Bank of England almost nationalised in 1917

The Bank of England was almost nationalised in 1917 because of an argument with the government about American loans taken out to fund the first world war. This has recently been revealed in papers almost 100 years old and released on 7 January 2015.

In 1917, Lord Cunliffe, the governor of the Bank, and Andrew Bonar Law, the Chancellor, argued over a demand by J P Morgan & Co for the repayment of two loans totalling $400m then worth about £84m. Bonar Law insisted it was impossible to repay the debt, while Curzon said that a loan for $85m to the Bank could be repaid immediately using $17.5m of gold held in Ottawa. The Bank prevented Treasury officials from withdrawing foreign gold until the debt was paid in full leading to acrimonious exchanges.

Lord Cunliffe apologised to Bonar Law for its decision, but Bonar Law wanted Cunliffe to resign and the Bank to be nationalised (which it was in 1946)_.

These details come from the Bank’s decision to end its 100-year rule on publishing its minutes. On 7 January, it published its minutes up to the year 1946. It plans to publish further minutes in succeeding months up to 1987, providing a unique perspective on economic history.

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