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 THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
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 PROPOSALS 
 
 TOR AN 
 
 ECONOMICAL AND SECURE 
 
 CURREN CY; 
 
 OBSEUVATiONS 
 
 ON THE 
 
 PROFITS OF THE BANK OF ENGLAND, 
 
 AS TllEY REGARD THE PUBLIC AND THE PKOPRIETOKS 
 OF BANK STOCK. 
 
 BY DAVID RICARDO, ESQ. 
 
 SECOND ED IT I OX. 
 
 LONDON: 
 
 'RlNTtD FOR JOHN MURRAY, ALBEMAkLE-STREET 
 1816. 
 
 ^.
 
 INTRODUCTION. 
 
 The following important questions concerning 
 the Bank of England will, next session, come 
 under tiie discussion of parliament : 
 
 1st. Whether the Bank shall be obliged to 
 pay their notes in specie at the demand of the 
 holders ? 
 
 2dly. Whether any alteration shall be made 
 in the terms agreed upon in 1808, between Go- 
 vernment and the Bank, for the management of 
 the national debt ? 
 
 And, 3dly, what compensation the public shall 
 receive for the large amount of public deposits 
 from which the Bank derive profit? 
 
 In point of importance, the first of these 
 questions greatly surpasses the rest : — but so 
 much has already been written on the subject 
 of currency, and on the laws by which it should 
 be regulated, that I should not trouble the reader 
 with any further observations on those topics.
 
 did I not think that a more economical mode 
 of effecting our payments might be advantage- 
 ously adopted ; to explain which, it will be ne- 
 cessary to premise briefly some of the general 
 principles which are found to constitute the 
 laws of currency, and to vindicate them from 
 some of the objections which are brought against 
 them. 
 
 The other two questions, though inferior in 
 importance, are, at these times of pressure on 
 our finances, when economy is so essential, well 
 deserving of the serious consideration of parlia- 
 ment. If, on examination, it should be found 
 that the services performed by the Bank for the 
 public are most prodigally paid ; and that this 
 wealthy corporation has been accumulating a 
 treasure of which no example can be brought 
 . — much of it at the expense of the public, and 
 owing to the negligence and forbearance of 
 government — a better arrangement, it is hoped, 
 will now be made ; which, while it secures to the 
 Bank a just compensation for the responsibility 
 and trouble which the management of the public 
 business may occasion, shall also guard against 
 any wasteful application of the public resources. 
 It must, I think, be allowed, that the war, 
 which has pressed heavily on most of the classes 
 of the community, has been attended with uu-
 
 looked for benefits to the Bank; and that in pro- 
 portion to the increase of the public burdens 
 and difficulties have been the gains of that 
 body. 
 
 The restriction on the cash payments of the 
 Bank, which was the effect of the war, has 
 enabled them to raise the amount of their notes 
 in circulation from twelve millions to twenty- 
 eight millions ; whilst, at the same time, it has 
 exonerated them from all necessity of keeping 
 any large deposit of cash and bullion, a part of 
 their assets from which they derive no profit. 
 
 The war too has raised the unredeemed public 
 debt, of which the Bank have the management, 
 from 220 to 830 millions ; and notwithstanding 
 the reduced rate of charge, they will receive for 
 the management of the debt alone, in the present 
 year, 277,000/.*, whereas in 1792 their whole 
 receipt on acount of the debt was 99,800/. 
 
 It is to the war that the Bank are also indebted 
 for the increase in the amount of public de- 
 posits. In 1792 these deposits were probably 
 less than four millions. In and since 1806 we 
 know that they have generally exceeded eleven 
 millions. 
 
 It cannot, I think, be doubted, that all the ser- 
 
 * See Appendix, No. 3. 
 
 B 2
 
 vices, which the Bank perform for the public, 
 could be performed, by pubHc servants and in 
 public offices established for that purpose, at a 
 reduction or saving of expense of nearly half a 
 million per annum. 
 
 In 1786 the auditors of public accounts stated 
 it as their opinion, that the public debt, then 
 amounting to 224 millions, could be managed 
 by government for less than 187/. 10*. per mil- 
 lion. On a debt of 830 millions the Bank are 
 paid 340/. per million on 600 millions, and 300/. 
 per million on 230 millions. 
 
 Against the mode in which the public business 
 is managed at the Bank no complaint can be 
 justly made, ability, regularity, and precision, 
 are to be found in every office ; and in these par- 
 ticulars it is not probable that any change could 
 be made which would be deemed an improve- 
 ment. 
 
 As far as the public are bound to the Bank by 
 any existing agreement, an objection, on that 
 score, will be m'ged against any alteration. 
 Inadequate as, in my opinion, was, at that time, 
 and under the circumstances in which it was 
 granted, the compensation which the public re- 
 ceived from the Bank, for the renewal of their 
 charter, I shall not plead for a revision of that 
 contract j but permit the Bank to enjoy unmo-
 
 lested all the fruits of so improvident and un- 
 equal a bargain. 
 
 But the agreement entered into with the 
 Bank in 1808, for the management of the na- 
 tional debt, is not, I think, of the above descrip- 
 tion, and either party is now at liberty to annul 
 it. The agreement was for no definite period; 
 and has no necessary connexion with the duration 
 of the charter, which was made eight years before 
 it. Applying to the state of things existing at 
 the time of its formation, or such a state as might 
 be expected to occur within a few years, it is 
 not any longer binding. This is declared in 
 the following passage of Mr. Perceval's letter 
 to the Bank, dated the 15th January, 1808, on 
 accepting the scale in respect to the rate for ma- 
 nagement proposed by the Bank. " Under this 
 impression,** says Mr. Perceval, " I am strongly 
 inclined to give way to the suggestion of the 
 Bank in the minor parts of the arrangement, 
 and will therefore accede to the scale of allow- 
 ances therein proposed for the management of 
 the public debt, so Jar as it applies to present 
 circumstances, or to such as can be crpectcd to 
 occur xcithin any short period.'* Eight years 
 having since elapsed, and the unredeemed debt 
 having, in that time, increased 280 millions, can 
 it be justly contended that it is not in the power
 
 6 
 
 of either party, now or hereafter, to annul this 
 agreement, or to propose such alterations in it 
 as time and circumstances may render expe- 
 dient ? 
 
 To Mr. Grenfell I am very materially in- 
 debted ; I have done little more, on this part of 
 the subject, than repeat his arguments and 
 statements. I have endeavoured to give my 
 feeble aid to a cause which he has already so 
 ably advocated in parliament, and in which I 
 trust success will crown his future efforts.
 
 SECTION I. 
 
 Til the vied'ium of' circulation — cause ojumformxty 
 u cause of goodness. 
 
 All writers on the subject of money have agreed 
 thai uniformity in the value of tlie circulating 
 medium is an oljject greatly to be desired. 
 Every improvement therefore which can pro- 
 mote an approximation to that object, by di- 
 minishing the causes of variation, should be 
 adopted. No plan can possibly be devised 
 which will maintain money at an absolutely 
 uniform value, because it will always be subject 
 to those variations tt) which the commodity it- 
 self is subject, which has been fixed upon as the 
 standard. 
 
 While the precious metals continue to be the 
 standard of our currency, money must neces- 
 sarily undergo the same variations in value as 
 those metals. It wub the comparative steadi-
 
 8 
 
 ness in the value of the precious metals, for 
 periods of some duration, which probably was 
 the cause of the preference given to them in 
 all countries, as a standard by which to mea- 
 sure the value of other things. 
 
 A currency may be considered as perfect, of 
 which the standard is invariable, which always 
 conforms to that standard, and in the use of 
 which the utmost economy is practised. 
 
 Amongst the advantages of a paper over a 
 metallic circulation, may be reckoned, as not 
 the least, the facility with which it may be 
 altered in quantity, as the wants of commerce 
 and temporary circumstances may require : en- 
 abling the desirable object of keeping money at 
 an uniform value to be, as far as it is otherwise 
 practicable, securely and cheaply attained. 
 
 The quantity of metal, employed as money, in 
 effecting the payments of any particular country, 
 using metallic money; or the quantity of metal 
 for which paper money is the substitute, if paper 
 money be partly or wholly used, must depend 
 on three things: first, on its value j — secondly, 
 on the amount or value of the payments to be 
 made; — and, thirdly, on the degree of economy 
 practised in effecting those payments. 
 
 A country using gold as its standard would 
 require, at least, fifteen times less of that metal
 
 than it would of silver, if using silver, and nine 
 hundred times less than it would of copper, if 
 using that metal, — fifteen to one being about 
 the proportion which gold bears in value to 
 silver, and nine hundred to one the proportion 
 which it bears to copper. If the denomination 
 of a pound were given to any specific weight 
 of these metals, fifteen times more of such 
 pounds would be required in the one case, and 
 nine hundred times more in the other, whether 
 the metals themselves were employed as money, 
 or paper was partly, or entirely, substituted for 
 them. And if a country uniformly employed 
 the same metal as a standard, the quantity of 
 money required would be in an inverse propor- 
 tion to the value of that metal. Suppose the 
 metal to be silver, and that, from the difficulty 
 of working the mines, silver should be doubled 
 in value, — half the quantity only would then be 
 wanted for money ; and if the whole business of 
 circulation were carried on by paper, of which 
 the standard was silver, — to sustain that paper, 
 at its bullion value, it must in like manner be 
 reduced one half. In the same way it might be 
 shewn, that, if silver became as cheap again, 
 compared with all other commodities, double 
 the quantity would be required to circulate the 
 same quantity of goods. — When the number of
 
 10 
 
 transactions increase in any country from its 
 increasing opulence and industry — bullion re- 
 maining at the same value, and the economy in 
 the use of money also continuing unaltered — 
 the value of money wWl rise on account of the 
 increased use which will be made of it, and will 
 continue permanently above the value of bullion, 
 unless the quantity be increased, either by the 
 addition of paper, or by procuring bullion to be 
 coined into money. There will be more com- 
 modities bought and sold, but at lower prices; 
 so that the same money will still be adequate 
 to the increased number of transactions, by 
 passing in each transaction at a higher value. 
 The value of money then does not wholly de- 
 pend upon its absolute quantity, but on its 
 quantity relatively to the payments which it has 
 to accomplish ; and the same effects would follow 
 from either of two causes — from increasing the 
 uses for money one tenth — or from diminishing 
 its quantity one tenth ; for, in either case, its 
 value would rise one tenth. 
 
 It is the rise in the value of money above the 
 value of bullion which is always, in a sound state 
 of the currency, the cause of its increase in 
 quantity ; for it is at these times that either an 
 opening is made for the issue of more paper 
 money, which is always attended with profit to
 
 11 
 
 the issuers ; or that a profit is made by carrying 
 bulhon to the mint to be coined. 
 
 To say that money is more valuable than 
 bullion or the standard, is to say that bullion is 
 selling in tlie market under the mint price. It 
 can therefore be purchased, coined, and issued 
 as money, with a profit equal to the difference 
 between the market and mint prices. The mint 
 price of gold is 3/. 17^. 10|<r/. If, from in- 
 creasing opulence, more commodities came to 
 be bought and sold, the first effect would be that 
 the value of money would rise. Instead of 
 3l. lis. lOhd. of coined money being equal in 
 value to an ounce of gold, 3l. 15s. Od. might be 
 equal to that value ; and therefore a profit of 
 Qs. lOi^/. might be made on every ounce of 
 gold that was carried to the mint to be coined. 
 This profit, however, could not long continue ; 
 for the quantity of money which, by these means, 
 would be added to the circulation, would sink 
 its value, whilst the diminishing quantity of 
 bullion in the market would also tend to raise 
 the value of bullion to that of coin : from one or 
 both these causes a perfect equality in their 
 value could not fail to be soon restored. 
 
 It appears then, that, if the increase in the 
 circulation were supplied by means of coin, the 
 value both of bullion and money would, for a
 
 12 
 
 time at least, even after they had found their 
 level, be higher than before; a circumstance 
 which though often unavoidable, is inconvenient, 
 as it affects all former contracts. This inconve- 
 nience is wholly got rid of, by the issue of paper 
 money ; for, in that case, there will be no addi- 
 tional demand for bullion ; consequently its value 
 will continue unaltered -, and the new paper 
 money, as well as the old, will conform to that 
 value. 
 
 Besides, then, all the other advantages attend- 
 ing the use of paper money; by the judicious 
 nfanagement of the quantity, a degree of unifor- 
 mity, which is by no other means attainable, is 
 secured to the value of the circulating medium 
 in which all payments are made^ 
 
 The value of money and the amount of pay^ 
 ments remaining the same, the quantity of money 
 required must depend on the degree of economy 
 practised in the use of it. If no payments were 
 made by checks on bankers ; by means of which 
 money is merely written off one account and 
 added to another, and that to the amount of mil- 
 lions daily, with few or no bank notes or coin 
 passing; it is obvious that considerably more 
 currency would be required, or, which is the 
 same in its effects, the same money would pass 
 at a greatly increased value, and would therefore
 
 13 
 
 be adequate to the additional amount of pay- 
 ments. 
 
 Whneever merchants, then, have a want of 
 confidence in each other, v/hich disinclines them 
 to deal on credit, or to accept in payment each 
 other's checks, notes, or bills ; more money, 
 whether it be paper or metallic money, is in 
 demand ; and the advantage of a paper circula- 
 tion, when established on correct principles, is, 
 that this additional quantity can be presently 
 supplied without occasioning any variation in 
 the value of the wdiole currency, either as com- 
 pared with bullion or with any other commodity ; 
 whereas, with a system of metallic currency, 
 this additional quantity cannot be so readily sup- 
 plied, and when it is finally supplied, the whole 
 of the Currency, as well as bullion, has acquired 
 an increased value. 
 
 SECTION II. 
 
 Use of a standard co^nmodity — object io7U to it 
 considered. . 
 
 During the late discussions on the bullion ques- 
 tion, it was most justly contended, that a cur-
 
 14 
 
 rency, to be perfect, should be absolutely inva- 
 riable in value. 
 
 But it was said too, that ours had become such 
 a currency, by the Bank restriction bill ; for by 
 that bill we had wisely discarded gold and silver 
 as the standard of our money; and in fact that a 
 pound note did not and ought not to vary with a 
 given quantity of gold, more than with a given 
 quantity of any other commodity. This idea of 
 a currency without a specific standard was, I 
 believe, first advanced by Sir James Steuart, * 
 but no one has yet been able to offer any test 
 by which we could ascertain the uniformity in 
 the value of a money so constituted. Those who 
 supported this opinion did not see, that such a 
 currency, instead of being invariable, was sub- 
 ject to the greatest variations, — that the only use 
 of a standard is to regulate the quantity, and by 
 the quantity the value of the currency — and 
 that without a standard it would be exposed to 
 all the fluctuations to which the ignorance or the 
 interests of the issuers might subject it. 
 
 It has indeed been said that we might judge 
 
 ■* The writings of Sir James Steuart on the subject of coin 
 and money are full of instruction, and it appears surprising 
 that he could have adopted the above opinion, which is so 
 directly at variance with the general principles he endea- 
 voured to establish.
 
 15 
 
 of its value by its relation, not to one, but to the 
 mass of commodities. If it should be conceded, 
 which it cannot be, that the issuers of paper 
 money would be willing to regulate the amount 
 of their circulation by such a test, they would 
 have no means of so doing ; lor when we consi- 
 der that commodities are continually varying in 
 value, as compared with each other ; and that 
 wheii such variation takes place, it is impossible 
 to a.scertain which commodity has increased, 
 which diminished in value, it must be allowed 
 that such a test would be of no use whatever. 
 
 Some commodities are rising in value, from the 
 effects of taxation, from the scarcity of the raw 
 material of whicli they are made, or from any 
 other cause which increases the difficulty of pro- 
 duction. Others again are falling, from improve- 
 ments in machinery, from the better division of 
 labour, and the improved skill of the workman j 
 from the greater abundance of the raw material, 
 and generally from greater facility of production. 
 To determine the value of a currency by the 
 test proposed, it would be necessary to compare 
 it successively with the thousands of commodities 
 which are circulating in the community, allow- 
 ing to each all the etlects which may have been 
 produced upon its value by the above causes. 
 To do this is evidently impossible.
 
 ]6 
 
 To suppose that such a test would be of use 
 in practice, arises from a misconception of the 
 difference between price and value. 
 
 The price of a commodity is its exchangeable 
 value in money only. 
 
 The value of a commodity is estimated by the 
 quantity of other things generally for which it 
 will exchange. 
 
 The price of a commodity may rise while its 
 value falls, and vice "versa. A hat may rise from 
 twenty to thirty shillings in price, but thirty 
 shillings may not procure so much tea, sugar, 
 coffee, and all other things, as twenty shillings 
 did before, consequently a hat cannot procure 
 so much. The hat, then, has fallen in value, 
 though it has increased in price. 
 
 Nothing is so easy to ascertain as a variation 
 of price, nothing so difficult as a variation of 
 value; indeed, without an invariable measure 
 of value, and none such exists, it is impossible 
 to ascertain it with any certainty or preci- 
 sion. 
 
 A hat may exchange for less of tea, sugar, 
 and coffee, than before, but, at the same time, 
 it may exchange for more of hardware, shoes, 
 stockings, &c. and the difference of the compa- 
 rative value of these commodities may either 
 arise from a stationary value of one, and a rise.
 
 17 
 
 though in different degrees, of the other two 5 
 or a stationary value in one, and a fall in the 
 value of the other two ; or they may have all 
 varied at the same time. 
 
 If we say that value should be measured by 
 the enjoyments which the exchange of the com- 
 modity can procure for its owner, we are still 
 as much at a loss as ever to estimate value, be- 
 cause two persons may derive very different de- 
 grees of enjoyment from the possession of the 
 same commodity. In the above instance, a hat 
 would appear to have fallen in value to him 
 whose enjoyments consisted in tea, coffee, and 
 sugar ; while it would appear to have risen in 
 value to him who preferred shoes, stockings, 
 and hardware. 
 
 Commodities generally, then, can never be- 
 come a standard to regulate the quantity and 
 value of money J and although some Inconve- 
 niences attend the standard which we have 
 adopted, namely, gold and silver, from the va- 
 riations to which they are subject as commo- 
 dities, these are trivial, indeed, compared to 
 those which we should have to bear, if we 
 adopted the plan recommended. 
 
 When gold, silver, and almost all other com- 
 modities, were raised in price, during the last 
 
 c
 
 18 
 
 twenty years, instead of ascribing any part of 
 this rise to the fall of the paper currency, the 
 supporters of an abstract currency had always 
 some good reason at hand for the alteration in 
 price. Gold and silver rose because they were 
 scarce, and were in great demand to pay the 
 immense armies which were then embodied. 
 AH other commodities rose because they were 
 taxed either directly or indirectly, or because 
 from a succession of bad seasons, and the diffi- 
 culties of importation, ' corn had risen consi- 
 derably in value ; which, according to their 
 theory, must necessarily raise the price of com- 
 modities. According to them, the only things 
 which were unalterable in value were bank 
 notes; which were, therefore, eminently well 
 calculated to measure the value of all other 
 things. 
 
 If the rise had been 100 per cent., it might 
 equally have been denied that the currency had 
 any thing to do with it, and it might equally 
 have been ascribed to the same causes. The 
 argument is certainly a safe one, because it 
 cannot be disproved. When two commodities 
 vary in relative value, it is impossible with cer- 
 tainty to say, whether the one rises, or the 
 other falls; so that, if we adopted a currency
 
 19 
 
 without a standard, there is no degree of de- 
 preciation to which it might not be carried. 
 Tlie depreciation could not admit of proof, as 
 it might always be affirmed that commodities 
 had risen in value, and that money had not 
 fallen. 
 
 SECTION III. 
 
 The standard, its imperfections — Variations beiow 
 without allowance of the countervailing varia- 
 tions above the standard^ their effects — Cor- 
 resfondaice with the standard the rule for 
 paper money. 
 
