The Express.
London, England, 1857-12-05 00:00:00

and Ireland: the letter of the Gann= red

Deputy-Governor thus proceeds :—" This drain;
" was in its nature redden and irresistible,
" and acted necessarily in diminatioa of the
" reserve, which on the I Ith hod issreseed
"to 1,462,0001., and the bullion to 8,886,000 d
" The public became alarmed, large deposits assn.
" maimed in the Bank of England, money desists
" having vast sums lent to them upon call were
" themselves obliged to resort to the Bank of Eng-
" land for increased supplies, and for some days
w nearly the whole of the reqmirements of commerce
" were thrown on the Bank. Thus, on the 12th, it
" discounted and advanced to the among of
w 2,271,0004., which still left a reserve at night of
581,0001."
It is impossible to convey the actual state of things
in fewer or more pregnant words. Talk of hoard-
ing by merchants, indeed I look at the enormous
hoarding of the London bankers as represented by
that vast increase of private deposits in the Bank of
England. Every pound sterling in all those million
was so mach taken from the lending power of '
the discount house*, with whom, in quiet times,
the London bankers keep their deposits at call. The
discount hones found themselves suddenly drained
of all their resources ; the whole lending power
of this vast mercantile community was practically
centered in the Bank alone, and use lending power
of the Bank itself was chained down by the in.:-
crab(' letter of the law of 1844 to a limit which
every hoar wee bringing closer and closer. The
alternative in fact was this—either an absolute re-
fusal of all further accommodation by the Bank of
England, or a suspension of the Act. How was it
possible fur the Government to hesitate? The cast
iron devotees of a dogma, the pedantic slaves of
theory might have been prepared to look calmly on
while the whole mercantile fabric of the empire
went down in ruin, a miserable sacrifice to an im-
practicable law. Here and there one of those espi-
halite, the interference with whose " legitimate"
gains is • stock subject of complaint with the more
thoroughgoing Stoics of the Currency School, might
have been found to resent as a grievance any step
which tended to abridge has power of making a
harvest out of the necessities of the money market.
.foriparidern ferient rei■a is a piece of cheap forti-
tude when the ruin of your neighbour is the
making of yourself. But what was the Govern-
ment to do? What the Government had to do
was that which the Government did. The raw
pension, or rather, as the CHANCELLOR of the
Ifs-
CHErit'Ea very fairly pat it, the extension of a law
which had once before been necessarily abandoned
was on one side ; the desolation and ruin of the
greatest mercantile community in the world was on
the other. Ministers did their doty. The Bank by law
had the power of issuing credit notes up to the limit
of fourteen millions and a half ; they removed the
limit rued extended the power.
It was not an boar, not • moment too soon the
greater intensity of the note demand in 1837 its
compared with 1847 is shown in the fact, that the'
power of increased credit issue, which had only been
conceded in the earlier year, was exercised in the
latter. Aod yet how relatively trifling has been
the exerts of note ins* which has soaked to allay
the home drain, and stem the torrent of the panic.
The maximums expel of nominal Wm has been
2,000,0001, but the Neessieres excess of actual issue
—the increase in the amount of notes " out with the
" public "—has been only 928,0001. The miseiesisri
total supply of notes to the public which was
reached on the 21st of November was bat
21,3340001., little mare than a million and •
half beyond the average note circulation of
the most ordinary times; and yet how •ast is the
relief which, with this relatively trifling MOM ever
their normal note circulation, the Bank, by the relax-
ation of the Act, has been enabled to supply to the
public. The demand for discounts and advances lad
risen on the 21st of November to the enormous
limit of 21,616,0004. and the sum actually rupplied
to the public as discounts and advances between the
12th of November, when the Treasury letter
Mend, and the Ist of December, amounted in