TOPICS OF THE DAY.
MONEY-MARKET PROSPECTS.
DIE City is less made uneasy by the actual approach of the mo- netary storm than it was a few weeks back by the dead tranquil- lity which usually precedes the storm ; and the reason for the seeming inconsistency is said to be, that the causes of the embar- rassment are understood, and are in their nature transitory. Per- haps the instincts of the City have gone even beyond its articulate philosophy, and have perceived that the causes of the trouble must work out their own cure, since they are so passably understood. The chief of the admitted causes are—cross-currents of bullion disturbing the circulating medium of Europe; over-speculation on the Continent, especially, in France and Germany; and a vast expansion of legitimate trade. The cross and counter currents of bullion are very clearly traced. Gold, continually rising from the sources of Australia and California, flows into England and America ; thence a large portion flows into France- and Germany, displacing silver, and materially disturbing the ordinary, calculations of exchange. The silver has flowed from France into England, and thence to India and China. As much as 2,550,000/. has been shipped from England by the last three mails, and hence it is supposed that the - demand for the East must be pretty well satisfied : but since the influx of gold continues, and is likely to continue, the wise are anticipating a depreciation of gold in comparison with silver; and one gentleman proposes to substitute for the changing gold standard a stable silver standard. Theoretical expedients are seldom framed with sufficient sagacity to counteract natural changes. Experience has suggested the very process which the gold-discoveries have facilitated—the extension of a gold circula- tion throughout the .commercial world. It has been in great part effected in America ; it was taking place in the Levant, before the new movement in France, Belgium, and Germany ; and the proper rule would seem to be, to go right through in the same course. If silver is appreciated in proportion to gold—and it is inconvenient to have the legal token, designed for the convenience .of small change, encroaching on the business of a standard—the right way would be to recent the silver on a proper adjustment of its relative value, releasing a. trifle more for the ordinary con- sumption of silver spoons, forks, and teapots,—just the plan adopted by the Hindoos. No confusion can arise where there is any one chosen standard of value. If gold is produced faster than we have ever known it, the supply scarcely keeps pace with the extension of English commeroe, with the probable growth of English agriculture ; and if goods are produced faster than gold, and both exceed the ratio of increase in the population, the one great consequence will be, that necessaries and comforts will be cheaper than aver, that everybody will be able to put money in his parse, and that the million may look forward to "living like princes."
The over-speculation is a formidable item in the list of "causes," and the least definable. In France it has acquired a peculiar breadth and activity from the nature of the new societies. The model of these is the Societe de Credit Mobilier ; which, with a capital of 2,400,0001., has the power of borrowing or receiving in deposit to the amount of 24,000,0001., and the power of advan- cing to a like amount. In this organization the great banker Pereira contrived a machinery for executing what banks can- not do so vigorously—an agency for investment. He drew out the hoards of the saving French, threw dormant capital into great enterprises ; and France experiences, as if by miracle, the profits and pleasures of a great commercial country. Other societies were established on this model,—such as the "Societe des Clip- pers Francais," which was to have created a new mercantile ma- rine for France. Not long since it was reported that the Clipper Society had negotiated the purchase of certain English ships, and then paid the forfeit of 10,000/. rather than carry out the bargain. The Society, therefore, has not developed itself: but it has had ex- Ponces, and not to develop is to lose money. Others of the class, less plausible from the first, have been even less fortunate. Their shares are not floating. It is well known also, that men of " notorious " character have entered into the trade of making these societies, not only in France but in neighbouring countries ; and the race of Montague Tigg has enjoyed a frightful success in commercial tours starting from Paris. Even those societies that have been more respectable cannot be supposed to have escaped mismanage- ment. M. Pereire is a great banker ; he has a perfect knowledge of commercial opportunities—of foreign countries, their resources and risks—of individuals abroad and at home, their -charac- ter, ea,pacity, and means. He is an agent for investment, .whe, humau fallibility excepted, may be largely trusted. But there is many a degree between the real Pereire and the pseudo Pereira, and so down to the Montague Tigg. It is as impossible to draw the line between the capitalist states-
man and -the capitalist visionary, or the Brummagem knave, . . as it is to define the exact and proportionate amounts of the
honest and substantial speculation, -the foolish speculation, and the knavish speculation. We only know that all have been on a vast scale, and moving with all the fervour of a new fashion. We know that the time has approached -when the enhancement of discount will abruptly pull up many schemers, and will compel them to close their accounts ; and we may be sure that the defalca- tion will cause a sudden abstraction of means from a multitude of honest and substantial persons. The panic will aggravate its -own mischief. But here again the safest course -will be, -if-possible, to steer straight through ; to assist the Pereires of France in keep- ing on mercantile processes that will make a profitable return, undiverted and uninterrupted by the disturbances consequent on the bursting of bubble speculations. The extension of trade abroad has probably had an effect in increasing the demand for capital even beyond the degree already calculated. It is perceived at once that English shipping, Eng- lish agents, and English merchantsp are moving in every part of the world, even the most remote. -3,But there is reason to appre- • hend, that not only is English &pit a required for this roaming British population and this British 'apparatus, but that the trade of the foreigners themselves; lb all those great extensions, is carried on, at least in greutpart, by British capital. We know that the trade of Russia Nresaio, even in the interior, even on the estates of noblemen. Ilnemestionably, English capital will find its way into the hands of the Hopes and Pereires who are about to construct railways for Russia and work them on an eighty-one years' lease. It has been said that if our fleet were to born-- bard New York, for every American gold eagle destroyed an English five-pound note would be destroyed. If our shipping has penetrated to the inner waters of North America, the return trade depends upon English capital. The new commerce of China, or of India, is built upon the foundation of English ca- pital; and the principle holds good all round. But again, the only method of retrieving the wealth sunk, is to go on, and to remove every impediment which can be removed from the com- pletion of the circle. This necessity throws upon the men whom the force of circumstances makes the leading administrators in the government of commerce, an unusual responsibility in ex- ercising their judgment and their discrimination—to refuse as- sistance, however urgent the appeal, where the return of the ca- pital is doubtful—to accord it without stint wherever the course, however protracted, is clear and secure.
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