The Commercial Crisis 1847–1848: being facts and figures illustrative of the events of that important period, considered in relation to the three epochs of the Railway Mania, the Food and Money Panic, and the French Revolution

Claims Supported by This Source

1. In November 1844, the Bank of England held £14.3 million in bullion, with £21 million in notes in circulation, and the interest rate in Threadneedle Street was 2.5%. In January 1845, 16 new companies were registered, increasing to 52 per month by April (pp. 2–3).
2. Registrations increased again in July and August; September saw 457 registrations, bringing the cumulative total since the start of the year to 1,035, while October had 363. Although a railway newspaper wrote "no cause for alarm" regarding rumors of the bank raising interest rates, the bank raised the rate to 3% on October 16, and the end of October is remembered as the beginning of the stock market panic (pp. 12, 16–18).
3. In November, the bank raised the minimum interest rate to 3.5%. Before the submission of plans to the Board of Trade (end of November), The Times published Spackman's table: 47 completed companies (paid-up capital £48,043,563, borrowings £22,637,314, total £70,680,877), 118 lines under construction (£67,359,325), and 1,263 companies in planning (deposit required £59,136,300 = 10% of capital of £563,203,000 plus 5% for parliamentary costs). Of these, 643 companies had not registered a prospectus (pp. 20–22).
4. A Times editorial on November 17 cited "1,428 railways, estimated capital £701,243,208, deposit £49,592,816" and wrote that even adding £50 million to what had already been undertaken could not be done without "the most ruinous confusion." Although the 1,263 plans were said to be "mostly smoke," "where there's smoke, there's fire" (pp. 22–23).
5. Of the 1,263 companies, less than half submitted plans that met the Board of Trade's regulations. The deposits were initially estimated at £20 million to £30 million, to be lodged with the Accountant-General of the Court of Chancery. From November to December, the bank's bullion decreased from about £14 million to about £13 million (pp. 25–26).
6. Lord Dalhousie (House of Lords, April 1846): While the 248 railway bills of the previous year were considered an unprecedented number, by December 31, over 1,400 schemes had been provisionally registered. By November 30, over 800 plans had been submitted to the Board of Trade, and about 700 remained by December 31. As committee passage approached, share prices fell, and in Scotland, questions were raised about methods of dissolution. Thus, "Dalhousie's Dissolution Act" was passed (pp. 41–43).
7. States, "From the peer to the peasant, few escaped uninjured." "Further damages are in a later chapter" (p. 52).
8. Railway calls in 1847: January £6.15 million (of which £4.5 million for British lines), February £1.4 million, March £3.508 million, June £3.2 million (of which £0.75 million for foreign lines), July £5.3 million (£4.3 million for British lines, £1 million for foreign lines), August £2.28 million, September £4.16 million, October £3.76 million (total for September-October £7.92 million, of which £1.22 million for foreign lines), November £2.04 million (pp. 54–56, 64–65, 71, 74, 98).
9. The bank raised rates to 3.5% on January 14, 1847, and to 4% on January 21. On October 1, its announcement of "a minimum rate of 5.5% for bills maturing within 14 days, and no loans against public funds for the time being" caused a full-blown panic, and the cry was raised again that railways were destroying commercial credit with their calls for payment (pp. 55, 75–76).
10. On Saturday, October 23, London bankers went to the Prime Minister's residence to request the suspension of the Bank Charter Act. In response to a government letter on Monday, the 25th, the bank resolved a "minimum discount rate of 8% for bills maturing within 95 days, and 8% for secured loans of £2,000 or more." It includes a list of relief loans made by the bank from September 15 to October 25. Glyn testified that the letter's effect was "the same as an issue; it brought out the notes that were hoarded" (pp. 86–91).
11. In a speech on November 30, the Chancellor of the Exchequer explained the reason for setting the minimum rate at 8% instead of 10% and spoke of the "panic in the City" seen in October (pp. 93, 97–98).

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