28 SEPTEMBER 1839, Page 11

- TOPICS OF THE DAY.

THE MONEY CRISIS.

THE Bank of England seems anxious to prepare the public mind for a suspension of specie payments, or some violent action on the currency. In one of the City articles of the Morning Post, (uni- versally believed to be sanctioned by the Bank Directors,) it is said- ,"flic insufficiency of our corn crops last year, and the indifferent iwospects

of the present harvest, have caused, as every one is well aware, the utmost per- plexity to the Directors of the Bank of England. Our gold has gradually de- creased, until the average of the three months is reduced to something less than 3,000,000/. But the Directors have a resource in their ally, the Bank of France, which happens to have a profusion of the precious metals in her cellars, and is rejoiced to have an opportunity of ridding herself of a portion of the in- cumbrance ; so that, although more corn may be imported for the current year's consumption, all will go well until some permanent remedy for suck contingen- cies shall be supplied by the Legislature."

A large amount of the precious metals which the conductors of the Bank of France (lucky fellows !) "happen to have" in their cellars, has been already placed at the disposal of the Bank of Eng- land, and vet the exchanges decline and the stock of bullion de- creases. *The best that IS hoped for the Bank of England is, that its French ally will supply the means of meeting its engagements until Parliament shall assemble and provide a 44 permanent remedy." Much meaning lurks under the words " permanent remedy." The late Chancellor of the Exchequer affirmed, what nobody dis- putes, that as long as the country is liable to a demand of five or six millions of specie in a year for purchases of foreign corn, it will be impossible to prevent serious derangements of the currency. And Sir JimEs GR ABA M, at the Netfrerby dinner, said—" 'We know by fatal experience, that we have constantly two or three seasons together of an adverse character." In these adverse sea- sons, gold must be exported for wheat ; and as they are " con- stantly " occurring, derangements of the currency—which means universal embarrassment—must be continually expected.

Moreover, it is certain that each successive period of scarcity will be attended with increased inconvenience and distress. Sup- pose the present difficulty overcome, the recurrence of short crops, some five years hence, will find the country in a far worse position to bear the infliction : there will be a million and a half more mouths to feed, and the foreign trade of the country shows no symptom of extension.

Will, then, the " permanent remedy" be the abolition of the corn-duties ? We know it may be said that such a measure would not, under all circumstances, prevent a drain of gold, because in the countries with which England would establish an exchange of manufactures for wheat, the crops might fail, and then application, with specie in band, must be made elsewhere for fbod. As, how- ever, the trade would not be confined to one portion of the globe, but take a wide range of land and climate, the chances of a simultaneous failure in the sources of supply would be reduced to a fraction of small amount. The practical question is—can a better remedy be suggested ? what other means so likely to pre- vent scarcity, and its consequences on trade and the currency, can Parliament adopt ?

Immediate relief to the Bank might be afforded by a suspension of specie payments, and perhaps by an issue of one-pound notes. But the first expedient is equivalent to bankruptcy ; and the mis- chievous consequences of the small-note circulation compelled the Legislature to stop it after the panic of I 826. Besides, there is nothing to preveut the exchange of one-pound notes for gold; and thereilwe it is doubtful whether even a temporary respite would be gained by issuing them. What then is the " pernement remedy," to which the organ of the Bank-parlour alludes P Is it free trade in corn, or a Restriction Act ?—lt would be manifestly absurd to designate the latter a " permanent remedy."

We are not exaggerating the difficulties of the monetary crisis. The Morning Post of Thursday, after mentioning the "heaviness" of the money-market, says, " In the absence of any other pretext for croaking, the gentlemen of the Alley profess to be in great con- cern respecting the affitirs of the Bank; anti adds, "Their anxiety is, it must be allowed, rather premature :" but then, the Bank organ proceeds to give an excellent reason why such anxiety is nut pre- mature— "Although ihe egirers of the establishment are low, and the .fiweign exehanges 210i 51 blinaWit «5 could bewished, the Directors have ample resources for all purposes for a long time to come, prorided siwenhaion in foreian loans eau he hip in cheek. Of this there seems to be Mlle certainty. Et ii the Government appear to have been cooperating, in the ease of Spain, in files or of a new crea- tion of Stock for the Queen's service; and if trash like that which is already circulating in our market under the name of Active and Passive Bonds, and Which are exchangeable for gold, is again to be thrust upon the country, it is quite clear that no relief can be afforded to the commercial interest. The Bank is sufficiently baffled in their efforts to correct the exchanges without

having this of treason to encounter."

Here we have admissions—first, that the 13ank's coffers are low; second, that the foreign exchanges are not buoyant ; third, that the Bank's resources will only be sufficient in case speculation in foreign loans is checked, which speculation, the writer thinks, will be encouraged by the Government. And yet he says that anxiety about the affairs of the Bank is " premature." But the Legislature can provide a " pertnament remedy" for all this mischief. Will the Bank instruct the Morning Post to state what, in the opinion of the Directors that measure should be? The question involves considerations of the utmost importance.