"confidence money," being currency backed not by metal, but by British Government securities. The amount of the fiduciary notes, however, was fixed by the Bank Act of 1844, and for many years before the war had stood at £18,450,000. Above that point for every Bank note in existence there had to be so much gold coin or bullion in the Bank of England's vaults. It is true that under the terms of the Act, a certain amount of silver (one-fifth of the total bullion) was allowed as backing to the note issue. This right to base the Bank of England note on silver, however, had: not been used since 1861, and so, except to the extent of £18,450,000, the Bank of England note was actually a gold certificate. Its holder could always be certain of being able to turn it into gold on presenting it at the Bank of England. And this free and immediate convertibility of the Bank of England note was recognized as one of the chief props of the English monetary system. Anyone who had a Bank of England note, or any number of them, could rely upon being able to turn them into English sovereigns of the recognized weight and fineness without question and without delay, and to send the sovereigns to any country in which he wanted to put them.
