“The Press” In 1866

Press, Volume CV, Issue 31003, 8 March 1966, Page 16

“The Press” In 1866

March 8 OVERSEAS BORROWING.—As we are looking to the English money market for the capital necessary to enable us to construct our railways, it may be interesting to glance at the state of money matters on the other side of the world. The rate of discount which remained so high for so long a period during 1864-5, fell at last to a moderate rate: but within two or three months rose again to seven per cent., and still by the last advices stood at six per cent. Why was this? It is usual for money after a crisis to stand at a low figure for some time, owing to the destruction of all specu1

lative enterprise which has taken place during the crisis. The rapid recurrence therefore of a high rate of interest was somewhat peculiar and unexpected. It was, however, observed that almost all the increased advances required were for home use—mainly, as was supposed, for the payment of wages. The trade returns for November, which had been recently published, explain the phenomenon. Manufacturing industry of all kinds has made a sudden start, and demand for goods from all parts of the world called for the employment of every spare hand—in other words, for the supply of large advances to manufacturers for wages. f '<