New-York daily tribune., 1858-08-23

would eoutrsc. or expand il accordance with the
.tste OF the excbsnge-thst 10 to ssy. gold wSuid
flow in with favorable eIchang., Wills i would
leave the country with 40 unisyorable one. In tae
former case general prices would rise; IN the a:ter
they would fall. Now, supposing these violent
fuc.ustions OF prices to be Inherent IN purely me
talEc circulation, Mr. J. 5. MI was certainly
right il stating before the Committee that the con-
dtien to be aimed st By psper currency WAS not
to initiate but to correct and supersede such disas-
trcus yicissItudes.
But the premises the bulionists proceed from in
their reasoninss have been proved 10 be imaginary.
In countries where 10 credit operations exist aad
consequently psper circulation, as, comparatively
sreskiDg. was the case until recently IN France,
ard i, st the case on much greater scale through
out Ais, private hoard. Of gold and silver are every
where accumulated. When bullion is drained by
an unfsvorsble exchange the,e boards open IN con-
sequence Of rse il the rate of interest When
the excharge turns. tie hosrds agsn absorb the
surplus Of the precious metals. In neither case, Is
yacuum created in the currency, nor the opposite.
Tie efiux ard influx ofb1on Attest the state Of the
losrds but rot the state Of the currency snd thus
20 a.ticn ST all Is exercised upon general Pnces.
Whist tten, does the apology Of the Committee
amount TO- that the Bank &C! OF l'4, in periods Of
pressure tends TO create sudden huctustioas Of
prices which tfalsely suppOses would occur on the
foundation Of purely metallic currency. But ssy
tie Committee, the convertibility Of the notes.
which it is the srst duty Of the Bark to m,n.aiO,
is at Least guaranteed by Sir Robert PeeIs set.
They add:
THE supply necessarily usin.air ed il the Golfers Of
that establishment under the provisor OF the act
Of 1874, is greater than that which WAS ever msn-
rped III der crcumstaoces OF pressure lniorme. times
During the crsis Of S25 the bullion fell 20 20, 900;
in 1887 TO 80 81 000 and in that Of 1899 - t2 400,
CO., while the lowest points to which it las fallen since
1874 have been, il l3 IS 3l3O COO, and IN 80 So
OS0 OoO."
In tie frat instance the convertbility Of the notes
was upheld in all those psnics not because the Bsnk
possessed Ibullion enough TO realize its promises,
but simply because it wm rot asked to pay them
in gold IL l525, for in.tiuca, the Bank wi.hstood
the run By issuing { notes. II the comparatively
greater bullion reserve. in l5i7 and l557 con,d-
cred IS .n ply the consequences Of the act of l-i'
then On tie same reasoning TO the act must be
attributed the fact that 10 lS57 the bullion reserve,
despite California ard Australia had sunk By more
than f20O0, 600 below the level Of lSi7. But,
although possessed of twice or thrice the amount OF
tod which it had owned in 1875 and 1886, the
Bank Of England, thanks to the provisions of Sir
Robert Peers act trembled in lS47 and 1857
on the verge of bankruptcy. According to the EVIL
dence of the Governor of the Bank, the entire re-
serve Of the banking department on Nov. II, 1857,
the day of the issue of the Treasury Letter, WAS
Only f53O75l, its deposits at the same time
amounting to f22, 500 600, of which near f6,5OO,-
coo belonged 10 LoI don Bankers But for the ap
pea,auce Of the Treasury Letter, the shop must
have been shut up. To raise or reduce the rate of
nterestand the Bank confesses that it had no other
means Of acting upon the circulation-is an opera
ton which was applied before the passing Of the act
of l34i snd which, of course, might still have been
spplied after its repeal. But, says the Bank, the
Directors want their virtue to be fortified by the
act and IL would not be ex xpedient "to leave them
"to their own uDressted wisdon % aud frmness." Ia
ordinary times, when the set is nOtoriousy dead
letter, they want to b, fortified BY the fiction of its
legal operation, and 10 moments Of pressure, the
only moments n which it can operate at all, they
want to get rid Of it by Government ukase.