[The Money Market Review, 26. Oktober 1867]

The Money Market Review, 26. Oktober 1867. S. 427/428 u. 432.
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⦗October 26, 1867.
Monetary Panics und Lord Overstone.

In 1857, Overstone (bei Gelegenheit der suspension des Bank Act) said: „It was impossible to deny that the suspension of the Act, twice repeated, did create serious difficulty, and he thought the Gvt. were entitled to say that the Committee, which was in existence, ought to direct its attention to the question whether, while maintaining the provisions of the Act of 1844, which were essential to maintaining the solidity of the monetary system, and placing the exchange under proper control, they could not add, without relaxing these principles unsafely, an elastic power applicable to peculiar and exceptional circumstances.“ Said in another part of the same speech: „By suspending the Bank Act the Gvt. had intercepted the natural action and legitimate remedy for an unwholesome system, and therefore had rendered it incumbent upon Parliament to find some other remedy for the future.“ Verbosity and mysterious intricacy Zusatz von Marx.
The „provisions“ of the Act of 1844 were to be maintained. But to these „provisions“ which in the next sentence have become „principles“, „an elastic power“ was to be added to relax the provisions to be maintained and the „principles essential to preserve the solidity of the monetary system“. But the provisions or principles were not to be relaxed „unsafely“, and, therefore, the elastic power was to be „applicable only to peculiar and exceptional circumstances“. Exactly those circumstances in which, according to all the previous teaching of the Overstone school, the principles and provisions ought to be maintained“ maintained und under which the Act had been twice suspended. By suspending the Act, Overstone said, „they had intercepted the natural action and legitimate remedy for an unwholesome system“ und therefore he incontinently proposed that Parliament should in future neutralise this „natural action and legitimate remedy“ by providing an „elastic power to accomplish the same purpose as a suspension of the Act namely, the restoration of an unwholesome system“. The Act and its principles and provisions were to be maintained for the preservation of „the solidity of the monetary system“ and, at the same time, they were to be relaxed and neutralised to destroy that solidity, and substitute an unwholesome system.⦘  Aus: The Money Market Review, 26. Oktober 1867. S. 432. Gemeint ist ein Fall der Aktienkurse von Eisenbahngesellschaften.
In Folge dieses collapse, aggravated by that of Liverpool Royal Bank, great alarm in Railway Market. Almost panic. Next morning panic – was discounted.


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