§ Mr. Grenfellafter requesting the indulgence of the House while he explained the grounds of the motion which he was about to make said, that he should confine his observations strictly to those transactions of the Bank of England, in which the public had a direct interest. With the private transactions of the Bank, except under very peculiar circumstances, Parliament had nothing to do; but where the public were one party, and the Bank another, it was the bounden duty of Parliament satisfactorily to investigate the terms of the compact. The first of these transactions to which he wished to call the attention of the House was the deposit of the public money in the Bank of England, the Bank thus acting as the bankers of the public 661 It was well known, that by the Acts of Parliament which had passed several years ago, considerable portions of the revenue, under different heads of the public service, were to be progressively drawn out, by draughts of the treasurers or other officers duly authorized. This was, in fact, in the nature of ordinary transactions between individuals and private bankers. It was very simple: it exposed the Bank of England to no greater expense for buildings, or for clerks, than that to which private bankers were exposed by their transactions with individuals. The papers which he should move for on this part of the subject, were only a continuation of those produced by the Bank of England in 1807 to a Select Committee of that House, the report of which was on the table. By an examination of these papers, it would distinctly appear, that the aggregate of the public deposits in the Bank of England was unproductive to the public, and productive to the Bank; or rather, that to the public it was the loss, and to the Bank the gain, of a sum equal to the annual interest of the sum thus vested. By this Report it appeared, that in 1807 the amount of this aggregate exceeded, what he must call the enormous sum of eleven millions; the interest of which, exceeding half a million, was a loss to the public, and a profit to the Bank; and he was entitled to consider this as the price paid by the public to the Bank for transacting its business. Of the state of these balances, since 1807, he knew nothing, except from a little light thrown on the subject in a letter from his right hon. friend the Chancellor of the Exchequer, to the Governor of the Bank, referring to a statement in 1808, by which it appeared, that in that year the public balances in the hands of the Bank remained undiminished. The probability was, that these balances must have increased with the increasing expenses of the country. He was not, however, prepared to say that this was an absolute criterion. On the contrary, many causes might operate to the contrary. The papers, however, if they were produced, would show what alterations had taken place in the amount of these balances since 1807, and what was their present amount. And here he thought proper to say, that he would state with just as much alacrity those circumstances which appeared to diminish the loss which the public sustained by this depositing of the public balances in their hands, as those 662 circumstances which tended to show its extent. In 1806 the Bank agreed to advance what was called (although he thought he should presently show improperly) a loan to the public, of three millions during the war, at an interest of three per cent. This loan, the term of which expired six months after the conclusion of peace, was accordingly paid in December last with the interest, which amounted to 720,000l. In 1808 the Bank agreed to advance another loan of three millions during the war, but in consequence of the large public balances in their hands, agreed to take no interest. The term of this loan also expired in December, but on the statement that the public balances in their hands remained undiminished, the Bank agreed to extend the term of it to the 5th April, 1816. But here, he must contend, that these agreements on the part of the Bank of England ought not to be considered in the light of loans or accommodations to the public. The transactions amounted to nothing more than to give the public the liberty of drawing its own money—of drawing six millions out of eleven, leaving in the hands of the Bank five millions, an extravagant remuneration for their trouble, and including the unreasonable proposition that the public should pay 90,000l. per annum for the use of their own money! He would suppose, in the absence of the information which the papers he intended to move for would produce, that the deposits now in the hands of the Bank were, as formerly, eleven millions. They had advanced to the public three millions. Eight millions, therefore, were left in the hands of the Bank, and the interest of that sum, namely, 400,000l. he was entitled to consider as the price paid to the Bank for the transaction of the public business. One principal object which he had in view in this motion, was to urge his right hon. friend to consider, whether, under any circumstances, but more particularly under the peculiar circumstances of financial difficulty in which the country laboured, it was just or becoming that the public should pay so large and so extravagant a price for a service so simple and so circumscribed.
The next point to which he should advert arose out of the management by the Bank of the public debt. The Bank of England had a commission on the management of the unredeemed debt. In 1786, during the administration of Mr. 663 Pitt, that commission was fixed at the rate of 450l. on every million of the debt. This went on until 1808; during which period the debt swelled to such an enormous amount, that in that year another arrangement was made with the Bank, reducing their commission one-third, or from 450l. to 300l. on every million, at which rate it had continued to the present moment. He was far from denying the able, safe, and satisfactory manner in which this great branch of the public business was conducted by the Bank of England; and that, for the purpose of conducting it, the Bank most necessarily have incurred great expense in buildings, and must hare maintained, and must still maintain, a large establishment of clerks. But, taking all these circumstances into consideration, when he looked at the amount of the remuneration received by them, viz. 267,000l. per annum; he confessed that, without adverting to other transactions, but duly measuring the service by the reward, he could not help feeling, that on this subject the public had a right to expect from the Bank a considerable diminution in their demands. In America the Bank of the United States did the business of transferring the public stock and paying the dividends without making any charge to the public at all. He did not mean to compare the business done at the one Bank with the business done at the other; but let it be recollected that in the one case 267,000l. was paid by the public, and in the other case nothing.
