stock projections began to come
in favour with the British public, more particularly those of
the United States of America, then these deposits were
gradually withdrawn, and invested from time to time, toge-
ther with constant and enormous annual accumulations,
in undertakings rendered tempting, not, as it should have
been, by the reasonable prospect of ultimate success, be-
cause based on solid foundations, but by the temptation
afforded in the shape of high interest or a quick premium.
This species of gambling in time produced reflection on the
part of some, and more correct information of the real state
of affairs on the part of others ; induced the initiated from
one or the other of these motives to pocket the early bonuses,
and leave the unwary in the lurch. Ruinous as many of our
local schemes have been, in the United States of America,
where a very large amount of British money was invested,
the results are disastrous in the extreme. The absolute ex-
tinction of capital by many of these projections is enormous,
and the buoyancy of trade and commerce necessarily crippled
thereby. These remarks, though applying to necessarily crippled
interest generally, do particularly so to business men having
moderate surplus means, and a class of people not concerned
with trade."

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