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175 sufficient reserve, in all probability, to have coped with the crises of 1847 and 1857. The suspension of Overend and Gurney—the most trusted private firm in England—caused an alarm, in suddenness and magnitude, without example. What was the effect of the Act of 1844 on the panic of 1866 is a question on which opinion will be long divided; but I think it will be generally agreed that, acting under the provisions of that law, the directors of the Bank of England had in their Banking Department in that year a fairly large reserve—quite as large a reserve as any one expected them to keep—to meet unexpected and painful contingencies.

From 1866 to 1870 there was almost an unbroken calm on the Money Market. The Bank of England had no difficulties to cope with; there was no opportunity for much discretion. The Money Market took care of itself. But in 1870 the Bank of France suspended specie payments, and from that time a new era begins. The demands on this market for bullion have been greater, and have been more incessant, than they ever were before, for this is now the only bullion market. This has made it necessary for the Bank of England to hold a much larger banking reserve than was ever before