“We must consult the books to ascertain that, sir.”

“Must you?  Then just turn your head away, Mr. Richard, and I’ll put in a claw.”

Omnes.  “Haw! haw! ho!”

Richard Hardie resumed.  “My precautions seem extravagant to you now, but in a few months you will remember this conversation, and it will lead to business.”  The rest of the evening he talked of anything, everything, except banking.  He was not the man to dilute an impression.

Hardie junior was so confident in his reading and his reasonings that he looked every day into the journals for the signs of a general collapse of paper and credit; instead of which, public confidence seemed to increase, not diminish, and the paper balloon, as he called it, dilated, not shrank; and this went on for months.  His gold lay a dead and useless stock, while paper was breeding paper on every side of him.  He suffered his share of those mortifications which every man must look to endure who takes a course of his own, and stems a human current.  He sat somber and perplexed in his bank parlor, doing nothing; his clerks mended pens in the office.  The national calamity so confidently predicted, and now so eagerly sighed for, came not.

In other words, Richard Hardie was a sagacious calculator, but not a prophet; no man is till afterward, and then nine out of ten are.  At last he despaired of the national calamity ever coming at all.  So then, one dark November day, an event happened that proved him a shrewd calculator of probabilities in the gross, and showed that the records, of the past, “studied” instead of “skimmed,” may in some degree counterbalance youth and its narrow experience.  Owing to the foreign loans, there were a great many bills out against this country.  Some heavy ones were presented, and seven millions in gold taken out of the Bank of England and sent abroad.  This would have trickled back by degrees; but the suddenness and magnitude of the drain alarmed the bank directors for the safety of the bank, subject as it was by Mr. Peel’s bill to a vast demand for gold.

Up to this period, though they had amassed specie themselves, they had rather fed the paper fever in the country at large, but now they began to take a wide and serious view of the grave contingencies around them.  They contracted their money operations, refused in two cases to discount corn, and, in a word, put the screw on as judiciously as they could.  But time was up.  Public confidence had reached its culminating point.  The sudden caution of the bank could not be hidden; it awoke prudence, and prudence after imprudence drew terror at its heels.  There was a tremendous run upon the country banks.  The smaller ones “smashed all around like glass bottles,” as in 1793; the larger ones made gigantic and prolonged efforts to stand, and generally fell at last.

Many, whose books showed assets 40s. in the pound, suspended payment; for in a violent panic the bank creditors can all draw their balances in a few hours or days, but the poor bank cannot put a similar screw on its debtors.  Thus no establishment was safe.  Honor and solvency bent before the storm, and were ranked with rottenness; and, as at the same time the market price of securities sank with frightful rapidity, scarcely any amount of invested capital was safe in the unequal conflict.