§ Lord A. Hamilton
rose, to bring forward his promised motion upon the subject of the Bank. At a time when it was evidently intended to continue still farther the restriction of Cash Payments by the Bank, it was, in his opinion, the duty of the House to look to the conduct of that establishment with peculiar care, as well as to the proceedings of the minister, who was so intimately connected with it. With a view to understand the conduct of the Bank, he felt it necessary to move for copies of the notices issued by it for the payment of certain of its notes in cash within the last year. A pretty general impression prevailed, that those notices were issued merely for the purpose of delusion, and to induce a belief that the Bank was in possession of the means, and was in the progress of preparing to resume its payments in cash. It was, therefore, due to the character of the Bank, as well as to the satisfaction of the country, to explain the motive and end of those notices. It was now clear that 779 there was no intention of resuming cash payments. A plea was advanced for postponing that desirable measure, arising out of certain negotiations for foreign loans; but this he believed to be a mere pretence. It was known that there was a great deal of cash afloat in this country about two years ago; but now, comparatively, little was to be found in circulation, notwithstanding the boasted issue of cash from the Bank. This issue was, however, he apprehended, but very trifling; and that the country had not much reason to rely upon the professions or promises of either the directors of the Bank or the chancellor of the exchequer, as to the probability of the removal of the restriction upon cash payments. But it was for the Bank to show whether any, and what beneficial effect had arisen from the steps it was reported to have taken to prepare for the resumption of its payments in cash. This was the object of his motion, and that motion could not be resisted on any such grounds as were advanced by the chancellor of the exchequer towards the close of the last session. At all events, it could not be constantly resisted, unless it were shown that some injury would result to the Bank from its adoption. The noble lord con-eluded with moving, "That there be laid before this House, a Copy of any Notice given by the Directors of the Bank to the Public in the year 1817, respecting any payment of their notes in specie; together with an Account of the Amount of Specie which in consequence of such notice the company of the Bank became liable to pay, and the amount actually paid, to the latest period the same can be made out."
The Chancellor of the Exchequer
said, that the noble lord might anticipate his objections to this motion, if he recollected the grounds upon which he resisted a similar motion last year. These grounds were, that nothing would be so unadvisable on the part of that House, as to interfere with the conduct of the Bank in a case of this nature; that such interference was of all things most likely to derange the proceedings of that body, and to impede those preparations so essentially necessary for that final resumption of cash payments, which it was the wish of that House and of the country to witness. Yet the noble lord would deem it safe and convenient to bring those preparations under the view of that House; and 780 for what purpose he could not divine. The best plan to pursue, was to allow the Bank to proceed silently and cautiously in the progress of its preparations. That it had taken up a vast number of notes and issued cash to a considerable amount in consequence of the notices referred to by the noble lord, was a fact which he presumed no one would venture to deny. It was also indisputable that those notices were issued with a view of paving the way for the complete resumption of cash payments. Into the circumstances which lad since occurred, or which were likely to occur, to postpone that resumption, he was not then disposed to enter; but he would maintain, that the Bank had in the notices alluded to by the noble lord, given a pledge of its sincerity, and preparation to resume cash payments. The Bank, then, was entitled to confidence for the rectitude of its conduct, and its disposition to comply with the wishes of parliament and the public, as soon as it should be deemed advisable to remove the restriction. Therefore he could not sanction any measure which implied doubt as to this institution, and he felt it his duty to oppose the noble lord's motion.
