Cleveland daily leader. [volume] ([Cleveland, Ohio]) 1865-1873, 1866-06-02
REPLY.

TO the Governor and Deputy Goceraor Of
the Bank OF England
GENTLEMEN-We have the honor 10
acknowledge the receipt of your letter OF
to-day to the Chancellor of the Exchequer
in which you state the course of action at
the Bank of England under the circum-
stances of sudden anxiety which have
arisen since the stoppage of Messrs. Over
end, Quincy & Co. Limited yesterday.
We learn with regret that the bank re-
serve, which stood 50 recently as last night
at q sum of about five millions and three
quarters, has been reduced in a single day
by the liberal answer of the bank to the
demands of commerce during the hours
of business, and by its just anxiety to
avert disaster, to little more than one half
of that amount, or a sum %(actual for Lon
don and estimated for the branehes) not
greatly exceeding three millions.
The accounts and representations which
have reached Her Majesty's government
during the day exhibit the state of things
in the city as one of extraordinary dis
tress and apprehension. Indeed deputa-
tions, composed of persons of the greatest
weight and influence. and representing
alike the private and joint stock banks Of
London, have presented themselves in
Downing street. and have urged with
unanimity and with earnestness the neces-
sity of some Intervention on the part of
State to allay the anxiety which prevails,
and which appears to have amounted
through Il great partof the day to absolute
panic.
There are some important points in
which the present crisis differs from those
Of l847 and 1857. Those periods were
periods Of mercantile distress, but the
vital consideration of banking credit does
not appear to have been involved in them,
as it is in the present crisis.
Again, the course of affairs was COM
paratively slow and measured whereas
the shock has in this instance arrived with
an intense rapidity, and the opportunity
for deliberation is narrowed in proportion.
Lastly, the reserve of the Bank of Eng
land has suffered a d%iminution without
pecedent relatively TO the time in which
it has been brought about and, in view
especially of this circumstance, her Maj
esty's government cannot doubt that it is
their duty TO adopt, without delay, the
measures which seem 10 them best caleu-
lated to compose the public mind, and TO
avert the calamities which may threaten
trade and industry. If, then, the direc-
tors Of the Bank of England, proceeding
upon the prudent rules of action BY
which their administration is usually gov
erned, shall find that, in order to meet the
wants of legitimate commerce, it is requi-
site to extend their discounts and advanc-
es upon approved securities SO as to re-
quire issues of notes beyond the limits
fixed by law, her MajeSty's government
recommend that this necessity should
be met Immediately upon its occurrence,
and in that event they will not fail to
make application TO Parliament for its
sanction.
No such discount or advance, however,
should be granted at a rate of interest
less than ten per cent, and her Majesty
government reserve it to themselves to
recommend, ifthey should see fit, the I'M
position Of a higher rate.
After deduction by the bank Of what
ever it may consider to be a fair change
for its risk, expense and trouble, the pro
- these advances will accrue to the
We have the honor to be- gentlemen,
obedient servants,
RUSSELL,
w. E. GLADSTONE.
Downing street, May II, 1866.
The official correspondence is CONFLICT
I'd by the following letter and accompany
ng resolutions
To the Right Hon. Earl Russell and the
Right Hon. W. E. Gladstone, NJ. P.
BANK OF ENGLAND, May IL.
Ny Lord and Sir Having laid before
he Court Of Directors the letter received
you yesterday, with respect to a fur
her issue of notes, il necessary, beyond
he limit fixed by the Act of 1864, we
ave now the honor TO enclose q 0 of
he resolutions of the Court th~ereupon. (
We have the honor to be, nv Lord and j
II, your most obedient servants,
H. L. HOLLAND, Governor.
THos. n. HUNT, Deputy Governor.
CORY OF RESOLUTIONS ENCLOSED. =
AT a Court of Directors of the Bank on
aturday, the 18th of May, 1866:
ReSotred, That the Governors be re-
Vested to inform the first Lord of the !
and the Chancellor of the Elk j
that the Court is prepared TO act
conformity with the letter addressed to
Iem yesterday. /.
Resotred, That the minimum rate of dis :
unit on bills not having more than
nety-fve days TO run be raised from
% 10 per cent.
HAMMOND CLUBS, Sec,y.