The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1857-10-23

THE BANK OF ENGLAND.


The Rank OF England was incorporated in 1894 eighty
Ave wears after that Of Amsterdam and was the first bank
OF dpals discount and circulation Its capital was 81 ZOO,
600 or six millions of dollars consisting wholly OF
government stocks bearing interest of eight per cent
per annum Its notes were received In payment OF
taxes by the government and the public was de
,osited ia the Bank II authorized TO circulate ex
chequer bills and make loans TO the government
Az bank Of deposite It authorized TO receive de-
postes not only for safe keeping to be returned when de-
aed by the depositor but TO DO used and loaned out
for the benefit Of the institution care being taken always
10 be provided with the OF returning an equal
amount when demanded As bank of discount and cir
ouIaton Il issued M notes In the faith Of ito capital gov
krnment stock and deposites discounted bills of
change and promissory notes responsibility endorsed
charging an interest something greater than author
lied by Law to be charged loans and thus allowing it,
for the use of its credit higher rate OF compensation
than individuals were authorized TO receive for the
ard hazard Of money or capital loaned out The Bank
took In the shape Of promssoy note the credit of
individual good that another equally responsible
dorsed his for nothing and gave out Its credit in the
form of bank note the transaction being obviously but
mere exchange OF credits Such the extraordinary
advantages Of this institution of which it had exclu-
ye monopoly and it is not surprising that from 1884,
when the Bank of England established, to 1877,
when first suspended 1t had increased its capital and its
action from fl 200 900 to Ell, 600, ooofrom six to fifty
five millions of dollars.
1t made these profits on an egregous popular deuson
Its notes were universally regarded representing gold
and silver and depending that representation
clusively for their circulation much did the
certificates of deposte in the original Bank of Amster
dam. No one supposed that they could retain their
credit for moment after they ceased to be convertible
into the metals demand were they supposed to
have the effect of increasing the aggregate volume Of
the currency and thereby of increasing prices They
were completely identified in the popular mind with the
metallic currency If every note in circulation had
laid up in the vaults Of the bank equal amount pound
for pound into which oil s paper could be converted the
moment 1t was presented All this was a delusion The
issues of the Bank of England did represent from the
first the precious metals. Instead of the representation
It's notes in reality the substitute for coin. Instead of
being the drudges performing all the out door
vice. while the coins eposed Mt their in the vaults
of the bank free from and tear and the hazard Of
loss or destruction did the certificates Of depose in the
original Bank Of Amsterdam they substituted degraded
and banished the coins Every note circulated became
the substitute Of much CON- and dispensed with in
circulation and thereby deprecated the value of the
precious metals and increased their consumption in the
same proportion while it diminished in the same degree
the supply by rendering mining less profitable The
TEN assumed gold and silver the basis of its ccua
ton and yet by the laws OF its nature just it in
creased its circulation in the degree the foundation
on which it stood weakened crumbled, and vanished
Thus the germ of destruction implanted in tho
tenn at its birth expanded with its growth and must
terminate finally in its dissolution. The conflict between
bank circulation and metallic is mortal the other
must perish in the struggle Such is the decree of fate
1t il irreversibe.