The main cause of all these troubles was that the banks kept too small reserves, and the provisions of the Bank Charter Act of Sir Robert Peel were too rigid. The object of the Act was to secure the convertibility of the bank note into gold, and it would no doubt have worked well had sufficient reserves been kept, but practically the only reserve of gold was in the Bank of England, and this was frequently allowed to fall as low as five or six million in notes. All other institutions, both banks and discount houses, depended upon this reserve, and employed their entire resources, relying upon discounting with the Bank of England in an emergency. This emergency arose about every ten years. The Bank of England was unable to meet the demand--a panic took place, and the bank had to apply to the Government to suspend the Bank Act, and allow it to issue bank notes in excess of the amount allowed by the Act. All this took time, the suspense was terrible, and many banks and honest traders were cruelly ruined. Immediately the Act was suspended the panic disappeared as if by magic, and traders began to breathe freely again. Happily far larger reserves are now held by all banks, and banking business is also conducted on more prudent lines, and trade generally is worked on a sounder basis; payment by bills is now the exception; margins and frequent settlements on our produce exchanges prevent undue speculation, and the system of arbitration now universal has put a stop to the constant litigation which was a frequent cause of contention and trouble and loss of valuable time. I was admitted a partner in my father's firm on the 1st January, 1862. The previous year had been a very successful one. My brother Arthur had visited America, and believing that war between the North and South was inevitable, had bought cotton very heavily, upon which the firm realised handsome profits. But it was at the expense of my father's health; the anxiety was too much for him, and this, coupled with my mother's death on the 1st August, 1861, so prostrated him, that he was ordered to take a sea voyage, and it was arranged that I should accompany him. VOYAGE IN THE "GREAT EASTERN."