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Scott, Sir William, 304, 316, S59, 1395, 1414,
Secretary at War, see Windham; see also
Sheffield, Lord, 200.
Sheridan, Richard Brinsley, 81, 212, 325,
Tooke, John Horne, 956, 998, 1005, 1035,
1290, 1326, 1380, 1399, 1405, 1407, 1413,
Townshend, Marquis, 181, 1241.
Wallace, Thomas, 597.
Simeon, John, 11, 199, 200, 744, 1332, 1390, Walpole, General, 122, 1454.
Sligo, Marquis of, 1260.
Smith, John, 224.
Smith, William, 339, 411, 647, 1526.
Solicitor General, see Grant; see also Per-
Somerset, [Edward Adolphus Seymour], Duke
Speaker, The, see Right Hon. Henry Adding-
Sturt, Charles, 978.
Warwick, Earl of, 833, 834, 837, 1268.
Westmorland, [John Fane], Earl of, 181, 192,
Wilberforce, William, 116, 125, 320, 410,
Williams, Sir Robert, 339.
Winchester, Bishop of, [Dr. Brownlow North],
Suffolk, [John Howard], Earl of, 508, 874, Windham, Right IIon. William, 120, 203,
1188, 1259, 1264, 1535.
Taylor, Michael Angelo, 313, 957, 1035, 1036,
Temple, Earl, [afterwards Marquis of Buck-
Thornton, Henry, 719.
Thurlow, Lord, 1429, 1539, 1541.
Tierney, George, 1, 82, 151, 222, 329, 427,
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223, 302, 315, 345, 346, 392, 413, 593, 668,
Wynn, Charles Williams, 1400.
Yorke, Charles, 595, 768, 860, [Secretary at
Young, Sir William, 114, 596, 1107.
40 GEORGE THE THIRD, A. D. 1800.
DEBATE in the Commons on the Bank Charter Renewal Bill.] March 21, 1800. The order of the day being read, for the third reading of the bill" for establishing an Agreement with the Governor and Company of the Bank of England, for advancing the sum of Three Millions, towards the Supply for the service of the year 1800,"
Mr. Tierney said, that this was a question which involved the dearest interests of the country. He was anxious to know with whom the desire for the renewal of the charter had originated. He would put it to the House, if it would not have appeared strange, that any bank director, before half the time for which the present charter was granted had expired, should propose a renewal of this charter, more especially when it was remembered, that through the gross mismanagement of these very directors, the affairs of the Bank had been thrown into such disorder, that it was indebted for its existence, at this moment, solely to the forbearance of the public. On the other hand, would it not appear equally surprising, that ministers should propose the renewal of a charter to a set of men whom they had found it necessary, in consequence of their mismanagement, to subject to restraint, and whom they had only preserved from bankruptcy by parliamentary assistance? Would it not appear surprising, that mi[VOL. XXXV.]
nisters should apply for money to these men, and that body, whom only their own fostering care had, three years ago, saved from ruin? There were yet twelve years of the present charter to run, and at this distance, it was proposed to renew this charter for twenty-one years more, and thus to invest the very men, who had already so grossly mismanaged it, with the control and superintendance of the whole money concerns of the country for no less a period than 33 years. In this point of view, the measure appeared to him dangerous and unwise. But the bargain was to be considered in itself, as it regarded the Bank, and as it regarded the country. The terms proposed were, that the Bank should lend to government three millions for six years. The value of this loan was easily computed. Any person could tell what the value was of an annuity of 150,000l. for six years; but this bargain was not like the usual ones formed by government: it was connected with some refined speculations upon the value and the rise of stocks. These three millions, by the terms of the agreement, could be claimed by the Bank whenever the price of the 3 per cents was above 80, and the country were to lose the annuity of 150,000l. as soon as this claim was made, which might be expected very soon: for in case of a peace, there could be no doubt that stocks would almost immediately rise to 80, and then the only advantage that would remain to the country would be that of buying three millions of stock at par, that was to say, at 60, and selling it at 80. [Mr. Pitt here said, that the Bank, indeed, could claim the three millions which they advanced to government when the 3 per cents rose above 80; but they continued to pay interest at 5 per cent on the said three millions during
desirable, when the most busily employed mercantile men in the city were so eager to attain it. There was no office under government, no honour, more anxiously desired, or more keenly canvassed for. The salary was 150l. per annum. could not be supposed that men, who were accustomed to deal in millions, could be tempted by the paltry sum of 150l. But there must be some ground to account for the circumstances just mentioned. What these were could only be guessed at. This, however, was clear, that they had the power of controlling the whole city of London in money concerns; for if they refused to discount for one merchant, and discounted for another, who would say that these men stood on an equal footing, and that he against whom they were prejudiced would not fall under the effects of their declining to negociate with him? If these things were taken into consideration, the inference must be drawn, that there was something in the Bank which would not bear a name, but which yet required to be attended to by this House, when any proposal was made relative to the renewal of the Bank charter on its present footing. So long as the country owed the Bank eleven millions, it had been said that the Bank had a security from the country for its continuance as an exclusive corporation. At one time, indeed, it would have been a great burthen on the country to have redeemed this debt; but at present it could be no argument for granting the Bank a renewal of its charter. We must have peace long before its present charter was expired; and in the case of peace, from the effects of the sinking fund, and of the union with it of the tax upon income, there could be no doubt that this debt might be paid off with the greatest facility before the expiration of the present charter. After this debt had been redeemed, when an annuity of 671,000l. was to be disposed of, as might be the case were the charter not to be renewed till near the expiration of the present term, much more advantageous terms for the country might be procured than those now proposed. effects of competition might be tried; or if it was said, what! would you establish two banks? at least other directors might be employed: for surely the Bank could not possibly be under worse direction than that which had almost reduced it to bankruptcy.-From these statements it would appear clear, that 750,000l. was by