§ Mr. Grenfell
observed, that this motion was more interesting to the cause of the Bank than to that of the public; and therefore he was surprised to find that no director rose to speak upon it, especially as he had lately seen no less than four directors in the House. But he remarked that the chancellor of the exchequer was always ready to step forward as the champion of the Bank, without the aid of a single speech from any of the directors of that institution; of the votes of all of whom, however, he was of course fully assured, especially upon any question connected with their own interest. The right hon. gentleman had indeed those votes whenever he (Mr. G.) brought forward any motion with respect to the Bank. But the right hon. gentleman was not ungrateful, for when he (Mr. G.) objected to the allowance of half a million per annum to the Bank for performing the office of bankers for the public, and also to the grant of 300,000l. for managing the payment of the interest upon our public debt—when he protested against such improvident, such inordinate grants, the chancellor of the exchequer always stood forward as one of the contracting parties, urging that whatever the members of that House, or the people of the 781 country, thought of these grants, the Bank rendered such services to the public as formed an ample compensation; but what these services were was never accurately defined. As to the motion of his noble friend, the chancellor of the exchequer's objections were the same, he perceived, as those which he had advanced to a similar motion in July last. The case of the country, as well as of the Bank, was, however, rather different at the present time. The chancellor of the exchequer observed in July, that to accede to his noble friend's motion would only serve to gratify an idle curiosity, as the Bank had virtually resumed its payments in cash. But this was a statement which the right hon. gentleman would hardly venture to make on the present occasion. The motion of his noble friend, against which the right hon. gentleman had advanced neither fact nor argument, was such, in his opinion, as the House ought to adopt, especially with a view to obtain such information as was peculiarly necessary to guide its judgment upon the discussion of the bill, which was soon to be expected for the farther continuance of the restriction upon the payment of cash by the Bank.
§ The House divided: Ayes, 11; Noes, 34.
§ Mr. Tierney
said, that he rose for the purpose of moving for the production of certain papers connected with the issues of the Bank of England, to which he understood no objection was intended. His motion went to the farther continuation of the weekly accounts of issues of the Bank, from the 3d of February, to the 3d of the present month. It was not his wish to enter into many observations at present, willing rather to take the subject into consideration as a whole question, than in detached parts. It was, however, necessary to advert to some circumstances, in order to put the House in possession of what his object was in moving for the production of the accounts of the weekly issues, and of the course, which, dependent on the information these accounts gave, it might become his duty to take, respecting the engagements of the Bank with the country, as to its resumption of cash payments. And, in the first place, he begged to deny that he had ever expressed any doubt as to the fact of the Bank having accumulated a large amount of specie, greater, he believed, than at any former period in the history of their concerns, in 782 their vaults. But what availed that accumulation with reference to the return of payments in cash, if there was such a progressive increase in the amount of the outstanding notes, as tended to counteract the specie accumulated? He was most anxious in these inquiries to deal very amicably with the bank directors. Many of them he knew were truly solicitous to fulfil their engagements with the public, and amongst those he knew that the very worthy gentleman (Mr. Harman) who filled the chair, stood pre-eminently forward. It was indeed, to be expected of him, who was a thorough bred English merchant, and who therefore knew the value of a wholesome state of the circulation to the commercial world. The papers presented had thrown so much light, or rather he would say darkness, on the subject, that he could not well see his way. At the end of the last session, the chancellor of the exchequer had declared, that there was no doubt of the resumption of cash payments by the Bank, at the expiration of the time specified by law. He had since gone farther by stating that the Bank had virtually commenced such payments. Now all must agree, that whenever that resumption should take place, it must be attended with a considerable diminution of their issues. He was fully aware that such an inconvenience, as inconvenience it must be, was a subject with many of great and natural alarm. And therefore he was anxious on that point not to be misunderstood as at all wishing, in the event of the Bank paying its notes in cash on the 5th July next, that even a measure so desirable on many grounds, should be brought about by any sudden stoppage of its issues. His desire was to see the Bank gradually withdraw its outstanding notes. The House must see that the inconvenience will be felt, more or less, according to the preparation of the Bank to narrow its issues. Now, what inference did the conduct of the Bank, since the last meeting of parliament, afford on this head? The session had scarcely terminated, when the Bank changed its previous course, and issued a very large amount of notes. There were on the table of the House the amounts of issues for the eighteen months, from July 1816, to December 1817; and from these it appeared, that the issues in the first six months of that period amounted to 26,300,000l.; in the second