On this page
- Departments (1)
-
Text (3)
-
Untitled Article
-
Untitled Article
-
THE BANK AND THE DISCOUNT "B110ICE 113.
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.
-
-
Transcript
-
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.
Additionally, when viewing full transcripts, extracted text may not be in the same order as the original document.
Untitled Article
any other coalition that would prove available -for good . It is remarkable to notice how unreservedly Sardinian statesmen speak of the existing peace as only a truce , and yet we do not get a glimpse of prudent foresight on the part ot- the chief European Powers . The annexation of Nice and bavpy alarms Prussia for the safety of her Rhenish provinces , but the beiiiglited Crovernment of Berlin , revelling in all that stupidity which the Humboldt correspondence has disclosed , seems determined to help the schemes of France , and annoy the llhinelanders by oppressive taxation , vexatious meddling , and billeting of soldiers on private families . The German Governments will not see that their safety consists in making their people thoroughly contented , and establishing a . system which will contrast favourably with the clever though unscrupulous
despotism of France . We do not wish to isolate England from other Powers , if a just and useful common ground of action can be obtained ; but if these Powers will not concede thus-much , we must be content to stand alone as the supporters . of sound principles and the ihost industrious manufacturers of Armstrong guns . Let us , however , while we blame our neighbours , for causing their ' weakness ,, not forget that the want of reform in our naval
administration deprives us of our- natural strength . 3 Sve . ii bir Charles Napier ,, though a pertinacious stickler for Hogging , has , at last , found- himself : " obliged to surrender at discretion , anil he has- plainly pointed out to the House and to the country the changes that ' must take place before manning our navy can b ;) successfully carried ou . .. Were the right changes introduced , the last hope of ¦ ' competing with vis at . sea would be destroyed , ' our . Statesmen . would find that greater deference would : b ; j paid to their advice , whether it be given in congress or addressed to an individual state . ,
Untitled Article
THE Bank of England has again raised tile rate of discount . It is now 6 per cant . The dividends have been paid ; the money has been taken from the Bimk for most of the public salaries : ' and the public deposits are reduced to an approximation to the iiormal sum . They were £ 10 , 331 , 110 on . March 28 , and £ 5 ; S 7 S 135 on April 11 th . . € t , 505 , 075 of money paid into the JUuk on account of Government has been set free . Nevertheless , then : is not easu in the Money Market , such as usually follows the payment of the dividends . .. This is a curious circumstance , of which it is needful to give a brief explanation .
. We put forward as the prominent features of the case —1 st , 1 lie . fact that . the . bulk of our trade is carried oiv b y credit ; 2 nd , That this sort of business caw ho more be settled without small , change or credit notes , or sovereigns , than a retail trad ' . ; can be carried on and settled without shillings , sixpences , and pennies ; and , 3 rd , That the State has taken on itself , in order to give security to trade , to supply such a small credit-currency , making it a legal tender , the ' amount of which it regulates and -restricts . Without this legal tender , few or no bills cau be cashed , no balances Inundated , no pecuniary obligations finally discharged , and therefore it is clearly of first-rate imporhwee to consider the amount , created and in circulation , in connection with the amount of business to be . done
Our trade , seems to have returned to its normal slate , from the convulsion of 1857 , about the beginning of 1 S 5 J . Then what may now be called the customary niul progressive , increase of trade had again begun and was going on ; and . then the notes issued by the . Hunk of England , or the amount of legal tender authorized by the law , way £ 33 , 013 , 250 , and of this . G 1 : J , 1 01 , 001 , ) remained in \ ho Bank ; the other part , with a small addition ot Bank post-bills , making together £ 31 , 701 ? , 015 , was in the hands of the publicor constituted the circulation . The Bank
, minimum rate of discount was then 2 \ pur cent . In . 1859 , the value of our exports , which we ruler to a » an index to our whole tnulc , was - J 3 UQ . -A 10 , 427 , against jeH 0 , 00 S , 7 . ) 0 , in 1 ^ 58 ; in 185 D , the value of exports had increased . 213 , 831 , 071 . This is equivalent to an increase of 20 per cout .., which we ; muy assume , to represent the iucrcaso of business in society . Ei > the present year the value of the exports for two months was 4 HBQ , U 8 S , ' l » 7 , against £ \\ ) , 207 , 500 in the corresponding months of X 850 , indicating increasing- activity of enterprise , and a
