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striction was originally imposed by may appear most expedient for ena. order in Council in the year 1797, as bling them to resume payments in they became the subject of Parlia- cash without public inconvenience, mentary inquiry previously to the and at the earliest period, and that passing of the act by which the re- a time should be fixed at which the striction was confirmed and con. said restriction should cease.” tinued. Its duration was limited by The act which passed in the last the first act, which received the royal session, after reciting that it is bighassent on the 3d May 1797, to the ly desirable that the Bank of Eng. 24th June following. From that pe- land should as soon as possible reriod it was continued until one month turn to the payment of its notes in after the commencement of the suc. cash, and that “ unforeseen circum. ceeding session ; and again, by the stances, which have occurred since first act of that session, until one the passing of the last act continu. month after the conclusion of the ing the restriction, have rendered it war, by a definitive treaty of peace. expedient that the restriction should

In 1802, the provisions of the acts be further continued, and that anabove referred to were continued in other period should be fixed for the operation until the 1st March of the termination thereof," directed that following year; they were further the suspension should remain in continued until six weeks after the force another year. commencement of the then next ses. The restriction therefore at presion of Parliament, before which pe. sent stands limited to the 5th July riod war having again broken out, next; and, in fulfilment of the duty they were continued until six months imposed upon them by the House, after the ratification of a definitive your Committee will proceed, in the treaty of peace.

first instance, to report the result of An act which passed in the year their inquiries into the state of the 1814 continued the restriction until Bank of England, and their opinion the 25th March of the following with respect to the expediency of year, when, by an act which recited the resumption of payments in spein the preamble, “ that it was highly cie, at the period at which by law desirable that the Bank of England they are to be resumed. should as soon as possible return to

1. Your Committee called for an the payment of its notes in cash,” account of the total amount of outthe further suspension of cash pay- standing demands on the Bank of ments was directed until the 5th of England, and of the funds in the July 1816.

possession of the bank for the disIn 1816 it was again continued till charge of those demands; and have the 5th July 1818, the preamble of ascertained that the sum which the the act reciting, “ that it is highly Bank were liable to be called on to desirable that the Bank of England pay in fulfilment of their engageshould as soon as possible return to ments, amounted on the 30th Januthe payment of its notes in cash, but ary last to L. 33,894,580, and that it is expedient that the provisions of the Bank were then in possession of the acts imposing the restriction Government securities and other creshall be further continued, in order dits to the amount of L.39,096,900, to afford time to the Directors of leaving a surplus in favour of the the Bank to make such preparations Bank of England of L. 5,202,320 ; as to their discretion and experience exclusive of the permanent debt due



from Government to the Bank of the price of gold would have fallen L.14,686,808, repayable on the ex- to the Mint price, he answers, I piration of ihe charter.

think it might after some time ; but This document furnishes a clear that is matter of opinion only." and decisive proof of the flourishing In the year 1817, the Bank had a condition of the affairs of the Bank much larger amount of cash and of England, and justifies that ample bullion in their coffers, than they confidence which the public have had been in possession of at any reposed in the stability of their re- former period since their establish

From the commencement of The next point upon which the the year 1818 the stock has been Committee required information re- progressively diminished. This dispects the amount of cash and bul. minution has taken place in conselion in the coffers of the Bank, at the quence of engagements into which present and at various other periods the Bank entered (in conformity since the year 1797.

with the power reserved to them by After several Auctuations in the the original restriction act) in the amount of their treasure, which was months of November 1816, and April very much reduced at the close of and September of the following the war, there appears to have been year, to pay in the first and second a gradual increase from the month instance cash for all notes issued of July 1815, to the month of Octo- prior to the 1st of January 1812 and ber in the year 1817. During the 1st of January 1816; and in the latinterval between July 1816 and ter to pay cash for their notes of July 1817, the market price of gold every denomination dated prior to did not exceed L.3, 19s. per oz. The the 1st of January 1817. exchanges with the Continent for a The total quantity of gold coin isvery considerable portion of that pe. sued from the Bank, in consequence riod were in favour of this country; of the engagements thus entered inand the Bank took advantage of to, and the continuance of the fracthose circumstances, and made a tional payments under five pounds, great addition to the amount of the appears, by accounts before the precious metals in their possession. House, to have amounted, between The purchases made by the Bank the 1st of January 1817 and the 1st appear to have had no unfavourable of January 1819, to the sum of effect on the price of gold; and there L. 1,596,256 in guineas and half is reason to believe, that it would guineas, and in sovereigns and half have fallen to the Mint price, had sovereigns to L. 4,459,725. Your not the Bank fixed the rate, at which Committee have ascertained, that they were willing to purchase, at subsequently to the 1st of January L. 3:18 : 6 per oz.

