BANK OF ENGLAND REPORT FOR THE YEAR ENDED 28T H FEBRUARY 1955 lssutd by Order of the Court of Directors, 14th July, 1955. - ------------ -- - - COURT OF DIRECTORS FOR THE YEAR ENDED 28TH FEBRUARY, 1955. C."MERON FROMANTEEL CoBBOLD, ESQ., GOVERNOR. HUMPHREY C~IARLES BASKERVILLE MYNORS, ESQ., DEPUTY GOVERNOR. SIR GEORCE ED~lOND B RhCKEN BURY ABELL, K. C.I.E., O.B.E. SIP. GEORCE LEWIS FRENCH BOLTON, K.C.M.C. T HE RT. HON. LoRD BRAI NTREE. LhUR'ENCE JOHN C.WBURY, ESQ., O.B.E. Suo PATRICK ASHLEY CooPER. GEOt'FREY CECIL Rvv£$ ELf.V, Esq., C.B.E. SIR CHARLES JOCELYN H A!>IIIRO, K.B.E., )I.C. SIR JOIIN COLDBROOK H ANB URy-WILLlAMS. FIlANK CUlL H AWKER, ESQ. TilE Rr. HON. LoRD KnWERSLEV, C.B.E., M.C. SIR ANDREW N IIESMITH, C.8.E., ,.P. SIR KENNETH OSIVALD P EPrIAlT, II,.B.E. , M.C. THE RT. H ON . LORD PIEllCV, C.B.E. BASIL SANDERSON, ESQ., M.C. MICHAEL JA~IES B ABINGTON SMlnt, ESQ., C.B.E. TilE HON. RAND.\L HUGH VIVIAN SMITH. BANK OF ENGLAND Report for the year ended 28th February, 1955. Note Circulation and Issue Department. The totals of Notes Issued and Paid in recent years are shown In the following table :- £ millions. NOTES ISSUED, PAID AND IN C I RCULATION. YEAR TO END OF FEBRUARY. 1951. 1952. 1953. 1954. 1955. Issued during th, year 9,6 1,095 1,136 1,144 1 ,231 Paid during the year ... 8n 1,0 15 1,035 1,06" I,1I6 In circulation at end of the year ... 1,289 1,369 1,470 1,550 '.Ms The fo llowing tables show the changes in recent years in the various denominations m circulation : - NOTES C IRCULATION BY DENOMINATIONS. £ thousands. 'N END OF FEBRUARY. 1951. 1952. 1953. 1954. 1955. ''''. 86.362 87,334 SsI,I08 90,490 93,556 £> 998,7]1 1,054,927 t ,I23,l>96 1,179.9150 1,26'1>574 £5 135, 161 J5 2 , 185 172,957 191,556 217,797 £" 1,005 9"6 8'5 763 694 £" 455 408 363 343 3'5 £50 95' 83' 738 695 6'9 £'00 1,809 1,569 J,347 1,254 1, 134 £= 8 8 8 8 7 £500 '9" '75 ,65 ,6, ,,8 £1,000 '98 "7 ,68 '5' '34 Over £1,000 (a) 63.870 690930 80,750 84,680 86,530 1,288,981 1,368,591 1,47°, lIS 1,550,062 1,665.498 The issue of £10, £20, £50, [wo, £500 and £1,000 notes was discontinued in 1943. that of £200 notes in 1928. (a) Ust:d by the Bank of England for internal purposes, ~.g., to represent transfers made by banks of issue in Scotland and Northern Ireland as cover for their excess note issues. ( I ) ---.~--~~ PERCENTAGE OF TOTAL CIRCULATION REPRESENTED BY VARIOUS DENOM.INATIONS. END OF FEBRUARY. 1953. 1954. 1955. tos. 6· , 5. 8 5. 6 b 76'4 76'1 75'9 £5 11·8 12'4 13' I £10---£1,000 ,., ,., ,., Over £1 ,000 5'5 5'5 5" 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. 24th Feb., 1954 1,548 29th Sept., 1954 1,635 th 6 31St Mar" 1954 1,577 27 Oct" 1954 1,63 ,8th Apr., 1954 1,61 3 ",th Nov., 1954 1,652 26th May, 1954 1,61 3 29th Dec., '95' 1,752 3,th June, 1954 1,647 26th Jan., 1955 1,665 ,8th July, 1954 1,7 16 23 rd Feb., 1955 1,659 25 th Aug., 1954 1,654 The note circulation at Christmas, 1954, was higher than ever before, the Bank Return of the 22nd December, 1954, showing a figure of £ 1,759 million, an increase of £ 118 million on the corresponding figure for 1953. Changes in the Fiduciary Issue during the year were as follows: ~ £ millions. TOTAL DATE. CHANGE. FIDUCIARY isSUE. 15th March, 1954 + 5' 1,625 31st May, 1954 + 5' 1,675 12th July, 1954 + 5' 1,72 5 28th July, 1954 + '5 1,750 17th August, 1954 5' 1,700 30th August, 1954 '5 1.675 30th November, 1954 + 5' 1,725 13th December, 19S4 + 5' 10775 2 14th January, 1955 5' 1,7 5 The Currency and Bank Notes Act, 1954, provides for a Fiduciary Issue of £1,575 million and gives power to the Treasury (after representations by the Bank) to vary this amount. No continuous increase above £ 1,575 million is permitted for longer than two years except by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament. The Fiduciary Issue has remained above £1,575 million continuously since 15th March, 1954. ( 2 ) The liabilities and assets of the Issue Department at the beginning and end of the year were as follows:- ISSUE DEPARTMENT. £ thousands. END OF FEBRUARY. 1954. 1955 . Change. Notes in Circulation ... 