The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-08-04
source Of revenue to the Postoffice Depart
ment, which 1t should be permitted to enjoy.

| The BANK OF ENGLAND Institutions
banks as well as others, sometimes attain
such huge proportions that they become un.
manageable and fall by their own weight
| Fears are even expressed for the Bank Of
England, Among others the London Statist
the new financial paper, has created O tiutte1
in English financial circles by pointing out
the utter insufticiency of the Bank Of Eng
lands reserve seeing that it has to do duty
not for the Threadneedle street. establish
ments alone, but for all the joint-stock banks
as well, who expect the Bank Of England to
come to their help at PINCH The London
World re-echoes the alarm sounded by the
Stntist, and says the Bank OF England has OF
come practically the bankers bank, instead OF
the bank Of the nation. Its reserve is very
much larger relatively to it's liabilities than
those of other banks, and 1t would need to be,
for the ioint-stock banks have no cash reserves
to speak of, relying as they do upon the CEN
trail institution, to which, therefore, we must
apply @ very different standard from what is
applied to them. The cash balances of the
world, as well as those Of the United King
dom, centre in London. Should there be-
from any cause q sudden demand for money
for the Continent or the provinces, there Is an
instant drain upon the bill-brOkers and bank
ers of the metropolis, who, in turn, fall upon
the Bank of England; and in an emergency,
such as might be caused with q war with
Russia, the bank act would have to be sus-
pended, and there would be heavy risk Of the
whole Observation-Disclosures network OF credit
collaDsing like q house of cards. Things
are not as they were in 1897, continues the
World, when the bank was more isolated
than it is now, or even as they were in 1S47,
1857, and 1866, at each OF which dates the bank
act had to be suspended. AT these several
periods what are called transfer credits by
telegraph wire and transatlantic cable were
unknown. It is obvious that the suddenness
with which demand for cash can now be made
does not leave the time there was formerly to
organize means OF meeting. sudden strains
upon our system of credit. No doubt the tele-
graph facilitates ready. action on the part Of
the bankers in self-defense as well; but in
case in which time is absolutely necessary to
stave off danger. it vastly adds to the difficult
ties of pulling through. The Bank Of England
has virtually ceased to be the peoples bank;
and while there is seeming safety in its re-
dscounting paper of the bill-brokers credit
companies, and joint-stOck banks, there is
actual danger. At one time the bank reftlBed
to allow the London and Westminster bank q
drawing account. There ought to be entire
dissertation of the old lady from the other
banks, else all may go down together Until
there is, the Bank Of England cannot become
better than 1t Is at present. or show itself
more worthy of its quasi-national position and
privileges. 1t has lost It's old control over the
money market, and yet it has to bear all the
burdens that are involved in its position as
the centre of our banking system. The con- |
sequence that week by week the reserve is |
dwindling away, and yet the bank directors
are afraid to put up the rate to protect 1t, be-
cause the outside market would not follow
them, and they might lose even the small
discount business they have. This regulation
of the rate by reference to the banks bust
ness position is another weak point. Why |
should 1t not insist upon the ioint-stock |
banks helping to protect themselves
by keeping large amounts at their |
credit, and by thus withdrawing float |
ing capital from the market make money
dearer? The joint-stock banks would lose
the power OF discounting so largely as they
DO now, and therefore, would lose some por-
lion of their 'hoated profits, but they would |
3e all the safer for the precaution, and the
pressure on the Bank of England would be |
eessened. The. old lady, of Threadneedle
street has now fallen into the ways of routine |
Ind acts too much like O. mere huge machine. |
None of the shareholders, with the single ex- |
,eption OF Mr.. ones, the matchmaker of the |
Strand, who, with the zeal of his profession, |
5ries to wind up the bank, so that it may |
go in the right direction, take any part In
he proceedings at the periodical meetings, or |
wen seem to interest themselves In the banks |
,ffairS"