of railroads here or there, and who find nothing simpler than to buy cheap shares in the market for the purpose of outvoting any opponents. It happens that at a meeting of the London Produce Clearing House Company, the chairman defended speculation in words reported as follows:—'Their institution was used by continental bankers, who, when making advances to beet growers, protected themselves against any possible fall in prices before the sugar could be delivered, by selling forward under their guarantee. The most important position of the company was to regulate speculation; and they accomplished this object by simple and effectual means. They believed that their system was a necessity under the new conditions of trade.' To regulate speculation is one thing; to regulate prices is another; but the Produce Clearing House—although it has been called a gambling-table, a Monte Carlo in Mincing Lane, and so on—claims credit for forestalling fluctuations, and softening the effect of extreme and sudden change of prices. As there is the same facility for anticipating a fall as for forestalling a rise, the average of prices is probably not affected.
Change of Policy at the Bank of England.—Mr. Lidderdale, the present Governor of the Bank of England, has made his reign remarkable, not only for his strong grip of the situation when credit was threatened last November, but for another thing as well. This thing is a new policy which he has inaugurated on the part of the Bank of England. For many years the directors steadily refused to give interest on money lodged at the Bank. They regarded the paying of interest by banks on money lodged as a pernicious practice, and one against which they were bound as a matter of principle and policy to set their faces. The result was that for more than twenty years after the crash of 1866, the Bank of England steadily lost power in the market, its Bank rate became more and more nominal—higher and drier above the market rate. As time went on, the outside banks by degrees broke away from the thrall of the Bank rate by refusing to continue the former practice of allowing interest on deposits at just one per cent. less than Bank rate. The terms on which documentary bills could be taken up were also made to conform rather to the rates allowed by the outside banks than to the standard of the Bank of England. After experience of the growing impotence of the Bank of England under the old régime, it was reserved for the present Governor of the Bank, who is a man of exceptional pluck and sagacity, to change the practice of the Bank. The first warnings of this change were conveyed a year or two ago by a statement on the part of the Hampshire County Council, that the Bank of England had agreed not only to receive their money on deposit, but to give them an allowance varying with the opportunities for employing it profitably. Less public, but well-known at the same time, were the similar arrangements made by the Bank with the India Council, for the purpose of keeping within the control of the Bank sums of money which the India Council would otherwise have lent on the market for short periods at market rates, i.e., very much
