The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe.

  • Combe, George, 1788-1858.
Date:
1856
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Licence: Public Domain Mark

Credit: The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe. Source: Wellcome Collection.

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    circumstances, and what was meant. The mere announcement of the permission to suspend, dissipated the terror ; the run for gold for domestic hoarding ceased ; and the operation of the Act of 1844, as a means of supplying gold for paying English debts to foreigners, never ivas suspended. It performed all its beneficial functions with perfect success, and was seen to have done so the moment the public mind was tranquillised by the promise that it should be set aside if necessary. We are assured by one who has the means of knowing, that Mr. John Macfarlan’s statement in his speech to the Chamber, that “ the private bankers of London inti- mated [he does not say to whom,] that, if the Act was not sus- pended, they would withdraw their balances,” is wholly unfounded. The evil consequences of the state of things now described were aggravated by another unexpected occurrence. In February, 1848, Louis Philippe was chased from the French throne, and a wild de- mocracy established in his place. Political revolutions followed in quick succession in almost every country of Europe; and in April of that year the Chartists threatened to sack London. Great additional monetary embarrassments arose out of these events. Nevertheless, the domestic panic having been assuaged, the Bank never faltered in meeting the demand for gold for exportation. In point of fact, it disappeared when our impoverished people ceased to over-buy foreign produce, and tempted foreigners, by low prices, to buy from them. But dark as this picture of ruin and desolation is, it has another side, which we shall exhibit in our next article. [From the Scotsman of December 5, 1855.] We concluded our last observations on the Currency by the re- mark, that the dark picture of commercial ruin and desolation of 1847-8 had a brighter side; and we now solicit attention to it. The great sufferers on that occasion were the improvident persons who had bought or manufactured goods, or purchased shares or other property beyond their means of paying for them, and the creditors who had imprudently trusted them. When the directors of the Bank of England paid gold for their notes, they were very cautious in re-issuing them, to prevent their being imme- diately presented again for more gold. The country bankers, who also were bound to pay in gold, were forced to follow their example, and the consequence was a great diminution of the currency. This, and the forced sales following on bankruptcies, produced a rapid fall in the prices of all commodities held by the debtor class. Every one, however, who had avoided speculative entanglements, and had prudently husbanded his capital, now entered the markets with great advantage, and bought shares and goods, mills, houses, and ma- chinery, at very low prices. Annuitants, and persons living on the interest of capital, found their condition greatly improved; for money being scarce, interest rose ; and as goods had fallen, their