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    Untitled Article

    1116 THE LEADER . fNo . 400 , November 21 , 1857

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    THE MILITARY POSITION IN INDIA . The point : around which the insurrection now revolves is Lucknow . A decisive victory there , disorganizing the rebel forcesnot simply driving them off to drift in other directions—would leave little more than a succession of scattered districts to be pacified iu detail . Except iu Oude , the rebellion nowhere continues formidable , although it may continue rijisehievous and difficult to suppress for months to come . It is there that the enemy is gathering up his strength

    for a last resistance , and it is there that the supreme effort must be made . "We are without the means of ascertaining with much precision the relative capacity of the column under General ILyvelock . The army opposed to him is variously estimated at from twenty to iii ' ty thousand men . Probably thirty thousand represents the whole . They do not seem to be largely provided with artillery or nmnuimtiou . On the other hand , it is not exactly known whether General OuTiiAM remained at Imeknow or fell bade

    to Cawupore , the iifty-three miles of road lying between being reported a 3 awarniing with hostile bands , engaged in throwing up a succession of entrenchments . But it may be inferred that the garrison has boen at leasb doubled , if not trebled , by the event of the 25 th of September . This seems to reduce the question to one of supplies , since we have no grounds , for believing that the powers of attack possessed by the besiegers had been multiplied in a corresponding ratio . They

    were unable to dislodge an exhausted five hundred ; then does it follow that they nniat necessarily beat down the opposition of a thousand , with fresh artillery , provisions , and promises of immediate reinforcement ? Clearly nob ; unless disasters happen , the probabilities of which are not explained , the situation of the English at Lucknow ia one to inspire- confidence . Ono fact , at loast , is indisputable in

    connexion witli tho Oude mutineers . They have been expelled from every position they have hitherto attempted to hold against any determined attack by a i ' av inferior body of troops , and . for five months they have beeii kept out of Lucknow by tho intrepidity of a half-starved and attenuated garrison , encumbered with a thousand women , children , and invalids . As to tho chances of relief , tho

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    WHAT IS THE BANK CHARTER ACT ? "Whit is this law that it has been found necessary to relax . ? What is the nature of this Act that is supposed by some to have pressed with so much severity on a large portion of the commercial com munity ? We think that we shall be doing good service -i ? we answer these inquiries—if we put t ur readers in possession , of a simple statement of the facts of the case , in order ^ that they may "be prepared with the

    materials to form an opinion on the arguments * that will be presented on both sides of the question . Mueh will no doubt be said on the subject by men ' steeped in ignorance to the very lips , ' but an acquaintance with the leading * principles of the Act that now regulates our money matters will enable our friends to separate the "wheat from the chaff , and to keep their mind clear amidst the bewilderment of words that constantly attends discussions on the currency .

    The violation of the law of 1844 consists in . this : Bank-notes to a larger amount have been issued , under direct instructions from the Government , than the Act permits ; and it is to grant a Bill of Indemnity for this excessive issue that Parliament is now called together . Up to 1844 , the Bank of England had power to issue any amount of notes they thought proper ; they were not compelled by lawto keep anyfixed amount of bullion reserve . Now , the issue of bank-notes is clearly and distinctly restricted ; a total is fixed , beyond which not even , a 51 . note can be sent forth . The present system has been well described as * automatic '—no discretion is allowed- —the amount of issue is regulated as certainly by machinery aa the making of the paper and the printing of the notes . And this machinery is of the simplest kind . A few words will explain it . The Bank are permitted to issue notes for 14 , 475 , 00 OZ . without any gold to represent them ; any notes they create beyond these figures must be represented by a corresponding amount of gold in the -vaults of the Issue department . In . the Bank ' s account for the week ending 11 th inat ., which wo subjoin , the amount of bullion was C , G 66 3065 / ., winch lidded to 14 , 475 , 000 / ., inakes a total of notes issued of 21 , 14 . 1 , 065 / . * When the store ol * Issue Department . £ £ £ Not « 8 issued 21 , 141 , 005 Government debt 11 , 015 , 100 Other Securities 8 , 459 , 900 U . 475 , 000 Gold coin nnd bullion 6 , 66 G , 0 G 5 21 , 141 , 065

    gold increases , the bank-notes increase ; when gold is withdrawn , the bank-notes diminish pro tanto . The circulation varies just as would be the case if our money were all metallic : it increases when , the balance of trade being in our favour , gold flows into the country ; it decreases when , the foreigner takes his balance in specie , or when , from any political or financial cause , gold is withdrawn from the Bank to supply a popular want . Before we pass from this part of the

    subject , let us explain why the sum of 14 , 475 , 0 O 0 Z . was fixed for the issue of notes which- do not represent bullion . The sum was originally fixed at M , 000 , 000 Z ., the 475 , 000 ? . was added subsequently in accordance with one of the provisions of the Act to which we need not , for the moment , more particularly refer . Fourteen millions is the lowest sum of money that had been in the hands of the public—it was considered the smallest amount with

