/banking/Banking School A

Banking School A

/banking/Banking School, a group engaged in the controversies on the note-issuing policies of the English banking system in the period 1823-60. The name seems to have been coined by Samuel Jones Loyd in evidence before the Committee on Banks of Issue in 1840. Prominent members of the group were Thomas Tooke, John Fullarton, James Wilson and J. W. Gilbart. They opposed the views of the currency school, which advocated the automatic regulation of the note issue. They argued that the volume of currency was not determined solely by the quantity of gold and paper notes in existence, but included bank deposits and bills of exchange. Therefore regulation was impossible, and control would produce undesirable consequences. They maintained that individual banks should be free to decide how many notes to issue, subject to the control that they should be convertible into gold on demand. In these circumstances, they argued, the total number of notes in circulation would be regulated by competition between banks, and would vary according to the state of trade and the needs of the public. The Bank Charter Act of x8 reflected the views of the currency school.

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