HC Deb 10 February 1808 vol 10 cc415-31
Mr. Huskisson

moved the order of the day, for going into a committee of ways and means, to which the Correspondence between the Chancellor of the Exchequer and the Governor and Deputy Governor of the Bank, relative to the late Arrangement between the Bank and the public, was to be referred. (see p. 232.)

Lord H. Petty

wished for some explanation on a point which was not sufficiently clear upon the face of the Papers before the house. The Resolution of the Court of Directors on which the resolution of the company of the Bank of England was founded, agreed to lend to the public 3,000,000l. without interest, during the war, on condition that the balances of the public money should be continued in the Bank in the usual manner, though they should even exceed 10,000,000l. He wished to know, whether this condition had been acceded to. The answer to the letter in which the condition was specified, stated that it was not intended to alter the course of proceedings between the Bank and the Exchequer, or to take from the Bank and advantage that it now enjoyed by law. He wished to knows, whether by this it was meant that the government acceded fully to the conditions proposed by the Bank. In another letter it was stated, that the arrangement now entered into would not preclude a different appropriation of the balances above 10,000,000l. and a discretion was reserved to parliament to that effect. These statements were not easily reconcileable, and therefore he wished for some explanations with a view to a right understanding.

The Chancellor of the Exchequer

said, the noble lord would find that what had passed between him and the Bank was all recapitulated in the note of the 19th Jan. (p. 250.) The words on the particular point alluded to by the noble lord were, that the Bank should, on the 5th of April next, advance 3,000,000l. for the public service, free of interest, the principal to be secured by exchequer bills, to be deposited in the Bank, payable in six months after a definitive treaty of peace. It was certainly not intended that any part of the advantages the Bank now enjoyed by law, should be withdrawn during the present war, nor that any alteration should be made in the general course of proceedings between the Bank and the Exchequer. But it was possible, that some reduction might be made in the amount of balances, by other arrangements pointed out by the committee of Finance, without violating the tenour of the agreement now made between the Bank and the public. The principal point on which this part of the subject turned, was a direct application of some monies from the exchequer itself to the public service. This, though withholding the money, pro tanto, from the Bank, would not alter the course of proceedings between the Exchequer and the Bank.—The house having resolved itself into the committee,

