The following is an excerpt from Martin Hutchinson’s forthcoming book, “Britain’s Greatest Prime Minister”, a biography of Robert Banks Jenkinson, 2nd Earl of Liverpool (1770-1828). Lord Liverpool was Prime Minister from 1812 to 1827 and had led Britain through the later part of the Napoleonic Wars.
The following is an excerpt from Martin Hutchinson’s forthcoming book, “Britain’s Greatest Prime Minister”, a biography of Robert Banks Jenkinson, 2nd Earl of Liverpool (1770-1828). Lord Liverpool was Prime Minister from 1812 to 1827 and had led Britain through the later part of the Napoleonic Wars.
He was the decisive player in Britain’s resumption of the gold standard in 1821.
Parliamentary background
Definitive reports on cash payments resumption from the Commons and Lords Select Committees were presented on May 6 and 7, 1819. By this time, the economy had definitively turned down, with the temporary euphoria of 1817-18 having ended and a deflation in anticipation of the return to gold having set in.
The Commons report showed that, while the Bank of England, had in 1817 enjoyed gold and cash reserves larger than at any previous time in its history, redemption of old notes had since drained £6.76 million of bullion from it, which had mostly been sold by speculators at a profit, of which around £5 million had been carried to France, according to Alexander Baring.[1] The Commons Committee had accordingly recommended that notes redemption should cease temporarily, since only by a sharp contraction in its notes issue could the Bank reduce the bullion price to a level at which arbitrage was unprofitable.
Bank advances to the government totalled £19.4 million in Exchequer Bills at April 29, 1819, down from a maximum of £34.9 million in August 1814. Conversely, the public balances held by the Bank had declined from around £11 million in 1807 to £7 million currently (in consideration of which the Bank had lent the government £3 million interest-free in 1808).
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