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Leader (1850-1860), 20th November 1858, Edition 1 of 2, Page 1266, Untitled Article

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    • G O M M EROIA L.
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      Untitled Article

      London , Friday Evening . Judging by the reports from the country markets it would seem tlint the price of corn lias at present reached the lowest point , but to-day the market in Mark-lane . was , on the whole , dull , though some species of grain fetched prices rather above those of last week . The consumptive demand continues very great , and those most deeply engaged in the trade make no complaints . ..

      ,,,, The other produce markets—sugar , which is od . dearer , tea , which is firm , coffee , which is stationary —have about them nothing remarkable . In general there is no speculative business whatever going < orwarcl , and tlie opinion begins to prevail , that there will be no animation before the beginning of another year . It is noticed that the prices of commoilities arc higher in the laces of production than m those losses to

      p of consumption , which indicate on ^ the merchants and paralyse tra . le . Clefirly the ron . odj for this is increased consumption , and increased consumption can only bo expected from t » poop . le fln < - ing increased employment . The necessity of t e ense wiild , therefore , imply that there must speedily ensue , in some direction or other , an increase ot bu ainess and an increase of consumption . district a

      From tho various manufacturing ., our vices are nearly of the same tenor : -trade quit . but extending ; prices with a hare W ^ f " . { but steady . The recent lettora from C inn « ntt India are regarded as not encouraging . I he w'J trnclo at Liverpool , for thia period of thojc » i , «» been good , and , contrary to o ^ pectntion , cspcUni j after it was ascertained that tho crop tins > ya bo larger than estimated , the price « £ « " « £ newly * d . The shipping trade , which t \ o tcm plaints of shipowners' Assert is in a clej . re scd ton U tion , is likoly to sustain further loss iro » the £° n petition of vessels from Baltic ports , iu o w enry of the weather is rapidly closing tho northom l > or s of Europe to traffic for the winter , and it « » practice of Prussian , Swedish , and other vosag Inatead of lying icebound in tlioir own ports tit spring , to come over hero and compote loj " b at n . fltniru which enables them just w pay *»« . \\

      penaes of wng - es nndourront chargos--a nun > u of course our own shipowners wnnot nocodo to f any hope of realising " V ™ ^ linnors having business has been tolerably brisk , »»\ W » " Jf P J made exertions to got off winter and or / export goods before tho Putch and U J nt ports nrS clpsed by the ice . ' . Hip most io Intelligence is that the frost has already J > itself In tho Elbe . From the iron . u >» Ur the Midland Counties and W « le * ° ted It * variation ia tho state of trado is reported .

      G O M M Eroia L.

      G O M M EROIA L .

      Untitled Article

      is the . only one in which our law compel s a parti ciilar body to deal , and compels it to give for gold a certain amount of what it ordains shall be money and which liquidates its taxes . Of all other commodities the law leaves the sale , the price , aud distribution perfectly free and uuclogged . ' Not ouly is this proved to be advantageous , it is actually necessary , that society may be fed , clothed , au ' d otherwise provided for . Some reason therefore of overwhelming force and equal plainness should exist to justify the departure in the case of gold from this universally valid principle . No such reason exists . The law of ISli is merely the result of an old aud discredited prerogative , which is most improperly

      extended in modern tunes to the credit notes of bankers after the Government has givcu up interfering with the quantity of the metallic currcnev . Same half-informed political economists , some selfish and timid bankers , and . Ministers even more ignorant than their advisers , then thought that the principles of free trade * which they praised and adopted , were not applicable to bullion and to baukiiur , and so they established as a rule that the quantity . o £ legal tender of . money should vary with the bullion in the Bank of England . To c ' lfect this , they ordained that the Bank should buy all the gold oiiered it . issuing notes to pay for it , and cancel its notes

