The Chancellor of the Exchequerthen moved, "That a 197 sum, not exceeding 24,954,300l., be granted to his majesty, to pay off and discharge exchequer bills made out by virtue of an act of the last session, for raising 11,600,000l. by exchequer bills, for the year 1818; and also by another act of the same session, for raising 30 millions by exchequer bills, for the year 1818, outstanding and unprovided for."
§ Mr. Grenfelldid not rise to make any opposition to the motion, but he availed himself of the opportunity to press upon the attention of the House the necessity of obtaining for the public a participation in the profits of the Bank—profits arising from the balances of the public money in their hands. The House were aware that two loans, as the Bank termed them, one of six millions, the other of three millions, had been made by the Bank to the public. The loan of three millions was negotiated in consequence of the investigations of the committee of that House in the year 1807, when it was concluded between Mr. Perceval and the Bank of England, that such a sum should be advanced, free of interest, to the public, on the admitted ground of the right of the public to participate in profits wholly arising from the large balances belonging to it, of which that body availed themselves to their own advantage in the same way as any other bankers did. The amount of these balances was between ten and eleven millions, and had continued undiminished until the year 1817. He regretted that the hon. member for Corfe Castle and also the right hon. gentleman at the head of the department of Woods and forests were not in their places, as he could appeal to them whether he was not fully authorized in asserting that this loan of three millions was concluded on the express condition of being granted without interest, and as a compensation to the public for its share in the participation of the profits of the Bank. The period of that loan of three millions without interest expired in April last, and as it had not been paid off, the country was now giving the Bank interest upon it to the amount of 120,000l. per annum. At this very moment, too, the Bank were deriving enormous advantages from the balances of public money in their custody, which, if in the hands of private bankers, would produce not less than from 550,000l. to 600,000l. per annum, and without affording the nation the slightest participation therein. He asked the right hon. gentle- 198 man how he could give his assent to such a contract? He could scarcely believe his eyes when he saw in the accounts of the last year 4 per cent charged on the sum of three millions from April, an item of 120,000l. against the public, merely because the Bank allowed it to draw out of their hands three millions out of nine, or ten of their own money. He merely threw out those few remarks then, intending to speak at large on the subject at another opportunity. He should be happy to hear of any arrangement by which those large balances could be rendered available to the public.
The Chancellor of the Exchequerobserved, that as an occasion would so soon occur for fully discussing the concerns of the Bank, he did not mean at present to enter into that subject at any length; but upon some points to which the hon. gentleman had adverted, he had no hesitation in explaining the views of government. With respect to the loan from the Bank of three millions, in 1818, there was a new arrangement in contemplation upon that loan and the interest granted for it, which he would take an opportunity of stating to the House to-morrow. Then, as to the public balances in the hands of the Bank, there had been some communications respecting them between government and the directors, and the object was, to make such arrangements that the public balances should in future be applied to the public service. Here he thought it right to state, for the correction of some floating errors, that the amount of the public balances in the hands of the Bank were by no means equal to what many gentlemen appeared to think. A great reduction had taken place, in the amount of those balances, in consequence of the termination of the war and the reduction of the public expenditure, and partly also, in consequence of the economical arrangements of his majesty's government. Whether any retrospective measure should be adopted with respect to interest upon such public balances as had been heretofore in the hands of the Bank, he would not then say; but he could distinctly state, that it was in contemplation to make prospective arrangements for the application of all public balances to the public service. He thought it necessary to correct a mistake which had gone into circulation, with regard to the sum due from government to the Bank. That sum did, as was stated, 199 amount to eight millions; but of that sum, five millions were already paid, and provision would be made, out of the ways and means for the year, for the liquidation of the remainder. He was sorry for the misconception which had gone abroad, as to what he had said on a former evening upon this subject; but that misconception was, no doubt, owing to his not having been distinctly heard.
§ Mr. Grenfellexpressed his satisfaction at hearing that it was at length determined by the right hon. gentleman to propose that arrangement upon the subject of public balances, which he himself had so long and so eagerly sought to establish.
The Chancellor of the Exchequerdeclared, that it had always been his object to propose such an arrangement, but that he felt the difficulty of carrying it into effect, without the approbation and cooperation of the Bank; and he was now happy to say, that the directors fully concurred in his views.
§ Mr. P. Mooreobserved, that the right hon. gentleman had not attempted to controvert any point advanced by his hon. friend. On the contrary, the right hon. gentleman had expressed his intention to adopt the suggestions of his hon. friend, and to act upon his views. This he had heard with peculiar satisfaction. But there was one point connected with this subject, to which he was surprised to find his hon. friend had omitted to make any allusion. His hon. friend had forcibly animadverted upon the extraordinary transaction of the Bank lending three millions to the public without interest, on the condition, forsooth, that the public balances amounting, on an average of several years, to ten millions, should be allowed to remain in its hands. But his hon. friend had omitted to ask, why those balances should be at all deposited in the Bank? Such a system of deposit appeared to him inconsistent with the provision of the several appropriation acts: upon what ground was it that the money appropriated by these acts, was not advanced according as it was required, for the use of the army, the navy, or any other department of the public service, for which it was voted, instead of being transferred to the Bank? Why should not such advances be made by the exchequer itself, to each of the public departments, instead of being sent to the Bank? Such a system appeared to him quite incomprehensible upon any fair public grounds. The chancellor of the 200 exchequer had now shown what use could be made of these balances. He had shown that what was deficient in one department was made up out of the surplus of another. But instead of issuing five millions for the service of the navy and army, why did he not take them from those balances?
The Chancellor of the Exchequerinsisted, that he had never said that the surplus of one department had been applied to the service of another. However proper or economical such a plan might be, it would not be authorized, and he should therefore consider it a breach of his duty. All that the executive government had considered itself at liberty to do, was, to apply any part of the sums granted by parliament for any service, and which might remain unexhausted, to that particular service, beyond the time for which it had been voted.
§ The Resolution was agreed to.