the whole of the six years; and, in this case, he would leave any gentleman to judge how far it was probable that they would claim this money till the expiration of six years.] Mr. Tierney said, that allowing this circumstance its full weight, the real value of the loan granted to government could not be estimated at more than 750,000l. He had no means of ascertaining what was the ability of the Bank to pay this sum; but, if all circumstances were taken into account, he did not think it would be found that, in point of fact, they paid any thing. Allowing, however, that they paid 750,000l. it remained to be inquired, whether this was an adequate value for what was granted to them? In the first place, there was a dividend of 3 per cent on the eleven millions which they were in advance to government; but from the exclusive privilege which the Bank enjoyed on the whole of these eleven millions, which might be considered as a capital, the directors divided at least 7 per cent. This 4 per cent, which made the difference between the 3 and the 7, was what the country had to sell, and it amounted in value to 461,000l. Lord North, during his administration, estimated the advantage which the Bank drew from this source at 350,000l. and it was easy, from various circumstances, to account for the rise to 464,000l. But let the Bank profits be fairly estimated. The charges of management of the public debt, estimated at 4. 10s. per million, will amount to 212,000l. per annum. Assuming the annual advances to government to be ten millions, the profit arising from this source would amount to 500,000l. the profits on discount to 250,000l., making a total of 962,000l. From this must be deducted the expenses of the management of the Bank; for which he thought 100,000l. was an ample allowance. This, however, was an estimate founded upon calculations in time of war; in time of peace, there would be some deductions; but the profits upon a fair average, allowing six years of war in the 21 years for which the charter was proposed to be renewed, might be justly estimated, deducting the 100,000l. for expenses of management, at 671,0007. Was, then, the 750,000l., which was the value of the loan granted by the Bank, an adequate compensation for the profits which the Bank would derive? Certainly not. There surely must be something in the character of a bank director highly
no means an adequate compensation for the advantages conferred. It might be said, that the time at which this money was given increased its value; and that it was more now than double the sum would be at another period: and it would no doubt be stated, that government, by borrowing three millions at 60, and selling at 80, would be a gainer of 900,000l. which, added to the 750,000l. made a gross sum of 1,650,000l. Allowing the truth of all this, still the compensation was not adequate to the sacrifice which the country made, nor even to the profits which it gave. But, laying aside the pecuniary bargain altogether, the renewal of the charter should not at present take place. It was conferring, for a great length of time, immense privileges and powers on a corporate body; and it had been proved, that the granting of great privileges to one body was often attended with much inconvenience to the country. The evidence delivered before the Committee of Secrecy of the House of Commons, proved this point incontestibly. From that evidence it appeared, that at that time the Bank, in consequence of making too great advances to government had become bankrupt. The examination of Mr. Herry Thornton proved, that, in consequence of this, there had been an association of bankers to establish a new circulating medium, and that in the use of this, they were to become responsible for each other. This plan, wise and beneficial as it might have proved, could not be carried into effect, because it interfered with the privileges of the Bank, At the same period the establishment of another bank was proposed by an hon. baronet; and he supported his proposition by the argument that the Bank had forfeited its charter. The proposition, it was argued, could not then be discussed, because the exclusive charter of the Bank was still in force, and had not been forfeited: but it was allowed, that the proposition deserved mature deliberation, and that it would come under review with greater propriety when the renewal of the Bank charter came to be discussed. Why, then, by such a precipitate measure as the present were we to be precluded from considering whether the establishment of another bank would be expedient, or whether, though this might not be thought proper, it might not be expedient to abridge in some mca. sure the privileges which the Bank en joyed. Such a proposal as that mentioned
