Note Footnote 53: — Chapter XXV · (continued 2)

Viscount Palmerston presents his humble duty to your Majesty, and begs to state that the condition of financial affairs became worse to-day than it was yesterday.53 The Governor of the bank represented that almost all private firms have ceased to discount bills, and that the Reserve Fund of the Bank of England, out of which discounts are made and liabilities satisfied, had been reduced last night to £1,400,000, and that if that fund should become exhausted the bank would have to suspend its operations. Under these circumstances it appeared to Viscount Palmerston, and to the Chancellor of the Exchequer, that a case had arisen for doing the same thing which was done under somewhat similar circumstances in 1847—that is to say, that a letter should be written by the first Lord of the Treasury and the Chancellor of the Exchequer to the Governor of the Bank of England, saying that if under the pressure of the emergency the bank should deem it necessary to issue more notes than the amount to which they are at present confined by law, the Government would apply to Parliament to grant them an indemnity.