The Chancellor of the Exchequer

rose again. He had the satisfaction, he said, to call the attention of the committee to an Arrangement, which it had been his good fortune to make, under circumstances so advantageous to the public, and at the same time so fair towards the Bank, that he was confident on explaining them to the committee he should have its full approbation. The Papers before the committee contained the details of the correspondence between him and the governor and deputy governor of the Bank. It was therefore only necessary for him to state the origin and conclusion of the arrangement which he had now to submit. The committee would be aware, that this arrangement was first suggested by the Committee appointed last year, to enquire into the means of reducing the public expenditure. The Second Report of that Committee turned upon the management of the public debt by the bank, and the manner in which the bank was connected with the public revenue and the public expenditure.* This subject resolved itself into three heads; 1st, the Management of the Public Debt; 2dly, the Balances of the Public Money in the hands of the bank; and 3dly, the Unclaimed Dividends. On all these heads the committee had presented such facts as afforded opportunities of considering how those matters might be conducted with a saving to the public. The allowance that had been first made for the management of the public debt, the times and degrees in which that allowance had been altered, and the causes of the alteration, were all specified. The great increase of the amount of the public debt since the last alteration, was mentioned as a proper ground for revising the last arrangement, with a view to a saving to the public. On this point the agreement between the bank and himself rested. It was agreed that the allowance for management should be 340l. per million when the debt should amount to 400 millions, and from that to 600 millions inclusive; 300l. per million for all debt above 600 millions, the 600 millions continuing at 340l.; and 450l. per million between 300 and 400 millions, in the event of the public debt being reduced so low as that amount. Under this head alone the saving to the public by the present arrangement would be from 62 to 65,000l. a year. He trusted the committee would see the propriety of the arrangement on this head; and as from a bare reference to the state of the public debt at the present time, better terms of management might be expected by some, he wished gentlemen to bear in mind the different engagements and contracts with the bank prior to this, which could not possibly be got rid of without the consent of the bank to a new arrangement. In 1791, an agreement had been entered into for the management of all the public debt at 450l. per million, and neither the public, nor the house of commons, would be disposed to force a supposed advantage by bringing down the bank from the rate of this contract, otherwise than by its own free will. The appearance of a breach of faith in such compulsory reduction, would be an injury to the public far more than sufficient to outweigh the benefit by the reduction of the rate of management. Whatever allowance the bank was entitled to under any act of parliament, could not be taken from it, otherwise than by the consent of its own body. The consent was given in this case, with as large an abatement as could be expected under the consideration of all circumstances. The next head of the arrangement, was the advance of 3,000,000l. by way of loan to government without interest, till six months after the conclusion of a definitive treaty, in consideration of the advantages of management, and in participation of the benefit of the balances. The Committee, to whom he was indebted for being enabled to bring this subject distinctly before the bank and the house, had stated that the average amount of balances of the public money in the bank was about 11,104,919l. But the committee was in error in including in this 475,000l. part of 600,000l. placed in the bank, in virtue of an arrangement with the United States of America. Though the claimants on this fund might not have been as prompt in coming forward with demands as before, it was in the power of the trustees to vest the money in exchequer bills for the benefit of the claimants, whenever they should come forward. The fair sum at which the amount of balances might be taken was about 10,600,000l. or 10,500,000l. From the economic attention that had of late been put in force, these balances would not rise above 10,000,000l. from year to year during the continuance of the war. The committee that had suggested these improvements that were now to be carried into effect, had shown one principle on which advantage may be reasonably claimed for the public. Mr. Pitt, in his arrangement with the bank, had asserted the right of the public to participate in the advantages derived by the bank from the management and balances; and that whether this participation should be in the proportion of one-third, one-fourth, or one-half, it would be greatly to the advantage of the public. This shewed that not more than a participation was intended, and therefore, as the proportion of one-third, being the middle rate, was what was most looked to, and probably considered as most equitable, that proportion was agreed to. Calculating that proportion of advantage, he would now state how it operated upon a balance of 10,000,000l. By the former advance of 3,000,000l., at 3 per cent. when the legal interest was 5 per cent. the public gained an advantage of 60,000l. a year, which was equivalent to a capital of 1,200,000l. which was to be computed towards the amount of the total benefits realized at present. In addition to that ought to be taken also the amount of balances then in contemplation, according to Mr. Thornton's evidence, which was 2,500,000l. This amount of balances was to be deducted from 10,000,000l. and left 7,500,000l., which was the amount upon which the present arrangement was to be calculated. The arrangement now entered into, gave to the public, besides the 500,000l. of unclaimed dividends, one-half of the reduced balance after the arrangements made by Mr. Pitt. Then there was to be added the 1,200,000l. in consequence of the arrangement entered into by the noble lord opposite, which made the advantage to the public considerably more than a moiety of the benefit derived by the bank. If some would say that the 2,500,000l. arranged for by Mr. Pitt, according to Mr. Thornton's evidence, should not be deducted from the total balances of 10,000,000l. he submitted, that on the full consideration of all the circumstances, the agreement now proposed was as fair a participation of the profits of the bank, as the public could expect, under the Report of the Committee of Finance.