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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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NOTICES TO CORRESPONDENTS . 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 quiteindependent of the merits of the communication-Several communications unavoidably stand over . No notice can be taken of anonymous correspondence . Whateveris intended forinsertipn 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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FINANCIAL PROSPECTS OE 1858 . "We have a great distrust of modern prophets . Neither Joe Smith , nor Dr . Cttmmin g , nor Moobe ' s Almanack numbers us as believers and votaries . We have as much curiosity about the future as most people , and would willingly lift the veil , and trace by anticipation the windings of the history of the new year . We should be proud to be able to speak confidently with reference to the future on the great subject of Reform , on India , and on European politics ; but necessity compels us to continue in the more sober course of reeording and commenting upon events as they arise—in guiding and giving expression to public opinion .
In offering , therefore , a few remarks upon the financial prospects of 1858 , we need scarcely disclaim any pretension to prophetic inspiration . "We know that all things are double one to another ; and all we can do is to compare the present with the past , and offer such inferences as may be fairly drawn by experience from the records of bygone years .
The year opened with an exceptional state of things . A high rate existing at the Bank , but few borrowers there — Consols rising daily , railways rapidly improving in price in the face of declining traffic—even foreign undertakings once more lifting up their heads—all betokening that on the Stock Exchange there is again a speculative feeling that the public will come in as buyers , and relieve the dealers of what they are holding with borrowed money . So decided is this conviction , that as much as 8 and 9 per cent , have been given for loans for a term of six months on the security of railway shares . Trade is dull , most dealers being uncertain wbat to do until the course of affairs is more
decidedly marked . Should the tendency towards a rise in the prices of produce continue ( as it probably will ) , theconcurrence of buyers will 7 "tttno' * very'diBtant'dates r briug-quotations to very nearly the old levels , The terrors and anxieties of the end of 1857 will be Bjpoedily forgotten , no complaints wiJl be heard about the Bank Charter Act , and all will go on swimmingly again until But we protest we are not prophets by profession , and must leave our readers to finish the sentence at their discretion ,
Within the last few days , considerable arrivals of bullion have swelled the deposits in the Bank cellars , and very large amounts are known to be on their way at this moment from the Australian diggings . Almost any sum can now be readily borrowed on Government securities at under 4 per cent ., and there is every indication that for a time at least there will be a considerable difficulty in placing out money in a satisfactory manner . Events are
repeating themselves ; after the last monetary convulsion the rate of interest ran down rapidly , so that in 1848 less than 3 per cent , was to be obtained . Then , indeed , the prices of stocks did not rise as they now have done ; a feverish feeling prevailed in Paris , which ended in the expulsion of the reigning monarch , and shook every European Government . This naturally prevented the rise that would have otherwise taken place had politics run in their ordinary course .
Immense efforts have been made in Paris to mitigate the monetary pressure , and the Executive has been constantly occupied in maintaining the amount of bullion , and keeping down the rate of interest . While money here commanded 8 per cent ., the price there was lowered to 5 ; it might have been expected that this would lead to bullion being exported from France , to seek employment here at the higher rate ; but whoever wished to effect such an operation found numerous impediments in the way , which were not at
all smoothed down by the agent of police , who was constantly paying him a remarkable , and even unpleasant amount of attention . None knows better than the Emperor that he has no foe to dread so much as a financial difficulty ; and all the powers of that remarkable man ' s mind are constantly directed towards the development of the natural resources of the country , and the attracting , by various inducements , foreign capitalists to invest their surplus moneys in French securities . The year 1858 will no doubt see a considerable
issue of railway obligations at such rates as will induce some holders of English Three per Cents , to exchange into an investment paying a tempting interest . The last fortnight has witnessed but few failures , and encourages the general belief that the crisis has passed . But we may yet see commercial houses fall which have stood the shock up to this time , especially those which have engaged in speculative purchases of silk and cotton . The markets have gone entirely against them , and in many cases the
large profits of preceding yeara are more than absorbed by the frightful losses of 1857 . The men of Liverpool still look grave , as if they dreaded some further calamities to be added to the disastrous chronicle of the late crisis . Long-dated bills have vet to fall due > which are as entirely speculative as any that found their way into the portfolios of the Western Bank pf Scotland . It is scarcely possible that the banks will renew them ; the recent lesson hns been too severe to-permit the holders , for a time at least , to continue their advances on accommodation paper .
