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THE RELATIONS OF THE BANK 1YITH THE GOVE...
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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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The Story Of 1857. The Past Year Was Mem...
moral' renovation in Belfast . The Dublin police' are beaten in their own field by a murderer ; Madex-eiiTe Smith , with unabashed eye , walks out of court ; the Bramliall tragedy is left in darkness ; not a glimmer of light has broken into the bloodyden where that man was murdered whose fragmentary remains , discovered on Waterloo-bridge , created a nine days' horror in the midst of London . Blind Justice was many times cheated in 1857 . Not by assassins only . Men pn whose faultless linen no speck of blood has ever fallen , who have used poisons more subtle than those of Italy , and weapons more fine than the stilettoes of Venetian
revenge , have robbed the widow and orphan , and done worse than murder , and have been spirited away by medical certificates , or screened by the custom of the country . A penal establishment , after all , is a parliament , and convicts are but the representatives of classes . Mr . Henry S . Bkight is the delegate of the forgers , and Bjeale and Thompson are condemned in the name of the undetected .
Promote Social Science , says a new League at Birmingham , born a , d . 1857 . Well , the book of 1858 is open . Record only our actual progress , and how many pages will be filled before another New Year ' s Day ?
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The Relations Of The Bank 1yith The Gove...
THE RELATIONS OF THE BANK 1 YITH THE GOVERNMENT . Necessity is a stern and unnatural parent ; at least she often appears to be so , frequently treating her offspring very harshty , or seeming to neglect them altogether—leaving them to chance and to shift for themselves . But she has produced many distinguished children , of which Invention is reputed the eldest and most famous : other noble sons she has had , and at least one daughter , far advanced in years , and till now thought to be in danger and extreme distress ; we mean the old lady in Threadneedlestreet , lately an object of tender solicitude throughout the world .
Her birth and pai'entage were mean in the extreme ; the bill which called this great institution iuto existence was entitled * An Act for granting to their Majesties several duties upon tonnage of ships and vessels , and upon beer , ale , and other liquors , ' its real object being to raise a million and a half of money to supply the pressing wants of Wit . tjam III .
TJnder this Act the Bank of England was formed , and the duties above mentioned were pledged to the new corporation as a security for the advance made to the King , who gained not merely the ready money of which he stood in extreme need , but also the adherence and support of a large number of influential and wealthy citizens , whose personal interests thus became identified with
the new dynasty . The experiment was too successful not to be quickly repented , and a most intimate and close alliance grew up between the corporation and the Governmont , greatly to the advantage of both . "William : obtained extensive money support , and the Bank prospered under court favour , a creature of the State , entirely devoted to the cause of tho new monarch , and dreading above all the return of tho Stuarts . It became ' the stronghold of tho Whig party , and the bulwark of the Protestant succession ^— - ~ — — -. ~—*~~
In return for the zealous and effectual snpport rendered to tho King the corporation secured an entire monopoly of banking . No other bank of any kind whatever was to bo suffered , countenanced , or allowed within tho kingdom . A few years later this concession was modified to tho extent that no bank could be started having move than six partnersthus effectually hindering tho formation ol
any banking company- —wnich condition remained in force until our own time , gradually the exclusive privileges of the . Bank of England have been reduced ; as the new dynasty became more firmly established the political aid of the Bank was less and less required ; every renewal of the charter was effected with diminished advantage to the Bank , and at present we see the corporation perfectly independent of Government control—an ally , but not a servant , of the executive of the country .
