Bank Restriction Act of 1797

(redirected from Bank Restriction Act)

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.
Taking Pitt's small domination notes after the Bank Restriction Act forced individuals to perform outward signs of trust and trustworthiness in depersonalized monetary exchanges.
William Pitt, the Bank Restriction Act, and Semiotic Instability
Industrial Revolution, Napoleonic wars and the Bank Restriction Act of 1797
For this reason Ricardo came to the conclusion that the Bank Restriction Act of 1797 should be repealed, the convertibility of the pound restored and the private banks should be forbidden by law to issue banknotes, since such an activity was against the public interest.