A HUNDRED YEARS AGO
[" THE SPECTATOR," JULY IST, 1837.]
The scarcity of money has not in any degree diminished ; rather, indeed, the pressure during the last few days seems to have increased. This state of things is in a great degree attributable to the reluctance which the large discount brokers evince to the transaction of business. It has long been the custom for these capitalists to take large sums on loan from the Bank at low rates of interest, and reap a proportionate advantage from the employment of it by discounting the bills of traders of less known credit, at a higher rate ; thus taking, in effect, a percentage for the guarantee they afforded to the Bank for the safe employment of its capital. The state of commercial affairs is, however, at present such, that more than one large establishment of this nature has determined to restrict itself to the employment of its own capital ; and hence its discount customers are forced to seek elsewhere for that accommodation which its extensive agency in the employment of the capital of others has hitherto enabled it to afford them. A great temporary demand is therefore created for money, while this change in the mode of its employment is going on. The following notice was yesterday issued from the Bank-
" The Governor and Company of the Bank of England do hereby give notice, that the advances in pursuance of their notice of the 1st instant, on bills of exchange not havin3 more than 95 days to run, will be extended to bills not having more than six months to run ; such advances to be repaid on or before July 15th next, with interest at the rate of five per cent. per annum, and to be for sums not less than 2,000/.-" Bank of England, June 29th, 1837."
Previous page