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CHAPTER III.

Bank Loan bill.-Bill for renewing the Bank Restrictions of Payment.— Complaint on employing the Military on Court Days.

T has been mentioned that Mr. brought under the consideration

I to

of Commons a motion for the appointment of a select committee for inquiring into the engagements subsisting between the public and the Bank of England for the purpose of adopting a new arrangement, which was rejected. The hon. gentleman, on March 14th, after a preliminary address to the House, in which he declared himself satisfied that without any thing like an infraction of the public faith towards the Bank, they ought, particularly at this time of distress, to look to it as a resource for many millions which were now productive to them, not by way of loan, but as a matter of right; and being also convinced that the public ought to demand a considerable reduction of the sum charged for the management of the national debt; moved eight several resolutions. Of these, the seven first were merely affirmation of certain accounts relative to the Bank the eighth bound the House forthwith to take into considération the advantages derived by the Bank from the management of the national debt, and from the balances remaining in their hands, with a view to a new arrangement.

The first resolution being put, the Chancellor of the Exchequer observed that these points might be

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After some debate, this motion was agreed to; when the House having resolved itself into a committee on the Bank Loan bill, the Chancellor of the Exchequer proposed to fill up the blank in the second clause, relative to the interest on the loan, by the words "four per cent." Mr. Grenfell then moved, as an amendment, the substitution of “free of all interest." This motion being given up, Mr. Bankes proposed filling up the blank with three per cent. which was negatived without a division. Mr. Grenfell then proposed his resolutions, for the purpose of putting them upon the Journals of the House, upon each of which, excepting the last, which was withdrawn, the previous question was carried.

Mr. Mellish then moved a number of resolutions, consisting of statements of accounts relative to the concerns between the Bank and the public, on which the previous question was put and carried.

On March 29th, the order of the day being for the third reading of the bill, empowering the

Bank

Bank of England to advance the sum of six millions towards the supply of the year 1816, Mr. Grenfell rose to declare his permanent opinion on the subject. The Chancellor of the Exchequer (he said) bad culpably acquiesced in the extravagant demands of the Bank, and had sacrificed from 2 to 300,000l. a year for no other purpose than to swell the enormous treasures of this opulent eorporation. The ingenuity of the defenders of this measure could not controvert the position that the state of the question was this"You, the public, have for the last eight years, and now have, deposited in the Bank a stationary and permanent sum of eight millions and a half, out of which you have received, free of interest, an advance of three millions and a half." Was it not absurd to talk of an advance under such a state of account between the Bank and the public? And now, when six millions were wanted, an interest of 240,000l. was required for the advance; and this was, by a misapplication of terms, called a loan! Parliamentary interference had already done much, and would do more on similar occasions. In the present bill a saving of 60,000l. a year had been effected, by borrowing at 4 instead of 5 per cent.; but why had not the public the benefit of this regulation in 1806, 1813, and 1814, when the Bank held the same public funds as now? At some future period the country might derive considerable advantage from the unclaimed dividends, to which the attention of parliament had been directed by an hon. friend of his (Mr. Bankes). Notwithstanding

the way in which the proposition had been received by the Chancellor of the Exchequer, he should again press on that right hon. gentleman, should he extend to the Bank the term of restriction on their cash payments, the expediency of stipulating, on the part of the public; for a participation in the enormous profits arising to the Bank from the exclusive circulation of their paper as the currency of the country.

In the debate which followed the former, differences of opinion between the favourers and the opponents of the interests of the Bank were displayed. At length, the bill having been read a third time, the Chancellor of the Exchequer rose to move an amendment to the preamble of the bill, which preamble ran thus: "Whereas the Bank of England are possessed of divers sums of the public money, arising from balances of several public accounts, and are willing to advance," &c. The proposed amendment was to leave out all the words from "Bank of England," to "are willing" In the discussion of this matter it appeared that the clause in question had been proposed by Mr. Grenfell, and at his suggestion had been incorporated in the preamble: that Mr. G. had been desired by the Chancellor of the Exchequer to consult the governor of the Bank on the subject, from whom he received an equivocal answer, and that this being regarded as an acquiescence, the clause was inserted.

Mr. Mellish (the governor of the Bank,) stated that when the hon. gentleman had given him a copy of the clause, he had ex

pressed

pressed a strong objection to it, but he had taken it home, not thinking that the bill would come on that night; and that he was afterwards surprised at its introduction in the preamble. He said, he complained of the words because they gave an ex parte view of the question. If the advantage which the Bank derived from the public were to be inserted in the preamble of the bill, it was but fair also to insert the advantages which the public derived from the Bank.

Mr. Ponsonby called upon every member in the House who was of no party, to observe whether he was not right in his assertion, that the Chancellor of the Exchequer was not a match for the Bank of England? When, after having agreed to a preamble of his own bill, he consulted with the governor and directors, and proposed to expunge a part of it at their pleasure, must it not be admitted that they governed and directed the Chancellor, and endeavoured to extend their authority to parliament itself? He hoped the House of Commons would not degrade itself by agreeing to an amendment under such dictation.

Mr. Baring, in defence of the amendment, said that the intention of the words proposed by the hon. gentleman, (Mr. Grenfell) was to insert in the bill the substance of the opinions entertained by him, who, in his extreme zeal on the subject, had made so exaggerated a statement of the accounts between the public and the

Bank.

