§ MR. BAZLEY
With the permission of the House I wish to inquire of the Chancellor of the Exchequer, Whether he has consented to recommend any peculiar faci- 841 lities to be extended to the Bank of England during the existing monetary panic, and what may be the nature of the indulgence, provided he has consented to meet the wants of the mercantile community?
§ THE CHANCELLOR OF THE EXCHEQUER
I stated, in the commencement of the evening, that representations had been made to me from quarters of the greatest influence and credit with respect to the extraordinary state of alarm and distress prevailing in the City to-day. I stated that those representations had come to me from gentlemen representing in particular the private banks of London, and I expected that I should shortly receive similar representations from those connected with the joint-stock banks. Those representations I have received accordingly, and they were pressed even more earnestly and urgently than I anticipated. I stated, also, at the time when I had the honour of addressing the House, that the effects of the day's proceedings in the City through the Bank of England had not been fully given to us. Since that time we have become acquainted with those results, and we find that the Bank, moved by a just desire to sustain the commerce of the country, and to avert disaster, has extended its loans and discounts to-day to a sum of something more than £4,000,000. The effect of that large accommodation was to reduce the reserves of the Bank to a sum not very far short of £3,000,000 of money. Under these circumstances, as far as the facts are known, and—there being no reason to believe that any great change has occurred in the state of things, the estimate is sufficiently accurate for all practical purposes—we find the Bank reserves reduced in a single day from a sum approaching £6,000,000 to a little exceeding £3,000,000. The Government have felt that this is a state of things which, combined with the uneasiness prevailing in the mind of the public in regard to monetary matters, calls for intervention on their part. We have taken the opportunity during the evening of considering the state of the facts, and the result has been that we have determined to address a letter to the Governor and Deputy Governor of the Bank, substantially the same as was addressed to those high officers in 1847 and 1857. That is to say, if the Bank, proceeding upon its usual prudent rules of administration, shall find occasion, in order to meet the wants of legitimate commerce, to make such ad- 842 vances from the Issue Department as shall exceed the limits allowed by law, we recommend that they should not hesitate to make that issue, and we undertake, in the event of the arrival of that contingency, to make immediate application to Parliament to sanction that proceeding. There are other points of detail, but that is the substance of the letter which shall be in the hands of the Governor and Deputy Governor of the Bank to-morrow, and which we earnestly hope may have the effect of allaying the feeling of uneasiness which prevails in the country, especially as it does not arise from any general unsoundness in the condition of our commercial relations, but only from causes of a peculiar and specific character. In that respect we are able to draw a favourable distinction between the present crisis and others in former times; but there is also another distinction, and that is the extraordinary rapidity with which the crisis has come upon us, and which has reduced the opportunity of deliberation given to the Government within very narrow limits indeed. We have not, however, hesitated to act, to address ourselves to the subject with all the means in our power, and we trust that our proceedings will meet with the approbation of Parliament.