 While a standard is used, we are subject to 
 only such a variation in the value of money, as 
 the standard itself is subject to ; but against such 
 variation there is no possible remedy, and late 
 events have proved that, during periods of war, 
 when gold and silver are used for the payment 
 of large armies, distant from home, those varia- 
 tions are much more considerable than has been 
 generally allowed. This admission only proves 
 that gold and silver are not so good a standard 
 
 c 2
 
 20 
 
 as they have been hitherto supposed ; that they 
 are themselves subject to greater variations than 
 it is desirable a standard should be subject to. 
 They are, however, the best with which we are ac- 
 quainted. If any other commodity, less variable, 
 could be found, it might very properly be adopted 
 as the future standard of our money, provided it 
 had all the other qualities which fitted it for that 
 purpose; but, while chese metals are the stand- 
 ard, the currency should conform in value to 
 them, and whenever it does not, and the market 
 price of bullion is above the mint price, the cur- 
 rency is depreciated. — This proposition is unan- 
 swered, and is unanswerable. 
 
 Much inconvenience arises from using two 
 metals as the standard of our money ; and it has 
 long been a disputed point whether gold or silver 
 should by law be made the principal or sole 
 standard of mo^ey. In favour of gold, it ma}^ 
 be said, that its greater value under a smaller 
 bulk eminently qualifies it for the standard in 
 an opulent country ; but this very quality sub- 
 jects it to greater variations of value during 
 periods of war, or extensive commercial dis- 
 credit, when it is often collected and hoarded, 
 and may be urged as an argument against its 
 use. The only objection to the use of silver,
 
 21 
 
 as the standard, is its bulk, which renders it un- 
 fit for the large payments required in a wealthy 
 country; but this objection is entirely removed 
 by the substituting of paper money as the ge- 
 neral circulation medium of the country. Silver, 
 too, is much more steady in its value, in conse- 
 quence of its demand and supply being more 
 regular; and as all foreign countries regulate the 
 value of their money by the value of silver, there 
 can be no doubt, that, on the whole, silver is 
 preferable to gold as a standard, and should be 
 permanently adopted for that purpose. 
 
 A better system of currency may, perhaps, 
 be i?7iaoined than that which existed before the 
 
 o 
 
 late laws made bank notes a legal tender ; but 
 while the law recognized a standard, while the 
 mint was open to any person, who chose, to take 
 thither gold and silver to be coined nito money, 
 there was no other limit to the fall in the value 
 of money than to the fall in the value of the 
 precious metals. If gold had become as plenti- 
 ful and as cheap as copper, bank notes would 
 necessarily li^ve partaken of the same dtprecia- 
 tion, and nil per.-ons the whole of u host^ posses- 
 sions coiisistt.'l oi nioney — such astl)o^e who hold 
 exchequer bills, who discount mercliauts' bills, 
 or whose income is derived from annuities, as 
 the holders of the public funds, mortgagees, and
 
 many others — would have borne all the evils ot 
 such a depreciation. With what justice, then, 
 can it be maintained, that when gold and silver 
 rise, money sl)ould be kept by force and by le- 
 gislative interference at its former value; while 
 no means are, or e\er have been, used to pre- 
 vent the fall of money vv^hen gold and silver fall? 
 If the person possessed of money is subject to 
 all the inconveniences of the fall in the value of 
 his property, he ought also to have the benefits 
 of the rise. If a paper currency without a 
 standard be an improvement, let it be proved to 
 be so, and then let the standard be disused ; but 
 do not preserve it to the disadvantage solely, 
 never to the advantage, of a class of persons pos- 
 sessed of one out of the thousands of commo- 
 dities which are circulating in the community, 
 of which no other is subject to any such rule. 
 
 The issuers of paper money should regulate 
 their issues solely by the price of bullion, and 
 never by the quantity of their paper in circula- 
 tion. The quantity can never be too great nor 
 too little, while it preserves the same value as 
 the standard. Money, indeed, should be rather 
 viore valuable than bullion, to compensate for 
 the trifling delay which takes place before it i 
 returned in exchange for bullion at the mint. 
 This delay is equivalent to a small seignorage ;
 
 2Z 
 
 and coined money, or bank notes, which repre- 
 sent coined money, should, in their natural and 
 perfect state, be just so much more valuable 
 than bullion. The Bank of England, by not 
 having paid a due regard to this principle, have, 
 in former times, been considerable losers. They 
 supplied the country with all the coined money 
 for which it had occasion, and, consequently, 
 purchased bulhon with their paper, that they 
 might carry it to the mint to be coined. If their 
 paper had been sustained, by limiting its quan- 
 tity, at a value somewhat greater than bullion, 
 they would, in the cheapness of their purchases, 
 have covered all the expenses of brokerage and 
 refining, including the just equivalent for the 
 delay at the mint.
 
 *4J4 
 
 SECTION IV. 
 
 An expedient to bring the E?iglish currency as 
 near as possible to perfection. 
 
 In the next session of parliament, the subject 
 of currency is again to be discussed; and, pro- 
 bably, a time will then be fixed for the resump- 
 tion of cash payments, which will oblige tlie 
 Bank to limit the quantity of their paper till it 
 conforms to the value of bullion. 
 
 A well regulated paper currency is so great an 
 improvement in commerce, that 1 should greatly 
 regret, if prejudice should induce us to return to 
 a system of less utility. The introduction of the 
 precious metals for the purposes ot money may 
 with truth be considered as one of the ujost im- 
 portant steps towards the improvement of com- 
 merce, and the arts of civilised life ; but it is no 
 less true that, with the advancement of know- 
 ledge and science, we discover that it would
 
 25 
 
 be another improvement to banish them again 
 from the employment to which, during a less 
 enlightened period, they had been so advan- 
 tageously applied. 
 
 If the Bank should be again called upon to pay 
 their notes in specie, the effect would be to lessen 
 greatly the profits of the Bank without a corre- 
 spondent gain to any other part of the community. 
 If those who use one and two, and even five 
 pounds notes, should have their option of using 
 guineas, there can be little doubt which they would 
 prefer ; and thus, to indulge a mere caprice, a 
 most expensive medium would be substituted 
 for one of little value. 
 
 Besides the loss to the Bank, which must be 
 considered as a loss to the community, general 
 wealth being made up of individual riches, the 
 state would be subjected to the useless expense 
 of coinage, and, on every fall of the exchange, 
 guineas would be melted and exported. 
 
 To secure the public against any other varia- 
 tions in the value of the currency than those to 
 which the standard itself is subject, and, at the 
 same time, to carry on the circulation with a 
 medium the least expensive, is to attain the most 
 perfect state to which a currency can be brought, 
 and we should possess all these advantages by
 
 26 
 
 subjecting the Bank to the delivery of uncoined 
 gold or silver at the mint standard and price, in 
 exchange for their notes, instead of the delivery of 
 guineas ; by which means paper would never fall 
 below the value of bullion without being followed 
 by a reduction of its quantity. To prevent the 
 rise of paper above the value of bullion, the Bank 
 should be also obliged to give their paper in 
 exchange for standard gold at the price of 3l. 17*« 
 per ounce. Not to give too much trouble to 
 the Bank, the quantity of gold to be demanded 
 in exchange for paper at the mint price of 
 31. 17s. 10r</., or the quantity to be sold to 
 the Bank at 31. \7s., should never be less than 
 twenty ounces. In other words, the Bank should 
 be obliged to purchase any quantity of gold that 
 was offered them, not less than twenty ounces, 
 at 31. 17^.* per ounce, and to sell any quantity 
 that might be demanded at 3/. 17*. lOid. While 
 
 * The price of 3/. lys. here mentioned, is, of course, an 
 arbitrary price. There might be good reason, perhaps, for 
 fixing it either a little above, or a Httle below. In naming 
 3/. 17*. I wish only to elucidate the principle. The price 
 ought to be so fixed as to make it the interest of the seller 
 of gold rather to sell it to the Bank than to carry it to the 
 mint to be coined. 
 
 The same remark applies to the specified quantity of 
 twenty ounces. There might be good reason for making it 
 ten or thirty.
 
 £.7' 
 
 they have the power of regulating tlie quantity 
 of their paper, there is no possible inconve- 
 nience that could result to them from such a 
 regulation. 
 
 The most perfect liberty should be given, 
 at the same time, to export or import every 
 description of bullion. These transactions in 
 bulhon would be very iew in number, if the 
 Bank regulated their loans and issues of paper 
 by tiie criterion which I have so often men- 
 tioned, namely, the price of standard bullion, 
 without attending to the absolute quantity of 
 paper in circulation*. 
 
 The object which I have in view would be in a 
 great measure attained, if the Bank were obliged 
 to deliver uncoined bullion in exchanp-e for their 
 
 o 
 
 notes at the mint price and standard ; though 
 they were not under the necessity of purchasings 
 any quantity of bullion offered them at the 
 prices to be fixed, particularly if the mint were 
 
 ♦ I have already observed that silver appears to me to be 
 best adapted for the standard of our money. If it were 
 made so by law, the Bank should be obliged to buy or sell 
 silver bullion only. If gold be exclusively the standard, the 
 Bank should be required to buy or sell gold only ; but if 
 both metals be ritained as the standard, as they now by law- 
 arc, thu Bank should have the option which of the two 
 metals they would give in exchange for their notes, and a 
 price should be fixed for silver rather under the standard, at 
 which they should not be at liberty to refuse to purchase.
 
 28 
 
 to continue open to the public for the coinage 
 of money: for that regulation is merely sug- 
 gested to prevent the value of money from va- 
 rying from the value of bullion more than the 
 trifling difference between the prices at which 
 the Bank should buy and sell, and which would 
 be an approximation to that uniformity in its 
 value which is acknowledged to be so desirable. 
 
 If the Bank capriciously limited the quantity 
 of their paper, they would raise its value; and 
 gold might appear to fall below the limits at 
 which I propose the Bank should purchase. 
 Gold, in that case, might be carried to the mint, 
 and the money returned from thence being 
 added to the circulation would have the effect 
 of lowering its value, and making it again con- 
 form to the standard -, but it would neither be 
 done so safely, so economically, nor so expedi- 
 tiously, as by the means which I have proposed ; 
 against which the Bank can have no objection 
 to offer, as it is for their interest to furnish the 
 circulation with paper, rather than oblige others 
 to furnish it with coin. 
 
 Under such a s^'stem, and with a currency so 
 regulated, the Bank would never be liable to 
 any embarrassments whatever, excepting on 
 those extraordinary occasions, wljen a general 
 panic seizes the country, and when every one 
 is desirous of possessing the precious metals
 
 as the most convenient mode of realizing or 
 concealing his property. Against snch panics, 
 Banks have no security, on (my system; from 
 their very nature they are subject to them, as at 
 no time can tliere be in a Bank, or in a country, 
 so much specie or bullion as the monied indivi- 
 duals of such country have a right to demand. 
 Should every man withdraw his balance from 
 his banker on the same day, many times the 
 quantity of bank notes now in circulation would 
 be insufficient to answer such a demand. A panic 
 of this kind was the cause of the crisis in 1797 ; 
 and not, as has been supposed, the large advances 
 which the Bank had then made to government. 
 Neither the Bank nor government were at that 
 time to blame ; it was the contagion of the un- 
 founded fears of the timid part of the commu- 
 nity, which occasioned the run on the Bank, 
 and it would equally have taken place if they 
 had not made any advances to government, and 
 had possessed twice their present capital. If the 
 Bank had continued paying in cash, probably 
 the panic would have subsided before their coin 
 had been exhausted. 
 
 With the known opinion of the Bank direc- 
 tors, as to the rule for issuing paper money, 
 they may be said to have exercised their powers 
 without any great indiscretion. It is evident 
 that they have followed their own principle with
 
 30 
 
 extreme caution. In the present state of the 
 law, they have the power, without any control 
 whatever of increasing or reducing the circula- 
 tion in any degree they may think proper: 
 a power which should neither be intrusted to 
 the state itself, nor to any body in itj as there 
 can be no security for the uniformity in the 
 value of the currency, when its augmentation 
 or diminution depends solely on the will of the 
 issuers. That the Bank have the power of re- 
 ducing the circulation to the very narrowest 
 limits will not be denied, even by those who 
 agree in opinion with the directors, that they 
 have not the power of adding indefinitely to its 
 quantity. Though I am fully assured, that it is 
 both against the interest and the wish of the 
 Bank to exercise this power to the detriment 
 of the public, yet when I contemplate the evil 
 consequences which might ensue from a sudden 
 and great reduction of the circulation, as well as 
 from a great addition to it, I cannot but depre- 
 cate the facility with which the state has armed 
 the Bank with so formidable a prerogative. 
 
 The inconvenience to which country banks 
 were subjected before the restriction on cash 
 payments, must at times have been very great. 
 At all periods of alarm, or of expected alarm, 
 they must have been under the necessity of pro- 
 viding themselves with guineas, that they might
 
 31 
 
 be prepared for every exigency which might 
 occur. Guineas, on these occasions, were ob- 
 tained at the Bank in exchange for the larger 
 notes, and were conveyed by some confidential 
 agent, at expense and risk, to the country bank. 
 After performing the ofiices to which they were 
 destined, they found their way again to London, 
 and in all probability were again lodged in the 
 Bank, provided they had not suffered such a loss 
 of weight, as to reduce them below the legal 
 standard. 
 
 If the plan now proposed, of paying bank 
 notes in bullion, be adopted, it would be neces- 
 sary either to extend the same privilege to coun- 
 try banks, or to make bank notes a legal tender, 
 in which latter case there would be no alteration 
 m the law respecting country banks, as they 
 would be required, precisely as they now are, to 
 pay their notes, when demanded, in Bank of 
 England notes. 
 
 The saving which would take place, from not 
 submitting the guineas to the loss of weight, 
 from the friction which they must undergo in 
 their repeated journeys, as well as of the ex- 
 penses of conveyance, would be considerable; 
 but by fur the greatest advantage would result 
 from the permanent suppl}^ of the country, 
 as well as of the London circulation, as far as
 
 32 
 
 the smaller payments are concerned, being pro- 
 vided in the very cheap medium, paper, instead 
 of the very valuable medium, gold ; thereby 
 enablinii: the country to derive all the profit 
 which may be obtained by the productive em- 
 ployment of a capital to that amount. We 
 should surely not be justified in rejecting so de- 
 cided a benefit, unless some specific inconve- 
 nience could be pointed out as likely to follow 
 from adopting the cheaper medium. 
 
 Much has been ably written on the benefits 
 resulting to a country from the liberty of trade, 
 leaving every man to employ his talents, and 
 capital, as to him may seem best, unshackled 
 by restrictions of every kind. The reasoning 
 by which the liberty of trade is supported, is 
 so powerful, that it is daily obtaining converts. 
 It is with pleasure, that I see the progress 
 which this great principle is making amongst 
 those whom we should have expected to cling 
 the longest to old prejudices. In the petitions 
 to parliament against the corn bill, the advan- 
 tages of an unrestricted trade were generally re- 
 cognised ; but by none more ably than by the 
 clothiers of Gloucestershire, who were so con- 
 vinced of the impolicy of restriciiotj, that they 
 expressed a willingness to relmquish every 
 restraint which might be found to attach to
 
 33 
 
 tljtir trade. These are principles vvliich cannot 
 be too widely extended, nor too generally adopted 
 inpracticej but if foreign nations are notsnffici- 
 ently enlightened to adopt this liberal system, 
 and should continue their prohibition* and exces- 
 sive duties on the importation of our commodi- 
 ties and manufactures, let England set them a 
 good example by benefiting herself; and instead 
 of meeting their prohibitions by similar exclu- 
 sions, let her get rid, as soon as she can, of every 
 vestige of so absurd and hurtful a policy. 
 
 The pecuniary advantage which would be 
 the result of such a system would soon incline 
 other states to adopt the same course, and no 
 long period would elapse before the general 
 prosperity would be seen to be best promoted 
 by each country falling naturally into the most 
 advantageous em[)loyment of its capital, talents, 
 and industry. 
 
 Advantageous, however, as the liberty of 
 trade would prove, it must be admitted that 
 there are a few, and a very few exceptions to it, 
 where the interference of government may he 
 beneficially exerted. Monsieur Say, in his able 
 work on Political Economy, after shewing the 
 advantages of a free trade, observes*, that the 
 
 * Economic Politique, livre i. chap. 17. 
 
 D
 
 34 
 
 interference of government is justifiable only in 
 two cases; first, to prevent a fraud, and secondly, 
 to certify a fact. In the examinations to which 
 medical practitioners are obliged to submit, 
 there is no improper interference; for it is neces- 
 sary to the welfare of the people, that the fact 
 of their having acquired a certain portion of 
 knowledge respecting the diseases of the human 
 frame should be ascertained and certified. The 
 same may be said of the stamp which govern- 
 ment puts on plate and money ; it thereby pre- 
 vents fraud, and saves the necessity of having 
 recourse on each purchase and sale to a difficult 
 chemical process. In examining the purity of 
 drugs sold by chemists and apothecaries, the 
 same object is had in view. In all tliese cases, 
 the purchasers are not supposed to have, or to 
 be able to acquire sufficient knowledge to guard 
 them against deception; and government inter- 
 feres to do that for them which they could not 
 do for themselves. 
 
 But if the public require protection against 
 the inferior money which might be imposed 
 upon them by an undue mixture of alloy, and 
 which is obtained by means of the govern- 
 ment stamp when metallic money is used; 
 how much more necessary is such protection 
 when paper money forms the whole, or almost
 
 the whole, of the ch'culating medium of the 
 country? Is it not inconsistent, that govern- 
 ment should use its power to protect the com- 
 munity from the loss of one shilling in a guinea; 
 but does not interfere to protect them from the 
 loss of the whole twenty shillings in a one pound 
 note ? In the case of Bank of England notes, a 
 guarantee is taken by the government for the 
 notes which the Bank issue; and the whole 
 capital of the Bank, amounting to more than 
 eleven m/liions and a half, must be lost before 
 the holdrrsof their notes can be sulVerers fromany 
 imprudence they may commit. Why is not the 
 same principle followed with respect to the coun- 
 try banks? What objection can there be against 
 requiring of those who take upon themselves 
 the office of furnishing the public with a circu- 
 lating medium, to deposit with government an 
 adequate security for the due performance of 
 their engagements ? In the use of money, every 
 one is a trader; those whose habits and pursuits 
 are little suited to explore the mechanism of 
 trade are obliged to make use of money, and 
 are no way (piaiified to ascertain the solidity of 
 the dillt^rent banks whose paper is in circula- 
 tion; accordingly we tjnd that men living on 
 limited incomes, women, labourers, and mecha- 
 nics of all descriptions, are often severe sufferers
 
 56 
 
 by the failures of country banks, which have 
 lately become frequent beyond all former exam* 
 pie. Though I am by no means disposed to 
 judge uncharitably of those who have occasioned 
 so much ruin and distress to the middle and 
 lower classes of the people, yet, it must be al- 
 lowed by the most indulgent, that the true 
 business of banking must be very much abused 
 before it can be necessary for any bank, possess- 
 ing the most moderate funds, to fail in their 
 engagements 3 and I believe it will be found, in 
 by far the major part of these failures, that the 
 parties can be charged with offences much more 
 grave than those of mere imprudence and want 
 of caution. 
 
 Against this inconvenience the public should 
 be protected by requiring of every country 
 bank to deposit with government, or with com- 
 missioners appointed for that purpose, funded 
 property or other government security, in some 
 proportion to the amount of their issues. 
 
 Into the details of such a plan it is not neces- 
 sary to er^ter very minutely. Stamps for the 
 issue of notes might be delivered on the re- 
 quired deposit being made, and certain periods 
 in the year might be fixed upon, when the 
 whole or any part of the security should be re- 
 turned, on proof being given, either by the r^-
 
 37 
 
 turn of the cancelled stamps, or by any other 
 satisfactory means, that the notes for which it 
 was given were no longer in circulation. 
 
