THE LIVERPOOL COTTON MARKET FOR 1965 AND THE RETURNS OF THE BANKS OF ENGLAND AND FRANCE. HOW AFFECTED BY THE LONDON PANIC. The year 1866 in Great Britain opened with flattering prospects. Notwithstanding the high rate of discount, an extensive, healthy and remunerative trade was fully anticipated. One of the leading features then most apparent was the resumption of trade with ourselves. During the closing months of 1865 we were very extensive buyers of goods in English markets, and it was chiefly owing to this activity that considerable stringency was produced in the London money market. The first week of the present year the minimum rate of discount at the Bank of England was raised to 8 per cent., inducing much more caution on the part of merchants, so that matters soon assumed a more satisfactory position. On the 22d of February the rate was reduced to 7, and on the 15th of March to 6 per cent. But this improving posi tion suddenly received a serious check. During the early months of the year there had been an uneasy feeling respecting the Joint Stock Discount Company, and at a meeting of the proprietary, in January, it was decided to make a call of £5 per share; eventually it was decided to wind up the concern. The failure of this company, however, would probably have passed away without more than ordinary comment had it not been apparent that several other institutions were similarily situated, and the fear on the part of many therefore that this collapse was but the commencement of a series of failures. Great uneasiness was consequently felt, and this was increased by an advance in the bank rate on the 8th of May. The previous tendency of money had been of a favorable character, and yet on a Tuesday the Directors had deemed it advis able to raise their quotations to the extent of one per cent. The fact of the bank rate being raised on any day except Thursday is a certain sign that the position of affairs is unsatisfactory, and such proved to be the case on this occasion. For some time the public had shown much curiosity to ascertain the reason why the shares of Overend, Gurney & Co., limited, with the handsome dividends they had paid, should be at so low a price (10 dis.) in the market. The inquiries commenced in the Metropolis, extended to the provinces, and at length Overend, Gurney & Co's shares became almost unsaleable. The Directors of this Company foresaw that without extensive and prompt aid there was no alternative but to close their doors. It was at the time that the bank-rate was raised to 7 per cent. that the Directors of Overend's were endea voring to raise sufficient money to enable them either to reclaim their position or to delay the period when they must succumb. A meeting of the leading bankers was held, but in consequence of the very unfavorable state of the accounts, and the little prospect of surmounting their difficulties, the Bank of England and the other banks declined to grant the accommodation required. Hence there was no alternative left to the Directors but to announce their failure. This announcement was made on the 10th of May at the close of business, and the excitement produced by so important an event was, as our readers will remember, intense. Unlike the Joint Stock Discount Company, the name was famous, the private firm of Overend, Gurney & Co. having, for a long series of years, been considered one of the most respectable and wealthy in the Kingdom. The suspension having occurred on the afternoon of Thursday, the 10th of May, the effect of the failure was not felt until Friday, the 11th, and those who witnessed that day will probably never forget the excitement which prevailed. The run upon the banks was very great; the strain upon the resources of the bank of England was heavy in the extreme, but, fortunately, all the principal banks met their payments promptly, and some, indeed, kept their establishments open two hours beyond the usual period. Nevertheless, many institutions were compelled to succumb, viz. the English Joint-Stock Bank, the Imperial Mercantile Credit Association, and the private firm of Peto, Betts & Crampton, including many others of lesser note. The failures of the year may be considered to reach a total of about one hundred, of which seventy were of considerable importance. The course of this monetary trouble, and its effect, may be seen in the following table we have prepared, showing the position of the Bank of England each week in the year. From the commencement of May to the period when the rate was reduced to 5 per cent. the figures are extremely interesting. It will be observed that on the 30th of May the strain upon the establishment was the greatest, and that the Bank was almost compelled to make use of the liberty, granted by Government, to suspend their charter. Such a course, however, was unnecessary, and as the year closes the bank holds a position of very great strength. The returns are as follows: RETURNS OF THE BANK OF ENGLAND FOR 1866. Public Private Private Bank 8 7 Circulat'n. De osits. Deposits. Securities. Bn lion. Reserve. rate. 26,650,817 5,936,219 18,620,672 30,943,259 12.823,805 1,202,8.0 10 8 Reserve. rate. 6 5 5 4%2 Circulat'n. Deposits. Deposits. Securities. Bullion. 411 46 41%2 436 41%8 4 4 4 4 4 32 The return of the Bank of France also presents many features of interest to the mercantile world, and the particulais for the present year are therefore subjoined. The distrust existing in England shows its effect here in an increase of confidence, and as the reserve of the Bank of England was reduced the bullion in the Bank of France began to increase. The course of the Liverpool cotton market during the year is also of interest in this connection. In great part the effect of the crisis on this staple was anticipate-a dull unsettled trade at Manchester preceding by some weeks these monetary troubles. The direct and im mediate result, however, is seen in a decline of about 6d. in the prices of Middling Uplands from April 12 to May 10; while the unsatisfactory state of business at Manchester since that time, which ras prevented any decided recovery, may be stated as a more hemote effect, but as working the greater injury to the trade. The following table shows the movement for two years, and is so full it needs no explanation: THE COURSE OF THE LIVERPOOL COTTON MARKET FOR 1865 AND 1866. 11,510 36,502 31,090 67,810 510,290 392,200 25 19중 105,355 186 739 18,171 42,027 44,440 107,100 509,340 417,710 241 192 128,276 248,547 24,328 60,913 70,900 146,800 499,350 424,460 231 191 - February 1. 155,771 293,654 30,761 76,537 91,270 182,540 500,040 418,200 221 181 227,298 371,477 36,502 101,894 124,350 225,890 536,660 429,310 22 191 THE COURSE OF THE LIVERPOOL COTTON MARKET FOR 1865 AND 1866. 328,398 420,567 920,360 1,272,260 361,070 923,100 19 14 19. 1,155,922 2,266.044 336,771 442,523 968,390 1,317,700 332,700 878,170 19 131 1,373,800 322,390 882,830 191 14 -August 2 1,252,117 2,431,153 356,342 482,851 1,014,820 1,418,610 347,580 902,330 19 14 66 9. 1,337,363 2,482,480 367,516 507,790 1,062,740 1,447,980 373,740 898,500 19 131 536,012 1,094,810 1,505,210 470,590 883.230 18 134 562,675 1,143,920 1,542,780 430,060 865,740 181 13 582,928 1,211,410 1,583,500 411,760 880.210 181 131 -September 6. 1,591,548 2,701,176 423,619 606,782 1,275,400 1,617,590 361,140 850,050 18 13 13 1,718,425 2754,432 445,987 631,303 1,315,650 1,669,120 427,590 827,570 181 13 1,737,350 349,870 871 960 19 13 506,182 665,309 1,481,800 1,806,850 261,500 774,480 211 141 -October 4 1,796,043 2,939,557 524,745 679,930 1,551,900 1,884,480 271,960 737,040 24 14용 719,854 1,597,680 1,933,900 201,970 692,720 24 15 3,011,247 557,834 745,394 1,632,270 1,980,220 280,370 647,000 234 151 763,816 1,647,630 2,015,110 303,099 702,500 22 15 665,160 201 15 306,260 2,129,160 291,430 618,690 19 14 369,820 604,710 19 14 356,210 578,180 204 14 339,230 5 9,010 211 137 |