Mr Goldsmid there has been a further demand informed the Committee, that “ at on the Bank for gold to the exthat period there were no other buy- tent of about L. 700,000. The to. ers in the market at the price which tal sum, therefore, which has been was given by the Bank; had there issued by the Bank since the combeen, they would have been suppli- mencement of the year 1817 has ed on the same terms, if they had been about L. 6,756,000; and no wanted gold.” Being asked whe- doubt can be entertained that the ther, if the Bank had not been pur- coin thus drawn from the Bank was chasers at L.3:18:6, he believes demanded, not for the purposes of


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internal circulation, but in order to their notes in cash, under the cir. realize a profit, either on its sale as cumstances above mentioned, acted bullion in this country, or on its ex- from the best motives, and from a portation.

belief that the measure would tend Your Committee are confirmed in to facilitate the complete resumption this conclusion by the documents of payments in specie. Unfortubefore the House, from which it ap- nately it has had a contrary effect; pears, that the sum issued from the the last of the three notices having 9th of December 1816, (when the been given at a period when the es. notes of the Bank became payable changes were unfavourable, when under the notice issued in the pre- the price of gold had risen from ceding month), to July 1817, a- L.3:18:6 Lo L.4 per ounce; and at mounted only to L. 38,020, 10s., a time when the Bank had not (acthough the Bank had become liable cording to the evidence given by Mr on the 2d of May of the latter year Harman) that control over their isto pay cash for all their notes of L.I sues which might have enabled them and L.2 value, dated prior to the 1st to counteract the effect of the unfa. of January 1816.

vourable exchange, by a reduction In July 1817, the former ex of their paper currency.. changes became unfavourable, and There was, in fact, in the half. have continued so since that period; year between July and December a profit has been realized on the ex. 1817, a considerable increase in the portation of gold coin, and the Bank amount of notes issued by the Bank. has been subject to a constant de. The average amount outstanding in mand for cash in payment of their the four half years preceding had not

exceeded L.26,771,914 ; in this half The following extract from the yearit was increased to L.29,210,035, evidence given by Mr Alexander having been in the previous half Baring shows the purposes to which year L. 27,339,768. It appears by a considerable portion of the gold the returns, that on the 5th July thus withdrawn from the coffers of 1817, immediately preceding the the Bank has been applied :-In payments of the dividends, the aFrance it appears, by the Report of mountoutstanding was L.25,800,000 the Minister of Finance, that there and on the 4th of October, being a has been carried to the Mint of few days before the payment of the France, in the 16 months preceding dividends of that quarter, the amount the 31st December last, gold to the, was L.28,900,000. amount of L.125,000,000 of francs The issue of sovereigns between (being equal to about L. 5,000,000 July and December 1817, amounted Sterling); and silver to the amount to L.1,240,422 ; so that, had the soof a little more than L.3,000,000 of vereigns remained in circulation, francs. Of that gold upwards of there would have been an increase three-fourths were in coin from this to the circulating medium issued by country; and this operation has the Bank of England, in the course continued during the present year, of that half year, compared with the though the amount of the importa- average amount outstanding in the tions of this year has not been re- four half years preceding, to the exported.

tent of L. 3,678,543. Your Committee are satisfied that Your Committee cannot avoid ex. the Bavk, in undertaking to pay pressing an opinion, that whatever


might be the policy, and however The necessity of the repayment laudable the intentions of the Bank, of a large portion of that debt has in engaging to make partial issues of been so earnestly insisted on by the coin in payment of their notes, yet, Bank, and the nature and extent when the exchanges became unfa- of the connexion between the Govourable, and the price of gold rose vernment and the Bank involve so above the Mint price, the only mode many important considerations, that by which they could have retained your Committee deem it incumbent the coin in circulation would have upon them to enter into some debeen a contraction of their issues; tail with respect to the origin and and unless the Bank at that period gradual increase of the advances possessed such a control over the a- made by the Bank on behalf of the mount of those issues, as would have public, and the effect which they enabled them to effect that object, have, when carried to the amount at your Committee must consider it to which they at present stand, of dehave been expedient in the then priving the Bank of that control state of the exchanges, to undertake over their issues of notes, the posan extensive though partial issue of session of which is deemed by them coin, which subjected the Bank to an essential preliminary to the reconsiderable loss, and a great drain sumption of cash payments. of treasure.

