Annual Report and Accounts 1956
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BANK OF ENGLAND REPORT FOR THE YEAR ENDED 29th FEBRUARY 1956 Issued by Order 0/ the Court of Directors. 19th Jllly. 1956. COURT OF DIRECTORS FOR THE YEAR ENDED 29TH FEBRUARY, 1956. CAMERDN FROMANTEEt. COBBOlD, ESQ., GOVERNOR. HUMPHREY CHARLES B.~SKER V! LLE MYNQRS. EsQ., DEPUTY GOVERNOR. SIR GWRGE EOMOND BRACK.ENBURY ABELL, K.C.l.E" O.B.E. THE RT. HON. LoRD BICESTER. SIR GEaRGE LEwlS FRENCH BOLTON, K.C.M.O. LAURENCE J OHN C"DBURY, ESQ., 0.8.£. GEOFFREY CEelL R VVES ELBY, EsQ., C.B.E. SIR CHARLES JOCELYN H AMBRO. lCD.E .. M.C. S IR JOHN COLDBROOK HANBURy-WILLlAMS, C.V.O. FRANK CVRIL H "WKER. EsQ. WllllAM J OHNSTON KESWiCK, EsQ. THE! RT. HON. LORD K 1NDERSLEY, C.B.E .. M.C. SIR ANOREW NAESMITH. C.B.E., J.P. SIR KENNETH OSWALD PEPPIATI. K.B.£., M.C. THE RT. H ON. LORD PIERey, C.D.E. SIR W!LLlAM HENRY P1LK1NGTON. BASIL SANDF-RSON, EsQ .. M.C. MICHAEL J AMES BABINGTON SMITH, E SQ., C.B.E. BANK OF ENGLAND R eport for the year ended 29th February, 1956 Note Circulation and Issue Department The totals of Notes Issued and Paid in recent years are shown in the following table:- I millions NOTES ISSUED, P AID AND IN CIRCULATION YeAR TO END OF FEBRUARY 1952 1953 1954 1955 1956 Issued during the year 1,095 1,136 ),144 1.231 1.354 Paid during the year 1.015 1,Q35 1.064 1,116 1,231 In circulation at end of tbe year ... 1,369 1,470 1,550 1,665 1,788 The following tables show the changes in recent years in the various denominations m circulation : - £ Ihousands NOTES IN CIRCULATION BY DENOMINATIONS END OF FEBRUARY 1952 1953 1954 1955 ,,5< IOs. 87,334 89.108 90,490 93,556 95.351 £I 1,054,927 1,123,696 1,179.960 ),264,574 1,357,248 £5 152,185 172,957 191.S56 217,797 242.097 £10 906 Bt, 763 694 652 £20 408 363 343 3ts 299 £50 832 738 695 629 592 £too 1,569 1,347 1,254 1,1 34 1,054 £200 8 8 8 7 7 £500 27S 16' 162 t28 120 £1,000 2t7 t68 1St 134 122 Over £1,000 (0) 69,930 80,750 84,680 86.530 90,340 1,368,591 1.470,115 1,550,062 1.665.498 1.787,882 The issue of £iO, £20, £SO, £100, £500 and £1,000 notes was discontinued in 1943, tbat of £200 notes in 1928. (a) USsed by tbe Bank of England for internal purposes, e.g .. to represent transfers made by banks of issue in cotland and Northern Ireland as cover for their excess note issues, ( 1 ) PERCENTAGE OF TOTAL CIRCULATION REPRESENTED BY VARIOUS DENOMINATIONS END OF FEBRUARY 1954 1955 1956 10s. ,., ,.. '·3 £1 76'1 75-9 75'9 is 12'4 13-1 13-5 £10·£1,000 0·2 0·' ~, O ... er £1,000 ,., ,., ,., 100'0 100'0 -100'0 Seasonal variations in the note circulation are illustrated by the following figures for the total of notes in circulation on the last Wednesday in each month during the period under review: - [ millions 23rd Feb., 1955 1,659 28th Sept., 1955 1,766 30th Mar., 1955 1,696 26th Oct., 19 55 1,765 27th Apr., 1955 1,732 30th No.... , 1955 1,796 25th May, 1955 1,752 28th Dec., 1955 1,890 29th June, 1955 1,783 25th Jan., 1956 1,772 27th July. 1955 1,861 29th Feb., 1956 1,788 31st Aug., 1955 1,782 The note. circulation at Christmas. 1955. was higher than ever before. the Bank Return of the 28th December. 1955, showing a figure of £1.890 million, an increase of £131 million on the corresponding peak figure for 1954. Cbanges in the Fiduciary Issue during the year were as follows: - T OTAL £ mil/ions DATE CHANGE FIDUCIARY ISSU E 5th April, 1955 +2S 1,750 4tl1 May. 1955 +2S 1.775 1,825 lrd June, 1955 +SO 14tl1 July. 1955 +SO 1,875 16tl1 August, 1955 -SO 1,825 1st September, 1955 -2S 1,800 28th No ... ember, 1955 +SO 1,850 9th December, 1955 +SO 1,900 9th January, 1956 -SO 1,850 1,825 17th January, 1956 ... -2S The Currency and Bank Notes Act. 1954, pro",ides for a Fiduciary Issue of £1.575 million and empowers the Treasury. after representations by the Bank. to vary this amount; but. except under the authority of a statutory instrument (subject to annulment in pursuance of a resolution of either House of Parliament). the total may not remain above the figure of £1,515 million for longer than two years. The amount of the Fiduciary Issue having continuously exceeded that figure since the 15th March, 1954. an order was made. towards the end of the period under review. authorising from the 14th March. 