The Express.
London, England, 1866-05-11 00:00:00

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posits. The effect of the changes showtOi ply
that the sum paid in to the credit of santen-
ment balance has been chiefly paid out ilisPensseo
on mercantile or "other" securities, the increase
in which is 483,822/. The Bank being now the
only free diseounter, and it being certain that the
prevailing apprehension will cause a rapid increase
of the pressure now shown to have set in, it be-
comes a most serious question how long that esta-
blishment will be able to meet the warning demands
upon it from every side, especially from private
and joint stock banks anxious to prepare for even-
tualities. We may expect to see the advances on
private securities rise instantly and greatly, and
though the drain thus occasioned upon the reserve
will be mitigated—as it was in 1847 and 1887—
in proportion as the funds withdrawn from one de-
partment of the Bank are relodged with it as de-
posits, it must be borne in mind that on both the
previous occasions of crisis referred to there was
found only one inevitable issue to this see-saw
process, and that was an ultimate complete ex-
haustion of the legal resources of the Bank. More-
over, in times like the present sovereigns are
usually drafted away in great quantities by bankers,
by way of precaution—no matter if they are to be
returned within a few weeks with the boxes un-
opened.
" •

Assuming that these necessarily gloomy views are
correct—and only a strong conviction of public
duty impels ua to follow them out to their logical I
sequel—we may expect to see immediately a run
upon numerous banks, the suspension of several,
and many failures in the mercantile world. The
great question then arises—is all this ruin neoes-
sary, or is it preventible ? One essential feature
of the present crisis must be kept steadfastly in ,
view, for it is our sheet-anchor in the storm.
There is no foreign drain. So far as the foreign
movement is concerned, gold is rather flowing into '
the Bank than out of it, as is evidenced by the ;
operations at the bullion-office yesterday, which
consisted of a purchase of 57,0001. in bar gold.
The exchanges are already turning in our
favour, although the Bank directors, doubtless
from unwillingness to stimulate fresh alarm,
have refrained from raising the rate of dis-
count beyond 8 per cent., notwithstanding the
general expectation that it would have been
fixed at 9. In fine, all fresh foreign commitments
are at an end, and every outlet is being stopped as
fast as possible under the sheer pressure of the
times. We arrive, then, at this -result—the dis-
turbance is solely internal, and is being aggravated
into absolute panic by the stringent operation of
the Act of 1844. While trade is being stricken
with paralysis through the fear of being unable to
obtain the requisite amount of the circulating me-
dium, that Act imposes upon the Bank of
England, not the duty of assuaging the
throes of commerce, but that of combating
its every demand with precisely the same weapons
with which it would endeavour to stave off a
foreign drain. Events move with extraordinary
swiftness in these days, and we shall be surprised
if, within a comparatively few hours, the Bank Act
is not for the third time rent in twain, with the
unanimous concurrence of a suffering community.
Instant measures, in our opinion, are absolutely
essential. Prudent bankers, well aware that in
these times they cannot obtain any large advances
upon even the best bills, have yet relied implicitly
upon their government securities, but we are
sorry to believe that, according to present ap-
pearances, even government securities will be found
unsaleable for rash, as they were in 1857. Con-
sidering the limited resources of the Stock Ex-
change, especially at a time of panic, this result
cannot be greatly wondered at. This point reached,
how can bankers, no matter how solvent, possibly
meet a prolonged run upon them ? There is, in
our deliberate opinion, but one mode of escape from
the impending difficulty, and it will be a great pity
if the seemingbut deceptive sufficiency of the reserve
still in the possession of the Bank delays its adop-
tion. If the bankers of this metropolis are
wise, they will, before the area of lose be-
comes needlessly extended, and before the
panic grows uncontrollable, organise an in-
, fluential deputation, proceed without delay
to government, and urge an immediate relaxation
: of the Act of 1844. If their hands are strengthened
by the instant co-operation of influential deputa-
tions from Liverpool, Manchester, and other great
provincial towns, so much the better. The counter-
; argument of those who would ruthlessly see the
whole of the trade and finance of this empire sacri-
ficed to a mere currency crotchet will, of course, be
I that the relaxation of the Act will be the signal for
a renewed export of gold. The answer is, as already
stated, that the exchanges are improving, foreign
commitments stopped, and gold coming in ; but,
if further safeguards against this imaginary
• danger are deemed desirable, let the issue
,of the letter of relaxation be accompanied by
a recommendation or suggestion to the Bank of
I England that the minimum rate of discount to be
charged in the event of an extra legal issue of
notes actually taking place, shall be 9, or even 10
per cent. What commerce wants is a definite and
explicit assurance that it shall not be strangled
through an absolute dearth of that circulating
medium which is its very breath. Merchants will
scarcely care what rate they pay ; they only require
to know that their solid securities shall be pre-
; served from inconvertibility resulting entirely from
the operation of our cast-iron currency law.

OUR CONTEMPORARIES.
(THIS DAY.)

THE FILMIAL CRISIS.

It would be idle to deny, the Times remarks, that
the stoppage of such a firm as that of Overend, Gurney,
and Co. will produce general and wide-spread incon-
venience. The company was practically the banker of the
merchantswho discounted their bills at its establishment,
and the annoyance caused by the sudden interruption of a
great businees—to put it no higher—must be extreme.
There is no reason, however, why the panic which has
besot the Stock Market during the present week should
I .
I be intensified by this event, still less would it justify •
general want of confidence in all departments of cons.
meree. The suspension of Overend, Gurney, and Co.
is due to faults from which all but the most
speculative of financial companies are free. In the
leading article columns of the Thies it is observed
that only men who possess such information and experience
as the governors of the Bank of England can determine
whether it is the case that acceptances of persons of un-
questionable responsibility cannot be discounted solely in
consequence of the pressure upon the market ooessioned
by the stoppage of the greatest of the discount houses; and
that the action with the government must be left to them ;
but in the City article it is directly urged that this morn-
ing, without the slightest avoidable delay, the leading
institutions and firms who see the jeopardy of the moment
shouldforma deputation to the Chaneellorof the Exchequer,
witha request that he should authorise the Bank of England
to issue interest-bearing poet notes in the shape of
ordinary bank post bills, either at the customary seven
days or thirty days, or for any other period that might be
considered better, to any extent they may deem 111103•1111ry
and prudent upon unquestionable security. If this or
some analogous request be axeded to there will be reason
to expect an immediate subsidence of all unnecessary