There was one other subject on which he should move for information as a necessary accompaniment to that which the motions he had already described would produce; and that was to ascertain the amount of the issues of Bank paper, since the passing of the Restriction Act in 1797. When he knew that the increase in the issue of Bank paper since that period amounted to 14 or 16 millions, from which an annual profit was derived of 7 or 800,000l. and when he recollected that the Bank were indebted for all this advantage solely to an Act of the Legislature, although he could not propose that the public should participate in the advantage, he felt that the circumstance should so far enter into the consideration of the contracting parties, as to induce the Bank to treat the public with the greatest liberality in all their mutual transactions. He disclaimed any party feeling on this subject, or any disposition hostile to his right 664 hon. friend. Although from what he had heard, he thought it probable his right hon. friend might say that it was premature to call for papers on a subject which must come under discussion early in the next session, and that it would be a breach of faith towards the Bank at present to diminish the public balances in their hands, as by act of parliament they were not to be withdrawn until the end of the year 1816, he was nevertheless satisfied, that if he could look into his right hon. friend's heart, he should find that he was satisfied of the justice of what he (Mr. G.) had stated: nor had he the slightest feeling of hostility to the prosperity of the Bank of England, or to those respectable gentlemen by whom their affairs were conducted. With a number of those gentlemen he had been acquainted many years. He knew them to be men of the most honourable character. No difference from them on public grounds could induce him to consider them with any other disposition than unfeigned regard. He was not so ignorant, nor had he been so inattentive an observer of the events of the last thirty-five years, as not to know and acknowledge that the country had derived, and, he trusted, under proper regulations, would continue to derive the most important and solid advantages from that great and valuable establishment, the Bank of England. But then, on the other hand, it ought to be recollected that the Bank owed its existence to an act of the Legislature. Having existed for a considerable period, the Charter of the Bank was renewed, not solely with a view to the benefit of the proprietors, but for the advantage of the community at large. The division within the last eighteen years of seven or eight millions among the Bank proprietary, in addition to the ordinary dividend of 7 per cent. annually, sufficiently evinced, that in the bargains between the Bank and the public the profit preponderated in a most undue degree on the side of the former. On every principle of justice and equity, therefore, the public had a right to expect that the Bank of England, taking a liberal view of the whole subject, should allow the public participation of those profits, by transacting the public business on less expensive terms than at present. The hon. gentleman concluded by moving his Resolution the first of which was,
"That there be laid before this House, an Account of the Balances of Cash in the 665 hands of the Bank of England, on the 1st and 15th days of each month, between the 1st of February 1807 and 1st of April 1815 inclusive, resulting from payments under the head of Customs, and of all other branches of the public revenue, stating the average balance in each year; in the form in which a similar Account was produced by the Bank of England to the Committee on the Public Expenditure of the United Kingdom in the year 1807."
The Chancellor of the Exchequersaid, that the House a short time ago had accepted of an advance of three millions from the Bank for one year without payment of any interest; and he certainly considered that that advance had taken place on the faith of the same system relative to the management of the public debt being continued till April 1816. Till that time the House could not, consistently with their engagement, whatever they might think of the economy of the transaction, open a bargain which they had so lately sanctioned. If the hon. gentleman wished the papers for which he had moved, for the sake of laying information before the House to enable them to make a better bargain in future, there was no necessity for this at present, as there was sufficient time in the course of the next session. It was to be borne in mind that the accounts were very voluminous, and could not begot ready soon. His hon. friend had unintentionally thrown a false colouring on the balances in the hands of the Bank; the great balk of these balances arose from the payments to the Consolidated Fund; and this could not be interfered with without violating the compact with the public creditor. This was by far the most considerable part of the balance. From the great increase of the public expenditure, it was natural to presume that the balances at the Bank would increase proportionally; but this had by no means been the case, and it depended very much on the heads of branches whether they would allow large balances at the Bank which should be unprofitable to the public. The balances had arisen, for the most part however, from acts of parliament over which Government had no controul; and to interfere with this subject would be to derange the whole system of public credit. With respect to the profits which the Bank had been supposed to have derived under the restrictions, and which had so often been discussed in that House, it was 666 to be observed that these restrictions had not been wished for by the Bank, but had been adopted on grounds of public policy, and therefore the Bank could in no manner be accountable for what had taken place, without their wish or consent. He concluded with moving the previous question.
