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Bank Restriction Act 1797

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11-559: The Bank Restriction Act 1797 ( 37 Geo. 3 . c. 45) was an Act of the Parliament of Great Britain which removed the requirement for the Bank of England to convert banknotes into gold. The period lasted until 1821, when convertibility was restored. The period between these two dates is known as the Restriction period . An increasing number of people were trading their banknotes for gold. Due to

22-581: The Battle of Fishguard , became known in London, a much greater run on the Bank of England was feared, had a large number of holders of banknotes attempted to convert them into gold when bullion reserves were heavily reduced. However, because the total face value of the notes in circulation was almost exactly twice the actual gold reserves held (£10,865,050 of notes, compared to £5,322,010 in bullion), this would have bankrupted

33-512: The Union with Ireland Act 1800 is cited as "39 & 40 Geo. 3. c. 67", meaning the 67th act passed during the session that started in the 39th year of the reign of George III and which finished in the 40th year of that reign. Note that the modern convention is to use Arabic numerals in citations (thus "41 Geo. 3" rather than "41 Geo. III"). Acts of the last session of the Parliament of Great Britain and

44-456: The Bank, and Parliament decided to suspend these "specie payments" with immediate effect; this suspension was renewed annually until 1821. British banknotes were overprinted by the government of William Pitt the Younger after Britain declared war on revolutionary France in 1793. The Bank Restriction Act released the government from the fear of mass redemption of such convertible banknotes, and by

55-600: The British government resumed "convertibility" on 1 May 1821 (two years ahead of schedule). After the passing of the act, Richard Brinsley Sheridan publicly bemoaned the way in which the Bank of England had fallen under the influence of William Pitt the Younger by describing the institution as "An elderly lady in the City, of great credit and long standing who had unfortunately fallen into bad company". This in turn led to James Gillray ’s famous cartoon entitled Political Ravishment; or

66-534: The Old Lady of Threadneedle Street in Danger , which depicts Pitt seducing the Bank of England, personified as an old lady attired in £1 and £2 notes, for her fortune. This cartoon is the origin of the Bank's nickname of " The Old Lady of Threadneedle Street ", still in use today. 37 Geo. 3 Interregnum (1642–1660) Rescinded (1639–1651) This is a complete list of acts of the Parliament of Great Britain for

77-529: The Scottish Parliament , the list of acts of the Northern Ireland Assembly , and the list of acts and measures of Senedd Cymru ; see also the list of acts of the Parliament of Northern Ireland . The number shown after each act's title is its chapter number. Acts are cited using this number, preceded by the year(s) of the reign during which the relevant parliamentary session was held; thus

88-469: The end of the war in 1814 the banknotes in circulation had a face value of £28.4 million, yet were backed by only £2.2 million of gold. However, by 1821, and with radical economic policies instigated by Sir Robert Peel (the future Prime Minister, acting as Chairman of the Bullion Committee ), this situation was reversed, and with £2,295,360 of notes in circulation being backed by £11,233,390 of bullion,

99-579: The first session of the Parliament of the United Kingdom are both cited as "41 Geo. 3". Acts passed by the Parliament of Great Britain did not have a short title ; however, some of these acts have subsequently been given a short title by acts of the Parliament of the United Kingdom (such as the Short Titles Act 1896 ). Continuing the sixth session of the 17th Parliament of Great Britain , which met from 29 October 1795 until 19 May 1796. This session

110-614: The overprinting of banknotes, the Bank of England was losing its supply of gold, and due to the gold standard , the value of each banknote was diminishing. The timing of the act, which had been under consideration for a few months owing to runs on banks in Newcastle-upon-Tyne , Sunderland , and Durham that had in turn requested monetary support from the Bank of England , was the invasion of Britain on 22–24 February 1797 by French forces in Fishguard . When news of this event, now known as

121-410: The year 1796 . For acts passed until 1707, see the list of acts of the Parliament of England and the list of acts of the Parliament of Scotland . See also the list of acts of the Parliament of Ireland . For acts passed from 1801 onwards, see the list of acts of the Parliament of the United Kingdom . For acts of the devolved parliaments and assemblies in the United Kingdom, see the list of acts of

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