there should be no exaggeration on this position, and to which I certainly should subject, that not one shilling should be not be desirous to point and direct the atexhibited as a deposit, which did not tention of the House, if the bank had not, actually exist : so, Sir, it is equally intel- since that period, most strangely, most ligible now, with reference to the discus. unaccountably, I may add, most whimsisions which took place upon this subject cally, endeavoured to set up and maintain in the last session of parliament, as well a doctrine, which, had they been successo as to the object I have in view, that the ful in establishing it, would have gone to bank should now be anxious, that none of the utter subversion and denial of a printhe deposits which actually existed in their ciple go plain, simple, and self-evident, as hands in the year 1800, should at present this principle appears to me to be; but, be suppressed or kept out of view. Now, Sir, this transaction not only admits the I do not mean to charge the bank of Eng- profits which the bank were deriving from land with having intentionally misled the possession of this public money, but it either the committee in 1807, or Mr. Pitt recognizes also, what is of more importin 1800 : I merely state the facts, such as ance to the public-the right of the public they present themselves in the papers now to a participation in them. befose us: and it is for the bank of Eng- Under this agreement then, and with land, and not for me, to account for and the usual covenant for continuing the to explain, the difference that exists be- whole of the bank capital, amounting to tween the two statements which they | a sum of about 11,600,000l. in the hands have laid before us, both having reference, of the public, at the three per cent. in. as I have before observed, precisely to terest (at which rate of interest the public one and the same subject. It is sufficient have held this capital ever since the year for me to have shown, as I trust I have 1742, and the advantage of which to the done, to the satisfaction of the House, public has always been considered as a sure I am, that I have done so upon such part of the price paid by the bank for its authority as cannot, will not, be ques- charter), the charter of the bank of Eng. tioned, controverted, or denied, by the land was renewed for a period of twentybank itself, that the only deposits calcu. one years, from 1812; extending its duralated upon, when the charter was removed, lion, therefore, to 1833—of which, conwere the two I have mentioned, amount- sequently, seventeen years now remain ing together, as then stated by the bank, unexpired. to a sum of about 3,100,0001.

In the year 1806, the loan of 1800 for In the profits resulting from these two three millions became payable ; but, indeposits then, Mr. Pitt claimed a partici- stead of discharging it, the government of pation; and, after several discussions, the that day, lord Grenville and lord Henry negociation ended in an agreement, on Petty being at the head of the treasury, the part of the bank, to advance to the and the right hon. gentleman, the present public a loan, as it was called, of three chancellor of the exchequer, filling the millions, for six years, without interest, situation of one of the secretaries of the upon the distinct and specific ground of treasury in the finance department, enthereby giving to the public a participa- tered into a negociation with the bank, tion in the profits which the bank was de- which ended in an agreement for prolong. riving from the possession of this public ing the period of this loan for the duration money; and also in other benefits deriva- of the then existing war: not without inble from their exclusive privilege of bank terest, upon which terms the loan had ing as a corporate body, the particulars of been made in 1800, but subject, on the which are not described, and upon which, part of the public, to interest at three per therefore, I will not hazard a conjecture. cent., or, in fact, to the payment of

Now, Sir, before I proceed further, 1 90,000l. per annum for the use of it. am anxious that the House should notice, Now, inadequate as I think this arrangeand bear in mind, this transaction, as a ment was, to what the public had a right direct recognition on the part of the bank, to expect, unreasonable on the part of the of the productiveness of profit, resulting bank to require, and improvident on the from the possession of this money-a re- part of the public to accede to these terms, cognition, indeed; upon which I should it nevertheless, was a transaction by which be disposed to lay little or no stress, be the public acquired the use of three milcause it appears to me to be nothing more lions, at three per cent. interest, instead than the recognition of a self-evident pro. of paying five per cent, for it; and, in this

a

point of view, it may be considered, and to the public, amounting to a sum little was a saving of two per cent. upon three short of twelve millions ! wholly unpromillions, or of 60,0001. annually; and, as ductive to the public, but productive such, I wish the House to notice this of advantage to the bank: which treasure, transaction, as a second admission, on the too, I would observe, in passing, has repart of the bank, of the profits they were mained with the bank of England, with deriving from the possession of these pub- little or no diminution ever since. lic deposits, and also as a recognition of Now I would ask the House, whether the right of the public to a farther partici- it is possible to believe, without imputing pation in these profits: a participation to the government of that day, what I should beyond that which the public had ac- be most backward in imputing to it or inquired at the period of the renewal of the deed to any other government under similar charter.

