The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1875-10-30

subsequent thereto. During the Napo-
ment had contracted dept to the bank.
1t was q book account, and il a book ac-
count to-day. 1t is not based upon consOls
or anything of that kind. 1t was simply
charge against the British Government OF
915, 900, 900. The law of 1874 permits the
Bank of England to issue bank-notes to
the amount of this government debt, with
out having anything behind it. Now We
may say that they have the government
debt behind it but Ernest Seyd, In his
recent work on the Bank of England, says
that it is acknowledged by all good author
tiles in London and Great Britain that the
bill holder has
NO MORE CLAIM
for the security of the note which he holds
upon that Indebtedness of the British
Government to the Bank OF England, than
has the depositor. Palgrave refers to but
does not lndorse an article which he
designates, as able, and from which he
quotes, which was published in an issue OF
BtdckiooOd Magazine Of rather recent date,
in which the writer claim that the holder
of the note, in case of the stoppage of the
Bank of England, would not be preferred
creditor over the depositor as regarded the
amount of gold which might be in the issue
department Of the bank. The system Of
the Bank of England, and | say it with
due respect, but merely for the purpose OF
making an illustration, is very much like
what would be system of this kinda
CHICAGO ELEVATOR,
which, having a capacity for 20O, OOt
bushels of wheat, should issue warehouse
receipts for 1, 900, 600 Of bushels, and which
should be required to keep on hand25O, 600
bushels as a reserve to redeem the ware
house receipts, with. The price of grain
rises, a demand for it is made, and it i,
flowing out of the country, al d the owners
Of receipts require great quantities Of
wheat delivered. After having delivered
25O. 900 bushels they suspend, or the gov
eminent suspends the act by which they
are required to deliver wheat on preseata
ton Of receipts, and by which they are re
stricted to the issue Of receipts for 1000,
600 bushels on reserve of 20, 900 bushels
1t is claimed the Bank Of England never
suspended and never refused to deliver
gold, or in the other case that the ware
house ever refused to deliver wheat Blu
the act by which they were
REQUIRED To REDEEM,
and were restricted from making excessive
issues, has been suspended from time t,
time by order in council, and then note.
are issued al ibittm These notes AT,
transferred from one to another who owei
the bank III its discount department, anC
they finally are worked in as the banE
squeezes the merchants, and compels then
to cover their obligations ana are Cancelled
in the issue department, and when they
have no excess Of noIes remaining out
then they resume. do not know whethe
| make myself clear in mixing up gran
with coin, but am trying to state tn
principle on which the Bank Of Englan,
has issued that Gl5, 900. 900 tiduciary cir
culation without gold behind it, and hov
1t acts when gold is demand on it, per
son having Bank Of England notes Is per
mitted to draw coin as long a. it lasts
This is merely an illustration Of the sys
tenn, upon what are called specie payin;
banks are conducted that is. upon tn,
English system.
ITO BE CONTINUED