      NOW AND LAST NOYEMBER . THE ACT OF 1344 . At this period last year the Act of 1 S 44 * had been suspended , and the Bank of England had overstepped its provisions by issuing 2 , 000 , 000 / . in notes on securities more than the law authorised , Then the country was in the midst of , a commercial convulsion , several banks had stopped , and mercantile nouses were falling in all directions . No branch of foreign business escaped the general catastrophe , and a stop liad been put to an apparent prosperity in winch all delighted ; confidence was for the time

      at an end , and mercantile men thought only of what they could save in the general wreck . To give _ orders , or engage in new enterprises , was entirely oat of the question , and for a time , the otherwise ever and actively flowing stream of commerce seemed entirely stagnant . In the end this convulsion turned out to he a mere adjustment of credit to production , with a distribution of the assets as'far as they would go amongst the presumed rightful owners . " Alarming as it was , no one of the old and g eat productive businesses of society was injured , nly new and sometimes extravagant enterprises

      were checked . The harvests -were good , and all things essential to trade , except credit and confidence , were plentiful . The convulsion accordingly passed away -without any serious losses , and without imposing any further' check to progress than great additional caution . The effects of this were chiefly felt , but felt somewhat severely , by the new , young , active , andL enterprising members of the mercantile community . Never was , we believe , a convulsion so widely spread which shook down so many paper edifices , destroyed so many _ towering hopes , and which was otherwise so little injurious .

      tion . With them debts may be everywhere paid , except at the Bank counter . They swell the nominal wealth of the establishment . Other bankers and discounters , the chief of whom keep an account at the Bank of England , with all the persons in the empire who carry on any part ol thenbusiness on credit , look at the great reserve . I lie Bank has upwards of lS , 000 , 000 / . of bullion , and upwards of 11 , 000 , 000 / . of notes , or of 29 , 000 , 000 / . of legal money lying idle . The cousequeuce is that money appears extremely plentiful . It is the representative of capital , and , therefore , it is supposed that capital is equally plentiful , and the market for it , or the rate of discount , is kept proportionately low . / :

      ,.,., ,,, _ ,. In the rate of profit , which is tolerably high in general business , neither here nor abroad is the re any reason for such a low rate of discount as no w prevails . The chief reason for it is the abundance of legal money deposited in the Bank , and at the command , on good securities , of all the bankers , merchants , and dealers in the country . The effect last year of adding 2 , 000 * 000 / . to the legal money to restore confi

      of the country was immediately - dence , and almost immediately to lessen the price of money . Of course a large quantity or legal tender must at all times have , pro tanto , similar effects , and therefore , we say , that the present low rate of discount is , in a great -measure , the consequeuce of the large quantity of legal tender which lies idle in the possession of the Bank . It is not the result of natural circumstances , and will be

      sure to mislead the mercantile community . It must not be said that the rate of discount is almost everywhere equally low , for this would not be true , and recently there was a- ' considerable , rise abroad ; and , if true , would be in part the consequence of the undue creation of legal niouey here , and the great influence which our money market has on the money markets of the world . The t

      It put an end to great expectations rather than realised wealth , and though it has left many a grieved and . disappointed heart , it has not marred the fortunes , of either individuals or the public . Now business is again reviving here and abroad , new expectations and new hopes are excited , arid they will be more prudently indulged and more generally realised . The living race of mercantile men have had a memorable lesson impressed on them , and till another generation arises ignorant of the lesson they are not likely again to run into such extravagance as characterised 1 S 56 and 1857 .

      quantity of gold and silver produced brought o market , and by universal consent used as money , is as much a portion of the great natural phenomena of production and consumption , by which the merchant must guide his operations , as is the quantity of corn , of cotton , or of tallow . Our Government , taking this just view of the matter , professes not to interfere in any way with the auantitv of bullion brought to market , or the

      quan-That they may see as clearly as possible the probable consequences of their confidence and their actions no artificial blind should be drawn between them and the future . Their operations all have their origin in commodities actually produced , they all terminate in the distribution ol commodities for consumption , and all their profits , with the reasonableness of all the credit they take , depend on the relative cost of commodities , when and where produced , and on their value when and where consumed . Credit is , and must for ever bo , proportionate to goods on their way to the market , or

