The Placer herald., 1874-05-30


the Council, aud for twenty-three years from
that fatal moment
SPECIE PAYMENTS WERE SUSPENDED
In all England. The business of the nation
was conducted upon an unlimited issue of
paper money. The disasters and the tri-
umphs of the Napoleonic wars were borne
by community whose currency had no me-
tallic basis. Yet the natural energy and
honesty of the Saxon race preserved Eng
land from that wide bankruptcy that fol-
lowed the issue of the French assignats.
The Bank of England notes remained for
several years equal in value to specie. In
1910 they fell thirteen per cent; in 1914 they
were at seventy-four. The suspension of
many country banks in this year, the de-
crease in the amount of currency, and the
success of the British arms, raised them in
1919 to eighty-three per cent. From this
time they slowly rose with the progress of
manufactures and the increase of the ma
tional wealth, until for the last three years
OF suspension they remained at ninety seven,
and the most eminent of England's states
men now QS1Y urged Parliament to direct
the bank to resume its cash payments.
The proposition was opposed by many
tlmld fnanciers, and even mahy intelligent
thinkers. 1t was urged that the nation had
become accustomed to paper currency, and
was content; that to resume the use of gold
| must produce disaster in all the paths of
trade; that it might excite popular disturb
ance and even revolutions; that under the
happy influence of an elastic currency Eng
lands commerce and manufactures had
tiourlshed and grown great, and that any
change in its financial policy was as need
less as it was inexpedent. To these obiec-
tlons Mr.. Peel replied that
DEBAsED CURRENCY WAS NATIONAL DIS
HONOR
And that trade and labor chiefly suffered
from its prevalence. AT length it was agreed
that the restoration of specie payments
should be enforced. But even the most
eminent financiers differed as to the mode of
accomplishing it, and were frightened at the
difficulties with which it seemed surrounded.
Various plans were suggested to enable the
bank to enter upon gradual resumption
One was that only large sums should become
payable in gold. Ricardo proposed that the
bank should be allowed to pay in bullion of
sixty ounces. A compromise was made;
the bank was directed to pay in bullion after
May, 1920, and in specie May 1st, 1928.
All were agreed that the resumption should
not be immediate, and that ample time should
be allowed to provide an abundance of gold
to meet the expected demand.
But when the decision was made, and the
project of resumption had been finally cal
ried through Parliament, none of those diff
culties that had once been supposed to sur
round it were found to be of any real weight.
The bank rapidly accumulated gold in is
vaults. The nation continued prosperous;
trade steadily advanced The Directors
soon found that they need not avail them
selves of the privilege of paying in bullion,
nor of the long period allowed them to
strengthen their resources. They decided to
anticipate the legal limit, and on the 1st of
May, 1921, began their cash payments
Tie event passed off with little notice.
NO oLAMoRoUs THRoNGs
Brought in their notes to exchange them for
gold: no disturbance followed in any of the
walks of trade. The people hailed the re-
turn to honesty with new confidence in the
Governments commerce flourished; and the
nation prepared itself for further reforms
Since that period England has had no de-
based currency, and the credit of its bank
remained unshaken. In 1926 general
panic drew largely on its resources; in 1889
it was saved from failure only by the timely
aid of the Bank of France But the restrc-
tions that have since been placed upon its
& hoyo ,,racarva1 II FROM, oil
danger of suspension. Under its present
Constitution, whatever may be the misfor-
tunes of England's merchants, its bank
must be the last to fail.
Of the high sense of honor and the general
integrity of its management there can be no
doubt, but some English traders and some
careful financiers complain of the autocratic
power with which the bank rules over the
domain of commerce. They urge that all
business transactions are impeded by
ITS VARYING SCALE OF DISCOUNTS;
That to preserve its legal amount of specie,
the bank contracts its loans when the nation
most needs aid, and produces constant un
certainty in the results of all commercial
speculntions They contend that trade
should be free from all artificial restrictions,
and the price of money vary onl y with the
demands of commerce. And the stockhold-
ers of the bank are equally affected by the
legal restrictions that impede the free action
of their directors. The Bank of England
pays only dividend of 10 per cent, while
the free banks often divide Is and 20. That
the stability of the National Bank has not
procured commercial security or prevented
vast speculation, is shown by the succession
of a long series of periods of financial panic
in England. 1t is probable that the princi-
Pile of free banking must at last extend over
Europe and America.
But against deprecated and irredeem-
able currency, honesty, prudence and ma
tional self-respect cry out through all his
tory. Necessity may for time excuse, but
only for the briefest period, the attempt to
substitute promises for money. The use of
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