The Bank of England. The Bank Acts & the Currency. By Cosmopolite.
BANK OF ENGLAND. ; THOMSON William Thomas. (1866.)
£450.00 [First Edition]
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First edition. 8vo. 74 pp., with seven folding letterpress graphic charts highlighted in colours. Half calf with marbled paper covered boards, spine with five single raised bands outlined in gilt, second panel lettered in gilt on red morocco label, sprinkled edges. Edinburgh and London, William Blackwood & Sons.
A sharp critique of the economic consequences of Sir Robert Peel's Bank Charter Act of 1844 by the Scottish actuary William Thomas Thomson (1813-1883), published under his pseudonym Cosmopolite.
The 1844 Act gave exclusive note-issuing powers to the Bank of England and limited the number of notes in issuance to a fixed value of the Bank's gold reserves. In contrast, "Thomson advocated a paper currency convertible into gold at the market price of gold, and issued only by the government, with a fixed maximum amount of issue. Proposals for the convertibility of paper money into gold at the market price of gold instead of at a fixed rate, but without concrete suggestions as to the manner of regulation of the quantity of such currency or express recognition of the need for such regulation, had been common since the bullion controversy" (Viner, Studies in the Theory of International Trade, p. 285).
The year 1866 would prove to be turbulent for banking. On 10th May there was a panic caused by the failure of the collapse of wholesale discount bank Overend, Gurney & Co. and, on 11th May, the government suspended the 1844 Bank Charter Act, authorising the Bank to issues notes unbacked by its stock of gold. Both of these events are referenced in an addendum to the verso of the title page: "11th May 1866. While this Pamphlet is going through the press another panic has occurred in the Money Market: Consols have been unsaleable, and money could not be raised on them for some time to-day on any terms. 'Apply to the Chancellor of the Exchequer to Suspend the Act,' is again the cry in Lombard Street. 12th May 1866. The Bank Act again violated under the sanction of Government."
See: Dictionary of anonymous and pseudonymous English literature, Vol IX, p. 25
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