The Sun.
London, England, 1857-11-12 00:00:00

THE MONEY CRISIS.

(From the Times' City Article)
This has been the most anxious day in the city
since the height of the panic in 1847.
The first disaster announced was the stoppage of
another Scotch establishment—the City of Glas-
gow Bank, with a capital of 1,000,0001., a reserved
fund of 90,5951., and 96 branches.
This was followed by the suspension of the Lon-
don discount-house of Messrs. Sanderson, Sande-
man, and Co., with liabilities for three or three and
a half millions, believed, however, to be amply
secured by commercial bills and the property of the
firm.

The telegraphic accounts from Glasgow during
the morning described a continuance of the run
which commenced yesterday on the various banks,
and nearly 800,000 sovereigns in addition to the
300,000 despatched last evening have been sent
from the Bank of England to meet the demand. It
was stated also that a military force had been found
necessary at Glasgow to preserve order.
When the Western Bank of Scotland, which
stopped on Mond a,y,was applying for assistance to the
other Scotch banks, its expectations were alleged
to be based upon the fears to be entertained of the
universal panic that would result if it were to close
its doers. The coirage of the various institutions,
however, was not to be shaken, and their feability
is now being tried to the utmost. That the
City of Glasgow Bank would be in danger seems
to have been generally contemplated, but strong
hopes are entertained that the remainder will stand
their ground. The amount of its deposits is not
known. They are supposed to be considerably be-
low those of the Western of Scotland, although still
of great magnitude and widely diffused, owing to
the number of branches, and the fact of the con-
cern having been established 19 years. It has an
authorised note issue of 72,9311., and the extinction
of th; s will be equivalent to a contraction of 46,6141.
in the circulation, in addition to the suppression of
1225,292/. from the failure of the Western Bank.
Its shares are distributed among a larger number
of persons than those of the Western Bank, the
total in that case being 1,280, while in this it is
1.309. Of the prospects of a resumption of course no
conjecture can yet be formed, but from the circum-
stance that the bank had agencies empowered to
draw not merely in New York but California, it is
to be apprehended a close investigation may show
it has not been conducted with great prudence.
The drain of gold to Scotland at the rate of more
than a million in two days constitutes, of course, a
most serious addition to the pressure in London.
It must have its limits, however, and these can be
clearly traced. The authorised note issues of Scot-
land amount to 3,087,2391. Beyond that total not
a note can be put out, except against gold. Ac the
last return the circulation was 4,051,2391., being
964,0001. in excess of the fixed sum, but specie was
held to the amount of 1,573,546/. The UECOVE red
paper currency was therefore 2,477,6931,, and the
gold sent hence to-day and yesterday is, conse-
quently, nearly equal to 50 per cent. of the whole.
Considerable quantities, it must be remem-
bered, had been sent previously, and further
parcels, it is said, will be forwarded to-morrow,
although it seems scarcely possible that more will
be required. If the run consisted simply of note-
holders it would be altogether improbable that
the existing supply would prove inadequate, but
depositors are contributing to the panic, and a large
number of these also claim specie. Nevertheless,
whatever may be the demand on the Scotch banks,
it is plain that their power of drawing upon us must
be simply to the extent of the credits they have
open, the Bank of England notes they may be able
to collect, or the funds they can realties by sales on
the Stock-Exchange. Of the entire deposits which
they hold and which are estimated at more than 30
millions, only a very moderate proportion is avail-
able in this way. As far as London is concerned,
ther.fore, the movement now taking place has no
vague terror,,. For the moment it creates a most
annoying aggravation of our troubles, but as it
cannot go beyond a certain point, and even at the
worst is not a withdrawal of gold from- the country,
the Bank of England can meet it in a b slder
manner and with more indifference as to the tem-
porary effect it may have upon their reserve than
would otherw se be the case. Unfortunately the
differences between Scotch and English law which
have so long been permitted to embarrass the in-
tercourse between the two countries are most pro-
minent on all financial matters. Bank of England
notes are not a legal tender in Scotland, and thus
it is impossible even to lessen partially the incon-
veniences of the case by sending the required
remittances in that form. The fact of about two-
thirds of the Scotch circulation being in notes under
5/ coupled with the known habits of the people,
especially of tl:e operative classes in Glasgow, in
suing the banks as places of deposit for their
saving., will account fcr any popular disturbances
that may now have been threatened. Such move-
ments, however, are more evanescent and more
easily met than those of larger capitalists, and, if
tie- se should not take fright, the whop affair will
prebably be of short duration. It appears that the
rate of allowance of the Scotch I a iks for deposits
throughout all the recent advance in the money-
market has not been raised above 4 per cent.,
although the changes in the rates of discount heve
kept pece with these of the Bank of England. In-
deed, they were recently ch. e 87 per cent.
when the London rate '. 8. aTrZeturbeasOns as-igned
for keepin,gatnarstaee wa"llowaucs for deposits are
ti3l3l:zttntshoef
investmento
api,roaching
considered to offer the only
iv
ai
to tuort
gages or Consols, -uadthat as thefoX•searfe ea scarcely
be obainel, and Console pay a
sattililolow:rninterest,
4 per cent. is a sufficient tempta.t n
Annexed is the cireuhr issued by Messn. S la-
derson, Sandman, and Co., announcing the neces-
sity for their suspension. The liabilities of the
house to depositors, by whom bolls ate held as se-

Ths applications at the Bank to-day for discount
were again extraordinarily numerous, but this
featu re loses much of its importance from the cir-
cunis lance that it is chiefly from parties over-supply-
ing themselves. These persons, when they get the
money pay it into their bankers', by whom at
the end of the day it is again paid into the Bank of
England. Many merchants, in order to gratify au
ignorant impulse of caution, have now at their
bankers' two or three times the amount they ordi-
narily keep. The reason they give is they "do not
know what may happen." They might know, if
they would take the trouble to reason, that the
foreign drain having been almost wholly checked,
there can be no increased demand for money, ex-
cept such as may be occasioned by their own fears
and by any temporary contingency like the Scotch
panic ; that under such ciroumatances, whatever
is taken from the Bank must always within a few
days retarn to it ; and that under any circum-
stances the Bank will continue to afford at the fair
market price every accommodation it would ever
have granted even in the calmest times.