The Times in its city article dated Satur-aay, 14th Sept., contains the following The Stock-Exchange settlement which has just been concluded shows that the specula ative business which has fora long time been carried on with the aid of the cheap money has for the present, at all events, been to a large extent put estop to. The process by which this hus been brought about is only a repetition of what has been often seen before. Following upon the turn in the tide of commercial prosperity the volume of capital at-the centres increased, and its value fell to the minimum. When money is dear, securities, as a rule, are low in price, a circumstance which many times before has afforded the specula ator a favourable opportunity of making large profits. The autumn of 1873 was the dost time that money was driven up to panic rates, and then it lasted but for a Short period. Again, in December, 1874, 6 per cent. was reached, but that rate only Tasted out the month. From that date 2 per cent. has ruled the longest; a 5 per cent. rate has been found necessary on three occasions, and it was again placed at that figure on the 12th of last month. In the intervals the value of money at the Bank may be said to have averaged 3 per cent. to 3} per cent., and in the open market it has been less. It will thus be seen that since the commencement of 1874 the opportunities of making money by holding stocks even of a high el rowed money have been first the profits der between the yield of interest on the securities and the rate paid for the borrowed money with which they are bought. When comniercial operations dwindle down until the stagnation is reached from which, unhappily, we have hardly begun to emerge, bankers are very glad to lend their deposits upon British "and Indian Government Guaranteed Stocks, and an active business of this nature has been carried on, giving to the banks and, discount houses dividends for their shareholders at a time when it was difficult to see how anything like the old rate of profit could be earned in the half-year. With the aid of the deposits of the public the speculators, as usual, have gone in advance of the investor, appropriating to themselves the double gain of the constantly rising value of the principal sum embarked." There is, however, an end to this as to everything else. The Bank of Eng-Jand on several occasions tried to defeat the tactics of these operators, but the efforts of the Directors have until lately always been frustrated by the unmanageable volume of unemployed capital in the market. While money is to be got on the stocks held for speculative purposes in the open market, the speculators can defy the Bank, whose rate of discount when raised to counteract their operations, as we have seen or, many occasions, was useless while the market rate fell away. The savings of the natica must be gradually used up when no new profits are being made, and from this cause the available supply of money has at length declined to a point which has enabled the Bank to deal successfully with the class of operator referred to. As soon as the Bank discovered that the speculative holders of j these stocks were compelled to have recourse to them, they charged a rate which annihilated the profit which had been for the last three or four years so comfortably gathered in, and the only way out of the difficulty was for the hold-r to sell. The market, however, got wind of the awkward position these gentlemen had at last brought themselves into, and realizing was no easy matter in some cases and quite impossible at the moment in others. The margin demanded by the Bank in addition to the 7 por cent. interest of course enabled the Directors more effectually to cope with those who had for so long fattened ct their expense, and some very audible complaints have been heard against what is considered to be the sharp practice of the chief institution, We are, however, of opinion that the Bank should long ago have demanded a margin, and that those who are now driven into a corner by their greed and want of foresight are paying a just penalty for the rashness which seems always to be engendered sooner or later under the influence of wealth too easily acquired. A severe lesson has, no doubt, been administered in two or three quarters, and both the market for the stocks referred to and also the loan market are in a sounder condition in consequence. The obvious result of this is that more care will be taken in future in lending money in large amounts for such purposes, as it is evident that much of the oscillation in the value of money in this market has been for months past due to the manipulation of a large part of the floating supply of money by speculators who care nothing for the general welfare, but seek only to enrich themselves. Moreover, such business is of no real benefit except to the few who happen to come out of it with ai profit. There is no reproduction of anything by which the country gains, while, as we have seen, there may be much troublesome and useless disturbance of values. Looking at all the circumstances, we can only hope that the Bank will act in the same way again immediately it has the power and perceives that it is being used merely for speculative purposes, which are opposed to the interest of the public, and constitute a dangerous element in a market already sufficiently sensitive when influenced by the operations of legitimate business,
Text read from the printed page and cleaned; old type leaves the occasional error.