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Page 47
The distress of England in 1847 was scarcely over when France was more
severely affected than at any period since the Continental War. Louis
Philippe abdicated in February, 1848, when consols closed at 88-7/8. By
the close of the week they fell to 83, upon the formation of a
provisional government. The political dissensions and commercial
revulsion led to a large withdrawal of gold from the Bank of France, and
finally the Government authorized, in March, the suspension of the bank,
which was followed by the suspension of the Bank of Belgium and by the
_Soci�t� Generale_.
Again, in 1857, the Bank of England was on the verge of suspension. Lord
Palmerston and the then cabinet issued an order, November 12,
authorizing the bank, if they thought it advisable, again to violate the
charter; but it was found at the last moment unnecessary.
November was the critical period of the year 1857. The _Times_ of
November 12, 1857, contained these announcements:
1. Bank charter suspended.
2. Interest in London, 10 per cent.
3. " in Hamburg, 10 per cent.
4. " in Paris, 8-1/2 per cent.
5. " in New York, 25 per cent.
6. Suspension of cash payments generally
by all banks in the United States.
7. Two banks stopped in Glasgow,
and one in Liverpool, and a great bill
panic in London.
8. Commercial credit and transactions
almost suspended in the country.
9. Bullion in the bank, �7,170,000.
10. Reserve notes in the bank, �975,000.
11. Bank liabilities, �40,875,000.
'One gentleman, during the heat of the excitement at Glasgow, went
into the Union Bank and presented a check for �500. The teller
asked him if he wished gold. 'Gold!' replied he, 'no; give me
notes, and let the fools who are frightened get the gold,' Another
gentleman rushed into the same bank in a great state of excitement,
with a check for �1,400. On being asked if he wished gold he
replied, 'Yes.' 'Well,' said the teller, 'there is �1,000 in that
bag and �400 in this one.' The gentleman was so flurried by the
readiness with which the demand was granted that he lifted up the
bag with the �400 only, and walked off, leaving the �1,000 on the
counter. The teller, on discovering the bag, laid it aside for the
time. Late in the day the gentleman returned to the bank in great
distress, stating he had lost the bag with the �1,000, and could
not tell whether he dropped it in the crowd or left it behind him
on leaving the bank. 'Oh, you left it on the counter,' said the
teller, quietly, 'and if you call to-morrow you will get your
�1,000.' (_Vide_ 'History Bank of England,' p. 429.)
The facts and statistics from the year 1844 to 1860 relating to the bank
are superadded to the English work by the American editor. Of the
important phases of this period the editor gives a slight sketch in the
following paragraphs. The prominent financial movements in England,
France, and the United States are given in the subsequent pages of the
volume.
'The sixteen years which followed the last charter of the bank have
been pregnant with important events of a financial character; the
most important, perhaps, during the whole history of the
institution. The bank has twice, during this short period, been on
the brink of suspension, and was relieved only by the interference
of Government. The second instance occurred after new gold, to the
extent of one hundred millions sterling, or more, had been poured
into Western Europe from California and Australia. The Bank of
France had, during the same period, suspended specie payment. Two
financial revulsions have occurred in the United States, when, with
few exceptions, the banks of the whole country suspended specie
payments. The production of gold and silver throughout the world,
which, up to 1844, was annually about ten or twelve millions
sterling, had recently advanced from twenty-five to thirty millions
sterling per annum, thus stimulating industry and production
largely throughout Europe and America. Sir Robert Peel, the author
of the new charter of the bank, has left the world's stage, after
witnessing the failure of the charter to fully accomplish the end
promised; Europe and America, Asia and Europe, have been knit
together by a wire cord, and capital is now subscribed to
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