 Against such a regulation no country bank 
 of respectability would object; on the contrary, 
 it wouldj in all probability, be most acceptable 
 to them, as it would prevent the competition of 
 those, who are at present so little entitled to 
 appear in the market against them. 
 
 SECTION V. 
 
 A practice which creates a great mass of mere an- 
 tile ificouvenierice — Remedy proposed. 
 
 After all the improvements however that can 
 be made iH our system of currency, there will 
 yet be a temporary inconvenience, to which the 
 public will be subject, as they have hitherto 
 been, from the large quarterly payment of di- 
 vidends to the public creditors;— an inconveni- 
 ence which is often severely felt ; and to which 
 I think an easy remedy might be applied. 
 
 The national debt has become so large, and 
 tht interest which is paid quarterly upou it is
 
 38 
 
 so great a sum, that the mere collecting the 
 money from the receivers general of the taxes, 
 and the consequent reduction of the quantity in 
 circulation, just previously to its being paid to 
 the public creditor, in January, April, July, an(;l 
 October, occasions, for a week or more, the most 
 distressing want of circulating medium. The 
 Bank, by judicious management, discounting 
 bills probably wevy freely, just at the time that 
 these monies are paid into the Exchequer, and 
 arranging for the receipt of large sums, imme- 
 diately after the payment of the dividends, have, 
 no doubt, considerably lessened the inconve- 
 nience to the mercantile part of the community. 
 Nevertheless, it is well known to those who are 
 acquainted with the money market that the dis- 
 tress for money is extreme at the periods I have 
 mentioned. Exchequer bills, which usually sell 
 at a premium of five shillings per 100/. are at such 
 times at so great a discount, that by the purchase 
 of them then, and the re-sale when the dividends 
 are paid, a profit may often be made equal to 
 the rate of fifteen to twenty per cent, interest 
 for money. At these times, too, the difference 
 between the price of stock for ready money, 
 and the price for a week or two to come, affords 
 ii profit, to those who can advance money, even 
 greater than can be made by employing mo-
 
 39 
 
 ney in the purchase of exchequer bills. This 
 great distress for money is frequently, after the 
 dividends are paid, followed by as great a plen- 
 ty, so that little use can for some time be made 
 of it. 
 
 The very great perfection to which our system 
 of economizing the use of money has arrived, 
 by the various operations of banking, rather 
 aggravates the peculiar evil of which I am speak- 
 ing; because, when the quantity of circulation 
 is reduced, in consequence of the improvements 
 which have been adopted in the means of effect- 
 ing our payments, the abstraction of a million 
 or two from that reduced circulation becomes 
 much more serious in its effects, being so 
 much larger a proportion of the whole circula- 
 tion. 
 
 On the inconvenience to which trade and com- 
 merce are exposed by this periodical distress for 
 money, I should think no difference of opinion 
 can possibly exist. The same unanimity may 
 not prevail with respect to the remedy which I 
 shall now propose. 
 
 . Let the Bank be authorised by government 
 to deliver the dividend warrants to the proprie- 
 tors of stock a few days before the receivers- 
 general are required to pay their balances into 
 the Exchccjucr.
 
 . 40 
 
 Let these warrants be payable to the bearer 
 exactly in the same manner as they now are. 
 . Let the clay for the payment of these divi- 
 dend warrants in bank notes be regulated pre- 
 cisely as it now is. 
 
 If the day of payment could be named on or 
 before the delivery of the warrants, it would be 
 more convenient. 
 
 Finally, let these warrants be receivable into 
 the Exchequer from the receivers general, or 
 from any other person who may have pay- 
 ments to make there, in the same manner as 
 bank notes 3 the persons paying them allowing 
 the discount for the number of days which will 
 elapse before they become due. 
 
 If a plan of this sort were adopted there could 
 never be any particular scarcity of money before 
 the payment of the dividends, nor any particular 
 plenty of it after. The quantity of money in 
 circulation would be neither increased nor di- 
 minished by the payment of the dividends. A 
 great part of these warrants would, from the 
 stimulus of private interest, infallibly find their 
 way into the hands of those who had public pay- 
 ments to make, and from them to the Exchequer. 
 Thus then would a great part of the payments 
 to government, and the payments from govern- 
 ment to the public creditor, be effected without
 
 41 
 
 the intervention of either bank notes or money ; 
 and the demands for money for such purposes, 
 which are now so severely felt by the mercantile" 
 classes, would be effectually prevented. 
 
 Those who are well acquainted with the 
 economical system, now adopted in London, 
 throughout the whole banking concern, will 
 readily understand that the plan here proposed 
 is merely the extension of this economical sys- 
 tem to a species of pjiyments to which it has not 
 yet been applied. To them it will be unneces- 
 sary to say any thing further in recommendation 
 of a plan, with the advantages of which, in oilier 
 concerns, tiiey are already so familiar.
 
 4^ 
 
 SECTION VI. 
 
 The public services of the Bank excessively over' 
 paid — lieviedi) proposed. 
 
 Mr. Grenfell has lately called the attention gC 
 parliament to a subject of importance to the 
 financial interests of the community. At a time 
 when taxes bear so heavy on the people, brought 
 upon them by the unexampled difficulties and 
 expenses of the war, a resource so obvious as 
 that which he has pointed out will surely not be 
 neglected. 
 
 It appears by the documents which Mr. 
 Grenfell's motions have produced, that the 
 Bank have, for many years, on an average, had 
 110 less a sum of the public money in their bands, 
 on which they have obtained an interest of five 
 per cent., than eleven millions ; and the only 
 compensation which the public have derived for
 
 43 
 
 the advantage which the Bank have so long 
 enjoyed is a loan of three millions from 1806 
 to 1814, a period of eight years, at an interest 
 of three per cent. — and a further loan of three 
 milHons, without interest, which the Bank, in 
 1808, agreed to afford the public till six months 
 after the definitive treaty of peace, and which by 
 an aci of last session was continued without in- 
 terest till April 1816. From 1806 to 18l6, a 
 period of ten years, the Bank have gained five 
 per cent, per annum on 1 1,000,000/., which will 
 amount to .... ^,0,500,000 
 
 During the same time the public 
 have received the following com- 
 pensation: the difference between 
 three per cent, and five per cent, 
 interest; or, two per cent, per 
 annum on 3, 000, COO/, for eight 
 years, or - - - £480,000 
 
 From 1S08 to 1816, the public will 
 have had the advantage oi' a loan 
 of three millions without iutcrest, 
 which at five per cent, per ann. 
 would amount, in eight years;, to X'l, 200,000 
 
 ],G80,CW; 
 
 Balance gained by the Bank - , - ;j, 820,000
 
 44 
 
 3,820,000/. wttl have been gained by the Dank 
 in ten years, or 382,000/. per ann. for acting as 
 bankers to the pubhc, when, perhaps, the whole 
 expense attending this department of their busi- 
 ness does not exceed 10,000/. per ann. 
 
 In I807j when these advantages were first 
 noticed by a committee of the house of commons, 
 it was contended, by many persons, in favour of 
 the Bank, and by Mr. Thornton, one of the 
 directors who had been governor, that the gains 
 of the Bank were in proportion to the amount of 
 their notes in circulation, and that no advantage 
 was derived from the public deposits, further 
 than as they enabled the Bank to maintain a 
 larger amount of notes in circulation. This fal- 
 lacy was completely exposed by the committee. 
 
 If Mr. Thornton's argument were correct, no 
 advantage whatever would have resulted to the 
 Bank from the deposits of the public money— 
 for those deposits do not enable them to maintain 
 a larger amount of notes in circulation. 
 
 Suppose that before the Bank had any of the 
 public deposits, the amount of their notes in 
 circulation were twenty-five millions, and that 
 they derived a profit by such circulation. Sup- 
 pose now that government received ten millions 
 for taxes in bank notes, and deposited them 
 permanently with the Bank, The circulation
 
 45 
 
 would be immetliutely reduced to fifteen mil- 
 lions, but the profits of the Bank would be pre- 
 cisely the same as before ; though fifteen millions 
 only were then in circulation, the Bank would 
 obtain a profit .m twenty-five millions. If now 
 they again raise the circulation to twenty-five 
 millions, by employing the ten millions in dis- 
 counting bills, purchasing exchequer bills, or 
 advancing the payments on the loan for the 
 year, for the holders of scrip receipts, will they 
 not have added the interest of ten millions to 
 their usual profits, although they should at no 
 time have raised their circulation above the 
 original sum of twenty-five millions? 
 
 That the increase in the amount of public 
 deposits should enable the Bank to add to the 
 amount of their notes in circulation is neither 
 supported by theory nor experience. If we at- 
 tend to the progress of these deposits, we shall 
 observe that at no time did they increase so mqch 
 as from 1800 to 1806, during which time there 
 was no increase in the circulation of notes of 
 five pounds and upwards; but from 1807 to 1815,' 
 when there was no increase whatever in the 
 amount of public deposits, the amount of notes 
 of five pounds and upwards had increased five 
 millions.
 
 46 
 
 Nothing' can be more satisfactory on tiie 
 subject of the profits of the Bank, from the 
 public deposits, than the report of the com- 
 mittee on pubHc expenditure, in 1807. It is 
 as follows : 
 
 " In the evidence upon this part of the sub- 
 " ject, it is admitted that the notes of the Bank 
 ** are productive of profit, but it appears to be 
 " assumed that the government balances are 
 *' only so in proportion as they tend to aug- 
 '' ment the amount of notes; whereas your 
 " committee are fully persuaded that both ba- 
 " lances and notes are and must necessarily be 
 " productive. 
 
 " The funds of the Bank, which are the sources 
 ■" of profit, and which constitute the measure of 
 " the sum which they have to lend (subject only 
 " to a deduction on account of cash and bullion), 
 " may be classed under three heads. 
 
 " First. The sum received from their pro- 
 *^ prietors as capital, together with the savings 
 " which have l)een added to it. 
 ' "SecQunlv. 'I'he^ .sum received from persons 
 "keeping cash ai rhe Bank. This sum consists 
 " of the balances of tie deposit accounts, both 
 " of government and of individuals. In 1797, 
 " this fund, including all the balances of indivi-
 
 47 
 
 " duals, was only 5,130,140/. The present go- 
 " vernment balances alone have been stated 
 *' alread}^ at between eleven and twelve millions, 
 " including bank notes deposited in the Exche- 
 " quer*. 
 
 " Thirdly. The sum received in return for 
 *' notes put into circulation A correspondent 
 •!* value for every note must originally have been 
 " given, and the value thus given for notes consti- 
 ^* tutes one part of the general fund to be lent 
 " at interest. A note-iiolder, indeed, does not 
 "differ essentially from a person to whom a 
 " balance is due. Both are creditors of the 
 ** Bank; the one h Iding a note, which is the evi- 
 " dence of the debt due to him, the other having 
 " the evidence of an entry in the ledger of the 
 " Bank. The sum at all times running at inte^ 
 " rest will be in exact 'proportion, to the amount 
 
 • By some of my readers the words " including bank 
 *' notes deposited in the Exchequer" may not be understood. 
 They are bank notes never put into circulation ; neither 
 are they included in any return made by the Bank. They 
 are called at the Exchequer special notes, and are mere 
 vouchers, (not having even the form of bank notes), of the 
 payment to the Bank from the Exchequer of such monies as 
 are daily received at the latter office. They are the record, 
 therefore, of a part of the public deposits lodged with the 
 Bank.
 
 48 
 
 ^ of iliese three funds combined, deduction being' 
 " made for the value of cash and bullion *." 
 
 Every word of this statement appears to me 
 unanswerable, and the principle laid down by 
 the committee would afford us an infallible clue 
 to ascertain the net profits of the Bank, if we 
 knew the amount of their savings, — their cash 
 and bullion, and their annual expenses, as well 
 as the other particulars, are known to us. 
 
 It will be seen by the above extract, that in 
 1807 the amount of the public deposits was be- 
 tween eleven and twelve millions, whereas in 
 1797 the amount of public and private deposits 
 ^vere together only equal to 5,130,140/. In con- 
 sequence of this report, Mr. Perceval applied to 
 the Bank, on the part of the public, for a parti- 
 cipation in their additional profits from this 
 source, either in the way of an annual payment 
 
 ♦ In 1797 the Bank stated their finances to be as follows : 
 Bank notes in circulation - - =£8, 640,000 
 Public and private deposits - 5,130,140 
 
 Surplus capital - - - - 3,826,890 
 
 17.597,030 
 On the other side of the account they shewed in what secu- 
 rities these funds were invested, and, with the exception of 
 cash and bullion, and a small sum for stamps, they were all 
 yielding interest and profit to the Bank.
 
 49 
 
 or as a loan of money without interest ; aiK^, 
 after some negociation, a loan of three millions 
 *vas ottained without interest, payable six 
 months after a definitive treaty of peace. 
 
 The same report also notices the exorbitant 
 allowance which was made to the BanK for tl^e 
 management of the national debt. The public 
 paid the Bank at that time at the rate of 450/. 
 per million, for management, and it was stated 
 by the committee that the additional allowance 
 for management in the ten years, ending in 1807, 
 in consequence of the increase of the debt, was 
 more than 155,000/. whilst the " whole increase 
 " of the officers who actually transact the busi- 
 " ness, in the last eleven years, is only one hun- 
 " dred and thirty-seven, whose annual expenoe 
 " may be from 18,449/. to 28,290/. ; the addition 
 " to the other permanent charges being probia- 
 *' bly about one half or two thirds of that sum." 
 
 After this report a new agreement was made 
 with the Bank for the management of the public 
 debt. 
 
 450/. per million was to be paid if the unre- 
 deemed capital exceeded three hundred million?, 
 but fell below four hundred millions. 
 
 340/. per million, if the capital exceeded four 
 hundred millions, but fell belo\v six hundred miji- 
 lions. 
 
 £
 
 so 
 
 300/. per million on such part of the public 
 debt as exceeded six hundred millions^ 
 
 Besides these allowances the Bank are paid 
 800/. per million for receiving contributions on 
 loans; 1000/. on each contract for lotteries, and 
 1250/. per million, or one eighth percent, for re- 
 ceiving contributions on the profits arising from 
 property, professions, and trades. This agree- 
 ment has been in force ever since. 
 
 As the period is novv approaching when the 
 affairs of the Bank will undergo the consideration 
 of parliament, and when the agreement which 
 regards the public deposits will expire, by the 
 payment of the three millions borrowed of the 
 Bank without interest, in 1808 ; no time can be 
 more proper than the present to point out the 
 undue advantages which were given to the Bank 
 in the terms settled between them and Mr. Per- 
 ceval in 1808. This I apprehend was the chief 
 object of Mr. Grenfell; for it is not alone to the 
 additional advantages which the Bank have ob- 
 tained since the agreement in 1808 that he 
 wishes to call the attention of parliament ; but 
 also to that agreement itself, under which the 
 public are now paying, and have long paid, in 
 one shape or another, enormous sums for very 
 madequate services. 
 
 Mr. Grenfell probably thinks, and, if he does.
 
 51 
 
 I most heartily concur with him, that a profit at 
 382,000/. per annum, which is the sum at which 
 tlie advantages of the pubhc deposits to the 
 Bank, for a period of ten years, may be cafcula- 
 ted, as will be seen page 44, very far exceeds the 
 just compensation which the public ought to 
 pay to the Bank, for doing the mere business of 
 bankers; particularly when, in addition to this 
 sum, 300,000/. per annum is now also paid for 
 the management of the national debt, loans, &c. ; 
 when moreover the Bank have been enjoying, 
 ever since the renewal of their charter, immense 
 additional profits, from the substitution of paper 
 money in lieu of a currency consisting partly of 
 metalUc and partly of paper money, which addi- 
 tional profits were not in contemplation, either 
 of parliament \vhich granted, or of the Bank 
 which obtained that charter, when the bargain 
 was made in 1800; and of which they might be 
 in a great measure deprived by the repeal of the 
 bill which restricts them from paying their notes 
 in specie. Under these circumstances it must, I 
 think, be allowed that in 1 SOS Mr. Perceval by 
 no means obtained for the public what they had 
 a right to expect; and it is to be hoped that, 
 with the known sentiments of the Chancellor of 
 the Exchequer, as to the light of the public to 
 
 E 2
 
 52 
 
 participate in tlie additional advantages of the 
 Bank, arising from public deposits, terms more 
 consonant with the public interest will now be 
 insisted on. 
 
 It is true that the above sums, though paid by 
 the public, are not the net profits of the Bank ; 
 from them a deduction must be made for the ex- 
 pences of that part of the Bank establishment 
 which is exclusively appropriated to the public 
 business ; but those expences do not probably 
 exceed 150,000/. per annum. 
 
 The committee on public expenditure stated 
 in their report to the House of Commons, in 
 1807, " that the number of clerks employed by 
 "the Bank exclusively or principally in the 
 *' public business was. 
 
 In 1786 243 
 
 1796 313 
 
 1807 450 
 
 " whose salaries, it is presumed, may be calcu- 
 " lated at an average of between 120/. and 170/. 
 " for each clerk : taking them at 135/. which ex- 
 " ceeds the average of those employed in the 
 " South Sea House, the sum is - - 60,750/. 
 
 « at 150/. the sum is 67,500/. 
 
 '' at 170/. the sum is 76,500/. 
 
 *' either of which two last sums would be suffif 
 " cient to provide a superannuation fund.
 
 53 
 
 " The very moderate salaries, the report con- 
 
 " tinues, received by the governor, deputy go- 
 
 " vernor, and directors, amount to ;^8,000 
 '* Incidental expences may be es- 
 
 " timated at about - - 15,000 
 *' Building additional and repairs, 
 
 - " at about - - - 10,000 
 *' Law expences and loss by frauds, 
 
 " forgeries, at about - - 10,000 
 
 43,000 
 Add the largest estimate for clerks 76,500 
 
 Total i; 11 9,500 
 
 Allowing, then, the very highest computation 
 of the committee, the expence of managing the 
 public business in 1807, including the zvhole of 
 the salaries of the directors, incidental expences, 
 additional buildings and repairs, together with 
 law expences and loss by frauds and forgeries, 
 amounted to 119,500/. 
 
 The committee also stated that the increased 
 expences of the Bank for managing the public 
 business, after a period of eleven years, from 
 1796 to 1807, were about 35,000/. per annum, 
 on an increased debt of two hundred and seventy 
 eight millions, being at the rate of 126/. per mil-
 
 54 
 
 Hon. From 1807 to the present time the um'e- 
 deemed debt managed by the Bank has increased 
 from about five hundred and fifty millions to 
 about eight hundred and thirty millions, or 
 about two hundred and eighty millions — little 
 more than from 1796 to 1807, and therefore at 
 the same rate of 126/. per million, would be at- 
 tended with a similar expence of 35,000/.; but, 
 *^ as the rate of expence diminishes as the scale 
 '* of business enlarges," I shall estimate it at 
 30,500/. which added to 1 19,500/., the expences 
 of 1807, will make the whole expence of ma- 
 naging the public business amount to 150,000/. 
 The auditors of public accounts in 1786 esti- 
 mated that 187^- lOi". per million was sufficient 
 to pay the expences of managing a debt of two 
 hundred and twenty-four millions. The esti- 
 mate which I have just made is about 180/. per 
 million, on a debt of eight hundred and thirty 
 millions, which will appear an ample allowance 
 when it is considered in what different proper- 
 ions the debt itself increases, cqmpared with the 
 uork which it occasions. 
 