to 27,400,000l.; and in the last, that was 783 to December 1817, to 29,000,256l. Thus it was evident, that if the Bank, in place of preparing for the resumption of their payments in cash, at the time specified by law, had determined to multiply impediments to such a result, they could not have more dexterously managed to effect the latter object than by the conduct they were pursuing. What course, he would ask, was more calculated to augment all the inconveniences which would naturally attend the resumption? Was it meant to create such a state of circumstances by the excess of issues, as would have the effect of frightening the country from the return to cash payments, by the apprehension of the convulsion which such an amount of circulation would produce? It was unintelligible to him how these large issues arose; for the House must recollect, that the accommodation to the government formed no part of it. Would the chancellor of the exchequer say, that if the Bank had abstained from these issues, he would have been enabled to make those flattering statements of our financial interests in which he sometimes indulged? Could he have disposed of his exchequer bills? The advances of the Bank to the government, he took at 10,000,000l., that left 19,000,000l. unaccounted for. The average of the discounts he calculated at 2,000,000l. at the most. Under these circumstances, without acting hostilely to the Bank, did it not become every man who looked to a wholesome state of the circulation, to watch its proceedings narrowly, in order to ascertain what were the preparations making to enable it to fulfil its engagements with the public? If these preparations tended to multiply difficulties rather than to facilitate the return to payments in cash, then he must say, there was a juggle going on, disgraceful to the Bank, and discreditable to the government. In that case the Bank had turned its back upon its duty, either to amass property for itself, or to show its subserviency to the treasury. He would give them a month longer. If in the accounts he now moved for, and in those for which in April he intended to move, he should sec progressive reduction, then he would feel that the Bank were in earnest in their preparations. Should a contrary appearance present itself, it would become his duty to take the consideration of the House on resolutions which he should submit for that purpose. His sole object was, to restore the circulation 784 to a healthy state. That was also the bounden duty of the Bank towards the public; and it was of importance that they should conduct their concerns to that end. He could not see, now that we were at peace, and no panic whatsoever existing, what, in the event of the restriction being taken off, should induce men to exchange their Bank paper for gold. But at all events no one could deny, that whilst the present fluctuating state of circulation continued, the private property of every man in the kingdom was placed in jeopardy, and that some great calamity must, sooner or later, be the inevitable result. It was impossible but that an inconvertible paper currency without limit, must end in ruin. It might be the case that some of the directors of the Bank would explain the motives for these increased issues of their paper. Should they afford no such explanation, but shelter themselves under the majorities of the chancellor of the exchequer, he, for one, and he believed the whole kingdom, would entertain suspicions of such conduct. The right hon. gentleman concluded with moving for "The total weekly amount of Bank Notes and Bank Post Bills in circulation from the 3d of February to the 3d of March 1818; distinguishing the Bank post bills, the amount of notes under the value of 5l., and stating the aggregate amount of the whole."
The Chancellor of the Exchequer
did not intend to oppose the production of this account, nor did he think the present a fit period for entering into a consideration of the general question. He should only say, therefore, that he agreed for the most part with the principle maintained by the right hon. gentleman, that the reduction of the issues of the Bank was a necessary means and preparation for enabling them to resume their cash payments. He had some limitations, however, to suggest to the broad proposition that it was the only means, which limitations had been very clearly explained in the work of a deceased friend both of his and of the right hon. gentleman; he meant the late Mr. Henry Thornton.
§ Mr. Manning
was surprised, after the right hon. gentleman's profession of a friendly disposition to the Bank, that he should act with such hostility as to summon it to an unconditional surrender at the expiration of a month. He must say, that he could not accept his friendship on such terms, nor could he be induced by 785 any menace to sacrifice the interests of the Bank, and, as he believed, the interests of the country. He denied that the Bank had ever sought to shelter itself behind the majorities of the chancellor of the exchequer. The directors were prepared to justify every part of their proceedings. The right hon. gentleman had accused the Bank of enlarging their issues immediately after the last session of parliament, as if the operation of the funds, and the payment of the public dividends in July last, did not sufficiently account for the increased quantity of paper in circulation at that period. He could not at that moment, not having expected to hear the right hon. gentleman's statement, mention the other circumstances which might have contributed to an extension of their issues; but he disclaimed on the part of the Bank, any wish to extend them at that particular time. He had no intention to oppose the motion, and had never, when filling the chair of the Direction, been averse to afford the House all the information which, in its vigilance or jealousy, it might require.
