§ Mr. Tierneyimmediately moved, "That a 13 Secret Committee be appointed to examine the total amount of the outstanding demands on the Bank of England, and likewise of the funds for discharging the same; and that they do also enquire into, and report their opinion upon, the effects produced by the Order in Council of the 27th of February 1797."
§ Mr. Manningobjected to the motion; and stated, that the Bill which had been brought in that night was not introduced at the desire or request of the Bank of England, any more than the Bill of last session, commonly called Lord Stanhope's Bill. He spoke not in the character of a Bank Director, but from himself alone. In that view, he could not see any necessity for the committee which was proposed. If, indeed, the Bank Directors had desired the present measure, he should think it a sufficient reason for the appointment of a committee. The actual amount of the issue of Bank notes at present was 22,500,000l. which, of course, did not include Bank tokens. If any member moved for any particular return, he would second it. He was surprised that any member should so far under-value the securities of the Bank: as every acre of land in the country might be considered as forming a part of the securities for the Exchequer Bills. There was a debt owing from government to the Bank of 11,600,000l. and the two loans, which altogether amounted to near twenty millions. This was sufficient security. The Exchequer Bills, as he had before observed, stood on the most solid ground. He thought that parliament was right in calling, from time to time, for the amount of Bank notes in circulation, and for other particalars, but he could see no reason for entering into such a committee as the hon. member proposed. As to what had been said of the sordid and selfish views of the Bank, many matters of great public interest had been assisted by the liberality of the management of the Bank; and he challenged the right hon. gentleman to show a single instance in which the public had not received their portion of the profits said to have been made by that corporation.
§ Mr. H. Thorntonobjected to the motion. The amount of Exchequer Bills and loans, &c. was generally known. If the question stood on the solvency of the Bank, then it ought to go to the committee that a report might be made, which would shew that an opinion adverse to the Bank's solvency 14 rested on a false foundation. He was favourable to all fair and reasonable enquiry, but he must say, that it was not the object of the Bank Directors to gain base lucre. If they were misled, it was in their wish to assist the mercantile world. The measure now proposed might be necessary, though uncalled for by the Bank, and though it went beyond what had been enacted last year.
§ Mr. Johnstonewould vote for the motion, though he disclaimed all idea of imputation upon the conduct of the Bank Directors, who had shewn more moderation in the issue of paper-money than had been practised in any other country, when that expedient had been adopted. He could not agree with his right hon. friend, that the Bank were masters of the minister: but the contrary. It was the fault, not of the Bank but of parliament, that things were in their present situation. If the Bank were left to itself, he should have no fear of the proposition of a legal tender. He wished the country to know what were the assets of the Bank independent of what consisted in government securities, which latter (in Exchequer Bills) amounted at this moment to no less a sum than 7,500,000l. There was no doubt that the Bank could discharge all its debts, as it related to itself; but the connection with government was a different thing; and a time would come when that would be a serious consideration. Every nation that had adopted a practice similar to the present, had run a career of bankruptcy; and the effect must be serious, if men were compelled to take a Bank note as a legal tender. The mischief had been done by parliament itself in compelling the Bank to advance money when they were making extraordinary issues of paper, which had raised the paper issue up to 22 millions. Government were the means of doing this, in consequence of the embarrassments which they had experienced from the deficiencies of the late Mr. Goldsmid.
Mr. Marryattthought the reason for opposing the motion extraordinary as urged by the deputy governor of the Bank, (Mr. Manning), namely, that the Bank had not required it. Did any public body come to parliament and ask for such an enquiry into their concerns? Nothing was more unlikely. He was far from wishing to overthrow the credit of the Bank, and he thought its credit would be best supported by a fair enquiry. What was said of the Bank would be as applicable to govern- 15 ment respecting sinecure places. In both instances the parties would be benefitted, and gain more credit by enquiry. The longer we went on in the present fatal paper system, the worse should we find our situation. The deputy governor of the Bank was last year against the legal tender; now he had a little changed his opinion. What it might be next year it was not possible to tell. One circumstance was important. A Bill lay on the table to make the embezzlement of property a higher crime, in consequence of the repeated failures of bankers, and other occurrences. The misconduct of the bankers was owing in a great degree to the change of the practice at the Bank since the restrictions on their cash payments. After that restriction they offered their discounts in an unprecedented manner, and the bankers lost sight of all prudence and circumspection: the results of which had produced astonishing occurrences. The discount system had been carried to an extent almost incredible. Every failure of this sort had been owing to the conduct of the Bank of England; whereas, formerly, the bankruptcy of a banker was a very rare thing. That of Fordyce, many years back, was still talked of: such an event was formerly thought to be like a dreadful fire, or a plague: fit to be registered in a chronological table. Bat now, by the new plan, in the course of eleven years, there had been eleven bankers in the Gazette, out of the sixty in London. Their failures were likely to be as common as those of underwriters or any other traders whatever. Every one of these bankrupt bankers had kept a discount account with the Bank of England. He had not the list in his pocket, or he could read the proofs of his assertion to the House. None had failed who did not carry on such accounts. He viewed the Bank as useful and absolutely necessary, and on that account felt that any abuse of it ought to be guarded against. He knew indeed that the governor and directors were bound by an oath, but it was an oath which related to their duties only as a corporate body.
