Page images


ance that the repeated promises so fre- port to this country, and, indirectly, quently made to them, that the ad- to the civilized world. These, how vances on the Treasury bills should be ever, are yet only so far advanced in completely done away, may be actually their progress; and it would ill befulfilled at the next meeting of Parlia- come passing speculators like us to ment, and the necessary arrangements attempt to describe its future directaken to prevent the same from ever tion. The immediate fact with regard happening again; as they conceive it to to the purpose intended by this meabe an unconstitutional mode of raising sure is, that it was completely successmoney, what they are not warranted ful. Indeed, the untouched resources by their charter to consent to, and an of this country were, from many causes, advanee always extremely inconvenient at that time in a state of unparalleled to themselves.' Towards the close vigour. The more they were probed, it of 1796, and the beginning of 1797, was found, to use an expression of Mr the fears of the Bank increased, and Burke's, that “ we were full, even to Mr Pitt's demands became more ur- plethory.” Taxes to an amount hitherto gent. On 25th February, the bank- unknown in the history of the world notes in circulation were £8,640,250; were collected with certainty, and with and next day an order in council was such ease, that their first pressure only issued, suspending payments in specie was felt. All the powers of Europe who at the Bank, which was soon after joined in the coalition against France followed by an act of the Legislature, were subsidized by us, some years restraining the Bank of England nearly to the amount of their own from paying its obligations in cash.”

The great majority of the On 1st May 1797, the first issue of landed proprietors, almost all the merone and two pound notes was made; chants and manufacturers, and cerand at that date the amount of notes in tainly much of the rest of the populacirculation was £13,055,800—a sud- tion, fully concurred in these measures. den bound of four or five millions from If ever minister could say, that in all that point which the Directors found he proposed the nation went with safe while they were called on for him, that minister was Mr Pitt. His specie. On 27th December 1796, Mr schemes of war and expedients of fiPitt stated the probable expenditure of nance were received with a fervour of the ensuing year at £27,647,000, and approbation which seemed to think no the new taxes to defray the interest of advance too great for the objects in a loan of £18,000,000, to make up view, and only to regret that means that expenditure, at £2,132,000. In alone, however costly, could not ac1796, we find the highest price of complish them. All of our national bank stock to have been, on 23d spirit that was sentiment, or emotion, January, 1771, and the lowest, on or propensity, tended to utter hatred 24th November, 144. The highest of France, and cordial trust of the amount of bank notes in circulation high-minded man who had gained the was £11,700,000. In January 1797, it ascendant in our councils. It is with was only £10,500,000; and Mr Gren- the consequences of these measures to fell states the value of the capital the Bank of England that we have stock, on an average of the whole

now to do; and they were as follow: year, only 125 per cent." The total The Bank of England was, by pubof the funded debt, in 1796, was lic contract, the agent for managing £327,071,371.

our debt, and, by parliamentary apThe suspension of cash payments pointment, the place of deposit for all we consider to have been at that pe balances of public money from departriod the most important event that ments of revenue or accountantship. had occurred, from the declaration of In the first of these characters, its independence by the British American emoluments had increased with the colonies, if we except the revolution increasing burdens of the country, in France itself. All parties are now until for that service alone nearly agreed on the importance of this sus- £300,000 per annum was received; pension, though two very distinct opi- and in the second, the Bank has now nions have been maintained about its had, for eleven years, the custody of propriety. We humbly imagine, that balances of money, permanently, aveit was fraught with political and moral raging, on the whole, £11,500,000. consequences of the most serious im- On this large sum the Government

[ocr errors]



[ocr errors]

at the very

received no interest. It attracted the Mr Grenfell now possesses, we should attention of the committee on public have had a bargain more advantageous expenditure in 1807. That commit- to the public. The plain truth, with tee, in its report, commented with respect to what was really done, is, equal good sense and ability on the that the Bank lent, with an air of saadvantages which the Bank must de- crifice and self-denial, as the equivarive from such a large deposit of mo- lent in a bargain most advantageous ney.

