, 1861-10-21
BRITIsH CRKpIr SYSTEM.
secret ef K1xlIsh Commercial IN.
Hx&knGYs
[Fton the n. Z. Wo1M.I

n6st in order to acor,ire money and meaaB with !
Rh1ch to maintain the contest With fiance le
bas continued In operation from that time to
he present, an ipgeu1ous1y devised seheme for
the supremacy of Great Britain ny
1t taa ssatsn consista
exchanging BritiEh :ht11s Of exchange and les-
kers Of credit for he cash Of the countries with
which Great Britain trades. These Bulls OF ex-
change aud letters Of credit sfe pagaole after
sight" when accepted Or co1nImsn conn 1s IN 1ssat
ejxtv days to tTelye mouths, in addition 10 the
time occupied in tie transit, 50 that the clesE
credit is that named in the BILL, which Eonla
not be the case il drawn after dats"
instead Of after sight" Eor ,t etxsample' an t9e
New York lately, during the excltemenMt It AZ a6oat t
the seizure Of Southern balances, 4l0Do
of bills of exchange, payable sixty Gays a1tef
Sight in London, furnished the pafHnsao nsoa Wno nno
drew these bills with the use of about t5t9,0oo
fuily to ihe nonccmmercial reader this syB-
TEN, by which foreign firms succeed u
exchanging for cash their OWN bills payable
at long dates, We shall narrate one OF the modes
adopted by them to obtain United States cash
and capital For example, SPY lnat Jones,
Smith 3 Co, with retlnue ef junior partners,
form tlrstclasB mercantile firm In Liverpool, |
England, and are desirous Of doing an Ameri- |
can business. As cotton Is the largest export |
from this country, they decide to establish
branch firms in New Orleans, New YORK. aud
firms are al identical in interest, composed Of
preciee]y the same partners throughout, and in
fact simply one concern. There Is an obYions
departure from legitimate trading in firm, is-
suing, 90 regular business, drafts upon itself.
These bills may or maJ not represent bona Hde
tions, as in Gaze OF commercial bills Of ex
change which are drawn agafnst value Ia ship
ments Of produce Sipg1e-nsmed bills, there
fore, however good, co1ld never command the
confidence Of buyers like legitimate bills with
two separate houses as security for their pay
which might limit their sale, Jones, Smith,
Robinson & Co., decide that the firm namein
each city eban be varied. This arrangement
gives their bills an appearance Of distinct and
separate securities from two firms, and thus
enables them to sell more readily in the mark
ct. Accordingly, Jones, Smith, Robinson &
Co., remain the parent house in Liverpool
Jones, Robinson & Co. in London-5mith,
Robinson & Co. in New York-and Robinson
d Co. in New Orleans complete the atf4ir.
These varied firm names furnish ample conve-
niences for keeping atloat, the whole time, an
ability 10 sell them.
The business OF the branch in New Orleans
| is to make advances on cotton consigned to tho
| Liverpool firm, and IN order to obtain the cash
necessary to do this they sell for cash, In New
! Orleans, Robirson d Co.'s bill Of exchange on
Smith, Robinson & Co., New York, payable
| sixty days after sight. This operation gives
the New Orleans branch the use of the money
| fer sixty days. With the proceeds from the
sale Of thei1 sixty day bills OF themselves
in New York they make cash advances on cot
top ard n 50 doing geaesal5 d obtain ssy for
which is shipped to the Liverpool firm for sale.
This cotton can be converted into cash in
Liverpool within three months Of its depart
ure from southern ports, either by sale OF
p1edging for cssh loans from banks aud others.
Again, the New York firm sells for cash its
bills Of exchange drawn On the Liverpool Of
London firm, and payable there sixty days after
they are accepted. This process gives the New
York firm q loan for sixty days If money be-
longing to the United States, to the amount oi
blls they succeed In selling; The sums real "a
New Orleans bills drawn On New York be
come due, SO that the New York firm ha:
all the time large cash balances, which they
use for call and short loans until they ars
required to pay the New Orleans bills
The Liverpool and London firms pay ths
Sl00, 600 600 OF sixty day bills, drawn on then
ny the New York branch, by selling the $l20,
t 0O0, GOO of United States cotton consigned tt
them, and at the end Of the year or SEASON
when their account current iB rendered, the,
Pay to the United States the surplus $40, 600,
GOO, or such sum ~ may have been realized
for the cotton in Liverpool. Carstu1 attentio!
| to this explanation Of American trading witt
Great Britain Shows that not one doliar 0
British money is used, but, on the contrary
Great Britain advances American cash o.
