s addressed to the
governors of the Bank:--

"Her majesty's government have seen with the deepest regret the pressure
which has existed for some weeks upon the commercial interests of the
country, and that this pressure has been aggravated by a want of that
confidence which is necessary for carrying on the ordinary dealings of
trade. They have been in hopes that the check given to transactions of a
speculative character, the transfer of capital from other countries,
the influx of bullion, and the feeling which a knowledge of these
circumstances might have been expected to produce, would have removed
the prevailing distrust. They were encouraged in this expectation by
the speedy cessation of a similar state of feeling in the month of April
last. These hopes, however, have been disappointed, and her majesty's
government have come to the conclusion that the time has arrived when
they ought to attempt, by some extraordinary and temporary measure, to
restore confidence to the mercantile and manufacturing community. For
this purpose, they recommend to the directors of the Bank of England,
in the present emergency, to enlarge the amount of their discounts
and advances upon approved security; but that, in order to retain this
operation within reasonable limits, a high rate of interest should be
charged. In present circumstances they would suggest that the rate of
interest should not be less than eight per cent. If this course should
lead to any infringement of the existing law, her majesty's government
will be prepared to propose to parliament, on its meeting, a bill of
indemnity. They will rely upon the discretion of the directors to reduce
as soon as possible the amount of their notes, if any extraordinary
issues should take place within the limits pi escribed by law. Her
majesty's government are of opinion that any extra profit derived from
this measure should be carried to the account of the public, but
the precise mode of doing so must be left to future arrangement. Her
majesty's government are not insensible to the evil of any departure
from the law which has placed the currency of this country upon a sound
basis; but they feel confident that, in the present circumstances, the
measure which they have proposed may be safely adopted; and that, at
the same time, the main provision of that law and the vital principle
of preserving the convertibility of the bank-note may be firmly
maintained."

The Bank directors passed reso