 Supposing, then, the expences to be about 
 150,000/. the net profits obtained by the Bank 
 by all its transactions with the public this year 
 will he as follows:
 
 55 
 
 Charge for managing the national 
 
 
 • debt for one year, ending the 
 
 
 1st February, 1816*, - 
 
 254,000 
 
 For receiving contributions on 
 
 
 loans, at 800/. per million, on 
 
 
 thirty-six millions - m 
 
 28,800 
 
 Ditto lotteries 
 
 2,000 
 
 Average profits on public depo- 
 
 
 sitsf , . - 
 
 382,000 
 
 Allowance for receiving property 
 
 
 tax - - 
 
 3,480 
 
 
 670,280 
 
 Expences attending the manage- 
 
 
 ment of the public business 
 
 150,000 
 
 Net profits of the Bank paid by 
 
 
 the public - - . 
 
 £520,280 
 
 Of this vast sum, 379,000/. probably arises 
 from the deposits alone, an expence which might 
 almost wholly be saved to the nation, if govern- 
 ment were to take the management of that con- 
 cern into their own hands, by having a common 
 
 * This charge is calculated on the debt as it stood in 
 February, 1815 : more than seventy-five millions have been 
 added since. See Appendix. 
 
 t Sec page 44.
 
 5.t) 
 
 treasury, on which each department should draw 
 in the same manner as they now do on the Bank 
 of England, investing the, eleven millions, which 
 appears to be the average deposits, in Exchequer 
 bills, a part of which might be sold in the market, 
 if any unforeseen circumstances should reduce 
 the deposits below t4iat sum. 
 
 The resolutions* proposed by Mr. Grenfell, 
 aOad> on which parliament will decide the next 
 session, after briefly recapitulating the facts conr 
 tained in the documents which his motions have 
 produced, conclude thus : " That this House 
 " will take into early consideration the advan- 
 " tages derived by the Bank, as well from the 
 *' management of the national debt, as from the 
 " amount of balances of public money remaining 
 '* in their hands, with the view to the adoption 
 " of such an arrangement, when the engage- 
 " ments now subsisting shall have expired, as 
 ^' may be consistent with what is due to the in- 
 '^ terest of the public, and the rights, credit, and 
 *' stability of the Bank of England.*' 
 
 Mr. Meliish, the governor of the Bank, has 
 also proposed resolutions to be submitted to par- 
 liament next' session. Tljese resolutions^ admit 
 iall the facts^stated by Mr. Grenfell- s -, they men- 
 
 f iSee- Apgeriditx.
 
 ^7 
 
 tion also one or two trifling services which the 
 Bank perform for the public, one without charge,* 
 and another at a less charge than is incurred by 
 employing the ordinary collector of taxes. But 
 tiie 8th and 9th resolutions adv.mce an extra- 
 ordinary pretension, —they appear to question 
 wlietherow the eJcpircH'ion ojth loan of :•}, 000,0001, 
 
 * The one^without charge is the calculating the deduction 
 from each dividend warrant for property tax. 
 
 The other is receiving contributions from those who pay 
 tlieir property tax into the Bank, for which the Bank receives 
 1250^. per milHon, or one-eighth per cent. 
 
 If the collector had gone from house to house to receive 
 ]this money, he would have had an allowance of five pence 
 per pound, which would have cost the public 58,007/. in- 
 stead of 3480^. paid to the Bank. 
 
 Perhaps no part of the business of the Bank is more easily 
 transacted than this which they have pointed out. Instead 
 of being under-paid, it appears to me to be paid most li- 
 berally. 
 
 The saving to the public is really effected by the money 
 being brought to one focus, instead of being collected from 
 various quarters. The Bank appear to consider the rule, by 
 which they are to measure the moderation of their charge*, 
 to be the saving which they effect to their employer, rathet 
 than the just compensation for their own trouble and expence. 
 "What would they think of an engineer, if in his charge for 
 the construction of a steam engine he should be guided by 
 the value of the labour which the engine was calculated to 
 save, and not by the value of the labour and materials neces- 
 sary to its construction ?
 
 58 
 
 in 1816, government will be at liberty before 
 18$"3, the time when the charter will expire, to 
 demand any conip nsation uhat'^ver from the 
 Bank for tlie advantages they derive from the 
 public deposits, or to make any new arrange- 
 ment respecting the charge for management 
 oftlie national debt. These resohitions are as 
 follows : 
 
 ' Slh. " That by the 39 and 40 Geo. 3. c, 28. s. 
 " 13, it is enacted, "That during the continuance 
 " of the charter, the Bank shall enjoy all privi- 
 " leges, profits, emoluments, benefits, and ad- 
 " vantages vi^hatsoever, which they now possess 
 " and enjoy by virtue of any employment by or 
 " on behalf of the public. 
 
 " That previously to such renewal of their 
 " charter, the Bank was employed as the public 
 ^* banker, in keeping the cash of all the principal 
 " departments in the receipt of the public re- 
 " venue, and in issuing and conducting the pub- 
 '' lie expenditure, &c.** 
 
 . 9th. "That whenever the engagements now 
 <' subsisting between the public and the Bank 
 *' shall expire, it may be proper to consider the 
 *' advantages derived by the Bank from its 
 " transactions with the public, with a view to 
 " the adoption of such arrangements as may be
 
 " consistent with those principles of equity and 
 " good faith, which ought to prevail in all trans- 
 '^ actions between the public and the Bank of 
 *? England."* 
 
 * Since the first edition of this work was published, the 
 first Lord of the Treasury, and the Chancellor of the Ex- 
 chequer, have proposed to the Bank that they shall continue 
 the advance of three millions, which would have been due in 
 April next, for two years without interest : — and further 
 that the Bank shall advance the sum of six millions at four 
 p.er cent, for two years certain, and shall continue the same 
 fpr tl^ree years longer from such period, subject to repayment 
 upon six months notice to be given, at any time betsveen the 
 lOth October in any year, and the 5th of April following, 
 either by the Lords of the Treasury to the Bank, or by the 
 Bank to their Lordships. This proposal was agreed to by a 
 General Court of Proprietors of Bank Stock, held, on the 
 8th of February, for the purpose of considering the same. 
 
 At this general court, on asking for some explanation re- 
 specting the deposit of the public money at the end of the 
 two years, I noticed with approbation the departure of the 
 Bank from the claim which they had set up in the above reso- 
 lutions, in which they appeared to me to assert the right of the 
 Bank to the custody of the public money without paying any 
 remuneration whatever j to which the Governor of the Bank, 
 INlr. Mellish, replied, that I had totally misconceived the 
 meaning of those resolutions, and he was sure if I read them 
 again with attention, I should be convinced that no such con- 
 struction could be put on them. I am glad the Bank dis- 
 claim having had the intention of depriving the public of 
 the advantage whicli they liave enjoyed since the report of
 
 Co 
 
 That the Bank should now for the first time 
 intimate that their charter precludes the public 
 from making any demand on the Bank for a 
 participation in the advantages arising from the 
 public deposits, after all that has passed since 
 1800 on that subject, does indeed appear sur- 
 prising. 
 
 The charter of the Bank was renewed in 1 800 
 for twenty-one years, from its expiration in 
 iSiS; consequently it will not now terminate 
 till 1833. But since 1800, so far from the Bank 
 asserting any such claim of right to the whole 
 advantages of the public deposits, they in 1806 
 lent government 3,000,000/, till 1814, at 3 per 
 cent, interest, and in 1808 they lent 3,000,000/. 
 more till the termination of the war, without 
 interest, and in the last session of parliament 
 the loan of 3,000,000/. was continued without 
 interest till April 1816. These loans were ex- 
 pressly granted, in consideration of the increase 
 in the amount of the public deposits. 
 
 the Committee on Public Expenditure ; though I regret, that 
 they have expressed themselves so obscurely, as to have given 
 me and many others a different impression. The resolutions 
 still appear to me to assert that the privilege of being pub- 
 lic banker was for a valuable consideration secured to the 
 Bank during the continuance of their charter, and that at 
 the expiration of that engagement, and not before, it might 
 be proper to consider of a new arrangement.
 
 61 
 
 The committee on public expenditure, in their 
 report (1807), to which I have already referred, 
 speaking of the loan of 3,000,000/. to the public 
 in 1806, at three per cent, interest, observe, 
 " But the transaction is most material in an- 
 *' other view, as it evinces that the agreement 
 ** made in 1800 was not considered either by 
 ** those who acted on the part of the public, 
 *' or by the Bank directors themselves, as a bar 
 *' against further participation, whenever the in- 
 " crease of their profits derived from the public, 
 " and the circumstances of public affairs, miglit, 
 ** upon similar principles, 7nake such a claim 
 " reasonable and expedient.'* And what is Mr. 
 Perceval's language at the same period, when 
 in consequence of this report he applied for 
 and obtained a loan of 3,000,000/. till the end 
 of the war? In his letter to the governor and 
 deputy governor of the Bank, dated the 1 1th of 
 January 1808, he says, " I think it necessary to 
 " observe, that the proposal to confiTre the dura- 
 ** tion of the advance, by way of loan, or of the 
 *' annual payment into the Exchequer, to the 
 " period of the present war, and twelve months 
 " after the termination of it, is by no means to 
 " be understood as an admission on my part, 
 " that at the expiration of such period, tlie pub- 
 " lie will no longer be entitled to look to any ad-
 
 62 
 
 *' vantage from the continuance of such deposits -, 
 ^' but simply as a provision, by which the govern- 
 " ment and the Bank may be respectively en- 
 " abled, under the change in the state of affairs 
 " which will then have taken place, probably 
 " affecting the amount of public balances in the 
 '^ hands of the latter, to consider of a new ar- 
 " rangement." On the 19th o^ January, Mr. 
 Perceval's proposals were submitted to the Court 
 of Directors in a more official form, — they con- 
 clude thus : " And it is understood that during 
 " the continuance of this advance by the Bank, 
 ■' no alteration is to be proposed in the general 
 " course of business, between the Bank and the 
 " Exchequer, nor any regulation introduced by 
 " which the accounts now by law directed to 
 " be kept at the Bank shall be withdrawn from 
 " thence." These proposals were recommended 
 for acceptance by the Court of Directors to the 
 Court of Proprietors, and were, without comr 
 ment, agreed to on the 21st o( Ja?iuary, 
 
 Mr. Vansittart, in his application to the Bank 
 in November 1814, relative to continuing the loan 
 of 3,000,000/., which would have become due on 
 the 17th of December following, till April 1816; 
 uses these words: " But 1 beg to be distinctly 
 " understood as not departing from the reserva- 
 " tion made by the late Mr. Perceval, in his
 
 63 
 
 " letter to the governor and deput}^ governor of 
 " the Bank, of the 1 1th January, 1808, by which 
 ** he guarded against the possibility of any mis- 
 ** construction which could preclude the public, 
 *' after the expiration of the period of the loan 
 ** then agreed upon, from asserting its title to 
 *' future advantage from the continuance or in- 
 " crease of such deposits; and as adhering ge- 
 ** nerally to the principles maintained by Mr. 
 " Perceval, in the discussion which then took 
 " place." 
 
 No comment whatever appears to have been 
 made by the Bank on these observations : a ge- 
 neral Court of Proprietors was called, and the 
 loan of three millions was continued till April, 
 1816. 
 
 It surely will not come with a very good grace 
 now from the Bank, to insist that the agreement 
 of 1800 precludes tlie public from demanding 
 any compensation for the advautagt^s which the 
 Bank have derived from the increase oi' the pub- 
 lic deposits since that period, when, on so many 
 occasions, tne right ol participation has been so 
 expressly claimed on the part of government, 
 and acceded to by the Court of Directors. 
 
 In addition to these strong facts, by a refer-
 
 64 
 
 ence to the basis on which the agreement for 
 the renewal of the charter was founded, as de-^ 
 tailed by Mr. Thornton in his evidence before 
 the committee of public expenditure in 180?*, 
 it will still further appear^ that the Bank have 
 no claim whatever to shelter themselves under 
 their charter, in refusing to let the public parti- 
 cipate in the profits which have accrued from 
 the augmentation of the public deposits. 
 
 It must be recollected that Mr. Thornton 
 was, in 1800, the governor of the Bank; that 
 he was the negociator, on the part of the Bank^ 
 with Mr. Pitt, for the renewal of the charter.-j 
 and that, in fact, the idea of renewing the 
 charter, so long before its expiration, originated 
 with him. Mr. Thornton told the committee, 
 that the only sums of public money, on which the 
 Bank derived profit, and which were referred to 
 •by him and Mr* Pitt, with a view to settle the 
 Compensation which the public should receive 
 tbr prolonging the exclusive privileges of the 
 Bank, were those lodged at the Bank for the 
 payment of the growing dividends, and for the 
 quarterly issues to the commissioners for the 
 redemption of the national debt. 
 
 * Report, i>age 104. ^
 
 65 
 
 The first of these sums Mr. Thornton esti- 
 mates to be on an average - <£2,500,000* 
 And it appears by an account 
 
 lately produced, that the second 
 
 amounted to . . , . 6lo,84^ 
 
 .^3,115,842 
 
 Mr. Thornton expressly states, that all other 
 public accounts were of trifling amount, and 
 " the probable augmentation of the balances 
 " of public money from the various departments 
 " of government was not taken into the ac- 
 " count;*' " that such augmentation was neither 
 ** adverted to, nor provided for." 
 
 If, then, it is acknowledged by the very 
 negociator on the part of the Bank that the 
 probable augmentation of the public balances 
 formed no part of the consideration in settling 
 the pecuniary remuneration which was given to 
 the public for continuing to the Bank their ex- 
 clusive privileges, how can it now, with any 
 justice, be contended by the Bank, that the pro- 
 fits derived from those augmented balances, 
 
 * By an account laid before parliament last session, it 
 appears, that the amount of exchequer bills and bank notes 
 deposited with the Exchequer, as cash, amounted, on an 
 arerage of the year ending March, 1800, to 3,G9O,O0o/.
 
 Q6 
 
 which were " neither adverted to, nor providecf 
 *' foV," belong of right exclusively to the Bank, 
 and that the public have no claim either to 
 participate in them, or to withdraw the ba- 
 lances to any use to which they may think 
 proper to apply them. 
 
 It is to be observed, that Mr. Thornton, in 
 his evidence before alluded to, represented all 
 the other public accounts, excepting the twp 
 before mentioned, as of trifling amount; but, 
 by accounts which were last session presented 
 to parliament, it appears that in 1800, the year 
 to which Mr. Thornton's evidence refers, when 
 the charter was renewed, the public balances 
 of all descriptions deposited with the Bank 
 amounted to 6,200,000/., exceeding the aggre- 
 gate amoiint stated by Mr. Thornton, by three 
 millions, which he would, if he had been aware 
 of this fact, hardly have called " a trifling 
 " amount." 
 
 If, then, the fact of this large additional de- 
 posit did not come under the consideration of 
 Mr. Thornton and Mr. Pitt, at the time of re- 
 newing the charter; if no part of the remunera- 
 tion which the public then received was founded 
 on this fact; the large amount of public deposits 
 in 1800, so far from entitling the Bank to retain
 
 •67 
 
 the whole profits arising from the still larger de- 
 posits at the present period, binds them injus- 
 tice to be particularly liberal in any new en- 
 gagement they may now make with the public, 
 as affording a remuneration for a profit so long 
 enjoyed, which, it is to be presumed, they would 
 not have been allowed to enjoy, if the facts had 
 been clearly known and considered, at the time 
 of settling the terms on which the charter was 
 renewed. 
 
 But whether known or not known, must have 
 been of little consequence in Mr. Thornton's 
 estimation ; whose opinion, that the profits of the 
 Bank were not increased by the augmentation of 
 the public balances, otherwise than as they con- 
 tributed to increase the amount of bank notes in 
 circulation, is so emphatically given. 
 
 Is it not lamentable to view a great and opu- 
 lent body like the Bank of England, exhibiting 
 a wish to augment their hoards by undue gains 
 wrested from the hands of an overburthened 
 people ? Ought it not rather to have been ex- 
 pected that gratitude for their charter, and th« 
 unlooked for advantages with which it has been 
 attended; for the bonuses and increased divi- 
 dends which they have already shared, and for 
 the great undivided treasure which it has further 
 enabled them to accumulate, would have in- 
 
 1 %
 
 68 
 
 duced the Bank voluntarily to relinquish to the 
 state, the whole benefit which is derived from the 
 employment of eleven millions of the public 
 money, instead of manifesting a wish to deprive 
 them of the small portion of it vvhicli they have 
 for a few years enjoyed? 
 
 When the rate of charge for the management 
 of the national debt was under discussion, in 
 1807, Mr. Thornton said, *'that in a matter 
 between the public and the Bank, he was sure 
 nothing but a fair compensation for trouble, 
 risk, and actual losses, and the great responsi- 
 bihty that attaches to the office, would be re- 
 quired." 
 
 Hov/ comes it that the language of the direc- 
 tors of the present day is so much changed ? 
 Instead of expecting only a fair compensation 
 for trouble, risk, and actual losses, they en- 
 deavour to deprive the public even of the inade- 
 quate compensation which they have hitherto 
 received ; and appeal, now for the first time, to 
 their charter, for their right to hold the public 
 money, and to enjoy all the profit which can be 
 derived from its use, without allowing the least 
 remuneration to the public. 
 
 If the charter were as binding as the Bank 
 contend for, a great public company, possessing 
 so advantageous a monopoly, and so intimately
 
 69 
 
 connected with the state, might be expected to 
 act on a more liberal policy towards its gene- 
 rous benefactors. 
 
 Till the last session of parliament, the Bank 
 were also particularly favoured in the composi- 
 tion which they paid for stamp duties. In 1791, 
 they paid a composition of 12,000/. per annuin, 
 in lieu of all stamps either on bills or notes. 
 In 1799, on an increase of the stamp duty, 
 this composition was advanced to 20,000/. ; and 
 an addition of 4,000/., raising the whole to 
 24,000/., was made for the duty on notes under 
 5/., which the Bank had then begun to circulate. 
 In 1804, an addition of not less than 50 per cent, 
 was made to the stamp duty imposed by the 
 act of 1799, on notes under 5/., and a consi- 
 derable increase on the notes of a higher value ; 
 and although the Bank circulation of notes 
 under 5/. had increased from one and a half to 
 four and a half millions, and the amount of notes 
 of a higher description had also increased, yet 
 the whole composition of the Bank was only 
 raised from 24,000/. to 32,000/. In 1808, there 
 was a further increase of 33 per cent, to the 
 stamp duty, at which time the composition was 
 raised from 32,000/. to 42,000/. In both these 
 instances the increase was not in proportion even 
 to the increase of duty ; and no allowance what-
 
 70 
 
 ever was made for the increase in the amount of 
 the Bank circulation. 
 
 In the last session of parliament, on a further 
 increase of the stamp duty, the principle was 
 for *he first time established, that the Bank 
 ,i.,_. -jay a composition, in some proportion to 
 the amount of their circulation. It is now fixed 
 as follows. Upon the average circulation of the 
 three preceding years, the Bank is to pay at the 
 rate of 3500/. per million, without reference to 
 the classes or value of the notes of which the 
 aggregate circulation may consist. 
 
 The average of the Bank circulation for three 
 years, ending 5th April, 1815, was 25,102,600/. j 
 and upon this average they will pay this year 
 about 87,500/^ 
 
 Next year the average will be taken upon 
 the three years, ending in April 1816; and if it 
 differs from the last, the duty will vary accord- 
 ingly. 
 
 If the same course had been followed now, as 
 in 1804 and 1808, the Bank would have had to 
 pay, even with the additional duty, only 52,500/., 
 so that 35,000/. per annum has been saved to 
 the public, by parliament having at last recog- 
 nized the principle which should have been 
 adopted in 1799 ; and by the neglect of which, the 
 public have probably been losers and the Bank
 
 71 
 
 consequently gainers, of a sum little less than 
 500,000/. 
 
 SECTION VII. 
 
