On settling day, without the Clearing-house, there would be a mass of failures, and a bundle of securities.

The effect of these failures would be a general run on all bankers, and on the Bank of England particularly.
It may indeed be said that the money thus taken from the Banking Department of the Bank of England would return there immediately; that the public who borrowed it would not know where else to deposit it; that it would be taken out in the morning, and put back in the evening.

But, in the first place, this argument assumes that the Banking Department would have enough money to pay the demands on it; and this is a mistake: the Banking Department would not have a hundredth part of the necessary funds.

And in the second, a great panic which deranged the Clearing-house would soon be diffused all through the country.

The money therefore taken from the Bank of England could not be soon returned to the Bank; it would not come back on the evening of the day on which it was taken out, or for many days; it would be distributed through the length and breadth of the country, wherever there were bankers, wherever there was trade, wherever there were liabilities, wherever there was terror.
And even in London, so immense a panic would soon impair the credit of the Banking Department of the Bank of England.