PP/GC/LE/47 Letter from Sir G.C.Lewis to Henry John Temple, third Viscount Palmerston regarding the possible suspension of the Bank Charter Act, 15 November [1855]
Letter from Sir George Cornewall Lewis, [second Baronet, Chancellor of the Exchequer], Kent House, [Knightsbridge, London], to Henry John Temple, third Viscount Palmerston: Palmerston's suggestion is a very useful one; Lewis will not fail to adopt it. While the facts and dates are still fresh in his mind, Lewis will write them down so as to have some notes for a statement. There is an excellent summary of the grounds of the measure in the ECONOMIST of the previous day. The letter was an unfortunate necessity, but he is satisfied that it was necessary and that the government would have been culpable if they had hesitated about acting. "The Bank Directors were prepared to do and suffer anything rather than inpinge the letter of the law, and it was therefore necessary that we should act upon our own view of the case. As far as I can hear the step has met with universal approbation, and, so far as events have hitherto gone, it has certainly produced the effect which was intended and desired. Lewis believes that the proper course will be to grant the executive government the power to do legally, what twice has been done as a coup d'etat. Commercial panics will recur, whatever British legislation may be, because credit is influenced by causes originating abroad, and so outside the influence of British laws. Whenever such panics occur, it will become necessary to suspend the legal limit on the Bank's circulation. A legal machinery ought to exist for this purpose. "Peel evidently thought that his law would either prevent panics altogether, or, that if they were to occur, they would be as rare as the occasions for declaring martial law. Neither of these suppositions, I am sorry to say, is well founded." Lewis will draft a bill for consideration by cabinet. If introduced it may be discussed immediately; it is not necessity for it to pass before Christmas. The bill of indemnity ought to be passed before the House adjorns for the holidays. 15 Nov [1855]
Two papers
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Newspapers, periodicals and the press
The Bank Charter Act 1844, (Peel's act), linked the Bank of England's power to issue banknotes to bullion reserves and securities
Finance; banking
Sir Robert Peel, second Baronet
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