 Ba?2k Profits and Savings — Misapplication—^ 
 Proposed Remedy* 
 
 I HAVE hitherto been considering the profits of 
 the Bank, as they regard the public, and have 
 endeavoured to shew that tliey have greatly 
 exceeded what a just consideration for their 
 rights and interests couhj warrant. — I propose 
 now to consider them in relation to the interests 
 of the proprietors of Bank stock, for which 
 purpose I shall endeavour ta state a basis on 
 which the profits of the Bank may be calculated, 
 with a view to ascertain wliat the accumulated 
 savings of the Bank now are. — If we knew ac- 
 curately the expences of the Bank, and the 
 amount of cash and bullion which they may 
 at different times have had in their hands, we 
 should have the means of making a calculation 
 on this subject, which would be a very near ap- 
 proximation to the truth. 
 
 The profits of the Bank are derived from 
 sources which are well known. They arise, as 
 lias been already stated; from the interest on
 
 72 
 
 public and private deposits, — the interest on the 
 amount of their notes in circulation, after de- 
 ducting the amount of cash and bullion, — the 
 interest on their capital and savings, — the allow- 
 ance paid them for the management of the pub- 
 lic debt, — the profits from their dealings in bul- 
 lion, and from the destruction of their notes. — ■ 
 All these form the gross profits of the Bank, from 
 which must be deducted only their expences, 
 the stamp duty, and the property tax, in order to 
 ascertain their net profits. 
 
 Under the head of expences must be included 
 all the charges attending the management of 
 the national debt, as well as those incurred by 
 the proper business of the Bank. — In estimating 
 the former of these charges, I have already stated 
 my grounds for believing that it could not ex- 
 ceed 150,000/. — In the management of the pub- 
 lic business, it was stated by the committee on 
 public expenditure, that four hundred and fifty 
 clerks were employed in 1807 i and it is probable 
 that the number may now be increased to be- 
 tween five and six hundred. 
 
 It has also I understand been stated from the 
 best authority, in parliament, that the Bank em- 
 ployed in the whole of their establishment about 
 one thousand clerks j consequently if five hun- 
 dred are employed exclusively on the public 
 business, five hundred more must be engaged iu
 
 73 
 
 the business of the Bank. — Supposing now the 
 expences to bear some regular proportion to the 
 number of clerk« employed j as 150,000/. has 
 been calculated to be the expence attending 
 the employment of five hundred clerks in the 
 public business, we may estimate a like expence 
 to be incurred by the employment of the other 
 five hundred, and therefore, the whole expences 
 of the Bank to be at the present time about 
 300,000/., including all charges whatsoever*. 
 
 But although this large sum is now expended, 
 it must have been of gradual growth since 1797 ; 
 when, probably, the whole expences of the es- 
 tablishment were not more than one-half the 
 present amount. In the first place, since 1797, 
 the amount of Bank notes in circulation has in- 
 
 * It has been remarked that a sufficient allowance is not 
 made in my calculations for the losses of the Bank by bad debts, 
 in consequence of the bad bills which they occasionally 
 discount. Their losses from this source, I am told, are often 
 very large. On the other hand, I have been informed that the 
 profits of the Bank, from private deposits, for which I have 
 taken no credit, must be considerable, as the East India Com- 
 pany, and many other public boards, keep their cash at the 
 Bank. 
 
 A deduction from the Bank profits should have been 
 made for their loss by Aslett, and ibr the expences attending 
 their military corps. My argument will not be affected by 
 their surplus capital being only 12 or 11 instead of 13 millions. 
 l^ote to Second Edition.
 
 creased from about twelve millions to twenty- 
 eight millions, but the expences of their circula- 
 tion, instead of increasing in the same propor- 
 tion only, have, at least, increased as one to ten. 
 
 The amount of notes of five pounds and up- 
 wards has been raised from twelve to eighteen 
 millions, and if the average value of notes, of all 
 descriptions above five pounds, be even so low as 
 fifteen pounds, a circulation of twelve millions 
 would consist of 800,000 notes, and a circulatioa 
 of 18 millions of 1,200,000 notes, an increase in 
 the proportion, as one to one and one-half; 
 but the nine millions of notes under five pounds, 
 which are now in circulation, have been wholly 
 created since 1797, and if they consist of five 
 millions of notes of one pound, and two millions 
 of notes of two pounds, a number of seven mil- 
 lions of notes has been further added to the 
 circulation, and the whole number of notes 
 has been raised since 1797, from 800,000 to 
 8,200,000, or as one to ten, and at an expence 
 ten times greater than was incurred at that 
 time, the expence being in proportion to the 
 number, and not to the amount of notes. It 
 is probable too, that the notes of one and two 
 pounds, which are so constantly used in the cir- 
 culation, are more often renewed than notes of 
 a higher value. 
 
 The public debt, too, under the management
 
 75 
 
 of the Banky is more than doubled since 1797, 
 and must have added considerably to the ex- 
 pences of that department. These expences have 
 been already calculated to ha,v^ risen since 1796, 
 from 84,500/. to 150,000/. or 65,500/.* 
 
 The public deposits too are at least double 
 what they were in 1797, from all which 1 have a 
 right to infer, that the expences of the Bank in 
 1797, could not have exceeded 150,000/., and 
 that they have been gradually increasing since 
 that period ; perhaps at the rate of seven or 
 eight thousand pounds per ann. 
 
 The next subject for consideration, is the 
 amount of cash and bullion in the Bank, which 
 at no time has been laid before the public j — • 
 that, and the amount of their discounts, were 
 the only material facts which the Bank con- 
 cealed from the public in the eventful yedr 1797. 
 — They stated in the account laid before parlia- 
 ment, that their cash and bullion, and their 
 bills and notes discounted, amounted together 
 to 4,176,080/. on the 26th of Fehruarif 1797- 
 They gave also a scale of discounts from 1782 to 
 1797, and a scale of the cash and bullion in the 
 
 * The Committee on public expenditure calculated these 
 expences at 119,500/. in I8O7, and stated the Increase from 
 I79Q to 180/ at about 35,000^
 
 76 
 
 Bank for the same period. By comparing these 
 tables with each other, and with some parts of 
 the evidence delivered before the parliamentary 
 committees, an ingenious calculator discovered 
 the whole secret which the Bank wished to con- 
 ceal. According to his table the cash and bullion 
 in the Bank, on the <i6th oi February 1797, was 
 reduced as low as 1,227,000/., — and four millions 
 was about the sum which the Bank considered 
 as fair cash ; to which it never attained after 
 December 1795, though previously to that year 
 it was on some occasions more than double that 
 amount. 
 
 For the first year or two after the suspension 
 of cash payments, the Bank must have made 
 great efforts to replenish their coffers with cash 
 and bullion, as they were then by no means 
 sure that they should not be again required to 
 pa}^ their notes in specie. We find accordingly, 
 b}'^ accounts returned to parliament by the 
 mint, that the amount of gold coined in 1797 
 and 1798, was very little less in value than 
 5,000,000/.* 
 
 * The committee of secrecy reported to parliament, that 
 the cash and bullion in the Bank, in November 1797, had 
 increased to an amount more than five times the value of 
 that at which they stood on the 25 th of February 1797' 
 They stated too, that the bankers and traders of London,
 
 77 
 
 Whatever might have been the amount of 
 cash and bullion, which the Bank had acquired 
 in the first two years after the suspension of 
 cash payments, it is probable that their stock 
 has been decreasing since that peiiod, as they 
 could have no motive for keeping a large 
 amount of such unproductive capital, when they 
 must have been quite secure that no call could 
 be made on them by the holders of their notes 
 for guineas, and that before they were again re- 
 quired to pay in specie, they would have ample 
 notice to prepare a due store of the precious 
 metals. — It does not appear possible then, under 
 all the circumstances of the case, that the Bank 
 can have added to their stock of bullion, since 
 the great coinages of 1797 and 1798j but it is 
 highly probable that they have considerably 
 reduced it. 
 
 In estimating the profits of the Bank, as flir 
 as those profits are influenced by their stock of 
 cash and bullion, I shall be justified in consi- 
 dering them greater since 1797 and 1798, as 
 since those years they would naturally keep a 
 
 who had a right, by the act of parliament, to demand three- 
 fourths of any deposit in cash, which they liad made in the 
 Bank, of five hundred pounds and upwards, after the 25th 
 of fehruary 1797. lia<l only claimed in November 1797 > 
 about one-sixteenth.
 
 78 
 
 less part of their capital in that unproductive 
 shape, and, consequently, more in Exchequer 
 bills, or in merchants' Ht;ce()tauces, securities 
 which pay interest, and are productive oi profit. 
 — On an average of the whole eighteen years, 
 from 171^7 to 18:5, the cash and bullion of the 
 Bank cannot be estimated as amounting to 
 more than three millions, though, probably, for 
 the first year or two, it amounted to four or 
 five millions. 
 
 These circumstances being premised, it will 
 not be difficult to calculate the profits of the 
 Bank, from 1797 to the present time, all the 
 facts necessary to such calculation being known 
 to us excepting the two I have just stated, viz. 
 the amount of expences and of cash and bullion, 
 but which cannot differ much from that at which 
 I have calculated them. 
 
 Proceeding then on this basis, it appears, 
 as will be seen by the accounts in the Appendix, 
 that the profits and surplus capital of the Bank 
 for a series of years, after paying all dividends 
 and bonuses, have been as follows :
 
 79 
 
 Year cuiii- 
 
 
 Profits ;iltcr pay- 
 
 Dividend aiiU | 
 
 nencing in 
 
 Sur[>lus capital. 
 
 ing ili\idend 
 
 boi 
 
 lus to- 
 
 January 
 
 
 and bui)us(s. 
 
 gether. 
 
 i7y7 
 
 .f3,826,890 
 
 of 89,872 
 
 7 per cent. 
 
 1798 
 
 3,916.762 
 
 533,621 
 
 7 
 
 do. 
 
 1/99 
 
 4,460,383 
 
 ^ 
 
 17 
 
 do. 
 
 1800 
 
 3,911,228 
 
 611,981 
 
 7 
 
 do. 
 
 1601 
 
 4,553,209 
 
 116,038 
 
 12 
 
 do. 
 
 1802 
 
 4,669,247 
 
 160,509 
 
 9t 
 
 do. 
 
 1803 
 
 5,120,756 
 
 705, S5g 
 
 7 
 
 do. 
 
 1804 
 
 5,8.15,6 15 
 
 306,794 
 
 12 
 
 do. 
 
 1805 
 
 6,202,409 
 
 346,335 
 
 12 
 
 do. 
 
 1806 
 
 6,548,7-J4 
 
 368,008 
 
 12 
 
 do. 
 
 1807 
 
 6,916,752 
 
 581,274 
 
 10 
 
 do. 
 
 1808 
 
 7,408,026 
 
 385,805 
 
 10 
 
 do. 
 
 1809 
 
 7,833.891 
 
 470,760 
 
 10 
 
 do. 
 
 1810 
 
 8,3:J4,651 
 
 651,483 
 
 10 
 
 do. 
 
 1811 
 
 9,006,134 
 
 722,188 
 
 10 
 
 do. 
 
 1812 
 
 9,728,322 
 
 739.867 
 
 10 
 
 do. 
 
 1813 
 
 10,468,189 
 
 b09.786 
 
 10 
 
 do. 
 
 1814 
 
 ll,279..'^75 
 
 1,081,649 
 
 10 
 
 do. 
 
 1815 
 
 12,339,624 
 
 1,066,625 
 
 
 
 1S16 
 
 13,426,2'J9 
 
 
 
 
 
 If in the accounts referred to, it should be 
 thought that I have estimated the expences of 
 the Bank too low, it may on the other hand be 
 remarked that I have not allowed for any profit 
 from the deposits of individuals. Those deposits 
 may not be very large, as the Bank do not 
 afford the same accommodation to individuals as 
 given by other bankers. Some profit must, 
 however, be made fron this source, as well as 
 from the loss and destruction of notes, which 
 it may be presumed, after a time, are not in- 
 
 * There was this year a loss of 509^155/.
 
 eluded in the amount stated to be in circulation. 
 By the purchase of silver, and coinage of tokens, 
 the Bank must, on the whole, have been gainers ; 
 for the value of the token has been generally 
 lower in the market, than it has passed for in 
 circulation at the time of its issue. 
 
 In point of fact,, too, the Bank receives more 
 than five per pent, interest for their money; for 
 Exchequer bills, paying three pence half-penny 
 per day, pay 5l. 6*. 53^. per cent, per ann. ; and, 
 in discounting bills, the interest being imme- 
 diately deducted, is employed as capital, and is 
 instantly productive of profit ; at the same time, 
 it must be observed that daring a part of the 
 time for which these, calculations are made. 
 Exchequer bills bore an interest of only three 
 pence farthing per day, which amounts to 
 4/. 185. O^d. per cent, per ann,, rather less than 
 five per cent. 
 
 In March 1801,when a bonus offive per cent., 
 in navy five per cents., was divided amongst 
 the proprietors of Bank stock, Mr. Tierney 
 said in the house of commons, " that when 
 " the affairs of the Bank of England were 
 " investigated by the house of commons in 
 " 1?97, the surplus profits were considered 
 *' by some as a security for the engagements of 
 « the Bank to the public." To which Mr. Sa-
 
 SI 
 
 inuel Thornton, then governor ot the Bank, 
 replied, that " he could assure the honourable 
 ** member, that the security of the public would 
 ** not be lessened from what it was in 1797, by 
 " the division of the sum of 582,120/. voted at 
 " the general court, on the 19th instant, as ex- 
 *' elusive of that sum, the surplus profits of the 
 *' Bank were more now than tUey were in 
 « 1797*." 
 
 On an inspection of the account in tfie Ap- 
 pendix, it will be seen, that after paying all the 
 dividends and bonuses to the proprietors, the 
 Bank had accumulated in April 1801, savings 
 to the amount of 3,94.5,109/. exceeding the sav- 
 ings of 17^J7, by 118,2197., an increase not in- 
 consistent with the declaration of Mr. Thornton, 
 and therefore tending to confirm the correctness 
 of the basis on which these calculations are 
 made, f 
 
 It will appear on an examination of the ac- 
 counts in the Appendix for the subsequent 
 years, that the profits of the Bank for every year, 
 
 * Allardyce's Address to the proprietors of the Bank of 
 England, Appendix, No. 11. 
 
 t The accounts in the Appendix arc made up from Jau, 
 to Jan. Tlie bonus in question was paid in Jp7il 1801. 
 The net profits of the Bank for the whole year 1801 were 
 
 G
 
 82 
 
 since 1801, have exceeded the annual dividend 
 paid to the proprietors, and that in 1815, the 
 surplus for that year only must have amounted 
 to 1,066,625/. so that the Bank could have paid 
 a dividend for that year of nineteen per cent.^ 
 instead of ten per cent. 
 
 It will appear too that if the Bank affairs 
 have been only moderatelj'- well managed, they 
 must now have an accumulated fund of no less 
 than thirteen millions, which, in defiance of the 
 clearest language of an act of parliament, the di- 
 
 1,526,019/., consequently for the quarter, ending in ^^prt/, 
 they may be stated at - - - - £ 381,504 
 Which, added to the surplus capital 
 
 o^ January 1801 - - - 4,553,3011^ 
 
 Gives the total of the surplus capital 
 
 in April 1801, before paying the 
 
 dividend and bonus - - 4,984,713 
 
 Deduct 
 Dit^idend three and a half per cent., 
 
 for half a year - - - 407,484 
 
 Bonus five per cent. - - - 582,120 
 
 989>604 
 
 Leaving a surplus capital in Aprils — — 
 
 1001, of - . - 3,945,1Q^ 
 
 And exceeding that in 1797 of - 3,826,890 
 
 by £ Il8,ai9
 
 83 
 
 rectors have liitlierto withheld from tlie proprie- 
 tors. 
 
 A\'ith such an accumulated fund, the Bank 
 could make a division of one hundred per cent, 
 bonus, without infringing on their permanent ca- 
 pital: and if they could maintain their present 
 profits, with a deduction only of523,908/. per ann. 
 the interest (less income tax) on the surplus capi- 
 tal proposed to be divided, tliejMvould still have an 
 unappropriated income of ^4i{,000/. which would 
 enable them to increase their perm.anent divi- 
 dend from ten to fourteen and a half per cent. , in 
 addition to the bonus of one hundred per cent. 
 
 If they divided only a bonus of seventy-five per 
 cent, they would retain a surplus capital, exceed- 
 ing that of 1797, and might on the above supposi- 
 tion have an unappropriated income or673,000/. 
 — they might therefore raise their permanent di- 
 vidend frou) ten to fifteen and a half per cent., in 
 addition to the bonus of seventy-five percent. 
 
 But it cannot be expected that the Bank will, 
 during peace, have the same opportunities of 
 making profit as during war, and the proprietors 
 must prepare themselves for a considerable re- 
 duction in their annual income. What that re- 
 duction may be will dej)end on the new agree- 
 ment now to be entered into with government; 
 on the future amount of public deposits; and 
 
 g2
 
 84 
 
 oh the conditions on which the restoration of 
 metallic payments may be enforced. It is evi- 
 dent that if the plan which I have recommended 
 in the fourth section of this work be adopted, 
 the Bank profits from this last item will not be 
 materially reduced. 
 
 Supposing, however, that the reduction of the 
 annual income of the Bank should, from the 
 falling off of their profits in all these depart- 
 ments, be as much as 500,000/., the profits of 
 the Bank would, nevertheless, be equal to the 
 payment of the present permanent dividend of 
 ten per cent., even after a division of one hun- 
 dred per cent, bonus to the proprietors of Bank 
 stock; for, if my calculations be correct, the 
 profits of the Bank, after the payment of the 
 annual dividend of ten per cent, to the pro- 
 prietors, were for the year ending January 1st, 
 
 1816 - - - - 
 
 .£^1,066,625 
 
 Deduct then the interest now- 
 
 
 made on 11,642,400/. pro- 
 
 
 posed to be divided, less pro- 
 
 
 perty tax - - - - 
 
 523,()08 
 
 Loss by a peace arrangement 
 
 500,000 1,023,908 
 
 Leaving a surplus of, per ann. 
 
 cf42,7i7 
 
 If, instead of a hundred per cent., fifty per 
 cent* bonus only were paid to the proprietors,
 
 85 
 
 the annual surplus profit of the Bank, after pay- 
 ing tea per cent, dividend, would be 304,671/. 
 a sum equal to a permanent increase of dividend 
 of two and a half per cent. 
 
 And if no bonus whatever were paid, but the 
 savings were considered as part of the Bank 
 capital, the annual surplus profit of the Bank, 
 after paying ten per cent, dividend, would be 
 566,6'25l.y very nearly equal to a permanent 
 increase of dividend of five per cent. 
 
 These estimates are made on a supposition 
 too, that the property tax should permanently 
 continue, which is calculated to be an annual 
 charge of more than 200,000/, to the Bank, and 
 consequently more than equal to a dividend of 
 one and three quarters per cent. 
 
 But the Directors are bound, in my opinion, 
 under every case, to divide the surplus profits 
 amongst the proprietors, the law imperatively 
 enjoining such a division, and policy being no 
 wise opposed to it. 
 
 Well was it urged by the Hon. Mr. Bouverie, 
 who moved in the last Bank court that an account 
 of the surplus capital of the Bank be laid before 
 the proprietors, that this law respecting the divi- 
 sion of profits was probably enacted by the legis- 
 lature, on a consideration of the powers of ac- 
 cumulation at compound interest, and the dan-
 
 86 
 
 gers which might arise to the constitution or the 
 country, from any corporation becoming pos- 
 sessed of milUons of treasure. If the profits of 
 the Bank were to continue at the present rate, 
 and no addition were to be made to the dividend 
 now paid often per cent., the accumulation of the 
 surplus profits in forty years would give to the 
 Bank a disposable fund of more than one hun- 
 dred and twenty millions. Wisely then did the 
 legislature enact, that " All the profits, benefits, 
 " and advantage from time to time arising out 
 " of the management of the said corporation, 
 " shall (the charges of managing the business 
 ** of the said governor and company only eX' 
 *' ceptedj be applied from time to time to the 
 " uses of all the members of the said corporation 
 *' for the time being, rateably and in proportion 
 " to each member's part, share, and interest, in 
 " the common capital, and principal stock, of 
 " the said governor and company of the Bank of 
 «' England." 
 
