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On the morning of 27 February 1797, the Bank of England opened its doors to customers as usual. The day's business was, however, significantly different. Since the end of the seventeenth century, the Bank of England note had been a 'promise to pay', meaning one could demand exchanging a banknote into coins. On this day, the Bank of England announced that it would no longer honour that promise, or as Kevin Barry described it, the banknote became 'a promise to pay promises with promises'.1The crowd of people who came to the Bank that morning saw, possibly with a sense of imminent financial doom, a handbill stating that the privy council had ordered the Bank of England's directors to 'forbear issuing any Cash in Payment'.2
In spite of the apparent gravity of the situation, existing scholarship does not tell us much about this event. The consequence of the suspension of the Bank's cash payments is, in contrast, far better known. The impact on emerging monetary economics has also been well researched. Indeed, the debate that culminated in 1810-11 over the nature of paper money and its implications to the national financial policy and the overall financial system, came to be known as the 'Bullionist Debate', in which classical monetary theory was consolidated.3Thereafter, in the late 1810s, advocates of the link between paper money and precious metal, represented by David Ricardo, with strong support from liberal Tory politicians like William Huskisson, steered Britain towards adopting the gold standard, which - practically in 1815 and officially in 1821 - ended the suspension of cash payments.4
Historians have contemplated the causes and consequences of the suspension of cash payments, but, curiously, their efforts have not extended to the event of suspension itself.5This neglect starkly contrasts with the perception of contemporaries. For example, William Cobbett wrote that the suspension would be remembered as an event 'amongst the most memorable in the annals of England'.6This comment may sound like another example of Cobbett histrionics, but the fact remains that paper money was a topic to which Cobbett devoted a significant part of energy and time, as did many of his contemporaries.
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