New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-14
THE POLICY or THE BANK or ENGLAND

We are requested to answer the following
question: (Which il more beneficial to the
"peOple of England the retaining of millions
"of gold idle in the vaults of the Bank
"of England, or the importation or the
"breadstuifs and provisions necessary to feed
" the people during the next six months T.
We reply that, in our opinion, the SOL
yeIcy of the Bank of England Will be
preserved by the maintenance OF the reserve,
and furthermore, that the people of England
will be fed during the Winter months. The
question, however, when closely examined
will be found to consist of nothing but the
writer's opinion that the Bank OF England Is
not justified in its attempts to turn the ex-
changes in favor of London, and thereby
check the expectation of gold
Let us take brief glance at the position OF
affairs in England before the outbreak of the
panic at New York. Prices of labor and ma
terals had already greatly expanded, and the
expectation of the products OF British industry
had received sensible check. Then came the
comparatiye failure of the crops, which, by
the lowest estimates, made necessary an I'M
nortation from abroad Of one hundred and
fifty million dollars worth of wheat and other
breadstuff5. Lastly came the panic III New
York. the effect of which was foreseen to be
the emitting off of great volume OF Brltlsh
exports and the indefinite Dostponement OF
paymeat for great mass of commodities which
had already been shipped out of the country.
The question which then arose, one OF no less
importance to Englishmen in general than to
the directors of the Bank, was this: Should
extravaganza, speculation, loans to foreign pow
er5 and the great upward movement IN prices
be supported by a rate OF interest artiliclaly
low, or should decisive measures be adopted
TO increase the value OF money! The former
course has been many times pursued by the
Bank 1t was followed in 1925 and in lS47,
when the consequences were most disastrous.
We have already observed that the exports
were falling off by reason of high prices;
could they be expected to increase with prices
fully maintained and perhaps going still higher
in England and falling in other countries
We're Englshmen to be expected, or per-
mitted, to load themselves up with new loans
of the Texas Central and Pennsylvania
Railroads and the Reading Coal mo-
nopoly, beside the stocks which were
thrown upon London by tie New-York panic
and the dltllcultlcS az vienna, faTls, anu Der
lin In such condition of British trade,
and foreign finances, cOnjoined with a failure
of the crops, had the Bank of England ex-
tended its issues-we here suppose the act of
1874 suspended and no legal obstacle TO infia-
ton TO exst-and refused TO raise its rate of
discount it is not unlikely that gold would
have borne premium in London before the
close of tho year. The Bank would have
been drained, as it was i'll 1925, and
forced into suspension of payments in specie
And the end of the whole would still have
been a panic. We are well aware that it is
not a pleasant process to check speculation
and advancing prices. So sanguine are the
generality of mankind that the natural tend
ency of prices, in ordinary times, is always to
rise. The fall is commonly attended with
violence, but the violence of the shock, be it
noted, bears some proportion to the distance
trayersed by tho falling body. No balloon
was ever yet constructed which sooner or
later did not return to earth, and none ever
will ha