—Having stated these circumstances, as to the manner of reforming the allowances of management, it remained for him only to say, that the precise benefit to be given to the public was an advance of three millions without interest, during the war, and till six months after a definitive treaty. Thus far the bank had given its full sanction to the arrangement. On the next head, the bank had acceded so completely, that what he had to submit would be found so fair and equitable between the public and its creditors, and so perfectly competent to the right and powers of the house, that there could be no difficulty of arranging and agreeing to it without the consent of the bank. He alluded here to the unclaimed dividends. This, like the other parts of the present arrangement, originated in the Report of the Committee of Finance. But the manner in which the account of unclaimed dividends had been called for by that committee, had rather produced an increase in the calcu- lation upon which the loan was grounded. The unclaimed dividends, according to the report of the committee, amounted on the 8th of July to 986,573l. and at the lowest period of some antecedent years they had not fallen below 900,000l. This calculation had been taken on the day before payment, whereas it ought to have been taken on the day after. In demanding 500,000l. for the public in addition to 376,739l. advanced under the act of 1791, provision was to be made that the balance ready for the payment of the public creditor should not be reduced below 100,000l. and according as any reduction below that sum should take place, a proportion of the 500,000l. should be refunded from the exchequer to make up the deficiency. The definition of an unclaimed dividend was one that had lain in the bank undemanded from the day of payment of dividends before the last. The bank in agreeing to pay 500,000l. out of the surplus of this species of dividend would have exceeded the amount of the precise fund; and therefore the governor and directors would not undertake to go so far without the consent of the proprietors of bank stock in general courts. It was impossible to ask the bank to make the advance out of such a fund on its own authority. But when the power of the public came to be considered, with respect to the money due to its creditors, it appeared that the public provided sufficiently for the security of all demands, when a constant balance of 100,000l. was reserved, never to be reduced below that amount, without a constant reparation of the deficiency.—These were two of the three heads of arrangement completely sanctioned by the bank; the third was sanctioned in principle; and though the house had to make the arrangement between the public and the public creditor, without the intervention of the bank, there was no doubt of the equity of the arrangement, and, therefore, the house could have no difficulty in acceding to and confirming it. On the first head, the public would have an advantage of 3,000,000l. on account of management, which would be an annual saving of 65,000l. This was so obviously beneficial, that there was no necessity to expatiate on it. The public, he was sure, would receive this, as well as the other parts of the arrangement, with satisfaction. He was sure the more the whole was considered, the more it would be found just and advantageous. There was no room for complaint on the part of the proprietors of bank stock, as if the governors and directors favoured government, nor any ground of complaint on the part of the public, as if the government shewed favour to the bank. It was not to be presumed, that in taking this money the country took the profits and savings of the bank, which the bank alone was entitled to touch. The money taken was a portion of the profits of the public money, which the public might dispose of otherwise, if it suited its convenience or its interest. Many modes had been shewn to the managers of the bank, by which the public money might be economically employed for the public out of the bank. It was on a mutual consideration of the convenience and advantage derived on both sides that the arrangement was framed. The public was at liberty to take advantage of the deposits to save interest incurred in other quarters; but from motives of regard to general convenience, this arrangement was mutually agreed to. He now submitted it in the hope of obtaining the full sanction of the house. The agreement while advantageous to the public was fair and equitable to the bank. Others might look to greater advantage to the public; but he was sure the public interest would be found to be fully attended to on a fair consideration of the whole of the circumstances. The right hon. gent. concluded with moving, "That the sum of 500,000l. being part of the balances arising at the bank of England from the dividends of the public debt due and not demanded, and of the balances of unclaimed lottery prizes, be paid into the exchequer, provided that if at any time the balances remaining in the hands of the cashier of the bank on both these accounts, shall be reduced to a less sum than 100,000l. exclusive of the said sum of 500,000l. and of 376,739l. to which the sum of 500,000l. paid into the exchequer by the said governor and company, in pursuance of an act passed in the 3lst of his present majesty, hath been reduced, then and in such case so much of the said first-mentioned sum of 500,000l. shall be repaid to the said governor and company as shall be equal to the sum by which the said balance shall be less than the sum of 100,000l."

