deemable discount, and they had not the remotest prospect of ever bringing it back to par. Their conduct, therefore, was the result of sheer necessity; they were driven to bankruptcy only when they were irretrievably insolvent, but they did not deliberately cheat their creditors after their currency was restored to par. The motion was rejected by a majority of 96 to 27, and was the last attempt to tamper with the measure of value

19. The harvest of 1823 was deficient, both in quality and quantity, and prices rose considerably in the beginning of 1824, old wheat being then at 788.; later in the year, however, they declined; but the harvest of 1824 being also inferior, they rallied again. The Bank had for some years been accumulating treasure to meet the anticipated deficiency of the country issues expected to follow the suppression of the £1 notes. When the unhappy change in the policy of the Government took place, this great amount of bullion was rendered comparatively useless, and the country banks began to extend their issues in 1824, and in 1825 they were beyond what they were in 1818. In January, 1824, the bullion in the Bank amounted to £14,200,000. During the preceding year, an adjustment of rents to meet the altered state of prices had taken place, and the old stocks having been gradually worked off, the energy of the people began to revive. The enormous amount of cash in the Bank, for which there was no immediate use, enabled the Government to carry through a great financial operation, the reduction of the interest upon nearly a quarter of the national debt. The Navy 5 per cents. were reduced to 4 per cent. and the 4 per cent. stock to 3. This vast operation had a very considerable influence in curtailing the incomes of many persons who could ill afford it, to a very inconvenient extent, and prepared them to look out for more profitable investments for their money. Notwithstanding the unhappy and severe distress to the agricultural portion of the community, Mr. Tooke says that the trading and manufacturing interests had never been in a more regular, sound, and satisfactory state than in the interval from 1821 to 1824. At the close of the Session of 1823, the King congratulated Parliament on the flourishing condition of all branches of our commerce and manufactures, and the gradual abatement of agricultural distress

20. At the close of 1824 the seeds of the disasters which ensued in the end of 1825 were sown. The Royal speech opened Parliament with the same strain of congratulation as had closed the preceding Session, and the same congratulations were used at the close of the Session of 1824. Towards the end of that year it became visible that in some of the leading articles of consumption the supply was falling short of the demand, which gave rise to a spirit of speculation, and as, in all similar cases, a few early purchases, which were successful, induced extensive imitation; and at the end of 1824, and beginning of 1825, this had amounted to positive infection, numbers of persons being induced to go out of their own line of business to speculate in articles with which they had no concern whatever, but induced by representations of their brokers to do so in the hopes of realising great and immediate gains

21. Just at this period occurred one of those events which have so frequently lured the commercial world to their destruction. The long contest between Spain and her South American colonies had now finally terminated in favour of the colonies. We have already noticed the great commercial catastrophe brought about in 1810, by the extravagant speculations on the opening of the Brazils to British trade. Precisely the same course occurred in 1824. The recognition of the independence of the South American States and Mexico opened out a boundless field for speculation, and the consumption of British manufactures; and this spirit of speculation was aggravated to the utmost by the visions of countless wealth which was to be extracted from the gold and silver producing countries, and immense schemes were formed for working the mines with British capital. However, the long struggle for independence had inspired the British people with much sympathy for the juvenile republics, and when they wanted to borrow money to support their public credit, the British were only too eager to lend it. It is alleged that £150,000,000 of British capital was sunk in different ways in Mexico and South America.

22. Although the symptoms of a coming mercantile catastrophe were plainly evident in the beginning of 1825, the speech

put into the King's mouth declared the utmost gratification at the continuance and the progressive increase of the public prosperity. "There never was a period," it said, "in the history of this country, when all the great interests of the nation were at the same time in so thriving a condition, or when a feeling of content and satisfaction was more widely diffused through all classes of the British people." The speech of Lord Dudley and Ward was exactly in the same strain. After contrasting the sufferings the nation had gone through, during the last 30 years, he said it was his good fortune to ask their lordships to carry to the foot of the throne their unmixed, and, he hoped, their unanimous congratulations, upon a state of prosperity such as he believed was unequalled in this country, and had never been surpassed in any age or nation. And yet, though the whole debate was in this strain, no sooner was it ended than the Lord Chancellor called the attention of the House to the dangerous extent to which the mania for joint stock companies had gone, and said he would move for leave to bring in a bill to restrain the system. Within seven weeks after that Lord Lauderdale called the attention of the House to the "fury for joint stock companies which had taken possession of the people," and said that the schemes already subscribed for amounted to £200,000,000

