THE SUSPENSION OF THE BANK CHARTER.

New Zealander, Volume 3, Issue 190, 25 March 1848, Page 3

THE SUSPENSION OF THE BANK CHARTER.

The pressure put u pon the Government within the last week by the city bankers and merchants, has at len»th caused them to move, though reluctantly, and with great caution. When it became known on Saturday that Messrs. Mabterroan and Rothschild intended to wait upon the Chancellor of the Exchequer, the utmost excitement was experienced m the city, as it was evident something was about to be done. The Ministers serm to have anticipated the wishes of the deputation, however, as, when it arrived at the Treasury, it was informed by Lord John that the course Governmerit intended to puisue was already made known to the Bank, nud early in the day, the official correspon deuce between that establishment and the Ministers became generally known. The following is a copy of these important documents :— " Downing-gtreet, O«iober 25, 1847 — Gentlemen : Her Majesty's government have seen with the deepest regret the pressure which has existed for some weeks upon the commercial interests of the country and that this pressure has been augmented by a want of that confidence which is neces«ary for carrying on the ordinary dealings of trade. They have been in hopes that (he check given to transactions of a speculative charactir, the transfer of capital from other countties, the influx of bullion, und the feeling which a knowledge of these circumstances might be expected to produce, would have removed the prevailing distrust. They were encouraged iv this expectation by the cessation of a similar state of feeling in the month of April last. These hopes have, however, been disappointed, and her Majesty's government have come to the conclusion that the tirre has arrived whet) they ought to aUempt by some extraordinary and temporary measure to restore confidence to the mercantile and manufacturing community. For tins purpose they recommend to the directors of the Bank ot England, in the present emergency, to enUugethe amount of their discounts and advances upon approved security ; but, that, in order to retain this operation within reasonab'e limits, a high rate of interest should be charged. In presmt circumstances they would suggest that the rate of interest should not be less than 8 prr cent. If this course should lead to any infringement of the existing law, her Majesty's government will be prepared to propose to Parliament, on its meeting, a Bill of Indemnity. They will rely upon the d'scretion of the directon to reduce as soon as possible the arc ount of their notes, if any extraordinary issues should take place, within the limits prescribed by law, Her Majesty's Government are of opinion that any ex* tra profit derived from this measure should be carried to the account of the public, but the precise mule of doing so must be left to future arrangement. Her Majesty's Government are not, insensible to the evil of any departure from the law which has placed the cur rency of this country upon a sound baiis ; but they feel confident that, in the present circumstances, that which they have p:oposed may be safely adopted, and that at tl c same time the main provisions of that law. and tliß vital principle of preserving the convertibility of the bank-note may be firmly maintained. We h-ive the honor to be, gentlemen, your obedient humble servants,— John Russell, and Charles Vyood, the Governor, and Deputy-Governor of the Bank of England." (Copy of Reply.)— " Bank of England, October 25, 1847. — Gentlemen, We have the honor to acknowledge your letter of this day's date, which we have submitted to the Court of Directors, and we enclose a copy of the Resolutions thereon ; and *c have the honor to be, Sirs, your most gbedient servants, — James Morris, Governor. H.J. Prescott, Deputy- Governor. To the First Lord of the Treaiury, and Chancellor of the Exchequer." " Resolved,— That this Court do accede to the recommendation contained in the letter from the First Lord of the Treaiury and the Chancellor of the Exchequer, dated this day, and addressed to the Governor and Deputy-Governor of the Bank of England, which hat juts been read. That the minimum rate of discount on Bills not having more than 95 days to run, he 8 per cbnt. That advances be made on Bills of Exchange, on Stock, Exchequer Bills', and other approved securities, in, sums of not less than £2,000, and for periods to be fixed by the Governors, at the rate of 8 per cent, per annum. The effect of this anpouncement was to send Consols up from 80, the* closing price of Saturday, to ,83, a price which with some fluctuations, they maintained till Thursday. Independently of this measure, however, thing* are beginning to improve — large arrivals of gold have taken place, a ium of £200,000 having been received from America* and further sums from other quarters, amounting to more than a quarter of a million. We have ttill to announce a few further stoppages, however, the most important of which is that of the North and South Wales Bank, at Liver* pooj> which suspended payrnefit on Monday,