The Sun.
London, England, 1855-11-16 00:00:00

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[ PRICE 4D. STAMPED SD.

THE BANK CHARTER ACT.

(Front the Times City Article.)

While it is quite probable that the Government pro-
pose giving effect to the provisions of the Bank Charter
Act for enlarging the Bank issues on securities to the
extent of two-thirds of ti.e lapsed country notes, it is
certain that most exaggerated and erroneous opinions
are promulgated of the effects of the measure, which is
simple in character and limited in scope. The authorised
issue of the Bank of England on securities was fixed by
the act of 1844 at 11,000,0001., and that of the country
banks at 8,648,0001. Of this amount of country issues,
portions, making an aggregate of 700,0001., have been
gradually dropped, owing to the extinction of some banks
and the adoption by others of issues of the Bank of Eng-
land ; and, although the many modifying circumstances
which arise forbid the expectation of precise corres-
pondence in the results, it is the case that the aver-
age internal circulation of the _ notes of the Bank
of England, which was in 1843.4 20,000,0004,
amounted in 1854 to 20,700,0001., while that of the
country banks had decreased in a more than correspond-
ing ratio. It is obvious that if the groundwork on which
Sir Robert Peel fixed the credit paper of the Bank
of England at 14,000,0001., and that of the country
banks at 8,648,0001., was sound, the resuscitation of the
portion which has lapsed is not only safe, but is neces-
sary to the full operation of the bill. It will, therefore,
create no surprise if it be found that Sir Cornewall Lewis
has expressed to the Bank directors a desire that an ad-
ditional issue on securities to the extent of about 500,000/.
should be made by the issue department. It may be
assumed that the suggestion would proceed from the
Government, because in the first place they would be
pecuniarily the greatest gainers by the operation, being
entitled to the yearly profit of the additional issue ; and
in the next, the Bank, who never found it expedient to
apply for such an extension when they were far more
closely pressed, are not likely to invite it now tbat they
are in an easier position than for several weeks Fast and
have the prospect of an increased reserve, which has in-
variably occurred in the close of the last quarter of the
year, from the action of the incoming revenue. Hence
the application on their part will have been merely minis-
terial. Upon the assent of the Government the results

of the measure on the position of the Bank would be as
follows

ISSUE DEPART3VI-T.

Before After
additional additional
issue. issue.
Dr.
Notes with the Public 20,000,000 20,000,000
Notes with the Bank 5,000,000 5,500,000

Cr.
Bullion .
Securiti©s

25,000,000 25,500,000
11,000,000 11,000,000
14,000,000 14.500,000

25,000,000 25,500,000
BANKING DEPARTMENT.

Before After
additional additional
issue. issue.
£
14,500,000 14,,00,000
3,000 00) 3,000,000
15, 003,0J0 15,00 ,),000
1,00,000 1,000,000

Dr.
Capital
Rest
Deposits
Bank post bills

33,500,000 33,500,000

Cr.
Securities
Reserve ..

28;500,000 28,000,000
5,000,000 5,500,000

33,500,0J0 33,500,000
It is apparent that an accession to the reserve of the
Bank of 500,000/. would be wholly inadequate to offer
the prospects of results which according to some un-
f mnde I statements hare induced the entire banking
community to petition the Government on the s'ibject.
The enlargement would not affect in any sensible degree
the value of money or the Bank rate of discount, and it
would be speedily absorbed by the heavy foreign expen-
diture of the Government. Indeed within a very short
time from the alteration being made we may find the ac-
counts of the Bank stand thus :