The Hattiesburg news. (Hattiesburg, Miss.) 1908-1917, 1911-10-20

ming of the nineteenth century"
The Bank And The Government Debt |
| THE foundation of the Bank of Eng
land forms the transition from the |
system of floating to that of funded |
: debt T." The Bank of England. |
! however, was not the only institution |
that received its corporate privilege |
because of its relations to the Govern
ment debt. In 1898 "the English Com
pany Trading to the East Indies" was
granted certain exclusive trading
rights in return for an advance of
G2,0O0,000 at per cent; in I'LL the
South Sea Company was granted
the exclusive privilege of trading in
the South Seas in return for the ad
vance of funds used to consolidate
the floating debt. The Bank of Eng
land, however, is the only institution
which has survived and which has
continued to serve the Government.
The growth of the relations between
the bank and the exchequer is well
illustrated by the history of the ex-
chequer bills. These bills were orig
inally issued to furnish a currency,
later they became a means of antici
pating revenue. AT their first issue
in 1896 they were negotiable securi-
ties, payable on demand, without other
. ~, ho ba nph1ip IN,
eral" Later they were accepted i'll
payment of taxes and the bank Was
appointed to cash them and give "a
voice in deciding the 'otal value of
the bills issued The exchequer bills
thus acquired for the public the same
value as the banks own notes, while
they served as bond between the
State and the bank, which bound the
two together in even closer relations
through regularly repeated loans and
contracts and, finally. through the
funding of the bills into a permanent
debt until the State should repay the
capital needed to cash them"
As the Government debt was IN
creased from time to time its admin
istration was deputed to the bank or
to the trading companies. The posi-
ton of the agents varied according to
whether they advanced the funds di-
rectly or simply acted as intermedi-
aries. In the first case their capital
stock was increased by the amount ad-
vanced: in the second case, they took
subscriptions for the Government debt
OF annuites, kept proper accounts,
turned over the amount subscribed to
the exchequer, and managed the semi
annual interest payments. The bank
was finally given exclusive charge of
the business Of handling the Govern
ment debt.
The Bank and the Government ONCE
However, it was the increasing
share taken by the bank in the daily
administration of the public receipts
and expenditures that caused the al
iteration in English financial admins
tration. At the end of the seven
teenth century all the officials of the
excheuuer were absolutely indepen-
dent in their application and employ
ment of public money. Each official
had to give security depending in
amount on that of the money to be
received" Paymasters, likewise,
were assigned certain amounts for
which they were personally RESPONSE
bile. Some of the officials and pay
masters deposited the Government
funds at their disposal in the Bank OF
England; some made other disposition
of the funds. During the eighteenth
century the connection between the
bank and the public offices grew con
tinually closer. The bank acted mere
" as a banker, and the relation be
tween the public offices and the bank
was no more than that between pri-
vate person and his banker"
Between 1850 and 1884 the relations
between the Ddnk ana lhe puplc oii
, ces were systematized, but it was not
, until the latter date that the real un-
ion of the public treasury with the
bank took place. The duties of the
: various officials were then defined by
3 law and the following principles were
p adopted for the management of the
> public money:
"nD All moneys payable to the GOV
ment were paid into the bank either
directly or through the intermediary
:, of the receivers.
I "(2) All public money held by the
. bank was TO form a single rund known
as the account Of His Majestys eX
obaouar, put oenarata ocCOuntS were