In the Appendix to the Report Under these impressions, and from will be found an account of the aa firm conviction that the continued mount of advances made by the issue of coin from the Bank, by di- Bank of England to Government on minishing the amount of their trea- Exchequer Bills and other securities, sure, would have the effect of post- from the year 1792 to the latest peponing the period at which the ter- riod to which it can be made up. mination of the restriction can take The first item of this account, place, without producing, on the entitled, “ An advance out of sums other hand, any advantage whatever issued for the payment of dividends to the country, while the exchanges now amounting to the sum of and the price of gold are in their pre- L. 1,098,820," ought not, in the sent state, your Committee were in- opinion of your Committee, to be duced to recommend to the House, considered as 'any portion of the in their first report, the immediate debt due by the Government to the enactment of a law to suspend all Bank. It arises from money origipayments in gold coin by the Bank, nally lodged by Government at the until

your Committee might be ena. Bank, for payment of dividends to bled to present to the House their public creditors, which, not having view of the whole subject which has been claimed, has been withdrawn been referred to their consideration. from the Bank, and applied to the - The next important point to public service, under the provisions which the Committee will call the of acts of the Legislature passed in attention of the House is the amount the years 1791, 1808, and 1816. It is of the issues of the Bank of Eng. not therefore an advance from the land, which are outstanding upon funds of the Bank, but it is the proGovernment securities ; or, in other perty of the public creditors, which words, the amount of the debt due has been made available for public by the public to the Bank of Eng. purposes, until demanded by them. land.

Ti will be seen from the account,


that a great proportion of the ad. for the amount of such Treasuryvances of the Bank are at present bills of exchange as were directed made under the two heads of “ Ex- for payment to the Bank, until the chequer bills issued,” and “ Exche- amount was about 20 or L. 30,000, quer bills purchased;" and before the when the Treasury usually sent ora Committee point out the distinction ders for the amount of such advance between those heads of the account, to be set off from the respective ac. they will shortly advert to the laws counts to which the bilis properly which have been passed since the belonged. In the American war, institution of the Bank for the re. they had been permitted to run to a gulation of their advances to Go. larger amount, but he believed they

never exceeded L. 150,000. Doubts On the original establishment of occurred to him, when Governor, the Bank, by the 5th and 6th Wil. whether the penalties of the Act of liam and Mary, a penalty is imposed William and Mary did not extend upon the Directors, if they purchase, to this transaction; and for the puron account of the Corporation, any pose of removing them, the Act of Crown lands, or if they advance to 1793 was introduced and passed." his Majesty any sum of money by It appears to have been originally way of loan or anticipation on any proposed, that the Bank should be branch of the public revenue, other empowered to advance to a limited than on such funds only on which a

amount of L. 50,000 or L. 100,000; credit of loan is or shall be granted but the act passed without any limi. by Parliament. Such credits have tation ; its operation being of course ever since been granted from time confined to advances upon Treasury to time, and advances made upon bills of exchange; on which spethem. The amount annually, from cies of security, however, no adthe year 1777 to the year 1792, ex- vances appear to have been made tracted from the documents publish- since the restriction. ed in the Report of the Committee By an act which passed very of Secrecy of 1797, will be found in shortly after the first restriction aci, the Appendix.

the Bank were prohibited from make · In the year 1793 an act was passed, ing any loan or advance on account protecting the Governor and Com- of the public service during the pany of the Bank of England from continuance of the restriction ; but any penalty, on account of their hav, at the commencement of the follow. ing advanced, or advancing in future, ing session it was enacted, “ that any sums of money in payment of the Bank may make an advance on bills of exchange accepted by the the credit of duties on malt, and op Lords of the Treasury, and made the land-tax imposed in that session, payable at the Bank, but not char. and any other advance which may ged on any branch of the revenue. be authorised by any other acts The motives for passing this act are which may be passed during the fully detailed in the evidence given continuance of the restriction.” by Mr Bosanquet, then a Director In almost all the acts authorising of the Bank, to the Committee of the issue of Exchequer-bills passed Secrecy in the year 1797. He states, subsequently, a special clause has " that it had been the custom of the been introduced, empowering the Bank, time out of mind, to advance, Bank to advance the whole or a

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