THE COMING COMMERCIAL STORM IN EUROPE. Tan greatest danger to
be apprehended from the impending finan- cial pressure does not lie in the magnitude of the liabilities that will be suddenly brought to the test of reality, vast as that will be. We can only form an imperfect idea of the scale of the account that will have to be balanced in a few months or weeks, with such a de- plorable shortness of cash to liquidate the balance. In a general way, we can see it from the continually rising price of money. London is following the example of Amsterdam and Hamburg ; and in Turin, where our old standard of " legal " interest has been retained at 5 per cent, the Government is compelled to throw the trade open, or to see capital leaving a country in which it is peremptorily needed for improvement. France has been buy- ing gold at any price, in order to dress the returns of the Bank for the monthlyparade, and to conceal the real state of the deficit in France. But we find that there is the same deficit in Europe, the same in America, the same throughout the commercial world. Now, in America the power of production is capable of an indefinite and not tardy expansion ; notwithstanding the high rate of interest, American gold has not ceased to cross the Atlantic : so that it is not America who is causing the drain. Neither is it England; where the proportion of transactions based on real exchanges at a profit is large almost beyond precedent ; a fact known by the details of commerce, and attested by the extraordinarily small proportion of bankruptcies after so prolonged a " tightness" of the money-market. Speak ing generally, and excepting the fictions of positive fraud, our trade is peculiarly genuine. Yet our money is not enough for our purposes. We do not occasion the drain, but suffer it. France does both. She drains us to fill up a constant leak. In France, therefore, the money available is too little for the business on hand ; but the derangement is greater somewhere else. " Where else'?" is a question difficult to answer offhand. Austria and Ilussia could probably account for some of the gold absorbed. We might probably find the place of the greatest deficiency by tracing the rate of the interest actually paid; but it is not necessary. We see clearly enough that there is more business on hand than capital to cover it.
If there were a surplus capital in Europe, we could suffer the
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superabundance to be set aside and invested in works of prospec- tive utility : since that is not so, if we are engaged on works of purely prospective utility, we may at once perceive that they will make no present return for the capital laid out upon them ; the circle of exchanges will stop at such parts ; and those who are risking their property will find that, although wealthy at some future date, they are beggars today. Those classes who risk their industry depend upon the present : if interruption in the cireb3 of
i returns is ruin to the humble capitalist, it is starvation to the ar- tisan and labourer.
Is there any reason to suppose that a large part of the trade of Europe is in this state of present sterility—that it is, for present purposes, so far baseless and unreal ? Yes, we have many evi- dences of it.' If some Of the great credit societies of Paris are based upon real transactions, with sufficient security, others, we know, are not so. One of the innumerable " companies " of Paris is before the world just now in conjunction with the frauds of two of its original directors ; and the capital implicated in the acts of the two men and of other undertakings is stated at 2,000,000/. We could point to several whose operations have not been carded out, but which have absorbed large capital—in the aggregate, millions upon millions sterling. It is in Paris that certain persons of small political credit have got up a credit mobilier for Madrid, where all credit was mobilized long ago in the most ludicrous sense of the words, since Spain cannot keep up the payments of interest on her consolidated interest of old loans. Again, Russia is asking 40,000,000/.--or at present 12,500,0001.—for railways, when rail- ways are everywhere in a state of depression. Austria is seeking a loan in the market. Here are millions upon millions of trading
money which has no solid basis of present supply and demand, no possibility of making a present return. It is in fact absorption of our already insufficient capital in a wide field of unreal commerce. That process cannot go on ; it must stop. But for those who are busily engaged in te trading crowd and turmoil, there is no trustworthy test for offlrbriminating between the true and the false. Numbers are engaged in bona Me labours on behalf of those who are trading in the unreal : the real traders are calcu- lating on payment ; they will be disappointed ; and the suspension of payments, or stoppage, will break the round of industry in
many a circle of genuine ;rade. This is hard ; it will create dis- content sharpened by injustice and by hunger. This, however, is not the worst danger. Those who suffer pinching even in food can bear the hardship if others bear it with them. But in the country which sees the greatest activity in the speculative trade, there is not the union of classes which would soften disappointment and encourage fortitude. The Go- vernment has at once professedly confronted the " seven mil- lions " and confronted itself with the people. It has courted the liabilities of a democracy without its safeguards. Even that is not the worst. As a rule, the employing classes: have cast their lot with the Government, and they dread its re- moval, for fear of disturbance and loss. The employing classes have been intent on profits, on interest for money lent. They have pushed these speculations, which must be brought suddenly to account. They have at the same time eschewed the dangerous democracy—have stood aloof from the many ; even more so than the Elected of December. Any general suspension of payments would afflict one class as much as another, but the working classes would not think so. In the middle class they see those who have made money by the ups and downs of the market—speculators who have risked suspension of industry, which is starvation, in the lust of lucre—a servile horde who worship an arbitrary govern- ment for the sake of pelf—the authors of ruin and starvation. The worst incident of all is this simple fact of separation of in- terests, in ideas, in feelings.
And if there were any general trouble in France—any of the discontent which is begotten by arrested wages and dear bread-- it is that separation between the classes of the people which would be a more dangerous element in the economic storm than even the severance of Government from the people. Alone, un- guided, suspecting those who should lead and those who should aid, the multitude in their suffering would not be wise. We speak conditionally, for what human foresight can reckon the events of the coming months ? but truly we shall be glad to see the sun of spring returning upon Europe.
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