On the Crises of 18^7, 184'/, and i8^j 



41 



by foreign houses, without any remittance previously or contem- 

 poraneously made, but with an engagement that it should be 

 made before the acceptance arrived at maturity."^ 



jBank J^a ieof/nterest efthc 

 JBank of Sn^land. 



from Seudj SanAofEn^landNote/a^uc and /tsSrror, p95. Chart. 6. 



The permanent cause at the bottom of this extension of credit 

 was a force -already alluded to in the discussion of changes in the 

 permanent environment, namely, the enormously increased out- 

 put of gold. Statistics show that for England there had been 

 excessive imports of the precious metals. This was accompanied 

 or perhaps followed by a correspondingly increased foreign trade. 

 These factors demanded increased facilities for distribution of 

 capital. The usual results followed. A movement of specula- 

 ticHi was started within the financial circle .itself. 



In France the period 1840 -to 1857 is characterized as an era 

 of invention and improvement. To further the onward move- 

 ment, checked by the panic of 1847 ^"d the revolution of 1848, 

 the government came to the aid of the railway and telegraph 

 ■companies. To accomplish this some large financial operations 

 were necessary. Large loans were obtained from the Bank of 



* Evans, The Commercial Crisis of 183/-58, 33-34. 



183 



