Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1866-06-05
The Bank of England-The Recent suspen-
sion Of the Bank Charter What it Means.

The Banking Laws of England are not
generallyyunderstood In thiscouutry, aud
the inquiry has often been made during
the past few days asto what the "suspen-
sion of the bank charter" really amounts
to. We will try to explain the matter:
The principal bank of deposit and cir
culation in Europe was founded in Lon
don in l764, and grew out of a loan OF
'f1 200, 900 for the public service. Its
principal protector was William Patter-
son, Scotch gentleman, who, according
TO his own account, commenced his ex-
ertions for the establishment ofa National
Bank,in 1851 The subscribers, besides
receiving eight per cent on the sum ad-
vanced, and "a, 900 ayear, in all floO,00O
per year. were incorporated into socle-
ty, July 27th l764, and denominated the
Governor and Company of the Bank OF
England---the name they are still known
by The first Governor was Sir John
Heublon, whose house and garden occu-
pied the site Of the present Bank.
During the great recoinage in 1886
crisis occurred and the Directors were
compelled to suspend the payment OF
their notes This, however, they got
over, and in order to prevent the like oc-
currence, the capital was increased from
Fl 200. 900 to f2,20ll7l. The charter
was renewed the next year until I'LL
in l1O8 it was further continued to 1888;
in l1l2, to l743; in l742, l765; in 1863,
20 1856 in 1871, to 1872, in 1900, to
1888; in 1893 until 1885, and in 1874, the
charter which has recently been sus-
pended andkhown as the Peel Bank Act,
was adopted by Parliament. The first
great event in the history of the Bank
occurred in 1877 when cash payments
were suspended On Saturday, February
'26, 1876, public announcement was
made of the landing Of some troops in
Wales from French frigate. The alarm
on the subject Of invasion was deep and
universal, and the bank, though posses
sing property, after all claims upon her
had been deducted TO the amount of fl5-
5l3, 500, had only fl,279,00O Of cash and
bullion in her Golfers. There was every
prospect of violent run, and on the
next day Sunday an order of council
was issued, prohibiting the Directors from
paving notes in cash until the sense of
Parliament had been taken on the sub
jeet Parliament cOncurred with the
Privy Council and the restriction act pro
hibiting the bank from paying cash, ex-
cept for sums under twenty shilings,
was passed. Previous to, 1859 the bank
did not issue any-notes fdr less than f2O;
el0 notes were then issued for the first
time. 95 notes were first issued in 1894
In 1891 fl and f2 notes were issued, but
have since been discontinued. The
bank never re-ssued the same notes,
even if they are returned the same day
they are sent out
A los: bank note, of which the holder
knows the number and date, may be
stopped at the bank for day, and no
tice obtained of its being presented, by
giving information at the secretary
office and paying Is. Cd. The hrst
forgery of bank note occurred IN li5S,
when the person who forged was con-
victed and executed The total loss to
the bank from Fauntleroys forgeries
amounted to e360,000
The bank charter. which is now sus-
pended, permits the bank to issue notes
to the anrbunt Of coin on hand IN the
Issue Department, and also to the extent
of el4l, 900, 900 based upon public stocks.
If these provisions are violated, the bank
forfeits its charter and an over issue
cannot be authorized without consent of
the Government Semi-weekly returns
are made to the Chancellor of the Ex-
chequer, and the letter of the law is
always lived up to
This is the third time in twenty-five
years that the Bank OF England has been
compelled to ask of the Government a
suspension of its terms of Incorporation,
and for the third time have the Ministers
of the Crown ihterposed TO save its char
ter from legal forfeiture.
The old expedieuts adopted in this
case by Mr.. Gladstone, of Professionally
allowing a temporary over-issue OF ElO,-
900, 600 has doubtless afforded relief, IT
not commercial ease. Technically, the
Bank of England has not suspended spe-
Gle payments, but, practically, the Bank
on the llth instant had neither specie
nor its once secured notes TO continue
business twenty-four hours longer.
This last panic will doubtless cause
revision and enlargement Of the cele-
brated Peel act Of lS44
T. as