The Sun.
London, England, 1860-04-23 00:00:00

TILE BANK AND THE DISCOUNTERS,

The peculiar features of the Bank return con
tained in our last number have been completely ex
plained by a paper which has been laid on the table
of the House of Commons. That return showed
that the reserve of notes in the Banking Depart-
ment had decreased between the 4th of April and
the 11th of April from £6,842,000 to £4,922,000;
and the magnitude of the change naturally excited
much remark. The paper laid before Parliament
proves that almost the whole of that decrease was
caused by a large increase of £l,OOO notes. The
figures are these :
ENTITUN OF BANK Nivrr.s ISSUED BY TIIE ISSUE DE-
PARTMENT OF THE BANK OF ENGLAND.
On April 4,1860. On Aprilll,lB6o.
£5 notes
£lO notes..
£2O to £IOO notes
£2OO to £SOO notes
£I,OOO notes
Notes held by the public 21,845,000 .. 23,467,000
Notes held by the Bank 6,842,000 .. 4,922,000
Now, as £l,OOO notes are a knd of circulation
very rarely used, it was evident that some peculiar
agency must have been in operation, and it is
now ascertained that the house of Overend,
Gurney, and Co. took from the Bank about
£1,650,000, and placed it in their own coffers.
Of course, to this in itself the public could have
no objection. The money was theirs. The pay-
ment of the dividends had given them an
unusual command of money, and if they distrusted
the solvency of the Bank, or for any other reason
thought it safer to keep their own cash in their own
till, it would not be becoming in others to remark
on it, still less would it be proper for us to write
about it. But, as Mr. Gladstone observed on Thurs-
day evening, the firm in question do not desire that
their course of conduct should be kept a secret;
they say that they adopted it on public grounds,
and wish it to be subjected to public discussion.
Their object was a very simple one. As our readers
are well aware, there has been an unceasing dispute
for some months between the bill-brokers and the
Bank of England, in consequence of the rule which
excludes the brokers from the Discount-office of the
Bank. The greatest bill-broking house in London
desired to put an end to this if possible ; they wished
to show the Bank how strong they were—how
much money they had control over, how much they
could withdraw at a critical instant. Accordingly,
they took advantage of a moment at which it seemed
likely that the Bank reserve would be less than it
had ever been since the end of the panic of 1857,
and at which they themselves happened to have
rather more spare money than usual ; they with-
drew the whole of it from the Bank. What has
been the result ? We find from the return of this
week that the " great house " have put their money
back again. We are -not aware that they have
gained anything, that they have brought their
lamentable dispute with the Bank nearer to a con-
clusion, that they have elucidated anything, or ac-
complished anything. They have, indeed, shown
their power. r But everyone knew that Messrs.
Overend and Co. dealt with millions, and to
deal with millions is a great power. And, though
they have not gained anything themselves, they
certainly did some harm to the public : they caused
some days' uneasiness. Se large a reduction in the
reserve of notes could not but create some anxious
feeling, even if the cause had been known, but at
first it was only known vaguely. There were
rumours of a " conspiracy among money-dealers,"
and firms which had no concern in what had been
done were said to have participated in doing it.
So extraordinary a course of conduct adopted by
such persons, under such circumstances, could not
but cause some degree of anxiety. We have very
lately expressed our views at length on the merits
of the dispute between the Bank and the bill
brokers, and we need not recur to that subject at
present. We can only regreV, that what has oc-
curred is likely to embitter the discussion between
them. The Bank of England cannot afford to be
frightened; Messrs. Overend and Co. have, in
simple English, attempted to frighten them. A
firm in such credit as Messrs, Overend cannot like
to fail in so marked a manner ; and yet they have
replaced their money, and all goes on as before.
On the 7th of April we suggested a course which
we thought, and still think, might close the dis-
pute ; but possibly too much irritation may have
been created—possibly it is too late for that now.
—Economist.

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