23. The following extract from the Annual Register of 1824 contains a sufficient description of the rising of the Joint Stock Company mania. After stating that the "mines of Mexico" was a phrase which opened visions of boundless wealth to the imagination, and how the mania spread from foreign enterprises to home ones, it says

"In all these speculations, only a small instalment, seldom exceeding 5 per cent., was paid at first, so that a very moderate rise in the price of the shares produced a large profit on the sum actually invested. If, for instance, shares of £100 on which £5 had been paid, rose to a premium of £40, this yielded on every share a profit equal to eight times the amount of the money which had been paid. This possibility of enormous profit, by risking so small a sum, was a bait too tempting to be resisted. All the gambling propensities of human nature were constantly solicited into action, and crowds of individuals of every de

scription-the credulous and the suspicious-the crafty and the bold-the raw and the experienced-the intelligent and the ignorant-princes, nobles, politicians, placemen, patriots, lawyers, physicians, divines, philosophers, poets, intermingled with women of all ranks and degrees-spinsters, wives, and widows, hastening to venture some portion of their property in schemes of which scarcely anything was known except the name

As a specimen of the madness of the speculations, we may quote the prices of mining shares. The Anglo-Mexican, on which £10 was paid, were at £43 on December 10th, 1824; on the 11th January, 1825, they were at £150. The Real del Monte, with £70 paid, were at £550 in December, and at £1,350 in January, and others in similar proportions. The prices of most other commodities doubled and tripled

24. Now, what was the conduct of the Bank of England during this period? The bullion which stood above £14,000,000 in January, 1824, was reduced to £11,600,000 in October, 1824. The exchange on Paris had been falling ever since the close of 1823. The last time it was above par was in June, and since then the fall had been continuous. The decrease in bullion had been steady, uniform, and rapid ever since March. Now, when it was known that immense sums were leaving the country, and the exchange falling lower, what did the Bank do? It increased its issues. During the month of October, 1824, they were increased £2,300,000. When every consideration of common sense and prudence demanded a rapid contraction, when the speculative fever was plainly declared, instead of doing what they could to check it, they added fuel to the flames. But the directors seemed determined to set all the principles of the Bullion Report at defiance; and the drain upon them proceeded with increased severity. In April, 1825, the bullion was diminished by upwards of £4,000,000, and their issues were £3,600,000 higher when they had only £6,650,000 of bullion than when they had £14,000,000

25. The speculative fever was at its height in the first four months of 1825, when it had spent its force and came to an end

VOL. II.

I

in the natural course of things. Vast numbers of persons who had embarked in these wild schemes, with the hope of selling out of them before the inevitable crash came, were now called upon for their subscriptions. Vast quantities of capital having been already absorbed, had the inevitable effect of raising the rate of interest. Successive calls compelled the weaker holders to realise, and, while the calls for ready-money were immediate and pressing, the prospect of returns was distant and uncertain. Accordingly, after May and June, the decline was rapid. The South American loans, and the Mexican mining schemes, proved almost universally total losses. In the meantime, that slack water, which Mr. Tooke observes always precedes a great turn in the tide of prices, took place. The increase of commodities which speculation had caused, could no longer be kept from being realised, prices fell as rapidly as they had risen. The obligations of the speculators now became due, and the sale of the commodities had to be forced to meet them. Universal discredit now succeeded, goods became unsaleable, so that stocks which are usually held in anticipation of demand were wholly unavailable to meet the pecuniary engagements of the holders. Merchants who had accepted bills for only half the value of the goods consigned to them, were unable to realise even that half, or even obtain advances, on security of the bills of lading, and even the advances already made were preemptorily called in. The usury laws, which limited interest to 5 per cent., greatly aggravated the distress; nobody would lend money at 5 per cent. when its real value was so much greater; hence, numbers who would gladly have paid 8 or 10 per cent. interest, were obliged to sell goods at a difference of 30 per cent. for cash compared with the price for time

26. The bankers in the country had followed exactly in the steps of the Bank of England. While the fever was raging they had increased their issues and liabilities, by speculative advances on commodities. The persons to whom these advances had been made had no means of repaying them, but the "promises to pay " the bankers had lent them still remained in circulation, and must be met. The bankers foresaw the coming storm, and endeavoured to provide funds to meet it. The Bank of England itself had its