The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1847-10-06

Acualcrcuation 948l9 $40 I893475 1870 SOS
This shows falling of in the
amount Of notes issued and increase in the amount
of notes hand which reduces the circulation at both
ends On the 18th Of September the actual circulation
Of the bank less than at any previous period
the establishment of the act there ofcourse
on hand smaller amount Of gold and silver bullion.
Notwithstanding the steady drain Of bullion, and the
losses which the bank must have experienced from the
numerous heavy failures that institution appeared to be
In very strong and prosperous condition. II may
Judge from the extent Of the dividend and the tone
the last report the bank in sounder state;
but not disposed to take all this for granted
are not disposed to place 80 much confidence in the
statements emanatng from the bank court In times
past in consequence Of the few facts which have re-
Gently to light relative to the connection existing
between the Governor and several of the directors Of the
bank, and the speculative movements Of the day. The
failures which have recently taken place in London,
have brought to light facts relative the movements of
the bank which will create considerable sensation in
financial circles and bring about ultimately very
cessary and important change in the direction Of that
powerful institution.
The embarrassments which have long pressed 30
heavily upon the commercial classes in Great Britain
must have placed the bank in precarious position
and have made 1t heavy creditor Of many Of the inso
vent houses IL has doubt been weakened but by no
means alarmngly embarrassed It has done everything
in It's power to check the speculative movements going
on and has doubt partially succeeded, and II has
brought about crsismuch sooner and much less ipjuri
ousy than would have been realized the bank pursu
ed the same course as in previous revusons under the
old system We say the bank has done every thing in its
power to check speculation might with much more
proprety have said that the bank compelled to pur
the IT did Under the bank act the 40
tua of circulation is regulated by the Of bullion
on hand, and If drain Of bullion takes place for ex
portaton similar to that experienced within the past
eight months the rate OF interest is advanced a. the
circulation and resources Of the bank decrease The
principal object in such times Is to maintain the oircua
ton and to preserve Its bullion, which only be done
by raising the rate Of interest to unusual point
In attending to Its preservation adds to that of
the commercial classes generally and exerts very pow
eru influence In restraining the imitation of speculative
bubbles
We are disposed to view the new bank act in . fayors
bic light, principally this account The currency
certainly In much valuable and In better con.
diton the fluctuations In the amount Of issues much
more limited and less chance Of getting up an expansion
OF private credits The issues based upon gold and
silver and government seouritiss-and are therefore
reduced below carried above the proper standard
There Is uniformity guaranteed which insuresa more
uniform state of trade than the old system could eive
and every thing connected with commercial affairs must
become regulated upon this basis The course Is marked
out that all should pursue and II any devate from Il
they do SO at their perilthey know the
and cannot complain The beneficial effect of the ops
ration Of this portion Of tho act under which the Bank
Of England at present trrnsacts business Is seen In the
sudden and severe check given to the corn and railway
aud the serious effect upon those who in
volved themselves in the bubble
Inc nrst great revulson in the money market under
the new banking act brought down those old rotten
concerns which have, for 80 many years, sustained
themselves upon the credit they enjoyed but not
entitled TO- upon the reputation Of being rich when
they had for long time been insovent Under the old
banking system Of England, these houses enabled
to keep their heads above water and ,em the torrent
setting 30 strongly sganst them the aid Of the bank
which then was not subject TO many restrictions In
its issuing department and could keep up large circu
aton without any regard to the amount Of bullion on
hand. The expectation OF bullion under the old sys-
tenn had no influence upon the circulation snd copse
quenuy was not 10 much felt In commercial circles
The operation Of the act in this particular has been