The Sun.
London, England, 1866-05-14 00:00:00

The Panic in the City.

In the City on Saturday there was a manifest
abatement of the panic, having regard to the ap-
pearance ooft hathtest thetreets
einxotihtenit whichofeneenighbourhobocolgano
then
Bank.
Thursday evening on the announcement of the
failure of Messrs. Overend, Gurney, and Co., and
prevailed in a more intense degree throughout the
whole of Friday, had altogether subsided, but at no
part of the day were any of the streets in the bank-
ing quarters inconveniently crowded. Lombard-
street and Birchin-lane, in particular, where most
of the intense excitement of Friday prevailed, had
begun to assume their wonted quietude, and at no
time on Saturday was the ordinary traffic impeded
by any crowd of idlers. Shortly after mid-day,
when the evening papers were expected to make
their appearance, the newsvendors' shops in front
of the Royal Exchange were besieged, and the jour-
nals were in great request. The public curiosity was
then gratified by the appearance of the correspond-
ence which had passed between the Governor and
Deputy-Governor of the Bank of England and Earl
Russell and the Chancellor of the Exchequer, result-
ing in the suspension of the Bank Charter Act, and
with some other intelligence as to the state of pub-
lic feeling in the City during the morning. All
things concurred to show that the public anxiety
and suspense had been greatly allayed, and a mani-
fest feeling of relief appeared generally to prevail,
from a belief that the crisis had passed.
With respect to a complaint against the City
authorities for not having insisted on maintaining a
clear approach to the various banking houses and to
the Clearing-house, it should be stated, to the credit
of the Lord Mayor, that on finding the thoroughfare
so densely crowded he gave very peremptory in-
structions to the police to clear it, as far as practi-
cable, of all but persons who appeared to have legi-
timate business there, and that he himself on being
released from his duties in the justice-room was seen
in the thickest of the crowd on foot giving directions
to the police in the emergency. The result was that
the services of a number of the most experienced
men in the force were brought into requisition,
under Inspector Foulger, and in that way the traffic
was facilitated as far as practicable ; but they had
a most difficult duty to discharge, considering how
little they were able, in a crowd mostly composed of
well-dressed people, to distinguish those who were
there from sheer curiosity from those who had legi-
timate business to transact.

(From the I:cononii.

The failure of Overend, Gurney, and Co. (limited)
has given occasion to a panic more suitable to their
historical than to their recent reputation. It will
be found that when that firm was converted into
a private company we expressed ourselves
most anxiously and guardedly as to the value
of their shares. Of course, we could not say
what we then believed, and what was generally
known, that the old firm had by most reckless
management reduced one of the most profitable
concerns in England to one of the most losing con-
cerns. We can only say what we can prove, and ,
though we thought this as much as we now think
it, we could not say it in print without legal con- I
sequences. We expressed ourselves with guarded
caution, and under the circumstances this is all
which we could do. Now no one doubts that the
state of the Joint-Stock Discount Company is very
much like the last state of Overend and Co. un-
limited, and that there was much more excuse for
the Joint-Stock Discount Company than for this
old partnership. The former had to make a busi-
ness in opposition to extreme competition—the
latter had only to pick the best business. The plain
truth is that Overend, Gurney, unlimited, for the
sake of high interest took bad securities, and in
consequence some one must reap the due conse-
quence of that badness. As to Overend, Gurney, and
Co. (limited), as far as we can learn, in any new
business they did the best they could, but they could
hardly help bringing over old business of very ques-
tionable nature from the old firm. The worst bills
and securities they would strike out at once, but
the rest in the common and usual course of affairs
they would renew and take on. And in so doing
they must have taken on some of the worst bills in
England. The consequence is that they are stated
(as the accounts are not made up we cannot vouch
for it) to have lost most of their paid-up capital at
any rate. We have often heard it said, and we our-
selves believed, that the failure of Overend, Gurney,
and Co. (limited) (which we have thought possible
any time this three Frionths) would not produce at all
the effect which would have been produced by the
failure of the private firm some years since. But, in
fact, the failure of Overend's could hardly in their
most reputable days have produced a greater effect.
It has been signally shown how an old name, which
all really instructed people knew to have lost its
virtue, still retains its magical potency over the mul-
titude. Lombard-street has been thronged and almost
stopped by curious wanderers in a way we never saw
it stopped before, and, on the whole, we doubt if
there ever was a collapse of credit more diffused and
more complete. It has hardly been observed how
new an element of danger limited companies intro-
duce. The moment the operations of the Stock Ex-
change depress their prices that instant a run begins.
Overend's, no doubt, deserve to go, but many com-
panies may go which did not deserve it, merelyfrom
the depression of their shares. Some cause there is
generally for such depression—really sound people
never suffer so; but that cause is often painfully
exaggerated, and the warningthat companies which
live by credit (as all banks,must)lshould avoid trans-
actions having even a taint of evil, so possible is it
that such taint may diffuse itself and destroy their
whole reputation.

At Birmingham some degree of uneasiness was
created on Saturday morning on the announcement
of suspension by Messrs. Peto and Betts. As to the
panic itself and much of the anxiety which prevailed
on Friday subsided when it became known that the
Bank Charter was to be suspended. Neither on
Friday nor Saturday was business at all out of the
ordinary way at any of the banks ; in one or two
instances the amounts of money flowing in to those
establishments were larger than usual.

The intelligence of the suspension of payment by
the firm of Peto, Betts, and Co. became generally
known to Bristol early on Saturday morning, and
created a profound impression, as well from the
magnitude of the failure as from the fact of Sir S.
M. Peto being one of the members for the city.
Hopes were generally expressed that the suspension
might only prove temporary, and the circular which
appeared in The Sun, giving the estimated liabilities
and assets of the firm, was received favourably.
There were, nevertheless, speculations as to the pro-
bability of Sir Morton Peto's seat for Bristol be-
coming vacant ; and in the course of the day Lord
Claude Hamilton was introduced at the Commercial-
rooms by Mr. W. M. Baillie, of the hankwg firm of
Baillie, Carr, Edwards, and Co., of StiitOli a visit