Government by the Governments of the United States and France, with reference to which the Governor of the Bank wrote to the Chancellor of the Exchequer that the Bank was prepared to hold one-fifth of the bullion held against the note issue in silver, provided that the French Mint was again opened to the free coinage of silver, and the prices at which silver is procurable and saleable were satisfactory.
On this correspondence becoming known, the Committee of London Clearing Bankers immediately met and passed a resolution: "That this meeting entirely disapproves of the Bank of England agreeing to exercise the option permitted by the Act of 1844, of holding one-fifth or any other proportion whatever of silver, as reserve against the circulation of Bank of England notes. That a copy of this resolution be sent to the Bank of England, to the Prime Minister, the First Lord of the Treasury, and to the Chancellor of the Exchequer." Nothing more was heard of the suggestion; but it shows that the gold basis of our currency is not so absolutely assured as is generally supposed.
In many other respects the relations between the State and the Bank must, of course, be of an intimate and a. close character, especially as regards the management of the national finances; but these it is hardly our province to discuss. The object of my remarks has been to set before you, however imperfectly, my conception of the duties appertaining to the State and delegated to the Bank, of the inseparable connection between the two, and of the gravity of the issues involved. I have not approached the subject in any alarmist spirit; if I had considered it a subject for alarm, I should not have ventured to speak so freely, I should not have ventured to call attention to it publicly; but, above all, I hope that no expressions I have used may be held to imply anything like criticism, either on the framers of the Act of 1844, or on those who have so ably and loyally administered it.
The wonderful way in which so far the Act has fulfilled its object is sufficient proof of the genius of its author, and its principles remain unassailable. It is clear that it is the duty of those who have the interests of the country at heart to enquire