The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1865-11-20
ana the bank has been subject to constant demand Tor
cash In payment of their notes.


been carried 10 the mint Of France in the sixteen
months preceding the December last gold to the
amount Of one hundred anuA '"eLiy nVe millions y,
silver To the amount OF little &C than three millions
of francs OF that goa upm ma s was
t,nued during the present year. kough the amoN
The importatons of this year has hot been reported
FAILURE OF THE ATTEMPT TO RESUME sPEcE
PAYMENTS.
Your committee satisfied that the bank, in under
taking TO pay their notes In cash. under the circum-
stances above mentioned, acted from the pest motives
and from belief that the measure would tend to iaci
tate the complete resumption of payments in specie.
Unfortunately has had contrary effect the last OF
the notices having been given at period when the
exchanges unavorabe when the price OF gold had
risen from f3 ISIS id TO four pounds per ounce and
time when the had not according the evidence
given by Mr. Harman) that control over their issues
which might enabled them TO the effect
Of the untavorable exchange by reduction Of their
There was in fact in the half year between July and
December 1877 considerable increase in the amount
of issued by the bank. The average out
standing in the four half years preceding had not
ceeded f26 I'LL l4. In this half year increased
Ell 1876 appears by the returns that on the 5th
OF July, 1877 Immediately preceding the payments OF
the the was s. gro ss Usy
mont Of the dividends OF that quarter the amount was
The issue OF sovereigns between July and December,
1877 amounted 81 240 422 that h9d the soveregns
remained in circulation there would have been an IN
the circulating medium issued by the Bank OF
England In the course Of that half year. compared with
the average amount outstanding the four half years
preceding, TO the extent OF f3,67s, 543.
WHAT THE COMMITTEE THOUGHT OF THE ATTEMPT
ED RESUMPTION.
Your committee cannot avoid expressing an opinion,
that whatever might be the policy and however audaDe
the intentions of the bank in engaging to make partial
of payment OF their notes, yet when the
exchanges became unfayorabe and the price OF gold
rose above the price, the only mode by which they
could have retained the coin In circulation would have
been contraction of their Issues; and unless the bank
at that period possessed such control the amount
of those issues rs would have enabled them to effect
that object your committee must consider it to have
been nexpedicnt the then state of the exchanges TO
undertake an extensive though partial issue of coin,
which subjected the bank TO considerable loss and
great dlan Of treasure
the continued issue OF coin from the bank by diminish
ing the amount Of their treasure, would have the effect
OF postponng the period ut which the termination of
the restriction take place. without producing, the
other hand, any advantage whatever to the country,
while the exchanges and the price of gold in their
present state your committee were induced to recon-
mend to the house. in their first report the immediate
enactment OF law to suspend all payments in gold coin
by the bank until your committee might be enabled to
present TO the house their view Of the whole subject
which has been referred to their consideration.
GOVERNMENT INDEBTEDNESS TO THE BANK.
The next important point TO which the committee will
call the attention of the House is the amount of the
issues OF the Bank OF England which are outstanding
upon government securities, or, in other words, the
amount Of the debt due by the public to the Bank of
England.
that debt has been earnestly insisted by the bank
and the nature and extent of the connection between
the government and the bank involves so many mpor
tant considerat ons, that yo1r committee deem ucum
bent upon them 20 into detail with respect
the origin and gradual increase OF the advances made Ivy
the bank on behalf the public and the effect which
they have when ed 10 the amour. al which they at
present stand Of deprving tn bank of that control
their issues OF notes he possession of which is deemed
by them an essential preliminary TO the resumption Of
cash payments.
In the appendix t. The report will be found account
oil the amount OF advances made by the Bank of Eng
land to the government, or exchcquer bills and other
securities from The 1902 TO the latest period TO
which 1t can be mad1 up.
