tion. 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 description-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 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. 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

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 peremptorily 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 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 Pole, 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,

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