circumstances; I ask you, whether, withBut there is something in this transac-out imputing to that government, the tion so objectionable in my view of it, - grossest negligence, or the most culpable something that so strongly marks and cha- indifference to the interests of the public, racterizes the spirit in which the bank has it is possible to believe, that they would conducted itself in all its transactions with have agreed to pay the bank 90,0001. per the public of late years, that I cannot suf- annum, for the use of three millions of fer it to pass by me, without entreating money, if they had been aware, that they the leave of the House to offer one or two possessed at that very time, an aggregate observations upon it. I have no informa- amount of public monies in the hands of tion of what passed betwixt the govern- this very same bank, announting to a sum ment and the bank in the progress of this little short of twelve millions ? Sir, the negociation, It must, indeed, have been thing is absolutely impossible. It has notorious then, as it is now, that a consi- been the fashion to call this, and other derable increase had recently taken place similar transactions, “ loans” from the in the amount of public deposits at the bank. “ Advances of money forsooth, bank, in consequence of the recent detec. from the bank to the public:"---this term tions and discoveries of mal-practices, and has always appeared to me, I must not mal-appropriations, of the public money, say, intended, because it is a term applied on the part of certain public accountants, to the subject, in an act of the legislature, and of other gentlemen in office, to whom but I may say, if not intended, calculated the public money had been entrusted; to mislead and deceive the public, as to which very properly induced the govern. the real nature and character of the transment, supported by the legislature, in all action itself: and I confess it seems to cases where legislative interference was we, that instead of calling this operation necessary, to place the public treasure a loan, or advance, from the bank, it beyond the reach of loss or hazard in fu- would be much more correct to say, that ture, by directing it to be deposited, in it was a liberty given to the public, -orall cases where it was practicable, in the what I should like still better, a right ashands of the public banker—the bank of sumed by the . public, having a sum of England. But it was not till the year near twelve millions in the hands of its subsequent to that in which this arrange- bankers, to draw out and apply three milment took place, namely, till the year lions of that sum to the public service, 1807,-that either this House or the pub- without, however, subjecting the public to lic, or, as I think I may venture to assert, pay 90,000l. per annum for the exercise the executive government itself was aware, of that right. Such, however, was the either of the enormous magnitude to which agreement, and it has been, as

all

agreethese monies had accumulated in the hands meots ought to be into which the public of the bank, or of the enormous profits enter, whether improvidently or not, which the bank were at that time, and strictly and rigidly performed and this bad, during a considerable time previously, loan, as it is called, went on from the year been deriving from the possession of this 1806 to the year 1814, when it became money. Why, Sir, at the very moment, payable, and when it was discharged, toin 1806, when the bank required, and the gether with the interest upon it, which public most improvidently agreed to pay, amounted, during the eight years and 90,000l. per annum for the use of three eight months that the loan was in operamillions of money, the bank held, and tion, to the sum of 780,0001. which sum I were in possession of a treasure belonging maintain was paid by the public, for the

:

use of three millions of its own money, report, and to the labours of the enligtens during a period, in which the bank held ed members by whom it was framed, are constantly, exclusive of these three mile the public indebted, solely, and exclulions, an augregate amount of public ba. sively, for the advantages derived immedia lances, fluctuating betwixt 54 and 84 mil- ately afterwards under the arrangement lions ; and this is one, I am sorry to add, made by Mr. Perceval with the bank in of the many transactions, in which the 1808; advantages however inadequate, as public interests have been most impro- I know they were in the estimation of perly and unjustly sacrificed, to swell and many of the most distinguished members aggrandize the already enormous treasures of that committee, to what the public of the bank of England.

