The Nashville daily union. [volume] (Nashville, Tenn.) 1862-1866, 1866-05-29
The Bank Of EngIand--Its Charter
and the British Government.

For the third time in the twenty-five
years history of the Peel Act of 1874,
the Bank of England has been com
PEELED to ask of the Governments sus-
pension of its terms of incorporation.
For the third time the Ministers of the
Crown have interposed to save its Char
ter from legal forfeiture On Friday,
the llth inst, the Bank had not the
Whe-ewithal to continue its payments
to depositors, its reserve of notes being
so reduced that, without an intimatiOn
from the Government of relief it could
not have gone on with its business an
other day. On such an intimation il
did proceed with its discounts and pay
ments so close to the point of entire
exhaustion that the Chancellor Of the
Exchequer announced in the House of
Commons at midnight on Friday, that
the Government had authorized an oUer
issue Of notes. and would ask of Parlia-
ment the passage of bill Of indemni-
ty for this violation of the Peel Act of
1874 r
This, in brief, is tte suspension oftbe Bank
Of England as announced in the news
Of yesterday morning by the steamer
Cuba. Our English friends in New
York, or some OF them, at least, cay
the Bank has not suspended specie pay
ments Technically, they are right;
but practically the Bank on Friday
had neither specie nor its once secured
notes to continue business twenty four
hours longer Pract cally, Il was in
imminent peril of suspension in It's
wors phase; for its gold being locked
up II the Issue Department, together
with el5,000000 of public stocks for
the security OF Us notes, and its notes
being exhausted, the great establish
menJ was at a dead lock, 80 II had buen
on two similar occasions before, IN 1917
and 1891 The Peel Act authorized
the employment OF only Ga OU00O0 Of
public stocks, in addition 10 the gold,
IN the Issue Department, but, as the
same act authorized Is 100000 circula-
ton by the provincial banks Of Eng
land, without the sixty miles circuit Of
London, and these banks subsequently
surrendered 81 ,000,0 900 of this priv
lege, the one million was transferred
by the Government to the Bank of
England
From the great peril of Friday, May
IL, The bank was rescued by the Minis
tiers Of the Crown, by authorizing a
suspension Of the Peel Act, and an in
creased issue of notes The relief to
be sure was not to the bank alone, but
10 the whole financial and trading pub
lie It was absolutely and instantly
imperative. 1t could not be delayed
even for the brief forms of bill of in
demnity to be passed through the two
Houses Of Parliament The Suspension
took place on the advice and assurance
of Her Msjesty's First Lord of the
Treasury, Earl Russell, and Chancellor
of the Exohequer, Mr. Gladstone, that
it should not work forfeiture of char
ter
Il has always appeared to US that the
governing power of the English system
Of banking should have persevered in
attempting to maintain the exact pro-
portions of the original Peel Act of
1914, which they have now three times
failed to keep inviolate. The trade of
the Kingdom has been trebled since
1874 The great stimulants to this in
crease, and indeed to the increase of
the commerce Of the world, were uu-
known in 1914, and almost unheard Of
by Sir Robert Peel when he was re-
moved by death in lS59-We mean the
extraordinary gold discoveries in Cali
fornia in 1880, and ia Australia in
lS5l-52 The principle of his Bank
Act was, perhaps, the best for the time
lie believed that el4,00000 of notes,
based on public stocks, in addition to
the notes secured by the gold 10 the
Issue Department land which cannot
be used to pay deposits, except by the
absolute cancellation of q correspond
ing amount Of notes. were sufficient
for the paper currency of the great es-
tablishmenG but there is no reason to
suppose that had he lived ten or fifteen
years longer, or even Eve years longer
ne would have insisted upon the same
arbitrary basis without reference to the
rap-d and enormous growth Of trade.
de had already seen the Bank Act
once suspended in the famine crisis Of
1877 and could not have been a believ.
er IN It's infallibility, as many of bis
successors in the administration appear
TO have been even after the second sus-
pension Of 1857.
The old expedients adopted in this
case by Mr. Gladstone Of proyisionally,
allowing the temporary addition Of E5
100000 or so 00O000 10 the circulation
of the Bank, has probably 10y this time
brought relief, II not commercial ease.
And the effect viii be, OF certainly
ought TO be, a revision aud permanent
enlargement of the celebrated Peel
Bank Act of 1914 N J. Tines, 23L