The Bank of England and the Bank of London

By 1797 the country is really under quite considerable strain and gold reserves have started to diminish. Up until this point the Bank of England was issuing relatively high denomination notes and it backed those notes by gold. In 1797 that has to be suspended, that connection between bank notes and their sort of physical tangible value has to be suspension. It cannot be sustained because if it is sustained the Bank ofEngland will run out of gold. That could have been disastrous and some people perceived that it would be disastrous but again it was handled very well.