National Republican., 1884-06-02
A GREAT PANIC.
How tho Bank OF England WeAthcred a
Terrific Storm Many Years Ago.

How tho Bank OF England TVeAthcred n
Terrific Storm Many Years Ago.
There was great panic in the Bank of Eng
landi in December, 1895, caused by the redemp-
tion ofinterest on f215, 100000 of stock held by
the public. The Bank Of England was acting
US banker for the nation, and offered to ad-
vance money to the holders Of stock to pay OFF
their principal investment. This was an era
of speculation, and no less than 9372, ,000, 900
or over $l,sOo,0Oo,O0o, was invested in all
kinds Of bogus" stock projects. In somo Of
these scheme shares of 4100, on which only
95 had been paid, rose to premium of $40
yielding a profit of eight times the amount of
money paid. Everything went as merry as
marriage bell for time and large sums had
been withdrawn from the Bank of England,
reducing tho gold in its vaults from fS,750,-
900 in October, 1924, to 43,624,320 in Feb
ruary, 1925.
The pa mic began on the 5th of December,
1925, when London bank failed, at which
the agency Of over forty country banks was
transacted, and such reaction was the neces-
sary result of the previous madness of specu-
lation. Lombard street and the vicinity of
the bank were filled with excited men and
women, somo frightened out of their wits,
others raviDg like maniacs. The scenes wit
messed in New York's financial center tho
past week were of q similar nature. The
thousand of excited people were waiting
eagerly to withdraw their Investments. Next
day several other banks failed. The rush on
the Bank Of England was terrific, but the
clerks kept paying away the gold In bags
containing twenty-five sovereigns each.
From 0 o'clock q. m. until p. M, each
day twenty-five clerks were engaged count
ing out gold, and as it would take that num-
ber of clerks to count out 100000 in sover-
eiEns, If counted by hand, plan was adopted
by which tho tellers counted twenty-five
soveregns into one scale and twenty-five
into another, and If the scales balanced they
continued until there were 200 sovereigns in
each scale. In this way f1,0O0 were paid out
in few minutes the weight of 1000 sover-
eigns being twenty-one pounds, while 5l2
bank notes only weigh one pound. In this
way G317000 in gold was paid out in nine
hours to clamorous depositors.
Instead of contracting their Issues the
directors of the bank boldly extended them
In ono day they discounted 4,20O bills. On Do
cember 8 the discounts at the bank amounted
to 81, 500 900 on the 10Th they were ELL ,500,-
600, and on the Goth Gl5,000,000; Dec. 3
the circulation of the bank was 9l7,500, 900,
and on the day before Christmas, Dec. "A, it
was 925, 800, 000-or the enormous sum of
$l27, 100000. Any kind of paper that was
not absolutely worthless was discounted
Tremendous advances on deposits of bills of
exchange were made by the bank, stocks was
entered as security, and exchequer bills were
purchased, The gallant old institution
weathered tho Storm and on the 26th of
December gold began to come in slowly.
During the latter part Of the panic week u
forgotten box of one-pound notes, containing
100000, WAS discovered, and these wore
Immediately issued, and tho directors ac-
knowledged that tho forgotten box saved tho
commercial credit of the Bank of England.
There was only 960l,0 in bullion, and
G42G,000 in coin, when the great rush stopped.
In February, 1897. whom the bank suspend cd
cash payments, there were f10sO, 170 in co in
and bullion remaining in tho vaults.