 Those who vindicated the directors at the last 
 general court for their departure from the line of 
 conduct prescribed by the law, recommended 
 the increase of the capital of the Bank, — and 
 they thought that the accumulated savings 
 might be advantageously employed for such 
 purpose.
 
 87 
 
 It is said that the Bank directors are favour- 
 able to such a plan. 
 
 If the measure should be a good one, the 
 sum of capital to be added should be at once 
 defined, — the proprietors should have accounts 
 laid before them of the amount of their accumu- 
 lated fund, and should be consulted on the ex- 
 pediency of such a disposition of it, — and lastly 
 the sanction of Parliament should be obtained. 
 
 The Bank, however, have waited for none of 
 these conditions, — they have been, in fact, for 
 years adding the annual surplus profits to their 
 capital, without defining the amount added, or to 
 be added; they do it without laying any accounts 
 before the proprietors— without consulting them 5 
 and not only without the sanction of Parliament, 
 but in defiance of an express law on the sub- 
 ject. 
 
 But if the Bank complied with all these con- 
 ditions, would the measure itself be expedient, 
 and are the reasons giren in support of it, 
 namely the enlarged business of the Bank, and 
 that it would tend to the security both of the 
 Bank and the public, of suflicient weight to 
 justify its adoption ? 
 
 The business and income of the Bank depend, 
 35 before stated, on the amount of the aggre- 
 gate fund which they have to employ, and this
 
 88 
 
 fund is derived from the three following sources : 
 The amount of Bank notes in circulation, de- 
 ducting only the cash and bullion: The 
 amount of public and private deposits : And the 
 amount of that part of the capital of the Bank 
 which is not lent to government. But it is only 
 the two former of these funds which contribute 
 to the real profit of the Bank ; for the interest, 
 received for surplus capital, being only five per 
 cent., might be made with as much facility by 
 each individual proprietor, on his share of such 
 capital, if under his own management, as by 
 combining the whole into one fund. If the 
 proprietors were to add from their own indivi- 
 dual property ten millions to the capital of the 
 Bank, the income of the Bank would indeed be 
 increased 500,000/. or five per cent, on ten mil- 
 lions; but the proprietors would not be gainers 
 by such an arrangement. If, however, ten mil- 
 lions were added to the amount of notes, and 
 could be permanently maintained in circulation, 
 — or if the pujblic and private deposits were to 
 be increased ten millions, the income of the 
 Bank would not only be increased 500,000/., 
 but their real profits also, and this advantage 
 would arise wholly from their acting as a joint 
 company, and could not be otherwise obtained. 
 There is this material difterence between a 
 Bank and all other trades: A Bank would
 
 S9 
 
 wever be established, if it obtained no other 
 profits but those from the employment of its 
 own capital : its real advantage commences 
 only when it employs the capital of others. 
 Other trades, on the contrary, often make enor- 
 mous profits by the employment of their own 
 capital only. 
 
 But if this argument be correct, with respect 
 to an additional capital to be actually raised 
 from amongst the proprietors, it is equally so to 
 one witiiheld from them. 
 
 To increase the profits of the Bank pro- 
 prietors, then, an increase of capital would be 
 neither necessary nor desirable. 
 
 Ncitlier would such an addition contribute 
 towards the security of the Bank ; for the Bank 
 can never be called upon for more than the 
 payment of their notes, and the public and pri- 
 vate deposits ; these constituting, at all times, 
 the whole of their debts. After paying away 
 their cash and bullion, their remaining securi- 
 ties, consisting of merchants acceptances and 
 Exchequer bills, must be at least equal to the 
 value of their debts; and in no case can these 
 securities be deficient, even without any surplus 
 capital, excepting the Bank should lose all that 
 which constitutes their growing dividend; and 
 •nen then they could not be distressed, unless
 
 90 
 
 we suppose that at the same time payment were 
 demanded for every note in circulation, and for 
 the whole of their deposits, both public and pri- 
 vate. 
 
 Is it against such a contingency that the pro- 
 prietors are called upon to provide ; when even 
 under these, almost impossible circumstances, 
 the Bank would have an untouched fund of 
 11,686,000/., which Government owe them? 
 
 Would the security of the public be increased? 
 In one respect it would. If the Bank have uo 
 other capital but that which they lend to Go- 
 vernment, they must lose all that capital by 
 their trade, or more than eleven millions and a 
 half, before the public can be sufferers ; but if 
 the capital of the Bank were doubled, the Bank 
 might lose twenty-three millions, before any 
 creditor of theirs could suffer loss. Are the 
 friends to an increase of the capital of the 
 Bank prepared to say, that it is against the 
 consequences of the loss of the whole Bank 
 capital that they are desirous of protecting the 
 public ? 
 
 It remains to be considered, whether the abi- 
 lity of the Bank to pay their notes in specie 
 would be increased by an increase of their ca- 
 pital. The ability of the Bank, to pay their 
 notes in specie, must depend upon the propor-
 
 91 
 
 tion of specie which they may keep, to meet the 
 probable demand for payment of their notes ; 
 and in this respect their power cannot be in- 
 creased, for they may now, if they pleane, have 
 a stock of specie, not only equal to all their 
 notes in circulation, but to the whole of the pub- 
 lic and private deposits, and under no possible 
 circumstances can more be demanded of them. 
 But the profits of the Bank essentially depend 
 on the smallness of the stock of cash and bullion ; 
 and the whole dexterity of the business con- 
 sists in maintaining the largest possible circula- 
 tion, with the least possible amount of their 
 funds in the unprofitable shape of cash and bul- 
 lion. The amount of notes in circulation de- 
 pends in no degree on the amount of capital 
 possessed by the issuers of notes, but on the 
 amount required for the circulation of the 
 country; which is regulated, as I have before 
 attempted to shew, by the value of the standard, 
 the amount of payments, and the economy 
 practised in effecting them. 
 
 Tiie only effect then of the increase of the ca- 
 pital of the Bardi would be to enable them to 
 lend to governujent or to merchants those funds, 
 which would otherw ise have been lent by indi- 
 viduals of the community. The Bank would 
 have more business to do— thev would accumu-
 
 92 
 
 Jate more merchants acceptances and Exchequer 
 bills : they would even increase the income of 
 the Bank ; but i iie profits of the proprietors 
 would be neither more nor less, if the market 
 rate of interest for money were at five per cent., 
 and the business of the Bank were carried on 
 with the same economy. The proprietors 
 would be positive losers, if they could indivi- 
 flually have employed their shares of this capital 
 in trade, or otherwise, at a greater profit. 
 
 But not only do the Bank refuse, in direct 
 contradiction to an act of parliament, to make 
 a division of their accumulated profits, but they 
 are equally determined not to communicate to 
 the proprietors what those profits are, notwith- 
 standing their bye-law enjoins, '* that twice itj 
 ** every year a general cowrt shall be called, and 
 " held for considering the general state and con- 
 '* dithn of this corporation, and for the making of 
 " dividends, out of all and singular the produce 
 " and profit of the capital stock and fund of this 
 " corporation and the trade thereof, amongst 
 *' the several owners and proprietors therein, 
 *' according to their several shares and proper^ 
 " tions." 
 
 If the law had been silent on the subject, the 
 Bank Directors would, I think, be bound to shew 
 some specific evil which woul4 result frpm pub-
 
 93 
 
 Ilcity, before they refused to shew a statement of 
 their affairs to the proprietors. 
 
 It is ill fact the only security which the pro- 
 prietors have, against the abuse of the trust re- 
 posed in the Directors. 
 
 The affairs of the Bank may not always be 
 nianagc'tl by such men as are now in the Direc- 
 tion, agniiist wliom not a shadow of suspicion 
 any where ("xists. 
 
 Without Hcconnts; without a division of pro- 
 tits ; and without any other proof" of the ac- 
 cumulated fund of the Bank, but the notoriety of 
 the increase of the sources from which the Bank 
 profits are made — and that for a period of more 
 than ten years ; what security have the pro- 
 prietors, against a corrupt administration of 
 their affairs ? It is not consistent with the de- 
 licacy of the situation of those who are entrusted 
 with the management of miUions to demand 
 such unbounded confidence — so much rehance 
 on their own personal character, without stating 
 some grounds for such a demand. Yet the only 
 answer which the Directors made to a motion 
 for a statement of profits, in the last general 
 court, was, that they should consider the passin.i^ 
 of such a resolution as betraying a want of con- 
 fidence in them, and as a censure on their pro- 
 ceedings.
 
 9* 
 
 On all sides, such an intention was disclaimed ; 
 yet, strange to say, no other reply could be ob- 
 tained from the Directors. 
 
 The publication of accounts, besides being 
 necessary as a check against the corrupt admiiii- 
 stration of the Directors, is also necessary to give 
 assurance to the proprietors, that their affairs 
 are ably administered. Since 1797, no state- 
 ment has been made of the condition of the 
 Bank; and, even in that year, it was made to Par- 
 liament, on a particular exigence, and not to the 
 proprietors of Bank stock. How then, can the 
 proprietors know whether, in the favourable cir- 
 cumstances in which the Bank have been placed, 
 the directors have availed themselves of all the 
 opportunities which have offered, of employing 
 the funds entrusted to their charge to the best 
 advantage? Would it not be desirable, that from 
 time to time the proprietors should be able to 
 ascertain whether their just expectations had 
 been realised, and whether their affairs had been 
 ably as well as honourably administered ? If 
 the practice of laying all accounts before the 
 proprietors had been always followed, perhaps 
 the Directors of 1793, 1794, and 1795, might 
 have been admonished for so badly managing 
 the affairs of the Bank, as to keep permanently 
 in their coffers a sum of cash and bullion, gene-
 
 95 
 
 rally more than three-fourths, and seldom less 
 than one-half the whole amount of their notes in 
 circulation. They might possibly have been 
 told, that such a waste of the resources of the 
 Bank shewed a very limited knowledge of the 
 principles by which a paper currency should be 
 regulated.* 
 
 These irregularities in the proceedings of the 
 Bank excited the attention of an independent 
 proprietor, Mr. Allardyce, in 1797 and 180f. 
 In his excellent publication on Bank affairs, he 
 has pointed out with great force and ability the 
 illegal conduct of the Bank. His opinion was 
 confirmed by Mr., now Sir James, Mansfield, 
 who was consulted by him as to the course, ne- 
 cessary to be pursued, to compel the directors 
 to lay an account before the proprietors of the 
 state of the company. Sir James Mansfield's 
 opinion was given as follows : 
 
 " I am of opinion, that every proprietor, at a 
 " general half yearly court, has a right to re- 
 " quire from the directors, and it is the duty of 
 *' the latter to produce, all such accounts, books 
 
 * For the account of cash and bullion in the Bank in the 
 above years I trust to the calculations to which I have al- 
 ready alluded, page Jr4. I can see no reason to doubt their 
 general accuracy.
 
 96 
 
 " and papers, as are necessary to enable the 
 *' proprietors to judge of the state and condition 
 " of the corporation and its funds, and to deter- 
 " mine what dividend ought to be paid. Tiie 
 *' proper method to be pursued by those who 
 " consult me in order to obtain such a produc- 
 *' tion is, that a number of respectable proprie- 
 " tors should immediately give notice to the 
 "governor and other directors, that they shall 
 " require at the next general court a production 
 " of all the necessary books, accounts and pa- 
 " pers ; and at the general court, when it shall 
 " be held, to attend and require such a produc- 
 " tion. If it shall not be obtained, I then advise 
 " them immediately, or within a few days after 
 *' the holding of the general court, to make an 
 " application to the governor to call a general 
 " court, which application must be made by 
 " nine members at least, having each 500/. 
 " stock. If the governor shall refuse to call such 
 " general court, then the nine members who 
 " shall have applied to him to have a court cali- 
 " ed, may themselves call one in the manner 
 " prescribed by the charter ; and whether the 
 " governor calls such court, or it is called by the 
 " nine members, I advise them, as soon as it is 
 " called, to apply to the court of King's Bench
 
 97 
 
 " for a mandamus to the governor and directors, 
 
 " to produce at such court all the necessary 
 
 " books, accounts and papers. 
 
 " J. Mansfeild." 
 *' Temple, March 9, 1801." 
 
 In consequence of this opinion, Mr. Allardyce 
 delivered a demand in writing at the next gene- 
 ral court, held the 19th March, 1801, that the 
 accounts should be produced, and no doubt in- 
 tended to follow up this proceeding in the way 
 recommended by Sir James Mansfield, — but he 
 soon after died ; and since that time no proprie- 
 tor has made any demand for accounts, till at 
 the last general court in December. It is re- 
 markable that, ver}^ unexpectedly to the proprie- 
 tors, a bonus of 5 per cent., in navy 5 per Cents., 
 was voted in the general court of the 19th March, 
 1801, the da}' on which Mr. Allardyce's demand 
 was made and refused. The first motion for ac- 
 counts made by Mr. Allard3xe was in the ge- 
 neral court, held 1 4th Dec. 1797; and in March 
 1799, there Avas a bonus of 10 per cent, in 5 
 per Cents. 1797. Mr. Allardyce did not, I be- 
 lieve, make any motion in the Bank court be- 
 tween December, 1797, and March, 1801. 
 
 Since 1797, then, the proprietors have remain- 
 ed in utter ignorance of the affairs of the Bank. 
 During eighteen years the directors have been 
 
 H
 
 98 
 
 silently enjoying their lucrative trade, and may 
 now possibly think that the same course is best 
 adapted to the interests of the Bank, particularly 
 as negociations are about to take place with 
 government, when it might be as well that the 
 amount of their accumulated fund should not 
 be known. But the public attention has been 
 lately called to the affairs of the Bankj and the 
 subject of their profits is generally canvassed 
 and understood. Publicity would now probably 
 be more beneficial than hurtful to the Bank ; for 
 exaggerated accounts of their profits have been 
 published which may raise extravagant expect- 
 ations, and which may be best corrected by 
 official statements. Besides which, the Bank 
 are secure of their charter for seventeen years to 
 come ; and the public cannot, during that time, 
 deprive them of the most profitable part of their 
 trade. If indeed the charter were about to 
 expire, the public might question the policy of 
 permitting a company of merchants to enjoy ail 
 the advantages which attend the supplying of a 
 great country with paper money ; and although 
 they would naturally look with jealousy, after 
 the experience furnished by other states, to 
 allowing that power to be in the hands of go- 
 vernment, they might probably think that in a 
 free country means might be found by which
 
 99 
 
 so considerable an advantage might be obtained 
 for the slate, independently of all control of mi- 
 nisters. Paper money may be considered as 
 affording a seignorage equal to its whole ex- 
 changeable value, — but seignorage in all coun- 
 tries belongs to the state, and with the security 
 of convertibility as proposed in the former part 
 of this work, and the appointment of commis- 
 sioners responsible to parliament only, the state, 
 by becoming the sole issuer of paper money, in 
 town as well as in the country, might secure a net 
 revenue to the public of no less than two millions 
 sterling. Against this danger, however, the 
 Bank is secure till 18S3, and therefore on every 
 ground publicity is expedient. 
 
 H 2
 
 APPENDIX, 
 
 No. I * 
 
 Table shewing the Amount annually paid by the Public, 
 from 1797 to 1815, for Management of the British, Irish, 
 GermaHj and Portuguese Debt.; 
 
 Year commencing 
 
 
 
 
 ith January. 
 
 L. 
 
 *. 
 
 d. 
 
 1797 . . . 
 
 . 162,431 
 
 5 
 
 3 
 
 1798 . , . 
 
 . 212,592 
 
 1 
 
 5 
 
 1799 . • . 
 
 . 218,190 
 
 17 
 
 
 
 1800 . . . 
 
 . 238,294 
 
 3 
 
 8 
 
 1801 . . . 
 
 . 230,772 
 
 15 
 
 8 
 
 1802 . . . 
 
 . 263,105 
 
 14 
 
 
 
 1 803 . . 
 
 . 247,538 
 
 11 
 
 
 
 1804 . . . 
 
 . 267,786 
 
 19 
 
 7 
 
 IS05 . . 
 
 . 271,911 
 
 11 
 
 9 
 
 I8O6 . . 
 
 . 292,127 
 
 9 
 
 10 
 
 1807 . . . 
 
 . 2y7,757 
 
 16 
 
 1 
 
 1808 . . 
 
 . 210,549 
 
 2 
 
 7 
 
 1800 . . 
 
 . 222,775 
 
 2 
 
 4 
 
 1810 , . 
 
 . . 217,825 
 
 13 
 
 5 
 
 1811 . . 
 
 . . 228,349 
 
 16 
 
 
 
 1812 . . 
 
 . . 223,705 
 
 1'2 
 
 5 
 
 1813 . . 
 
 . . 238,827 
 
 17 
 
 7 
 
 1814 . . 
 
 . . 242,263 
 
 14 
 
 7 
 
 • The particulars in the above table are taken from the annual finance 
 book, printed by order of the house of commons. They include not only 
 what is paid to the Bank, but to the Exchequer and South Sea company. 
 The annua! charge of the South Sea company is now about 14,560/. 
 Ifl 1797 it was 14,657/. The Exchequer charee was as high as 
 6760/. 6s. 8d., in 1807 it fell gradually to 248:)/. and has vow, I 
 believe, ceased. 
 
 The Bank have also been paid for management of life annuities since 
 1810, — and since 1812, about J200/. or 1300/. per ann. for manajremeit 
 of a loan of two and half millions, raised for the East India Company, 
 which are not iticludcd in this table.
 
 102 
 
 No. II. 
 
 Table shewing the Amount annually received by the Bank 
 from 1797 to 1815, for receiving Contributions on Loans.* 
 
 Year comQiencing 
 
 
 
 
 Michaelmtks. 
 
 L. 
 
 J. 
 
 d. 
 
 1796 • 
 
 . . . 20,50a 
 
 a 
 
 4 
 
 1797 . 
 
 . . . 27,410 
 
 
 
 4 
 
 Yearcommeiicins 
 
 
 
 
 5th January. 
 
 
 
 
 1799 "• 
 
 . . 16,115 
 
 6 
 
 8 
 
 1800 . 
 
 . . . 12,489 
 
 15 
 
 5 
 
 1801 . 
 
 . . 39,080 
 
 17 
 
 1] 
 
 1802 . 
 
 . . 22,538 
 
 12 
 
 3 
 
 1803 . 
 
 . . 9669 
 
 10 
 
 
 
 1804 
 
 
 
 
 1805 . 
 
 . . . 11,683 
 
 19 
 
 7 
 
 1800 . 
 
 . . . 18,130 
 
 16 
 
 3 
 
 1807 . 
 
 . . 16,115 
 
 16 
 
 8 
 
 1808 . 
 
 . . 12,650 
 
 18 
 
 7 
 
 I8O9 . 
 
 . . 8,400 
 
 
 
 
 
 1810 . 
 
 . . 11,680 
 
 
 
 
 
 1811 . 
 
 . . . 14,705 
 
 
 
 
 
 1812 
 
 . . 19,031 
 
 14 
 
 
 
 1813 . 
 
 . . 21,639 
 
 8 
 
 9 
 
 1814 . 
 
 . . 42,200 
 
 
 
 
 
 • This table is taken from an account laid before parliament, on the 
 19th of June 1815.
 
 103 
 
 No. iir. 
 
