This was the appalling question on everyone's tongue all over the country, for it now became generally known that upon this line of defence four complete and perfectly equipped German army corps were ready to advance at any moment, in addition to the right flank being exposed to the attack of the XIIth Saxon Corps, entrenched on the Essex coast.
It was estimated that no fewer than two hundred thousand Germans were already upon English soil!
The outlook grew blacker every hour.
London was in a state of absolute stagnation and chaos. In the City, business was now at an entire standstill. The credit system had received a fatal blow, and nobody wanted to buy securities. Had people kept level heads in the crisis there would have been a moratorium, but, as it was, a panic had been created that nothing could allay. Even Consols were now unsaleable. Some of the smaller banks were known to have failed, and traders and manufacturers all over the country had been ruined on account of credit, the foundation of all trade, having been swept away. Only persons of the highest financial standing could have dealt with the banks, even if they had remained open.
The opinion held in banking circles was that if the invasion should unfortunately prove disastrous to England, and Germany demand a huge indemnity, there was still hope, however small. The experience of the Franco-German War had proved that though in such circumstances the Bank, for a considerable period, might not be able to resume cash payments, yet, with sound finance, there was no reason that the currency should greatly depreciate. During the period of suspension of cash payments by the Bank of France the premium on gold never went above 1.5 per cent., and during most of the period was 5, 4, or even less per mille. Therefore what the French by sound banking had been able to do, there was no reason why English bankers could not also do.