§ Mr. Bankessaid, that provided the accounts should be laid before the House in sufficient time to allow a full consideration of the subject before making any fresh bargain with the Bank, it was immaterial whether they should be ordered this day or at a future time; but if the House should not be allowed sufficient time for the examination of this subject, the public might receive an injury which by a proper investigation might have been avoided. Did the right hon. the Chancellor of the Exchequer conceive that the public were precluded from adopting a new plan, by which the balances might not be withdrawn, but by which they might be lessened? If he did, there was the more reason for having the accounts before them, that fell consideration might be given to the matter, before making again such an imprudent bargain; and that when they became free agents, they might suggest some more economical mode of conducting the public business. Perhaps if the different branches had the power of drawing from the one to the other, the balances might upon the whole be considerably diminished; and if, instead of keeping up a continual balance of 11 millions, by any such mode the balance could be reduced to six millions, would they be precluded by the engagement with the Bank from, acting upon it? Were they not only to keep their accounts with the Bank, but to keep up the balances to nearly the same amount? If such was the case, they might, indeed, not be at liberty to adopt any alteration at present; but that was no reason why they should not see how the matter stood, that if they had made an improvident bargain, they might see that they did not in future fall into the same inconvenience. It must be desirable in the present state of the country, that the House should endeavour to use every possible economy. The Bank had derived great advantages from its connexion with the Government, and the country had also derived great advantages from the Bank: they ought not to look on the interests of the Bank and the country as adverse; but they were guardians of the public money, 667 and in that character they ought to see that the bargain made with the Bank should be economical. He did not think formerly when the subject was before the House, that the arrangement was so beneficial as it ought to have been. Whenever the time came that they should be unfettered by any specific regulations in the statute-book, he hoped that a more beneficial plan would be adopted; but at all events he hoped that a previous investigation would take place.
The Chancellor of the Exchequerexplained, that he did not consider himself at liberty to withdraw the balance, nor to vary the manner in which the business was carried on. But he had no objection to adopt any suggestion calculated to lessen the balance. On the contrary, every means had already been adopted to effect that purpose.
Mr. Ponsonbywas not sure that he understood the Chancellor of the Exchequer. Did he merely object to the production of the accounts on that day, or at any period of the present session? If he only wished to fix another day, then he should have no objection to agree to his proposal. But if he should intend to postpone it to another session, then he should think it his duty to offer a few observations. He then read the clause which engaged that no alteration should take place in the mode of transacting the business, and that the balances should not be withdrawn. There was no other restrictive clause to prevent Parliament from exercising its own judgment on that subject. Undoubtedly for a fixed period, it had no right to interfere with the existing arrangements; neither was it the intention of his hon. friend, nor his own, nor that of any person in the House, to go in opposition to the pledge given. One of the objections to the production of the accounts at this period, was their being voluminous, and that it would require much time to make up one's mind on the subject. If the right hon. gentleman had spoken in favour of the motion, he could not have used a stronger argument; as since the papers were voluminous, and would require much time for consideration, the sooner they should be produced, the greater would be the opportunity for investigation. The right hon. gentleman had not pointed out any inconvenience likely to result either to the public service or to the Bank of England, from acquiescing with the motion. He did not consider Parliament 668 precluded from making further economical arrangements, but these would be more easily effected when the information should be laid before the House. Was it not its duty at this period to endeavour to save 3 or 400,000l. to the public?
§ Mr. Tierneyasked, what possible objection there could be to immediate inquiry? The more documents the House had before them, the better judgment they would be enabled to form upon the subject. The only person who could be supposed to have any desire to defer the investigation was the Governor of the Bank; but no reasons had been urged by him for delaying the inquiry.
Mr. Marryatsaid, it was not the first time in his life he had observed how very differently men acted in their individual characters, and as members of a corporation; in the first capacity he had often found them frank, liberal, and obliging; and in the latter he had as often found them unaccommodating, narrow, and disobliging. He could not help thinking, that the apprehension shown lest the papers moved for should be produced, at least proved that a very undue consideration was paid to the Bank of England for the management of the public concerns. Any gentleman could find private bankers to manage his money concerns, without any charge or any other advantage being derived by the bankers than the use of the balance left in his hands; the greater the transactions the greater was the profit; and therefore the immensity of the transactions was of the greatest advantage to the Bank on the banking principle. It was stated, that by a different system of management, 400,000l. might be saved; and they found that 300,000l. more was gained by paying their dividends to the public. When the Bank of the United States paid all the dividends to the public creditors without any charge; surely, where the transactions were so much more large, and were so much more an object of emolument, they were less entitled to any allowance from the public. It was his opinion, that the Bank did derive more from the public than in fairness and liberality they were entitled to. The great increase of the revenue and expenditure had greatly improved the situation in which the Bank stood with regard to the public; the increase of the profits of the Tellers of the Exchequer had increased at an enormous rate from the same cause; and this was considered 669 as a good ground for inquiring into the matter. The Bank of England stood in the same situation; and it was reasonable that the public should know what their profits were. All the arguments stated by the Chancellor of the Exchequer went to prove the propriety of hastening, instead of delaying the production of the accounts.
§ The House then divided:
| For the previous question | 94 |
| Against it | 75 |
| Majority | —19 |
§ Alter a few observations as to the point of order from Mr. Tierney, Mr. Ponsonby, and Mr. Grenfell, the seventh document moved for was agreed to, and the remainder were withdrawn to be proposed again to-morrow, that in the mean time the Chancellor of the Exchequer might ascertain whether he had any objection to them.