T he Bank of England played a key role in the supply of credit during the Suspension of Cash Payments. In London, the hub of the nation's commercial and financial affairs, the cessation of issues in the I770s had given it a monopoly of the note circulation. Bank notes were used as the basis of all sizable transactions and increasingly, as gold coins disappeared after I797, for small payments.2 They formed most of the reserves of the banks which financed the trading activities of the City. The Bank had no contact with country areas and the extent of its influence there is unclear. That provincial credit conditions tended to reflect those in the capital is suggested by various monetary links: the popularity of bills drawn on London, the dependence of country banks on metropolitan reserves (especially deposits with banks), and the convertibility of country issues into Bank notes. However, as fixed reserve ratios were employed by neither London nor country banks, it seems likely that the latter could generate at least short-run monetary expansion independently of any action by the Bank.3 The Bank made advances principally through investments in government securities, the so-called private loans, and discounts of commercial paper.4 For much of the period, the government advances were uncontrollable because the directors felt obliged to satisfy the urgent wartime demands of the Treasury. To some extent, the loans can similarly be considered essential, designed as they were to assist subscribers to war loans and to tide solvent firms over temporary difficulties. They comprised a fluctuating but generally much smaller portion of Bank credit than the other two categories. Thus, the most effective method by which the Bank could control total advances was to regulate the discounts, which it gave to London traders and (from I 797) bankers. Demand for discounts was closely influenced by the Bank's adherence to the legal maximum interest rate of five per cent. This ensured that most of the public's needs were normally met by other institutions