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in relation to public accounts, directed to be opened there for greater security, &c. The Acts are stated in an abbreviated form, in the general collection of the statutes, and the mere titles of them extend to nearly 200 pages.
13. In accordance with these Acts the Bank of England is to enjoy the exclusive privilege of banking, and all other powers given or recognised as belonging to or enjoyed by the bank, until the repayment by Parliament of the sum of £11,000,000, being the amount of the Government debt due to the bank, without any deduction or abatement whatever, and upon payment to the bank of all arrears of £100,000 per annum, together with the interest or annuity payable on the debt due to the bank, and also upon the repayment of all the principal and interest on every description of public securities held by the bank, then and in that case, and not till then, the exclusive privilege of banking, granted to the corporation, shall cease and determine.
14. I cannot here forbear to mention that a handsome library has been fitted up by the liberality of the Court of Directors within the walls of the bank, for the benefit of the clerks, who had expressed a desire for such an institution. A large room has been placed at the disposal of the clerks for this purpose, and books to the value of £500 have been presented to them by the Court of Directors. The whole management is left in the hands of the members.
OF BANK OF ENGLAND NOTES.
1. Of the character and properties of Bank of England Notes; legal tender.
2. Stolen notes.
Lost notes. Stoppage of notes.
3. Bank never re-issue their notes; advantages of this practice.
4. Where and how Bank Notes are to be made payable.
1. Bank of England notes are in form nothing but common promissory notes, and before the year 1833 had no more legal validity in making payments than the notes of a country bank, or of a private person. That is to say a person to whom a Bank of England note was offered in payment might object to receive it, as he might any other note, on the ground that it was only a promissory note and not money. If he received it without objection he would be considered to have taken it as money, but so he would if he so took country bank notes, and he might even so receive the note of a private individual (though in the latter case very distinct evidence would be required that he took it as money itself, and not as mere security for money on which he might bring an action against the man who paid it to him if it were dishonoured). Country bank notes are still in the same position as Bank of England notes occupied before 1833.
But now, by an Act passed in the year 1833, Bank of England notes are a legal tender for sums above five pounds everywhere in England (except at the bank itself or one of its branches), but not in Scotland or Ireland. In these parts of the kingdom nothing but coin is a valid legal tender; though, of course, Bank of England notes or any other notes will do to make a payment if not objected to.
This enactment is considered to give Bank of England notes in England all the qualities of money, so that they will pass by a bequest of all testator's money, and if bond
fide taken, whether for value or not, even from a finder or a thief, they will pass to the taker. (See next sect.)
But though the finder or the thief may effectually pass the property in the note to a person taking it in good faith, so as to confer a title which should be good even against the person who lost it or from whom it was stolen; yet, as long as the note remains in the hands of the finder or the thief, it still belongs legally to the last owner, who may retake it if he can get hold of it. This is the same in case of money. After conviction of a thief or receiver, bank notes, for stealing which he is indicted, will, like other property, be restored, on the order of the judge, to the person from whom they are stolen, or his executor or administrator who has prosecuted the case, always supposing the notes have not been transferred bond fide by delivery.
Among the other qualities of money, Bank of England notes also have a locality, so that they would pass by a bequest of all that testator had "in his house," which would not be the case with country bank notes or other notes, bills, or cheques.
2. As a matter of course the Bank of England always receive value in one shape or another for every note they issue, the notes are consequently payable to bearer on demand; the payment of them by the Bank of England, on presentation, is therefore imperative.
Where a note or half-note is lost or destroyed, payment of it, if refused, may nevertheless be compelled by bringing an action at law upon it (as it may in the case of any other lost negotiable instrument), and a judge may order that the loss is not to be set up as a defence to the action, upon an indemnity being given to his satisfaction against the claims of any other person upon the note.
When notes have been lost or stolen, it is customary to give notice at the bank of such loss, with particulars of the amount, number and date of each note, which notice the company enter in a book, and for which they charge a small fee. (As to stolen notes see last sect., 4th. paragraph.)
This is commonly called "stopping payment of a note," but for reasons above stated, all that the bank can legally do when a note, which they have received notice has been
lost, &c., is presented for payment, is to inform the party who gave the notice that the note has been presented through such and such a bank.
If tendered to the bank by a stranger who, on inquiry, proves to be a bona fide holder and owner of the note, the authorities of the bank intimate, in a respectful manner, that the note has been stopped, requesting him to wait until an opportunity is afforded to the party who stopped it to inspect the note, &c.; a special messenger is immediately dispatched with the information of the presentation of the note, and if the party does not attend within a reasonable time the note is paid: any unnecessary delay or offensive detention of the person presenting the note would subject the bank to an action for false imprisonment, unless indeed the person so presenting the notes happened to have stolen them, in which case his detention would be justifiable, and the notes, upon his conviction, would be restored to the prosecutor.
There are occasions, however, when the bank do absolutely stop the payment of their notes, but this is not, done without the bank being guaranteed against the consequences thereof; so that if a note, on which a stop has been placed, is presented by a bond fide holder, and is refused, and an action against the bank for the recovery of the amount of the note is the result of such refusal, the bank are of course indemnified.
The consequences likely to result from the absolute stopping the payment of Bank of England notes are of too serious a character to be disregarded, especially in respect of notes transmitted from abroad, for bank notes pass freely on the Continent among bankers and exchange brokers, who readily deal in them.
On a recent occasion the bank stopped two of their notes for £500 each, which notes had been exchanged by two Paris bankers in the ordinary course of their business, and transmitted to their London agents: on the refusal of payment two actions were brought against the bank. Although in both cases the facts were almost identical, yet in the one case the plaintiff recovered, and in the other the jury decided in favour of the bank. The action in the latter case was subsequently compromised, but not till after the parties had incurred enormous expenses in law proceedings.
When the result of these actions became known in
Paris all the bankers affixed notices, in a conspicuous part of the office, to the effect that no Bank of England notes would, for the future, be exchanged by that bank, thus throwing a discredit on Bank of England notes.
Such stoppage of the payment of bank notes might give rise to another serious annoyance to the bank. A note so stopped could be protested for non-payment, and, if of sufficient amount, notice of bankruptcy might be served on the bank, a result which some years ago absolutely took place in respect of a note of the Bank of Ireland.
3. The bank never re-issue their notes; when once tendered for payment they are destroyed; the process of destroying the notes is by burning them, but this operation does not take place till they have been laid aside for a given number of years. The whole are not destroyed together, but at different times, and as many are burnt as correspond with the new notes issued.
The Bank of England at one time tried the experiment of re-issuing their notes, but were obliged to return to the former practice; the innovation interfered with the simplicity of the registration system. The expense and trouble of fabricating notes was found to be inconsiderable when compared with the delay and risk which attended the counting and recording notes not bearing consecutive numbers. The system now in force must therefore be considered as identical with the business habits of the community, and any change which would impair its efficiency or clog the wheels by which money transactions are carried on with the rapidity, regularity and security, observable in a London bank, would be regarded as a serious evil.
4. All promissory notes of the bank, payable on demand, must be made payable (i. e. compulsorily changeable for cash) at the place where issued; it is not lawful for the bank, or for any person on its behalf, to issue, at any place out of London, any such notes, not made payable at the place where they are issued.