Cheraw gazette. [volume] (Cheraw, S.C.) 1835-1838, 1837-05-31
THE BANK OF ENGLAND'S SUS.
PENSION OF SPECIE PAYMENTS,

THE BANK OF ENGLAND'S SUS.
PENSION OF SPECIE PAYMENTS,
l.; 1897.
The present posture Of affairs in the
United States will give great in crest to the
annexed br cf history OF the suspension OF
specie payments by the Bank of England,
which Is from sources TO DC relied upon:
':On the 2G;h of February, 1877, being
Sunday, an order Of the prIvy council w;;s
transmitted 10 the bank towards evening,
prohi5;:ing the further payment ol specie
until he pleasure of Par.iameE, should be
ma'c known. The Parliament tool: the
subject nto ccus!dcr;ion on the next day,
February -, and approved OF tie order OF
Tie rrivv co,',:iI. The suspension OF
specie payment WIS originally Intended 10
Ge only temporary measure, and the
strongest ASSURANCES we're given 20 tA!s CT.
feet on the part OF the bank ard the govern
mcnt. 1t was, however, continued from
time TO time, bu: always us j temporary
measure, until, in 1916. Twcn y-two
years after the suspension Of payments,
stcpts began serious! uto be taken .orrcsum.
ing specie payments, which were. in fac.
rcsan,cd, on the lst Of May, 1929. The
bank thus presents the singular example OF
virtual insolvency for twenty-sIx years.
and eventual redemption Of lis paper and
its credit; and this rc,urn 10 specie payments
was not attended By any reyu!s;on or COM
mercia shock; preparations were made
! for it long beforehand. The amount Of
the NOES of the bank in circulation was
reduced from about f24,000,OO0 to about
! ls,O00,GOO. In the mean time a new
coinage of gcll had been issued. in 1921
| 1922, TO the amour, Of EAST: 7:5l7, which
! supplied the country chasm made in the
circulation Of the country by the reduction
of the amour, Of Bank of England no es,
and also went 10 rcplcnish the yoults ofthe
bank, in rrcpar;ion for tic run that might
be made the resumption Of paymen'; but
the danger was passed with the greatest
facility. The bank notes had deprecated,
or, as the phrasc was ut tic time, the price
of bullion had gradually risin, so as TO be
at one period. u: tho rate Of IA or ID per
cent; and it the bank had then stopped
suddenly, and, ir We may imagine pos
sble, had redeemed the whole Of lis paper
f25,OO0, 0,OO0or more, with specie, It would
been a gain to the then holders Of the notes,
in the whole, f3, $4,000. coo. and Il loss 10
the then debtors to The bank Of ihe same
amount, assuming thc depreciation to
be Ii per cent, while the bank itself would
have lost only the amount of bad debts
which would have been made by such
sudden and tremendous rcvuISion; for The
moment Of the banks resumng 10 pay
specie Itself, by this very operation, it re-
d1ccd ;hc payments to the bank by is debt
/ ors, to specie; for the bank had right TO
demand payInca: Of ro,cs ard bills dis
counted in specie, or what would have been
equivalent, its own notes. Such measure
would evidently have shaken thc kingdom
to its foundations, and probably have
brought down lis commercial, financial,
and economical systems in ruins. Instead
Of such catastrophe, either in dIscontInu.
ing Or renewing payments, of specie, each
of which was equally difficult and haz.
ardous, the transition in the depreciation Of
paper was gradual, and almost imrreccpt-
ible, and afer the overthrow OF Napoleon,
lis r;sc in value was again. i"r the most
part, as gradual, Until it arrived ata par with
with gold, before the resumption OF spccle
payments. In a political. financial, and
! commsrcial view, this institution, from the
suspension 10 the resumption Of specie
payments presents stupcndous phcnome-
non, unparalleled in history. The suspcn.
sion of payments, in 1897, WAS one Of
those bold measures, which are justified
only By extreme cases. are, in fact. the only
prulcnt measures. The whole system of
financial administration: and ali the com.
mcrcial combinations and connexions Of
the kingdom, were involved in the affairs
of the Institution at the lime Of is stopping.
in 1877. The holders Of The notes, and
the dcposi,ors, were pressing 10 the bank
for specie. of which there remained III the
vaults only sl.272, 900 while the notes and
| claims outstanding. and WHICH EliSnt pc
demanded, were fS.6l0. $50, and the de-
mands were pouring in with still ncrcas,
ingtilc. I;sccmcd probable that tie bank
must SOP payment after paving out this
spece; the shock, whatever 1t might be,
must be encountered. and it vas very justly
supposed that it would be, in Il measure.
broken, by anticipating Tic necessity, and
stopping with more than a million in It's
vrults, instead Of waiting until they Should
: have baon emitted. The reasons given III
Parliament in favor Of this suspension OF
payment. and Of its continuance from time
! to time, were, |. that the bank could not
continue its Gicoun:s, aud its payments in
specie; and, if is discounts were stopped,