544 



THE FARMER*S MAGAZINE. 



THE PRICE OF MONEY AND THE PRICE OF CORN. 



We aijpear to be approaching another of those mone- 

 tary crises, which from time to time bave of late years 

 occurred, and thrown the trade and commerce of the 

 country into the convulsions of a panic, while altering 

 for the moment the relative value of every commodity of 

 native or foreign production. The cause of the present 

 dilemma of the Bank of England is as follows : It ap- 

 pears that the Trench Government has been "out- 

 running the constable,'' or, in plain parlance, spending 

 its money too freely of late, so that its financial system 

 has become greatly embarrassed, the specie having dis- 

 appeared from the Bank of France. It has, therefore, 

 become imperative to procure supplies of gold any 

 where and at any rate; and in order to eflfect this, 

 recourse has been had to an expedient practised so 

 successfully in 1855. It is this : Agents are employed 

 to purchase on the continent all the bills of exchange at 

 short date upon London that they can procure. Other 

 agents are also employed in London, to purchase similar 

 bills at long dates ; and both, as procured, are dis- 

 counted at the Bank of England, or in Lombard-street, 

 and the proceeds, in bullion, instantly transmitted 

 to the Bank of France. We have said that the ope- 

 ration proved successful, but it was at a heavy cost ; 

 for in 1855 the Bank of France paid a premium on gold 

 of i£'410,000in a few months, being at the rate of 1| 

 per cent, on £27,360,000 sterling. 



This operation, we understand, is now in course of 

 being repeated by the French Government; and the 

 consequence is, that the Bank of England finds its 

 specie and bullion so rapidly disappearing, as to render 

 it absolutely necessary to put a stop to it, if possible, by 

 raising the rate of discount to six per cent. That 

 this, or some other stringent measure is, necessary will 

 appear by looking at the Bank account published on 

 Saturday last. From this we learn there are upwards 

 of forty-five millions of liabilities : — 



Notes issued ......... £26,997.656 



Public Deposits 5,804,822 



Private Do 12,603,792 



45.406,270 

 Now these are subject to be called for at any 

 moment, the Banking Department holding only 

 £792,156 in specie to meet it. For although the Bank 

 of Issue possesses upwards of twelve millions in bullion 

 and specie, not one farthing of that sum can the Bank- 

 ing Department touch, unless by virtue of an act of 

 Parliament, or an order in Council, and for the latter 

 the prime minister must get a bill of indemnity when 

 Parliament meets. This is one more — the third — illus- 

 tration of the Currency Bill of 1844. The Banking 

 Department of the Bank of England is at this moment 

 insolvent, and if called upon would not be able to pay 

 more than 4d. in the pound ! And this state of things 

 exists by virtue of an act of Parliament, which sepa- 



rates the two departments of the Bank of England as 

 efiectually as if they belonged to two rival houses of 

 business, living in difiierent places, and having no con- 

 nection whatever the one with the other. 



Twice before have we seen the Bank of England com- 

 pelled to go to the Prime Minister and beg for an in- 

 fringement of the Act, in permission to avail itself of 

 the specie in the Issue department. It becomes 

 daily more probable that another similar application 

 must be made in order to prevent a panic which would 

 throw the whole trade and commerce of the country 

 into confusion, causing the utter ruin of thousands. For, 

 it is by no means likely that the advance in the rate of 

 discount will d'eter the Bank of France from pursuing 

 the plan it has adopted, until its want of specie is satis- 

 fied. Gold it must have, let the price be what it may > 

 and the only efi'ect of the rise will be to harass and 

 check the commerce and trade of this country, and 

 throw every department of industry into a paroxysm of 

 distress. 



The corn market is one of the first to feel the efi'ect 

 of this measure. We are told that orders for corn from 

 the United States were made up on Thursday ; but on 

 learning the proceedings of the Bank, the letters were 

 reopened and a large reduction made in the ofifers, both 

 in regard to price and quantity. The stagnation, too, 

 on the market of Friday was wholly owing to the same 

 cause; and we may anticipate a still greater impression 

 on the trade for the present, it being certain that a 

 large quantity of foreign wheat must be thrown upon 

 the market for sale, as the bills on consignments be- 

 come due. This will also check, if not wholly prevent, 

 further importations, which under present circum- 

 stances would be a heavy calamity; for there is 

 increasing reason for believing that a serious de- 

 ficiency exists in the produce of wheat of the late 

 harvest, arising not only from the smallness of the 

 acreage yield, and the great quantity destroyed 

 by the weather, or from not having properly ripened, 

 but still more from the enormous deficiency in the pro- 

 duce of flour from a given quantity of wheat. Thus, on 

 Monday last, we were told by a miller, that finding his 

 mixed wheats yielded no profit, and being doubtful 

 whether it arose from the inferiority of his English or 

 the high price of his foreign wheat, he put it to the 

 test by grinding 20 quarters of a general run of home- 

 grown corn by itself. To his dismay and astonishment, 

 instead of obtaining, as he ought to have done from 

 good wheat 28 sacks, of flour from|the 20 quarters, he had 

 only 22 sacks ! In another instance, a miller purchased 

 a parcel of wheat which was delivered by xoeight at 

 631bs. per nominal bushel. We saw this wheat at the 

 time it was purchased, and the buyer considered it 

 rather above par in quality, for the season, and sup- 

 posed that it would have weighed about 59 or 601bs . 



