Note F — THE PAPER CURRENCY OF ENGLAND DISPASSIONATELY CONSIDERED, &c. (continued 2)

“About the same time the Government had occasion to borrow of the banking department about £3,500,000 to pay the April dividends. The banking department, consequently, for a while, limited their discounts; and even refused to grant loans on Exchequer bills. Great pressure was consequently felt, though it did not last for a long time. Now it is alleged that if the Act of 1844 had not existed, the Directors would have allowed the gold to be exported without immediately contracting the notes in circulation. They would have lent the money required by the Government, without refusing the loans and discounts to the public: and the contraction of the circulation, by being extended over one or two months, instead of a few weeks, might have produced no inconvenience,”—Practical Treatise on Banking, by J. W. Gilbart. F.R.S. Fifth Edition. Page 129.

G “Had the Act of 1844 not been in existence, the Bank of England (as in the case of the West India loan, and of previous loans) might have lent out the money before the time of payment arrived, and no apprehensions would have been entertained. The notes in circulation would have been largely increased for a few days, and then again have subsided to the former amount. As it was, the payment was not made through any virtue in the Act; and had it been required under different circumstances, or when the banking department had a smaller reserve, it could not have been made at all.”—Practical Treatise on Banking, by J. W. Gilbart, F.R.S. Fifth Edition. Page 128.