The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-11-09

he senior partner OF which arm was Covcrr Of the Bank
Week after week followed until last the total exceeded
SIS 900 600 Almost all the firms connected with the Mau
rtus such Reid, Irving Co.. failed principally from
having their funds locked up in sugar plantations This
accompanied by immense failures in the India trade
The extreme pressure be considered 10 have begun
on the 2sd OF September when the bank adopted more
stringent measures for curtang the demand upon IT,
Ever since the 26th Of June the dmnuton Of
bullion had been going on rapidly on the I'd Of October
il was reduced to 81, 565 900; the in circulation
being 900, and the reserve f340a 900. This
showed the directors that they must think Of their
own safety ON that day they gave notice tina, the mini
mum rate OF interest ON all bills falling due before the
18th of October would be 5 per cent and they refused
altogether TO make advances exohequer bills The
The private bankers fastened sell their securities to
convert them into money. The difference between the
price % c.nsos for ready money and for the account OF
the 18th OF october showed rate Of interest eQuivalent
TO 90 per cent per annum Exchequer bills sold at
30 shillngs discount Everything became worse day by
day On the 10th Of October the bank OF discount
varied from u TO per cent The following week from
Monday, 18th, TO Saturday, the 23d, was the great
crisis On that Monday the Royal Bank of Liver,
pool, with paid up capital Of $500 900, stopped
payment which caused the funds fall per cent This
was followed by the stoppage Of the North and South
wales Bank the Liverpool Banking Company, the Union
Bank Of Newcastle, and various other banks Manchcs
ter and the west of England. complete cessation oil
private discounts followed No one would part with the
money or notes in his possession The most exorbtant
ums were offered to and refused by merchants for their
acccptances The continued and increasing severity
Of the crisis caused deputaon after deputaton to be
sent TO the government to obtain relaxation OF the
bank charter and Saturday, the 23d Of October the
final determination Of the Ministry to authorize the bank
10 issue notes beyond the limits prescribed by the act was
TAKEN and communicated to the bank, which Immediately
acted upon and discounted freely at per cent The
letter was made public about O'Clock on Monday, the
25th and no sooner did appear than the panic vanished
like dream Mr.. Quincy stated that produced It's
effects in ten minutes No sooner was known that notes
might he had, than the want Of them ceased Not only
did infringement Of the act take place but the whole
issue Of notes in consequence of this letter was only
f4O0 900.
IS4s-On the sth Of June the Committee of the Com
mons appointed in November 1S47 TO inquire into the
causes OF the recent commercial distress and how far it
had been effected by the Of 1874 made their report
They gave as their opinion that il not expedient to
make any alteration in the act. The Committee of the
ed to introduce discretionary relaxing power which
only to be exercised during the existence Of favora
bic foreign exchange
ls4e-The Bank OF France suspended specie payments
and thereby saved the Bank Of England from another
drain Of gold
lS5o-l-2-3-The commerce of the country having been
placed sounder basis by the removal Of houses that
had been long hopecssy insovent, we have nothing in
the shape of financial vicissudes to record during these
years.
1s54-owng TO the great demand for shipping, caused
by the chances of there good deal ospecuatve
dealing in that property which with extravagan over
trading in Australia led to losses and
extensive failures in the autumn. The large amount of
accommodation paper which was circulated, also contr
buted to the temporary shock TO credit caused
by these failures
ls55-Towards the end of June another great drain of
bullion from the Bank England commenced and continued
rapidly and steadily till the middle OF October On the
23d June at Els 0OO including the coin and
bullion in both departments, and by the 18th October
reduced 10 ell 152 00O The bank acted in this
with promptitude and decision most favorably contrast
ing with its former The rate Of discount
pdy raised from per cent in June, to per cent by the
sth November. The Economist of the Goth December,
In noting the effect Of these sad-The great
extent Of our trade indicated by the returns of No
yember confirms the suspicion awakened by the contin
ued demand for money that trade has received serious
check from the advance in the rate of discount and Is
still extensive than prudence warrants in the end
will be justified"
This would go 10 establish the theory advanced by
writer's that to the operations Of the Bank of
France that the outflow Of bullion TO be attributed
1S56-0wng TO the necessity Of continued caution on
the part Of the bank arising from the last named opera
tons we'll from the steady flow OF specie TO the East
Indies high rates OF discount continued during the
year In October and November the rates of discount
steadily maintained at per cent On the 9th Of
December they were reduced 10 81.
REvrIs0S or ls57-REACTIoS or THE AMERICAN PANIC.
lS5For some time previous TO the news ofthe failure
of the Ohio Trust and Life Company, the English money
market had exhibited fevesh and unsettled aspect The
created Vienna in consequence of the National Bank
reduce it, circulation $50 900 forms by the LIST Of
January next a simultaneous inc.easc in the rate of
discount by the Bank Of Holland others Of the great
continental banks the depressing character Of the
from India and the unfayoable accounts arriving from
this side continued TO aggravate this feeling To show,
however how slightly these depressing influences affected
the value of American securities on the London money
market quote the closing rates OF American railway
stocks on the 10th September