The new North-west. [volume] (Deer Lodge, Mont.) 1869-1897, 1884-07-04
AN ENGLISH PANIC.
A Forgotten Cash-Box That Tided Over
Trouble.
Cincinnati Gnzsttp-

/ S"tHhutt uuSeNe'
There was great panic in the Bank oi
England In December, 1926, caused by the
redemption of interest on G215 0Oo, 900 o
stock held by the public. The Bank of En-
gland was acting as banker for the nation
and offered to advance money to the holder:
of stock TO pay of their principal investment
This was an era of speculation, and no less
f372, 900 900, or over 81, SOC, 900, 900, was in
vested in all kinds of bogus stock projects
In some Of the schemes shares of f100, on
which only rs had been paid, rose to pre-.
! MUM of f40, yielding profit of eight times
the amount Of money paid. Everything
tfseat as merry as a marriage bell for time,
aud large sums had been withdrawn from the
Bank of England, reducing the gold in Its
vaults from fS,750, 900 in October, 1924, to
f3, ,624 ,320 in February, 1925.
The panic began on the 9TH of December,
1926, when a London bank failed, at which
the business of over forty country banks was
transacted, and such reaction was the nee
essary result Of the previous madness OF
speculation.
| Lombard street and the vicinity Of the
bank were filled with excited mea and
women, some frightened out Of their wits,
others raving like maniacs. The scenes wit
messed in New York's financial center re-
Gently were Of similar nature. The thous.
ands 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 contain
| ing % sovereigns each.
From a. m. to ) p. ID. each day twenty
five clerks were engaged counting out gold
and as it would take that number of clerks
TO count of 100000 in sovereigns, If counted
by hand, plan was adopted by which the
tellers counted 25 soverelgns into one scale
and % into another, and if the scales ba..
anced they continued tilt there were 200 sover.
egns in each scale. In this way f1 900 was
paid out In few minutes, the weight oi
1000 sovereigns being % pounds, while 81:
bank notes only weighed one pound. In thi:
way f317 900 were paid out in nine hours &c
clsmorous depositor.
Instead of contracting their issues the Di
rectors of the bank boldly extended them
In one day they discounted 200 bills. De
cember sth the discounts at the bani
amounted to f7,500,000; on the 10Th they
were ELL 100000, and on the 10Th Els,
000, 700. December Sd the circulation of th,
bank was f17,5OO, 900, and on the day before
Christmas, December oath, it was f25 500,
0O0-or the enormous sum of S127 $780, 900
Any kind of paper that was not absolutely
worthless was discounted. Tremendous ad
vances on deposits of bills Of exchange wer'
made by the bank, stock was entered as Sc
eurity, and exchequer bills were purchased
| The gallant old institution westhered th,
storm, and on the Goth of December gold be
gan to come in slowly. During the latte
part Of the panic week forgotten box o
one-pound notes, containing 10000 wa
discovered, and these were i'm mediatel.
issued, and the Directors acknowledged tha
the forgotten box saved the commercial credi
of the Bank of England. There was onl.
f6O1 900 in bullion and f426,0OO in coil
when the great rush stopped. In February
1797, when the bank suspended cash pay
ments, there were f1,os0,170 IN coin AM
bullion remaining in the vaults.