Richmond palladium. [volume] (Richmond, Wayne County, Ind.) 1831-1837, 1836-01-09
THE BANK OF ENGLANUS SUSPENSION O
SPECIE PAYMENTS IN 1897

Tho present pasture Of affairs in the Unite,
States will give great interest tn the annexed brie
history Of the suspension ofspecie payments by tn,
Hank Of England, which is from sources to be re
lied upon:
'On the 2G,h Of February. 1897 being Sunday
IN order Of this privy council Transmitted TO til,
bank towards evening. prohibiting the further pay
ment Of specie until the Pleasure Of Psrl,amen
should he made known. The Parliament tool
the subject into confederation the ne 1t day. Feb
TuaTy ~, md approved Of the order Of the priv,
council. The suspension Of specie payment wa,
originally intended To be only Temporary meas
use, and the strongest given to thi.
effect the pa,t Of the bank aud the government
II was, however, continued from time To time, bm
always as n Temporary measure, until, in 1919
tweniy-tw years after the suspension Of pay ment
steps began seriously TO be taken for resuminq
specie pa, menis, which were, in fact, resumed, or
the LIST Of May, 1898. The bank thus pre-eI
the singular example Of virtual insolvency fos
twenty six yeats, and eventual redemption Of its
paper ond its credit; and this return spc,ie pay
ments was not attended by any revu.ion or com
mercisl shock: preparations were made for il
long beforehand. The ampInt Of the notes Of the
bank in circulation was reduced from about ga,
OOO,OOO to about els, OOO,OOO. In the mean time
. new coinage of gold had been issued, in 1921
1922 to the amount Of fl4,S77 SAT, which sup
Piled the chasm made the circulation Of the
country by the reduction Of the amount of Bank Of
vaults Of the bank, prepss Ltion for the that
might be made on the resumption Of payment; but
the danger passed Xith the greatest facility.
The bank notes had depsec lated, or, the phrase
was at the time, the price Of bullion had gradually
risen, to be, nj period, at the rate Of Ia
or u per cent; and ifihe bank had then stopped
suddenly, and, if may imagine il possible, had
redeemed the whole Of its paper, ca, 900 or
more, it'll specie, il would have been gain the
then holders of the notes. IN the whole, of e. 600
600, md loss to the then debtors to the bank Of
the same amount. assuming the depreciation 10 be
II per cent. while the bank itself would have lost
only the amount Of bad debts which would have
been made Ivy such sudden and Tremendous re-
SusiOn; iOr the moment If the banks resumiDg to
pay specie ITSELF by this very operation il reduced
the payments TO the bank, by its debtors, specie
fos the bank had right TO demand payments Of notes
and bills discounted in specie, OF, what would have
been equivalent. lis own nOtes--Such a measure
would have evidently shaken the kingdom to its
foundations, and probably have brought down its
commercial, financial, and economical systems iD
ruins. |
Instead Of such catastrophe, either in dscon-
tinuiDg or renewing pay n,ents OF specie, each Ut
which was equally diflicIlt and hazardous, the tran
si,ion in the depreciation Of paper, was gradual,
and almost imperceiaible, and after the overthrow
Of Napoleon. its rise in value, was again for the
most par!, gradual, until it arrived al par with
gold, before the resumption Of specie payments
In . political, financial, and commercial view, this
INSTITUTION, from the suspension TO the resumption
Of specie payments, presents stupcndOus phe nom
enon, uDparalled in history. The suspension Of
payment, in 1871. was Of those bold measures,
which are justified only by extreme cases and
which, in such cases, are, in fact, the only prudent
measures The whole system Of financial admin
is,ra,ou. and all the commercial combinations q nd
CONNIE xions Of the Kingdoms. were involved IN the
.irs Of the institution at the time OF stopping, IN
1897. The holders Of the notes. and the deposit
or, were pressing the bank for specie, Of which
shrrc remained IN the vaults only El.262. 900.
while the notes and claims outstanding, aud which
nigh, be demanded. were fs,64O,15O, and the de-
m,en,ls were pouring in with q still increasing tide
I. seemed probable that the bank must stop pay
,nent after paying out this specie; tho shock, what
.,., II might be- must be encountered, and IL was
very Justly supposed ilat it would be, in meas
ure bsoken, BY anticipating the necessity, and
.soonop vi,h moro than million 10 its vaults, IN
.,end Of waiting until they should have been emp
tied The reasons given in Parliament in favor
Of this suspension o. payment, and ITS con-
tinuance from time to time, were - that the
banks could not continue its discounts, and ITS pay
ments in specie and il its discounts were stoPPed,I
or greatly reduced, the commerce ct tbs country
vonld be DESTROYED: 2 that the credit Of the gov
eminent would be lost il the bank should cease to
make advances upon its taxes: 3. that specie pay
ments we're OF benefit to England, as the specie,
On being drawn from the nix, went absoad: q.
that IL was mote important that the bank shcud ex-
ii, than that it should meet its pay ments at the
expense of existence: 5. that the commercial ar
engagements, combinations, and relations, existing
in the kingdom, would be broken up by the dissO-
LUTON Of this institution, and, being once broken
up, il could never BE- rene wed: and o. that il was
better to stop specie payments while specie and
bullion could Be kepe in the country BY that means.
Such wese the reasons gwen in favor Of the meas
ure, aud sh0Seh Il has bees censured by some
vho have pretended to discover in il the cause Of
much financial and commercial arrangement, yet
they ID not show by what other course Great Brit
sio could have struggled thro' the terrible conflicts
of that pssiod.