Sitting of 13 June 1820

BANK OF ENGLAND ACCOUNTS.
Mr. Grenfell,in moving for the printing of certain Bank of England accounts of the public balances, presented yesterday, said, that as there were possibly some members in that very select House, who were not members of the last parliament, and but little conversant with the subject, he begged leave to make one or two observations. Now that the principles, arrangements, and regulations, for which he had so strenuously contended, in common with other members, in the last parliament, were recognized and adopted, he trusted the warfare between the Bank of England and himself was over. When he said warfare, he used that word only in a political sense, for no feeling had ever entered his breast which was not founded upon public and political principles; he had never wished to interfere with the private transactions of the Bank of England, or to suggest any thing contrary to those principles of justice, liberality, and good faith which ought to regulate all transactions between that corporation and the public. It had been proved by documents for which he had at different times moved, that during a period of from ten to twelve years, the corporation of the Bank had been in undisturbed possession of public money, amounting upon aft average to a sum of eleven or twelve millions sterling. The interest upon that sum amounted to 575,000 l. taking it at the current that of interest; for it was not denied that the loss sustained by the public was to be estimated by the value

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which money bore in the market during that period; or that the profit made by the Bank was not precisely as much as if the money had been in the possession of any private banker or individual. This loss to the public, or profit to the Bank, for these terms were identical, was stated by the committee of public expenditure, which sat in 1807, and of which the member for Corfe-castle was chairman, to amount to very little short of 600,000 l. per annum. The advantages derived by the public from the Bank, which were to be set against this loss, were two loans, one in 806, at an interest of four per cent, and another of three millions, without interest, in 1818, when the right of the public to a participation in the profits of the Bank was distinctly recognized. The aggregate amount of the public money in the hands of the Bank during this period was nearly eleven millions and a half. He held in his hand a paper, from which it appeared, that this sum of eleven millions and a half was reduced, in 1819, to four millions and a half, and that since January last, a farther reduction had taken place to 3,700,000 l., and the loss to the public, from the profits made by the Bank during the former period, had consequently been reduced in the same proportion. The cause of this reduction was partly attributable to the cessation of the war, but principally to the increased attention of his majesty's ministers to the subject during the last four or five years. Two acts had passed the legislature, by one of which the balances from unpaid dividends were reduced, and brought within 100,000 l. per annum, and another, by which the growing produce of the consolidated fund had been made applicable to the public service. The effect of these acts had been to reduce the balances in the hands of the Bank to three millions and a half, whereas in former periods they had amounted to 12,600,000 l. The object which he had in view was to invite the attention of the chancellor of the exchequer, had that right hon. gentleman been present, and of the House, to the practicability of making a still further reduction in the amount of those balances, and consequently of effecting a still further saving to the public. In the present most difficult, not to say alarming, state of our finances, it was the duty of the House to neglect no practicable means of introducing economy and retrenchment into the public expenditure. Speaking
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in the presence of practical men, and of the hon. gentleman opposite (Mr. Peirse), who was a Bank director, he had no hesitation in saying, that the management of the public debt by the Bank, involved no greater difficulty than the most simple banking transaction. However advantageous it might be to the public that their money should be placed in such safe custody, the amount of trouble to the Bank was, in point of fact, less than that encountered by many a private London banker in the management of a single bank. He had given this subject the fullest consideration, and in his opinion a saving of not less than 100,000 l. might be effected to the public from this source. He should move that the accounts of the aggregate amount of the balances presented by the Bank to this House be printed.
Mr. Peirsesaid, that the hon. gentleman appeared to have forgotten the great advantages which the public had derived from the Bank in consequence of the advance of large sums of money without interest, or at very low interest. The balance of eleven millions and a half, to which the hon. gentleman had alluded, had been gradually reduced the year after to eight, seven, six, and at length to three millions and a half. In one transaction with the public, he alluded to the issuing of tokens, the Bank had lost no less than 700,000/. In the loan of three millions advanced by the Bank at three per cent, taking the difference between the current interest of five per cent, and that rate of interest, the advantage to the public was not less than 60,000/. a-year. He adverted to a letter of the late Mr. Perceval, in which that gentleman expressed the highest satisfaction at the liberal disposition of the court of directors. The whole annual sum which the Bank received from government, and out of which they had to pay all the expenses attendant on the management of the public business, was only 262,000 l. He would venture to say, that there was no other business of so large an extent done for so small a remuneration. It ought also to be recollected, when the former profits of the Bank were spoken of, that during the last twenty years of the war the Bank were always ready to afford every possible facility to government, although constantly in opposition to their own pecuniary advantages.
Mr. Grenfell,in explanation, maintained, that within the last twenty-two years