Mr. Bankes

agreed with the right hon. gentleman, that it was most just that the country should avail itself of the profits arising from its own money, without in- fringing the faith due to the public creditor. He applauded him for his perseverance in that point, upon which the bank seemed to be somewhat perverse; namely, to take such a part of the unclaimed dividends as would never leave the balance left at the bank lower than what had been prescribed by the act of 1791. He wished to know, whether the unclaimed lottery prizes were included in the papers. These advances on the dividends ought unquestionably to be made, and he did not see that they depended on the consent of the bank, rather than the reasonableness of the thing, any more than the rest of the agreement. The large rate of allowance which the bank enjoyed for the management of the national debt, he strongly condemned. Even in 1786, the report of the auditors of public accounts stated, that the business could be done for 200l. in the million, and this at a period when the debt was comparatively small. Great as was his respect for the illustrious man, who at that time presided over the finances of the country, he could not help thinking that he had made an improvident bargain on the subject. He conceived it would have been infinitely better in the present instance, had a larger reduction been made in the rate of allowance, even if that reduction had been elected by reducing the amount of the loan; for the reduction of the rate of allowance would be a permanent advantage to the country, while the advantage derived from the loan was contingent; although he feared that that contingency would be of long duration. At the termination of the war, the benefits resulting from the loan would cease; and by fixing the rate of allowance by a legislative admission, it would be rendered difficult again to open the subject. There was another point which must be contemplated with some jealousy. The bank had in their hands the complete coinage of the circulation of the country, without an equivalent paid. It would be as easy for them to coin the sums advanced to government, as to coin the amount of their notes cancelled yesterday. He was aware that this could not be done indefinitely, but it might be done to a great extent. The country had certainly reason to be satisfied with the prudence with which that branch of the public economy, the management of the national debt, had been conducted by the bank; but it was evident, that in return, they derived con- siderable benefit from the public balances remaining in their hands. To suppose otherwise, would be to suppose that the bank were ignorant of that with which every common banker was conversant. He did not like any thing that drew the bank into too close a connection with the ministry. Be wished them to feel mutual good will, but to be perfectly independent of each other. Were he asked, however, would he adopt the bargain such as it was, or change the mode of managing the debt, he would answer, that so many difficulties and inconveniences must result from such a change, that inadequate and disadvantageous as the terms were, if they were the best that could be obtained, he would acquiesce in them rather than set the whole business afloat.

