ity." A high rate, 8%, was to be charged to keep these
operations within reasonable limits; a bill of indemnity was promised if
the arrangement led to a breach of the law. The extra profit derived was to
be for the benefit of the public. The effect of the government letter in
allaying the panic was complete.

The crisis of 1857 was the last occasion of an official inquiry. This is
contained in the _Report and Evidence of the Select Committee of the House
of Commons on the Bank Acts_ (1857, 1858). The evidence given by Mr
Sheffield Neave, the governor, and Mr Bonamy Dobree, deputy-governor of the
bank in 1858, gives a vivid picture not only of what occurred, but of what
might be expected to recur on such occasions. The wildest alarm prevailed,
exchequer bills were scarcely saleable, and the bank itself sold L3,000,000
government securities at a considerable loss.

The extreme pressure was relaxed by the letter issued by the government on
the 12th of November 1857, signed by Lord Palmerston, then premier, and Sir
G. C. Lewis, which allowed a temporary relaxation of the Bank Act of 1844.
The public alarm, however, was so great that it was not until the 21st of
November that the severity of the pressure was in any way diminished. On
the 20th of November the notes issued to the public on securities beyond
the statutory limit (then L14,475,000) reached the sum of L928,000. By the
next week the issue was almost down to the limit, and in the week following
it was within the limit. On the 1st of January 1858 the bank rate was
lowered to 8% and the anxiety gradually passed away. Had the treasury
letter been issued earlier, the pressure might not have been so severe, and
the governor of the bank expressed a strong opinion that, if it had been
later, it would not have been sufficient. November 1857 was the only
occasion when the limits of the Bank Act as to issue were actually passed.

During the crisis of May 1866 L4,000,000 left the bank on one day in notes
and coin, and the reserve of the bank was reduced in the return of the 1st
of June of that year to L415,000. The bank rate was raised to 10% and
permission was given by the government to suspend the act. This, however,
was not done. Tradition says that the bank asked the bankers, during the
period of heaviest pressure of that terrible crisis--pressure more severe
than anything that had taken place before or that has occurred since, to
pay in every night the notes they had draw