After other members had argued for and against the insertion of the clause, and the Chancellor

had acknowledged that he had agreed to it only on the understanding that it was not disagreeable to the governor of the Bank of England, the House divided, when the numbers were, For the amendment 116, Against it 56: Majority 60.

The words were then erased, and the bill passed.

On April 5th, the motion for the second reading of the Bank Loan bill being made in the House of Lords, Lord Grenville rose, and in an eloquent speech expressed his entire dissatisfaction with the bargain which the ministers had concluded with the Bank. He referred with high encomium to Mr. Grenfell's speech lately published on the subject, and entered into a detail of circumstances connected with his own negociation with the Bank.

His lordship was replied to by the Earl of Liverpool, who was followed on the other side by the Marquis of Lansdown and the Earl of Lauderdale.

The bill was then read a second time. It appears to have passed the House without further discussion.

The subject of the restriction of the Bank from making payments in money, had been brought before parliament almost yearly since the act had passed for that purpose; and the public expectation of a return to the former system had been disappointed as often as circumstances had excited it. The general peace had rendered this hope more sanguine; and it could not but occasion surprize as well as disappointment, to learn that the ministers had determined upon a new and considerable pro

traction

traction of a measure, during the continuance of which the financial state of the country could not be said to have recovered a sound and healthful condition.

This avowed intention induced Mr. Horner, on May 1st, to rise in order to make a motion for the appointinent of a select committee to inquire into the expediency of restoring the cash payments of the Bank of England, and the safest and most advantageous means of effecting it. In a preliminary speech, displaying a very exact and comprehensive knowledge of the subject, the hon. member took a view of the reasons which had been adduced for the renewals of the Bank restriction, and the evils which they had occasion ed; and expressed his conviction that neither the directors nor the ministers could be trusted as sincere in their professions of desiring that cash payments should be resumed at any period, till measures had been prepared for effecting the resumption. He suggested some arrangements for entering upon a gradual payment which would guard the Bank from the danger of a sudden change, and concluded with the motion above-mentioned.

The Chancellor of the Exchequer positively denied that, by prolonging the restriction for two years, there was any intention of rendering it perpetual. He said that an act passed long ago had empowered the Bank to prepare the way for a general payment, by enabling it to issue cash for notes under the value of 51. giving notice thereof to the Speaker, on which it had acted to a great extent; and he concluded his argu

ments in favour of a further delay of two years, by declaring that he had no doubt whatever of an absolute resumption of payment at the end of that period.

After several speakers on both sides had delivered their opinions on the subject, and the mover had concluded with a general reply to the arguments of the opposers of his motion, the House divided, when there appeared, For it, 73; Against it, 146: negative majority 73.

On May 3d the House resolved itself into a committee on a bill, for further continuing an act of the 44th year of his Majesty, to continue the restrictions on payments of cash by the Bank of England; when the first clause having been read, for continuing the restriction till the 5th of July, 1818,

Mr. Horner declared himself unwilling to oppose the measure of allowing two years for the Bank to return to cash payments, because it appeared to concur with the general sense of the House; but it seemed to be as generally the sense of the House that such protection to the Bank ought not to be extended beyond that period; and as there was no clause expressive of this expectation, he hoped the bill would not pass the committee without receiving such an amendment. He then put the question to the Chancellor of the Exchequer, whether he would agree to the introduction of such clause; and expressed his resolution of opposing the bill in every stage in case of non-compliance.

The Chancellor of the Exchequer said, that it being in the preamble expressed

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Mr. Horner argued on the difference between such security, and a parliamentary assurance that no farther renewal of the restriction could be hoped for; and he said he would move a clause, that after July 5th, 1818, the Bank should be able to pay in specie, and that no renewal of the restriction could be expected.

The Chancellor of the Exchequer then proposed adding a clause to the preamble, which, however, avoided any positive declaration on the subject.

Other members expressed their dissatisfaction at leaving the matter in this ambiguous state, and some proposed the insertion of the words and no longer," At length the committee divided on Mr. Horner's proposed amendment, which was negatived by 133 votes against 57.

The further consideration of the report of the committee on the Bank Restriction Bill being the order of the day on May Sth, Lord Folkstone, in consequence of the want of a clause to compel the directors to resume cash payments at the end of two years, moved that the report be taken into consideration on that day six months.

The question upon this motion being put, it was negatived without a division.

Mr. Horner then proposed a

clause to provide that the Dire >tors of the Bank should take measures immediately in order that cash payments might be resumed at as early a period after the passing of that act, as appeared to them to be expedient.

On a division the clause was rejected by 135 to 32.

The bill being introduced into the House of Lords on May 17th, the Earl of Liverpool moved the order of the day for going into a committee upon it. After observing, that no difference of opinion could exist as to the impolicy of removing the restriction on the Bank without the intervention of some further time for preparation, and stating that he proposed to keep in view that the Bank should resume its payments at the earliest period consistent with the public interest, he gave an account of the object and purpose of the bill, to the same effect as had been done in the other House. In fine, he said, the security was in the parliament's own hands: if it did not think fit to continue the restrictions, the Bank was bound to resume its payments as a matter of course.

The Earl of Lauderdale entered into a train of argument to prove that the time was unnecessarily and hurtfully prolonged; and he moved as an amendment that July 5th, 1817, should be inserted instead of July 5th, 1818.

The amendment being put, and negatived without a division, the earl next moved the insertion, after the time, the words "and no longer." This was also negatived, and the bill having gone through the committee, was reported without any amendment.

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