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    1092 THE LEADER. [No. 390, November 14, ...

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    INDIAN MILITARY PltOSPECTS. The most wel...

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    The Monetary Crisis. The Monetary Crisis...

    charged by dealers on what Las always been counted perfectly good paper is 12 to 15 per cent . ; for inferior paper there is no market whatever . Our readers will naturally look to us for some exposition of the causes that Lave produced the present state of affairs , and the probable turn that they may be expected to take .

    According to the Bank return made up to the 4 th inst ., the amount of notes in the till of the Bank of England was then 2 , 155 , 3157 . This , with 550 , 720 Z . in gold and silver , making together 2 , 706 , 035 / ., was all .. the ready money they had against deposits amounting to 17 , 595 , 8117 . They had no other funds but this 2 , 706 , 035 / . to meet the demands of their depositors , and to discount any bills that Were offered to them . And this at a time when our mercantile community , deprived of their usual remittances from the United

    States , were urgently in need of accommodation . The amount in the till beiug so small , and the demand for discounts out of proportion large , money naturally rose in value according to the unerring laws of demand and supply ; and so the Bank Directors first raised the minimum rate to 9 per cent , on the 5 th , and then to 10 per cent , on the 9 th . This simple statement will , we feel persuaded , offer an easy explanation to the inquiry why the rate of interest is now so high .

    We have now to take another step , and endeavour to ascertain how it happens that our Bank Till is so low—so ill-provided to meet the pressing wants of the commercial world . As we have stated above , the Bank Till contains only 2 , 700 , 000 ? . iu notes and bullion to meet all its engagements , and to serve as a fund out of which to make advances to the mercantile world . Four

    months ago—viz ., July 16—the till contained 6 , 104 , 94 j 57 ., or two and a quarter times its present amount . The rate of interest was then 5- ^ per cen t . Since that time we have had numerous arrivals of gold from Australia and elsewhere , but the precious metals have passed away far more freel v than they arrived , until we are reduced to our present figures . It is not difficult to ascertain at least some of

    the causes that have produced this result . For many months a continuous draiu of the precious metals has been going on regularly to China and India . We have been purchasing most extensively silks and tea of our ' enemies ' the Chinese , who have taken few goods in return—the balance has been paid ia silver . A similar state of things has been going on in India , where , with English money , some hundreds of miles of railway are now in course of construction .

    Within the last few years English capital has been largely expended in the construction of rail way 8 in France , Austria , and Belgium , on the continent of Europe , and in Canada and the United States in the Western World . Concurrently with this distribution of British capital all over the world we have seen the most extraordinary development of our trade generally , evidencing itself in the fact that from the year 1841 to 1857 the figures have increased from 45 , 000 , 0002 . to 120 , 000 , 0002 .

    Taking these matters into consideration , ia it a matter of surprise that the value of money should be extremely high ? Is it a matter of surprise that money should be scarce when our principal debtor , the United States , with " whom we transact at least a fourth of our whole foreign trade , is for the time being in embarrassed circumstances and compelled to stop payment ? Is it a matter of surprise that 10 per cent , should be charged by the Bank of England , when money can be readilv employed in New York at rates varying from 24 to 60 per cent . ?

    The question has no doubt passed through the minds of some of our readers—How long is this state of things to last ? Is there airy remedy for our present distress ? We venture to suggest one or two considerations , which may tend to remove any undue anxiety . The very fact of the high rate of interest will lead men in "business to diminish their engagements ; 'with a diminution of business will come a diminished demand for money ; as money becomes less in demand the rate of interest will of course fall .

    These causes are already in operation . Our exports are greatly diminished ; the New York merchants are sending back goods most recently shipped to their port , and our money dealers are avoiding , as much as possible , all new advances , even at the present extravagant rates . There is one circumstance that is very encouraging in the midst of this emergency , viz ., the absence of panic in the City . It * this great fact that distinguishes the pressure of 1857 from the disastrous crisis of

    1847 . In spite of numerous mercantile failures— -in spite of the stoppage of the Liverpool Borough Bank—and , still more—of the Western Bank of Scotland and of the City of Glasgow Bank—with their hundreds of branches and millions of deposits , the commercial world pursues its ordinary course , not without deep anxiety and the most cautious watchfulness , but calmly , steadily , as threatened by a great calamity requiring tlie exertion of alt its energies to ward ofty arid conscious that an unwise fear is the means

    most calculated to hinder the exercise of the cool , ealm judgment which alone can carry it through any period of political or financial difficulty . One other fact seems worth } ' to be recorded with reference to the present state of affairs . The very morning that the newspapers announced the stoppage of the Western Bank of Scotland , the funds rose ^ per cent . This result surprised many , but it is not difficult of explanation . The failure of banks whose leading principle it is to receive money

    at a high interest from all who will deposit it with them , lias induced many persons to place their ready money in the funds , rather ' than expose themselves to the embarrassments that would follow from further banking difficulties . The public are beginning to understand that it is better to invest at the present low prices in a Government security ^ , first , because their money is there perfectly safe ; and secondly , because it will probably in the end pay them better than even the 8 and 9 per cent , of the joint-stock banks .

