Dec. 31.
The honour recently conferred on Mr. Walter Cunliffe, Governor of the Bank of England, is sufficiently exceptional to be worthy of special notice, especially in view of its possible effects on accepted theories in regard to his responsibilities. As everybody knows, the Bank of England is the Banker's bank and therefore keeps the ultimate cash reserve of the whole country. On the wisdom of its directors depends whether Great. Britain shall be solvent or insolvent. Yet few, if any, of the traditional theories capable of quotation recognize the responsibility to the nation which this fact involves. On the contrary, there are a whole series of authoritative statements from the time of Sir Robert Peel downwards ich deny that any such responsi exists. They all favour the view that the Bank of England is only a Bank like any other bank, 2 company like other companies, and that in this position it has no public duties at all. The classic expression of thi theory is contained in the dictum of a former director, who in his book on the Bank says. "T do not intend here to enter at any length on the subject of the general manngement of the Bank, meaning the Banking Department, as. the principle upon which the bnsiness is conducted does not differ. og far as T am aware, from that of any well conducted bank in London." And the constitution of the Rank's executive is in keening with this view. It is shifting one and is composed of men who, whatever experience they may have in other businesses, have not any special knowledge of the brsiness of banking. In fact, full as 1 il British institutions are of -nomalivs, it would be difficult to any greater than the disrepancy which exists between she importance of the Bank and he theories and practices sociated with its daily life.
The peerage given to the present Governor og a recognition of his services at the outbreak of he war may strengthen these theories or put an end to them.
it is viewed in the light in which the granting of a peerage is often regarded, as a reward, that is to say, for some special service to the State which vho doer was not obliged, but took it upon himself, to perform, it will have the former effect. If, as seems more likely, it is looked upon a8 a recognition of the fact that had the Governor and his assistants failed to behave in the way they did the—financial machinery of the nation would have come hopelessly to grief, it will have the latter, for the logical consequence of 80 public a recognition must be some new formulation of the Bank's position. Such a result, if it takes place, will have more than theoretical importance. It ill lead, or should do, to reforms in the Bank's executive which, at present constituted, is not, in the opinion of a great many ekperts, in conformity with the institution's powers as monarch of Lombard Street. It may also the starting point of closer relationships between the Government and the country's financial bodies as a whole. Whether that would be a good thi or not is a thorny question capable of the most elaborate argument. Hitherto the accepted principle has been that the less the Government interferes with the business of the country, whether banking or mercantile, the better, and unquestionably the results attained have been highly satisfactory. The same principle, however, has ruled in other departments of national fife and in many of them has required modification. The idea that "'the Englishman's home is his castle," an iden inseparably connected with the policy of "laissez faire,' is being tested more severely than it has ever been tried before, and just as it may yet be fonnd necessary to convert a voluntary military system into a compulsory one, so may he necessary to introduce greater coordination and direction of effort into the financial system of the country.
Original f
Text read from the printed page and cleaned; old type leaves the occasional error.