rds them. These observations are mere
contributions to a discussion, and by no means pretend to dispose
of the question.

II

DISPUTE WITH THE BANK

In the autumn he had a sharp tussle with the Bank of England, and
displayed a toughness, stiffness, and sustained anger that greatly
astonished Threadneedle Street. In the spring he had introduced a change
in the mode of issuing deficiency bills, limiting the quarterly amount
to such a sum as would cover the maximum of dividends payable, as known
by long experience to be called for. The Bank held this to be illegal;
claimed the whole amount required, along with balances actually in hand,
to cover the entire amount payable; and asked him to take the opinion of
the law officers. The lawyers backed the chancellor of the exchequer.
Then the Bank took an opinion of their own; their counsel (Kelly and
Palmer) advised that the attorney and solicitor were wrong; and
recommended the Bank to bring their grievance before the prime minister.
Mr. Gladstone was righteously incensed at this refusal to abide by an
opinion invited by the Bank itself, and by which if it had been adverse
he would himself have been bound. 'And then,' said Bethell, urging Mr.
Gladstone to stand to his guns, 'its counsel call the Bank a trustee for
the public! Proh pudor! What stuff lawyers will talk. But 'tis their
vocation.' Mr. Gladstone's letters were often prolix, but nobody could
be more terse and direct when occasion moved him, and the proceedings of
the lawyers with their high Bank views and the equivocal faith of the
directors in bringing fresh lawyers into the case at all provoked more
than one stern and brief epistle. The governor, who was his private
friend, winced. 'I do not study diplomacy in letters of this kind,' Mr.
Gladstone replied, 'and there is no sort of doubt that I am very angry
about the matter of the opinion; but affected and sarcastic politeness
is an instrument which in writing to you I should think it the worst
taste and the worst feeling to employ. I admire the old fashion
according to which in English pugilism (which, however, I do not admire)
the combatants shook hands before they fought; only I think much time
ought not to be spent upon such salutations when there is other work to
do.'

In a letter to his wife seven years later, Mr. Gladstone says of this
dispute, 'Mr. Arbuthnot told me to-day an observ