On Dec. 24, 1824, the coin and bullion in the Bank was L10,721,000

On Dec. 25, 1825, it was reduced to L1,260,000

and the consequence was a panic so tremendous that its results are well remembered after nearly fifty years.  In the next period of extreme trialin 1837, the Bank was compelled to draw for 2,000,000 L. on the Bank of France; and even after that aid the directors permitted their bullion, which was still the currency reserve as well as the banking reserve, to be reduced to 2,404,000 L.:  a great alarm pervaded society, and generated an eager controversy, out of which ultimately emerged the Act of 1844.  The next trial came in 1847, and then the Bank permitted its banking reserve (which the law had now distinctly separated) to fall to 1,176,000 L.; and so intense was the alarm, that the executive Government issued a letter of licence, permitting the Bank, if necessary, to break the new law, and, if necessary, to borrow from the currency reserve, which was full, in aid of the banking reserve, which was empty.  Till 1857 there was an unusual calm in the money market, but in the autumn of that year the Bank directors let the banking reserve, which even in October was far too small, fall thus: 

Oct. 10 4,024,000 L " 17 3,217,000 L " 24 3,485,000 L " 31 2,258,000 L
Nov. 6 2,155,000 L " 13 957,000 L

And then a letter of licence like that of 1847 was not only issued, but used.  The Ministry of the day authorised the Bank to borrow from the currency reserve in aid of the banking reserve, and the Bank of England did so borrow several hundred pounds till the end of the month of November.  A more miserable catalogue than that of the failures of the Bank of England to keep a good banking reserve in all the seasons of trouble between 1825 and 1857 is scarcely to be found in history.

But since 1857 there has been a great improvement.  By painful events and incessant discussions, men of business have now been trained to see that a large banking reserve is necessary, and to understand that, in the curious constitution of the English banking world, the Bank of England is the only body which could effectually keep it.  They have never acknowledged the duty; some of them, as we have seen, deny the duty; still they have to a considerable extent begun to perform the duty.  The Bank directors, being experienced and able men of business, comprehended this like other men of business.  Since 1857 they have always kept, I do not say a sufficient banking reserve, but a fair and creditable banking reserve, and one altogether different from any which they kept before.  At one period the Bank directors even went farther:  they made a distinct step in advance of the public intelligence; they adopted a particular mode of raising the rate of interest, which is far more efficient than any other mode.  Mr. Goschen observes, in his book on the Exchanges:  ’Between the rates in London and Paris, the expense of sending