HC Deb 22 February 1853 vol 124 cc403-5

said, he wished to put a question to the right hon. Gentleman the Chancellor of the Exchequer arising out of a paragraph which had appeared in a morning journal of that day reflecting on the high character of a body with which he had the honour to be connected. The question he had to ask the right hon. Gentleman was, whether the Governor and Company of the Bank of England were aware of the intention of the Government to reduce the rate of interest on Exchequer Bills from 1¼d. to 1d. a day before the 12th of February, the accusation conveyed in the paragraph being that they had been in possession of that information some ten or fourteen days beforehand, and had used it for their own private advantage?


Sir, I trust that the House will excuse me; if I endeavour to give an answer to the question my hon. Friend has put to me, in the most distinct terms I am able to command, for it is a question which is not altogether of a common order, relating as it does to the character of an estab- lishment standing so high in public estimation as the Bank of England, and whose high character it is so necessary to maintain. The statement to which ray hon. Friend refers was the statement, not of a morning journal, but of the correspondent of a morning journal—printed certainly in a conspicuous manner—and it was to the effect that there was not proof, but a presumption, that the Bank of England was aware of the intention of the Chancellor of the Exchequer to reduce the rate of interest on Exchequer Bills to a penny a day some considerable time before that reduction took place, and that it availed itself of this knowledge to sell a large amount of Exchequer Bills at a premium much higher than they would have been likely to realise after such reduction. That is in substance the statement to which my hon. Friend has referred. Now, the exact date when the intended reduction of the rate of interest on Exchequer Bills became known to the public, was on the 15th of this month—the time when the formal act which determined the reduction was perfected was the evening of Monday, the 14th, and I did not think it right to ask any advice from the authorities of the Bank of England, or to take any steps to ascertain the opinion of the Governor and the Deputy-Governor of that establishment on the subject any long time before that period; and it was only on the afternoon of Saturday, the 12th, that I addressed a note to the Governor requesting him and the Deputy-Governor to favour me with their company in Downing-street, at an early hour on the 14th; nor did I in that note specifically state the object upon which I wished to confer with them, but that it was upon a subject on which it was necessary a decision should be come to on the Monday. No doubt, though the purpose was not stated in distinct terms, the Governor and Deputy-Governor, with their knowledge of business, would gather from the note that it must relate to the interest on Exchequer Bills; but the House will see from this statement that no communication was addressed by me to them until the 12th, which is a conclusive answer to the imputation that has been so rashly made. It was on the morning of Monday, the 14th, that I first saw the Governor and Deputy-Governor, and consulted with them; and when they left me, about the middle of that day, they were even then not possessed of what my final intentions on the subject were. I hope, therefore, if there is the slightest doubt in the mind of any man on the subject, that what I have now stated will be sufficient to dispel it. And I think it is but just to the Governor and Deputy-Governor of the Bank of England, that I should add that they are not in any way or degree responsible for the course taken by the Chancellor of the Exchequer, though they gave their recommendation, as they always do, in the most frank and friendly spirit, of what they thought best for the public interest. I, on the part of the Government, gave their recommendation the attention to which it was entitled, deter mined, however, to take that line of conduct which I thought the public interests demanded, and they are in no manner or degree responsible.