The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1856-11-24

Mai, NVt &MDEn Af, ~
These were all remarkable periods, and each ex-
himts phenomena bringing conviction to our minds,
az least, OF the futlty and mischief OF the Act OF
1874, but We have arrived nov At state OF things
| far more remarkable concerns monetary theories
| than Of those of which we have made mention.
In 1866, with the train Of war at an end with CON-
meree sound, although rapidly increasing and wide
~ extending, and speculation quiescent, there Is
again great pressure operations are checked if
not paralysed; traders and merchants are sub
Jected TO great and serious losses; thsir
profits, more large on each transaction, now
a-days are mulcted; and there ia not access
TO capital and credit sufficient for the carriage of
the current and legitimate enterprise OF The coun-
try. And why? Because again the Bank OF Eng
land has created violent and sudden alterations In
the rate OF interest, not influenced by any policy in
respect OF commerce, but simply for the purpose OF
preventing bullion dealers here selling gold to the
Bank OF France, whose directors, rightly or wrongly,
deem II better to buy bullion, when necessity drives
them, just as they would any other commodity, than
expose trade 10 the disturbances in which they
Ills so constantly involved by the practices resorted
TO here Surely this is hard case upon the COM
meTcial word, and one which il is the proper func
tons Of good banking system TO avert, not to
create.
The Banks Of England and France.
From sne London Chronicle, Nov. 8.
The arrival of the James Balnes, with f70O 900
worth OF Australian gold, has long been anxiously
expected. BY that large consignment OF precious
metal it was hoped that the drain of bullion to the
Continent would be supplied for some time TO come,
and the Bank Of England might be then relieved
from the pressure which mad week by week been
reducing the stock of metallic currency, wherein,
to law, her paper issues and transactions
generally must be based. Although the packet
richly laden left Melbourne on the 9th OF August,
and has now been nnety-two days out, we are still
without advices OF her approach. But meantime the
process OF exhaustion, as applied by France aud
other Continental nations to the British stores OF
gold, would seem to have died away. For many
days past the announcement has been stereotyped
that no further removals Of gold have taken place
from toe Bank OF England" These announ eements
are moreover cofroborated by the bank returns pub
lished in last nights Gazette.
According 70 this expose which reports the status
Of the bank affairs the previous Saturday, the
amount Of gold and silver remaining in Doth depart
Dents was 80 $50 1927, showing only Insignificant
diminntion OF cal ,269, as compared with the prev
Gus return. During the week tina: has since elapsed
the bullion departures from the bank believed
have been few, and trifling in amount; while some
considerable parcels of precious metal have been re-
ceived from various quarters.
The flu citations in the OF trade and genearl
amount of business in the country are best shown
by extending the comparison over longer periol
than single week. BY comparing the last three
bank returns, tor instance, we find the folio wing
results:-rhe sums borrowed from the bank upon
commercial sc ,urities amounted to fl905i ,0SS on
the 18th of October, but declined during the suose
quent week by sum OF f50S,773. This diminuton
arose entirely from strenuous application of the
preventive check is maintained in full stringency,
the decline has BEEN more than recovered in
the course Of the week ending on Saturday
last, and the item OF Other Securities again
exceeds nineteen millions. This renewed de-
nand for accommodation by the public, despite .
al attempts to choke of the majority OF app cants,
was no doubt, the subject of those prolonged deli
berations in the bank parlor on Thursday which we
assured had well nigh resulted in the application
OF still more vigorously repressive measures. The
strong essure for money out Of doors is also exem-
pl1ed by the constant withdrawal Of private de-
posts, which we're reduced by f436 Asst in the seven
days between the 18th and the 25th of October,
and by q further sum OF fl3l 9S7 during
the week comprised in the return published
tive circulation Of bank notes has been re-
| trenched by more than eleven hundred
thousand pounds, having declined from
Ell ,l55 ,445 on October Is, 70 f2O 472s55 on the
in the present return The Bank has thus succeeded
/ in considerably augmenting its reserve Of notes,
which now amounts to nearly three millions although
their object bas doubtless been attained at the
| of severe suffering to commerce generaly-apd, We
| msy add, no small sacrifice OF safe and Legitimate
i profit 10 the Bank itself.
Contemporanecusly with the encouraging aspec
| of the Bank OF England. somewhat more sarsfac
tory accounts are given respecting the state Of the
/ Paris BaDque. The demand for gold from that
| establishment has relaxed; and even though this
symptom should prove evanescent, there are others
| which seem to show that the worst Is now past,
snd that our allies win weather the monetary diff
hculties which no. long ago seemed to threaten an
inevitable commercial shipwreck. Although the
duced the. bank TO purchase that metal at heavy
premium, was regarded in this country With great
alarm, our spprehensions were not excited 70 much
by the feet itself, incouvenent as IL might be to
ourselves, rs from the financial c0nd ion whereof
It seemed to be symptomatic- Under the impress
sion formed from our own monatery system, the
purchase Of gold above par appeared almost equi-
valent TO an act Of bankruptcy. 1t was giving
II UaVfu lana Ctt lltvDn far vsrxn. nvA t.
-volved the idea Of inconvertble note and depre
ciated paper currency, while recalling the affecting
"reminiscences Of own discredited issues during
the war with Nspoleon. But those who thus argued
forgot that the Paris Banque is not, like own.
prohibited from buying gold at any other price than
the Official e It's. load. per ounce. Both the pre-
| cious metals are made regular objects Of bargain
and sale The directors give more or less for gold,
Just as the managers Of the Bank of England charge
more or less for accommodation, ,ing in all
with the view Of placing themselves in position Of
the best security, and reasing the largest profit In
this senae the premium paid for gold by the Banque,
instead OF being loss, as too many fanced on this
side Of the Channel, incurred in order save 0
fioDal bankruptcy, was in reality one Of the most
profitable Investments that could have been made.
On this item Of expense no doubt there were large
OUTLAWS. During the last financial year the Banque
| spent more than 100000 on these premiums, and
within the last four or five months some ESQ 900 ad-
ditiona But the stock Of bullion which, by the aid
Of their Purchases, they succeeded in maintaining,
enabled the directors 10 keep ahoat many millions Of
paper currency, from which they have rcaped a
profit sufficient to pay is per cent dividend to their
/ proprietary.
The real iseue evidently does not lie with the
| Bapque- Whether that institution can provide
itself with . sufficient stock OF gold permanently
remaining IN its Golfers 10 constitute substantial
basis for its paper Issues or must continue " buy
1 up bullion ct q high price wherever Y DO 90.
| tained, are matters Of very little consequence 70
the ultimate question. So long the notes issued
are probably. employed. the Banqae can well
i for md IL
| sure 70 command ample supplies. The process
under theee circumstances might 90 indefinitely,
without mourning any risk Of collapse The real
point turns upon the actual condition Of trade and
industry in France. Who are the customers OF the
BsnqueY They give an enormous interest for ad-
vancee Of capital out Of which the Banque pays for
lie gold, and Distributes besides literal dividend.
How Il that intafest derivedy II the borrowers are
mere gamblers on the Bourse-dsbbers in etocks IN
sharee-epecuators, not n enterprise, but In the
schemes and scrip q enterprise-if In short, the