Year: 1872




Bank OF England Bulling and Bear
Ing the Market.


The Secretary of the Treasury on this side
the Atlantic and the Bank Of England on the
other are continually meddling with the
money and stock markets and disturbing the
natural currents of business. The operations
are somewhat different, but the object and
effect are the same. The pretext in both cases
is to regulate the money market, and the con-
sequence is TO disturb and change values gen.
orally. The Bank of England, finding its
specie reserve declining million or two
sterling, or at most q few millions, from some
unusual exigencies of trade for money or from
some unusual demand for specie abroad,
raises the rate of discount in order to check
the drain from its vaults. In former times
generally not only the business and exchanges
in England but throughout the commercial
nations Of the world also in q
measure. Although this great power has
been declining of late years, with the enor-
nous increase of trade and wealth both in





growth of other powerful banking and
moneyed institutions, and with the grow
ing independence Of other great COM
mercial nations, the Bank still has
considerable influence over the market
and money values. The time is coming, how
ever when its power will be little felt. The
action of the Bank is really illogical, though
operating as a temporary expedient and
though it has the sanction of long practice.
To keep few millions of specie in its vaults
it may derange business and values to an
amount of hundreds Of millions. By checking
trade at one time through raising the rate of
discount and then by stimulating it at
another through lowering the rate, it keeps
up sort of seesaw in the market which pro-
notes speculation and unsettles values and
the regular current of business.


just the same results are produced by our
Secretary of the Treasury entering Wall
street ftfully or periodically, as the case
may be--with his gold and bonds. By the
use of q few millions of bonds, or by con-
tinuing to draw gold from the market, he can
OcAu oAAC PAAOC w oAu oOAAOuoiy CAAOu4Iuco Ouk
merchants, and, by selling some mil
lions suddenly, as he frequently does,
he can run the premium down and
disturb values in that why. It is this
more than anything else that fosters gambling
in money, stocks and bonds; that interferes
with legitimate business and demoralizes the
whole community. There is no authority in
law, if even there be no direct prohibition, for
such practices, and the Secretary goes beyond
the proper functions of his Office in thus inter-
fering with the trade and values of the coun-
try. Mr.. A. T. Stewart, who understands this
matter better, perhaps, than any other bust
ness man, properly censured such meddling Of
Mr. Boutwell, in the interview one of our COM
missioners lately had with him. Nor do we
suppose there are any of our intelligent mer-
chants or bankers, who are not blinded by the
favors Of the Secretary or by partisan preju-
dice, that do not condemn his meddling with
the market The duty of the government should
be confined to collecting and disbursing the
revenue. 1t should have nothing to do with the
money or stock market The sooner Mr.. Bout
well understands that the better, and if he
cannot Congress should restrain him by law
and keep the Treasury Department strictly
within the limits Of its duty as the simple fdu-
ciary agent of the public for collecting and
disbursing the revenue