"They have been in hopes that the check given to dealings of a speculative character, the transfer of capital from other countries, the influx of bullion, and a feeling which the knowledge of these circumstances might have been expected to produce, would have removed the prevailing distrust.

"They were encouraged in this expectation by the speedy 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 time has arrived when they ought to attempt, by some extraordinary and temporary measure, to restore confidence to the mercantile and manufacturing community.

"For this purpose, they recommend to the Directors of the Bank of England in the present emergency to enlarge the amount of their discounts and advances upon approved security; but that in order to retain this operation within reasonable limits a high rate of interest should be charged.

"In present circumstances they would suggest that the rate of interest should not be less than eight per cent.

"If this course should lead to any infringement of the existing law, Her Majesty's Government will bo prepared to propose to Parliament on its meeting a Bill of Indemnity. They will rely upon the discretion of the directors to reduce as soon as possible the amount of their notes if any extraordinary issue should take place, within the limits prescribed by law.

"Her Majesty's Government are of opinion that any extra profit derived from this measure should be carried to the account of the public, but the precise mode of doing so must be left to future arrangement.

"Her Majesty's Government are not insensible of the evil of any departure from the law which has placed the currency of this country upon a sound basis; but they feel confident that, in the present circumstances, the measure which they have proposed may be safely adopted, and at the same time the main provisions of that law, and the vital principle of preserving the convertibility of the bank note, may be firmly maintained.

"We have the honour to be, Gentlemen, "Your obedient, humble Servants,

(Signed) " J. Russell.

" Charles Wood.

"The Governor and Deputy Governor " of the Bank of England."

- Bank of England, Oct. 25th, 1847. "Gentlemen,

"We have the honour to acknowledge your letter of this day's date, which we have submitted to the Court of Directors, and we enclose a copy of its Resolutions thereon.

"We have the honour to be, Gentlemen, "Tour most obedient Servants,

"James Morris, Governor.

"H. J. Peescott, Deputy Governor."

At a Court of Directors, at the Bank of England, Monday, October 25, 1847 :-

"Resolved-

"1. That this Court do accede to the recommendation contained in the letter from the First Lord of the Treasury and the Chancellor of the Exchequer, dated this day, and addressed to the Governor and Deputy Governor of the Bank of England, which has just been read.

"2. That the minimum rate of discount on bills not having more than ninety-five days to run be 8 per cent.

"3. That the advances be made on bills of exchange, on stock, exchequer bills, and other approved securities, in sums of not less than two thousand pounds, and for a period to be fixed by the Governors, at the rate of 8 per cent. per annum."

" Downing Street, Nov. 23rd, 1847. "Gentlemen,

"Her Majesty's Government have watched with the deepest interest the gradual revival of confidence in the commercial classes of the country.

"They have the satisfaction of believing that the course adopted by the Bank of England, on their recommendation, has contributed to produce this result, whilst it has led to no infringement of the law.

"It appears from the accounts which you have transmitted to us, that the Reserve of the Bank of England has been for some time steadily increasing, and now amounts to 5,000,000. This increase has in a great measure arisen from the return of notes and coin from the country.

"The bullion exceeds 10,000,000, and the state of the exchanges promises a further influx of the precious metals.

"The knowledge of these facts by the public is calculated to inspire still further confidence.

"In these circumstances it appears to Her Majesty's Government that the purpose which they had in view in the letter which we addressed to you on the 25th October has been fully answered, and that it is unnecessary to continue that letter any longer in force.

"We have the honour to be, Gentlemen, "Your obedient, humble Servants,

(Signed) "J. Russell.

"Charles Wood.

"The Governor and Deputy Governor of the Bank of England."

"Bank of England, Nov. 23rd, 1847. "Gentlemen,

"We have the honour to acknowledge the receipt of your letter of this day's date, in which you communicate to us that in consequence of the gradual revival of confidence in the commercial classes of the country, it appears to Her Majesty's Government that the object they had in view in the letter they addressed to us on the 25th October has been fully answered, and that it is unnecessary to continue that letter any longer in force.

"We have the honour to be, Gentlemen, "Your most obedient Servants,

"James Morris, Governor.

"H. J. Prescott, Deputy Governor.

"To the First Lord of the Treasury and the Chancellor of the Exchequer."