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Samuel Jones Loyd, Lord Overstone, 1796-1883

British banker, leader of the Currency School, and principal architect of Peel's Banking Act of 1844.

Samuel Jones Loyd (not "Lloyd"), known as Lord Overstone after 1850, was the son of Lewis Loyd, a Welsh dissenting minister, and Sarah Jones, heiress to a banking family.  Also out of that union would come forth the bank of Jones, Loyd & Co. of Manchester. 

The junior Loyd was educated at Eton and Trinity College, Cambridge, graduating in 1818 and taking up a position in his father's bank.  He entered politics immediately, representing the Parliamentary seat of Hythe for the Liberals from 1819 to 1826. Loyd's banking experience made him one of the leading experts on monetary and banking matters in Parliament.  And even after having lost his seat, Loyd continued to be called on for consultation by the ministers of the day. 

After the financial crisis of 1825-26,  Parliament broke the Bank of England's monopoly by lifting the prohibition on establishing joint-stock banking companies (albeit note-issuing was limited to outside of London).  The sudden growth of new banks - and associated speculative excesses and spectacular failures - were a cause of serious concern. 

Loyd positioned himself at the head of Currency School in the debates of the 1830s and 1840s.   The the country bank disturbances of 1836 and the revelation of the "Palmer Rule" in 1830s - that the Bank of England had been maintaining a gold reserve-liabilities ratio of one third -  provoked Loyd's 1837 pamphlet denouncing the rule as evidently inadequate.  Loyd proposed a stricter "Currency Rule",  that is, that the Bank should hold 100% gold reserves on note issues, which would thus make banknotes "just like currency", and thus eliminate any room for discretionary monetary policy.  He also demanded a  "single bank of issue", eliminating note-issuing country banks and extending the Bank of England's monopoly over all England.  In pamphlets and parliamentary evidence, Samuel Jones Loyd railed on the ills of allowing more than one bank of issue and called for tighter restrictions. 

The Currency School gained ground and converts, most notably Sir Robert Peel.   Loyd virtually authored the 1844 Bank Charter Act ("Peel's Act") imposing the Bank of England's monopoly on issue, tying note-issue strictly to gold reserves and severely restricting the creation of joint-stock banks.   The latter restrictions would be gradually lifted in 1858-62, but the remainder would continue in force until World War I.

Loyd succeeded his father as head of the Jones, Loyd & Co. bank in 1844.  Curiously, in 1864, Jones, Loyd & Co. would be merged with the  London & Westminster bank, one of the 'new' joint stock banks (founded 1834) which he had so opposed, and had been managed by his free banking school rival, J.W. Gilbart.

Loyd received a peerage in 1850, being made the First Baron Overstone of Overstone and Fotheringhay.  He was also the last. Upon his death, with only a daughter, the Overstone title became extinct.



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Major Works of Samuel Loyd, Lord Overstone

  • Reflections suggested by a perusal of Mr. J. Horsley Palmer's Pamphlet on the causes and consequences of the pressure on the money market, 1837  [bk], [1858 Tracts ed]
  • Remarks on the Management and Circulation and on the condition and conduct of the Bank of England and the Country Issuers, during the year 1839, 1840  [bk][1858 Tracts ed]
  • A Letter to J.B. Smith, Esq., President of the Manchester Chamber of Commerce, 1840  [bk]  [1858 Tracts ed]
  • Effects of the Administration of the Bank of England - a second letter to J.B. Smith, Esq., president of the Manchester Chamber of Commerce, 1840 [bk] [1858 Tracts ed]
  • Thoughts on the Separation of the Departments of the Bank of England, 1840 [bk] [1858 Tracts ed]
  • "Extracts from the evidence of Samuel Jones Loyd, Esq., before the select committee of the House of Commons, on Banks of Issue in 1840", 1840 [1858 Tracts ed]
  • Speeches of Samuel Jones Loyd, Esq., and Lord John Russell: at the London Tavern, on Tuesday, June 15th, 1841, 1841 [bk]
  • The Petition of the Merchants, Bankers and Traders of London, against the Bank Charter Act; with comments on each clause, 1847 [1858 Tracts ed]
  • "Extracts from the evidence of Samuel Jones Loyd, Esq., before the secret committee of the House of Lords of 1848, on commercial distress", 1848 [1858 Tracts ed]
  • "Extracts from the evidence of Samuel Jones Loyd, Esq., before the select committee of the House of Commons of 1848 on commercial distress", 1848  [1858 Tracts, bk]
  • [Mercator] Letters to the Editor of the Times on the Bank Charter Act of 1844, and on the state of the currency in 1855-57, 1855-57 [1858 Tracts ed]
  • Questions Communicated by Lord Overstone to the Decimal Coinage Commissioners, with Answers, presented to Both Houses of Parliament by Command of Her Majesty, 1857 [bk]
  • The Evidence, given by Lord Overstone, before the Select Committee of the House of Commons of 1857, on Bank Acts, with additions, 1858 [bk]
  • Tracts and Other Publications on Metallic and Paper Currency, 1858. [bk]
  • Speech delivered by Lord Overstone in the House of Lords, 15th March 1860, on the address on the Treaty of Commerce with France, with an appendix, 1860 [bk]




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Resources on Lord Overstone

  • On the Causes and Consequences of the Pressure on the Money Market,  with a statement of the action of the Bank of England from 1st October 1833 to the 27th December 1836. by John Horsley Palmer, 1837 [bk]
  • Reply to the Reflections, etc., etc. of Mr. Samuel Jones Loyd. by John Horsley Palmer, 1837 [bk]
  • Effects of the Administration of the Bank of England: Reply to the Letter of Samuel Jones Loyd, by John Benjamin Smith, 1840. [bk]
  • The Errors of the Banking Acts of 1844-5, as Exhibited in the Late Monetary Crisis: Being a Reply to the “Times” to “Mercator” (Lord Overstone), and to “The Scotsman” (Mr George Combe); &c. by Robert Somers, 1857 [bk]
  • "Baron Overstone" 1881, Biograph and Review, p.264
  • "Loyd, Samuel Jones"  in R.H. Inglis Palgrave, editor, 1894-1901 Dictionary of Political Economy [1901 ed.]
  • "Loyd, Samuel Jones" in Leslie Stephen & Stephen Lee, editor, 1885-901 Dictionary of National Biography [1908-09 ed]
  • "Lord Overstone and the Establishment of British Nineteenth-Century Monetary Orthodoxy", by Walter Eltis, 2001 [pdf]
  • Correspondence of Lord Overstone, D.P. O'Brien, editor, 1971
  • Loyd-Overstone entry in History of Parliament
  • Wikipedia
  • Loyd family archives
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