were entitled to receive - short in my We now come to the year 1807 ; a me- view, by at least one half, of what the morable year in these transactions. In that public ought to have enjoyed, amounting, year a committee of this House, known nevertheless, to a public saving of between by the name of the committee on public two or three hundred thousand pounds expenditure, applied itself to the investi- per annum-for the whole of which, I regation of these and of other transactions peat, we are indebted to the committee subsisting betwixt the public and the of 1807. bank. This committee was presided over This report no sooner made its appearby an hon. gentleman, now in his place, ance than Mr. Perceval, as chancellor of the member for Corffe Castle (Mr. the exchequer, came forward, and, with Bankes), whose zeal, abilities, and per- the report in his hand, claimed from the severance, are most particularly conspi- bank a further participation in the profits cuous on all subjects connected with the deriveable from these deposits, and also a finances and public expenditure of the reduction in the charge for the managecountry. The committee was also most ment of the public debt. The communicapowerfully assisted in its labours by an tions and correspondence which took place hon, member of it, now, unfortunately for between Mr. Perceval and the bank on that the country, no more, I mean the late occasion, were laid upon the table of this Pr. Henry Thornton, whose practical House; they now form a part of our parlia-knowledge and experience, industry and mentary records, and are of course acceshabits of life, pre-eminently qualified him sible to any member who has a taste for infor investigations of this nature, and whose vestigations of this nature. I abstain, thereprivate character gave a sanction to every fore, from troubling the House with any deact of his public life ; and in the very able tails with respect to this negociation, obu and clear report, * which was presented serving only, that in the papers produced, from that committee, will be found, the will be found much curious and important first combined view that ever was given to information upon the whole of this subthis House or to the public ; the first ject; and, that after many discussions, in combined view I venture to assert, that which the bank resisted but as it appears ever met the eye of the executive govern- to me very feebly resisted Mr. Perceval's ment; stating the aggregate amount of claims, the following arrangement was these deposits in the hands of the bank; concluded. The bank agreed to advance accompanied too, with what was not the immediately another loan (as it was again least valuable part of this valuable report called) of three millions to the public,

a perspicuous, unanswerable argument, without any charge of interest: The bank showing the extent to which the possession also acquiesced in the withdrawing of a of these deposits was profitable to the sum of half a million from the balance of bank ; demonstrating, that the bank was unclaimed dividends in their hands, to be deriving a profit from these public monies, applied to the public service, where it has equivalent to about five per cent. per an- remained ever since; they also agreed to num; upon their whole aggregate amount; a reduction equal to about one fourth in and that the benefit at that time, and for the then existing charge for the managesome time previous to it enjoyed by the ment of the debt; and the whole saving, bank from that source, amounted to a sum effected by this arrangement, amounted fluctuating betwixt five and six hundred to the sum of about 242,0001. per annum. thousand pounds annually. And to this In reviewing this arrangement of 1808,

when the bank advanced three millions * For a copyof this report, see Vol. IX. without any charge of interest, and conappendix p. lxxxvii. .

trasting it with what happened only about twenty months before, when the bank Mr. Perceval in 1808, could extort from required to be paid ninety thousand the bank any admission of the existence pounds per annum for a similar loan one of these profits: the evidence of the cannot avoid asking, what was the cause directors before the committee, amounts of this different conduct of the bank at indeed, to a positive denial of it; and Mr. those two, not very distant periods? The Perceval, in his letter to the bank in amount of public money possessed by January 1808, though he gets the three mil... them, (the only ground upon which lions from them, laments “ that he should both the arrangements were founded) not have been so fortunate in the several was nearly the same in both instances : conferences which he had held with them nay, it appears from a statement formed as to convince them of the truth and acfrom the documents now before us, that curacy of his principle, with reference to the aggregate amount of deposits pos- the advantages derived to the bank, from sessed by the bank was something higher these deposits.” in 1806 than in 1808: and nevertheless But, though the bank have refused us, they charged the public with 90,0001. per all verbal admissions, these several loans annum, in 1806, for doing what, in 1808, are practical admissions of the existence they did for nothing! To what principle of such profits, and also of the right of is this to be attributed? Can we discover the public to a participation in them. Nay in it any of that spirit of moderation, which the arrangement of 1808, particularly I think the public had, and have a right that part of it which refers to the reducto expect from bank? Any thing of that tion in the charge for the management of unceasing anxiety to promote the interest the debt, goes still further; for it is a, of the public"*_about which we have precedent to which we may now, or at heard so much, and seen so little or in any future period during the charter, it not rather to be traced to another prin- refer if necessary, to show that nothing ciple !-a principle, that I have heard passed at the period when the charter was avowed, maintained, and defended, not renewed that no terms or expressions only by many proprietors, but also by are to be found in the act of 1800, upon directors of the bank elsewhere? and which the renewal of the charter was which is this" that the bank of England founded which operates as a bar to our are a trading company-that their direc- making any regulations either with respect tors are bound not only by their interests, to the deposits of public money, or to the but by their oaths, by all lawful means” charge for the management of the debt, (and God forbid I should be supposed to which the legislature in its wisdom may impute to them any means which are not judge conducive to the interests of the strictly and rigidly lawful!) “ to make all public. the profit they can for their proprietors ? I am not now aware of any thing having and that, acting upon this cominercial and occurred with respect to this branch ot mercantile principle, in all contracts and the subject, betwixt the years 1808 and agreements with the public, it is their 1814, upon which it will be necessary for business to make the best bargain they me to make any observation to the House can for themselves." The House will In 1814 the loan of 1808, limitrd like that determine to which of these two principles of 1806, to the duration of the war to ascribe the conduct of the bank, with became payable; when the right hon. reference to these two transactions in the gentleinan, the chancellor of the excheyears 1806 and 1808.

