The New York herald., 1869-04-20
The Advance Of the Rate of Discount by the
Bank Of England.

from the money article London Star April 81
The position 10 which the bank has now advanced
Its rate oi discount concludes the term OF the exceed
3nGly low interests which succeeded the months OF
panic. The remembrance of the ten per
cent rate OF 1866 preceded as that was by the very
high and semi-panic rates OF 1864, followed as the
whole has been by uneXamped depression. and tie
miserable returns for capital OF two and two and
half per cent are sufficient TO establish the PROPOSE
tion that at present the regulation OF the elements
upon which the rate OF discount depends Is not
such as TO attain medium rates or ease and
smoothness In the working. Ana we may take
for granted, without demonstration, that the
amount or gold In the issue department Of the bank
is the controlling influence IN the monetary world
II the engagements or the government and OF the
public al quarter day put more money In circulation,
or the International trade OF the country, financial
In produce, requires balances TO be met in either
case the extent OF the depletion OF the banks
In the issue department. The amount OF gold there
stored i5 the measure OF the currency which cannot
be increased at quarterly periods unless gold has In
creased wn'le as has been the case IN tue present
week. II gold be taken out for international purposes
the currency must be contracted a. the
very time when the quarterly demands press
most heavily upon the resources OF the
bank. The miserable mater OF an export OF
fsooooo or so Of gold TO New York, coming colnci-
IDENTITY with greater demand for money Tor tempo
rary purposes has made genera disturbance OF
values and shaken the confidence OF the commercial
community. II this were the consequence OF O law
OF nature. or OF laws OF economy equally immutaOle,
should have no resource but to grin and bear IL.
Instead. however, OF being accumulated according
to law OF political economy, our stores or gold
are regulated by a law OF Peel, which ought TO
have no other sanctity than It's own merit. We
are aware, however, that very many persons re-
gard the Law OF Peel as something so transcend
ent In Its wisdom as to &c incapable or improve
ment, ana, III short 10 constitute the very gospel
OF finance. We venture TO believe that II could he
improved, ana improved In such a manner "a TO add
immensely 10 the stock o gold IN the Bank OF
England, a. 10 lead 10 greater eqnii5rIums
In tue rates OF discount The stock OF gold In the
bank vaults at the present moment, and even at the
highest point OF the late acc mutation, compared
with our enormous commerce IL small. On " Mcdnes-
day evening last, when the bank return was made
up, the stock Of bullion and coin in botn depart
ments was. IN round numbers, .I7, 10000. Now,
the transactions which passed the Clearing House
on the same day amounted 20 s2j J2.OO0 and for
the week (Which was short OF the usual number OF
business days, GG9,lGi,0O0 n we had not managed
by artificial means to DO without money IN Tue set
tement OF transactions, the whole gold In the Bank
OF England would not have been sufficient Tor lac
wants OF the single day we have quoted. The Bank
OF France, by various means mas managed to obtain
possession OF more than double the amount OF gold
which the Bank Of Eng ana pOssesses and the result
has been remarkable steadiness In the rate OF dis
CONT In tnat country a. compared with Eng and.
suppose the amount OF gold ~ the Bank OF England
stoOd at ft0OO,OO0 In place OF G75O0,O0J tue little
transaction the other day Of sending CONS 20 Amer
lea could not possibly have created the enormous
sensation Ci adding one per TO the raie OF d.s
count ana depressing the value OF securities. The
thought OF adding very largely % the gold IN the
Bank OF England ought to be particularly gratelu "
all VINO uphold the banS act, Tor its principle Is u
maintain bullion basis. auu bullion basis Is moi
only theoretically just, but 1t ls the only basis winch
the word ackuOwll dyes. ana tue estimate ol tns
whole world VIII prevail we may Ue assured, agains
the theory Of any indivilnal