MOTION FOR PAPERS RELATING T THE BANK OF ENGLAND. (Hansard, 3 February 1818)

§ Mr. Grenfell

said, he should trouble the House with a few observations, in relation to the papers for which he was about to move. It would be absurd for him to affect any surprise at the communication of the chancellor of the exchequer, respecting the affairs of the Bank. Though he was unaware of the grounds which had been stated for continuing the restriction, he was aware that on some pretence or other such a communication would be made. He had long expressed a persuasion in that House, that such a course would be taken, when the ministers approached the time when they were to fulfil those promises and hopes, with which, for the last three years, they had entertained, might he not say deluded the House and the country. Those promises had been given not only by the chancellor of the exchequer, but by other members of his majesty's government, and particularly by the right hon. the surveyor of woods and forests. There were words, too, introduced into the bill, to impress more strongly on the country the confident expectation that, on the 5th of July next, the Bank would resume its payments in cash. These fair promises and protestations on the part of the government, were met by similar promises and protestations on the part of the Bank. The governors of that corporation declared, that they were not only able, but most anxious to discharge their solemn engagements to the public. If the directors were sincere, and he had no reason to believe that they were not, particularly one director, of great respectability, not in that House—Mr. Harman—the Bank, for its credit, was desirous of resuming its payments. That corporation would, he hoped, beg to be relieved from that situation in which it had been placed in the year 1797, which, whatever profit was derived from it, was a situation of disgrace. The situation of the Bank was anomalous. Nothing was to be found like it in the history of trade or commerce. What would have been rum to any other body, was the cause of their wealth. The stopping payments for one and twenty years, the failure of all their engagements to the public and their 132 creditors, had been a source to them of power and prosperity. But they now said, the continuance of the restriction was not for their convenience, but a measure of state policy. The declaration to this effect had been made by the member for Taunton (Mr. Baring), who was now in France, pursuing those negotiations which were made the ground for the continuation of the restriction—a measure, which, while it enriched the Bank of England, impoverished the public, and sapped the means and solid resources of the country. Before this measure was again adopted, a committee should, at least, be appointed, as in 1797, to satisfy the public, not only as to the means of the Bank of England, which could not be doubted, but as to the principles on which it conducted its operations, and whether they could justify so immense a confidence as was to be reposed in them. The legislative acts by which the Bank had been protected during one and twenty years from payments in cash, were eight. Three had been brought forward in 1797; three during the administration of lord Sidmouth, about the time of the Peace of Amiens; and two by the present chancellor of the exchequer. The pretexts for them were, war, subsidies to foreign powers, foreign expenditure, the high price of bullion, the war of the French against our finances, or their great desire to get hold of our gold; but of all the pretences on which the restriction had been justified, there was none so futile, so flimsy, or so insulting to the understanding of the House and the public, as that which was now brought forward. Were they to be told, because France, or Austria, or Prussia wished to negociate loans—that, because two or three merchants in the city, Messrs. Rothschild for instance, wished to have negotiations with foreign powers, the House of Commons was to inflict an evil on the people of England? Besides, this restriction would give the facility to transactions which the chancellor of the exchequer deprecated. The fact was, that if the Bank resumed its payments in cash, not one shilling of British capital would go from the country. He agreed that trade should not be interfered with, and that the trade in money should be as free as any other trade in any other article. But was the article of money free while the Bank restriction lasted? If he had to make his choice between cash payments and foreign 133 loans, he should prefer cash payments, and he should be willing to see all foreign loans prohibited, so long as the Bank did not resume its payments—and no longer. There was an argument as to the exchanges connected with this subject, much of a similar nature. It was said, that the state of the exchange was against us, and thus prevented the return to cash payments. The effect here had been mistaken for the cause. So long as there was a paper currency not convertible into cash, the exchange would be against us. The authors of the evil thus attempted, in that very evil, to find a reason for the acts which had produced it. He thought that a paper currency was a great benefit, but to secure this benefit, it should be founded on, and referable to, some standard definite, and to a great degree unchangeable. For this purpose, gold and silver formed the best, and perhaps the only standard which had been discovered by mankind, and the sooner they reverted to it the better; the longer they continued in the present course, the more difficult would be a return, and the greater would be the convulsion it would occasion. If this was an error, he shared it with all great political writers, from Locke to Adam Smith, the late lord Liverpool, and even the present ministers; for they always had acknowledged the principle, though they deviated from it in practice. He concluded by moving for various accounts of the Bank notes and post bills in circulation during the last year; of the balances of public money in the hands of the Bank; the price of bullion, and the rate of exchange; and of the allowances made to the Bank for business done for the public.