The bank notes in circulation to them, three millions of money to had then increased to £16,621,390; that public, of whose treasure they and the deposits, which in 1797 had were then in permanent possession of been only £5,130,140 inclusive of sums amounting to more than six milprivate accounts, were, on the Govern- lions ! In 1806 this loan became payment account alone, betwixt eleven able. The administration at that time and twelve millions. Bank stock, did not find it convenient to make the which had sold in 1800 from 156 to payment, but succeeded in “ prolong172 per cent., then sold at 230 ing the period of this loan for the then

strong circumstances," as the com- existing war," at 3 per cent. i.e. paying mittee observes, “in confirmation of £90,000 per annum for the use of the large increase of profits.” It ap

Why, sir,” says Mr Grenpears, from the evidence of Mr Samuel fell, addressing the Speaker with most Thornton before the committee, that excusable animation, in 1800, when he, as Governor, trans, moment, in 1806, when the Bank reacted with Mr Pitt a renewal of the quired, and the public most improviBank's charter for twenty-one years, it dently agreed to pay, £90,000 for the had not escaped his eagle eye, to urge,

use of three millions of money, the on the part of the public, a right to Bank held, and were in possession of, participate in the profits of the Bank, a treasure belonging to the public arising, among other things, from amounting to a sum little short of money lodged there to pay the grow- twelve millions, wholly unproductive ing dividends, and the quarterly issues to the public, but productive of adfor redemption of the national debt, vantage to the Bank.” In the year which “ Mr Pitt estimated, might, 1814, it is most proper to add here, during the progress of the charter, ac- this loan was repaid, and the interest cumulate to £4,000,000 a quarter.”+ on it, amounting, for eight years and The final bargain made for the public eight months, to £780,000 ! was, --for the renewal, and on account As soon as the report of the comof the advantages from public money mittee on public expenditure made its enjoyed by the Bank,

-a loan of three appearance, Mr Perceval, who was by millions, without interest, for six that time Chancellor of the Exchequer, years, “producing," as Mr Thornton came forward to claim for the public says, a profit of £900,000 ; but, at a participation in the profits derivable the then price of annuities, it was from the deposits, and a reduction in worth only £750,000, reckoning £5 the charge for managing the national per cent. interest of money.”

The debt. The Bank agreed to give anosame gentleman states the average ther loan of three millions without balance from money lodged for pay- interest ; to allow the withdrawing of ment of growing dividends, as half a million of the unclaimed divi. millions and an half,” and “ on the dends then lying in their hands; and public accounts at that time, of trilling a reduction equal to about one fourth amount.” Mr Grenfell, however, has in the then existing charges for the found out,

from statements now management of the debt.” The saving made by the Bank,” and avers it in by this arrangement was £242,000 per his speech, that the money for grow- annum. In 1814 this loan became ing dividends exceeded £3,600,000, due. The present Chancellor of the and that the trifling deposits were Exchequer prevailed easily on the £1,947,000. If Mr Pitt had pos- Bank to allow the prolongation of it to sessed, in 1800, the knowledge which 5th April in this year, on the ground

that the public balances had remained

undiminished.• See Report, &c. ordered by the House of Commons to be printed, 10th August

We may now venture to state the 1807, pp. 75, 76, 77, 78, and 79. + Vide Report, as above, p. 103.

* Mr Grenfell's Speech, p. 21.


[ocr errors]
[ocr errors]

present profits of the Bank, arising vidends, 64 per cent. £7,451,136.* out of its contracts or transactions with New bank stock, £2,910,600, divided the public.

amongst the proprietors in May 1816, Interest at 5 per cent. on £11,500,000 worth 250 per cent. equivalent in moof public balances held by the Bank ney to £7,276,500. Încreased value since 1806, £575,000. From which of the capital of £11,642,000, upon an deduct for a loan of three millions to average of 1797 only 125 per cent. the public without interest, saving but which is now taken at 250, being 5 per cent., which is £150,000; ano- an increase in the market value of ther of six millions, at 4 per cent. this property of 125 per cent. equivasaving 1 per cent. £60,000; another lent to £14,553,000.“ Thus the total of three millions, at 3 per cent. saving profit, in addition to the annual divi2 per cent. £60,000; and half a mil- dends of 7 per cent. which had never lion taken from the unclaimed divi- been exceeded during the first hundends, saving 5 per cent. £25,000 ; in dred years of the Bank's existence, all £295,000 ;-leaving to the Bank of has been, in twenty years, on a capital England, merely for the safe custody of £11,642,400, the incredible sum of of the public money, a clear profit of £29,280,636 ! £280,000 a-year! The rest of their We have now put our readers in allowances stand thus: Commission for possession of some striking facts in making transfers and paying dividends the history of this celebrated estabon the national debt, £275,000. Com- lishment, for almost all of which, at mission on loans and lotteries, £30,000 least for those which are most import(both these stated as in 1815). Annual ant, we are indebted to the unwearied allowance, since the erection of the research and perseverance of the auBank, for house expenses, £4000. An- thor of the Speech before us. That nual allowance on four millions of the speech, and the propositions to Parpublic debt bought by the Bank in liament on which it is founded, t re1722 from the South Sea Company, solve themselves into three questions. £1898. If to this we add, for sixteen Can the allowances made to the Bank millions of increase in the circulation be reduced in their amount, with jusof Bank of England paper, since 26th tice to the Bank and safety to the February 1797, an annual profit of 5 public? Can the nation derive farther per cent. which is £800,000, the gross advantage from the large deposits of returns to our national Bank, from its money lodged at the Bank? These transactions with the state, will be objects once found practicable and ex£1,390,898 yearly !*

