as to produce effects the very reverse of public economy. But he admitted that it was the duty of every department to keep its balance as was consistent with convenience, and that of the treasury to control and check the whole. With respect to the exchequer balances belonging to the consolidated fund they were appropriated for the security of the public creditor, and it was admitted in the negociation between Mr. Perceval and the bank in 1808, that the public were entitled to the use of them, if they could be employed consistently with that security. But he (the chancellor of the exchequer) was convinced that the plan suggested to Mr. Perceval was in itself impracticable, and he had never met with one which could be carried into execution, without the concurrence and assistance of the bank. It must also be remembered, that any arrangement which involved the security of the public creditor was a subject of the greatest delicacy and difficulty (and he entered at some length into an explanation of his reasons for thinking so). If, then, the bank in 1808 granted nearly half of the profits they could possibly make, he thought that Mr. Perceval and the parliament were deserving of the approbation of the nation for having concluded so advan tageous an arrangement. It remained, then, only to consider the second point, namely, whether, since the year 1808, such an increase of profits had been derived by the bank as justified a more extensive plan of participation? If gentlemen would refer to the accounts before the House, it would be seen, that instead of a great increase of the public balances in the hands of the bank since 1808, the average amount had diminished rather than increased. The annual average of the balances of public money, from February 1807 to February 1815, was, on the whole, 10,976,000l. being 850,000l. less than the medium of the same accounts for the year ending 1807. The balances then, it appeared, since 1808, were diminished rather than increased, as the hon. gentleman seemed to insinuate. What reason had we, then, to press the bank for any further participation? [Hear, hear!] Further it must be owned, that the profits of the bank must be much greater in time of war than in time of peace; and instead, therefore, of the profits being greater, they would be much diminished, as in time of peace the interest and profit of money would proportionably decrease. On all these grounds, it (VOL. XXXII.) appeared to him, that the hon. gentleman, instead of saying that it was to be expected that an increase should be made in our participations, might with more truth have expected a diminution. From all this it would be seen, that in 1808 an advance was made by the bank of three millions without interest, which was by a recent agreement still to be continued; and as he had the honour of stating last night, an additional loan of six milions, at only four per cent. had been obtained from the bank, which appeared to him a much more advantageous bargain for the public, under the present circumstances, than the advance of three millions, which had been continued during the war under the agreement made with lord Lansdowne. He would ask, what should hinder the bank from making 5 per cent. of the six millions so granted, by purchasing exchequer bills, instead of only taking four per cent.? He was sure no charge could be justly made against the bank directors, for he could bear testimony that the government had always found that the bank of England would willingly lend themselves to the public service, and afford every accommodation in their power, whenever occasion required it. With respect to the allowances alluded to, they were secured to the bank by the charter. [Mr. Grenfell inquired as to the last.] The chancellor of the exchequer said the last was adopted on the principle of those allowed by the charter. But there was one circumstance which he could not omit, and which gave a flat contradiction to what had been stated as to the exorbitant profits of the bank for managing the public money. What he alluded to was the mode in which they calculated the deductions to be made on the dividends, on account of the income tax. This operation rendered necessary at least 110,000 calculations, for which the bank only received 3000l. a year; whereas, had the same duty been performed by the collectors of government, the expense would have been at least 55,000l. He had thus shown that we had in 1803 received a participation in the profits, which was then found satisfactory to parliament after the fullest investigation, and that since that period an actual diminution had taken place in the balances deposited in the hands of the bank. Upon these grounds, then, he considered that to go into a new committee would be wholly unnecessary, and would take up the time (2 K) of the members for no useful purpose. He could not help thinking also that such a committee would be dangerous to the public credit; and he hoped to show in a few days, more fully than he had done this night, that as advantageous an arrangement had been made as could reasonably have been expected; but at present it would be premature to discuss that subject. Conceiving, herefore, as he did, that it would be not only unnecessary, but dangerous, to form such a committee as was proposed he must give it his determined opposition. Mr. Bankes said, that of all men in the House it could be least supposed that he would not be gratified by the compliment paid by the right hon. gentleman to the committee which sat on the public expenditure in 1807. He owned, however, that he had never supposed what that committee had done was so perfect and complete in every respect as to preclude the House from entering at any future time on an investigation into the same subject; or that they had left nothing for others to do after them. He could say that Mr. Perceval had not for what he had done the authority of that excellent man