But, as already said, the measure has not only failed; it has made worse the panics it was to have warded-off. And it was sure to do this. As shown at the outset, the multiplication of promises-to-pay that occurs at a period of impoverishment caused by war, famine, over-investment, or losses abroad, is a salutary process of mitigation—is a mode of postponing actual payments till actual payments are possible—is a preventive of wholesale bankruptcy—is a spontaneous act of self-preservation. We pointed out, not only that this is an _a priori_ conclusion, but that facts in our own mercantile history illustrate at once the naturalness, the benefits, the necessity of it. And if this conclusion needs enforcing by further evidence, we have it in the recent events at Hamburg. In that city, there are no notes in circulation but such as are represented by actual equivalents of bullion or jewels in the bank: no one is allowed, as with us, to obtain bank-promises-to-pay in return for securities. Hence it resulted that when the Hamburg merchants, lacking their remittances from abroad, were suddenly deprived of the wherewith to meet their engagements; and were prevented by law from getting bank-promises-to-pay by pawning their estates; bankruptcy swept them away wholesale. And what finally happened? To prevent universal ruin, the Government was obliged to decree that all bills of exchange coming due, should have a month’s grace; and that there should be immediately formed a State-Discount-Bank—an office for issuing State-promises-to-pay in return for securities. That is, having first by its {340} restrictive law ruined a host of merchants, the Government was obliged to legalize that postponement of payments which, but for its law, would have spontaneously taken place. With such further confirmation of an _a priori_ conclusion, can it be doubted that our late commercial difficulties were intensified by the measure of 1844? Is it not, indeed, notorious in the City, that the progressively-increasing demand for accommodation, was in great part due to the conviction that, in consequence of the Bank-Act, there would shortly be no accommodation at all? Does not every London merchant know that his neighbours who had bills coming due, and who saw that by the time they were due the Bank would discount only at still higher rates, or not at all, decided to lay in beforehand the means of meeting those bills? Is it not an established fact that the hoarding thus induced, not only rendered the pressure on the Bank greater than it would otherwise have been, but, by taking both gold and notes out of circulation, made the Bank’s issues temporarily useless to the general public? Did it not happen in this case, as in 1793 and 1825, that when at last restriction was removed, the mere consciousness that loans could be had, itself prevented them from being required? And, indeed, is not the simple fact that the panic