§ Mr. Grenfell
remarked, that the increased issues alluded to by his right hon. friend had taken place, not at one period, but had continued during the whole half-year ending in December of last year. The average circulation for that period exceeded, by a sum of between two and three millions, the average circulation of the corresponding six months of the year preceding. He would go farther, and assert, that the amount of circulating paper issued by the Bank of' England for the last six months, was greater than at any former period of equal duration since the year 1797. He wished the House to understand that the extent to which gambling in the funds was carried on at the present moment was without precedent. He did not say, that the right hon. gentleman was desirous of producing such an effect: but the system on which he acted had an inevitable tendency to create and encourage the evil. It had, in fact, caused a greater degree of fluctuation in the value of the funds than had ever before been known; and it might be traced in some measure to the uncertainty that existed on the subject of renewing the restriction act. He entreated the right hon. gentleman to put an end to this uncertainty by openly declaring his intentions, or if the event depended on a contingency, to state what that contin- 786 gency was. It was due in justice to the public, that those who stood nearest to the right hon. gentleman should not, by becoming first acquainted with the secret, possess themselves of very considerable advantages. The right hon. gentleman was a moral man, and he was sure was not aware of the effects of the present vacillation of the funds, or of the number of those who daily became its victims. The same uncertainty prevailed with respect to the right hon. gentleman's plan of finance for the year, and whether it was in his contemplation to fund exchequer-bills. He could not conceive any adequate reasons for all this concealment; and he again entreated the right hon. gentleman to give the public some information on the subject.
The Chancellor of the Exchequer
felt himself called upon to say a very few words, after what had fallen from the hon. gentleman. He challenged the hon. gentleman to show, that any thing he had ever uttered with relation to the finances of the country, had led to the encouragement of gambling in the funds. He likewise denied that any persons had received or would receive private information from him of what financial arrangements he proposed to submit to parliament for the service of the year; and he treated the insinuation, therefore, with the contempt which it deserved. He did not think it consistent with his public duty to make the disclosures suggested by the hon. gentleman, and he should leave it to the House to judge, whether he was not more likely to promote gambling by any premature or partial declarations than by preserving a perfect silence on the subject.
§ Mr. Tierney
observed, that as to the charge brought against him by an hon. director, of hostility to the Bank, it was not only himself, but every man in the country, who would be convinced, if no preparation, by withdrawing and reducing its, issues, should be made in April next for resuming its cash payments, that the blame lay with the Bank, and not with the chancellor of the exchequer. The persuasion of the public, he was sure, would then be that the Bank, notwithstanding all its professions, was taking pains to prevent the performance of their engagements at the time limited by law. The country was entitled to look to the Bank for the protection of its currency: it was the condition of their charter, and the 787 tenure by which they enjoyed all their advantages. If he should, therefore, observe, that they failed in making those timely and gradual preparations which alone could enable them to restore the circulation to a sound state, his only course would be to draw the attention of the House and the public to their conduct. He should then contend that the Bank had forfeited their claim to any further confidence. The hon. director smiled, and he was glad to see him restored to his good humour; but he must repeat, that the Bank were, on this question bound to act separately and independently of the chancellor of the exchequer. If the Bank neglected to take those precautionary measures which must precede their return to cash-payments, happen when it might, the responsibility would belong to them, and not to the government. With regard to foreign loans negotiated in this country, it could not be pretended that they would be facilitated by the resumption of cash-payments. The House certainly did not know how far the right hon. gentleman might wish to see our allies accommodated; but however that might be, -with this the Bank had nothing to do. They had a plain, simple course to pursue. He could not help thinking that the hon. director, who had twice passed the chair, must, with his experience, be able to state the cause of the increased issues subsequent to the last session of parliament. As he would not, however, give any reason, he (Mr. Tierney) must find one for himself. He entertained much private friendship for the hon. director, but he could not forego his public duty; and if he should find in April next that the Bank were still proceeding in their present career, he should move certain resolutions declaratory of the opinion of parliament, for the purpose of giving that security to the property of the country which he conceived it would, under such circumstances, require.
§ Mr. Grenfell
complained of the warm manner in which the right hon. the chancellor of the exchequer had expressed himself. Nothing was farther from his intention than to impute to that right hon. gentleman any improper or corrupt motive in his financial views. He believed him to be the last man capable of so acting; and nothing that ever fell from him should have been received as casting any thing like this imputation. He merely deprecated silence on a subject like the 788 present, where the arrangements must be formed, and perhaps ready to be acted upon,
hoped the Bank would take proper means to make their notes so as to render forgeries of greater difficulty than they now were.
§ The motion was then agreed to.