Mr. Tierney

observed, that the right hon. chancellor of the exchequer, seemed to think it a matter of course, that provided the nature of the bargain, as to the public gain derived from it, were approved, no other objection could arise to it. In the outset he would state this vital objection, which he confessed was not new; that while the public restricted the bank from paving in specie, it was at least highly indelicate that the public should derive benefit from that restriction. But could the right hon. gent. have asked for a loan of 3 millions had it not been for that restriction? Would any bank directors tell him, that the loan would have been granted with so much composure, had it not been for that restriction? The right hon. gent. concluded that this was no advance from the bank, but from the public money. How? There were certainly large public balances in the bank, but they were all appropriated to specific purposes. The bank lent this money for what purpose government pleased. If that were not a loan from the bank, what was it? He allowed that the public ought to derive some advantage from the bank, but he differed from the right hon. gent. with regard to the manner in which those advantages should be derived. He would agree with him, that in consideration of the large public balances held by the bank, the bank should furnish the public with the interest of 3 millions; or instead of a loan of 3 millions, that they should pay an annual sum of 150,000l. With regard to the rate of allowance charged by the bank for the management of the national debt, in his opinion the bank ought to do that business without any allowance whatever. The right hon. gent. might smile, but he contended that they would then be on the footing of every private banker. We left ten millions in their hands, and we wished them to do that which would cost them 100,000l. What private banker was there that would not be very happy to have a customer on similar tems? The right hon. gent. seemed particularly desirous to have a capital advanced by the bank; a thing in his opinion unjustifiable, except by the strongest necessity. There ought not to be the most distant implication that the public gained by the restriction on the payment of specie. By a participation of profit between a government and a bank, other countries had at various times been most deeply injured. In the present state of Europe, it was most desireable to shew the enemy that our resources were such as enabled us to meet him with confidence. It was on this principle that he admired the plan of his noble friend near him (lord H. Petty), which professed to put the finances of the country upon a footing that would allow of a continnance of war for many years. Could an advocate of Buonaparte's have better materials for depreciating the means of England, than by a reference to the bargain made by the right hon. gent.? Desirous of avoiding a public loan, the influence of government had been exerted on the bank to procure a loan of 3 millions without interest. The right hon. gent. after this step, would find it difficult to convince a Frenchman that we were not driven to shifts and subterfuges. In recent times similar expedients had been resorted to in France, which at the period of their occurrence had met with the reprehension of this country. The Caisse des Comptes, in particular, had furnished a similar loan to the French government, the principle of which transaction had been here very generally condemned. Besides, never was there a period so advantageous for the negociation of a public loan as the present, owing to the great stagnation of trade, and the great quantity of money necessarily afloat, and for which no employment could be discovered. The right hon. gent. seemed to think, that the bank agreed very cordially to this loan of 3 millions. By a reference to the Papers, it would appear that this was not the case. It was said by them, that it would be highly imprudent in the bank to make to the public an advance, amounting to half the public balances in their hands. He agreed with the bank in this respect; it was very imprudent, and it was very extraordinary that the bank should have put out of their own reach such a sum as 3 millions of money. Whence did this sum proceed? Parliament ought to know; for if they took it, they would subject themselves to be responsible for any inconveniences that the bank might sustain in consequence. In 9 years the bank had advanced six millions to the public. Since the restriction upon the payment of specie, they had shared no less than 4 millions in bonuses among themselves: they had increased the dividends on their capital from 7 to 10 per cent. If their profits had been extensive enough to justify all this, then the right hon. gent. had not made half so good a bargain as he ought to have made. At any rate, it was material to the honour and the interests of the country, that parliament should ascertain the truth. It was wrong to take this loan from the bank while the restriction on the payment of specie existed; it would be worse to take it, if by doing so the taking off of the restriction would be retarded. Would the right hon. gent. say that the bank had communicated to hint their situation, and that the step proposed to be adopted would not retard the taking off of the restriction? Let the house know this then—let the subject be referred to a committee—the Committee of Finance for instance, by which such an able report had been already presented upon it. What would the world say to a merchant, who, after a stoppage, should set up his carriage, rand extend his expences before his creditors were satisfied? The bank ought to have secured their profits for the period when they should again open, and not have been so eager to divide them among themselves. He generally observed, that in transactions between the directors of the bank and chancellors of the exchequer, the one party or the other got a mauling. He could remember the period when even Mr. Pitt came off but second best in the conflict. In the year 1795, the bank took panic, and wished their money to be instantly repaid them. They talked very much of the terrible advances they had made, and of the impossibility of continuing to make such advances; and yet those advances were nothing to the advances which they now agreed to make with the utmost tranquillity. The bank directors consented to lend the country 3 millions, which in his apprehension would not cost them threepence. Did they mean to encrease their notes for this purpose? If so, it was a strong argument against the step; and he certainly did recollect, although he would not draw any inference from the circumstance, that about the time of the renewal of the bank charter, a report was prevalent that above a million of small notes had been issued from the bank beyond the ordinary circulation. If they did not mean to encrease their notes, did they mean to distress the trade of the country, by refusing to discount the bills of the merchants? This would also be a strong argument against the step. On the face of the affair, there appeared a clear profit resulting to the bank on the management of the national debt of about 100,000l. Why this, in addition to the advantages they derive from the use of the public balances? He knew that the bank was at a, great expence for clerks, for buildings, &c. but this expence ought to be defrayed from the last mentioned profits. He repeated his wish that the subject should be referred to a committee. He believed no committee could be found which would not tell the right hon. gent. that he had not taken half enough in interest, and that he had taken too much in principal. With respect to the unclaimed dividends, there was a great deal of truth and justice in what the right hon. gent. had stated. Perhaps it was politic that the bank directors should make a show of resistance on this point, lest the public should suspect that they had got too good a bargain on the other points. He thought they owed great obligations to the right hon. gent. who had certainly granted them what no other man would have done; but he would take another opportunity of expressing his sentiments on this business, not having yet had time duly to examine the papers on the table. It was a most important subject, and deserved the serious attention of parliament.

