1925 April 28
Gold Standard Act, 1925: ‘A Bill, To facilitate the return
to a gold standard and for purposes connected therewith’. Note
that although this Act restored convertibility, Britain no longer
minted gold coins and would only redeem its currency for gold
in the form of 400 oz. bars of gold.
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Be it enacted by the King’s most Excellent Majesty,
by and with the advice and consent of the Lords Spiritual and Temporal,
and Commons, in this present Parliament assembled, and by the authority
of the same, as follows:—
1.— (1) Unless and until His Majesty by Proclamation
otherwise directs—
(a) The Bank of England, notwithstanding anything in any Act,
shall not be bound to pay any note of the Bank (in this Act referred
to as "a bank note") in legal coin within the meaning of section
six of the Bank of England Act, 1833, and bank notes shall not
cease to be legal tender by reason that the Bank do not continue
to pay bank notes in such legal coin:
(b) Subsection (3) of section one of the Currency and Bank Notes
Act, 1914 (which provides that the holder of a currency note shall
be entitled to obtain payment for the note at its face value in
gold coin) shall cease to have effect:
(c) Section eight of the Coinage Act, 1870 (which entitles any
person bringing gold bullion to the Mint to have it assayed, coined
and delivered to him) shall, except as respects gold bullion brought
to the Mint by the Bank of England, cease to have effect.
(2) So long as the preceding subsection remains in force the
Bank of England shall be bound to sell to any person who makes
a demand in that behalf at the head office of the Bank during
the office hours of the Bank, and pays the purchase price in any
legal tender, gold bullion at the price of three pounds, seventeen
shillings and ten pence halfpenny per ounce troy of gold of the
standard of fineness prescribed for gold coin by the Coinage Act,
1870, but only in the form of bars containing approximately four
hundred ounces troy of fine gold.
2.— (1) Any money required for the purpose of exchange operations
in connection with the return to a gold standard may be raised within
two years after the passing of this Act in such manner as the Treasury
think fit, and for that purpose they may create and issue, either
within or without the United Kingdom and either in British or in
any other currency, such securities bearing such rate of interest
and subject to such conditions as to repayment, redemption or otherwise
as they think fit, and may guarantee in such manner and on such
terms and conditions as they think proper the payment of interest
and principal of any loan which may be raised for such purpose aforesaid:
Provided that any securities created or issued under this section
shall be redeemed within two years of their date of issue, and no
guarantee shall be given under this section so as to be in force
after two years from the date upon which it is given.
(2) The principal and interest of any money raised under this
Act, and any sums payable by the Treasury in fulfilling any guarantee
given under this Act, together with any expense incurred by the
Treasury in connection with, or with a view to the exercise of,
their powers under this section shall be charged on the Consolidated
Fund of the United Kingdom or the growing produce thereof.
(3) Where by any Appropriation Act passed after the commencement
of this Act power is conferred on the Treasury to borrow money up
to a specified amount, any sums which may at the time of the passing
of that Act have been borrowed or guaranteed by the Treasury in
pursuance of this section and are then outstanding shall be treated
as having been raised in exercise of the power conferred by the
said Appropriation Act and be the amount which may be borrowed under
that Act shall be reduced accordingly.
3. This Act may be cited as the Gold Standard Act, 1925.
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Source: Great Britain, Parliamentary Papers, House
of Commons, 1924-1925, 163, vol. 1, p. 1167.
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