Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1897-01-27
Walker on the Bank of England.
Boston IIerald.)

(B0ston Herald.)
We print I'm another column n letter
from Congressman Walker In regard 10
the two departments Of the Bank OF
England He claims that "there IL not
a bigger humbug ~ the whole financial
world than the pretence Of the bank
that IL has. In substance. two depart
ments-one OF issue OF bank notes and
the other for the discount Of bills-each
having an autonomy OF It's own" Hs
Is mistaken. The two departments have
been In existence for more than half u
century. They are. for all practical
purposes, as separate and distinct as
they would be II the books and treasure
OF the issue department were removed
to tho Offices OF tho National Exchequer
in Somerset House. while the books and
reserve OF the banking department re-
manned In Threadneedle street.
Before the present line OF division was
drawn by the famous act OF 1874, mo
Bank OF England was a bank OF the ordi-
nary pattern There was no distinction De-
tween its notes and It's deposits as re-
CARDS the provision for their payment.
The two liabilities were based upon lts
banking assets-that is. Its loans and DIS
contemplated by a common fund
OF specie. But after long and bitter ex-
perience, the English people found that
for a currency system, and the lesson took
form In an act OF Parliament creating two
departments In the Bank of England-one
for the ordinary operations OF bank I'm
connection with the holding OF deposits
and the making OF loans; the other for tho
issue and redemption OF notes.
The act OF 1874 was drafted on lines
suggested by Mr. Samuel Jones Lloyd.
afterward LORD Overstone, one OF tho
greatest authorities OF the time on bank
ing and currency questions, and II was
framed and carried through Parliament
by Sir Robert Peel prime minister OF
the highest business capacity. The in
tent of these IN )st competent experts to
create two separate departments Is
shown very clearly I'm the first section
OF tho act. from which we quote:
"Be IL therefore enacted, That from ara
after the 3lst day OF August, 1874, the
issue Of promissory notes OF the gov
ernor and company Of the Bank OF Eng
land, payable on demand, shall be sepa-
rated and thenceforth kept wholly dis-
tinct from the general banking business
OF the said governor and company; and
the business OF and relating TO such Is
sue shall be thenceforth conducted and
carried on by the said governor and
company ia separate department, to
|
Bank OF England subject 10 the rules
and regulations hereinafter contained;
etc"
Such, avowedly. was the intcrf OF the
act. Mr. Walker thinks that II has not
been achieved. lie holds that the
separation OF the two departments Is IA
pretence" But the whole financial world
regards IL as an undeniable fact, which
has furnished abundant proof OF it's
soIdity in the financial history Of Eng
land during the past fifty-two years. He
argues that because the liabilities OF
the bank are payable IN gold, there cam
not be two departments, but his afgu-
ment is sheer nonsense, for sold pay
ments ofer no obstacle I'm the matter.
He might as well assert that II all the
obligations of the United states were
redeernable In gold on demand the opera
lions OF the Treasury would have 10 be
consolidated under a single department. A
Mr.. Walker claims that the Bank oy
England has repeatedly suspended the
fundamental law creating IT," and that
| the Old Lady has always issued all the
| currency notes she needed" lie Is mis-
taken. The bank has never ventured or
| her own authority TO Issue single note
| since the passage OF the act OF lSi ex-
| cent In strict accordance with its pro-
| visions. On the only occasion In which
an issue outside OF the law was made
| the bank acknowledged that she had no
newer 10 do II, and petitioned the gov
| e,nmenf 10 grant her authority therefor
IA a temporary expedient. We may add
,nat ON that occasion the temporary issue
amounted 70 less than Sooooo.