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the whole profits of the Bank of England I were to be ascribed to its connexion with the government. From 1794? to 1796 or 1797, their dividends averaged about 6½ per cent. But, during the last twenty-two years, a profit of 30,000,000 l. sterling had been divided among the proprietors and company. He did not speak this unadvisedly, for he was himself a Bank proprietor. The hon. gentleman had remarked, that the Bank of England annually paid to the government 90,000 l. for stamps; but all private bankers were obliged to contribute proportionally, in the same way, to the revenue; and the Bank would have to pay a much larger sum for stamps than this, if it were put on the same footing with the country banks.
Mr. Wilsondenied that, because when the Bank possessed large balances of the public money they were enabled to make considerable profits from them, it followed that those profits were a loss to the public. The risk they ran, the extensive buildings they erected, and other considerations of a similar nature, entitled them to adequate remuneration. He was persuaded that the advantages enjoyed by any private banking-house were as great, and in some instances greater, than the advantages enjoyed by the Bank; and he was also convinced, from all he had observed, that the Bank were as anxious for the public good as for their own.
Mr. Ricardoconceived, that if it were true, as had been stated, that the Bank had made no larger profits in consequence of its connexion with government, and its retaining these balances than any private concern which might have held them would have made, it must have managed its own affairs very badly. The hon. director bad mentioned, as one of the great advantages which had accrued to the public from the acts of the Bank, the lending of a sum of money, without interest, to the government. But the thing was differently represented by the court of directors at the time. The Bank was then in this situation:—it had been allowed to increase the amount of its capital, instead of dividing a larger amount of profits among the proprietors—that is, instead of making a larger dividend it had been permitted to add to its capital: and the understanding was, that the loan of 3,000,000 l., upon which no interest was to become due, was a boon to the public in return for that permission. At some former periods, the remuneration to the Bank must have been
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enormous, or it was now very considerably underpaid. But his own opinion upon the charge of management was, that the balances in question were now so small, that it was hardly necessary to have brought the subject before the House. The papers were ordered to be printed.

SCOTCH PEERS.
The Earl of Roseberryrose to move the second reading of the bill for regulating the right of voting at the election of peers to represent the peerage of Scotland. He observed, that neither in the acts of parliament relative to the election of Scotch peers, nor in any of the resolutions come to at different times on that subject by their lordships, was there any provision for the evil which the present bill was meant to prevent. The object of the bill was, to guard against cases of unqualified persons assuming the right of voting, there being no power to reject their votes at the time. He appealed to noble lords who knew the practice, whether it was not the fact, that scarcely an election occurred in which persons did not vote, who, in the opinion of every one present, were not entitled to give their suffrages. It was proposed by the bill to exclude from voting (with some exceptions) all persons who claimed as succeeding to deceased peers, until they had made out their titles. This would prevent the intrusion of individuals, who, from vanity or worse motives, often interfered in those elections. The right of petition and redress would, of course, be open to those who might consider themselves wronged. The inconveniences of which he had spoken would not occur at the election for the peers of Scotland, if the same provision had been made respecting them as exists with regard to the Irish peers. No Irish peer, not even the direct descendant of a deceased peer, is allowed to vote at the election of a peer to sit in that House, until he has folly made out his title. He did not mean to interfere with the claim to vote where the right was obviously undoubted. The bill, therefore, as far as regarded direct descendants, left the practice as it now stood, and only required collateral descendants to make out their titles.
Earl Cathcartthought that the object which the noble lord had in view might be more conveniently obtained by a resolution of the House. He concurred, however, in the necessity of some regulation being applied to the practice which at present prevailed.
Lord Melvilledid not oppose the bill, which, under all the circumstances connected with the elections of Scotch peers, was, he thought, entitled to their lord-

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ships approbation. How far the object could be obtained by a resolution he was not certain. He was afraid it could not; but if, on further consideration, their lordships should think such a course practicable, it might hereafter be adopted. With regard to the clause of the bill allowing direct descendants to vote, he approved of it, but questioned whether it might not be advisable to give the same right to brothers of peers as to sons of peers.
The Earl of Lauderdaleapproved of the object of the bill. Such was the practice at the election of Scotch peers, that he could at any time procure fifteen or sixteen votes, which would be good for the time, though protested against. He did not think it competent to the House to attain the object of the bill by a resolution. He believed it would not be necessary to insert the word brothers in the bill, as the brother of a peer must be also the son of a peer. As Scotch peers could not be created, it followed that the brother would be the son of a peer. It could not be otherwise, unless the deceased peer had succeeded collateral. He was fully of opinion that peers should make out their claim before they assumed the right of voting; but there was another class of claimants besides those to which the bill applied. Against two claimants of this description the House had passed a resolution, directing the clerk register not to receive their votes until they made out their claims. He should, perhaps, on a future occasion, propose a resolution that no person should vote until they had made good their titles.
Lord Melville,in explanation, observed, that the clause in the bill excepted the sons and grandsons of peers; but he still thought that brothers ought also to be excepted, because it might happen, from collateral succession, that the brother of a deceased peer was not the son of a peer.
The Lord Chancellorapproved of the bill. The provision in the law respecting Irish peers was extremely salutary, and be thought it might be properly extended to the Scotch. An English peer must have a writ before he appears to take his seat in that House. It was also necessary to prove that he was the legitimate son of his father, to whom he succeeded; and, in cases in which there could not be the slightest doubt, this proof often required
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some time. It might be worth their lordships while to consider whether a similar proof ought not to be required of persons claiming to vote at the elections of Scotch peers.
The Earl of Lauderdaleremarked, that such proof was not necessary in Scotland, from the nature of the law respecting marriage.
The Lord Chancellorwas aware that there were many modes of contracting marriage in Scotland. He had heard, he believed, three or four hundred ways pointed out by counsel at their lordships bar, who descanted on the subjects as learnedly as if they had had three or four hundred wives themselves.
The bill was then read a second time.