§ The House having resolved itself into a Committee on the Stamp Duties Bill,
The Chancellor of the Exchequerproceeded to state his intentions with respect to the various objects comprehended in the measure. In the clause which related to the composition to be paid by the Bank of England for the exemption of their paper from the Stamp-duty, he meant to propose no alteration. The next subject was the duty on Probates; and as it had been considered a hardship that it should operate on the whole of the effects of the deceased, instead of on the balance after the debts were paid, he intended to propose a drawback to remedy this grievance for the present, although he felt that the whole of this subject was one which must soon undergo parliamentary investigation, with a view to a general, arrangement of it. There were two subjects remaining—one, the licences for the issuing of promissory-notes, which be was content to abandon in this instance, meaning to bring the consideration of them before the House in the next session; the other, the stamps on law proceedings in Scotland, which he proposed to remain as they now stood in the Bill.
§ On the reading of the first clause, relating to the Bank Composition,
§ Mr. Grenfellobserved, that he agreed with his right hon. friend on the principle of the proposed composition, and differed from him only as to its extent. He repeated his former statement, that by the neglect of his right hon. friend's two predecessors on this subject, the public had sustained a loss, and the Bank had gained an undue profit, which, correctly calculated from the documents on the table, amounted to no less a sum than 534,183l, He was happy to make this declaration in the presence of a great number of the Bank Directors; by whom, it unfounded, it would no doubt be controverted. The hon. gentleman proceeded to contend, that up to the year 1799 the composition was fairly estimated, with respect both to the Bank and to the public, but that from the year 1799 to the present moment those circumstances had been overlooked, which had occasioned the loss to the public that he had already mentioned; and in support of this argument, he entered 1058 into an historical detail of the negotiations between the Government and the Bank in the years 1791, 1799, 1804, and 1808; maintaining that at the two last-named periods no reference had been had to the greatly increased circulation of Bank-of-England paper. The public having lost so much already, he could not conceive on what principle Parliament could now be called upon to give the Bank an additional bonus. Yet such would be the effect if his right hon. friend's proposition were adopted. If the average of paper in circulation were taken for the last three years, as proposed by his right hon. friend, it would produce 87,500l. If the average were taken of the paper of one year, as proposed by him (Mr. Grenfell), it would mount to 99,000l. for the notes, besides a large sum for the Bank Post-bills, which the absence of the necessary documents vendered it impossible for him to calculate with accuracy. He could see no reason why the Bank of England should enjoy any greater advantage on this subject than a private banker; and even if his proposition were adopted, they would still have an advantage, as the private banker must pay duty on the notes which he issued, and not on those only in circulation, although he might not circulate nearly as many as he obtained stamps for. The hon. gentleman concluded by moving an amendment to the clause, substituting the average of one year for the average of three years, and providing that the notes should be distinguished into classes of different value, &c.
The Chancellor of the Exchequerdid not consider that Mr. Pitt's principle of arrangement had been materially departed from either by lord Sidmouth or Mr. Perceval. When the Bank stopped payments in cash, it was thought by writers that the outstanding notes amounted to 20,000,000, whereas they were only 12,000,000. The difference between the arrangements was, that the former one was permanent, and the present fluctuating, according to the notes in circulation. He considered himself wholly responsible for this arrangement, such as it stood. He had offered terms consistent with the public advantage, and with the faith of Parliament. The right hon. gentleman contended, that it was vain to enter into an examination as to the equality of charge upon the Bank as compared with what might be paid by private bankers. It was impossible to institute such a com- 1059 parison, because there was no similarity in the situation of the parties. No private bankers could accommodate Government with the advances made by the Bank of England. The principle on which he had proceeded was, that the public were entilled to as full a composition as was consistent with these indulgencies, the continuance of which the Bank had well merited. He had adopted a triennial average in preference to any other, and, upon the whole, conceived a very advantageous bargain had been concluded, as compared with the former arrangement, without at the same time pushing the Bank to that extreme of concession which was irreconcileable with the system hitherto pursued.