      tity of coin put into circulation . It merely certifies that the coin is of the ordained standard and weight . If the Government were to interfere with the quantity of bullion brought into or sent out of the country , or with the amount of coin in circulation , it would be immediately decried for interfering with and deranging commerce . But after it has discarded and wholly given up as injurious the old privilege and practjeo of regulating the quantity

      of coin and bullion in the country , tho Legislature , by the Act of 1841 , limits and regulates the quantity of legal money . In 1857 tho law supplied a great deal too little , and was of necessity suspended ; in 1858 it ordains a great deal too much , and though nobody now asks for it to be suspended , the law is equally injurious . The owners of capital , the value of which the law now unjustly doprecmtes , find little employment for it , and tho law compels tho Bank of England to buy it , issuing against it an equivalent in legal money . On looking at the Bank returns it will bo scon that the notes created and issued last wock amounted to 32 , 316 , 000 / ., of which only 21 , 820 , 000 / . were in tho hands ot the public ,, and tho romainder , consisting of mc' < e P jnisos to pay . swelled tho x * eaervo ol tho Bank ot

      between tho producer and the consumer . By the quantities ana value of commodities it is in the end Jtor ever adjusted ; b y them , therefore , which really and always give fixed laws to trade , mast the conduot of all merchants be regulated . Legislation accordingly should interpose no screen betwixt mercantile men . and the naWal results of their occupations . ^ Perfectly free trade between individuals , whether living under the jBanxo Government and fellowcountry men , oi Jiving under different Governments and foreigners to each others ., is not only as wo know eminently ladvantogeaus to nations , it is essential in a moral : sense to the merchant , that he

      may « ee bis -way , -and iguide his conduot betwixt production « nd consumption to a successful issue . At present the Batik of England , whioh at this time last year had issued JJ , O 0 Q , O 00 £ . more promises to pay than the law allowed , and had only 6 , { L 84 i , 000 Z . bullion in its possession , with a reserve of notes of only 1 , 148 , 0002 ,, lias . regulated its issue of notes by the law , and has in it » wro . possession , a xeservo of its own pramiaes . to pay to ithe amount of 11 , 327 , 0001 . ( last week ' s return ; , together with 18 , 502 , 000 / . bullion . How , this reserve < of notes , though ithey be only promises to pay -by tho Bank , and-ar e in its own possession , are by the law declared to be legal tender , and aro ns muoh the lega'l money of the country as the sovereigns in

      oixeufo-, England . By compelling tho Bank to isbuo legal money proportionate to tho amount of gold deposited In it , and by compelling it to buy by issuing such , legal tender all the gold offered to it , tho law does more mischief now , though it be not so immediately apparent , and will do more mischief horoaftor , than it avowedly did in 1857 , for doing which it was suspended . ' Clwvjy tho lawcausos 11 , 000 , 000 / . of xodundftut mont > y to . bo croatod whon the prooioun metals we unusually . abundant in the iqouutpy , ; and so Mtpe > to keep down the rate of discount , and helps to make men imprudent and enterprise hereafter unsuccessful . 'Gold is a commodity subjeot to all tho laws of production , distribution , and consumption j and it

      as the bullion was withdrawn . The consequence , we now sec , is that there is u great and useless surplus of legal money in the country , which beats down the rate of discpunt as much below its natural level as the restriction on the supply raised it at this tiiiie last year , and compelled the Legislature with disgrace to set aside its own enactment .

      Untitled Article

      THE X » E A P E _ B . [ No . 452 , November 20 , 185 8 .

      Untitled Article

      GENERAL TRADE REPORT .

  • Citation
    • Leader (1850-1860), Nov. 20, 1858, page 1266, in the Nineteenth-Century Serials Edition (2008; 2018) ncse-os.kdl.kcl.ac.uk/periodicals/l/issues/vm2-ncseproduct2269/page/26/