Mr. Peelsaid, that among the recommendations contained in the report of the Select Committee on the affairs of the Bank, there remained one to which the House had not yet adverted. It was a recommendation, however, which was by no means of minor importance. The committee recommended that parliament should adopt some permanent provision for defining and limiting the future advances made by the Bank to the public, and for bringing; those advances constantly under the superintendence of parliament. It was a bill to effect that object that he should, in conclusion, move for leave to bring in. There were three modes in which the purpose might be accomplished—either by a law, interdicting the Bank from making any advances at all—a prohibition that would be attended with great public 1193 inconvenience; or by establishing a nominal amount to which the advances might be extended, which would be attended with the disadvantage, that that amount might sometimes be too small, sometimes too large for the necessity; or thirdly, by the plan which, under all the circumstances of the case, he conceived to be the most expedient. He proposed to enact, that the Bank should, in the first place, be prohibited altogether from making any advances to government; and that, when-over such advances were deemed desirable by government, an account of them should be submitted to parliament for the purpose of obtaining its authority. This course would bring the whole subject of the advances from the Bank, under the constant inspection of parliament. The first clause of his bill would prohibit the Bank of England from making any advances to government unless distinctly authorized by parliament. It would then provide, that if parliament considered such advances desirable, and authorized them by a specific act, either the first lord of the treasury, or the chancellor of the exchequer, should make a written application to the directors of the Bank for the required advances, which application, and their answer to it, the directors should enter on their minutes. The next clause would provide, that the written application so made, and the minutes of the Bank, stating their acquiescence or refusal, should be laid before parliament, thus bringing the whole transaction under its cognizance. There was another point to which the bill would be directed. He should propose the same regulations respecting the purchase of Exchequer bills by the Bank as he proposed with reference to the advances. This appeared to him to be the most natural and effectual mode of establishing a parliamentary control on this important subject. He concluded by moving for leave to bring in a bill to establish regulations for the purchase of government securities by the Bank.
§ Mr. M. A. Taylorcongratulated the House on its being now proposed to do what, if it had been done long ago, would have averted the calamity of the late war.
§ Mr. Ricardothought the Bank ought not to be in any way shackled in the management of their own affairs. Great inconveniencies, in the diminution of the circulating medium, might result from 1194 establishing too strict a limit on this subject.
The Chancellor of the Exchequersaid, it was not his opinion that any diminution of the circulating medium was necessary, nor did he believe that any such would take place.
§ Leave was then given.