Tae announcement that the Bank of England bad decided to hold a portion of its reserve in silver, which, flashed through the telegraph, seemed to indicate a partial return to the system of hi-metallism, loses muck of its importance when plainly stated. The Economist describes the action of the Bank with regard to silver since the passing of Sir Robert Peol's Act of 1844, By that Act the standing of silver as bullion was distinctly acknow-lodged, and the Bank, which bad generally eld a varying quantity of that metal, was permitted to continue the practice, limiting the amount of silver to one-fourth of that of the gold held in the issue department, This amount was never reached, the highest limit being in September, 1846, when the Bank held in silver 159% of the total bullion reserve. From this point it declined, till fox a series of seven years from 1858 actually no silver was held in the issue department, when again under peculiar circumstances it commenced to appear fora short time.- Like maw other things in the internal economy of the Bank of England, which appear inexplicable to the general public, this disuse of silver bullion did vot proceed from any abstract policy or from any desire to uphold a doctrine, It was done from purely mercantile considera. tions, the price of silver having reached a point in 1853 which made dealing in it unprofitable. In 1860-1861 the Bank returns again show that a considerable quantity of silver was held by the Bank, amounting in January, 1861, to 14% of the entire stock of bullion. The explanation in this case, as before, was that the Bark fouud it profitable to do so, The Bank of France bad been inconvenienced by the coinage system of the country, and found its stock of gold below its requirements the Bank of Eogland lent it about silver deposited in its vaults, the security being at the time a perfectly safe one as the ruling price of silver made its absorption in the ordinary course of business perfectly certain, The amount dwindled down by degrees, and appears for the last time in an item of £70,000 in the returns of the 3rd July, 1861. The Bank thinks that possibly the time has arrived when it may make a little more profit out of the holding of silver bullion, and is prepared to do so, should such an occasion as happened in 1860 again arrive. Doubtless, as before, it will take care of its own interests, and see that the security against loss is absolute, and that it is not to be induced to hold portion of its reserve in silver, merely in the hope of giving that moral a fictitious value in the market. Such fa course would be contrary to the traditions of the Bank; and it may safely be assumed that in return ing to an old' practice it will do so in the old lines, and only when the security is beyond question. At the present moment it may be said that England is more deeply interested in the silver question than any other nation, and there is, therefore, aninducement for English financiers to favour any suggestion which may lead to an improved market for the metal, with out entering on the quagmire of hi-metallism. A continually increasing proportion of the trade of England is carried on with India and the East, while its trade with the Continent is, if anything, showing a tendency to decrease. The need of remittances from India for the purpose of paying dividends and other expenses of Government causes a large amount of Government paper to be placed on the market in London against silver in India. Under certain conditions of trade it might happen that it would be profitable to remit the bullion direct from India, This condition does not, however, prevail, and in any case the capacity of Europe to take off silver is limited. Even should the Continent universally return to the system of hi-metallism, the amount of silver which it would be capable of absorbing would have its limits, and would certainly ba affected by the general decrease of trade with Bugland. Wo can imagine, therefore, that for a time the exchange with India would be improved, and that a rupee would fetch on the London market something approaching to the equivalent of its old value. That this would result in a flow of silver to Europe we may assume as certain. For a time silver would doubtless maintain its old value, bat as the absorbing powers of the hi-metallic countries became glatted, the silver remaining outside would be in a worse position than ever. It would be legally money, but actually dross, something like the condition of paper money in countries where its issue is nob surrounded with checks asto its amount,
Text read from the printed page and cleaned; old type leaves the occasional error.