1,550,062 ·,6<>;,,98 + It5,436 Notes in Banking Department 25,295 59.864 + 34,5i59 Notes Issued 1,575,357 1,725,362 + 150,005 Government Debt 11 ,01 5 11 ,015 Other Government SC(urities 1,560,774 1,710,227 + 149,453 Other Securities 700 7,6 + 46 Coin other than Gold Coin 2,5 11 3,012 + 5" Fiduciary Issue 1,575,000 1,725,000 + 150,000 Gold Coin and Bullion 357 36, + 5 1,575,357 1,725,362 + 15°,005 Banking Department, The liabilities and assets of the Banking Department at the beginning and end of the year were as follows :- £ thousands. END OF FEBRUARY. 1954. 1955. Change. Capital 14,553 14,'553 Rest 3,9"8 3,9'9 + Public Deposits 18,905 11,728 7,177 H.M. Tre:tSury Special Account 4,705 6,549 + 1,844 Bankers' Deposits 278,237 292,868 + 14,631 Other Accounts ... 67,058 66, 1I4 ~ T otal Deposits 368,905 377,259 + 8,354 387,366 395,721 + 8,355 -- ~ Government Securities 3240504 267,°26 - 57,478 Discounts & Advances 10,208 51.370 + 41,162 Securities 24,948 15,100 - 9,848 Other Securities 35,156 66,470 + 31.3 14 Notes 25,295 59,86, + 34>Si59 Coin 2,411 2,361 5· 387,366 395.721 + 8,355 ~ --- The balance on H.M. Treasury Special Account at the end of February, 1955, represented monies available as a result of the Mutual Security Acts, 1952, 1953 and 1954, of the United States of America, and not yet disbursed. ( 3 ) ------- - Half-yearly payments of £873,180 were made to H.M. Treasury on the 5th April and the 5th October, 1954, in pursuance of Section 1(4) of the Bank of England Act, 1946. Bank Rate was lowered on the 13th May, 1954, from 3 0. i'o to 3 % and remained at that rate until it was raised to 3 ~i'o on the 27th January, 1955. It was further raised to 40: i'o on the 24th February, 1955. Short-Term Money Rates. The following table illustrates recent trends m short-term money rates per cent. per annum: - E nd of End of End of End of End of End of F eb ruary, February, July, December, January, February, 19~3 . 1954. 1954. 1954. 1955. 19155. Bank Rate 4 31 3 3 31 .1 (I\< dalt of previou$ eh:.tngt) (12th Mar., 1952) (17th Sep., 1953) (131h May , 1954) (13th M"y. 1954) (27th Jan " 1955) (24th Feb., 1955) Advances by B/ E to the Discount Mkt. (~:unst T,B's, 31 - - - - - Tttasury Bills: Average rate of Discount on Allotment b:8/.0·:l.Sd. £2:u· 3'37d. £1 :11 /. :I. ·8od. £1: 171. 3·8ui. £:1.: 61, 7'33d. £3: '51. S· 3'ld· CLIAll.INC B.... "u Deposit Account$ ~b) I!(h) Itch) Itch) liCe) * e) Cilll Money i.e., Lo.. n. 10 the Discount Market : against T .B·s. , ,I -, -, against Prime -I ,I , (minimum) (minimum) Bilnk Bills ' I -I -I } ilgilimt Bonds ' I " -I -I DI§CO\1NT MARJ'U Buying Rates: Prime Bank Bill. (J months) 3 'I -If -I 'I 311 T rilde Bills (J months) .-, 3l- d 21 - 3 :1.1 - 3 3 - 31 41 - 41 (0) The special arrangement which was announced on 7th November, 195I, lapsed on 17th September, 1953, since when advances to the Discount Market have been made at Bank Rate, (b) at 2I days' notice. (c) at 7 days' notice. ( 4 ) " -~ Floating Debt. The outstanding total of the Floating Debt, as given in the Exchequer Returns for the dates nearest to the end of February in each year, ~howed an increase during 1954-55 of £460 million, made up as follows:- £ millions. Tr~asury Bills + 471 Ways and Means Advances n FLOATING DEBT OUTSTANDING. £ millionl. Srd Mar. 1st Mar. 28th Feb. 27th Feb. 26th Feb. 1951. 1952. 1953. 1954. 1955. Treasury Bills 409"4 4, 185 4,306 4,37 1 4,842 Ways and Means Advances: by Public Departments 4" 3" '57 '79 ,68 by Bank of England ... Treasury Deposit Receipts 339 5,664 4,507 4,563 4,650 S,IlO ~ - = The major factors contributing to the overall change in the Floating Debt may be analysed briefly as follows :- £ miliions. INCREASE IN DECREASE IN FLOATING DEBT. FLOATING DEBT. Overall Exchequer Deficit (less net Issue of Tax Reserv e Certificates 4:1) :17 Issue: :1% Conversion Stock, 1958.-59 '99 Redemptions: :1*% National War Bonds, 195:1-54 3% National Defence Loan, 1954-58 Ii% Serial Funding Stock, 1954 and :1-1% Exchequer Stock, 1955 Issued to Exchange Equalisation Account 300 U .S.