• U.S.

British Commonwealth of Nations: The Chair

3 minute read

COMMONWEALTH (British Commonwealth of Nations)

For the third time in succession, the Rt. Hon. Montagu Collet Norman was elected to “the Chair” (Governorship) of the Bank of England.

Mr. Norman, who is 54 years of age, recently visited the U. S. (TIME, Oct. 20) on a mission that was widely held to be connected with Britain’s mooted return to a gold-standard currency. The Governor, who is an Eton man and served through the South African War before he became interested in finance, is as silent as a whole graveyard. Neither U. S. nor British reporters, earnest, inquiring, persistent, could drag from him one word of the portent of his U. S. mission.

The Bank of England or, more correctly, the Governor and Company of the Bank of England, came into being with the Tonnage Act of 1694. It was and still is an essentially private concern, receives deposits and in general conducts a public banking business. But it is something more: the Government Bank and the National Bank.

Its close connection with the Government has been maintained since the day of its birth; for, on that day, it lent the State £1,200,000 in perpetuity. For 70 years (1884 to 1914) it was practically the sole bank which had the right to issue notes; but, since the outbreak of the War, the Treasury has issued notes far in excess of the Bank of England’s issue. The Committee of Treasury, formed of an indefinite number of the older members of the directorate of 24, regulated the daily business between the Bank and the Treasury, for which it is sole banker. As a national bank, it is by no means the largest*, but its powers over the others are great. It fixes the bank rate of interest, holds the ultimate reserve for the banking and commercial interest for the entire kingdom−two things which alone give it a unique prestige. The Bank is governed by a Governor, Deputy Governor, and a Board of 24 members, half of whom usually return every year, none of whom by established custom is a professional banker. The Governor and Deputy Governor who form the Bank’s executive usually alternate every two years ; but, in special circumstances (as is the case with Governor Norman, who is remaining be cause of the gold question), this unwritten rule is waived. The directors form a “Court,” presided over by the Governor, whose office is known colloquially as “the Chair,” and which is subdivided into many important committees.

—Larger banks are the “big five”: Barclays, Lloyds, Midland, National Provincial, Westminster.

More Must-Reads from TIME

Contact us at letters@time.com