in the evidence of Mr. H. Thornton, though it could not be carried into effect in London, might be adopted with advantage in the country. In Yorkshire, Lancashire, and other places, a new world of commerce had arisen, where such a plan might be attended with immense advan tages. The wish which was strongest in my mind, was, that government and the Bank might be less connected, that they might be more independent of each other, and that they should act with that independence. The independence of the Bank on government, would be one of the best checks upon its power; and were government independent of the Bank, it would not be, as it was now, the slave of the monicd interests of this kingdom. It might be recollected, at the end of lord North's administration, when lord John Cavendish became chancellor of the exchequer, what difficulty he felt in negociating a loan, in consequence of the opposition of the Bank direction to government. This opposition had such an effect, that the subscribers to the loan were losers to the amount of between 10 and 12 per cent. This was, surely, too much power to be vested in any corporate body, when it could thus frustrate the plans of government. The answer to all his arguments and statements would be, that the right hon. gentleman was in want of three millions, and was afraid of coming on the country, at this moment, for such a sum, and of adding it to the funded debt. As to the ability of the Bank to advance this money, some reflcctions would naturally arise. From the beginning of the war, the Bank had been making growing advances to government; at last, in July 1796, they found it necessary to complain seriously that they could not carry on business with safety to themselves, except there was prompt payment made of some of these sums. At that time, they had advanced 9,829,000l. On the 21st of January last, the advances of the Bank to government amounted to eight millions and now they had advanced other three millions for six years, which made the total of their present advances eleven millions; a sum much exceeding that of which they had complained as disabling them from carrying on business with safety. It was impossible that the Bank could make such a proposal as the present, unless they knew that they were deriving a profit from their scheme, and that they would never be called on to pay their notes in cash. Nor could it he §
all the privileges now given to the Bank. We Could do no such thing; for the Bank was a chartered body corporate, actually empowered to take the care of the funds which arose to individuals out of the national debt, and should subsist until that debt was paid. Now, upon the amount of the national debt, the hon. gentleman had made many observations; but he really believed he had stated that part of the
said that other circumstances were now more favourable than they were in 1796. Subsidies were still draining the country of its cash, and expeditions, more extensive than any projected at that period, were now carrying on, which threatened the same effect. He had heard much talk of French finance; but he now saw no difference between the French system and that adopted in this country. The right hon. gentleman was, in fact, dealing in assig-subject differently from the fact. The nats. He might smile at the expression; real question was, what the public ought but he had never used the expression to have for the renewal of the charter of "flimsy paper" at any period, nor de- the Bank? And, in considering this, we claimed against the use of paper currency. ought to consider also, if the Bank really Yet now, when such measures of finance offered too little, what would be the were adopted, he really thought that the hazards of any new plan upon a subject country was dealing in assignats, in flimsy of such national importance, especially paper, and that a mean plan of state jug-with the experience we had of its effects gling was carried on between government and the Bank; ministers courting the Bank, and the Bank courting ministers. He called on the House to pause before they agreed to a measure which was such an infringement on the dearest rights of the country.
in other quarters; this should make us cautious, at least, how we entered upon any new plan upon the subject of a national bank. He maintained, that it was adviseable to enter into this agreement with the Bank, rather than divide it with others. He maintained also, that it was adviseable Mr. Pitt said, that the hon. gentleman to do it at a period of war, rather than bad concluded his speech with the sin- to wait for a time of peace: and he would gular request, that a measure, confessedly assign his reasons for thinking so. He of great importance, and now in its last had stated, when he opened this subject stage, should now be stopped on the to the House, that from certain circumsudden, although there was no circumstances the Bank had been under the nestance of surprise to be stated. The true way of considering the present measure was this: to consider the value of what we, that was, the public, were to give, and that which we were to receive? Nothing could be more fallacious than the mode taken by the hon. gentleman, to consider the profits of the Bank; for he included, in his estimate of such profits, all that they made by discounts, which they made, not as a chartered body, but merely as a mercantile company by the operation of their capital, and which they would possess whether they had a charter or not. To charge the Bank, therefore, any thing for the renewal of its charter, on account of the profits made by discount, was the same thing as going into the banking house of any individual banker, and to say, "You have been allowed to discount; you have profited by that practice to a given sum; and if you choose to continue that profitable practice, you must give us a sum of money, or else your right to do so shall not be renewed." But the hon. gentleman said, we might offer a charter to any other body of men, and give to that body
cessity, in the course of the present war, of stopping payment in cash; but such an event was so far from affording any argument against the present measure, that it furnished a very strong one in its favour. When that measure took place, almost every man dreaded it, and it was a subject which distressed speculative politicians to look at. We had, however, seen the effect, and we had seen that it had only proclaimed to the world the confidence of the public, and the solid foundation of the Bank. Nothing was to be inferred from it, but that the credit of the Bank was increasing, as well as the credit of the nation; and it appeared, that the prosperity of the country had advanced in a period of war more rapidly than at any former period of the same length of peace; that in this new world of commerce, in this war, four millions more of exports had taken place in one year than in any former year of peace. This was the result of that which no man hardly could look upon without fear and trembling, but which, he could now say, had proved to the world at large the solidity of the Bank, and had removed all