Mr. S. Thornton

declared, that whether they gave a loan of 3 millions, or an annual sum of 150,000l. to the public, would be immaterial to the bank, but, in his opinion, from the former, the public would derive the greater advantage. He denied the possibility of supplying the loan by an issue of notes. Let the right hon. gent. look at the quantity of notes at present issued, and then let him look to the quantity issued subsequent to the payment of the loan. The conjectural opinion contained in the report of the Financial Committee on the expences attending the management of the national debt was unfounded. The rate of allowance now fixed, if he were called upon to decide as between man and man, he would say was fair and reasonable. Much had been said of the profits of the bank; he would say something of the profits which the public derived from the bank. In the first place, the capital of the bank was lent to the public at 3 per cent. by which the public gained 2 per cent. On the 3 millions paid on the renewal of the bank charter, the public gained 2 per cent. The bank advanced the annual malt duties, amounting to 2 millions, at 4 per cent. by which the public gained 1 per cent. For the last two years the bank had collected the property tax, by which the public gained 47,000l. By adding these various sums together, it would appear that the public derived a profit of 595,000l. per annum from the bank, exclusive of what they paid for the property tax on their own capital. The ground on which the bank declined to consent to the arrangement proposed with respect to unclaimed dividends had been mistaken. As the trustees for the public creditors, they did not believe that the balance of unclaimed dividends would admit of having such a sum withdrawn from them as that proposed: and without having previously ascertained the opinion of those public creditors, they could not consent to it. It ought to be recollected, that in 1791, it was determined that 500,000l. should be drawn from those dividends, upon the express condition that 600,000l. were in the hands of the bank at the end of the penultimate quarter. It was now proposed to extend this to the last quarter, although since 1791, the debt had very much encreased, and a larger balance of unclaimed dividends was there by rendered necessary to be left in the hands of the bank. Until dividends remained for half a year, they had never been considered by the bank as unclaimed: it was running them much too close.

Mr. Huskisson

defended the proposition of his right hon. friend. The hon. gent. opposite had maintained, that an annual payment would be a permanent advantage, a loan only a contingent one. A loan, however, would not be rendered contingent even by peace, were large balances still to remain in the hands of the bank; for, by the transaction now under discussion, a principle had been established, which would be acted on in future, that in proportion to the balances in the hands of the bank, must be the advances made by the bank to the public. As to the rate of allowance for managing the debt, the bank had repeatedly declared, that they were not disposed to admit the truth of the report of the Committee of Finance on this subject. He had been an humble assistant at the conferences between his right hon. friend and the directors of the bank, and he was convinced that if a less sum had been offered for the management, the bank would have said, 'take the conduct of the debt upon yourselves.' The inconvenience of the expence arising from such a change in the management would have been infinite. It was a mistake that the ten millions of public balances were left in the hands of the bank to remunerate them for the management of the debt. They were left there for security; they would still be left there, were the management of the debt removed to another quarter. The only balances remaining in the hands of the bank consequent on their management of the national debt, were the unclaimed dividends.

Mr. H. Thornton

expressed himself tolerably satisfied with the bargain, that had in this instance been made for the public. He agreed with his hon. friend (Mr. Bankes), that the rate of allowance for management might have been reduced farther, had it not been for the acts of parliament that stood in the way. But taking these into consideration, he believed the right hon. the chancellor of the exchequer had reduced it nearly as much as the law allowed him. With regard to the 3 millions, he thought, that the public would derive a greater advantage from them than from the allowance of the interest recommended by some. The inconvenience to the bank would not be much. They would merely lose the interest of 3 millions of exchequer bills. All this, he said, did not diminish the duty of parliament to look with jealousy to the amount of bank notes in circulation. It might happen too, that the commissioners of the sinking fund might find it convenient to become subscribers to the loans; and the balance in the bank would, by this means, be diminished. He wished it, therefore, to be clearly understood, that the commissioners might be at liberty to become subscribers to the loan if convenient, without its being considered as any infringement of this agreement.

Mr. Huskisson ,

in answer, stated, that express care had been taken to provide that government should not be precluded from resorting to any means for reducing the balances.

