than it was last, as the following figures show. A great many of these are doubtless partly subscribed for in this country and partly abroad, but the figures may be taken as a fair index of the extent of the demands of this description : Capital applications for new concerns to, say September, 1882 To corresponding date in 1881 £93,000,000 Thus, both from the diminution in the business done, as shown by the Clearing-house returns, and from the proposals to set capital fast in new undertakings, as shown by the decrease in the applications to the public on account of new undertakings, we might expect the demand for accommodation this year to be smaller this year than last, and consequently the stringency in the market to be less, especially when we couple these points with the fact that the supply of loanable capital in the hands of the banks is larger. But to confine our view to these three points alone, important as they are, would be to omit very important factors, in some respects the most important factors of the whole from consideration. It is not only the supply of loanable capital, nor the demand for the same, either together or separately, which regulate the rate charged for the use of it so much as the amount of available reserve, that is to say, the quantity lying out of use at any given time. And in this country the only large sum of unused money lying unused at any time is the reserve of the Bank of England. The arrangements of our money market for the employment of capital up to the last point are so complete, and the competition between those who deal in the use of the same is so keen, that it may broadly be taken that there is no very considerable amount of loanable capital out of use, at some rate or other, in London at any time. The unused margin is always very narrow. It cannot even be measured by the amount of the bankers' balances with the Bank of England. The bank itself lends out as much of these sums as it can spare, and it holds, so to say, its reserve to meet its own requirements as well as those which the bankers may make on it. At this time of year the reserve of the Bank of England is always liable to have very serious deductions made from it, as the following figures, which refer to the three previous years, show: BANK OF ENGLAND-RESERVE-Autumn 1879, and 1880, The great diminution in the reserve in 1879 and 1880 was connected with the demands of specie for export to the United States, which followed on the extremely bad harvests of those years. But though we may not be exposed to this demand on the present occasion, a reserve of £11,000,000, which was the figure on September 6th this year, does not leave a very large margin to draw on. If we place the figures of the reserve by themselves for comparison we shall feel at once how small they are this If we look to France we shall see much the same features exhibited there as in this country. As the accounts of the Bank of France are made up in a different manner from those of the Bank of England we shall do best in its case to direct our attention to the amount of specie held by that bank. The following figures show the specie reserve of the Bank of France in September, October, and early December for the last three years. It will be seen that the same influence extends there also. In France, as in England, the great diminution in 1879 and 1880 is attributable to the demands on American account. BANK OF FRANCE-CASH HELD-Autumn, 1879, 1880. The bank is stated to have continued to increase its stock of gold at this time, in 1881, by retaining as far as possible the gold received in its business or paid to it on account of taxes through the Receivers-General. This accounts for the amount at the latter date in that year. The specie reserve of the Bank of France amounted in round figures to £86,000,000 on the 7th September this year. Again, if we look to the Bank of Germany, we shall find a corresponding pressure existing there. The regulations under which the business of the Bank of Germany is carried on differ from those which govern the Bank of England and the Bank of France. The German Bank Act corresponds in some respects rather closely with that under which the business of the Bank of England is carried on-but there is one very important difference in it. A supension of the Bank Act in England is necessary should that bank require to issue notes beyond the limit prescribed by the Act of 1844. In Germany, however, when the bank requires to exceed the fixed limit, the law permits it to do so on paying a tax to the Government on the excess amount. The following figures show the "note reserve," as it is called, of the Bank of Germany, that is to say, the amount of notes it is authorised to issue without payment of tax, in the autumn of that year and the corresponding date in this. It will be seen that the note reserve starts from a lower level this year than it did last, and it was at that time drawn upon smartly before the beginning of October : Judging by these proportions, the bank is more likely to find itself with its note reserve in a deficiency this year than last. No sketch of the position of the English money market would be complete at the present time without some reference to the position in New York. The law under which the Associated Banks at New York work corresponds to that in force in Germany in one point, that it requires the banks to keep a reserve fixed in proportion to their liabilities. We give the figures of the first returns in September now, and at the corresponding date last year : Converting American currency into English money at 4s. per dollar. 785,000 Both years, it will be observed, there is a deficiency in the legal reserve. This year it was less than last, but the pressure on the New York banks depends greatly on the demands caused by the harvest in the Western States, which naturally varies slightly with the seasons. On considering the facts thus brought together, we shall arrive at the conclusion that the annual autumnal demand, a demand regulated by the harvest requirements of the world, will this year fall on banks whose reserves are, with the exception of the Bank of France, lower than last year. The only method by which these banks can protect their reserve is by raising the rate of discount, and we must therefore expect a somewhat stiff rate to prevail. THE HARVEST CF 18.2. BEFORE proceeding to deal with the probable quantities and qualities of this year's European harvest it is desirable to point out that in one of the tables furnished last month of the average areas under the different grain crops, the acreages of maize and rye were transposed in the instance of the United States, where the average extent of land sown with maize may now be set down at 60,000,000 acres, and that with rye at 1,800,000 |