the late Mr. Henry Thornton, who, as well as himself, thought that what had been concluded with the bank fell short of the just expectations of the country. There was nothing in the act of 1808 declaring the bargain to be permanent. It was but too well known that parliament were always passing bills apparently perpetual, and as perpetually repealing them. The hon. gentleman then quoted the language made use of by Mr. Perceval to show that he did not consider the bargain made by him co-existent with the charter. The principle of permanency did not belong to any legislative enactment, and least of all could it belong to such a measure as the one in question. The right hon. gentleman had told them that it would be inconvenient and dangerous for a committee to interfere with the arrangement between the bank and the public; but advantages had been already obtained to the public from the bank, through the medium of a select committee of the House; and those advantages would not have been obtained without the labours of that committee. Had Mr. Perceval only lent himself a little more to the opinion of that committee, it was the opinion of Mr. Henry Thornton that much greater advantages would still have been obtained. The labours of a committee of the House might not be al together without utility to the right hon. gentleman, any more than to his predecessor. A former committee had shown, that Mr. Pitt, lord Grenville, and Mr. Perceval were ignorant of the manner in which the transactions with the bank were carried on, judging from their public declarations. He wished to be placed in the same situation with the right hon. gentleman, and to possess the same information relative to the bargain concluded with the bank; and the examination would be best carried on through a committee. The former committee having sat with so great benefit, he did not see how the right hon. gentleman could resist that committee now. He hoped he was fully sensible of the advantages derived by the public. from the bank of England, which he hoped would long subsist: but still it was the duty of the House to take care that the bank were not paid more than was proper for their services. Things could not be allowed to go on much longer, without a full investigation taking place into the circumstances of the transaction; with the bank. Mr. Baring said, he could not give a silent vote on this question; and whatever might be his interests derived from his connexion with the bank, he felt that he had also a duty to perform to the public as a member of that House. On the general subject he thought it unnecessary to go into detail; but he could not help saying, that the whole of his hon. friend's speech, introductory to the motion, was an inflamed representation of one side of the question only, in which he exaggerated the benefits which the bank enjoyed, and left out of view all the advantages which it returned to the public. If, as was the fact, the bank had divided of late only 10 per cent. on their capital without any bonus, making a dividend of 1,100,000/. how was it possible that they could derive, as his hon. friend stated, 1,500,000. annually from the public, exclusive of all the profits arising from their other busi, ness? He would beg leave to call the attention of the House to a few of the profits which the public had derived from the bank. In the first place, on the last renewal of their charter, they advanced to the country three millions, without interest, for five years; next, the whole of their capital of eleven millions was advanced to government at the very moderate interest of three per cent.; next, for several years they had lent the sum of three millions without interest; and, upon the whole, taking other items into account, he thought himself justified in estimating, that a sum of between seven and eight millions had been paid by the bank to the public since the last renewalof the charter. Whether in 1808 it was or was not a proper compensation that was given by the bank for the deposits of public money, he would not now consider; but unquestionably it was a bargain, understood to last during the continuance of the charter. He would not now speak at any length of the general facilities afforded by the bank to government: one of these, however, that it gave a silver currency at present, to the whole country solely at its own expense, and which was likely, when replaced, to be attended with much additional expense. The bank had also, at very critical periods of the Peninsular war, furnished government with considerable sums in guineas, at the rate oftwenty-one shillings each, which, if necessity had compelled their purchase in other quarters, could not have been obtained without a considerable sacrifice. He would add also, that by its charter the bank was entitled to be the depository of the public balances; nor was it then understood, in the ordinary times of peace, to be under any obligation to give a compensation to the public. It was true that government, by its own arrangements, might have greatly reduced these balances, but it would not have obtained equivalent safety and facility. He denied the assertion of his hon. friend, that the balances kept in the bank could produce to it any thing like an interest of 5 per cent. These balances were fluctuating in their nature, and could not, the moment they were deposited, be profitably employed. Speaking as a merchant, he never gave more than four per cent. for any money that might casually be placed in his hands. Whatever might be the case in the country, he knew no banker in London who allowed any interest for the balances in his hands; the bankers who had set out upon another principle had failed, and he should not be fond of depositing his money with any banker who allowed interest. The fair question then was, what was the amount of the extraordinary balances created by the war expenditure? for he conceived that the bank