The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-03

OF thin exists In 1877 there was no financial re-
vusion and the necessities Of the commercial classes
were not so pressing as to require the bank TO ac-
tually make the issue. The fact that the bank had
the privilege of doing SO from the government re
stored confidence, and all difficulty at once disap-
peared. Now the case is very different A financial
revulsion has spread over the whole commercial
world, and the financial affairs Of every trading
nation are seriously disturbed. Credit and
confidence have, for the moment disappeared
and the bank ng systems Of this country and Great
Britain are all deranged and upon the point of being
remodefed. The two great money centres Of the
world, London and New York are struggling along
under similar difficulties. produced by similar causes
and likely o result in similar effects and consc
quences. The banks Of each city are under state
of suspension in each the charter forfeited by the
suspension; in each the suspension was the result
OF the same influences; in each the law has been for
the momen. annued, leaving it to the legislative
powers to destroy protect the different institutions
in their operations The Bank of England depends
upon the favor Of Parliament in retaining its char
tered rights and privileges, and the banks of this
city depend upon the support Of the Legislature Of
the State Of New York in retaining their charters
and in avoiding the constitutional penalty for
pending. In the Investigations which these iegis-
Etive bodies must institute regarding the
pension of specie payments, it will be found that
the same influences were ut work both in New York
and London. Here the Anglo-American banking
houses, in connection with many depositors among
the mercantile classes, by combined action forced
our banks into suspension In London the same re-
suit produced by the joint stock banks, but in
mere indirect way. The private bankers here made
a simultaneous attack upon the banks by drawing
largely for specie. In England the joint stock banks.
by aiding and encouraging speculation by favoring
all sorts of enterprise, and extending credits upon all
kinds of operations, produced state Of affairs in the
money market which forced the Bank Of England To
raise its rate OF interest rapidly from six TO ten per
cent without eyen by such stringent acts removing
the difficulty. Nothing short of an Order in Council
allowing the bank to Issue an unlimited amount of
notes upon approved security, was the alternative,
and to that the bank compelled to resort. Par
lament viii investigate the matter thoroughly, and
the whole affair will be presented in its proper light
Our Legislature should do the same. Send for per-
and papers and let if we have among
antsgonistic interest, which, in periods of distrust
and embarrassment, can step in, and in 10 short
time force our banking institutions into suspen-
sion. The suspension of specie payments by the
Bank of England and the banks of this city is an
event not dreamed of sixty days before it occurred
No one anticipated it, and the actual position of the
institutions themselves did not make it necessary.
but series of circumstances of the most cxtraord-
nary character, as unforeseen "a they were violent
and formidable N their operation, suddenly arose
and swept away banks of undoubted strength and
solvency like so much chat.
1t il reported by telegraph from Halifax that the
steamship America from Liverpool brings the intel
ligence that the house of George Peabody & Co.. of
London, had been compelled to call upon the
Bank of England for assistance, and that it had
been promptly rendered ~ the extent Of one
million pounds sterling. This fact speaks
volumes for the character and credit of the
house. The policy of the Bank Of England Is to rem
der aid where the financial difficulty and embarraSs
ment is solely the result of circumstances beyond
the control of the party involved; and where the
bank does grant the aid required the financial world
may take it for granted that the house concerned Is
perfectly solvent and sound at the The Arm Of
George Peabody 4 Co.. of London IL intimately con.
nected with American interests and American fnan-
cial and commercial affairs generally. It has for
many years welded an immense capital. and aided
of the day. Its ramifcations of business have been
so extended. and IT has been No intimately identified
with American credit throughout Europe, that the
financial revulsion which has swept this coun-
try must have taxed its immense resources for the
moment to their utmost limit. In sustaining the
house of George Peabody & Co. the Bank Of England
was well aware that IL sustaining vast interests
on this side of the Atlantic, and the wisdom of the
act therefore apparent. The Bank Of England and
the great banking houses OF London make up the
financial power of that money centre. Their interests
are identical and there is therefore a mutual sup
port in the application Of the aggregate resources.
We do not look now for the failure Of any impor'
tant Anglo.American banking house of London.
The position of the Bank Of England guarantees the
continuance Of the principal private bankers and Thus
removes all apprehensons Of the panic being revived
or spreading by any disastrous intelligence of that
kind. The failure Of the house Of George Peabody x
Co.. Of London would have been almost national ca
iamity and the foresight Of the managers of the Bank
Of England never was more clearly illustrated than
by the prompt action In the matter and the liberal
support rendered. In 1897, when the three great
houses in London connected with the American
trade-wild, wiggin and wson-applicd to the Bank
Of England for relief, II was at once refused, and
those houses Immediately suspended. The managers
of the bank were well posted in regard to the nan
cial condition Of the houses named, and extended
helping hand The result showed their sagacity.
The failures proved 70 bad that the creditors got
little or nothing for then claims.
Stock Exchange.