The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-09-28

financial operations, and in other FGyS giving
announcement 10 all the branches OF traAe ana
industry. The Bank OF England however, was
from the first. and Is 10 this day, only private
bank on q large scale, endow we'd WIN special
privileges on account OF its loans TO the Gov
eTpment, amounting, at its foundation, to
Gl ,200,000 and now TO upwards OF eli ,0OJ, ,000
Its first charter offered no obstacle to the esta-
bhshment OF other like insritOtlons, and no law
could ever be passed preventing private indi-
vlduals trom folio the bankers trade: but
in I7O9 the Governors OF the Bank obtained an
act forbiddng the formation OF any banks of
Issue VI der more than six proprietors, and so
secured tor themselves practical monopoly in
ioint-stoCk banking. Their company was allowed
to issue paper money to the eXtenj OF It's loans
to the state, put no paI er money not covered by
Government securities was allowed, and the
quantity issued could not be forced on people
against their will. During the eighteenth CEN
tury great number of other banks were formed,
both in London and in the country. In 1850,
there were in England hardly dozen bankers
out OF London; in 1893 there were more than
tour hundred. scotland also, untouched by the
law IN favor of the Bank of England, had three
iont-stOck banks, with branches III various
parts, besides great number OF private esta-
blishments. These banks, growing out OF the
commercial prosperity of the country, helped the
tide OF speculation which, if 1t might have been
fortunate IN times OF peace. led to terrible tail
ures on the revival OF European war, and
the disaster consequent thereupon. In 1884
there were in circulation SIX millions OF bank
notes, that is, of the paper vouchers given by
DdDnGlS IOG bne money uPDOSlleu WIN IDeln,
which in those days took the place for ordinary
trading purposes of the modern cheques In
1892 the number had risen to nearly eleven mil
lions and half Next year war was declared
between England and France, and III the panic
that ensued at least oue-fourth of the English
country banks stopped payment, most OF the
Others beng grievously shaken. The London
banks also suffered considerably, the suffering
beng everywhere attributed In great measure
TO the restrictive policy of the directors OF the
Bank of England who, in spite OF tue advice Of
the Government and the prayers OF thousands
OF merchants and manufacturers, sought to
strengthen their own position by issuing as
little money as they possibly could tor the assist
ance OF their nelghbors. For this their best
excuse was IN the TACT that their resources had
been, and continued to be yet more and more,
materially crippled by the immense drains
made upon them by Government on account
OF the expenses OF Its continental wars.
In October, 1895, the directors, brought
aDOsC to bankruptcy, informed Pitt that tnev
could not hold out much loneer. Other mes
sages followed, and at last, III February, l7l7
the bank was authorized by the Pnvy Council
TO refused cash payment tor it. notes, or the
issue OF any coin in sums larger than twenty
shilIines. In the following May an act was
passed enforcing tnat resolution, and sanCtlOnng
an almost unlimited issue of notes. Sheridan
declared II "a farce to call that bank whose
promise to pay ON demand was paid by another
promise to pay at some undehned PERIOD" and
Sir William Pulteney introduced u bill 'IOr the
erection of a new bank in case the Bank of Eng
land dld not pay III specie on or before the 2iCn of
June, l79S' BuuthiS opposition was in elieCtual,
ana the Bank Restriction act renamed in force
tor tNo-and-tWenty years, without any serious
attempt at overturnlp% the monopoly OF the
Bank of England.
Great advantage sprang from this Restriction
act through its encouragement OF sound ana en-.
llghtened views as to the value OF paper money
and the nature OF credit; but, while 1t lasted, it
also brought serious mischief by its depreCla-
ton of the bank note in value, TO the extent, at
IRON tVUpn five n IrTU on,1t
Almost the greatest of the many great benefits
conferred on commerce by Sir Robert Peel was
his act OF 1873, abolishing the restrictions OH
cold ana silver currency and the forced issue OF
paper money. The directors of the Bank OF
England were still allowed to issue as many
notes as they chose, but they were compelled
to exchange them for gold on demand, and thus
were virtually prohibited from giving out more
price OF their equivalent in bullion. This was
national avowal of the principle that money
that Is, the circulating medium, is not gold ano
silver alone, but gold, silver, paper, and any
thing else which can be regarded as trust
worthy agent in the interchange OF commodities
and the barterlng Of capital, labor, and the like
This was the principle which gave vitality tC
such concerns as the one of which Samuel Cur
ney was tor long time the head, and which
not little through his help, has been a grea
source of extension to modem commerce
Credit" said Daniel Webster, "has done more
thousand 4mes to enrich nations than all the
mines OF all the world" Were we forced now
to carry on all our commercial dealings by
means OF gold and silver, 1t would only be posi-
bic, in spite of the increase of our stores 0
these metals, TO continue very small portion
OF our present trade. This, however no out
now attempts to do. The legal currency
whether gold silver or bank notes, is only sor
OF pocket money in comparison with thC
real currency of trade. 1t serves Tor thu
smaller sort of retail purchases, to
payments across the counter and til,
like; but the great merchant has not in his pos
oil thrOu0h lifatiD1a
equal in amount to the paper equivalent o
money that passes through his hands ever,
day OF the week. All his important busines
is carried on exclusively by means Of bills
bonds, cheques, and the other materials include,
in the terms Commercial debt" and 'Credit
His ready money is lodged with a banker a
has been the practice since the beginning o
the eighteenth century, except that now n
draws cheques tor so much as he needs tor us
tIOm time to time, instead OF receiving from hi
banker a number OF prOmissory notes, to b
passed to ana fro, while the actual deposit wa
III the bankers hands, to be used in whateve
safe and profitable way he chose. Now, how
ever, the cheques are in comparatively fey
cases exchanged for real money, they bein
piled up by the bankers into whose hands the
come, and paired OFF, one with another, or i
heaps together, while the deposits that the
represent are LETT untouched. In this way tn
money does double work, beng itself availabl
for use by the banker or his agents, while tn
equivalent checks are quite as serylceable 10
all rhe purposes OF trade. And this is only tn
simplest instance or the modern prinCplG O
credit. In all sorts OF ways, every bit OF none
and everything else that can be taGen as a repro
sentative of wealth, whether actual or pros
| pectiye is turned over and over, each turnln
being a creation, 10 all intents and purposes {
| so much fresh money. A merchant, for example
| buys thousand pounds worth OF goods for eS
| port, say to India, China, or Australia. He pay
tor the same by means of bill of exchange
| accepted as soon as possible, but not paya6l
| till two or three months after date The mani