Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1866-05-30
FInanCinaI Crisis i'm England.
A Great commercial Panic.

the Bd1h OAaLbCA NV B1AAO oUoy
ed the city to and fro on Friday, we may
excuse the step, although we believe the
reign of terror was approaching its end,
and would have speedily ceased had no
infraction of bank law been permitted.
Even now it is probable that the license
allowed to the Bank will not be used.-
1t cannot, however, be denied that about
midday yesterday the turmoil became
intense. The doors of the most respec-
table banking houses were beseiged-
more perhaps by a mob .actuated by that
strange symapthy which makes and keeps
mob together than by the creditors Of
the hanks,-and thfongs, tearing and
tumbling about Lombard street, made
that narrow thoroughfare impossible
Such excitement on all sides has not been
witnessed since the great crisis of l825.-
Each man aggravated the suspicious of
his neighbor, and rumors at that time un-
founded were circulated in the afternoon
that the Government had authorised the
Bank Directors to issue FIVE millions
pounds additional in notes. 1t seemed
as if the fear and distrust of the CONNER
cial world had become boundless. The
statement was baseless at the time, but
seemed to allay the panic, which had no
solid foundation. The announcement of
Peto's suspension die, not revive the panic
in its first intensity. Later in the eve
ming it transpired that the Government
had resolved to suspend the bank char
ter act. The assets of Peto and Belts,
even under, the most depressed circum-
stances, are estimated at fVei millions
sterling, and it is confidently assumed
that in short time proposition for the
adjustment of all claims can be submit
ed. Every one will hope that this may
be the case, for Sir Morton Peto and his
partner rank prominently among those
who have carried the fame of English en-
terprise to all parts Of the globe, while they
have commanded the high personslregard
in all sections among their eountrymen.
1t is already known that several fail
ures among dealers Will be announced
in connection with the approaching half
monthly settlements on stock exchange.
A large number of country bankers were
in London to confer with their London
agents to provide against all danger from
local runs and the statement of their
stoppages produced but little effect.
The Times adds "We need to be
pursuaded that had the GoVernmentstood
firm the panic would have subsidized itself,
and if, as we are to expect. confidence
will be speedily restored, we shall attrib-
ute it to the interference of the executive
government s-i-- ..-slt...s s.l5i
a The Daily News applauds the wise and
prompt action of the Government, and
says: "During Friday the bank had ex-
tended its loans and discounts until the
amount exceeded four millions sterling.
The effect was to reduce the bank re-
verses by nearly three millions. This
diminution and prevailing distrust justi-
fed the government Intervention. The
action OF the government was announced
in the House of Commons on Friday at
midnight, by Mr.. Gladstone, who had
been engaged all evening in consultation
with bankers and others, who represent
ed to him that the panic in the city was
without parallel in the financial history
of the country. Mr.. Gladstone said he
had addressed letter to the Bank Of
England to the effect that if they could
find no reason TO afford relief to the
wants of legitimate commerce, and make
such advances as would require the issue
of notes. In regard to the amount allow
ed by the Government, recommended
them not to hesitate in doing so, and un-
dertook in event of that contingency to
make Immediate application to Parli-
ment for an act of indemnify. 'ar-'.
Parliamentary proceedings are unim-
portant. '..- 4
The Morning Herald says at a very
large meeting of Lord Derby's sup
porters, on the 1Ith, it was resolved that
no opposition should be offered to the
second reading of the reform bill for the
redistribution of seats, and that the bill
be allowed to go into committee. e
The cholera continued,to prevail. among
the passengers of the returned steamer
HelFetia, with few additional deaths.
Rumors were circulated in the course
of the day of severe run on the banksof
Barnett, Hoover, Honbury & Co., but
they were entirely without foundation. -
There were runs made upon two or three
other banks, but being well met, soon
subsidized. Both In London and in the
country ample preparations were very
generally made for such contingencies. .
| In the Liverpool cotton market there
was increased panic at the commence
ment on Friday, but less unsteadiness at
the close. -'.i1 O.
At Manchester there was a complete
panic; at Glosgow the iron brokers re-
solved to suspend business till Monday
In the produce markets at London prices
were almost wholly nominal. E.
Taking into account that depreciation
has simultaneously occurred in England
funds, railways and foreign securities, the
dimunition in the market value of this
property since the beginning of the year
may be considered to reach f13O, ,OOO,O
to say nothing of the losses on cotton
goods, iron and other articles.
The Great Britain financial panic cul-
minated late on Thursday afternoon, the
10th, in the suspension of Leoerend, Guer-
ney & Co. The business was converted
in August last into a limited liability
company, with q nominal capital Of FIVE
millions sterling, of which million and
half was paid up. The liabilities are
stated at from ten to twelve million
pounds sterling. The break down is at
tributed to heavy speculative sales Of
shares, which force them down from ten
premium to discount. Depositors began
to get alarmed, and the draw on them
was very severe. Application for assist
ance was made at the Bank of England,
but the Government declined to grant
any on the ground that it Wonld be vain
in crisis like the present to assist one
establishment unless they were prepared
to help other applications as well. Itwas
too late to make a call on the sharehoid-
ers, or take any other steps. The doors
of the establishment were consequently
closed. The failure does not compromise
the Guernsey Bank at Norwich. ..
On the, following morning, Friday the
11th, the widest excitement prevailed in
financial circles in London, Liverpool and
other centres of business was almost sus-
pended. P.
The Times city article of the 18th, says:
The Bank of England yesterday raised
the rate of discount from 8 to 9 per cent.
The pressure even at these terms was
enormous. 1t was only on unexception-
able bills that accommodations could be
obtained. Meanwhile additional and
most serious disasters were hourly an
aounced. First was that of a compare
lively small Bank in English Joint Stock
for 1000 sterling, then that of Peto Il
Belts for four millions sterling: then that