pedient, What would be the most The effects of this profitable arrange- effectual and dignified course to be ment, which has operated so visibly adopted for securing them? on that thriving establishment, will On each of these we shall offer such be seen to the full conviction of our obvious and simple hints as the stinted readers, when we add a statement of limits of our publication will admit. the profits realized by Bank proprietors 1st, As to what farther deduction may during the last twenty years, reckon- be made on the allowance for managing ing from 1797 ; from which period, the debt, we quote, with deference and by the increased amount in the

public satisfaction, from a letter addressed to expenditure producing such deposits the Treasury, 18th January 1786, by of money, and the increase of the na- the commissioners for auditing public tional debt, and the increased issue of accounts. “ We take the liberty to notes, unchecked, until within the suggest (what is indeed very obvious), last three years, by any motive of that the commencement of every unprudence,-over and above the old or- dertaking is usually the most expendinary dividend of 7 per cent., there sive; and consequently, when the has accrued to that description of per- Bank had once provided additional sons-In bonuses, and increase of di

* Bonuses distributed among the pro

prietors betwixt June 1799 and October * It is only fair to state here a saving of 1806, 32 per cent. Permanent increase £233,720 per annnm, from £11,686,000 of dividend, at 3 per cent. per annum, comadvanced to the public from the Bank since mencing in April 1807, is to April 1817, 1746, at 3 per cent. interest, being the con. 10 years' dividends, or 313 per cent. To. sideration paid on every renewal of their gether, 64 per cent. charter for their exclusive privileges.

+ See No 390, Parl. Pro. Sess. 1815.

66 Is

clerks, and incurred such other new must be of the highest value. It is to expenses as might be necessary, the them so much added to their ordinary same persons and accommodations (or capital, without much of the risk or nearly the same) would be sufficient responsibility to which their floating to transact the payment of the divi- obligations subject them. For every dends on several additional millions, thousand of this money in their hands, without much increase of charges of they are enabled to discount so many management. We believe that most more bills, or issue so many more notes. other contractors have found, that a The public service ought instantly to moderate sum gained on a large quan- be benefitted by them, if the usury tity of any commodity generally pro- laws are repealed, to an amount acduces a greater profit than a higher cording to what may be the average price on a less quantity: therefore, if rate of interest for money throughout £360 was a sufficient allowance when the country. 3dly, Mr Grenfell reannuities on a capital of one million commends that Parliament should inonly were created, it should seem that terfere to make a new arrangement for the Bank could well undertake the the public ; assigning as a reason, that like service at a much lower rate, not the influence “ which, though all only when the public necessities have powerful, irresistiblein Downing Street, unfortunately increased the capital of would be impotent and unavailing the national debt to the enormous load within the walls of the House." of two hundred millions,* but also not,” says he, with the same animawhen the consolidation of a variety of tion which we spoke of before," Is annuities must have lessened both the not your whole financial history, durtrouble and expense attending the ma- ing the last twenty years, filled with nagement thereof."

The Bank has proofs of this influence? It is then in incurred, within the last twenty years, this House, and through the medium of a very great expense for additional this House only, that the interests and hands, and more accommodation to rights of the public can be secured in the public business; and no one can all negotiations of this nature with the deny that it is executed unexception- Bank; and I repeat it, if the House of ably well. But these views of the Commons will interfere, my conviction committee are still applicable as prin- is, that the Bank will not resist. If, ciples. The allowance of £4000 for however, I should be disappointed in house expenses was strongly adverted this expectation, and if the Bank, unto for discontinuance, in the end of mindful of what it owes to the public, 1807, by Mr Perceval, in his corre- ---forgetting that it has duties to perspondence with the Bank at that time. form towards the public, as well as The same reasons exist now; and in- within the limited circle of its own prodeed, the authority of that very acute prietors, I will go farther, and as a and able man is sufficient to those who proprietor of bank stock myself, add, know, that if his leisure from the mul- that if the Bank, taking a narrow, contifarious calls of state had permitted tracted, selfish, and therefore mistaken, him to turn a full attention to the view of its own real permanent interaffairs of the Bank, he would have ests, should resist regulations founded insisted on a thorough sifting and re- in fairness, equity, and justice, -in vision of their bargains. The allow- such a state of things, sir, I say it ance for the debt purchased of the must be a consolation to us to know, South Sea Company, is one which and I assert it confidently, that we ought to cease instantly, on the plain have a remedy within our own reach." ground that all management on it has p. 60. As to the profits accruing from ceased since 1722. 2dly, the deposits the paper circulation of the Bank, of of public money lying at the Bank which we hope the country will conare just so many millions of capital tinue to enjoy the advantages, under taken from the productive labour and due modifications, * Mr Ricardo is of productive capital of the country, where they might at least be useful, and

