PP/GC/LE/101 Letter from Sir G.C.Lewis to Henry John Temple, third Viscount Palmerston, about the causes and effects of the money market crisis, 13 October [1857]
Letter from Sir George Cornewall Lewis, second Baronet, [Chancellor of the Exchequer], Downing Street, [Whitehall, London], to Henry John Temple, third Viscount Palmerston: he is sorry to say that "American discredit, supervening upon French speculation, and Indian disturbance" has produced a pressure on the money market greater than at any time since the formation of the current government. "The danger is that some of the northern joint stock banks, connected with the large American houses, may fail, and that this may lead to a run on the London joint stock banks. The Bank of England was forced to adopt the unusual course of raising its rate of discount one percent on a Monday. It is now 7 per cent, and 8 per cent is considered panic point." There may be a further rise. "Consols today touched 8 per cent but rose 1 per cent before the close." Trade in London is quite sound; any crisis will be produced entirely by external causes. "I am in hopes that the good sense of the public will save them from a panic" and that runs on banks will be avoided. He has recently had interviews with the authorities of the Bank [of England] and India House, and hopes that the arrangements made will overcome the difficulties of Indian finance for the present. "The news brought by the last mail is the best which has arrived since the outbreak and if the mutiny is suppressed within a reasonable time, the financial difficulties of the Indian government will not be very serious." 13 Oct [1857]
Two papers
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Indian mutiny 1857-8
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