There appears to be an impression m the minds of a large number of persons that even now there is a connexion too intimate between the Government and the Bank . Mr . Gladstone seems full of the idea that the relations existing between them are superannuated and antiquarian ; he considers this notion of his to require the attention of the House as much as any question can do ; and
yet with , that extraordinary tendency to false conclusion which places this brilliant orator below many a dull man on practical subjects , he votes against an inquiry into this and kindred subjects . Probably he knows too well that -when an examination comes to be made , this assertion will be found , like many others that have preceded it , to be mere declamation . The Bank is at once the financial a < rent of
the G-overnment and the depositary of the public balances . In the first capacity it controls the issue of the paper circulation of the country ; it manages the national debt , it pays the dividends to the public , it assists in the collection of the revenue . These various operations , conducted by a board : consisting of some of the ablest commercial men in London , are effected in the most complete manner , and with far greater economy than if they were managed by a department of the Government . The profit to the Bank upon this portion of the public business is less than a quarter of a million ; for which sum it not only ably effects all that is required , but it relieves the Government of a considerable
amount of risk . It also acts as banker to the State , and in this respect its operations scarcely differ , except iu their magnitude , from those of private bankers towards individuals or commercial firms . All salaries , pay , allowances , Treasury bills , and payments of every kind , which every department of the Government has to make , are effected by drafts on tho Bank ; and the remuneration is found in the old-fashioned mode of employing temporarily a portion of tho balances . In exceptional times like these ,
when the Bank holds eight-and-twenty millions of private securities , discounted at a high rate of interest , this is a source of considerable profit ; but thero are times when it is extremely difficult to put out in a legitimate manner any largo amount of the deposits . Occasionally it happens that the Government balances are insufficient to meet payments falling ' clue ; then the Bank becomes a lender to tho Government , receiving interest for its advances in the same manner as if tho loans were made to an individual . All this is the
very reverse of mysterious ; it is just what happens to many of us—sometimes we have a littlo money to spare , and it lies idle in our bankers' hands ; nt others , our wants arc greater than our balance , and we borrow on ad <^ uato _ j ^ £ urjub ^^ othor , Mr . Gladstone is anxious to find fault with the Bank . While he wae in office , ho succeeded not ; only in making himself extremely unpopular in tho City generally , but he contrived to get up a disagreeable correspondence with the Bank on tho subject of tho public accounts , the Governor charging him with innovation , and keeping what is commonly called a very shabby account . Now
Mr . DisEA \ 8 ra ' s new ally wttttid introduce * a new housemaid to the Bank ; to sweep tf # ay the cobwebs ; ' being haunted ' , probably , wiV 6 the notion that the Bank is now , as it w 3 S in "yViXMAM m . ' s time , a stronghold of Whiggery and a bulwark of Protestantisitf , which it is his mission , to destroy . The only explanation that he has given of what lie means by superannuated and antiquarian reltt » - tions is , that when a loan is made a clause is inserted in the bill that the Bank shall be a
perpetual corporation until the loan is repaid . By omitting a few words , he conveyed to the minds of the House and of the country an impression altogether erroneous . It is stipu * lated in the bill that the payments on account of the loan shall be made to the officers of the Bank , and that the dividends shall be paid by the same agency . These are part of the conditions of the loan ; and in consequence it is provided , in a subsequent part of the bill ,
that the Bank shall continue a corporation for the purposes of this Act until the loans iB repaid . Its exclusive privileges might be taken away , its notes might no longer be a legal tender , as a bank it might even cease to exist ; but as an agent of the Government , charged with the management of the debt and with the payment of the dividends , it would still remain a corporation , but with powers limited to this object .
There is probably no particular reason why such a form should be retained . "Formerly , when the system of loans was novel and only imperfectly understood , such a clause was no doubt considered to give additional security to the lender ; but no such guarantee is now required , and the form might be safely dispensed with , just as many other forms which have ceased to be of value have quietly passed into disuse .
Unless some stronger charges can be brought against the venerable lady than this , the verdict of the country will be unanimously in her favour . The evidence of practical men speaks volumes for the liberality and skill displayed in the management generally . In every time of pressure the Bank has come forward in a very spirited manner , and has afforded relief to all solvent houses to the very uttermost . It is of no political nor religious party ; it looks simply to the
character of the house seeking assistance , and to the security offered . And it must not be forgotten that the means of the Bank , though ample , yet still have a limit ; it can no longer issue notes at discretion , as was formerly the case . Its till has been replenished by the sale of Government securities at a considerable loss to itself in order to assist struggling firms . It now holds only five and a half millions Government securities , having
disposed of not less than three millions within the last three months . As . Consols are now eight per cent , higher than they were in the middle of November , it is not difficult to form a fair notion of the sacrifices the Bank of England has made with the view of sustaining public credit . Indeed , the public have by this time pretty generally made up their minds to the fact that thero is nothing very far wrong either in our currency or in the Bunk ' s management of it . Some of the details may be safely and
even wisely altered ; but the source ol our recent troubles is to bo found not in defective currency regulations , but in the want oflc'FupTiimTsYfcBs ~ amoivg-nioderjJi-tradeiJs ^ au tho determination to make money—honestly if they can— but at any rate to make money , which has grown to bo a national infirmity , against which the united power of the pulpit , tho platform , and tho press must be unceasingly directed , if our country is to retain its character for truth and honesty and moral worth among tho nations of the world .
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Citation
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Leader (1850-1860), Jan. 2, 1858, page 11, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/cld_02011858/page/11/
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