The Bank of England and the British currency were therefore at risk from drains of gold leaving the country or being withdrawn internally, which reduced the backing for its banknotes. In 1847, heavy drains occurred, and the Act was 'suspended' when the Bank of England was presented with a letter from the government indemnifying the Bank for a breach of the Act. The crisis in the money market ended almost immediately, without any breach of the Act.
The Bank of England and the British currency were therefore vulnerable to drains of gold leaving the country or being withdrawn internally, which diminished the backing for its banknotes. In 1847, heavy drains occurred, and the Act was 'suspended' when the Bank of England was presented with a letter from the government indemnifying the Bank for a breach of the Act. The crisis in the money market ended almost immediately, without any breach of the Act.