Bank Restriction Act of 1797


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Bank Restriction Act of 1797

Legislation in the United Kingdom restricting the ability of the Bank of England from exchanging sterling notes for gold. At the time, the Bank of England was obligated to exchange the one pound sterling for one pound of gold on demand. However, the Napoleonic wars necessitated Parliament to order the printing of money to finance military operations. By 1814, 28.4 million pound notes were printed, but the Bank of England only held 2.2 million pounds in gold. This resulted in a 30% depreciation for the sterling. See also: Gold standard.
References in periodicals archive ?
Much like our current debates about financial crises, fiscal cliffs, and quantitative easing, debt was frequently the subject of heated debate throughout the eighteenth century, notably during the South Sea crisis in 1720 and the Bank Restriction Act of 1797.
By accusing Pitt of paying for the war with worthless French paper money, Cruikshank envisions the Bank Restriction Act of 1797 as the inability (or refusal) of Pitt to repay his treasury bills in specie.