    A . considerable portion of the forty millions that figured in the Insfc-published balance-sheets of these establishments has been transferred to the Government funds , otherwise it would be impossible to account for a rise in the price of stocks in the face of large sales made within the last few days to provide for the necessities of the Scotch banks . Lord P-OiMEuaTON has acted in 1857 precisely as Lord John Hits sell did in a similar emergency in 1847 . He has authorized the Bank of England to issue , if necessary , notes in excess of the amount fixed by Pejbi , ' 8 Act

    of 1844 . He sees that what the public require is not so much money , as tho conviction that thoy cari , if necessary , raise money upon tho deposit of good securities . Bankers and money-dealers generally have been holding large sums of ready money , far beyond their actual requirements , but simply tliat thoy might make themselves secure come what may . They havo been unwilling to do nny business that they could iitirly avoid , or to contract any now ongagemvents until tho heavy threatening cloud of disaster had cleared off .

    It is no doubt mortifying to Lord Oveb ,-stone and the staunch supporters of Peel ' s Act to see their principle even nominally violated ; but it would be a great satisfaction to the friends of the measure if it should prove , as was the case in 184 : 7 , -that the Act was not actually infringed—that the Bank -were not compelled to avail themselves ot the license allowed by the Premier ' s

    communication , and that not a single note had been issued in excess of the statutory limit . In 1847 the Bank Till . began to improve as if by niagie immediately the Treasury letter was issued . The same necessity existed then that is now felt ; what is wanted is not the issue of more notes , but the circulation of those already issued—not capital , but confidence .

    1092 The Leader. [No. 390, November 14, ...

    1092 THE LEADER . [ No . 390 , November 14 , 1857 .

    Indian Military Pltospects. The Most Wel...

    INDIAN MILITARY PltOSPECTS . The most welcome event announced by the incoming Indian mail is , doubtless , the relief of Lucknow , —a relief , indeed , to the anxious occupants of many an English hearth . The course of previous intelligence had rather led us to anticipate , with all "but certainty , " the glorious result now . formally notified ; and although our too sanguine expectations had well-nigh encountered a terrible rebuke —so imminent was the danger of the beleaguered

    garrison- —we may well bo permitted to rejoice that ; all has ended happily . Yet , oven in the height of our exultation , -we find serious cause for ; mourning . The gallant HA-ViiLOCK and his band of heroes have added fresh laurels to former well-earned trophies ; but in the death of the intrepid JSTeill we are compelled to lament the removal from amongst us of one -whose late brief but splendid career had rendered his name a Household word .

    Turning again towards Delhi , it is with deep regret thnt we notice the death , at . the early age of thirty-five ' ( from . the . ' effect of his wounds ) , of the- brave and highly-gifted NiCHOiiSON ; whilst an ' attack of cholera has cut off , in the midst of his valuable career , the energetic Commissioner GREA- 'm isi ) ( Bengal Civil Service ) , whose name has been , from the first , so intimately associated with the

    operations ot the besieging force . "We find , too , that tlie general expenditure of life in the recapture of tlie Imperial City has far exceeded the original estimate . Sixty-one officers and eleven hundred and seventyeight rank and file are 3 io \ v reported to . have been killed and wounded on the occasion of the storming alone , and we are loft to believe that the succeeding six or seven days' fighting 1 must necessarily have involved a long list of supplementary casualties . At Delhi , indeed , the mutineers seem to have foutrht with all

    the more obstinacy as hope abandoned them . Theirs , it is true , was an essentially desperate case . But oven at Lucknow , under altogether different conditions , tlie resistance offered by the rebels was evidently of the most determined nature ; nnd "this—notwithstanding that the catastrophe nt Delhi must have been perfectly well known to them at tho timethis does not look as if the game of mutiny wa 3 yet played out , in tho opinion , at any rate , of those most deeply interested .

    "" We have said before , nud in our earncstjiess to escape nny such imputation , venture on repeating , thnfc wo are no alarmists . But as , at the very outset of this unhappy insurrection , there were those ( ay , and men high in oflico too ) wliopronounced tho discontents to have been terminated ( by the astute diplomatist , Colonel BntC 3 i ?) ere they had well come to ahead , so it will be no gi ' eat matter for surprise it * tho saino interested parties should persuade themselves , and try to persuade others , that 'Iniquity was struck down liko an ox . ' with a tangle blow : and that tho

• Citation
  • Leader (1850-1860), Nov. 14, 1857, page 12, in the Nineteenth-Century Serials Edition (2008; 2018) ncse-os.kdl.kcl.ac.uk/periodicals/l/issues/cld_14111857/page/12/