The Press.
London, England, 1857-11-14 00:00:00

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FRIDAY EVENING.
Tins week will be memorable in commercial annals.
It opened on Monday by the Bank advancing the
rate of discount from nine per cent., at which it was
fixed only on the preceding Thursday, to the unpre-
cedented amount of ten per cent. Then followed the
suspension of the Liverpool Borough Bank, the
Western Bank of Scotland, the City of Glasgow
Bank, the great bill-brokers, Messrs. Saunderson,
Sandemann, and Co., and a whole host of commercial
firms more or less connected with the American trade
and with the trade in produce. The Bank of France in-
creased its rate of discount from seven and a half per
cent. to ten per cent. for three months' paper, making
a discrimination between the two extremes for
shorter bills. The failure of the Scotch banks
caused a heavy run upon the other establishments in
Glasgow, Edinburgh, Paisley, and elsewhere, which
drained the Bank of nearly 2,000,0001. in sovereigns;
whilst the applications for discounts and advances
were so heavy as to reduce the reserve of notes to
an extremely low point, and to compel the Bank to
dispose of a large amount of Government Securities.
The effect of this double drain may be estimated
from the character of the weekly return analysed
below. Things were rapidly approaching a dead
lock, and a panic was imminent, when, following the
well-known precedent of 1847, the interference of
the Government was sought, and the result was the
appearance of an official letter from the Premier and
the Chancellor of the Exchequer yesterday, autho-
rising the Bank Directors, if necessary, to increase their
issue of notes, upon approved securities, without
reference to the stock of bullion. The letter will be
found in another column. It is a clear suspension
of the vital principle of the Act of 1844, and of course
involves an early meeting of Parliament in order
to pass a bill of indemnity for any excess in the legal
issues. A relaxing power vested in the Government
would have rendered the interference of the Legis-
lature unnecessary. Such a power was proposed in
the bill of 1844, but the clause was rejected. After
the experience of 1847, and now of 1857, it is pro-
bable, if no other alterations are made in the law,
that this provision, at least, will be adopted.

1117

The immediate effect of the Government letter
yesterday was beneficial ; it arrested the demand for
money, which bad previously been excessive and
unreasonable, and manifestly increased confidence
among the commercial community. The fall in
produce was suspended, the funds advanced, shares
took a decidedly upward movement, and discounts
were much more freely obtained. Such was the
result yesterday. To-day the result was rather less
satisfactory, though still good, because most persons
appeared to expect improvement to come imme-
diately, instead of gradually.
We have before us the latest statements of the
condition of the Bank of England and of the Bank
of France, and these will assist in comprehending
the character of the emergency, particularly so far
as it has relation to the stocks of bullion. That of
the Bank of England for the week ending the
11th instant, Wednesday last, which obviously
determined the interposition of the Government,
shows the following changes compared with that for
the week preceding :

Itecrease in Circulation
Increase in Public Deposits
Increase in other Deposits
Decrease in Government Securities
Increase in Other Secarities 3,485,202
Decrease in Bullion

Increase in Rest
Decrease in Reser►e 1,43,882

Bullion in both Departments
Circulation, including Bank Post
Bills 21,016,430
Never in the entire history of the Bank was such a
return as this laid before the commercial world.
The notes in reserve aro absolutely below one
million. They were, on the evening of Wednesday
last, only 957,7101. With such an insignificant
amount in the till it was utterly impossible the
Bank could go on, with the continuous demand made
upon it for discounts and advances. There was
therefore no alternative but to accept the immediate
interference of the Government. That interference
came not a moment too soon. The Bullion at the
same time had fallen to little mote than 7,000,0001.,
the week's drain having absorbed no less than
1,397,0001. It is true that nearly the whole of this
vast sum was withdrawn to enable the Scotch banks
to meet the run upon them for coin, and that it is
likely to come back sooner than if the drain had
been a foreign one ; but it is also true that this
great absorption, in conjunction with the loss of
notes, placed the Bank in a very critical position.
On the other hand, although it is admitted that the
demand for accommodation was, as we have said,
unreasonable and excessive, seeing that it caused the
Private Securities to run up to the unprecedented
amount of 26,000,0001. odd, only 1,000,0001. is ac-
counted for by the addition to the Private Deposits.
This fact denotes that the public mind bad become
thoroughly alarmed at the reduced power of the
Bank to grant facilities, and that large balances of
cash are now held in private bands. Under such
circumstances, the power given to the Bank Directors
to increase their issue of notes was a measure of
simple prudence.
The corresponding return of the Bank of France,
which is made up to yesterday, the 12th instant,
shows the following changes during the month :
Decrease in Circulation
Decrease in Bullion
Decrease in Public Deposits 602,687
Increase in Other Deposits
Decrease in Commercial Discounts 806,779
Decrease in Advances on Public Securities. 1,396
Increase in Advances on Bullion
Increase in Advances on Railway Shares 166,780
Increase in Premiums on Gov. Purchases. 15,111
Circulation (Nov. 12th) 23,250,392
Bullion (Nov. 12th)
For the first time in our remembrance the bullion
in the Bank of England is below the stock in the
Bank of France, while the commercial discounts,
usually higher, are now less by nearly 3,000,0001.,
being only 23,541,6941. The French Emperor was,
in the prevent condition of the Bank, clearly justified
in resisting the importunities for giving forced
circulation to the Bank's notes ; while the falling off
in the Bullion also explains the increased rates of
discount now required. That falling off is large,
although 15,0001. was expended in premiums to
maintain it. That trade in France is not active may
be inferred from the large increase made to the Pri-
vate Deposits, and the decrease i❑ the discounts ;
but, on the whole, the return is more favourable than
that of the Bank of England.

As may be expected from the excited state of the
Money Market, there have been great changes in the
value of securities during the week. In Consols there
have been extreme variations between the money price
and the price for account, particularly yesterday,
before the Government letter was announced ; whdst
shares of all descriptions up to yesterday underwert
a most alarming depreciation. A considerable rally
took place, however, the moment it was known that
the Bank had been authorised to increase its issue
of notes.