The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-11-26

foreshadowed in these columns on various occa-
sions during the past three weeks, has come to
pass at last ; the Bank of England has virtual
iy suspended specie payments True, il is
not literally a suspension. The bank con-
tinues to redeem all its notes in coin, for the
present. But it has been authorized to- issue
notes beyond the point of possible redemption,
and it has therefore proximately or construc-
lively suspended. Should business suddenly re-
vive and confidence return, it might not be
found necessary for the bank to issue larger
amount of notes than it could conveniently
carry in I847, when Lord John Russell, like
Lord Palmerston now, took the responsibility
of authorizing the bank to break the law and
overissue notes, very few notes indeed were
issued and the bank took care Of them without
difficulty But should the present crisis last for
any great period of time, should disasters OF
still greater magnitude than those which have
vet occurred befall the straitened commercial
world, it might become necessary for the bank
to issue such an amount of notes as it could by
no common possibility hope to be able TO re-
deem in coin. That contingency, which would
be nothing less than the utter ruin of the bank,
is now rendered possible.
OF the attitude of the other European
banks we have but few details. All are
raising their rates of interest to the neighbor-
hood of ten per cent. But can they stay the
storm with appliances Of that kind? We think
not. The panic which caused the stoppage of
the Bank of England must spread across the
Channel; and it will be a piece of uncommon
good fortune if the banks of France, Prussia
Hamburg and Frankfort do not find themselves
under positive necessity Of suspending specie
PAYMENTS The shrewdest financiers foretold
the speedy suspension of the Bank of France by
last mail.
We are thus in the same boat, and the Lon
don Times will probably revise the structures it
contained some days since on the uncommonly
mercurial temperament of the American peo-
pie, and their liability to be led away by gusts
and flaws of panic. Even solid John Bull, it
seems, went roaring to his bank for the guineas.
If the truth were known, indeed, We suspect
that ali the commercial and corporate rotten
ness is not on this side the water; queer stories
about frauds and breakdowns in England are
being whispered already; the Royal British
Bank, it is feared was not unique specimen.
Persons whose station and character give i'm
portance to anything they say have openly ex-
pressed very grave doubts of the solidity of
financial houses against whom it has
and indeed, as all the private bankers
of London and money operators gene
rally have been largely concerned in our
railway schemes it would not be very sur
prising if most of them were found at this mo-
ment overloaded with such securities-on
which of course no money or aid could be now
obtained Public rumor likewise tells some
strange accounts of the manner in which the
English joint stock banks have been managed,
and the state in which they are at present: but,
as yet, all this is rumor. If the banks and
bankers are solid, the action of the government
has saved them; if they are rotten, they are
past salvation.
In one point Of view, the action Of the British
government creates q complication entirely un-
precedsnted in history. Such financial crisis,
so widespread and 80 radical, leading to such
terrible results, in the midst of profound peace
and bursting upon a thoroughly active and
shrewd commercial community, is entirely with
out parallel in modern history and though
Sir Robert Peel foresaw that the bank would,
in time Of panic, be forced to obtain abnormal
relief from the government, though in fact that
relief was actually obtained ten years ago, the
interference of the government at this crisis
immensely complexities and embarrasses the
imbroglio 1t is utterly impossible to say
how things may end. The revulsion may
continue and may lead, after breaking
more commercial houses. to general social
and political revolution, extending throughout
Europe; or II may end as il did here in gene
raj liquidation and contraction with occasional
failures and ultimately complete stagnation
Of business
At all events, whatever change the virtual
suspension Of the bank may cause, 1t il quite
evident that nothing can for the present restore
10 England the control Of the commercial af-
fair, of the world That control has been vested in
the United States by the force Of circumstances.
The priority of our revulsion here, and the
suspension of our New York banks; the sudden
aggregation Of specie here, and the stagnation
Of trade have placed the United States In a
position to command the world In commercial
point Of view. We can exact specie for our
cotton, and Europe cannot do without il; we
can keep all our gold, and England cannot take
II from us If our banks play their cards with
ordinary discretion this crisis will crown she
commerce Of the United States as the oontrOl-
ing power of the worlds trade.
The New York banks with their twenty-five
q Il