The Sun.
London, England, 1857-11-13 00:00:00

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selves, and then to seek safety by cutting off
" facilities" and throwing the applicants upon the
Bank of England. Then we have deputations to
the Governors, threats that if something:" is not
done the whole trade of the country will be brought
to a stand, and an outcry, of course successful after
the requisite amount of alarm has been created,
for the suspension of the Bank Charter Act.
If, however, the example of 1847 had never been
set, and these persons had been taught to feel that,
happen what might, the laws of the country=:
is the full knowledge of which they had undertaken
all their operations—would be rigidly kept invio-
late, not only would the public never have been
disturbed by predictions of coming ruin, but every
safeguard that ingenuity could devise would have
been secretly prepared to provide for any casualty.
If the discount-houses and any of the joint-stock
banks apprehended a withdrawal of their deposits ,
to an extent to cause public inconvenience, it was
their business to make common cause to guarantee
each other's safety, and, if any nominal or contin-
gent suspension were necessary, to bear the discre-
dit of it themselves, and not to inflict it on the
Bank of England and the country. They could
have announced to the public that a run being
threatened they had combined to mitigate its con-
sequences ; that, not being able to foresee its pOs-
sible extent, they had agreed to suspend for the
moment any return of deposits, and that to meet
the difficulty they would issue their promissory
notes at three months bearing 9 per cent. interest,
and secured by their common liability. A meet-
ing of all the principal bankers arid merchants, in-
cluding the governors and directors of the Bank of
England, might have expressed approval of the
wisdom of their course, and before p. few weeks had
passed these notes would have been at a premium.
But, unquestionably, the character of the issuers
would have been damaged, since the fact of their
having been obliged to resort to such a method
would have fixed them in their right position in re-
lation to the causes that had led to it. If any cha-
racter was to be damaged, it was much more plea-
sant that it should be that of the Bank of England,
the country, and the Government, and, thanks to
the complaisance of the latter, they have suc-
ceeded in putting it on that footing. To be sure
they took care that matters should go to a point at
which the Cabinet would have little choice. There
was, however, an alternative which, although
equally unjust in being an act of Government relief
for which there was no true claim, would still have
prevented a sacrifice of principle. An issue of one-
pound notes could have been adopted without any
infringement of the doctrines on which the Bank
Charter Act is grounded. The fact that the per-
mission for the circulation of such notes terminated
in 1820 is not material, as the law could have been
set aside on one point as easily as ou another. This
plan, however, seems not even to have been conci-
dered. After ton years' experience, therefore, and
all theenlig,htenmeut that was thought to have been
attained, we have thrown back at once to the dis-
creditable position we occupied in the last crisi,,
and all the admirable conduct of the Bank of Eng-
land and of the respectable mercantile public has
been rewarded by a proclamation to every specu-
lator or reckless money-lender who may choose to
disregard the plainest principles of monetary science,
th it he will always find his safety in the very penic
which his own misconduct has promoted, and that
the only persons who will be brought to disappoint-
ment or confusion will be those who have prudently
guided themselves by the law, and have relied
throughout upon its inviolability.
(From the Morning Post City Article.)
The scene witnessed at the discount department
of the Bank to-day was of the most exciting charac-
ter. The pressure for accommodation was general,
and the applications, numerous as they were, re-
ceived attention, but the very extreme rates had
to be enforced. As the weekly board is held on
Thursday, much anxiety was manifested to become
acquainted with the resolution, if any, adopted by
the Bank directors. The sitting was very protracted,
and, consequently, apprehensions were aroused
lest further restrictions might be attempted ;
but shortly after three o'clock p.m. it was an
nounced that the rate would cmtinue at 10 per
cent. No intimation had then been afforded of
the probable appearance of a Government
letter, but the azsurauce that the rate would not for
the present move above the fixed minimum was cal-
culated to ease the anxiety which had previously
been manifested. During the afternoon it was con-
fidently asserted that the Treasury authorities wer
prepared to afford relief, and the intimation to titat,
effect was shortly afterwards conveyed in official
form to the Bank and to the Stock Exchange.
Money out of doors was certainly less difficult to
obtain when the circumstance transpired, and
there was more readiness to extend assistance im-
mediately it was found that the Premier and the
Chancellor of the Exchequer were impressed with
the actual importance of the crisis. Although in
Lombard-street the demand was great, and not
readily respondedto throughout the day the brokers
exhibited increased liberality towards the close of
the afternoon. As illustrating the terms obtained
through discount operations, it may be mentioned
that a merchant to-day, in negotiating a bill of
four months' date given by one of our best and
most flourishing companies, had to pay 131 per
cent. for the accommodation. Some of the brokers,
it appears, have refused to deal with any paper ex-
cept at 10 per cent. and 1 per cent. commission.
Facts of this description corroborate in their full
sense the severity of the pressure in every depart-
meet

