The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1867-06-11
Tie Cotton Trade.

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their effects. Recently, we witnessed
succession of cotton failures in this
country and England, amounting, in
the aggregate, to $1,000, 900, and the
full effects of the depression of the
cotton trade have not yet been fully
developed. In this city, there are
large amounts of protested cotton
bills, the acceptors of which are not
yet announced in the list of insol-
vents, and upon which the holders
decline to take action, lest the de-
preston should spread into panic
and induce numerous failures. 1t ap-
pears not to be generally understood
that this condition of affairs is due to
the dependence of our commerce
upon the discount facilities of the
Bank of England.
That institution has, for some time
past, persistently declined to dis
count the bills of cotton merchants.
What may be the reasons of this ex-
traordinary course we know not. It
may be that Manchester, desiring to
have cheap cotton, has prevailed
upon the directors of that institu-
tion to withhold the facilities enabling
merchants to carry cotton. Or it
may be that, imagining cheap cotton
to be an essential to the renewal OF
active orders for yarns and goods
from the continent of Europe, the
bank has taken this course rs step
toward invigorating the continental
trade. Or it may be that, thinking
cotton unrcasonably high, the mana
gers deem cotton paper unsafe to dis
count; only i'll that case it would
seem singular that the bank should
have discounted cotton paper for so
long during the previous period of
the decline i'll price.
But whatever may be the cause of
its action, its effect has proved most
balcful to the cotton trade; and the
injury is not confined to the mer-
chants and bankers Of this country,
but extends equally to the great mer-
camille interest OF Liverpool. The
Bank of England ought to be the
best Judge Of its own action; but to
our view, its course in this respect
appears very short sighted. The
bank being in q certain sense a ma
tional institution, and being sup
posed to be managed with Il regard TO
the interests OF commerce at large,
may be considered justified in regu-
latlng its action with 4 view to giving
England the very important advan-
taSe OF cheap cotton. 1t must be
further allowed, that its refusal to dis
count cotton bills has had the effect
of depressing the price of the staple,
the probability being that but for its
course, middling uplands would have
been now worth 13d. per pound at
Liverpool, instead of lid. But how
long can this effect continue?
No institution, though endowed
with the vast power of the Bank of
England, can, for any important pc
riod, keep products below their real
value. Moreover, the direct effect of
the depression OF the cotton trade is
to limit the next crop. Planters are
so discouraged by the numerous diff
ticulties that beset them, that the de-
preston i'll the cotton market and
the downward tendency of the price
have easily induced them 20 turn
their attention from the production
OF cotton TO the cultivation of other
crops; while factors have had their
means for assisting the planters ma
terially limited
1t is quite probable that the pre-
sent condition of the trade may in
duce Il curtailment Of the crop to the
extent of $500 bales; and such
being the case, what has the bank
gained by its policy? The prospect
of another light crop would cause an
upward bound in the price of cotton,
in which all would be lost in the way
of reduction of the price which has
been gained by the action of the
bank. 1t is, to say tie least, very
questionable of n great bank to take
such an arbitrary course relative to
the chief branch of trade of the two
countries. The cotton trade cannot
be injured without damage resulting
to other large departments of COM
merce.
1t may be that, owing to the large
losses in the cotton trade for many
months past, cotton paper is not to
be considered the safest way Of en-
ploying money; but if it was not pru-
dent to discount it upon ordinary
terms. what should prevent the tenn
porary adoption of other terms, at
tended with less risk? 1t is the mis-
fortune of that venerable institution
that it has become "fogyish" and very
whimmy. With tirmer and more
competent management, the great