    winch they could transact their every-day business—in fact , that ¦ under no conceivable circumstance could society go on with less ready money than the above ; aiid iu consequence , that it would be all but impossible that so many bank-notes could be presented for payment as to leave less than fourteen millions in the pockets , the tills , and the iron-chests of the busy English world . "We dwell ou this feature of the

    question , because this amount has now been exceeded under .. Government' sanction , and because -the . ' , propriety- of permanently extending this limit will , no doubt , be one of the leading subjects brought -under consideration . / .. ' . ¦ ' ¦ ' : ¦ ¦ -. ¦ . -. - ¦ ¦ ¦ ; ¦¦ ¦ .. \' ' ¦ ¦ -. ¦¦ ¦¦ , . . / . ¦ ¦¦; .: In corroboration of this opinion , that fourteen millions might safely be issued on securities , we may here state that the amount oi notes in circulation is very rarely below nineteen , millions , and that even now- —at ' this

    moment of unexampled pressure—when the Bank rate is ten per cent . —the amount of banknotes actually in use is fully twenty millions—or six millions beyond , the sum-which the Act of lS ^ -i conceived that the public would- at all times absolutely require . To all intents and purposes , therefore , tho amount of nionev varies just as it would it

    the currency were all metallic , and what is called the convertibility of the -bank-note is ensured ; that is , each holder of a bank-note feels confident that it is of precisely the same value as the gold it represents , and that he can at any time , by presenting it ia Threadneedle-street , exchange it for the metal itself , of which all paper-money is but the sign and token .

    The leading principle of the Act of 1844 was , then , the introduction of a restriction in the paper currency , with a view to ensure the convertibility of the bank-note . Up to that time , the Bank of England were not restrained by any law—their issues were not uniformly guided by any distinctive principle ,

    nor had they the power of controlling the amount of paper in circulation ; for it frequently happened that at the very time when the Bank of England diminished their issues from motives of prudence , the country banks , whose issues also were entirely uncontrolled by law , increased their note circulation , and thus counteracted the action of the Bank .

    In consequence , tho note circulation was frequently altogether out of proportion to the amount of bullion ; and in . August , 18 : 39 , tho Bank of England found herself in the alarming position of having only 2 , 40 O , O 00 Z . in her coffers . Wo say alarming , since the convertibility of our paper currency was then endangered . By way of comparison , we may remind our readers that tho bullion in tho Bank at this moment ( when money matters are so urgent that Parliament must assemble

    before Christmas to take them into immediate consideration ) is 7 , 17 O , 0 O 0 Z . —a most satisfactory contrast , and one calculated to encourage the unduly desponding . To avoid all confusion , let us add that tho 7 , 170 000 J consists of 6 , 666 , 0007 . mentioned in the above account , and 504 ^ 000 / . in the bankin * department . The two sums must be added together in order to institute the comparison . We must reserve for a future occasion the remaining portion of the Bank accounts , or what is called the ' Banking Department . '

    One of the distinctive features of the Act of 1844 is the separation , of the Issue and the Banking 'departments—the former .-bejn « - as utterly distinct from the latter as if its business were transacted at the Treasury , Whitehall , while the Banking department is ' carried on in . Threadneedle-street . Meanwhile \ ve leave our readers to digest the facts now laid before them in the simplest possible manner—divested as much as possible of all technical and ' shop' terms—and , entreating them to bear always in-mind these fow

    purticulars as some of the essential elements of the question , we shall next week take up the remainder of the subject , in order that they may be fully prepared , before Parliament meets , to follow all the reasonings that will be adduced on a question , beyond all others , of vital importance .

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    NOTICES TO CORBE 8 POITDENTS . Several communications unavoidably stand over . It is impossible to acknowledge the mass of letters we receive . Their insertion is often delayed , owing to a press of matter ; and when omitted , it is frequently from reasons quite independent of the merits of the communication . ^ ° » ru i ico oa 11 be ta ^ ot anonymous correspondence . Whatever is intended for insertion must be authenticated by the name and address of the writer ; not necessarily for publication , but as a guarantee of his good faith . Wo cannot undertake to return rejected communications .

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    SATURDAY , NOVEMBER 21 , 1857 .

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    ¦ ¦ ¦ ¦ - . . ^ r . ¦ - ¦ . . ¦ . There is nothing so revolutionary , because there is nothing so unnatural and convulsive , as the strain to . keep things fixed-when all the world is "by the very law of iU creation in . eternal progress . — DeAbsold ,

• Citation
  • Leader (1850-1860), Nov. 21, 1857, page 1116, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/vm2-ncseproduct2218/page/12/