New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-08
TIE Sy7U1 ION ~ LONDON.

The advance yesterday of the minimum rate
of discount at the Bank Of England to nine
per cent is certainly an event OF grave impor-
lance. This rate within the last thirty years
has been but twice adopted, and in each case
it was the precursor OF panic. Bat there is a
great difference in the position OF the Bank
now and that in which it found itself in 1857
and 1856. The Bank reserve is much stronger,
the business of the Kingdom to all appear
ances is on sounde- footing, and the prin-
ciples by winch the action OF the Bank is and
sbonld be governed appear to be much better
understood by the business classes of England.
All these are hopeful elements of no little
consequence At the dato OF the last return
received here by mail (Oct. 22) the Banks
reserve was forty million dollars, and was
equal to more than One-'hird of the total
amount of public and private deposits. Since
then there has been no great loss of bullion,
and, until this week, no disturbance of any
magnitude has manifested itself in the stock
market.
Bat why these successive advances in the
rate of interest, the reader may inquire. To
represent, as is commonly done in New-York,
that the action of the Bunk is simply to stop
the outflow of gold to this side of the Atlantic,
is very inadequate account Of the matter.
The course of the Bank is principally governed
oy the state of its accounts. When the di-
rcctors have seen the reserve dwindle from
seventy million dollars to forty. in few
weeks, they would have been thought I'M
worthy of the honorable positions they hold
if they had not taken steps to protect the enor-
nous interests which depend on the solidty
of the credit of this Bank. In the present
case drain on the Banks resources had set
in from Germany, Canada, and the United
States simultaneously. To the Bank it is
of little consequence whether the drain
ia stopped directly. or tho loss made
up 10y withdrawing gold from the internal CIR
culation of the Kingdom or from the Cont
mental money markets. To have taken no
steps whatever to insure tho solyency of the
institution, and that. too, in the strictest sense
of this abused word, wOuld in the present age
of the world DO considered madness in Lon
dor. whatever might be thought of it here.
The position of the Bank at this time is anal
ocous to that Of ship which finds itself in u
tempest on lee coast with insufficient sea-
room. To sli straight before the wind would
he comfortable, but certain destruction unless
the wind should change or die away. TO claw
off in the teeth of the gale ia perilous. but in
navigation, at all events, is regarded as the
only course which offers hope of safety.
There are those vino blame the Bank of
England for not sailing straight ahead. In
the opinion of these critics tho rocks and
foaming breakers have 40 real existence. All
il. or should be, ono boundless sea of paper.
To hear them talk one might be persuaded
To believe that if their principles were acted
on il would be as impossible for the commercial
world to encounter q scarcity of money as for
tho terrestrial globe to sal out OF space. Bat
whatever bounds and limits there may be to
the speculations of these theorists, it is an ad-
,n;ttea fact that since the famous report in
1911 of Mr.. Francis Horners Special Commit
tee OF the House OF Commons, known as tho
"Bnliion Committee" tao weight OF opinion
bos been strongly in favor OF tho utmost
VIGILANCE in maintaining tho value OF Tue
money of England in close correspondence
with the value OF gold throughout the COM
mcrcial world. When the exchanges fall ana
gold leaves London in great qilntltlos IL 10
regarded as an iniaihblc sign that tho cur