§ Mr. Bankesthought it a strange fancy to represent the loans at low interest advanced by the Bank as a sort of payment for the licence of trading. The public, in his opinion, paid sufficiently, and even extravagantly for the accommodation, and for the general transaction of its business. All that could be urged in favour of the existing system, was the excellence of the security. But he must object to the use of the word 'composition,' as not expressive of the true idea that ought to prevail. In the Act of Parliament which recognized the present settlement, the word was 'compensation,' and the ordinary convertible term of that word was 'equivalent.' He could see no reason why the Chancellor of the Exchequer should adhere to an erroneous system. When the compensation was first fixed, it was not in the contemplation of Mr. Pitt, or of Parliament, to give any advantage to the Bank; they ought, indeed, rather to pay more than less than other bankers, for the advantage of not being put to the trouble of stamping every note. The Bank ought not to shelter themselves under an unfair construction of former Acts of Parliament. He considered the taking the average as advantageous for the Bank. That opulent body would, he thought, be acting more fairly and honourably by the public, if they did not attempt to claim any exemption from the common burthens of the country.
§ Mr. B. Shawcontended, that the Bank had acted, not only fairly and honourably, but liberally towards the public. He insisted on the danger of opening transactions entered into by the Chancellor of the Exchequer. In stating the amount of Bank paper in circulation, and the duty 1060 on it, it had been forgotten that three millions were lent by the Bank to Government without any interest, and another three millions at only three per cent. There ought not to be any composition on these six millions.
Mr. Forbessaid, that on the principle laid down by the preceding speaker, all discussion of the present Bill was unnecessary. With regard to the three millions lent to Government without interest, those three millions made only part of eleven millions of public balances in the bands of the Bank.
Mr. Thorntonthought, that enough had been said in defence of the agreement made between the Chancellor of the Exchequer and the Bank, to render it unnecessary for him to trouble the committee with any observations. Indeed, he despaired of making any impression on the honourable members opposite to him, as they received every thing that came from any gentleman connected with the Bank with great prejudice, though he could assure them he endeavoured to discharge his duty with uprightness and impartiality between the public and the great corporation for which he was a trustee. Supposing him, however, to err by leaning to the side of the Bank, he was certainly met by a more than equal zeal, and he might say prejudice, by the gentlemen on the other side. He then defended the agreement made at different times for a compensation in the stead of stamp-duties, and gave some explanations respecting the renewal of the charter, and the privileges it gave. On the present occasion a new principle had been agreed upon between the Government and the Bank, which raised the compensation to 87,500l. a year. It was proposed by the Chancellor of the Exchequer, and acquiesced in by the Bank. Would the House annul such a contract for the sake of gaining 4,000l. a year, when they considered the immense transactions the public had with the Bank, and how important it was to maintain its character and credit? Was it nothing to refuse to ratify what the executive government had thought reasonable and just? He then showed some errors in Mr. Grenfell's calculations respecting the profits of the Bank, and sat down with an assurance that the House would always find the directors liberal and fair in their dealings with the public.
§ Mr. Mellishmade some observations upon the calculations of Mr. Grenfell, 1061 which he could not agree with. He considered, that it would be fairer to take an average of three years, as was the case in the Property-tax, than to fix upon the last year, which was one when the issues were uncommonly great. Whether, however, the sum was 91,000l. or 87,000l. the difference would not be a material object to the Bank.
§ Mr. Grenfell, in explanation, said, that 99,572l. would be the proportion that the Bank ought, in his opinion, to pay on account of the issues of the last year. He should, however, abstain from entering more folly into the subject, as the regular discussion would come on on Monday.
§ Mr. Finlaythought the Bank ought to contribute in the proportion of all other classes of subjects.
§ Lord A. Hamiltonsaid, if it had not been for his hon. friend (Mr. Grenfell), this subject would never have come before them; and he had thereby been the means of rendering a most signal service to the country.
General Thorntonexpressed his regret at the frequent attacks made upon the Bank in that House, as being injurious to that establishment, and consequently to the public. He also thought that the gentlemen on the ministerial side were too much in the habit of giving way to such attacks. The honourable general supported the motion.
The House then divided.—For the motion, 32; Against it, 12. A conversation then took place, between the Chancellor of the Exchequer and Messrs. Mellish, Preston, Grenfell, Huskisson, and Forbes, as to the right which should be vested in Parliament to form a new arrangement, when it might be deemed necessary. It was terminated by the Committee agreeing, on the suggestion of the Chancellor of the Exchequer, to leave certain words out of the clause, by which the proposed object would be attained.—On the clause, relative to licences for Scotch bankers being read, Mr. Forbes proposed an amendment, for the purpose of placing the private banks in Scotland in the same situation, with respect to licences, as the chartered banks. This gave rise to a conversation, which was ended by the Chancellor of the Exchequer agreeing to postpone the original clause, until some gentlemen, connected with the chartered banks of Scotland, were present. The chairman then reported progress, and obtained leave to sit again to-morrow.