The first item al ,hs account, entitled stAn advance
out OF Sums issued for The payment OF dividends" now
amounting TO the o. 81, oos $50 ought not in the
opinion Of your committee TO be considered any por
ton OF the debt due by the government to the bank. II
arises from money originally lodged by government at
the bank for payment OF dividends public creditors
which, not having been claimed, has been withdrawn
from the bank and applied to the public service, under
the provisions OF the acts of the Legislature PASSED in
the years l79l 1908 and 1915 II is not therefore an
advance from the funds Of the bank but it is prop
erty OF the public creditors which has been made avaa
bic for public purposes, until demanded by them.
II will be from the account that great proper
tlon of the advances of the bank present mnde
'cxchequcr bills purchasedn and before the committee
point out the distinction between those heads of tho
tount they will shortly advert 10 the laws which have
been passed since the institution OF the bank for the
regulation OF their advances to government
BANK RESTRICTIONS IN THE ORIGINAL CHARTER.
On the original establishment Of the bank, by the nfh
and sixth William and Mary, penalty Is imposed upon
the directors II they purchase, account OF the copo
ratior any lands they advance to his Maies
any branch Of the public revenue other than such
funds only on which a credit OF loan is shall be
been granted from time TO time, and advances made
upon them. The amount annually, from the year 1TT7
20 the year 1892, extracted from the documents pub
Ished In the report q the Committee Of Secrecy Of
1897, will be found in the appendix.
THE RESTRICTIONS ASSuLLED FOR CONVENIENCE.
In the year 1898 passed protecting the Gov
crnor aud Company OF the Bank OF England from any
penalty, account Of their having advanced, ad-
vancing in future any sums of money in payment Of
lk aaf 40
and made payable at the bank but not charged
branch of the Tho motives for passing this
vet fully detailed In the cvdcnce given by Mr. Bosan
uet then director OF the bank to the Committee OF
ecrecy, in the year 1901 He states sthat il had
custom Of the bank, time out OF mind, to adj ance,
the amount o. such treasury bills OF exchange as
,re directed for payment TO the bank, until the
v about twenty or thirty thousand pounds, when the
lasury usually sent orders for the amount Of such
aance, To be set on from the respective accounts TO
web the bills properly belonged. In the American
wthey had been permitted 10 To a argcr amount
bc,e believed they never exceeded ESQ 900. Doubts
ocrrcd 10 him, when Governor whether the penalties
ofc act OF William and Mary did not extend to this
TRACTION, and Tor inc purpose OF removing them the
net 1898 was introduced and passed" II appears TO
has,ccn originally proposed that the Rank should be
emkcred to advance, TO limited amount of 100000
or 90 000 but tho passed without any limitation
It's Grafton being OF course confined 70 advances upon
Trcay bills OF exchange, which species OF security
tios.
Bya act which passed very shortly after the first
rcstrbn act the bank prohibited from making
any u or advance account OF the public service
durinihe continuance Of the restriction; bit at the
confinement Of the following session IL enacted
'sthat bmk may make advance the credit OF
duties malt and on the land tax imposed in that
sessiorod any other advance which may be uthorzed
by anylcr acts which may be passed during tho con
tinuancf the restriction .
In nlst all the acts authorizing hcfssue OF exche.
quer bpassed subsequently special clause has been
introduc empowering the bank 10 advance the whole
OF pom OF the amount specified In the act. They
never Aimee any sum beyond the amounteo which
they are lifted In the several acts have the bills
purchascy them, together, exceeded that amount
TIE BANDIDs Fon RENEWAL OF ITS CHARTER.
Tho biidescribed "issuedn those which pass
directly toe bank from the cxcheguer under special
contracts agreements entered into; as for instance
the bills he'd upon the credit Of annual duties and
upon the of f3 900 600 a loan to the public
In confideron OF the renewal OF the charter
The bills purchased those which taken by
the bank tuy on an application from the Treasury
when an ~ OF exchcquer bills takes place. and
they cannot sold to the public at a premium. The
bank never sdit any premium, nor deduct any dis