Whether the advances were made in the one form or the other, the result was the same in both cases. There being no funds to meet them as they fell due, they were renewed again and again, and were perpetually hawked about the streets, and drawing constant attention to a very reprehensible practice. At last these promissory note and bill operations got so large and unwieldy, that they began to be difficult to manage-the holders of the bills began to feel alarmed-credit gave way-the railway works came to a standstill for want of money-and the companies to which we have referred went one and all into liquidation.

This sudden collapse of railway construction (it will he seen that in 1874 only 1940 miles were built against an average of the previous five years of nearly 6000 miles) intensified tenfold the collapse of the credit out of which it arose. The iron trade, which had been exceptionally prosperous in consequence of the enormous demand for railway material, was hurt; the provision trade, which had been equally prosperous from the requirements of the large number of labourers engaged on the works, was hurt; indeed, every interest connected directly or indirectly with railway undertakings received a blow against which it could not stand. In short, self-preservation became the order of the day all round, and in the process many had to go to the wall.

The first decided indication of the impending panic was the failure of two trust companies in New York and Brooklyn. The failures in themselves were unimportant, but they were naturally looked upon as the harbingers of something more serious. The state of mind begotten of such a strained condition of public credit was in itself calculated to precipitate any impending disaster, and it was felt that any additional circumstance, even of otherwise trifling importance, would bring the fabric of American credit down like a house of cards.

The requisite circumstance occurred about ten days later in the failure on the 18th September of Jay Cooke and Co. This failure was of the first importance. The firm were agents of the American Government, and formed part of the powerful syndicate who took up and placed in the hands of the public the five per cent. funded bonds of the Government. Hence they were looked upon as something more than an ordinary firm, and to their failure "was consequently attached a greater degree of importance. The usual result followed. Runs took place on the National and other banks of "Washington, Philadelphia, and New York. The "Washington and Philadelphia banks stood firm, and so did those of New York until Saturday, the 20th, when five banks and trust companies failed. At this point it was hoped the worst was over, but after a few days' lull the panic revived and spread, and numerous other failures took place, both in the West and South. Difficulty was experienced in selling exchange. Securities had to be realized, and consequently prices fell. Huge 'Bear" accounts were opened, which still further depressed prices.

All this, naturally, considering the extent of the trade between this country and America, produced a considerable sensation upon trade circles here. The American exchange fell below gold point, and gold had to be shipped from this side. The bulk of the gold went between the 24th of September and the loth of October, during which period the Bank reserve had decreased nearly five millions and a half. To protect the gold the Bank of England raised its rate, which had been standing at 3 per cent. since the 21st of August, to 4, 5, 6, 7, 8,'and 9 per. cent. between the 25th of September and the 7th of November. And contemporaneously with the three last-named rates, the Bank charged for advances 8, 10, and 12 per cent. These rates had at last the desired effect, for not only did they stop the further export of gold to America, but they also attracted gold from the Continent, Australia, and India, and the bullion in the Bank account again showed an increase on the 22nd of November.

About the beginning of December the crisis began to pass away. It had been sharp, and the recovery was correspondingly slow. This again told against England, as America is our best customer, and she was in no condition to buy largely from us.

Hence the year 1874 was marked by business of a quiet, steady-going description, out of which little profit was made in any branch. It cannot be said there was any actual depression. The smallness of the volume of business arose chiefly in the reaction from the former period of prosperity, and from our large customer, America, not being in a position to buy from us as much as usual. Still, if there was little business doing, it was matter for thankfulness that there were few failures in 1874, and consequently little anxiety amongst the commercial classes. With the exception of a 5 and 6 per cent. rate on Nov. 16 and 30, caused by the usual autumnal drain of gold, aggravated by an unusual flow to Germany in connection with their new gold coinage operations, the Bank rate during 1874 was never higher than 4 per cent.

At the beginning of 1875 things looked better all round. The 6 per cent. rate during the closing month of 1874 had the effect of attracting gold from the Continent and elsewhere, and replenishing the Bank reserve. Money became plentiful and remained so; and it was fortunate that it did, for the comparatively fair outlook with which the year opened soon gave place to one of cloud and storm.

Business had for long been bad in South America, and losses there had been numerous and large. The knowledge of this fact caused all the London firms engaged in the South American trade, who were not of the first water, to be looked at somewhat askance, and as the result of this suspicion some heavy failures took place.

The first firm that succumbed was that of I. C. im Thurn and Co., with liabilities to the extent of three millions. This firm was peculiarly open to attacks upon their credit, for their name was continually before the London bankers and bill brokers in the shape of their acceptances in connection with their numerous financial operations. Then followed, as a matter of course, the difficulties of the Hamilton Windsor Iron "Works Company, of Liverpool, and Clark, Punchard, and Co., contractors, of London, both of whom were mixed up with the Buenos Ayres Railway Company, whose drafts upon im Thurn and Co., to the extent of about 400,000, were floating about on the London market. Then, partly from its connection with these concerns, and partly from its inherent unsoundness and mismanagement, the General South American Company stopped payment with liabilities of 400,000, but it is right to add that during last year this company paid a final dividend, making up 20s. in the pound. In addition to these there were numerous other failures in the South American trade, which, though of less moment, helped to deepen the anxiety which was felt, and which was fast paving the way for the crisis which occurred a little later on.