by its charter, was entitled to the advantage of the ordinary balances. He reckoned the extraordinary balances at little more than five millions, and of this sum the bank allowed government three millions (more than the half), in the shape of a loan without interest. Besides this, it had agreed to lend government six millions of exchequer bills at 4 per cent., which was in fact equivalent to a loan of 1,200,0002. without interest; so that out of the five millions of extraordinary balances, the public got 4,200,000l. without interest: and this was the whole amount of that outrageous bargain which the bank had got. His main objection to the motion arose from the exaggeration with which it was prefaced, and the sort of spirit with which it was proposed. Besides, nothing new could be discovered by a committee; the whole could only turn on the amount of the balances, and for these we either had or were about to have, the necessary accounts on the table. In fact, he thought the late bargain one of rather considerable hardship to the bank, as the balances must necessarily decline in peace. Mr. Tierney said, he would trespass but a few moments on the attention of the House. He would not detain them by going into any details, in which he should do more harm than good, for he was quite sure that a more clear statement never had been laid before a British parliament, than that of his hon. friend who made the motion; and therefore if in any degree he should attempt to follow him, he would only be liable to the imputation of weakening what had already been so ably stated. All that had been urged by the chancellor of the exchequer were only so many grounds for going into a committee. Whether the right hon. gentleman or his hon. friend were right or wrong it was not for him to know. A sum was stated which might be saved to the public-this was enough to call for the investigation of a committee; for whatever expense was saved was some thing taken from the amount of our taxation. The question divided itself into two branches; first, The management of the national debt: secondly The balances in the hands of the bank. As to the first, the chancellor of the exchequer had answered, that there was a difficulty arising from the charter. But this again was denied by as good an authority, the chairman of the finance committee (Mr. Bankes). At the recommendation of the committee, the act of 1791 had been altered; and it would be an extraordinary circumstance indeed, if in 1816 they could not exercise the same authority over an act passed only eight years before, as had been done in 1808, over an act passed so long before as 1791. This was a reason for going into a committee; and whether such was or was not the case, the report of the committee would be satisfactory. The chancellor had asserted, that something conclusive had been arranged in 1808; but here again he referred to another authority which he thought rather better than his. The chancellor of the exchequer had a divided duty to perform. On the part of the public he would be naturally desirous of making the best possible bargain; but it was to be recollected, also, that he was a sort of middle man between the public and the bank. He could hardly lose sight of the many advantages he had derived from the bank, or avoid taking into consideration, out of how many difficulties the bank had relieved him. It was for the committee to consider whether the bargain was one which was proper and advantageous for the public. His hon. friend who spoke last had alleged, that the profit in the balances was overstated; for no banker ever made the full amount of interest on the balances in his handsnever more than three-fourths. This might be true with respect to private bankers; but the case was altered, when a body on a million being asked from them, had only to set down a million, and they could make the million. The deposits in the hands of the bank of the public money, whether they were aware of it or not, were an additional source of profit, at the rate of five per cent. The bank were certainly right in trying to make the best bargain they could; but the House on the part of the public, were also entitled to make the best bargain they could. The chancellor of the exchequer had talked of the moderation of their charge for the incredible labour of no less than 110,000 calculations necessary to be made in receiving the property-tax on dividends. Now, he had learned at school that a division by ten was one of the easiest operations. But the right hon. gentleman added, that the same amount of calculations made by the usual collectors of taxes would cost 55,000l. instead of the 3000l. charged by the bank. By-the-bye, if the bank directors were thus collectors of the public money, they had no business in that House: this, however, was a matter in which he would not turn informer against them. But, as has been justly observed in a late able pamphlet on this subject, the bank appeared to consider the rule by which they are to measure the moderation of their charge to be the saving which they effect to their employer, rather than a just compensation for their own trouble. What, added the writer, would they think of an engineer, if, in his charge for the construction of a steam engine, he should be guided by the value of the labour which the engine was calculated to save, and not by the value of the labour and materials necessary to its construction? In his opinion, a stronger case for inquiry before a committee had never been laid; seeing that the former inquiries had only partially investigated and partially remedied. Lord Castlereagh thought it his duty to state the grounds on which he should resist the motion. The question was, whether or not any satisfactory reason had been stated why the House should appoint a committee? He was not satisfied with the grounds on which the hon. gentleman rested his motion. The hon. gentleman had preferred