(From the Times)

At a late hour yesterday afternoon the commer-
cial public received the news that the Bank Char-
ter Act had been suspended. The Bank is thus
allowed by Government to issue an excess of notes
not defined in value, and a promise is given that
a Bill of Indemnity will be introduced in the next
sessiou of Parliament to free the Bank from the
consequences of its conduct, should it be necessary
to take advantage of the permission of Govern-
ment. On the merits of this step we will say but
little. It may be consistent with the maxims of
political economy to regulate the issue of notes
during ordinary times, and thus to check rash
speculation and the embarkation in business of
men destitute of capital, while when an actual
dearth of money prevails, the ohief banking insti-
tution of the country may be allowed to extend its
issue of notes under a public guarantee. But if
such is to be the principle of our monetary system,
the sooner it is embodied into a law the better. If
the Bank is to exceed its legal issue of notes as
often as its rate of discount is necessarily raised
above a certain point, then an Act of Parliament
should establish the practice on sound and intelligi-
ble principles. The commercial interests of the
country should not be subjected to a system by
which a law is obeyed as long as obedience is easy,
and temporarily swept away as often as pressure
or panic suyervenes. The houses which in 1847
and in 1857 have stopped payment before the
relaxation of the law may well complain that,twhile
they have been crushed by the operation of the
Bank Charter Act, others not more solvent or of
higher standing than themselves have been saved
by the suspension of it. Whether the Bank avails
itself of the privilege accorded tp it or not, the in-
vasion of the law is the same, and those who, trust-
ing to its inviolability, prudently suspended their
payments now find themselves placed at a dis-
advantage in respect to those whom boldness or
good fortune encouraged to hold on a day or two
longer.
We can well imagine that only the representa-
tion that great commercial calamities were about to
take place has determined the Government to act
so bold a part How much they feel the import-
ance of the step is proved by what we have now to
announce—that it has been resolved to call Parlia-
ment together at once, in order to settle the ques-
tions raised by the present crisis, and to register for
Ministers and the Bank Directors that indemnity
for which they are obliged to appeal, A Council
will, we understand, be held next Monday, at which
probably Parliament will be summoned to- meet at
the end of 14 days.
re are ourselves for a violent
We may certainly p
attack on the English monetary system as estab-
lished by the Bank Act of 1844. All the theorists
of all the schools of currency will beready to pounce
on what seems the carcass of a dead law.in-
deed, they will have much that is plausible and not
a little that is true on their side. The law is a fair
weather law, a law for times of steady trading and
easy credit ; its provisions are like the pasteboard
defences of the Chinese—strong to look at, painted
with heavy masses of stones and guns of enormous
power,. but in reality a weakness and a sham.
Such
will be the reasoning of the partisans of inconver-
tible paper or uncontrolled banks. The defenders
of the existing system will, on the other hand, have
to face the fact that the act has been twice suspended
in two successive panie4. What better proof, it
would seem, that the law does not provide foe
that very condition of things in expectation of
which it was framed ? At this moment, when
the pressure seems about to cease, when the Indian
L mutiny is broken and the American disasters draw.

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