The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-09-11
A FINANCIAL SURPRISE.
oNE-FIFTH OF BANK OF ENG
LANDS RESERVE IN SILVER.
london Times Startled at What It
Calls Dramatic surprises'-The
Bank Simply Pursuing the Peel
Policy of Finance

London, Sept. n--The Times, in a spe-
cial article from special correspondent
in whose accuracy it says it has reason TO
place confidence, makes the announce
ment that the Bank Of England directors
have consented to hold one-fifth of the
banks reserve in silver.
The Times. commenting editorially ON
what it calls dramatic surprises" says:
THE establishment of the public will be-
immeasuTably greater than at the action
Of the India council" TIE editorial con-
tinue5: This revolution in policy Tor ir
is nothing less than our correspondent
described. applied to the stock Of com
and bullion neld in the issue department.
as security for the banks notes. PeefS
act forbids the bank TO hold more than
one-fouTth in silver. The business com,
munsty will hope that the directors may
be able to show our informant that he IS
mistaken. Inc silver would be quite use
less: for nobody after Witnessing the re-
cent heddIong fail in the price would
dream of regarding il as anything but an
eligible quantity IN such connection
The banks credit is certainly strong
enough 70 bear the additional strain with
out ever wineing; but why should it be
subjected thereto? If the government IS
responsible for The measure it TniEht nav
found some less Objectionable sop TO
throw to the American commissioners or
the bimet1lists anng ting minis tertal sup.
p9Uers, or WhomsoeVer u may be that
has to be conciliated. II would have been
preferable 10 adopt the oft-repeated sug-
gsstioIsto cease coming half soYereiSns
in order to secure a greater circulation.
This would have been more convenient
but not positively harmful The measure
now said to be contemplated can only
create temporary vacuum In The silver
rlaFkat. which was inevitably to be rap
idly filled by the practically ineIhaustIbl9
supplies available. II IS needless 10 deal
with the mechanical difficulties, such aS
the value of silver now standing in the
banks books. or the course to be pursued
when large Withdrawals Of gold raise tho
proportion Of silver above one-flfth- These
are mere details which shrink before the
Importance of the principle involved We
nope the directors VIII speedily explain"
The article. which is headed "a Re-
nOnStrdnce," says: Has the bank we'll
advised in falling in with the suggestion
pushed forward by certain Americans
that it should hold fifth of its reserve in
sflver2 Perhaps the assent WAS given in
very guarded terms; perhaps il WAS dOna
to oblige persons in high quarters, per-
haps 1t was considered an act of inter-
national courtesy. There may have been
this or that reason to excuse and extern
uate but the broad. plain truth is that
in existing circumstances the bank ougn6
TO have set its face enphdticahy against
dny such notion and it has not done so.
1t is useless to say that the plan is
stamped with the permission OF the bank
charter act and the authority OF Sir
Robarr Peel. II is equally useless 70
rem ember that at the Paris monetary
conference in 1888. the bank, on the sug-
gestion of Italy and the. United States.
gave some sort of promise that should
International bimetallis1n be established it
might allow the temperance of silver
bullion as assets in the issue department.
of the bank.
THE reason which actuated Sir Robert
Peel are OF no application in present cir
cumstances. It is important to remember
that the concession of 1881 was Immediate
~ seized upon as an important British
declaration in favor of bimetaH;sm and
has been a handle Of ANNOYANCE against
=
and we ought to learn wisdom from the
experience of 1881 Nowadays il would
be as useless for the bank of England to
keep T,Q00 000 pounds or 81, 100000 pounds
in fbe shame of SILVER reserve as II would
be fo~ parliament TO pass q law for the
creation of rotten boroughs. The bank
of England ought to have said This, and it
has not said this. Sir Robert Peel eX-
planned in 1874 that it was well 20 hold
silver so as to be in a position TO enjOS-
the opportunity afforded US by bimetdllic
France to pay our debts in cheaper metal.
But what mas this to do with the pres
ent SUGGESTION The very poiWt of il IS
that our reserve IS TO consist permanent
" in part Of silver, so that We may as
sist in raising the price of silver That
we should dispose Of il at a profit to
France or America is the very thing that
under the proposed scheme of interna-
| tiona1 bimetallism we could not do The
circumstances are quite different Where
Peel may have been wise we should be
exceedingly foolish, for as the only
the very occasional weakness of our gold
reserve at the bank, why should we de-
uberately choose to water that reserve by
practically reducing 1t one-ffth2 Sir
Robert Peel'S other reason was that a
stock of silver might occasionally be con-
venieut TO ship TO the far east But since
the telegraph was invented that reason
no longer exists. We can order silver
from anywhere in a few seconds; and as
London is the principal silver market for
the whole world; We need no stock at the