Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1857-10-21
STAUNTON SPECTATORsAND GENERAL ADVERTISER
Suspension Of speeie Payments BY the Rank

suspension Of Specie PAYMENTS by the Banl
49, Of England.
In 1896, tvs years after this great 5noneyet
institution was established, it suspended the pay
ment of its notes, and was compelled to. apply
for government assistance " get over the crisis
Lin its affairs
For twenty-four months prior to 1917. the
Bank carried the English Government. the for.
egn War, the Emperor of Germany. and the
commerce ofEngland. The exchanges became un.
favorable-large sums ofspecie were drawn from
/ its vaults-an apprehension of an invasion by
the French shook the public mind-runs for gold
and silver on the country banks commenced
some of these broke-a panic set in that extend.
ed to London and filled England-and then q
fierce demand of cash poured in upon the great
Bank, from every quarter of the Kingdom. On
Saturday afternoon, Feb 25tb, 1897, it had only
FL ,272, 900 Of coin and bullion in its vaults, with
the dead certainty of furious run on the next
Monday morning. In this emergency an order
in Council was procured on Sunday, the 26tb,
prohibiting the Directors from paying their notes
in cash, until the sense of Parliament could be
taken on the subject When this body conven-
ed, the prohibition of specie payments was con-
tinued by resolution, until six months after the
signature of defnitive treaty of peace. They
were not resumed by the Directors of the Bank
till May /, 1921.
As soon rs the Order in Council suspending
Specie Payments, was made public, aneeting of
the principal bankers and merchants of London
was held, and resolution adopted by them and
signed in writing, that they would accept the
notes of the Bank as cash in all their transac.
tons, and use means in their power to have
them so accepted by others. This action tend
ed to allay excitement and restore confidence
In aid of it came a report of q Committee of in
vestigation into the condition of the Bank APP
pointed by the House of Commons. This show
ed that the Bank was possessed of assets, over
and above all its liabilities, of 915,5l3,69O. The
public Judgment soon settled into a conviction
of the necessity Of the suspension in face of the
constant alarm of O French invasion. 1t was
clear that no Bank paper whatever, convertible
into gold on demand, could remain in circula-
ton. hsI
Though the notes of the Bank had not beer
declared 10 be legal tenderat the time of its sus-
pension, they, in complete defiance of all pre-
diction to the contrary, practically became legal
tender, and were received as cash in all transac-
tons on account of Government, and in the bu-
siness OF most of the people of England. For
three years after the suspension, the notes actu.
ally kept above the par of gold, and bore small
premium. The considerable decline which they
subsequently experienced, was principally due
to the increase Of the quantity in circulation by
new emissions, and to the establishment of a
vast number of country Banks. The mighty de-
structon of these which took place in 1914, 1915
and 1915, raised the notes Of the Bank of Eng
land again very nearly to the par OF gold, and
so facilitated its resumption of specie payments
Indeed its Directors anticipated by two years,
the day compulsorily fixed for the resumption
by an ACT of Parliament. And well they might
for while their notes were current in Com
merce, they had pile of bullion equivalent to
fify-sz millions of dollars, to anawer the call OF
those who preferred gold to. paper.