quer, proposed to the bank, that it should Another observation here occurs to me. be prolonged to the 5th of April next,The bank advanced loans in 1800, in 1806. distinctly stating that be made this proand again in 1808, upon the distinct ground posal upon the grounds of the public baof thereby giving to the public a partici- lance having remained “undiminished”. pation in the profits they were deriving in the hands of the bank since 1808, and from the possession of these public deposits expressing, at the same time his strict and yet it is not less curious than true, adherence to all the principles, and all the that neither the committee of 1807, nor reservations, with which' Mr. Perceval

had thought it necessary to guard himself * Vide the letter from the bank to Mr. in his arrangement with the bank at that. Perceval in the " Papers relating to the period. The bank (as well, indeed, they bank of England,” presented to the House might) agreed without hesitation to this in February 1808. Vol. X, p. 242. proposal of the chancellor of the exche

quer: and this brings us down to the fifth then, to the 5th April, 1816, the Bank of April next, when all agreements on will have held a public treasure of eigth the subject of these transactions will expire, millions and a half, and we shall have been and when we shall be competent to pro- paying to the bank at the rate of 425,0001. pose any other arrangements respecting per annum, for taking care of it. them, which the interests of the public Having now endeavoured, very impermay appear to require.

fectly, I am afraid, but in the best manner If I do not fatigue the House, I should I have been able, to put the House in posnow wish to submit to them a brief re- session of the nature and progress of these capitulation of the advantages gained by public deposits at the bank, together the bank, and of the corresponding loss with the effects produced by them, both in interest of money sustained by the upon the bank and upon the public; havpublic, arising out of the possession by ing stated, that the profit derived by the the bank of these public balances since bank from this source, and the loss sus. the year 1806, assuming their aggregate tained by the public in interest, during amount, during the whole of this period, this period, has fluctuated betwen 365,0001. to have been eleven millions and a half. and 515,000l. per annum, and that its pre

In 1806, as I have already shown, the sent annual amount is about 425,0001.; bank advanced a loan of three miļlions to it seems natural that we should inquire, the public, at three per cent. which re- and it is an inquiry to which I presume to duced the aggregate amount of the depo- | invite the House, what is the nature and sits from eleven millions and a half to value of the service performed by the eight millions and a half.

bank, that can have entitled it to so large,

so ample, so munificent a remuneration ? The interest on eight millions and a half is, per annum

And, in the investigation that I have felt

$425,000 To which add interest on the

it my duty to make on this subject, I can loan of three millions

assure the House, that I have spared no 90,000

pains, that I have shrunk from no labours, Together ..

and that, anxious neither to deceive myself, 515,000

normislead the House, my greatest anxiety

has been to arrive at the truth: after hav. From 1806 then, to 1808 the bank held a ing then carefully examined every docu. public treasure, amounting to eight milions ment produced to us upon this subject, and a half, and made a profit thereon; or, and after communications thereon with the public lost thereon in interest of money honourable friends of mine, and with pracat the rate of 515,0001 per annum. tical men of business, whose judgment on

In 1808, the bank advanced another these, and on all other subjects, i know to loan of three millions, which reduced the be greatly superior to my own, the result of deposits in their hands from eight millions all my inquiries has been to satisfy—to deand a half to five millions and a half.

monstrate to me-that the service per.

formed by the bank of England, for which The interest on five millions and a half is, per annum £275,000

the bank has received, during the last ten To which add, as before, on

years, a remuneration exceeding four milthe loan of 1806

90,000

lions sterling, is nothing more than a com

mon ordinary banking transaction; in its Together

365,000

character precisely the same as that which probably subsists betwixt every gentleman

who now hears me, and his private banker: From 1808 then, to 1814, the bank held simple in its nature, free from all complia treasure belonging to the public of five cation, exposing the bank to little risk or millions and a half, and made a profit, or trouble, and neither requiring, nor in point the public lost in interest of money there- of fact having any extensive establishment on, at the rate of 365,0001. per annum. of clerks or officers necessary for carrying

În 1814, the loan of 1806 was dis- it into execution. charged, and the amount replaced in the I have also, Sir, felt that it might be adpossession of the Bank, by which the ag- vantageous to ascertain, so far as it may gregate amount of deposits was again be practicable to do so, the rate at which raised from five millions and a half to it is probable this service would be pereight millions and a half.— The interest on formed for the public if there were any this is per annum, 425,0001. From 1814 competition to which we might resort; it,

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