American produce, and takes our cash AMI
British firms on promises to pay. Thes
British promises to pay are finally paid b
American money and produce sales. Th
Southern States, under this credit syeten. sur
ply Great Britain with at least 500, ,000, 600 /
j cash as permanent loan, and the firms er
gagged in that trade with much larger SUE
t nom the unrestricted facilities granted the1
for issuing bills, which are converted into cas-
: at banks In Europe and here. Furthermore
: it is not unreasonable to assume that Grea
! Britain enjoys q permanent loan Of the foa
: ipg capital Of other countries to the extent {
her imports, which we're, in 1860, e21o, ,648, ,63'
D or over Thousand millions Of dollars, al
for Whick enormous sum she gives only Britis
t signatures on bills Of exchange and lettezs (
i credit
British commercial supremacy, and her NO
J. derfu1 command Of capital and the markets
l. the world. Great Br1taiu is enabled by i
q workings to bug everything she imports Il
n cash at Low rates, and to sell her manufa
d tured products on credit at high Rates. By th
). mode Of buying for cash snd selling on credi
Crest Britain saves at least ten per cent pro
It on her imports and exports, owing to Il
b necessary difference which always exists
= tween cash and credit prices. The expor
It and imports Of Great Britain in 1860 We
1915, ,00, 600, or q, ,875 O00, 900, and this gain
A $1S7, 500, ,000, aud other countries, Of couri
are impoverished that amount, or whatev
mere she gains by this credit system. II
system is elected By the Bauk of England
policy. When the bank II compelled
to contract it's accommodations during CO
n. mercial crisis, failures take place to an slar
st irg extent among British firms With f
ut ejgn connections. Sometimes the bank hol
az Eo lalge an amount Of their paper that th
can demand more discounts under the thrt
Sc Of failure If they are refused In 1857, q
ae since then. the managers Of the bank ha
~ been made painfully conscious Of the totteri
n condition Of British credit firms, from the
ot velopments Of whiting. or the creation
a. bills not based on yalae," in the failures OIL
OF Western Bank Of Scotland, Borough b
u Of Liverpool, and the American firms who /
y. been sustained by them for years from
90 exhibit OF sanderson 4 Co.'s failure, the
IT. brokers Of London from the forged dG
TO- warrant case Of Oyerend, Gurney & Co., {
OF from the issue Of 1880 900 aceommodat
Iel bills b5 stfeathmoxe d Co, the leather q
st" limited credit has led these first class fir
W into oVertre dirg, speculation and loss, VII
e; they SEEK to conceal by the bill system
oe' have explained.
osb Ihe London 1anes as the retained Epel
me pleader for British interests, does 10 m
ag- Iban its duty to its client, Great Britain, vi
"a, it argues that the Federal Government and
IN securities are unstable and unsafe; beca
led this argument, with unsctupulous abuse
'ed American credit and inetitutions, may prey
"a the sale Of Treasury notes in London.
1oe United States ia the only Gnyernm
ect in existence which has paid at matul
ny the principle and interest Of its natie
: debt, without default, according to contr
40 and the logical sequence from this fact is
en-, controyertible that United States Treas
oe- security in the world. The London Tine.
me The effort to injure their sale in Europe
an therefore, driven necessarily to the use Of /
ey, representation, illogical reasoning, and
"a. last resort Of the bad advocate in q bud caus
ing cooIee abuse. The persistent virulenc
M0i M these attacks on the part Of the London il
81H Ha1R, is natural and perhaps excusable in i
my OF the gravity OF the crisie, which threa
NIL ruin to British credit from the less Of An
!, IL can capital in Southern products. G
ute Britain needs cctton to manufacture nc
oe an6 capital in London as well as for Lancas
aano ano looms.
Vs.
us) 4 Northwestern Republic, with I
and mont for PFeAldent.
on Correspondence OF the London Globe.l
ion, PANS, Sept.
.. The flying visit paid to Quebec By Fl
jerome, previous to his sacht getting
steam for France, ofer1 too tempting Pc
hang project on, and Lower Canada Is
got to figure On the chart of annexab1e territ
g is The cry Of Wolfe" may, however, be n
Ign. tn rffen mt ts, h1Dnt 3t4 Rf7rsrv erag ffc