The times. [volume] (Richmond, Va.) 1890-1903, 1897-01-29

We print i'm another column q letter
from Congressman Walker I'm regard to
the two departments of the Bank of Eng
land. lie claims that there is not a
bigger humbug in the whole financial
world than the pretence OF the bank that
it has In substance. two departments
one OF issue OF bank notes and the other
for the discount Of bllls-each having
an autonomy Of its own lie is mis-
taken. The two departments have been
in existence for more than half cen-
fury. They are, for all practical pur-
poses. as separate and distinct as tLey
would be If the books and treasure Of
the issue department were removed 10
the offices OF the National Exchequ4r in
Somerset House. while the books and
reserve of the banking department re-
maincd iu Thrcaduecdlc street.
Before the present line Of division was
drawn by the famous act OF 1874. che
Bank Of England was bank OF the
ordinary pattern. There was no dis
tncuon between its notes and It's de-
p0sits as regards the provision for tnel~
payment. The two liabilities were based
upon lbs banking assots-that is its
loans and discounts-supplcmen by .
common fund OF specie. But after q long
and bitter experience, the English people
unsafe basis for "a currency system, and
the lesson took form On an act OF Par
lament creating two departments in tine
Bank Of Engiand-one for the ordinary
operations of a bank in connection with
the holding OF deposits and the naIias
OF loans. the other for the issue and re-
dcmption OF notes.
The act OF 1875 was drafted on lines
suggested by Mr.. Samuel Jones Lloyd. af-
tcrward Lord Overstonc, ono Of the great
est authorities Of the time on banking
and currency questions. and IL was franz
ed and carried through Parliament by
Sir Robert Peel. a Prime Minister OF the
highest business capacity The intent
Of these most competent experts 10 create
two separate departments is shown very
clearly boo the first section Of the act from
which We quote.
"Be Ct therefore enacted. That from
and after the olst day of August, l,fL
the issue of pr0missory notes OF the gov
oru0r and company of the Bank of Eng
land. payable ON demand. shall De seDa-
rated and honcoforfh kept wholly de-
tinct from the general banking business
OF the said governor and company; and
tho business OF and relating 90 such issue
shall 10 thcucoforth conducted and carried
on by the said governor and company r.
Issue Department Of the Bank OF Eng
land subject To- the rulos and regulations
hereinafter contained. etc."
Such. av0weiiy was the intent Of the
act Nr walker thinks that 10 has MOI
been achieved. Tie holds that the senl-
ration OF the two departments is "a pre-
tcnco." But the whole financial world
regards 81 as an undoniable fact which
has furni he'd abundant proof Of its
soidity IN the financial history OF Eng
land during the past hfty-two yoars. He
argues that because the liabilities ~ the
bank are payable in gold. there cannot
be two departments. but his argument ie
sheer nonsense. FOR gold payments offer
no obstacle I'm tho matter. lie might as
well assert that If nm the obligations n
the r-nitod States we've redoemahia IN cole
on demand the operations OF the Treas
urv would have 10 Doe consolidated under
a single department
Mr. Walker claims that tho Bank Of
rrolard "has repeatedly euenended the
fundamental law creating IT," and that
tho Old Lady has always issued oil the
currency notes she needed" Tie IS mis-
taken. The bank has never vontured Of
tc,. own authority 20 issue n single note
since tho nassaro Of the act Of lSii 'X-
cont IN strict accordance with its pro-
visions on tho only occasion In which
an ISSUE outside OF the law was made
tho hank acknowledge that She had no
mower 10 do o. ana petitioned Tho gov
e,r,nsnt 90 crent her authority therefor
ae q touu0rarv cxnrdiert We may fdd
that ON ;hst occasion the temporary Issue
amounted 10 less than 5o90,o0o.-Boston
I..rall