The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-05-25
THE LONDON PANIC.


CerFespOudence Between the g 1vernors
OF the Bank of EngIand ..~d Earl Rus.
Sell-ERect OF the Suspension OF the
Bank Charter Act More About the
Failure Of OvereDd, Gurney d Co., ETC.
The following is a copy of the letter addressed,
Op me llih ms ant, by the Go ernors OF the Bank
OF England to tAe British Government with a
copy of Es ri Russell and Mr.. Gladstone's letter.
IN reply, aut orizing the banS 10 extend their
issue OF notes:--
BANK OF ENGLAND, May IL, 1sB.-Sir:-We con.
der 1t to be our duty to lay before the Government
the iacis reating to the extraordinary demands for
assistance which have been made upon the Bank of
England TO-DAY, in consequence Of the failure of
Messrs. Overend, Gurney & Co.
We have advanced to the BANKERS, bi-brokers,
OF four millions sterl ng, upon the security of GOV.
ernment stock and bills OF exchange, an unprece-
s Sented sum to lend IN one day, and which, there.
their requn emehts; although the proportion of this
sum which may have been sent TO tue country must
materially affect the question.
w conn Iced tins morning with a reserve of
f6T27,o0o which has been dawn upon so largely
Inat we cannot calculate upon having muo6 a ,
000 this evening, making fair q 10 vance for
what may be remaining at the branches. -
We have not refused any legitimate application
for assisant and unless the money taken II ON tho
bank is entirely Withdrawn from circu alton tn, re
ls no reason TO suppose that tins reserve rs in
suhclent we have the honor sir, to be your ODE
dieLt wants,
II. l. HOLLAND, Governor
THOMAS NEWMAN HUNT. Deputy Governor
Inc Right Hon. ChJncel or OF the Exchequer
NJ. T., etc.
THE GOVERNMENT REPLY
10 the Governor and Deputy : oyernor of the
Bank OF England: -Gentlemen I'VE have the honor
10 the receipt of your letter of this day
10 me Chancellor of the EXchequer, IN which you
ttate the course of action of the Bank of England
pnoer the circumstances of sudden anxiety winch
nave arisen since the stoppa0e OF Messrs Oyerend,
G1rLey Co. tmlted) esterday.
We learn with regret that tne bank reserve, which
stoGd 20 recently as last night at q sum of about
15,750C00, has been reuuced IN a single dav by the
nberai answer OF the bank 10 the demands of com
nefce during the ours of business and by its Just
anxiety to avert disaster to tte more than one.half
OF that amount, or q sum (actual for London and
estimated Tor the branches) not greatly exceeding
The accounts and representations which have
reacned her MalestYs Government during the day
exhibit the STATE Of things in the city as one o. ex.
traordinary distress and apprehension. Indeed de.
puiations composed of persons of the greatest
welPht ana influence ana Iepresentng IKE the
priv ate and joint-stocX banks OF London have pre-
sented themselves IN Downing street, and have urged
with unsmmity aud earnesrness the necessity of
some intervention the paIt OF the State TO allav
the anxiety which prevails. and which appears to
nave amounted through great part of the day to an
There are some important points in which the
hresent crisis differs from those of 1847 and 1857
Iho.e peIiods were periods OF mercantile distress
butt the vital consideration OF banking credit does not
appear to have been involved in them as il is IN The
presen Crisis.
Again, the course of affairs was comparatively
slow and measured; whereas the shock has in this
instance arrived with an mtet rapidity, and the
tion. -, - F'OPO'
suffered dImInution without o precedent relatively
to the time in which it has been brought about; and
in view especlal of this rcumstance her Haiesty's
government cannot douUt that 1t Is their duty to
ADOPT, without delay, the measures which seem to
and to avert the ca amiIes VI h'ch may threaten
trade and industry, H. then, the Directors Of the
Bank OF Engla nd proceed NC upon the prudent rules
OF action by which their administration is usually
governed shall find hat in order to meet the wants
OF their legitimate commerce, 1t is requisite to ex-
tend their discounts and advances upon approved
securities so as to issues of notes beyond
limits fixed by law, her M0jestY's Government re.
commend that his necess shou'd be met immedi-
atelV upon its occurrence and III that they will
OF fail TO make Application 10 Parliament for It's
No such discount or advance, however, should be
granted at rate of interest less than per cent
ahe her MaJesIy,s Government reserve It TO them-
selves to recommend, if they should fit the impo.
sition of bIRher rate
After deduction pY the bank of whatever it may
consider TO be tair charge for its risk expense and
trouble, the profit of these advances will accrue to
We have the honor to be, gentlemen, your ODE.
dent SCI wants, RUSSELL,
. w, q, GLADSTONE.
Downing Street, May IL, 1865
EFFECT OF TIE BANK CHARTER ACT SUSPENSION
ON THE STOCK EXCHANGE.
From the PaU Mall Gazette tEosatng papeI) AIoaey
ArtiCte May II.
SATURDAY, l o'clock.-The panic and excite.
ment IN the city has subsidized The action of
the Government in suspending the Bank Charter
Act has had a reassurng effect, and the run
upon the banks has ceased. The total amount
OF the advances made by the Bank of England
yesterday was Ga, 100000.
1t appears that the run upon the various
banks yesterday after all resulted in the with |
drawal OF only a comparatively small sum in the |
aggregate. In one instance, where millions |
might have been called for, Cnly 100000 was |
Withdrawn, and that by small depositors and |
customers. |
The Directors of the Bank of England have |
TINS day raised the rate OF discount TO ten per |
cent, or in other words have assimilated the |
charge ior bills to that for advance on stocks.
One declaration for a small amount was made |
on The Stock exchange to-day, but no other |
la lures are mentioned. |
Rumors OF expected stoppages are still cur |
rent in the city, but they are not to be relied on
and ought not to be repeated.
In Minclng lane to-day there is a very much
better feeling, the uneasiness having entirely |
disappeared; but there are M sales on. Notices |
are being sent out for sales on Tuesday next, |
although the number is very small. |
Two o'CLooK.-Public confidence is quite re.
stored. and there has been a considerable re-
covery in stocks and shares. In Consos a |
further improvement has taken place. Deal
ings have been effected from S5S up to 86a, and
the present quotation is from 86R to 86s for
money, and 85s to 85l ex div. for the account
New and Reduced Three Per Cents. have been
done at S4 up to 84l; EXchequer Bills, March,
5s. discount; and bank stock, 24O
The Panic I'm LOndOn-Its Character
what Caused the Failure or OVerend,
Gurney a. Co.
From the Pail Mall Gazette, Mag H.
1t is desirable in the midst of panic like the
present TO have clear views on the subject of its
real character ana significance. There are
several different causes from which such a state
of things may arise; and when it has arisen, it