Abstract

The Suspension of the Bank Act in England

The impression is very general, both in this country and in Continental Europe, that the suspension of the Bank Act, as it is commonly called, means the suspension of specie payments by the Bank of England. If this were so, the credit of England would stand on a rather precarious footing, since the event thus construed has happened three times within twenty years, and is destined to recur periodically every ten years as long as the act remains in force. But in fact this interpretation of the occurrence is entirely false. All that is suspended is a restriction upon the issues of the bank, imposed by its new charter in 1844, and ostensibly invented by a very conceited and very wealthy banker, Jones Lloyd. By the act of 1844 the Bank of England is divided into two departments, one of issue and the other of banking, each as absolutely independent of the other as if they were separate banks.