1956. the maintenance of a level higher than £1,515 million (or a further two years. ( 2 ) The liabilities and assets of the Issue Department at the begin ning and end of the year were as follows: - ISSUE DEPARTMENT £ thousands END OP F EBRUARY 1955 J956 Change Notes in Circulation ". 1,665,498 1,787,882 + 122,384 Notes in Banking Department 59,864 37.476 22,388 Notes Issued ... 1,725,362 1,825,358 + 99.996 Governme nt Debt 11 .0 15 11.015 Other Government Securities 1,710,227 1,8 10,275 + 100,048 Other Sec uri ties 746 69' 47 Coin other than Gold Coin 3,0 12 3.0 11 1 Fiduciary Issue 1,725,000 1,825,000 + 100,000 Gold Coin and Bullion 362 358 4 1.725.362 1.825.358 + 99.996 Banking Department The liabilities and assets of the Banking Department at the beginn ing and end of the year were as follows:- £ thousands END OF FEBRUARY 1955 1'56 Change Capital 14,553 14,553 Rest 3.909 3.911 + 2 Public Deposits 11,728 10,564 1.164 H.M. Treasury Special Account 6,549 3.1 30 3,4 19 Bankers' Deposits 292.868 258,100 -34,768 Other Accounts 66, 11 4 70.9 14 + 4.800 --- Total Deposit s 377.259 342.708 - 34.551 395.721 361, 172 - 34. 549 ~ Government Securities 267,026 283.8 32 + 16,806 Discounts & Adva nces 51.370 20.592 - 30.778 Sec urities 15. 100 16.988 + 1.888 Other Securities 66,470 37.580 - 28.890 Notes .. 59,864 37,476 - 22,388 Coin 2.361 2.284 77 395,721 36 1,172 -345 49 ~ The balance on H.M. Treasury Special Account at the end of February. 1956. represented moneys available as a result of the Mutual Security Acts. 1952. 1953 and 1954, of tbe United States of America, and not yet disbursed. ( 3 ) - ---------- Half-yearly payments of £873.1 80 were made to H.M. Treasury on the Sth April and the 5th October, 1955. in pursuance o( Section 1 (4) of the Bank of England Act. 1946. Bank Rate was raised on the 16th February, 1956. from 4;% to 5t%. The Rate had stood at 4t % since the 24th February, 1955. During the year the Bank made Market Advances, that is. loans against security to tbe Discount Market. on 100 days. Such Advances were outstanding on 335 days. Short-Term Money Rates The following table illustrates recent trends in short-term money rates per cent. per annum: - En(J of End of End of End of End of End of End of February, July, December. January, February, December, February, 1954 1954 1954 1955 1955 1955 1956 Bank Rate 3t 3 3 3j 4j 4j 5j (& ~ale of prevIOus change) (17th Sept., (13th May, (13th May, (27th Jan., (24th Feb., (24th Feb., (16th Feb., 1953) 1954) 1954) 1955) 1955) 1955) 1956) T reasury Bills; Average rate of Discount on Allotment £2;1:3'37 £1 : 11 :2·80 £1:17:3-82 £2: 6: 7·33 £3; 15: 5·32 £4: 1:5'40 £5: 4 :4'31 c l.EMtlNG B,\NKS Deposit Accounts I i(o) li{a) It(a) It(b) 2Hb) 2Hb} 3Hb) c all Money i.e .. Loans 10 the Discount Market: against T reasury Bills a a !j ag~insl Prime 2t II Bank Bills 2 Ij 1j } (minim!j um) (minimum) (minimum)" (minimum) against Bonds 21 It 11 DISCOUNT Mf"RKET Buying Rates: Prime Bank Bills (3 months) 21 III 11 21 3H 4h - 4t 5i! - Si Trade Bill s (3 months) 3! - 4t 2t - 3 2t - 3 3 - 3! 4t - 4t 5 - Si 6 - 6t (0) at 2 1 days' notice. (b) at 7 days' notice. ( 4 ) Floating nebt The outstanding total of the Floating Debt. as given in the Exchequer Returns foe the dales nearest to the end of February in each year. showed an increase during 1955·56 of £252 million. made up as follows:- £ millions Treasury Bills + 277 Ways and Mea ns Advances 25 + 252 FLOATING DEBT OUTSTAN DING 1st Mar. 28th Feb. 27th Feb. 26th Feb. 3rd Mar. £ millions 1952 1953 1954 1955 1956 Treasury Bills 4,185 4.306 4,371 4,842 5,119 Ways and Mea ns Advances: by Public Departments 322 257 279 268 243 by Bank of England 4,507 -4,563 -4.650 -S.IIO 5,362 The major factors contributing to the overall change in the Floating Debt may be analysed briefly as follows :- INCREASE IN DECREASE IN £ millions FLOATING DEBT FLOATING DEBT Overall Exchequer Deficit (including net repayment of Tax Reserve Certificates 87) 300 lssue: 4% Conversion Stock, 1957-58 249 Redemption: 3% Serial Funding Stock, 1955 98 U.S.