Some curiosity is felt respecting the course which the joint-stock banks will take . As we lately showed , the deposit system docs not permit the keeping of any reserve worth mentioning to meet current demands , and the excessive interest allowed compels the closest investment of the money in second aiid-tbird * rtttQ ^ QQ ^ be had . So groat has been the demandTor paper to be discounted in consequence of the extension of this system , that a new trade has sprung up to meet the wants of the banks of deposit . Men of straw have been getting a good living by accepting bills to any amount at a small charge per cent . ; and ' banking facilities' have been so extended that there
was no difficulty in getting this wretched paper discounted . Yet we shall have harmonious meetings of these banking companiesconsiderable dividends will be declared—the losses will be set down as next to nothing , and things will look so pleasant that shareholders will be led to believe the crisis was all a delusion , their anxieties groundless , the
immense losses imaginary , or that by some extraordinary and inexplicable good fortune , the establishments in which they have the good luck to hold shares are losers to a very inconsiderable degree on the millions of bills of exchange—good , bad , and indifferent ¦— which must have passed through their hands .
A very important question has escaped public observation lately , which will soon force itself again on the notice of all who have payments to make . The natural effect of the enormous production of gold from California and Australia is to raise the price of all commodities ; and many persons were so deeply impressed with this idea , that they some time since converted their Consols and other securities bearing a fixed rate of interest , into houses , land , and investments of a similar nature , from which the return would
increase with the increasing value of commodities . Quite contrary to general expectation , the large addition to the precious metals has been , up to this time , attended with a rise , instead of a fall , in the value of money . The year 1852 saw interest at 2 per cent . ; five years later it was 7 , 8 , and 10 per cent . But the remarkable fact accompanied this high rate of interest , viz ., a high price of
commodities . Formerly , when money was dear , commodities , as a rule , were cheap ; until within the last few weeks , both mouey and goods have ruled high . May it not be fairly presumed that the annual production of gold is already making its effect felt on the price of articles ? America has now a large gold currency , aud in many parts of the world gold is to be found where it was before unknown . In France it is coined into pieces
of small denomination , and is rapidly replacing the old silver currency . The same thing , but in a lesser degree , is observable iu many parts of Europe ; and concurrently with this distribution of gold , we hear everywhere abroad complaints of the dearness of the necessaries oflife . There is good ground , then , for believing that the immense accession of gold is telling upon prices . The news of the riches of California and
Australia spread rapidly through the world , and the consequence was the projection of schemes everywhere for railways , harbours , docks , steam-ships , and telegraphs . Mercantile houses extended their connexions , branch establishments were set up at every J ? ort , and tins extraordinary commercial activity has for a time counteracted some of the effects that were naturally expected from the yearly increase of gold distributed throughout the civilized world .
And it may be confidently asserted , that as there is nothing new under the sun , so wo shall see , wheii the immediate effects of the pressure are past , engineers and lawyers preparing p lans to absorb all our savinga for the next few years . Projectors of all kinds are watching anxiously tho right moment to launch their schemes . A few weeks more may , perhaps , suifice to see the broad sheet nts from
of tho Times filled with advertiseme "VffnouB ~ new-coinpaniefl r"establiehad ^ for ^ l | j . e benevolent purpose of paving at least 10 or 12 per cent , to all who will confide money to their keeping , llussin , too , is biding her time ; her network of railways ia yet to be made , and Bakings arc too able and experienced to let any fair opportunity slip ot persuading John Bv ^ h to lay out some of
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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 its creatiomn eternal progress . —Db . Aekoli ) .
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SATURDAY , JANUARY 9 , 1858 .
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V * A SiTPPtBMENT containing the Titus-page and Index for the Eighth volume of the ' Leader , ' is this day pubfished , gratis , with the present number .
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No . 407 , January 9 , 1858 , ] THE LE A P E R . 33
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Citation
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Leader (1850-1860), Jan. 9, 1858, page 33, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/vm2-ncseproduct2225/page/9/
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