 The total Amount of the Unredeemed Funded Debt of Great 
 Britain and Ireland, including Loans to the Emperor of 
 Germany and Prince Kcgent of Portugal, payable in Great 
 Britain, was on the first of February 1815, according to ac- 
 counts laid before parliament - Z/.727, 767, 42 1 2 5\ 
 
 Do. for East India Company - - 3,^29,561 O 
 
 731,696,982 2 5i 
 Debt contracted from^ 
 
 Feb. 1 to Aug. I, > 87,443,402 I6 
 1815 - - - - J 
 Redeemed from Feb. 1 , , ^,,^ , ^,, ^ 
 I to Aug. 1, 1815 >ll'0y9'l66 O 
 
 76,349,236 16 o 
 
 Total of unredeemed funded debt on 
 
 Aug. 1, 1815 I..808,046,218 18 5\ 
 
 The charge for Management on which is as follows : 
 
 L. 1 5,233,434 13 11 South Sea stock and annuities, for the 
 
 management of which the South 
 
 Sea Co. is paid L. 14,560 4 1 1 
 
 11,686,000 O due to the Bank of i , „„„ „ , 
 
 England - -} ^'^9^ ^ 5 
 
 600,000,000 at 340/. per million 20l',0(X) 
 
 181,126,734 4 6^ at 300/. do. 54,338 5 
 
 808,046,218 18 5^ 
 
 2.795, i-^0 life annuities - - 899 5 
 
 39,735,898 6 8 for 1,589,435/. 6«,8£/. -) 
 
 anns. at 25 years >1 1,920 15 4 
 chase - J 
 
 L.850,577,457 5 
 
 purchi 
 
 291,616 9 7 
 Deduct the fust sum paid to the South "j , ,^^ 
 
 Sea Company - - . - -} ^'^'^GO 4 11. 
 
 Management paid to the Bank of England 7 -j- - - 
 
 on the Debt as it stood Aug. 1, 1815. J 277,000 4 8
 
 104 
 
 No. IV. 
 
 Average Amount of Ba»k of England Notes, including Bank 
 Post Bills, in circulation in each of the following years. 
 
 
 Notes of five pounds, 
 
 
 
 
 and upwards, in- 
 
 Notes under 
 
 Total. 
 
 
 cluding Bank post 
 bills. 
 
 five pounds. 
 
 1797 
 
 10,095,620 
 
 1,096,100 
 
 11,191,720 
 
 1798 
 
 11,527,250 
 
 1,807,502 
 
 13,334,752 
 
 1799 
 
 12,408,522 
 
 1,653,805 
 
 14,062,327 
 
 1800 
 
 13,598,666 
 
 2,243,266 
 
 15,841,932 
 
 1801 
 
 13,454,367 
 
 2,715,182 
 
 16,169,594 
 
 1802 
 
 ^3,9^7,977 
 
 3,136,477 
 
 17,054,454 
 
 1803 
 
 12,983,477 
 
 3,864,045 
 
 16,847,522 
 
 1804 
 
 12,621,348 
 
 4,723,672 
 
 17,345,020 
 
 1805 
 
 12,697j352 
 
 4,544,580 
 
 17,241,932 
 
 1800 
 
 12,844,170 
 
 4,291,230 
 
 17,135,400 
 
 1807 
 
 13,221,988 
 
 4,183,013 
 
 17,405,001 
 
 1808 
 
 13,402,160 
 
 4,132,420 
 
 17,534,580 
 
 1809 
 
 14,133,615 
 
 4,868,275 
 
 19,001,890 
 
 1810 
 
 16,085,522 
 
 6,644,763 
 
 22,730,285* 
 
 1811 
 
 16,286,950 
 
 7,260,575 
 
 23,547,525 
 
 1812 
 
 15,862,120 
 
 7,600,000 
 
 23,462,120 
 
 1813 
 
 16,057,000 
 
 8,030,000 
 
 24,087,000 
 
 1814 
 
 18,540,780 
 
 9,300,000 
 
 27,840,780 
 
 1815 
 
 18,157,956 
 
 9,161,454 
 
 27,319,410 
 
 • Till 1811, the above are extracted from the report of the buUioa 
 c#mmittee ; since that year from returns made to parliament.
 
 105 
 
 No. V. 
 An Estimate of the Profits of the Bank of England, for tlic 
 
 year commencing Jan. 5, 179/. 
 Bank notes in circulation L.l 1,191,720 
 Public deposits - - - 5,0C0,000 
 
 ^"ca' itaf* °''- ^T^f "! } 3,826,890 
 
 20,018,610 
 Deduct cash and bullion 5,000,000 
 
 Funds yielding interest - I5,0l8,6l0at5 p.c." 750,930 
 
 Charge for management of national debt - - - 143,800 
 
 Do. - do. - Loan - - - 20,506 
 
 Do. - do. - Lottery - - 1,000 
 
 Interest on 11,686,000^. lent to government at ) 350604 
 
 three per cent ------ ) ' 
 
 L. 1,266,840 
 Deduct 
 Expences - - - . Z.l 50,000 
 
 Stamps . - _ - - 12,000 
 Voluntary contribution - - 200,000 
 
 362,000 
 
 904,840 
 Dividend seven per cent, on Z,.ll,642,400 - • 814,968 
 
 Profit - i.89,872 
 
 Estimate for the year commencing January 1 798. 
 
 Surplus before I797 - - 1.3,826,890 
 Do. - of 1797 - - 89,872 
 
 3,916,762 
 Bank notes in circulation 13,334,752 
 Public deposits - - 5,700,000 
 
 22,951,514 
 Deduct cash and bullion - 4,000,000 
 
 Funds yielding interest - 18,951,514 at 5 p. C« 947*575 
 
 • This sum was rrtuined by the Bank to parliament ai their lurplu* 
 Mpital, Fcbiuary 2G, 1797.
 
 106 
 
 Brought over . - - , L.947,575 
 
 Charge for management of national debt 192,000 
 Do. Loans ... - 27,410 
 
 Do. Lottery - - _ i,O0O 
 
 Interest on 11,686,800^. capital at 3 p. c. - - 
 
 220,410 
 350,604 
 
 Deduct 
 
 l,5is,589 
 
 Expences - - - . 158,000 
 Stamps - - - - 12,000 
 Seven per cent, dividend - 814,963 
 
 981,(j68 
 
 Profit - 533,621 
 
 Year commencing January 5, 1799. 
 Former savings - - L.3,916,762 
 Do. for 1798 - - 583,621 
 
 4,450,383 
 Bank notes - - 14,062,300 
 
 public deposits - - 6,400,000 
 24,912,683 
 Deduct cash and bullion 3,000,000 
 
 Funds yielding interest - 21,912,683 5 p. c 
 
 . 1,095,634 
 
 Charge for management of 1 ^ 106 700 
 national debt - J - '' 
 
 
 
 Do. Loans - - . - l6,115 
 
 
 Do. Lotteries - - - 1000 
 
 
 
 213,815 
 
 
 Interest on 11,686,800/. - - 
 
 350,604 
 
 
 1,660,053 
 
 Deduct 
 
 
 Expences . - - . 166,000 
 
 
 Stamps* .... 24,000 
 Dividend seven per cent - 814,968 
 
 
 
 Bonus ten per cent - - 1,164,240 
 
 
 
 
 2,169,208 
 
 Loss 
 
 509,156 
 
 • The composition for stamps was raised this year to 24,00O/.--in 
 1803-4, to 32,000i.— in 180G-7, to 42,000/.— and in 1815-16, to 87,500/.
 
 107 
 
 Year COMMENCING January 5, 1800. 
 Former savings - - L.4.450,383 
 Lo6sofi7p9 " - < 9,155 
 
 3 941 .^2'8 
 Banknotes - - 1 ,841,900 
 Deposits - - 7 10 1,000 
 
 26 883,128 
 
 Funds yieldino; interest L.20,883,l28 at 5 p. c. J,044,156 
 
 Managemc nt of nationa! 
 Do. Loans 
 Do. Lottery 
 
 Interest on ll,68S,800/. 
 
 Idebt 
 
 216,700 
 i 2,489 
 1,000 
 
 230,189 
 350,604 
 
 Deduct 
 
 
 
 1,624,949 
 
 Expences 
 
 Stamps 
 
 Dividend seven per cent 
 
 - 
 
 174,000 
 
 24,000 
 
 814,96s 
 
 J, 013,96s 
 
 
 Profit 
 
 LY 5, 1801. 
 
 o£6 11,981 
 
 Year co.%rMENCiNc; Januaf 
 
 
 Former savings 
 Surplus, 180O 
 
 L.3,941,228 
 611,981 
 
 
 
 Bank notes 
 Deposits 
 
 4,553,20:j 
 
 l6,idy,5ob 
 
 7,8CO,000 
 
 
 
 
 28,522,709 
 6,000,000 
 
 
 
 Funds yif Iding interest 
 
 2i,52^,V09atfivep. c. 
 
 1,126,13.' 
 
 • The Bank I' nt to govtrnnient, this year, three millions, i^ithout in- 
 terest, for six year*, and afterwards coiilinucd the same lonn for eight 
 years at three per cent, interest.
 
 108 
 
 Brought over - - - X. 1,126, 135 
 
 Cliarge for management of national debt 215,200 
 
 Do. do. Loans - - - " 39,080 
 Do. do. Lottery - - - 1,000 
 
 255,280 
 350,604 
 
 Interest on capital - - - 
 
 Deduct 
 Expences - _ . 182,000 
 Stamps 24,000 
 
 1,732,019 
 
 206,000 
 1,526,019 
 
 1,397,088 
 
 128,931 
 12,893 
 
 116,038 
 
 Dividend seven per cent. - ei4,g68 
 Bonus five per cent. - - 582,120 
 
 Property-tax* 
 Profit - 
 
 Year commencing January, 1802. 
 
 Foi'mer savings - - i.4,55 3,209 
 Profits, 1801 - - 116,038 
 
 4,669,247 
 Banknotes - 3 7,050,000 
 
 Deposits - - 8,600,000 
 
 Deduct 
 Loan to Go- 1 
 
 vernment J ^»^^'-^"^^ 
 Cash and 
 
 30,319,24-7 
 
 6,000,000 
 
 Funds yielding interest 24,319,247 at 5 p. c. 1,215,962 
 
 •The property.tax was paid by the proprietors till 1S06, when the 
 Bank agreed to pay, on their whole profits to Government, and not to 
 make any deduction from the dividend warrant.
 
 Brought over L. 1,215,C62 
 
 Charge for management of national debt 24l,60O 
 Do. do. Loans ... - 22,538 
 Do. do. Lottery - - - 1,000 
 
 265,138 
 
 Interest on capital - - - - - 350,tJ01 
 
 Deduct 1,831,704 
 
 Expences 190,000 
 
 Stamps 24,000 
 
 Dividend seven per cent. - 814,968 
 
 Bonus two and half per cent. 291,C60 
 
 1,320,028 
 
 Property tax - - 5 1, 167 
 Profit - - - 460,509 
 
 Year commencing January, 1803. 
 Former savings - L. 4,669,247 
 Pro6ts, 1802 - - 460,509 
 
 5,129,756 
 Bank notes - - 16,847,500 
 
 Deposits - - 9,300,000 
 
 31,277,256 
 > -3,000,000 
 Cash and bul- 
 
 i" 3,UUU,UUU 
 
 6,000,000 
 
 Loan to Go 
 vernment 
 
 lion - ^'\ 3,000.000 
 
 25,277.256 1,263,862 
 
 Manageraentof the national debt - 226,000 
 Do. do. Loans - - - 9,669 
 
 Do. do. Lottery ... 1,000 
 
 236,6^9 
 
 Interest on capital . . - . . 350,604 
 
 1,851,135
 
 10 
 
 Brought over L. 1,851,135 
 
 Deduct 
 Expences - - - - 198,000 
 
 Stamps - - - - 32,000 
 
 Dividend seven per cent - - 8i4,f;^8 
 
 1,044,968 
 
 800,107 
 Property tax on net profit, five per cent. - 40,308 
 
 Profit - - 765,859 
 
 Year commencing January, 1804. 
 Former savings - - L. 5,129,75(5 
 Profits, 1803 - ~ 765,859 
 
 5,895,615 
 Bank notes - - 17,345,020 
 
 Deposits - - 10,000,000 
 
 Deduct 33,240,635 
 
 Loan to Go- 
 
 }3,000,C 
 
 vernment ' -'-"".OOO 
 Cash and 1 „ 
 
 bulhon > 3,000,000 
 
 6,000,000 
 
 Funds yielding interest 27,240,635 five p. c. 1,362,030 
 
 Charge for management of national debt 246,700 
 Do. do. Loans . . - _ — 
 
 Do. do. Lottery - . . 3,000 
 
 249,700 
 
 Interest of capital - - - 350,604 
 
 Deduct 
 
 Expences - - - _ 206,000 
 
 Stamps - . , . 32,000 
 
 Dividend seven per cent. - - 814,968 
 
 Bonus five per cent. ... 582,120 
 
 ,962,334 
 
 1,683,088 
 
 . , 327,246 
 
 ir'roperty lax six and a quarter per cent. - - 20,452 
 
 Profit - - 306,794
 
 Ill 
 
 
 Year commencing 1805. 
 
 
 Former savings - L, 5,895,615 
 
 
 Profit, 1814 - - 306,794 
 
 
 6,202,409 
 
 
 Bank notes - - 17,241,932 
 
 
 Deposits - - - 10,700,000 
 
 
 34,144,341 
 
 
 Loan to Go- | 
 
 vernment ] "^'OOO'OOO 
 
 
 "-"- }^.-.- ,^,o.„ 
 
 
 28,144,341 5p. C. 
 
 1,407,217 
 
 Charge for management of national debt 254,400 
 
 
 De. do. Loan - - - 11,683 
 
 
 Do. do. Lotteries - - 4,000 
 
 
 II ■ — 
 
 270,083 
 
 Interest on capital - - _ 
 
 350,604 
 
 
 2,027,904 
 
 Deduct 
 
 
 Expences ... - 214,030 
 
 
 Stamps - - - - 32,000 
 
 
 Dividend seven per cent. - - 814,908 
 
 
 Bonus five per cent. - - 582,120 
 
 
 — — — 
 
 1,643,088 
 
 
 384,816 
 
 Property tax ten per cent. 
 
 38,481 
 
 
 346,335 
 
 Year commencing 1806. 
 
 
 Former savings - - L. 6,202,409 
 
 
 Savings, 1805 - - 346,335 
 
 
 6,548,714 
 
 
 Banknotes . - 17,135,400 
 
 
 Public deposits - 11,000,000 
 
 
 34,684,144
 
 112 
 
 Brought over - X. 34,684,144 
 
 ''rriS;-}3.ooo,ooo 
 
 6,000,000 
 
 ;3p.c.* 
 
 t 5 p. c." 
 
 75,000 
 
 18,130 
 
 2,000 
 
 90.000 
 
 28,684,144 a 
 Charge for management of national debt 2 
 Do. do. Loan 
 Do. do. Lotteries - - . 
 
 l,434,20Y 
 
 29 J, ISO 
 35©,604 
 
 2,169,941 
 1,651,088 
 
 Interest on capital 
 
 Deduct 
 Expences - - 222,000 
 Stamps - - 32,000 
 Dividend of seven per cent. 814,968 
 Bonus of five per cent. - 582,120 
 
 • 
 
 51,8S5 
 
 98,960 
 
 
 Property tax ten per cent, on surplus - 
 t Do. ten per cent, on bonus and Oct. \ 
 dividend - - - - _f 
 
 518,853 
 150,845 
 
 
 rofit, - 
 lY, 1807. 
 
 P 
 
 368,008 
 
 
 
 Year commen«ing Januai 
 
 Former savings - X.6,548>744 
 Profit, 1806 - 368,008 
 
 
 ^ , 6,916,752 
 Banknotes - . 17,405,000 
 Deposits - , 11,000,000 
 
 
 35,321,752 
 
 
 • See note, p. 107.. f See note, 
 
 p. 106. 

 
 113 
 
 Brought over - 35,321,752 
 
 Loan to Go- 
 vernment 
 
 Cashanabul.J 3^^^^ 
 
 Jion - ) _ 6,000,000 
 
 I 3,000,000 at 3 p. c. 90,000 
 
 29,321,7^2 1,466,087 
 
 Management of national debt 280,500 
 
 Do. do. Loans - - 16,115 
 
 Db. do. Lotteries - - 5,000 
 
 Commission for receiving property tax 3,154 
 
 1,556,087 
 
 Interest in capital - 
 
 - 
 
 304,769 
 350,604 
 
 Deduct 
 
 
 2,21 l,4t.O 
 
 Expences - * 
 Stamps 
 
 230,000 
 42,000 
 
 272,000 
 
 
 1,164,240 
 - -^ 193,946 
 
 Dividend ten per cent. - 
 Property tax . *. ^ 
 
 , 1,939,460 
 1,358,186 
 
 
 ■ Profit - 
 
 - 581,274 
 
 Year commencing 1608. 
 "Former savings - 6,916,752 
 
 Profit, I8O7 - - 581,274 
 
 ^ , 7,498,026 
 
 l>ank notes - 17,534,580 
 
 Deposits - - i:,000,000 
 
 36,032,606 
 
 'Tn;:;,^T}^-^«-.o«> a. 3 pore. 90,000 
 
 Ditto 3,000,000 
 
 '■"buuZ"' } ■'■^"•^ 
 
 9,000,000 
 
 27,032,006 1,351,630 
 
 1,441,630
 
 114 
 
 Brought over - - - ^ - 1.1,441,630 
 
 Management of taational debt - 193,300 
 Loan - 12,650 
 Lotteries - 2,000 
 
 Commission for receiving property duty 3,l54< 
 
 211,104 
 
 Interest on capital - - „ - - 350,604 
 
 Expences 230,000 
 
 Stamps - - - - - 42,000 
 
 Dividend, 10 per cent, - 1,164,240 
 Property tax, ditto - 172,233 
 
 2,003,338 
 
 281,000 
 
 1,722,338 
 
 1,336,473 
 
 Profit -3 H 385,865 
 
 Year COMME^CING Januaby, 1809. 
 Former savings - - 7'-^ 8<026 
 Profit, 1808 - - 335,863 
 
 7,883,891 
 Bank notes - - 19,000,000 
 
 Deposits - - 11,000,000 
 
 37,883,891 
 J 3,000,000 at 3 per cent, go,000 
 
 Loan to Go- 
 vernment 
 
 Ditto without I 
 interest / ' ' 
 
 C^h^andbul. J3„oo,oo0 
 
 9,000,000 
 
 28,883,891 1,'J44,194 
 
 Management of national debt - 205,500 
 
 Loan 8,400 
 
 Lotteries 3,000 
 
 Commission for receiving property duty 3,154 
 
 — 220,054 
 
 Interest on capital ----- 350,604 
 
 2,104j852
 
 115 
 
 Brought over - - L.2, 104,852 
 Expences - 246,000 
 Stamps - 42,000 
 
 288,000 
 
 1,816,852 
 Dividend 10 per cent. - 1,164,240 
 Property tax - - 181,8.52 
 
 1,346,092 
 
 Profit - - - 470,760 
 
 Year commencing January 1810. 
 
