Bank Monopoly the Cause of Commercial Crises. By George Guthrie.
With introduction and notes by William Guthrie. (Blackwood and Sons.)—The theory advocated by this able little treatise is that com- mercial crises are caused by the Act of 1844, which compels the Bank of England to store up bullion in its cellars when the country does not need it ; that this superfluity lowers interest, unduly facilitates discount, and stimulates overtrading ; that this raises prices and depreciates currency, so that sovereigns are exported as a commodity of trade, until the reduction of metallic stock forces a cessation of accommodation and a collapse of credit. His remedy for these evils is to do away with the monopoly of the Bank, and allow all banks to issue notes, on condition that they held Government stock and bullion to the amount of their issues. There would be no fixed price for bullion, but every sovereign would contain -25682 oz. of gold of the standard fineness. Under this system the author contends that when there was more gold in the country than was required the holders would be obliged to take it abroad, instead of being able to force it on the Bank, and so depreciate our currency. Mr. Guthrie's views may be sound or unsound, but in a literary point of view his book is well written.
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