The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-08-09

ana Downere elee, unless the American theory tna'
the Emperor Napoleon is preparing to seize Mexico
and Central America and defy the United States is
10 be entertained is there the slightest possibility oil
military or naval proceedings. Hence, if France
Will it, every cloud may be dispelled The financial
,co~td are therefore entitled TO demand ,chether Mr.
Disrash soM NOT on their behalf turn his "confden
f'af position TO account and bring about an under
standing for general return to peace standard
which may enable us to proceed in our accustomed
track and enjoy on all sides renewal Of prosperity
mo Accumulated Gold In the Banks ei
England and France.
From the London Economist. July l0]
The Accommodations of bullion in the banks OF
France and England, and Of America ALSO have not
unnaturaly attracted much attention. On the 18th
November the bullion in the Bank of England was
only f6, 4S4 900; ON the 3Oth of June it was Ell
S38, 900. The bullion in the Bank of France on the
18th November was less than seven millions and a
half; on the Sth of July it had risen to more than
twenty millions-so that in round numbers the bull
lion reserves of the two banks have increased about
twenty four millions in few months and at the end
of the period neayly three times large they
were at the beginning of it. This augmentation
OF treasure has not been obtained by diminishing
the stock of gold held on the other side Of the
Atlantic. The returns of the New York banks,
which are by far the most important, show that
there is great accumulation of specie there
also. On the 26th of September the cash in
hand in the New York banks was only Sl4, 1921 900;
it is by the last return $33 1867 900. So that the
causes, whatever they are, which have produced this
accumulation, must be in operation in America as
well as In Europe and any explanation must be ap-
pcabe to one country as well as to the other
Some persons imagine that the deficiency in the
bank reserves in November last was the result OF
panic and account for the magnitude of the present
accumulations by ascrbng it tothe greater confidence
which prevails now. But very little reference to
the facts will show that this expanatio erroneous.
The reserves in the banks of England and France
were no doubt in some measure diminished by the
distrust and anxiety which prevailed during the
crisis and previous to the suspension of cash pay
ments the same must have been the case with the
New York banks. But the returns OF the months
prior to the panic during which there was no alarm
and when there wasa much more diffused spirit OF
mercantile credit aud confidence than there Is now,
bank reserves Of this year and last is not to be so
accounted for. On the 4th of July, 1857, the bullion
in the Bank of England fl0 ,SG6 600; and within
a few days of the same time that in the Bank Of
France also about ten millions that there is
very remarkable change in the course of year
without any reference to the panic of the autumn.
Indeed those who have accurately followed the phe.
nomena of crisis will be aware that the boarding
caused by distfust the increase OF country bankers
reserves, and other consequences of sudden alarm
though sometimes very important from the inoppOr-
tune moments at which they occur-do not affect
amounts of money so large as twenty millions ster-
ling. Their effects far slighter, aud probably have
scarcely ever amounted TO q quarter of the sum.
The real explanation, we believe, must be
looked for in the contrasted commercial character
of the two periods under consideration. Last year
at this time, as well as for a long period before,
trade was brisk merchants busy exports and imports
increasing, transactions numerous At present the
reverse is the case From every quarter we hear
complaints of "slackuess, inactivity. and deficiency
in demand" The regular consumption OF the coun-
try goes on, and IT is very striking to observe how
very regular il is, and how little affected by these
commercial contrasts and transitions. Still on the
whole, the transactions of this year the number OF
purchases and sales the number of laborers employ
ed, are all much less than they were year ago; aud
whereas last year the great marts OF trade in.
stinct with life and energy ut present there is much
lapguor and depression.
The effect OF this contrast upon a currency cons-
tuted ike ours is curious The great of
means Of coin notes anything which would or
diparily be called money" at all. Checks are
given 10y the person who has 10 pays the persou who
is paid passes it his credit at his bankers. IL the
check should he drawn that banker also, the whole
bargain is settled 10y transfer in his ledger from the
account of the payer to that Of the payee. II the
check is drawn upon another banker, the transac-
ton becomes an item in the bankers exchanges"
and il settled ultimately at the Clearing House by
simple transfer in the books of the Bank OF England
The Wholesale currency of the country consists of
these book credits at least II Is 10y the aid OF these
that almost all large transactions effected. In a
brisk state Of trade, such prevailed last year, a
bankers day book Is crowded with entries of checks
TO the credit and the debit in such period as the
present those entries are much fewer, the bankers
clerks hut little occupied and the ala koess o.
trades show. itself IN the inactivity OF what may
call the paying machine OF society.
IL would he a great mistake, however u suppose
that the activity or inactivity Of trade has no effect
or but slight effect, on the metallic currency OF
the world. Although the large and wholesale
transactions are carried on through the credit me-
dunn which have described the retail and smaller
transactions are, from the necessity OF the case
settle in actual cash. In this wages are paid; the
small but enormously numerous purchases of the
working classes Effected the detail of business DONE
Active trade requires great extension Of currency
If that description, especially after II has beene
active for some time. The non banking classes ar
prosperous, and require for their transactions and
for their savings extension of currency, just as
the more opulent classes require il for theirs. We
sec something of this kind annually. In every har-
vest at leas. in many districts unusual quantity
of silver Is required for agricultural wages, which is
gradually spent in petty purchases by the aborers,
theu lies for longer or shorter time in the till. OF
the petty shopkeepers, and from thence slowly re.
turns 10 the banks from which II came. rhe &C.
tiviy Of trade Is for this purpose kind Of pepetnai
harvest which has q tendency TO reduce the amount
Of coin in the of banks and TO distribute it,
in driblcts throughout the nation.
This may at first sight seem slight cause 70 rs.
eign tor large effect IL is at irst sight din
cult TO believe that such large sccumu atoms ct
money could be consequent on what seems, aud what
In each individual case really Is, a very small mat
ter. Bnt must remember that the same cause W
in operation throughout the whole industrial world.
The quicgcence of trade which now exists, ami the
activity which existed last year not peculiar 10
this country, but extend 70 the continent Of Europe.
TO America and India and 10 every nation In which
commerce be- said 10 exist. The demand, there
fore Of cash for retail transactions aud for the uou-
banking classes IL widely diffused operates in
many places aud mod in the seats Of the grea, Il
commercial oruencc and actiyity-that IL IL not DIFF
fcult 10 believe that the amount OF money which II
may absorb must he reckon'd by millions.
From The nature of the case, very exact data can
not be procured to the amount OF cash that il Hue
tusting in the market AMI in the hands of the non
imnking classes. But. perhaps the activity mac.
tiviiy uf the mEts vi The great central commercial
nations l. Of the most likely ind cations OF the
variations Of that amount Much will he mauurac.
tured when much r. wanted; and little when little is
wanted. The increased activity Of the mn;s, buth
uf France and England during the recent activity OF
trade il well known From the exceptional state OF
the French currency il returns are scarcely 10 the
purpose; u natun which Is changing it, currency
must onn . great deal But this was not the case
with England. At the English mint the coinage was
IN 1855. f92ij 0J0; 1866. Eg47G 000 1857. Is 223,