We hope to be able to announce very lodged with a great corporation whose nomists of our time, an Essay, shewing that

from the pen of one of the ablest ecotrade is money, and to whom they a large coinage of gold would be an unpro

ductive fixation of capital, and therefore hurtThat truly “ enormous load" is now ful to the state. For the happiest idea that nearly 860 millions !

ever was conceived, of a currency liable to




opinion, that paper money affords a during the occupation of mind so naseignorage equal to its exchangeable turally produced by the vast concerns value; and he also believes, that the of the war. · The author of these disnation might gain two millions yearly, cussions, to whom all the merit is due, if it were the sole issuer of paper money.

and who might be excused for any He wisely adds, that this would only partiality to his own inquiries, or arbe safe under the guidance of “ dour in the pursuit of their objects, missioners responsible to Parliament shews exemplary moderation. He has only.” Mr Grenfell's recommendation taken them up without violence or of parliamentary interference is good. faction, but with the urbanity and deThat is, indeed, the truly constitu- cision of an English gentleman. He tional mode. Every exertion of the has not over-estimated their importkind is so much gained towards en- ance; and his statements are remarksuring a considerate use of the public able for perspicuity and plainness, treasure, and a strict control over it in without the least shade of laboured future, as matter of duty and honest comment or ostentatious deduction. emulation, on the part of those who He deals not in splendid generalizahave been recognised, since the Revo- tions, nor in well-turned invectives ad. lution, as its guardians.

captandum vulgus. We entreat the We have now gone over the prin- early attention of our readers to the cipal matters of these questions. For Speech itself, and to the Appendix, in the rest we refer to Mr Grenfell, who which they will find a variety of essenhas invested the subject with attrac- tial statement and explanation, for tions of manner to which we cannot which we could not possibly make aspire. To his interference in the business this country is indebted for a sav- Mr Grenfell was a member of the ing of £180,000 yearly, thing of bullion committee, and enjoyed the greater importance than those who are friendship of Mr Horner. In a letter occupied with the taking but doubtful written lately to a correspondent in schemes of a more extended patriot

this place, he says,

the sanction of ism could be easily led to acknow- his great authority, and his unvaried ledge. Nice calculations of political countenance and approbation of my arithmetic, however, and even the humble exertions in this cause, inmost refined inquiries of political eco- spired me with a confidence as to the nomy, come now, with direct force, to correctness of my own views, which the ordinary business and interests of has been most essential to me.” We all those who have, in common par- knew, ourselves, enough of that most lance, a stake in the country; and we excellent person, to perceive that this might even add, to those also who is a great deal for any man to say. have nothing but life and liberty to The privileges and advantages which care for, and whose interest in the it implies can only be equalled by incause of good government is the ulti- tercourse with one of the most original mate and the extreme.

and inventive writers on political ecoWe know, from the very best autho- nomy since the time of Adam Smith ;* rity, that Lord Grenville, much to the whose speculations on the great subcredit of his sense and candour, has jects of human interest with which recently taken blame to himself for that science is especially connected, not looking narrowly enough into the have much of the strictness and seveaffairs of the Bank in 1806-7, when rity of mathematical demonstration ; he was at the head of the Treasury, and who bids fair to give to its most and Mr Vansittart secretary under practical deductions more shape and him. The truth is, we believe, that certainty than they have received from ministers only overlooked this subject any writer of his day.


[ocr errors]

no variations except such as affect the stan- Mr Ricardo, who is the friend of Mr dard itself, we refer to the novel, solid, and Grenfell, seconded his resolutions proposed ingenious reasons urged in Mr Ricardo's to the Court of Proprietors at the Bank, Proposals. There also the reader will find 230 May 1816, and speaks with respect of the practical developement of this fortunate his exertions for the public. See Proposals conception made out with uncommon close- for an Economical and Secure Currency, ness, clearness, and simplicity.

P. 42.

« PreviousContinue »