The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-31
ments Of the Treasury and Of currency the efforts Of
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were at first but small and the intelligence receiv
ed with calmness; but quickly they began to spread
among the commercial community here, for, In real
ty the whole of trade had been stayed on the
other side of the Atlantic The currency being dis
turbed not only did the great and accruing liabilities
of the American merchants remain unlquiduted, but
the holders of cotton corn tobacco and other pro-
duce-of late independent of the merchants-hesi-
tated whether to forward produce to the merchants
in their cities ignorant even of the sovency of any
III the general mistrust. So, too the English mer-
chant was left with dishonored drafts and without
any remittances while his own produce lay unsafe
able, unless at ruinous prices in the Atlantic cities
The Bank of England-the great monetary institu-
ton which 30 strongly affects the financial destnies
Of the old and new country ia this crisis-gaye an
additional shock to the Atlantic trade by raising
rapidly its rate of dscOunt-by impeding the remit
lance OF specie to the United States for the resump
ton OF specie payments there and at period when
the rates OF discount were enormously enhanced, by
treating with suspicion the paper of all American
houses-thus virtually depriving them of discount
altogether Thus, solvent houses and insolvent
houses of all kinds were brought down; for though
1t has been said that no solvent house could want
accommodation yet, inasmuch as many houses
were endangered by the mistrust and suspicion of
the regulators of the discount market houses having
good bills, but with the names OF suspected firms
upon them were left with inconvertibe paper. A
bill with three names was reduced to two names, or
one name, and placed out Of line. Next, the joint
stock banks were disabled from rediscounting and
name lost thereby; SO that day by day the proper
ton of first class bills was reduced and no man hav
ing good bills in his hand could te-f he kept them
for month, a fortnight, week or even day-but
that they might become discredited thus depriving
of all resource therefrOm. Therefore he rushed to
the Bank of England to obtain accommodation while
he could; and, with diminished trade, we saw the
phenomenon of an increased amount of discount.
Those who had produce strove to realize and obtain
resources; thus prices and produce were depressed,
and, the usual course of credit was disturbed, fur
Their damage was caused Alarm was spread among
the small tradesmen and the working classes of Scot
land and lreland-notes were forced in for gold de-
posts left in confidence were summary withdrawn
and the banks, unable instantly to realize their re-
sources or to discount the paper on hand, had, in
several cases, to succumb to the sudden pressure.
In such crisis rotten houses stopped, because
rotten houses must stop and it is besides expedent
to cover disgrace by the appearance of yielding to
general misfortune but solvent houses suspended,
some of which have since resumed, and Others will
pay twenty shillings in the pound. The liabilities of
the British houses and banks which have failed dur
ing the crisis are estimated at ESQ 900 900.
The panic spread to the Continent, not only
through the customary channels OF trade. but be-
cause the Germans of late years have acquired very
close connection with the States by the intercourse
of half million of emgrants, while in the trade of
England itself the Germans have now a very great
share. The desire of freedom has made many Of
the most active men of Germany citizens or denzens
of England and the United States, while those at
home look with interest and longing to these emf
grant kinsmen. Thus. Germany has in this crisis
suffered even more than France and Hamburg: Bre.
men and every commercial city OF Germany have
been stricken with disaster.
FRENCH DRAIN FOR GOLD.
Concurrently with the extensive and eager demand
for gold the sovereign remedy fol- the evil we have
described the Bank of England has been subject TO
q drain its vaults in order to supply the demands
of French merchants through the Bank of France.
But in regard to this bank, that efficient check
which in all monetary operations unettered or not
interfered with by governments, regulates the pur-
chases of gold by the ability to do 80 proftably,
proves powerless. The political purposes of Louis
Napoleon override the natural laws Of commerce:
gold is taken from England to France, although,
while merchants are glad to pay discount OF ten
per cent for 1t in London, they get il for eight
or even seven in Paris. That the French Bank as
acting under the direction of the French govern
ment, is subject knowingly and aforethought to
heavy loss in the acquisition OF bullion is admit
ted fact. The Emperor is not deferred by the con.
sideraon of cost cost does not enter into his cacu-
latons because he weighs something more than the
money cost-the political objects he has at stake. the
maintenance Of commercial credit the supply of the
hoarders of bullion, and the upholding of the whole
imperial system. Were each million Of bullion to
cost another million OF bullion to acquire and did
one months tenure of the rens OF power depend on
this no one imagines the ruler of France would
hesitate at the cost in the disposal Of the
of the State under his absolute CONTROL whether
few hundred thousand pounds shall be directly or
indirectly laid out in the purchase Of bullion OF the
purchase OF bread, or in pulling down houses, in
maintaining soldiers, deporug political offenders
ia not matter of moment. That government, too.
has 80 many engines for enecting its purposes in
indirect manner-as for instance, the Municipality
of Paris, the Bank Of France, the Credit Mobilier-
that il can readily enough carry out any financial
expedent, nor IL IL restricted by the dictates Of
political economy For that matter. the Socete des
Economstes Is deiunct since the imperial regime has
been in full vigor; and Horace Say. Michel Cheval.
lier Adam Baise des Vosges. and their colleagues,
have no longer any organization, although indivi-
duals occasionally tilt unequal terms with the
protectionists. The French government have pro.
tfd ad rprl ria and hax 1t.I a..
public with cheap bread in times of scarcity aud
with dear bread in times of cheapness, have again
regulated the boucherfe and duly publish from
month to month assizcs with fixed prices Of bread
and meat according TO categores and qualities.
IL must be observed. however, that much OF the
bullion which France has obtained belongs right
fully to her in the Of trade, and in no way
owes allegiance to the dominion of our banking In.
situations. When a West India steamer comes in
and sends up seven wagon loads with two millions Of
dollars TO the Bank of England IL is gravey remark
ed. and in tones OF lamentaion that million or
a million and half have been taken to.the Cont.
nent: and Il is held forth that we have been In some
way defrauded Of our due right OF locking up the
dollars in the Bank of England and that IL has been
surreptitously carried oil by the bullion stealers Of
Paris: and yet If we could know the truth proba.
bly, the whole remittance belongs TO the Continent
and not five thousand dollars are on English account.
However il may be. the lamentation is great and
doleful prognOstcs are INDUCED in
II is quite forgotten lost sight Of that the peo-
America and that they can receive no returns in any
thing else but bullion, and through the channel Of
England. IL Is, however. the case that Mexico.
Columbia. Peru Bolivia Chile and Buenos Ayres are
full of merchants and dealers from the Continent,
and that the shopkeepers in many places arc French
Galatians and Genoese While the English and Anne.
rcans hold in their hands the great staples Of trade
the country towns occupied by petty shopkeepers
and storekeepers of the classes named. Since the
hatred 10 Old Spain has worn on and chino. is no
longer doomed man, the Spaniards have returned,
and feeling of affection and reverence for Old
Spain IL sprnging up, which may be productive of
serious political results. The old Spaniard has the
advantage Of possessing the same language, the
same habits, the same institutions, the same vices
and the same foibles as the inhabitants Of the New
World; and he can in many cases best suit their
tastes and habits Thus the trade with Old Spain IL
growing The Frenchman has the prestige Of fash.
ion in South America; the French language il the
foreign language most readily acquired. and that
from which the supply OF Spanish bookmakng in
these days is readily obtained. The French there
as elsewhere are dealers in nick-knacks har-dress