eyes open to the suicidal career it was following in May, and then endeavoured violently to contract its issues. This sudden change of policy only aggravated the general feeling of discredit. During the autumn everything portended the approach of the impending catastrophe. The following table shews the progressive decrease in the bullion in the Bank during 1824 and 1825

27. The inevitable contre coup of the undue expansion of credit in the spring began to press heavily on the country banks in the autumn of 1825. It gradually became severer during the month of November. On the 29th November it was announced in the London papers that Sir William Elford's-a large bank at Plymouth-had failed, and that was immediately followed by the fall of Wentworth and Co., a great Yorkshire firm. By the 3rd December, the panic had fairly set in, and the whole city was thrown into the most violent state of alarm and consternation. On that day (Saturday) some of the directors were informed that the house of Poole, Thornton, and Co., one of the leading city banking houses, was in difficulties, and at a hurried meeting held on the following day it was decided to place £300,000 at their disposal upon proper security. During that week the utmost attention was paid to the position of that house which fought it through the following week, though it was privately known to the governor that, if the storm did not abate, they must fail on the Monday morning. Instead of abating, however, it became more furious than ever on Monday; and Pole and Co. stopped payment, and the ruin of forty country banks which were connected with them was expected

28. The fall of this great banking house was the signal for a general run upon all the London bankers, and three or four more gave way, and spread universal consternation among the country banks, sixty-three of which succumbed to the crisis, though a considerable number paid 20s. in the pound, and eventually resumed business

29. From Monday, the 12th, to Saturday, the 17th December, was the height of the crisis in London. Mr. Richards, the Deputy-Governor of the Bank at that time, said

"On Monday morning the storm began, and till Saturday night it raged with an intensity that it is impossible for me to describe; on the Saturday night it had somewhat abated. The Bank had taken a firm and deliberate resolution to make common cause with the country, as far as their humble efforts would go, and on Saturday night it was my happiness, when I went up to the Cabinet reeling with fatigue, to be able just to call out to my Lord Liverpool, and to the members of His Majesty's Government then present, that all was well; that was, I believe, on the evening of Saturday, the 17th December. Then in the following week things began to get a little more steady, and by the 24th, what with the £1 notes that had gone out and other things, people began to be satisfied, and then it was for the first time in a fortnight, that those who had been busied in that terrible scene could recollect that they had families who had some claim on their attention"

30. As the crisis was evidently approaching at the end of November, the papers discussed the probable policy of the Bank, and it was generally anticipated that it would continue to contract its issues, and let the evil work its own cure by the fall of those houses which had been imprudent in their speculations, and this was the course adopted by the Bank, and to which they adhered as matters grew worse, and they were supported in it by public opinion. On the day after Pole and Co. fell another house of equal magnitude fell, Williams, Burgess and Co. The panic then became universal, and, as the directors thought that they would certainly have to stop payment, they sounded the Government as to a Restriction Act, but the Government absolutely

declined it, and it was resolved that the Bank should pay away its last sovereign. The Mint was kept constantly at work day and night, but it could not supply coin with sufficient rapidity, so that it kept constantly diminishing. On the Saturday the coin in the Bank vaults scarcely exceeded one million, but, by a happy circumstance, when the Saturday evening came the tide receded, and the directors were able to assure the Ministry that all danger

was over

31. The great pressure had produced the effect which necessarily results from such circumstances. The great increase in the value of money here had turned the exchanges in favour of the country, the directors expected remittances from Paris, and they fortunately came sooner than was expected. On the Monday following the 19th about £400,000 came from France, and the demand having sensibly abated, the supplies from the Mint fully equalled the sums drawn out of the Bank-or rather exceeded them

32. Mr. Huskisson said afterwards, in the House of Commons, that, during forty-eight hours (Monday and Tuesday, December 12 and 13), it was impossible to convert into money to any extent the best securities of the Government. Persons could not sell Exchequer bills, nor Bank stock, nor East India stock, nor the public funds. Mr. Baring said that men would not part with their money on any terms, nor for any security. The extent to which the distress had reached was melancholy to the last degree. Persons of undoubted wealth and real capital were seen walking about the streets of London, not knowing whether they should be able to meet their engagements for the next day. By this time, however, the exchange had decidedly turned in favour of the country, and on Wednesday, the 14th, the Bank totally changed their policy, and discounted with the utmost profuseness. They made enormous advances on Exchequer bills and securities of all sorts. Mr. Harman said

