In addition, from December, 1860, to at least April, 1861, there had been somewhat of a slump in demand for raw cotton by British manufacturers due to an over-production of goods in the two previous years.

There had been a temporary depression in 1856-57 caused by a general financial crisis, but early in 1858 restored confidence and a tremendous demand from the Far East--India especially--set the mills running again on full time, while many new mills were brought into operation.

But by May, 1860, the mills had caught up with the heavy demands and the rest of the year saw uncertainty of operations and brought expressions of fear that the "plunge" to produce had been overdone.

Manufactured stocks began to accumulate, and money was not easy since 1860 brought also a combination of events--deficient grain harvest at home, withdrawal of gold from England to France for investment in French public works, demand of America for gold in place of goods, due to political uncertainties there--which rapidly raised the discount rate from two and one half per cent.

in January, 1860, to six in December.