MR. GILBART'S estimate, in a former section, of the effects of the Bank Charter Act of 1844, in producing that singularly similar sequence of variations in the rate of interest " to which we must always be liable as long as our currency is regulated by the Act," has been amply verified by subsequent experience. Nor are these fluctuations of rise and fall in the bank rate more marked in the regularity of their fitfulness, than is the recurrence of those far more momentous periodic changes in the money market which entail misery upon thousands of happy households, and even bring nations themselves to the verge of bankruptcy.

It has been remarked that panics recur at regular intervals of about ten years each; nor can this be wondered at, seeing that the years 1825, 1837, 1847, 1857, and 1866 have, from various causes, been marked by the catastrophes so named. Judging by this recurrence of disasters at an apparently fixed period, it is not surprising that in the popular mind there seems to be a belief that a cycle exists, fated to bring in its train ruin to the monetary world and to millions outside of it. The dominant causes of the panics of the years specified, and their distinguishing characters, differ in some essential particulars. In one feature, indeed, they are all alike-the unreasoning fear which heralds, accompanies, accelerates, and sometimes produces them.

Like the awful panic of 1825, that of 1857 came suddenly upon the public. A general delusion had prevailed in the former year, countenanced by the speeches from the throne on the opening and on the prorogation of Parliament, as well as by the complacent remarks of members of both Houses, that the country was about to enjoy an era of unexampled prosperity. Peru and Mexico were to pour into her lap the fabled wealth of El Dorado, and the golden sands of Pactolus to be eclipsed by the treasures which every tide would bring up the Thames. By the end of the year those fairy visions had disappeared before stern realities. It was the same in 1857. Families that had been living in opulence, were in a few brief agonizing hours reduced to beggary and plunged in despair-their fortunes gone, their hopes dreams. Labour was driven from its accustomed fields; commerce laid prostrate; credit all but extinct; energy paralyzed; fear and distrust in the ascendant; and enterprise a departed spirit. The gloom was universal, for thousands in every rank of life were ruined.

In sober truth, the crisis of 1857 fell upon the commercial world like a thunderbolt. Not with standing the extra expenditure entailed by the Crimean war, peace was concluded before the national resources had been strained beyond the limit their strength could bear.

"A period of nearly ten years," says an able writer, "uneventful as far as commercial disaster is concerned, may be passed over in silence, except to remark that in 1852 consols attained their maximum price since 1737, namely 101$. The beginning of the memorable year, 1857, seemed to promise a long period of commercial ease, but the outbreak of the mutiny in India, the consequent suspension of remittances from that quarter, and the inverse demand for specie, the demand for capital to supply materials of war to the Government and the East India Company-all those causes tended to depress the funds. In January they reached 94|; in November, they fell to 87 1/8 -lower than at any time since January, 1856, during the pressure of the Russian war." 1

Even so late in the year as the month of August, the public were unapprehensive of the storm soon to ensue, and few or none foresaw the severity with which it would rage. During the inquiry which followed, the Governor of the Bank stated:-

"Things were at this time pretty stationary; the prospects of harvest were very good; there was no apprehension that commerce was otherwise than sound. There were certain more far-seeing persons who considered that the great stimulus given by the war expenditure, which had created a very large consumption of goods imported from the East and other places, must now occasion some collapse; and still more those who observed that the merchants, notwithstanding the enhanced prices of produce, were nevertheless importing as they had done successfully in the previous years. But the public generally viewed trade as sound, and were little aware that a crisis of any sort was impending, far less that it was so near at hand."

The crisis of 1847 had been owing chiefly to excessive railway speculations at home; this of 1857 was mainly due to over-trading abroad.

About the middle of September the mails brought disastrous news from the United States. American railway securities had fallen nearly 20 per cent. The railway accounts had long been "cooked," and the too well-known results of the process followed - sudden and enormous depreciations of railway stock, widely-spread distrust, a drain upon the American banks, and failures shaking commercial credit to its centre. The proximate cause of this terrible crisis in America was the stoppage of the Ohio Land and Trust Company; an establishment which made advances on financial securities, and which, at the time it stopped payment, held deposits to the amount of 1,200,000. Hereupon, a deliberately planned system of "bearing" operations was put in movement, which was described in the "Times" City article of September 10, 1857, as follows :-

1 "Commercial Panics," by Arthur Locker: Companion to the British Almanac. 1867.

"There is actually a powerful combination for the avowed purpose of bringing all the principal undertakings to ruin. A large body of active persons are known to be associated for the purpose : they influence the press to work out their views, and are alleged not merely to operate with a joint capital, but to hold regular meetings, and permanently retain legal advisers, whose chief vocation, it may be assumed, is to discover points that may enable the validity of each kind of security to be called in question, and thus to create universal distrust."'