making a motion for a committee, to proposing to the House any specific measure, and had thus got over the difficulty in a very easy way; but the principle of parliament required that in such a case some specific measure should be proposed. For the sake of the public credit, it was necessary that the bank should be kept in a flourishing and independent situation: now, it was plain that any unnecessary inquiry into its affairs would be to its prejudice, and, so far, to the prejudice of the country, by affecting the public credit. One of the great characteristics of the bank of England was, that government did not interfere in the management of its affairs. In 1808 there had been an inquiry into the general state of the country, including the affairs of the public, with which the bank was connected. All the facts of the case, as between the public and the bank, had been as fully laid before the House by the report of the committee then appointed, as they could possibly be by any committee now to be appointed. It only remained for the House to consider whether, at present, the public had a fair participation in the profits of the bank; and he thought that the appointment of a committee was not necessary in order to enable the House to make up its mind on this point. The great feature in the profits of the bank, at which the motion of the hon. gentleman aimed, was that derived from the circulation of their notes. On this subject he most strongly deprecated parliament doing any thing to make a profit of what was to be considered as a public calamity. If such a notion went forth as that parliament intended this, it would produce a most mischievous effect. This was clearly what the hon. gentleman pointed at, although in his explanation he had qualified it by saying, that he only meant the public to participate, in case the bank restriction act was made more permanent. Now, on this subject, he was clearly of opinion, that the only security which the public could have was, that parliament on its behalf and as its representative, should have no interest in the continuance of that act. He was not quite prepared to say that it would be a breach of faith with the bank to alter the regulation of 1808; but that arrangement had been made with so much deliberation and patient investigation of the subject, that unless a very grave case of expediency was made out, it would not become the House to alter it. The noble lord then took a view of the benefits which the public received from the bank. The annual amount of its advances to the public was 443,000. The public received in all more than one half of the total profits of the bank: 280,000l. was all the charge made by the bank for the whole administration of the public funds of the country, and it was to be considered that the bank was the only establishment that could undertake this. Mr. Ponsonby spoke shortly for the motion. The inquiry for which his hon. friend wished was simply, whether in certain dealings between government and the bank of England, the latter gave a proper remuneration for the profits secured to it? How, then, could it be said that the public credit or the credit of the bank was implicated by any such inquiry? In talking of the benefits which the public received from the bank, it was to be considered, that when the bank had originally agreed to lend its capital to the public at 3. per cent. it was abundantly compensated by a provision, restraining any other corporation from rivalling it or entering into any competition. Mr. Marryat adverted to the pledge of economy given from the throne at the opening of the session, and subsequently echoed from every department of the administration. He trusted that it would not prove mere empty sound, and thought that the present was a favourable opportunity for redeeming that pledge, and for showing a disposition to inquire into every possible mode of saving the public money. He said it was singular that the chancellor of the exchequer had so strenuously reprobated all coercion upon this subjeet, when he must be aware that not one step had been gained, since the first agitation of this question, but by compulsion with the bank of England. He contended upon principle, in opposition to the noble lord, that the public ought to participate in the profits arising from the restriction upon cash payments, as the only mode of compelling the bank to resume payments in specie, by lessening the advantages they derived from withholding it. He had apprehended that the directors would have been the first to move for a committee of inquiry, to show that their conduct was unimpeachable; they might then have come out of the investigation like their own gold, more pure from the furnace to which it had been exposed. It was the duty of the House, by adopting the motion, to show that it lost no opportunity of affording relief from the burthens of taxation. Mr. Manning said a few words strongly against the motion. He stated that, including all the responsibility and expenses, the bank only charged the public, for the expense of managing the funds eightpence in the 100%. Mr. Grenfell, in reply, contended that the public balances of late in the hands of the bank, were at least double what they were in the year 1808, or at any former period, thus contradicting the assertion of the noble secretary of state. .......... The House then divided: 44 ..81 -37 When the CALL OF THE HOUSE.] gallery was opened, the House was engaged in a conversation upon the motion of Mr. Brougham, for a call of the House upon this day fortnight. The Chancellor of the Exchequer acquiesced in the proposition for a call of the House, but rather preferred Friday week. Mr. Ponsonby deemed it essentially necessary, upon the present extraordinary state of public affairs, to have a call of the House, especially with a view to the due consideration of the proposed military establishment, and the renewal of the pro |