The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-11-27

in the country and will assuredly ere long find their
way back In large masses in London. mercantile
houses which has been stricken by the American en-
bd,rassmsnfs riH still come 10 the ground and the
losses Sustained through the heavy fall in produce
riH tend 10 increase the number of lettering firms.
In this, however there is nothing in any way sug-
gestive Of alarm, and il must not be forgotten
that the money which is dropped by speculators IN
produce is picked up by the consumer. Now that
the storm has swept away the trammels imposed
by the Bank act, there is every ground for legiti-
mate confidence; and the people of England will
not be true to their reputation for sobrety
if they do not scout every provocative to panic.
from the London Herald, Nov. 1871
Yesterday we commented upon remarkable and
ably constructed document, issued by the French
Emperor and stated that twas calculated to inspire
the minds of neighbors the other side of the
Channel with confidence, and thus in some measure
lessen the intensity of the monetary crisis through
which France like the rest of the different European
nations, ia at present passing Soon after these re-
marks were penned communication, signed by the
Premier and the Chancellor Of the Exchequer, was
addressed to the Governor and Deputy Governor
OF the Bank of England spurport was to authorize
these monarchs of the financial world to extend the
issue of Bank of England notes. Thus, as in lS47
has been found necessary set aside the act OF 1874
in order to relieve the pressure upon commerce The
step taken by the government meets with the appro
baton of our chief financial authorities, and the
opposition to this expedient waged so vigor-
ouslV by certain ministerial organs has serl-
ously damaged what little credit they enjoyed
as authorities upon matters Of finance. In our own
country the commercial crisis has already produced
most disastrous effects. Several large firms, report
ed to have possessed large balances in their favor
few weeks since, have been compelled to stop pay
ment and the position of others is critical in the ex
IRENE. In Scotland, in particular, the panic has
spread with fearful rapidty The failure OF the the
Western Bank followed by that of the City OF Glas-
gov Bank-both extensive concerns, with numerous
bsanches-has led to an almost total prostitution OF
trade in that part OF our island Upon the causes OF
this crisis we have already remarked and shall in
yestigate them more fully at another opportunity,
our purpose at present being to deal solely with ITS
effects. The dminution in specie, the high rates oil
discount the numerous failures. rendered IL aos9.
lutely indispensable that the directors OF the Bank
of Engand-that fountain head OF commercial
credit in this country-should be invested with
certain discretionary powers, to be cautiously
exercised as emergencies may render necessary.
The manner in which the law has been tempo.
rariy suspended appears to meet the exigencies OF
the case. Ministers state plainly enough" In
order to prevent this temporary relaxation OF the law
being extended beyond the actual necessities OF the
occasion, her Majesty's government are OF opinion
that the Bank terms of discount should not be re-
dueed below their present rate" whether, by any
alteration in the law, commerce might be benehtted,
is of course matter for future consideration me
| committee appointed to investigate this question
| have not yet brought their labors to conclusion
Under the circumstances, therefore, 1t would be i'm
possible for ministers to rush into the other extreme
| and attempt, or even appear to sanction, perma
nent alteration Of the law. Such however, Is not
| their intention. We learn from this document
| Her Majestys government are fully impressed
with the importance of maintaining the letter OF the
| law even in time of considerable mercantile
difficulty: but they believe that, for the removal
| of apprehensions which have checked the course
of monetary transactions such measure as Is
now cont emplated has become necessary, ana they
rely upon the discretion and prudence OF the directors
for combining its operations within the strict limits OF
the exigencies of the case" II is evident enough
that commercial crisis is not exactly the kind OF
opportunity required for the total change of finan
cial system Ii is EXTREMITY delicate subject, and
one that must be approached with the greatest eau
ton. At present the chief object OF those IN autho
rity must he to restore confidence. This the letter
of the French Emperor will do in France, and we
believe that the ministerial document, published in
another column will have the same effect here
Upon this ground both receive our communication;
and when the crisis has been surrounded 1t may be
advisable for the authorities to endeavor TO ind out
means to avert repetition of the calamity for the
future
from the London Chronicle, Nov. 13
At last the government have adopted the measure
whose expediency we have maintained ever since the
present monetary difficulties commenced, and which
the events of the last few days have rendered an
absolute necessity. The Bank Restriction act is
| pended The directors possess ministerial autho
| rization to break the law, as laid down by the
| statute of lsi4, and issue notes to an unlimited
amount. For this infringement of the act, should II
| really take place. Lord Palmerston undertakes 10
obtain from Parliament bill of indemnity, express
ing al the same time his reliance the discretion
and prudence of the directors to conine their
plus issues. both to duration and extent, within
the strict limits OF the exgencies OF the case ms
impossible 10 estimate the importance Of hs step
The relief afforded TO commerce In every branch Will
as we confidently believe, he enormous and lmme-
date Our single regret j. that IL has been long
DELAYED Even q fortnight since, the appear
ance Of the ministerial letter we publish to-
day would have averted many catastrophes, and
spared the mercantile community long series
Of caamities. The proximate and avowed cause for
the proceeding is the soppage otthe two great joint
stock banks in Glasgow. These failures occasioned
a withdrawal, in about three days. OF more than a
million soveregns from the Bank Of England and by
the abstraction of so large an amount oil bullion re-
ducng the legal note circulation much as almost
10 absorb the whole reserve OF notes which NJ the
date of the last return hardly exceeded two millions
The point Of utter exhaustion having been reached
the issue Of n governmental letter of license was
the only remedy against almost total suspension OF
discounting operations in Threadneedc street Those
who have watched the course of events in the
monetary world have for some time oreseen that this
point would be, ere long reached. The failure
Of the Glasgow banks has but slightly prccipitated
the issue. But the question - everywhere asked
why was the remedy withheld longf II might
have been applied in time to save the Western
Bank Of Scotland, the City OF Glasgow Bank,
Messrs. sanderson, and many other firms OF
less note. but whose suspension will involve thou
sands in ruin. The delay has proved most disas
trous TO all the commercial interests of the coun-
try. We trust that the disasters have not yet
passed the limit at which they would become IRE.
trievable. BY the bgotted partisans OF the act Of
ls44 the violation Of its restrictive enactments now
authorized, will be regarded as something like
mortal sin. BY every one connected with commerce
the step must be looked upon as a daring experi.
ment. But the peril IL any there be- attending the
measure has been entirely created by the hesitation
in adopting IL. Her Majesty's ministers have &C
tually withheld the remedy until the condition OF the
mercantile body has become so fevcrisb and attcnu-
atcd as to render its application matter OF some
hazard But a few days since the prescription
would have proved equally safe and enectua. The
only peril which the partisans OF convertibity an
ftgin ~ Iron rgl
is that Of "run for gold" This was the bugbcsr
OF financial theorists during the early decades Of
the present century. In truth, the public mind in
this country has outuown any such suicidal folly as
completely as we have outgrOwn sedition chartism
or the Rights OF MAN. Nothing could induce
run for gold except the access of panic, in which
the most sober trader for the moment to he
reasonable being. II the government interposition