DOI Page / Citation link:
https://doi.org/10.11588/diglit.22140#0102
86 INDUSTRIAL AND COMMERCIAL HISTORY.
powerful operator to make ^100,000 by this safe operation, and, I
must add, it might be expedient to pay handsomely for the sole
information. The result of this reputed transaction with the
osficial, and real speculation of the tea dealer, was to introduce
a custom into administrations, under which the particulars of the
Budget are made known to the Cabinet only the night before the
Budget is introduced into the House of Commons. The story
which I have told you was given to me as an explanation of this
singular, and sometimes inconvenient, practice—inconvenient
because our coldness and over-timidity in finance are found
embarrassing to parties. But nothing under ordinary circum-
stances can exceed the anxieties with which traders seek to
anticipate the financial measures of the Government.
Sometimes, indeed, a general collapse of ordinary credit ensues,,
and this almost unexpectedly. This state of things has been called
a panic or a crisis, and is rarely or never foreseen. Now, I have
already referred to two of these by name only, i.e., the panics of
1825 and 1847. In both cases the catastrophe was due to a sudden
distrust of commercial credit, particularly of tbe country banks ;
for on both occasions, when credit was almost universally shaken.,
the reputation of the Bank remained intact. But the acutest men
of business were very much divided in opinion as to the causes
which had really brought about the calamity, and still more
divided as to the cause of its cessation. A panic rarely lasts long.
In 1825, according to Mr. Tooke, an eye-witness of the circum-
stances, its endurance was three weeks only. In 1847 the same
acute observer declares that there were two panics, one in April,,
the other in October, and each of somewhat longer duration.
The true cause, I conclude, of a credit panic is the close inter-
lacing of monetary interests. If Ucalegon's house catches fire,,
his neighbours are in extreme risk of the conflagration extending.
The incaution of one banking house has led to its failure, and
similar incaution is ascribed to other houses which have been
cautious. But, as it is the essence of banking that it puts its
credit into circulation, distrust induced on that credit leads to a.
demand for that which it represents, and in the crisis of 1825 it is
admitted that the form which the demand took was gold for internal
use. Fortunately the public was entirely convinced of the sound-
powerful operator to make ^100,000 by this safe operation, and, I
must add, it might be expedient to pay handsomely for the sole
information. The result of this reputed transaction with the
osficial, and real speculation of the tea dealer, was to introduce
a custom into administrations, under which the particulars of the
Budget are made known to the Cabinet only the night before the
Budget is introduced into the House of Commons. The story
which I have told you was given to me as an explanation of this
singular, and sometimes inconvenient, practice—inconvenient
because our coldness and over-timidity in finance are found
embarrassing to parties. But nothing under ordinary circum-
stances can exceed the anxieties with which traders seek to
anticipate the financial measures of the Government.
Sometimes, indeed, a general collapse of ordinary credit ensues,,
and this almost unexpectedly. This state of things has been called
a panic or a crisis, and is rarely or never foreseen. Now, I have
already referred to two of these by name only, i.e., the panics of
1825 and 1847. In both cases the catastrophe was due to a sudden
distrust of commercial credit, particularly of tbe country banks ;
for on both occasions, when credit was almost universally shaken.,
the reputation of the Bank remained intact. But the acutest men
of business were very much divided in opinion as to the causes
which had really brought about the calamity, and still more
divided as to the cause of its cessation. A panic rarely lasts long.
In 1825, according to Mr. Tooke, an eye-witness of the circum-
stances, its endurance was three weeks only. In 1847 the same
acute observer declares that there were two panics, one in April,,
the other in October, and each of somewhat longer duration.
The true cause, I conclude, of a credit panic is the close inter-
lacing of monetary interests. If Ucalegon's house catches fire,,
his neighbours are in extreme risk of the conflagration extending.
The incaution of one banking house has led to its failure, and
similar incaution is ascribed to other houses which have been
cautious. But, as it is the essence of banking that it puts its
credit into circulation, distrust induced on that credit leads to a.
demand for that which it represents, and in the crisis of 1825 it is
admitted that the form which the demand took was gold for internal
use. Fortunately the public was entirely convinced of the sound-