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    COMMERCIAL.

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    to obtain intelligence of M . Adolphe Schlagenttveit , a German , and a protege of Prince Albert , than of Connolly , Stoddart , or Wyburd . This has excited some indignation in India . A rich yellow shell marble at Agra has been brought into notice by Mi * . G ubbins . .. ' The carriage nuisance in Calcutta is likely to be amended , for with the growth of English enterprise , it is proposed to establish a Calcutta Suburban and Mofussil Omnibus and Carriage Company < " Limited ) .

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    : — " * ' — CHARGE AGAINST THfi JOINT-STOOE : BANKS . IT is said that the " action of the deposit-receiving joint-stock banks is of a character to aggravate the incipient mischief" in the money market at a time of pressure . These " monied establishments " are accused of precipitating the late crash in the Stock Exchange by rigorously calling in loans on all descriptions of securities , while they arc now in a peculiarly difficult position , overloaded with money , for which they have to pay interest , and cannot find safe customers . That banks should receive money on deposit . to lend , is now so universal a practice that it may be said to be natural -and necessary . . As long as interest is paid on the use of money , all who have money will be desirous of sharing that interest , and there will be a similar competition to lend whenever money is abundant , iind a similar withdrawal from loans whenever that

    disposed to increase it , did he remark that it is one of the means by which a territorial aristocracy is subverted by a monied aristocracy , instead of a healthy democracy . Old wrong is continued by a new , more subtle , and more rapacious wrong . But the effects of legislation are generally different from the intentions of the legislature , and we therefore cannot be -surprised thatr the Parliament , without intending it , as it is much . against the interests of its most influential members , should have contributed very much to the tendency of money to accumulate in masses . . Let those who how declaim against joint-stock

    banks remember . that they are exclusively the offspring of modern legislation . ISTot that associations for the purposes of banking are essentially injurious . They have to a great extent existed almost as long as banking itself . The Bank of England is a joint-stock bank ! AH the Scotch banks of importance are joint-stock hanks . Such associations arc natural and necessary , and they have long existed in- England in the form of . private banks , though they were restricted in the number of their partners , and hampered in their operations by the legal monopoly conferred on the Bank of Enirland . After the irreat revolutionary

    the same kind of panic—particularly if it had no good foundation— -as the returning abundance of money may make us suspect , would have been felt by them all . We believe it would not . a false opinion or sentiment is liable to correction , in proportion as great numbers are affected by it , and therefore we say , that the best correction of money panics , is to diffuse the resources of the money market amongst many individuals , exposing all to unrestricted conmetitioiij which will keep them all vigilant and all honest .

    war had driven all commercial transactions athwart their usual channels—after the Bank Suspension Act had deranged the whole monetary system , and tumbled all credit from its just foundation , some of the resulting disorders manifested themselves , in our private banks . Of course ,-the Bank of Eng land was sustained by legislation , and the whole power of the community guarded it from suffering . . The calamity fell on the private banks . and-on the community Avhieh sheltered the Bank of England-fromharm . Then , soon after the peace of 1815 , when hasty , illtimed , incongruous , and even scandalous loo-islation— -such as corn laws—was the . ordinary

    product of Tory , and aristocratic brains , before observation had found in commercial restrictions the causes ; of the vast disorders ' which prevailed between 1815 and 1830 , an alarmed and ignorant public , led by journalists unacquainted with the laws of social science , . and a Parliament more eager to act than to learn—for if it learned it _ would abstain from much action—ran down private banks ,- . and , a law was hastily passed to promote the establishment of joint-stock banks . They did not grow naturally in their present forms , like private banks ' with numerous partners—which would have become joint-stock bank . ? , had not the Legislature

    unwisely forbidden them , and very foolishly thought it could substitute something .. better—but were born of an act of the Legislature . On private banks , at the same time , . several restrictions were kid . ] N " ow complaints are made that the joint-stock bunks , which only net vigorously on the laws of competition—the supply of capital and thu demand for it—arc the sources of considerable disorder in the money market . ~ Wo believe that of late their action has not tended to keep it steady . They have taken the character of an" impelling power , while they should have been a guide—have been rather sails ' than the rudder , find have stimulutod the "ambliny ; and the enterprise they should

    have checked . For this , however , the joint-stock banks are far less to be blumod than the law which , in spite of experience , not only maintains the monopoly of the Bank of ' England , but lias done all it could to put down private banks , destroy their credit , and so prevent the healthy competition which is ns necessary in the capital or money market ns in the corn market . Die Legislature never eilbcts any good—never effects ought but mischief when it makes regulations for trade , and therefore it should , ns quickly ns is consistent with safety—for it cannot evon do away with its noxious regulations without inflicting injury on someonerepeal nil the laws now in existence interfering ¦ with banking .

    The Into destruction of members of the Stock Exchange began with a panic , which was jtsolf the consoquenoo of a general speculation for a rise . By help of money borrowed from the joint-stock bunks nnd other bodies , Consols had been forced up , or kept abovo their fair market value . Whatever might have been the cauacof the panic it was tally shared by the Bank of England , which raised its rate of disoount 2 per . cent ., in ten days and by the joint-stock bnnks , which hastened to draw in their loans on stock , with what threatened to bo nn insufticlent margin . Now it is not-to bo supposed , if the large resources of those bodies had been dispersed through ton times na many private bankers , thnt

    api ^ reliensions are -entertained ' money . will be wanted , whether joint-stock or other banks be employed as convenient instruments for Using the money . It could be easily shown , were it now necessary ,, that joint-stock banks , with -large-deposits , can make more . . of'money than individuals , and that it is really "advantageous to them and to the . community , that joint-stock banks and other institutions like . them should exist . "We must therefore consider the aggravation they are said to cause of the evils , of fluctuations in the money markets , as one of the sandbanks or rocks in the social ocean , warning us that we' have taken an nrroneoiis course . We cannot condemn t-akinur