"We lent it by every possible means, and in modes we had never adopted before; we took in stock as security, we purchased Exchequer bills, we made advances on Exchequer bills, we not only discounted outright, but we made advances on deposit of

bills of Exchange to an immense amount; in short, by every possible means consistent with the safety of the Bank, and we were not, on some occasions, over nice; seeing the dreadful state in which the public were, we rendered every assistance in our power."

This audacious policy was crowned with the most complete success, the panic was stayed almost immediately. On Friday evening, the 16th, the Courier said "We are happy to think that the worst is over, though there are still great demands upon the Bank, particularly from the country." The same paper, on the next day, the 17th, said-"Although public confidence is on the return in the metropolis, and things are resuming their usual course, yet, as might be expected, this has not yet communicated itself to the country." In fact, the London panic was completely allayed in this week by the profuse issue of Bank notes. Between the Wednesday, the 14th, and the Saturday, the 17th, the Bank issued upwards of £5,000,000 of notes

33. The waves of discredit, however, were propagated through the country, and throughout the following week the demand still continued great from the London bankers for their country correspondents. During the course of it, it came to the remembrance of some of the directors that there was a chest of their £1 notes which had never been used. As soon as this was discovered, it occurred to them that they might be used to stay the panic in the country districts, and the discredit of the country bank notes. Upon communicating this idea to the London bankers, it was eagerly approved of, and the sanction of the Government was asked for the experiment. The Government consented, and the notes were sent off to the country bankers without delay, and produced instantaneous relief. At Norwich, when the Gurneys shewed upon their counter so many feet of Bank notes of such a thickness, it stopped the run in that part of the country. By the 24th December the panic was completely allayed all over the country, and the amount of the £1 notes the Bank issued was under £500,000, and by the beginning of 1826 the credit of the banking world was completely restored

34. The circumstances of this famous crisis are the most complete and triumphant examples of the unquestionable truth

of the principles of the Bullion Report, and of Sir Francis Baring, already quoted in Chapter VIII. When the drain of treasure from the Bank was severe and unceasing, and notoriously for exportation, on account of foreign loans, the Bank, with infatuated obstinacy, had increased their issues instead of contracting them, in defiance of the clearest warnings of the Bullion Report. When, after six months' continuance in this fatal policy, they at last reversed their course, and contracted their issues. In the course of the autumn the drain for the exportation ceased, but continued for internal purposes; the demand for gold was entirely to support the tottering credit of the country bank notes. Now, as the country bankers were only too glad to withdraw their own notes, and substitute gold for them, there was not the slightest danger of an increase of Bank of England notes adding to the general amount of paper currency in the country, but just the reverse; consequently, it was just the precise case in which Sir Francis Baring and the Bullion Committee said that it was the duty of the Bank of England to extend its issues to support general credit. There was not the smallest danger that an extension of issues would, under such circumstances, turn the foreign exchanges against the country. The character of the demand was declared in the most unmistakeable manner. On Thursday, the 15th, a meeting of merchants and others took place at the Mansion House, when it was stated that Sir P. Pole and Co. had a surplus of £170,000 after payment of all claims against them, besides large landed property belonging to Sir Peter Pole, and about £100,000, the private property of other members of the firm. Williams and Burgess had enough to pay 40s. in the pound. Now if the course which was adopted on the Wednesday had been adopted on the Monday, the whole of that terrific crisis would have been saved. Mr. Vincent Stuckey, one of the most eminent country bankers in the kingdom, says

"My opinion was that the crisis at that time was brought on by excessive issues; but, when the panic came, country bank paper was brought in for Bank of England, and, therefore, all that was immedtately wanted was an Exchange of Paper. I stated, in a letter I wrote upon the subject to the Bank on the 14th of December, 1825, that they would not have to increase