Mr. D. Giddy

observed, that though the issues of the bank might be enlarged by the restriction, their capital was still limited, and unless they had so much capital that they did not know what to do with it, they must be losers by lending these 3 millions.

Lord H. Petty

said, that on two branches of this transaction he hardly thought it necessary to trouble the house with any observations at all. On the subject of the unclaimed dividends he felt much inclined to concur in the view of the right hon. gent. opposite. The bank directors in the course of the conferences on this subject naturally resorted to the definition of an unclaimed dividend, which had been allowed by certain acts of parliament: yet the natural definition he should take to be, a dividend that was not claimed in the quarter when due, without reference to the next quarter. Of these dividends all that could be taken, ought undoubtedly to be applied to the public service, and 100,000l. left in the bank, was an ample sum to meet any unexpected demand.—On another branch of the transaction, namely, the management of the public debt, he would also say but little; for though he thought that this might be conducted with more economy, yet as the bank acted in this as agents, and not exactly in their ordinary line of duty, they certainly had a right to be paid as agents, and not merely as bankers. Though the remuneration was large, yet the public derived a great advantage from their undertaking the management of the debt, since it could not be managed in a different manner without a much larger expence, than the compensation to the bank. He agreed that the subject ought to be viewed with a reference to this circumstance, and therefore he concurred in the general propriety of this part of the arrangement.—With regard to the third part of the arrangement, the loan of 3 millions, he concurred with the hon. gent. (Mr. Bankes), and his right hon. friend (Mr. Tierney), in expressing the strongest objection to the mode which had been resorted to in this instance. His right hon. friend had said, that the loan would not have been advanced, had it not been for the restriction. Whether he was right or wrong in that, he did not know; but of this he was sure, that the house ought to take care, that the bank restriction should not be considered in the slightest degree in this transaction. The restriction was only justified by its necessity at the time it was imposed, and it was due to the public, that nothing should be done which should in the least retard the period at which it might be taken off. If any accommodation was given or accepted, with a reference to this restriction, it would be attended with endless mischief, both to the public and the bank. He thought it the mere necessary to advert to this, because in the correspondence there was no direct recognition of the exclusion of all consideration of the restriction; and if what the directors said was correct, that they did not derive a profit from the balances up to the amount assumed by the chancellor of the exchequer, he was at a loss to know on what other ground they could agree to advance this sum, except that of the restriction. He could not agree that we were here only taking the public money: our right was to derive some profit from the additional notes issued from the bank, in consequence of the balances in their hands. If the bank should issue an additional 3 millions on account of this loan, they would not be losers but gainers. Perhaps they did not intend it; but he wished to have some security on the subject. But if they did not issue, they must draw 3 millions from some source; and they must afford less accommodation to the public in discounting, by 3 millions, than before. The noble lord then proceeded to the superior advantages which would be derived from having a regular and permanent allowance of profits on which a loan might be raised in another manner. He objected also that the right hon. gent. precluded himself from taking any farther advantage in case of increase of the balances beyond 10 millions, which was very probable. He was glad, however, that the matter had been brought so far to an issue favourable to the public.

Mr. Manning

defended the conduct of the bank, and contended that the charges of management of the public debt were much greater than gentlemen supposed. Of 800 clerks employed in the bank 400 were engaged in the business arising from the public debt. All the issues of the bank would still continue to be subject to par- liamentary inspection; and he could assure the house, that the bank looked forward with anxiety to the period when it would resume its issues of specie, and cease to issue its one or two pound notes.

Mr. Brogden

thought that the arrangement with the bank was not so advantageous to the public as it ought to be, but thought it better to agree to it than to shew any appearance of hostility.

Mr. Biddulph

considered the bargain of the right hon. the chancellor of the exchequer, to be extremely disadvantageous to the interests of the public.

Mr. Croker

defended the arrangement, as did also Mr. Carew, who as a member of the Committee of Finance, expressed his satisfaction that its suggestions for the public service had been thus attended to. —The different resolutions were then agreed to.