    interest on money ; we cannot condemn competition to make the best use of it ; we cannot condemn joint-stock banks which answer these piu--poses ; we have rather to find out from the wreck how we have gone out of our course . At N ~ ew York , where the commercial community suffered from sudden expansions and contractions of the money market , and where both ' borrowers and lenders wore groat sufferers , ic was proposod in the early part of last year to place an artificial limit , by the joint action of all the banks , both on the rate at which money should be taken in on icluposic and at which it should be employed

    to discount . But this project , after receiving the sanction of nearly all the banks of thnt city , uninc to nothing , because all wou-ld not agree to it . In truth , to prevent competition in borrowing nnd lending money is impossible . Usury laws in lOngliuul and in the United States , though agreeable to the popular sentiment , have failed to accomplish this object . We can entertain no rational hope of settling such matters bv positive regulations . We must ti-urjt to competition for settling them , nnd we must remove all obstacles to the perfectly free play of its laws . Outs obvious source of mischief is the heaping ui ) of money or credit in great masses , which up of money or credit in great masses , wJuieu

    places the control of the whole in the hands oi ' n tjoinpumtivuly few individuals . Money , or credit , is anutlier name for power , m \<\ the more it is diffused , so that each individual shnll have a reasonable share , the greater its benefits . Heaped up , li'kb manure , it generates rank nnd weedy disorder 5 spreads equally over the field it fertilies every part . Modern legislation on this subject has generally tended to collect money in few hands , and much of the late and presont disorder in the market is probably the result of this legislation . As money makes money , it hna naturally a groat tendency to this form ; and ns the condition no fervently prayed for by the prophdt , neither " poverty nor riches" is alike favourable

    to individual virtuo and sooial welfare , this tendency ought , on no account , to bo increased by legislation . Nor would the reflecting legislator be

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    REDUCTION IN THE RATE OF DISOOUNT . On Thursday the Bank of England reduced its minimum rate of discount from 4 J per cent . —to winch it was raised on the 5 th ull . —to li \ per cent . The abundance of money in the market , 'and the previous reduction of the rate by private bill discounters , fully justify the step . At the same tinie , these facts show that the Bank , vast as are its resources , docs not really determine the rate of discount in the market , though it affects to do so . If there were any error in its conduct , it was in raising the rate so suddenly , on the 5 th ult ., an additional 1 per cent . ; but it was then influenced by the sudden 'diminution of its resources , and the actual condition of the money market .

    All the dealers in money , whether borrowers or lenders , were frightened , and the Bank shared the general contagion . Whether the present reduction , which is justified by -the circumstances of the moment , will continue , will depend on the fact of war absorbing "less of the resources of the world at its commencement than it throws enterprise into inactivity ., it compels the suspension of much peaceful nidusti-y , and ' so limits the demand for capital ; At the same time capital is required to carry on war . \ n t ho end , as it impedes reproduction , it will press inure and more on the comparatively' diuiinis'liod resources of society , and enhance the value of capital . We anticipate , therefore , that the present redaction , though now justified by circumstances , will not be lnsf inrr

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    City , Friday Evening . In the money market to-day the demand increased , but only so much as to make the market'less dull than before . Money is now taken on call by the joint-stock banks at 2 per cent . and . 2 . } per cent ., and the best bills are discounted at something below the Bank rate . The litrJe increase in the demand did not alter the character of the market , which continues easy , and at present there uro no indications of tin adverse change . .. We have referred above to' the reduction by the Bank of Knglnud of the rate of discount , and the accounts published bolow will show in the increase of its resources llio reasons for its conduct . The markets of t'lio Stock 'Mxi-hangc , which hare exhibited through" the week a rapid tendency

    upwards—Consols even rising on Weilne . siluy to an unwarranted height—have boon dull to-day . They wont backwards yesterday , nnd to-day opened nt yesterday ' s prices—Consols D . 'M to i , —1 ml notwithstanding the prices from Paris lo-dny cuino firm and improved Consols , and the oUier funds receded . This was attributed to parties who . had inoculated for the rise having realised , and to political onuses . More weight was attributed to tho jirliele of tho Auysbury ft Gazette , published in the Times , than it deserves . It can only be considered as expressing tlio wishes of the heated and silly princea of Gorninnv , not the sentiments of the people Tho latter want political improvement nt homo rather than war abroad . The former would

    gladly excite an anti-revolutionary i-vy lo noouro their own powor . Some weight wmi ascribed to the presumed instability of our own ministry , and the uncertainty whether tli . ir opponents are in a condition to offer to tho country the guarantees of a strong government m room ot me ono they aim at destroying TJiobh civibi-h produced groat dulnoss on the Stock Market to-duy , and Consols wero done after tho clow at U 1 J , to IK . llio price at prosont is probably Houiowlml nflectcd by property remitted from abroad , to bo placed Lore In security , and ^ con sequently , quite aa hlyh us it is " Pni 88 la naa announced a loan for about . £ 2 , 300 , 000 , but us it will be negotiated in ( Jonnnny , n will not affect our market .

    Wo undorstaud that the failures in Connany continue , and that some of the oldont houaos in Augaburgh and other plucca are mentioned as having

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    CoMMESCiAi ,. ] THE LEADER 703

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    MONEY MARKET & STOCK EXCHANGE

• Citation
  • Leader (1850-1860), June 4, 1859, page 703, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/vm2-ncseproduct2297/page/19/