was not too large in 1859 , a reserve of . only £ 8 , 405 , 590 was too small : in i 860 . At the same time the increase of the circulation showed that the demand for money had increased . The public saw how much , the legal tender was curtailed , while the business was increased , and necessarily anticipated that it would become dearer . A commodity in universal demand was supplied , by comparison , in insufficient quantities , and rumours announced an increase in the Bank rate of discount . Accordingly , . the dividends on the debt were no sooner paid in January than the Bank raised the rate of discount to 3 percent ., at which nobody , who . looked at the . facts , even grumbled . In a fortnight it raised the rate , to " 4 per cent . ; , then , at the end of-March , to 4 i- ;• and last week again to 5 per cent . Arise from 2 A- to 5 per cent , in ten weeks recalls periods of commercial , distress and convulsion , and excites some consternation as to what is next to happen . Political disquiet is not so fatal to trade as a rapid rise in the value Of money . Affairs are , at present , somewhat more complicated ilian usual by a difference ' which has arisen between the Bank , of Eugland and the bill brokers . We have no inclination to take the . part of either , but we have a strong wish to . in-. ike the public-aware of the circumstances which have led to it . Of course the convulsion of 185 7 , the consequence of too mucli ; credit , -manifested ' itself in part through the bill brokers ; . and their demands for dUotint at the , Bank brought it into thsi condition Of requiring the law to b ~ - suspended . ' ¦ In eons ^ quenc . . of this , the Bank of England , aftsr nnicii deliberation , came to a resolution in 1858 , that , no discount broker should have , a discount account at the Bank . This resolution was remonstrated against at the tims . Oil the one hand , it was said that the liaiik was fully at liberty to choose , its own / customers , and that it did right in excluding '' rivals from access to its resourees , who used them to enrich themselves and foster unwise speculation .. Admitting the liberty of the Bank , it was stated , on the other hand , that this resolution was a great injustice : and injury to one class of dealers . The Bank , at once the instrument for creating legal tender and the banker '' of the ( Jovernnieut , did wrong , it was asserted , by excluding one class of dealers from a fair share : of the accommodation , which it is accustomed to give the public towards the ( dose of every < £ ii : irter . Jiy . giving this neeoininodation , it wisely neutralizes the- injury done to commerce by the abstraction qu . vrt ' . u-lv from its us' of a quantity of legal tender varying fro . u £ | . , 4 > 0 'J , 0-tJ 0 . t-j tO , 000 , 01 * 0 , an I lodged by f ! u ( jj ' ve . rum . Mit in th . ; Bank Lo pay dividen h and oth-Vr . c ' larges . This nrgam :.-ni , however , had ho eftVet on tin : B . mlc . It stuck to its resolution . From the tim ; of passing it , in 185 S , to lluv commiMUHMneut of tin ; present year , legal tender continued siblin g d : int , The rat ;; of discount oiitiiiued low . In the beginning of the year tin ; former hud diminished , as compared to January 1855 I , bv £ 2 , 752 , 505 . The rate of discount was then mim-il , . and ever sine legal tender has Ikjcii scarce , and the rate of di ; j * count has cmiini-UNl to rise . . So far as the climax of scarcity has yet been i \; aelieil , it was at taiued 'just bjfon : lliu . dividends won ) paid in , the week ei ) d > : d April 4 th , wh . Mi tli . f ¦ pr . nil . u securities or advances iikiiI- ! b . v the Bank reach . l \ - > 5 , om . » , Ui > fi , a sum ablest um ^ aiapled , except in a . s-.-uon of tfivat cveiteiiKMit and groat . speculation . . . Onlv now , therefore , or sine . * . January , ; md in the quarter just expired , have the discoutil . brokers sulIVred much inconvenience by being excluded from ( liseounting with tin ; ISuuU ; and they felt the incjuvenieuce nr > re and more si'Veroly Ui I he . quantity ol ^ legal tender bueuuiu more amL . more curtailed . In spite of repented applications the Bank continues to exclude , them , and now they have removed , as th'ty have a perfect right to do , their deposits ' from the . Hunk , whieh , with a very unusual miss ol securities in i ^ j possession , finds itself with a very small reserve . The public is threatened , should any demand arise for bullum — should the exchange , by the luscssity to purchase corn , turn against us—with ' another Hunk Suspension . I 5 v tin ; quarrel betwixt tin ; great luoniud powers of the metropolis , the money market is deranged , and alarm prevails . There Iooiih , throng ! ^ the small reserve in the Hank , and the diminishing quantity ol legal tender , diflieuHies in ttie dhtmie .. ' for . ( . ominorae , which have already seriously checked enterprise in the manufacturing districts . We shall make ; the loading HicU of 1 . 1 hj case more apparent by placing them before the raider in a tabular lonn . I he noUjs issued by the Bunk eon « titut (! the total amount of indispensable legal tender created by the direction of the I ^ mluturo for tin ; use of wmuierce ; autl this issue , with the nwrv » ol the Bunk , tliu nalo * i » the liunds of the }>\ i \)\} c , the pub hi deposits , and the private securities ou iuIvuuobs made l ) , v tli <» Bank , were , at tins commencement of January , 1 ^>> J , ami ol Jnnunrv Ilist , and by the lust returns , ao 1 ' ollfnvs : —
further extension ol trade . At the commencement of this year ,, however , tho amount of legai tender issued was only J £ 30 , 200 , GS 5 , and of tliia ^ 8 , 405 ; 500 w « s in the Bank , and J 323 , 080 , - () U 0 with liaiik post bills , iti tho hands of tho public , Tho Bank minimum rato of discount remained at a 4 por oeut . if ^ 3 , 013 , » B . 0- wm-o not too much legal tender in 1850 ,. £ 30 , 300 , 033 was nt least £ 3 , 000 , 000 too litilo in 1800 . If a reserve of notes in the Bunk of £ 13 , 1 . 01 , 000
Untitled Article
Aprtt , 21 1860 . 1 The Leader and Saturday Ana hist . 309
The Bank And The Discount "B110ice 113.
THE BANK AND THE DISCOUNT BROKERS .
-
-
Citation
-
Leader (1850-1860), April 21, 1860, page 369, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/vm2-ncseproduct2344/page/5/
-