BANKING FACILITIES 
tions, gave the public a new conception of the nature of A-D 17 
banking business, and showed that this might be largely 
developed, without interfering with the responsibility of the 
Bank of England in issuing notes. 
Such was the state of affairs in 1844, when an opportunity 
occurred of revising the terms on which the charter of the 
Bank was granted’. Sir Robert Peel treated the difference 
which had emerged, between the issue of notes and dealing 
in other forms of paper-money?, as a matter of principle, and 
divided the Bank of England into two departments; one of 
these carried on banking, in competition with other institu- 
tions, while the other was concerned with the issue of notes. 
[t was his opinion that the inflation of prices in 1825, and the 
2risis of 1837, had been due to over-issues of notes, and that 
the power of augmenting the circulating medium should be 
restricted. This view had been gaining ground for some 
time ; it had so far met with acceptance that the issue of £1 
notes had been discontinued in England®. By the Act of 
1844 it was determined that no new institution should have 
a right of issuing notes, and provision was made with a view 
to extinguishing the right in the case of existing banks, or of 
transferring it to the Bank of England Sir Robert Peel was con 
desired to get the whole business of issuing notes concentrated in the 
an the bands of the Bank of England. He refused, moreover, Loop 
50 leave any discretion to the directors in the management of 
this Issue Department. £14,000,000 in Government se- 
surities was to be transferred to the issue department, and 
for every note that was issued beyond this amount, bullion 
was to be retained in the vaults of the Bank. It was hoped 
that in this way the currency of the country would be 
mechanically kept on the same level as if it actually consisted 
of gold®, and that variations in credit would not react on the 
ordinary circulating medium. 
RIS 
By the Act 
of 1844 
the respon- 
sthility for 
issuing 
Rules 
1 The privileges conferred in 1833 did not actually expire till 1855. but 
Parliament had a right of revision in 1844. 8 Hansard, Lxxiv. 720, 
2 He distinguished between paper eurrency and paper credit. 3 Hansard, 
LXXIV. 784. 
+ 7 Geo. IV. c. 6. 4 7 and 8 Vict. c. 32. 
3 Sir R. Peel said in introducing his measure :—*‘ My first question, therefore, 
a. What constitutes this Measnre of Value? What is the signification of that