Sitting of 25 April 1811

EXCHEQUER BILLS HELD BY THE BANK.
Mr. Marryattrose to move for the production of an account of the Exchequer bills in the Bank of England, for a certain pe-wed. The hon. gent. conceived that it would be necessary-to make only a few observations by way of preface to his motion, reserving to himself-the right of replying to any arguments which might be adduced against it. The amount of Bank notes in circulation for the four years succeeding the period at which his motion would commence (1797), was from 11 to 13 millions. Previous to the passing of the Bank Restriction Act, they only amounted to 8 millions; and it appeared from the documents produced, that, at the latest period to which those documents were made up, they amounted to from 22 to 24 millions. The-effect of the depression of the coinage was the rapid increase of this species of circulating medium, and yet so unconscious was the deputy governor of the Bank of this boon of the ministers, that he attributed the depression to the unlimited grant of foreign licences, and not to the alarming increase of Bank notes. The great evil which the public sustained by this increase, was the advance in price of every commodity. The directors of the Bank, however, denied the fact; for they assert that the advance of price is owing to other causes, and they contend that there is not a note more in circulation than what is required for the service of the public. One of the great evils of this circulating medium is the facility which it affords to the company to purchase up ail the Exchequer Bills which may be brought into the market. Since the discounts have failed them, in consequence of many of their best customers having found their way into the Gazette, they of course are obliged to have recourse to other means to obtain profit, and they accordingly, with their own paper, purchase treasury securities. It was the wise policy of our ancestors, when the Bank was first established, not to grant them too wide a field for speculation, lest in so doing they might clash with the interests of the State; but of late years his Majesty's government had departed from that wise line of conduct, and, as it would seem, had connected themselves-with, the company. In 1793, Mr. Pitt found it convenient to pass an act,
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which legalised all treasury acceptances for advances of money made by the company for the use of the government. The spirit of that act did not, however, autherise more than 600,000 l. to be advanced; but subsequently that had been even done away with, because it became necessary that the connection should be closer than ever. The hon. gent. thought that the conduct of government in that instance was unfair, for if it were necessary that Exchequer Bills should be issued, they might be sent into the world bearing a small interest, and in small sums of 10 l., 20 l., 30 l., 10 l., or of 50 l. sterling: but the consequence of the measures adopted by government were, that the company was enabled to purchase the whole of the Bills issued, to the disadvantage of the public funds. Indeed, so much had the Company ingratiated themselves with the government, that, in 1796, they extorted a sort of promise from the minister, that he would not negotiate any subsidy with any foreign power, without the concurrence of the Bank. The hon. gent, considered this as giving to them a dangerous power, which was evidently manifested; for the extension of their paper issues enabled them to purchase annually 17 millions of Exchequer Bills. He contended that the act of the 33 d of the king made them a great part of the government; and, consequently, if they claimed a participation in the public interest, this House of course were entitled to look into their affairs. On these grounds he could see no objection to the production of the account. He then moved for "An Account of the Exchequer Bills held by the Bank of England, in January, April and June, of each year, commencing from the 1st January,.1797, down to the latest period, at which the same can be made up."
Mr. Manningreplied to the observations of the hon. gent., who had charged the Directors of the Bank with forfeiting that confidence which the public reposed in them. He denied that they had lost that confidence, and he had never heard a charge of the sort, except from the mouth of the hon. gent. He therefore must be allowed to disbelieve it, without evidence to prove it was founded in truth. Under this conviction the topics in the speech of the hon. gent., were sea reel worthy an answer. He must, however, State his grounds for objecting to the-motion The hon. gent, had referred to the clause in the

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act of the 33 d of the King, restricting the advances to the government to 600,000 l. That clause was introduced by Mr. Fox, and at that time was not objected to; but he should be glad if the hon. gent, would inform him what the commerce and the revenue of the country would have done if it had not been for the issues? The country could not have gone on without them. In proof of the confidence which this House had placed in the Bank, he would refer to the Exchequer Bills act, which permitted the Bank to advance the whole in some cases, particularly in 1810, and in other cases half of the loans of three millions, of the million and a half, and of six millions' out of fourteen millions. Would the House have permitted this without being perfectly satisfied that confidence was well placed? They had the opportunity of reviewing the conduct of the Bank, and if they had been jealous of their conduct, they ought in justice to the public to have said so. But in truth the House were not suspicious, and it was only in the hon. gentleman's imagination that the jealousy existed. There was no one instance in the purchase of Exchequer Bills in which the Bank had not gone incompliance with the direction of this House, and had given assistance thereby to the banker and merchant. With respect to the assertions of the hon. gent., he must deny them altogether. The object which he had in view might be obtained, if he would refer to the Appendix to the Bullion Report, which furnished the information required by his motion; that Appendix embraced an account from 1798 to 1810, and on the 5th January 1811, was delivered in an account, by the chief cashier of the Bank, of the notes in circulation; so that every thing which he desired was on the table. He must protest against the doctrine of the hon. gent, of interference with the concerns of the company. He did not conceive that the hon. gent. had the right from motives of curiosity, to examine into those concerns, and therefore he must resist the motion.
Mr. Marryattdenied that the information was on the table respecting the purchase of even a single Exchequer Bill in the market. He contended, that if they were permitted to go on purchasing, that they might purchase all the Bills in the market, though he admitted it was putting an extreme case.
Sir J. Newportthought that no ground of objection to the Accounts being produced

had been laid; at present he saw no limitation to the issue of Bank paper.
The motion was then put and negatived.