1861. An inquiry having been instituted by the govern-ment in 1854 into their relations with the Bank of England, and a committee having been appointed in 1860 to report upon the results of that inquiry, the following rate of remuneration was proposed by the government and agreed to by the bank for the services of the latter in connection with the management of the public debt, viz. - £300 per million for the first six hundred millions of debt, and £150 per million for the excess of that sum. This scale of remuneration is now in force, and according to Act 24 Vict. c. 3, will exist till 5th April, 1886.
1870. With a view to the revision of the Statute Law, and particularly to the preparation of the revised edition of the Statutes then in progress, it was considered expedient to consolidate, with amendments, certain enactments relating to the National Debt. Accordingly, in this year was passed Act 33 and 34 Vict. c. 71, with the view of regulating the various denominations of the Funded Debt, the payments of the dividends, and the unclaimed dividends, thereon, the transfers thereof, etc. etc. Clause 72 of this Act enacts that the Bank of England for the purpose of the Act shall continue a corporation until all the public funds are duly redeemed by Parliament, - thus practically continuing the charter of the bank in perpetuity.
1878. The Bank of England ceased publishing the totals of the London Bankers' balances as they had hitherto done. The particulars given in the statutory weekly return of the Bank are much more meagre than those given by the chief State-banks of the Continent, and it publishes no balance-sheet or yearly return such as that which the Bank of France issues. Many banking authorities would like the Bank of England to publish not only the total of the bankers' balances, but also some details of the item specified in the return as "Other Securities," more especially the total of the bills discounted.
The Bank in this year also let it be known that it would not in future be bound in all cases by its advertised minimum Rate of Discount, and it has since, on occasion, discounted for its own customers at market rate.
1888. Under the terms of the National Debt Conversion Act, 1888 (51 Vict. c. 2), the Consolidated 3 per cents, the Reduced 3 per cents, and the New 3 per cents were converted into new 2 3/4 per cent. Consolidated Stock, with the provision that after April 5th, 1903, the interest should be further reduced, and the stock become 2 1/2 per cent. Consols. The work of conversion fell upon the Bank of England, and to a lesser extent the Bank of Ireland, but notwithstanding the enormous mass of detail, it was successfully carried out within six months. Out of a total of £590,824,407 7s. 10d., dealt with under the Act, £549,094,010 19s. 1d. was converted by November 5th, 1888. Under the terms of the National Debt Redemption Act, 1889 (52 Vict. c. 4), £16,590,453 15s. 8d. was afterwards converted into new 2 3/4 per cent. stock, and £19,354,253 8s. 7d. was paid off at par. The balance of £5,785,689 4s. 6d., representing Stocks held by the Paymaster-General on behalf of the Supreme Court of Judicature, and those representing investments made by the National Debt Commissioners on behalf of depositors in the Post Office Trustee Savings Banks were temporarily converted into a Book Debt bearing interest at 3 per cent.
1890. In November of this year the well-known mercantile house of Baring Brothers, owing to heavy involvements with the Argentine Government, was forced to appeal to the Bank of England for assistance, and but for the energetic action of Mr. Lidderdale, the Governor of the Bank, supported by the other banks, a great disaster might easily have happened. The matter is fully dealt with in a later chapter.
1892. A new Bank Act (55 and 56 Vict. c. 48) was passed amending the remuneration paid to the Bank of England for the management of the National Debt, the annual payment for the inscribed Government Stock being fixed at the rate of £325 for every million pounds of stock up to £500,000,000, and £100 for each million beyond. For the management of Exchequer bonds and bills, the rate was henceforth to be £100, and for Treasury bills £200, for each million pounds outstanding on the last day of the previous financial year.
The Bank of England, though possessing privileges which place it in a position differing very materially from that of any other bank in England, is not a State Bank in the usual sense of the term. Among these privileges, the most important is what is practically the sole right of issuing notes in England. This privilege, together with the duties which the bank has itself assumed by accepting the accounts of the London Clearing Banks, combine to impose upon the bank many of the responsibilities inseparable from a National or State Bank, responsibilities which the bank does not attempt to repudiate. But the State does not interfere in the internal management of the bank, it has provided none of its capital, and has no representative in the Bank Court.
The government of the bank rests entirely with the court of directors, who may, if they please, change the whole system of management. The only check upon their proceedings consists in the publicity of their measures, the half-yearly meetings of their proprietors, and the communications between the court and the government. The directors are elected by the proprietors of bank stock at a general meeting. Eight directors go out and eight come in every year. The eight that come in are commended by the whole court - that is, a "house list" is sanctioned by the court; and though the proprietors are not required to vote for the names included in the list, yet these persons have always been elected. The qualification for governor is £4,000 bank stock; deputy-governor, £3,000; director, £2,000. The directors are not usually large holders of bank stock: none of them hold more than the qualification. The governor and deputy-governor are appointed by the directors, and usually continue in office for two years. The senior directors of the bank, who have passed the chair, form a select committee: to these are added the director immediately succeeding by rotation to the deputy chair. The governor and the select committee have the management of the bank in the intervals between the sittings of the court, but nothing of consequence is done without the knowledge and concurrence of the court of directors.