Their subsequent development was undreamt of, and our object is to enquire whether the duties of the Bank of England, both as regards the convertibility of the note and its position as the centre and mainstay of mercantile credit, would or could have been imposed upon that institution without additional safeguards, had such development been foreseen, and whether the time has not arrived for a reconsideration of the whole position.
For this purpose it will be necessary to compare certain figures at the time of the passing of the Bank Charter Act and the present time, a comparison which will, I think, compel us to ask whether legislation, which, adequate 60 years ago, can possibly apply to present conditions. The Report of 1858 states that while the £5 and £10 notes of the Bank of England had since 1844 shown a tendency to rise, a great diminution had been observable in notes of £200 and upwards; and this diminution is attributed to the growth of joint stock banking and of the Clearing House. The circulation of notes in the hands of the public immediately after the passing of the Act, appears to have been about £20,000,000, and is now under £30,000,000; and this increase is more apparent than real, as so many private issues have lapsed and the fiduciary issue has been increased by about £4,450,000. The balance of the increase, and probably more, will in all likelihood be accounted for by larger holding of notes by bankers; and it may safely be assumed that the actual circulation in the hands of the public is, if anything, smaller now than in 1844.
The average amount of bullion held in the Issue Department for the ten years after the passing of the Act, was about £14,600,000, at the present time it is £32,000,000. Thus while the circulation, though nominally increased by 10 millions, has not done so actually, the stock of bullion has increased by about 17½ millions. The average total liabilities of the Bank of England were, for the 10 years beginning 1845, £17,700,000, and for the ten years beginning 1895 £50,900,000, and this increase of £33,200,000 is to a considerable extent accounted for by the increase in the bankers' balances with the Bank of England which are included in these figures.