The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-04-16
Suspension Of Specie Payments Under
Acts Of Parliament.
Sound Views on Financial
Questions.
The Policy of Great Britain and the
United States Contrasted.

considerable extent the financial situation IN the
United states at present. Specie pay ments had
been Tor a considerable time restricted oy act or
Parliament; gold and silver had entirely disap-
peared rom circulation; paper money was the
only currency and it greatly deprecated In
yalue Business all over Great Britain was IN an
unset tiled condition. and the prices or the necss-
saries OF lie were higher than they had been
within great many years before. 1t is well
known that the Bank OF England is the agent
through which all the financial AFFAIRS OF the
government are transacted. The Berlin and
Milan DEGREES deprived England OF the
ability to export goods for the military
stores, naval supplies and foreign productions
she received, and consequently, there was
continual drain Of gold from the country.
In 1901 and the following year bank notes, owing
TO their excessive quantity in circulation, fell to
discount OF seven to eight per cent but partially
recovered in 1903 and remained until 1910 within
two OF three per cent OF par. Indeed, at many
and continued intervals during the time specie
payments were suspended oy law bank notes were
fully on a par with gold, but in the year last
mentioned ns10) the depreciation became so great
rs to lead to the appointment of the celebrated
Bullion Committee The labors Of the members
were extended over considerable period, and in
the report presented IL is admitted that some or
the soundesr views on finance are set forth.
Briefly they showed the evils existing in England
TO have been caused by an expansion or overissue
OF paper money, and the remedy proposed was q
return to specie payments at as early
period as possible. AS the debates and
reasoning on the subject OF finance and the
relative value Of specie and bank bills
have been carried on IN Congress now for months
1t is time, perhaps, that view may be taken of
the condition OF England at period when she
was engaged in sanguinary wars that taxed to the
N o ri
Bullion Committee favored under such circum-
stances a return to hard money within two years
az the only cure for the evils existing in COM
mercial circles. The report was not acted iavoraby
upon by the House OF Commons but 1t paved the
way for the resumption OF specie payments a few
years later. It's publication had, however, the
prompt and direct eject OF stopping the over
issues OF notes from the Bank of England and
country banks. The Ministry OF the day, though
not agreeing with the terms OF the bullion report,
ackno wledged the necessity of returning at the
earliest practical moment to specie payments, and
by a formal vote OF the House OF Commons the
further issue OF notes was inhibited while specie
payments were suspended.
RUN ON THE BANK OF ENGLAND IN 1897.
In 1897, while the certainty OF continued war
was hanging over the country, ad ditional shock
was given to the depressed spirits OF the nation by
the suspension OF specie payments by the Bank of
cial operations OF the government, had been called
upon for such great advances of cash for the pay
ment OF foreign subsidies and other state exigen-
cies that the directors had been several times
PEELED represent to the Ministry the impossible
ity OF supplying their demands. In an interview
with the Chancellor of the Exchequer, on the loans
10 the Emperor of Austria being mentioned the
governor assured MI. Pitt "that another loan OF
that sort would go nigh to ruin the country" And
at a later date February 0, 1870 the directors
ordered the governor to inform the Minister 'tnat,
under the present state OF the banks advances to
government here, to agree with his request OF
making further advance OF 81. SOC, 900 loan to
Ireland would threaten ruin TO the bank, and most
probably bring the directors to shut up their
doors.n
SPECIE PAYMENTS STOPPED.
At this time, TOO, a fear OF invasion induced the
farmers and others TO withdraw their money from
the hands OF bankers. The run first commenced
on the country institutions and the demand tor
specie soon reached the metropolis In this alarm
ing state OF affairs the Privy Council sent order
prohibiting the Bank OF England from issuing any
coin till the OF Parliament could be taken on
the subject, and measures be adopted for support
ing the public credit. on the following day the
King delivered a message to both houses, stating
that unusual demand OF specie having been
made from different parts OF the country on the
metropolis, 1t has been found necessary to prohibit
the issuance OF coin In the payment OF notes.
After warm debates, in which the opposition dwelt
on the violent stretch OF power in exonerating
trading company from the payment OF its debts,
a secret committee was appointed to examine into
the affairs Of the bank In the meantime, to
remedy the existing obstruction in the circulating
medium, bill was passed authorizing the bank to
issue notes below IS in value In the meantime,
however, the leading bankers and merchants Of
In payment OF any sums due to them.
THE BANK SOUND.
The secret committee reported there was sur
plus OF property OF nearly S20 100000 beyond the
total OF debts, exclusive OF a permanent debt
from the government over s5S 000,0 900; that the
bank had larely experienced drain OF specie
owing to prevalence OF alarm, which there was
creasing 50 that i was - that the
bank would be deprived Of the means OF supplying
gold and SILVER Tor the exigences OF the pubic ser
the measures already taken tor such time and
under such limitations as should seem expedient
rendered necessary were altogether OF a political
nature, and the only blame that could be at
tached to the directors OF the bank for their
conduct on the occasion out OF the
abandonment OF their own better judgment to the
urgent solicitations OF the government made on
the plea OF strong necessity. Parliament passed
bill to continue and confirm for limited time the
restriction OF the issue OF specie by the Bank OF
England. 1t was provided that the army and navy
should be paid in specie; that bank notes should
be received in payment by the collectors in every
branch OF the revenue; tnat the olfer OF bank
note IN payment OF demand should do away with
the effect OF an arrest and that the bank should
be permitted to issue $500 In cash for The ac-
communication OF private bankers and traders In the
metropolis, The directors declared at this time
that there was every 70 hope that the bank
would resume specie payments at once.
POLICY or THE GOVERNMENT.
In the gigantic contests then carried on and
which extended TO nearly every part OF the world
and which continued with brief intervals until
1916, IL was considered by the English govern
ment Indispensable to be provided with power
full engine Tor carrying on IT'S financial operations,
and 1t was thought also TO nave been necessary TO
remove from the engine thus employed the ordi-
nary responsibilities winch should attach TO
banking establishment. The convenience OF the
government, rather than the private advantage OF
the bank and the interests OF the public as dis
tinct from the government were kept In view Dy
the Ministry. Accordingly Parliament was pre-
vailed upon to continue the suspension OF specie
payments on the second renewal OF the Restric-