§ Mr. Manningexplained, and re-stated, that lord Stanhope's Bill was not desired by the Bank.
Mr. Baringsaid, that if we went on year after year borrowing, while we diminished our means of repayment, the nation like an individual, must come to a bankruptcy. If there were any reasonable 16 doubts of the Bank's solvency, a good reason would be furnished for appointing a committee; but he could not understand his right hon. friend (Mr. Tierney), when he called the Bank rich and prosperous, and afterwards said they might be in a state of bankruptcy. The truth was, that the Bank had it not in their power at the present moment to pay their debts in bullion, not having sufficient in their possession; and it was useless to endeavour to make them perform impossibilities. He believed that only a few bankers applied to the Bank for discounts, since it would rather affect their credit to do so, as it would affect that of an eminent merchant. As the motion might tend to excite distrust in the country with respect to the solvency of the Bank, he could not give it his support.
§ Mr. Hibbertsupported the motion. It would be a great evil to make a Bank-note a legal tender. He bore testimony to the honourable conduct of the Bank Directors, who, he believed, acted from the purest ideas of supporting commerce; but he thought that there would be great doubts in the public mind, unless parliament appointed a committee, as they had done in 1797.
Mr. Abercrombybegged to call the attention of the House to the admission made by an hon. Bank Director (Mr. Baring) who acknowledged that perseverance in the present system would be attended with the ultimate ruin of the country, and yet contended, that not persevering in it would be equally destructive, because it would prevent us from vigorously prosecuting the war. Surely, when men of so much experience involved themselves in such evident contradictions, it was reasonable that some enquiry should be made. There was no guarantee that the Bank of England should not either increase their debt or diminish the small quantity of bullion remaining in their hands. When to these circumstances was subjoined, the declaration of the deputy governor of the Bank of England, that every acre of land in the country was pledged for the payment of their notes, he thought there could he no hesitation in appointing the committee.
§ Mr. Manningexplained that he had said, that his own land as well as that of every other proprietor, was answerable in a due proportion for the payment of the Exchequer Bills, which was a public debt of the nation.
Mr. Baringsaid, the observation he had made was, that there was not a sufficiency of bullion to enable the Bank to resume cash payments.
§ Mr. Tierney, in reply, insisted that the issue of Bank notes had been greatly augmented since the year 1797, and as Exchequer Bills were secured by the notes, the landed property of the country was put in jeopardy at the will of the directors of the Bank of England. He begged to know if the other side of the House would consent to the production of an account shewing the quantity of Exchequer Bills purchased by the Bank of England from government in the public market, which had been hitherto with-held?
The Chancellor of the Exchequer, in answer to the declaration of an hon. and learned gentleman, that all the land of the country might be confiscated to pay the Exchequer Bills in the possession of the Bank, observed, that it might as well be said, that a gentleman possessed of au estate of 10,000l. a year, and having a mortgage of 10,000l. upon it, ran a risk of having all his land confiscated; for the Bank could not possess more Exchequer Bills than were issued by government, viz. 43 or 44 millions. On the subject of the motion, he thought that on the right hon. gentleman's own showing it ought not to be acceded to; for the right hon. gentleman asserted that the Bank was an extravagantly overgrown and rich corporation. What necessity then for an enquiry into its situation? As to the security for Bank notes, it was ample. Besides the assets in the hands of the Bank, it should be recollected, that Bank notes were receivable at the Exchequer, and that double the whole amount in circulation was received there yearly.
§ Mr. Tierney, in explanation, said, that he had not represented the Bank as great and flourishing, and abounding in wealth. He allowed that they had made great profits; but his next motion would shew how he thought they had dissipated those profits. In consequence of the restrictions imposed on their payment in specie, the Bank had certainly made enormous profits; but these they had divided among themselves, and for aught he and the country knew, had left nothing for their creditors.
§ The motion was put, and negatived without a division.
§ Mr. Tierneythen moved for an account of all sums divided by the Bank of England, on their capital, from 5th Jan. 1787, 18 to 5th Jan. 1812, specifying the sum in each year.
§ Mr. Manningthought this motion an unnecessary interference with the internal concerns of the Bank. Every one knew what those dividends had been.
§ Mr. Barham, although he objected to the former motion, supported this, on the ground that all possible information on the state of the Bank should be afforded to the public.
§ Mr. Grenfellstated, that the bonuses divided among the proprietors of Bank stock, since 1787, amounted to 32½ per cent. on the capital.
Mr. Baringthought the motion unnecessary. It would not give the House any information that was not already in their possession.
Mr. Marryattcontended, that it was never intended by the restrictions on the payment in specie, that the Bank should make the large sum which they had made out of the public distress. He attributed their unwillingness to show the state in which they were, not to any doubt of their solvency, but to their being ashamed of their profits. There was a provision in the charier of the Bank of England which required that a meeting should be called twice a year, at which meeting the profits of the Company should be exhibited. This provision had hitherto not been complied with; no doubt lest the public should be made acquainted with the enormous profits divided by the proprietors.
§ The motion was then negatived without a division.