The Protectionists maintained their numbers, though they did not increase them, in the new Parliament. Lord George Bentinck however gained an invaluable coadjutor by the re-appearance of Mr. Herries in public life, a gentleman whose official as well as parliamentary experience, fine judgment, and fertile resource, have been of inestimable service to the Protectionist party. The political connection which gained most were the Whigs; they were much more numerous and compact, but it was in a great measure at the expense of the general liberal element, and partly at the cost of the following of Sir Robert Peel. The triumphant Conservative majority of 1841 had disappeared; but the government, with all shades of supporters, had not an absolute majority.
Had the general election been postponed until the autumn, the results might have been very different. That storm--which had been long gathering in the commercial atmosphere--then burst like a typhoon. The annals of our trade afford no parallel for the widespread disaster and the terrible calamities. In the month of September, fifteen of the most considerable houses in the city of London stopped payment for between five and six millions sterling. The governor of the Bank of England was himself a partner in one of these firms; a gentleman who had lately filled that office, was another victim; two other Bank directors were included in the list. The failures were not limited to the metropolis, but were accompanied by others of great extent in the provinces. At Manchester, Liverpool, and Glasgow large firms were obliged to suspend payments. This shock of credit arrested all the usual accommodation, and the pressure in the money-market, so terrible in the spring, was revived. The excitement and the alarm in the city of London were so great that when the Chancellor of the Exchequer hurried up to town on the 1st of October, he found that the interest of money was at the rate of 60 per cent. per annum. The Bank Charter produced the same injurious effect as it had done in April; it aggravated the evil by forcing men to hoard. In vain the commercial world deplored the refusal of the government to comply with the suggestion made by Lord George Bentinck and Mr. Thomas Baring in the spring; in vain they entreated them at least now to adopt it, and to authorize the Bank of England to enlarge the amount of their discounts and advances on approved security, without reference to the stringent clause of the charter. The government, acting, it is believed, with the encouragement and sanction of Sir Robert Peel, were obstinate, and three weeks then occurred during which the commercial credit of this country was threatened with total destruction. Nine more considerable mercantile houses stopped payment in the metropolis, the disasters in the provinces were still more extensive. The Royal Bank of Liverpool failed; among several principal establishments in that town, one alone stopped payment for upwards of a million sterling. The havoc at Manchester was also great. The Newcastle bank and the North and South Wales bank stopped. Consols fell to 79 1/4, and exchequer bills were at last at 35 per cent, discount. The ordinary rate of discount at the Bank of England was between 8 and 9 per cent., but out of doors accommodation was not to be obtained. In such a state of affairs, the small houses of course gave way. From their rising in the morning until their hour of retirement at night, the First Lord of the Treasury and the Chancellor of the Exchequer were employed in seeing persons of all descriptions, who entreated them to interfere and preserve the community from universal bankruptcy. 'Perish the world, sooner than violate a principle,' was the philosophical exclamation of her Majesty's ministers, sustained by the sympathy and the sanction of Sir Robert Peel. At last, the governor and the deputy-governor of the Bank of England waited on Downing Street, and said it could go on no more. The Scotch banks had applied to them for assistance. The whole demand for discount was thrown upon the Bank of England. Two bill-brokers had stopped; two others were paralyzed. The Bank of England could discount no longer. Thanks to the Bank Charter, they were safe and their treasury full of bullion, but it appeared that everybody else must fall, for in four-and-twenty hours the machinery of credit would be entirely stopped. The position was frightful, and the government gave way. They did that on the 25th of October, after houses had fallen to the amount of fifteen millions sterling, which they had been counselled to do by Lord George Bentinck on the 25th of April. It turned out exactly as Mr. Thomas Baring had foretold.