The Evening Star THURSDAY, JULY 8, 1875.

Evening Star, Issue 3860, 8 July 1875, Page 2

The Evening Star THURSDAY, JULY 8, 1875.

War and the probability of war are written about in the journals of Europe almost as lightly as the announcement of a public dinner. It is not often that its indirect effects are dis cussed. These, although absolutely the most serious socially, are treated as secondary matters. Perhaps it may be objected that the destruction of human life is of more importance than depression of trade, ruin of merchants and manufacturers, and reducing tens of millions of men, women, and children to poverty, oftentimes bordering on destitution. We do not undervalue the carnage of battle; but it must be remembered that those in European armies who suffer, are men who may be considered dead to society, as they have been withdrawn from industrial life and set apart for the very purpose that has led to their horrible deaths. We have often drawn attention to the contingent evils that war induces, and shown that the interests of the whole human race are best conserved through peace. The high-flown bombast which has connected war with the idea of “ glory ” —a most unmeaning word, for which it would be wise to substitute "horror”—has induced false comparative estimates of the value of hnman duties; and the artizan who builds a work of art and beauty at great cost of training, patience, and mechanical skill, is regarded as less honorably employed than the soldier who ruthlessly destroys in a few minutes the labor of years. Perhaps it is necessary to make this artificial distinction, false as it is, in order to reconcile men to a warrior’s life. But it has the bad effect of leading to a distaste for studies connected with the science of every-day life, under the idea that money-grubbing, as it is termed, in contempt, and all connected with it, is degrading. Through this false idea and the distate for examining principles, abuses have grown up that are with difficulty corrected. What the ‘ Daily News ’ says of the effect of war upon the money market is perfectly true; but like consequences follow from other causes, as for instance from a panic in Wall street, New York. The shaking, like an earthquake, is not confined to the centre of disturbance, but extends over vast areas. In fact, a money panic is felt in every nook where a merchant is to be found. It affects the income of the squatter and the farmer, the land-owner and the stockholder, the wholesale and retail traders, mechanics and laborers. The following extract is worth considering :

The recent alarming telegrams from Berlin on the subject of an approaching war have not been without their effect on trade, and a writer in the ‘ Daily News ’ thus draws attention to what might be the state of the monetary affairs of this country in the event of a sudden outbreak'“ We wish it could be added that the money market is always so well organised against every cause of disturbance that the consequent evils for all sound business men would, in the event of a disturbance, be reduced to a minimum amount. But this consideration only brings into view the existence of a great predisposing cause of disturbance, which aggravates every symptom of danger, however faint. This predisposing cause is the permanent weakness of the Bank reserve now kept, according to the present system. Wo have often had occasion to dwell on this disagreeable feature as a constant cause of violent, extreme, and needless fluctuations in the value of money, but the evil remains unredressed, and now wemay see how we should stand in the event of anything serious coming of the present alarm. We confess we are afraid to use the language which would alone fitly describe the position. The reserve of notes in the Bank of England by the last account was under eight millions sterling, this sum being practically the only reserve against the immense liabilities of all English bankers, estimated to amount to from six to eight hundred millions. The New York banks, with far smaller liabilities, held more than this reserve just before the panic of 1873, but good and bad were alike overwhelmed in that panic. It is not pleasant to think of such a reserve when even the slightest whisper of disturbance is breathed, nor is any consolation afforded by considering the results of former experience. Sup. posing only that commotion takes place

thaa what was cauMd by the approach of the war of 1870, the event we may expect would be a reduction |h* present small reserve by ab least one-half. At tne end of June, 1870, the reserve of notes In the msv«*n2J^ ai ? men * i BmA of England was £12,665,000; by the Brd August following this sum was reduced to £8.537,000, or a reduction or four millions sterling within a month, in consequence of an export of bullion to the Continent determined by the approach and actual outbreak of war. At the same time, as already stated, the Bank rate was swiftly raised from three to six per cent., although at the worst the reserve remained larger than it now is before any commotion has hegnn. If any similar contingency should apw befall, the reserve of notes in the Bank of England being now only eight millions would almost immediately sink to four millions, and it would clearly be difficult to avert a panic. We need hardly say we expect no such contingency, as wo cannot believe in the possibility of a war without a pretext, and at the bidding of tho victor in so recent and so great a strife as that of 1870-71. But the hare suggestion of the contingency ought to recall attention to our si ate of preparation for unforeseen accidents, and show that they axe always so near happening that they should never be left out of sight. Unfortunately, by onr present system, wo do leave them out of sight, aud some day or other, unless an improvement is meanwhile effected, the country most assuredly will be involved in some great financial disaster.”