 Former savings - - L.7,883,89l 
 Protit - - - 470,760 
 
 8,3)4,651 
 Bank notes - 22,730,000 
 
 Deposits - - 11,000,000 
 
 42,084,651 
 
 Loan to Go- 1 3,ooa,000 at 3 per cent. 90,000 
 
 vernment J ' 
 Ditto without 1 3 0^ 
 
 interest - * 
 CashandBul-jgQQOQQQ 
 
 hon - - J 
 
 9 000,000 
 
 S3,084,()51 1,054,232 
 
 1,744,232 
 
 Management of national debt, 200,SOO 
 
 Loan - - 11,680 
 
 Lotteries - 3,000 
 
 Commission for receiving property tax 3,154 
 
 . 218.634 
 
 Interest on capital - - - - 350,604 
 
 2,313,470 
 
 I 2
 
 116 
 
 Brought over Z,. 2,313,470 
 
 Deduct 
 
 Expences - 254.,00O 
 
 Stamps - - 42,000 
 
 296,000 
 
 2,017,470 
 Dividend, 10 per cent. - - 1,164,240 
 Property duty - - - 201,747 
 
 ^ ^ ' 1,365,987 
 
 Profit , - - - 651,483 
 
 Year commencing January I811. 
 Former savings - - X. 8,354,651 
 1810 - - - 651,483 
 
 9,006,134 
 Bank notes - - 23,547,000 
 
 Deposits - - - 11,000,000 
 
 Loan to Go- 
 vernment 
 
 Ditto without 7 „ ^ 
 
 interest . | ^'000,000 
 
 Cash and bul- 
 
 43,553,134 
 } 3,000,000 at 3 per cent. 90,000 
 
 lion 
 
 3,000,000 
 
 9,000,000 
 34,553,134 1,727,765 
 
 Management of national debt, 211,300 
 Loan - - 14,705 
 
 Lotteries - - 4,O0O 
 Life annuities - - 206 
 Commission for receiv- 
 ing property duty 3,454 
 
 1,817,765 
 
 233,662 
 
 Interest on capital . - - 350,604 
 
 2,402,031
 
 117 
 
 Brought over - - - 
 Expences 
 Stamps - 
 
 - 264,000 
 - 42,000 
 
 L.2,402,031 
 
 306,000 
 
 
 1,164,240 
 209,603 
 
 Dividend, 10 per cent. 
 Property tax - - - 
 
 2,096,031 
 1,373,843 
 
 Profit - - - - 722,188 
 
 Year commencing January 1812. 
 Former savings - //.9,006,134 
 
 1811 722,188 
 
 9,728,322 
 Bank notes - - 23,462,000 
 Deposits - - 11,000,000 
 
 44,190,322 
 1 3,000,000 at 3 per cent. 90,000 
 
 }3,C 
 
 Cash and bul- 
 
 Loan to Go- 
 vernment 
 
 Ditto without J. 3 000 000 
 interest J''^.000,000 
 
 lion - ':}3>000,000 
 
 9,000,000 
 
 35,190,322 1,759,516 
 
 Management of national debt - 208,000 
 
 Loans - 19,031 
 
 Life annuities 369 
 
 Commission for receiving property duty 3,154 
 
 230,554 
 
 Interest on capital _ - - - 350,604 
 
 2,430,674
 
 118 
 
 Brought over - 
 
 - i.,.2,430,674 
 
 Expences 
 
 - 273, OCX) 
 
 Stamps 
 
 - 42,000 
 
 
 315,000 
 
 2,115,674 
 Dividend, 10 per cent. - 1,164,240 
 Property duty - - 211,567 
 
 1,375,807 
 
 Profit - - 739,867 
 
 Year COMMENCING January I813. 
 
 Former savings - - X.9,728,322 
 1,812 - - 739,867 
 
 10,468,189 
 Bank notes - - 24,080,000 
 
 ^Deposits - - 11,000,000 
 
 45,548,189 
 Loan to Go- 
 
 vernment 
 
 13,000,000 at 3 per cent. 90,000 
 
 ^tS;Sf^"}3^000,000 
 
 ^Hon"'^_^"^"}3>000,000 
 
 9,000,000 
 
 36,548,189 
 
 Management of national debt, 223,100 
 
 Loan - - 21,639 
 
 Ditto - - 2,000 
 
 Life annuities 462 
 
 .Commission for receiving property duty 3,154 
 
 1,827,400 
 1,917,400 
 
 250,S«5 
 2,167,755
 
 119 
 
 Brought over - - . - L.2,\67,755 
 
 Interest of capital - - - - 350,604 
 
 2,518,359 
 Expences . - - 283,000 
 
 Stamps - - - 42,000 
 
 325,000 
 
 2,193,359 
 Dividend, lO per cent. - - 1,164,240 
 
 Commission for receiving property duty 219,333 
 
 1,383,573 
 
 Profit - - - - 809,786 
 
 Year commencing January 1814, 
 Former savings - - L.. 0,468,1 89 
 1613 - - - 809,786 
 
 11/^77,975 
 Bank notes - - 27,840,000 
 
 Deposits - - 11,000,000 
 
 50,117,975 
 Loan to Go- "^ 
 vernmentwith- > 3,000,000 
 out interest J 
 Cash and bullion 3,000,000 
 
 ■ 6,000,000 
 
 44,117,975 2,205,898 
 
 Management of national debt, 227,000 
 
 Loan - . - 42,200 
 
 Life annuities - - - 576 
 
 Commission for receiring property duty 3,154 
 
 272,930 
 
 Interest of capital - - - - 350,604 
 
 2,829,432
 
 120 
 
 Brought over 
 
 Expences 
 Stamps 
 
 292,000 
 42,000 
 
 - X.2,829,433 
 334,000 
 
 
 - 1,164,240 
 249,543 
 
 Dividend, 10 per cent. 
 Property tax 
 
 2,495,432 
 1,413,783 
 
 
 r 
 
 Profit 
 
 1,081,649 
 
 Year commencing January 1815. 
 Former savings - - 11,277,975 
 1814 - - - - 1,081,6^9 
 
 12,359,624 
 Bank notes - - 27,3CO,000 
 
 Deposits - - - 11,000,000 
 
 
 50,659,624 
 
 6,000,000 
 
 44,659,624 2,232,98Q 
 
 Management of national debt, 250,000 
 
 Loan - • - - 28,800 
 
 Life annuities - - 700 
 
 Commission for receiving property tax 3,154 
 
 282,654 
 
 Interest on capital _ - - - 350,604 
 
 Expences - - - 300,000 
 Stamps - - - 87,500 
 
 2,866,238 
 
 387,500 
 2,478,738
 
 121 
 
 Brought over X,2,478,738 
 
 Dividend, 10 per cent. - '1,164,240 
 Property tax - - - 247,873 
 
 1,412,113 
 
 Profit - - - 1,066,625 
 
 January 18i6. 
 
 Former savings - - - - 12,359,624 
 
 leavings, 1815 • g • - - 1,066,625 
 
 L. 13,426,249
 
 122 
 
 No.VL 
 
 Resolutions proposed concerning the Bank of England^ 
 by Mr. Grenfell. 
 
 1. That it appears, that there was paid by the public to 
 the Bank of England, for managing the national debt, in- 
 cluding the charge for contributions on loans and lotteries, 
 in the year ending 3th of Jul) 1792, the sum of 99,803^ 
 12*. 5^.; and that there was paid lor the like service, in the 
 year ending .5th April 1815, the sum of 281,568/. &i. H-J^.; 
 being an increase of l8l-76'4^. 14 . o\d. In addition to 
 which, the Bank of England have charged at the rate of 
 1250?. per million on the amount of property duty received 
 at the Bank on profits arising from professions, trades, and 
 offices. 
 
 2. That the total amount of Bank notes and Bank post 
 bills, in circulation in the years 1795 and 1796 (the latter 
 being the year previous to the restriction on cash payment*,) 
 and in the year 1814, was as follows: 
 
 1795, 1st Feb. o£'12,735,520 ; and 1st Aug. «f 11,214,000. 
 
 1796, 1st Feb. 10,784,740; and 1st Aug. 9>856,110. 
 1814, 1st Feb. 25,154,950; and 1st Aug. 28,802,450. 
 
 3. That at present, and during many years past, more 
 particularly since the year 1806, considerable sums of public 
 money, forming together an average stationary balance 
 amounting to many millions, have been deposited with, or 
 otherwise placed in the custody of the Bank of England, act- 
 ing in this respect as the bankers of the public. 
 
 4. That it appears, from a report ordered to be printed 
 10th of August I8O7, from " the committee on the public 
 expenditure of the united kingdom," that the aggregate 
 amount of balances and deposits of public money in the hands 
 of the Bank of England, including Bank notes deposited in 
 the Exchequer, made up in four different periods of the 
 quarter ending 5th January 1807, fluctuated betwixt the sums 
 
 of ,£'11,461,200 ^ including Bank notes deposited in 
 
 and 12 19s,236 \ the chests of the Exchequer, 
 or, 
 
 8,178,536 ) excluding Bank notes deposited at 
 
 and 9,948,400) the Exchequer.
 
 123 
 
 5. That the aggregate amount of such deposits, together 
 with the Exchequer bills and Bank notes deposited in the 
 chests of the four tellers of the Exchequer, was, on an ave- 
 rage, in the year 1814, 
 
 o£l 1,960,3/1 ; including Bank notes deposited at the 
 or, Exchequer, amounting to 642,264^. 
 
 11,324,107; excluding Bank notes deposited at-the 
 Exchequer. 
 
 Q. That it appears, that this aggregate amount of depo* 
 •sits, together with such portions of the amount of Bank 
 notes and Bank post bills in circulation as may have been 
 invested by the Bank in securities bearing interest, was pro- 
 ductive, during the same period, of interest and profit to the 
 Bank of England. 
 
 7. That the only participation hitherto enjoyed by the 
 public, since the year I8O6, in the profits thus made on such 
 deposits by the Bank, has consisted in a loan of three mil- 
 lions, advanced to the public by the Bank, by the 46 Geo. 
 III. cap. 41., bearing 8 per cent, interest ; which loan was 
 discharged in December 1814 : And in another loan of three 
 millions, advanced to the public by the Bank, by the 48 Geo. 
 III. cap. 3, free of any charge of interest; which loan be- 
 came payable in December 1614, but has, by an act of the 
 present session of parliament, cap. 16, been continued to th^ 
 «th of April 18I6\ 
 
 8. That this house will take into early consideration the 
 advantages derived by the Bank, as well from the manage- 
 ment of the national debt, as from the amount of balances of 
 public money remaining in their hands, with the view to the 
 adoption of such an arrangement, when the engagement^ 
 now subsisting shall have expired, as may be consistent with 
 what is due to the interests of the public, and to the right*, 
 credit and stability, of the Bank of England. 
 
 13 June 1815.
 
 124 
 
 No. VII. 
 
 ^(solutions proposed concerning the Bank of Englandf 
 by Mr. Mellisk. 
 
 1. That by the act of 31 Geo. III. cap. 33, thei-e was al- 
 lowed to the Bank of England, for the management of the 
 public debt, 450/. per million on the capital stock transfer- 
 rable at the Bank, amounting in the year ending 5th July 
 i;'92, to 98,803/. 12s. 5d. on about 219,596,000/. then so 
 transferrable; and that by the act 48 Geo. Ill, cap. 4, the 
 said allowance was reduced to the rate of 340/. per million 
 on all sums not exceeding 60O millions, and to 300/. per mil- 
 lion on all sums exceeding that amount, whereby the Bank 
 was entitled, in the year ending 5th April 1815, to the sum 
 of241,97l/.4*.2irf. on about 726,570,700/. capital stock, and 
 7-93/. 6s. 'Jd. on 2,347,588/., 3 per cents, transferred for life 
 annuities, being an increase of 143,965/. 15s. A\d. for ma- 
 nagement, and an increase of about 50y,322,000/. capital 
 stock : Also the Bank was allowed 1,000/. for taking in con- 
 tributions, amounting to 812,500/. on a lottery in the year 
 ending 5th July 1792; and 38,798/. 19*. Id. for taking in 
 contributions, amounting to 40,585,533/. Qs. 8d. on loans 
 and lotteries in the year ending 5th April 1815. 
 
 2. That it appears, that the Bank, in pursuance of the 
 act 46 Geo. III. cap. 65, has, from the year I8O6 to the pre- 
 sent time, made the assessments of the duty on profits aris-. 
 ing from property, on the proprietors of the whole of the 
 funded debt, transferrable at the Bank of England, and has 
 deducted the said duty from each of the several dividend 
 warrants, which in one year, ending 5th April 1815, amount- 
 ed in number to 565,600; and that this part of the business has 
 been done without any expense to, or charge on, the public. 
 
 That in pursuance of the abovementioned act, the duties 
 so deducted have from time to time been placed to the " ac- 
 count of the commissioners of the treasury, on account of 
 the said duties," together with other sums received from the 
 public by virtue of the said act : part of this money is applied 
 to the payment of certificates of allowances, and the re- 
 mainder is paid into the Exchequer. 
 
 That by virtue of the said act, the lords commissioners of 
 the treasury have made annual allowances, at the rate of
 
 125 
 
 1,250/. per million, upon the amount so placed to the ac- 
 count of the commissioners of the treasury at the Bank of 
 England, as a compensation for receiving, paying, and ac- 
 counting for the sarne ; which allowances, however, have not 
 in any one year exceeded the sum of 3,480/., and upon an 
 average of eight years have amounted annually to 3,154/. 
 only. 
 
 The amount of duties received for the year ending 5tll 
 April 1814, was 2,784,343/,, which, if it had been collected 
 in the usual manner, at an allowance of 5c/. per pound, would 
 have cost the public 58,007/. ; and the cost for collecting 
 20,188,'293/., being the whole of the duty received from 
 1806 to 1814, on which allowances have been made, would 
 at the same rate have amounted to 420,589/- 
 
 That all monies received by the Bank on account of duties 
 on property, are paid into the Exchequer immediately after 
 the receipt thereof: when this circumstance is contrasted 
 with the ordinary progress of monies into the exchequer, the 
 advantage resulting to the public may be fairly estimated at 
 2/. per cent; which on the amount of duties for the year end- 
 ing 5th April 1814, would be 55,686/., and on the total 
 amount from 1806 to 1814, would be 403,765/. 
 
 3. That the total amount of Bank notes and Bank post 
 l)ill8 in circulation in the years 1795 and 1796, (the latter 
 being the year previous to the restriction on cash payments) 
 and in the year 1814, was as follows : 
 
 1795, 1st Feb. ,£12,735,520; . 1st Aug. ^11,214,000. 
 
 1796, 1st Feb. 10,784,740; . 1st Aug. 9,&56,110. 
 ISl^, 1st Feb. 25,154,950; . 1st Aug. 28,802,450. 
 
 4. That at present, and during many years past, both be- 
 fore and since the renewal of the charter of the Bank, con- 
 siderable sums of the public money have been deposited 
 with, or otherwise placed in the custody of the governor and 
 company of the Bank of England, who act in this respect as 
 the banker of the public. The average balances of these 
 deposits, both before and after the renewal of the charter, 
 were as follows : — 
 
 Public balances on an average of one year 
 
 ending the 15th January 18C0 . . 1,724,747. 
 
 Unclaimed dividends for the average of 
 one year ending 1 Jan. 1800 . . . 837,966. 
 
 £2,562,713.
 
 126 
 
 Public balances on an average of eight 
 
 years, from 1807 to 1815 .... 4,375,405. 
 Unclainaed dividends . . . do, , . 634,6l*. 
 
 ^5,010,019. 
 
 5. That it appears, from a report ordered to be printed 
 loth August I8O7, from •' the committee on public ejfpen- 
 diture of the united kingdom," that the aggregate amount 
 of balances and deposits of public money in the Bank of 
 England, including Bank notes deposited in the Exchequer, 
 made up in four difterent periods of the quarter ending 5th 
 January I807, fluctuated between the sums of Il,4f5l,200/. 
 and 12,198,236/. ; or, excluding Bank notes deposited at the 
 Exchequer, the amount fluctuated between 8,178,536/. and 
 9,948,400/.: the reason for which exclusion is not obvious, 
 as by the act of 48 Geo. III. cap. 3, the tellers of the Ex- 
 chequer are authorized to take as securities on monies 
 lodged, either Exchequer bills, or notes of the governor and 
 company of the Bank of England. And it also appears, ac- 
 cording to accounts laid before this house in the present ses- 
 sion of parliament, that the aggregate amount of such depo- 
 sits, together with the Exchequer bills and Bank notes de- 
 posited in the chests of the four tellers of the Exchequer, 
 was, on an average, in the year 1814, 
 
 df. 11,966,371. In<;luding Bank notes deposited at the 
 Exchequer, amounting to 642,264/. 
 11,324,107. Excluding Bank notes deposited at the 
 Exchequer. 
 
 6. That it appears, according to accounts before this 
 house, that the average of the aggregate amount of balances 
 of public money in the hands of the Bank of England, from 
 February 18O7 to February 1815, was 5,010,019/. ; and that 
 the average of bills and Bank notes deposited in the chests 
 of the four tellers of the Exchequer, from August 180/ to 
 April 1815, was 5,968,793/.; making together 10,9/8,812/,, 
 being 850,g06/. less than the average of the said accounts 
 for one year ending 5th January ] 8O7, as stated in the i^eport 
 of the committee on the public expenditure. 
 
 7. That by the 39 & 40 Geo. III. cap. 28, extending the 
 charter of the Bank for twenty-one years, the Bank advanc- 
 ed to the public 3,O0O,CO0/. for six years without interest,
 
 127 
 
 and extended tlie loan of 11,686,800/. for twenty-one years 
 at an interest of 3/. per cent, per annum, as a consideration 
 for the privileges, profits, emoluments, benefits and advan- 
 tages, granted to the Bank by such extension of its charter. 
 
 That the interest of 3^000,000/. for six 
 
 years, at 5l. per cent, per annum, is ,£900,000. 
 
 That the difference between 3/. per cent. 
 
 and 5l. per cent, on 11,686,800/. is 
 
 233,736/. ; which in twenty-one years 
 
 amounts to 4,Q08,456. 
 
 That the above loan of 3,000,000/. was 
 
 continued to the public from 180(5, 
 
 when it became payable, until 1814, 
 
 at an interest of 3/. per cent, making 
 
 an advantage in favour of the public 
 
 of 2/. per cent, or 6o,Oi)Ol. per annum ; 
 
 which in eight years and eight months 
 
 amounts to 520,000. 
 
 . That in 1808 the Bank advanced to the 
 
 public 3,003,000/. without interest, 
 
 which by an act of the present session 
 
 is to remain without interest until the 
 
 5th of April 18X6; the interest on this 
 
 advance, at 5/. per cent, will for eight 
 
 years amount to .... 1 ,200,000. 
 
 8. That by the 39 and 40 Geo. III. cap. 28, sec. 13, it is 
 enacted. That during the continuance of the charter, the 
 Bank shall enjoy all privileges, profits, emoluments, benefits 
 and advantages whatsoever, which they now possess and 
 enjoy by virtue of any employment by or on behalf of the 
 public. 
 
 That previously to such renewal of their charter, the 
 Bank was employed as the public banker, in keeping the 
 cash of all the principal departments in the receipt of the 
 public revenue, and in issuing and conducting the public ex- 
 penditure. 
 
 That the average amo-jnt of the public 
 balances in the hands of the Bank, be- 
 tween the 1st February 1814, and the 
 15th January 181.'3, upon accounts 
 opened at the Bank previously to th*
 
 128 
 
 renewal of the charter on the 28tli 
 March 1800, was .... 4,337,025* 
 tJnclaimed dividends, for the average of 
 one year ending 1st January 1815 . 'J'J%*J^A. 
 
 Z.5, 116,819 
 
 That the average public balances in th6 
 hands of the Bank during the same pe- 
 riod, upon accounts opened at the 
 Bank between the '28th March 1800 
 and the 27th Feb. 18! '8, was . . L.37O,0l9. 
 That the average public balances in the 
 hands of the Bank, during the same 
 period, upon accounts opened at the 
 Bank subsequent to the '27th February 
 
 1808, was 261, ld2. 
 
 g. That whenever the engagements now subsisting be- 
 tween the public and the Bank shall expire, it may be pro- 
 per to consider the advantages derived by the Bank from its 
 transactions with the public, with a view to the adoption of 
 such arrangements as may be consistent with those princi- 
 ples of equity and good faith, which ought to prevail in all 
 transactions between the public and the Bank of England* 
 
 2QJime, 1815. 
 
 THE END. 
 
 In a few Days will be published, 
 
 THE SPEECH of PASCOE GRENFELL, Esq. delivered in the 
 House of Commons, on Tuesday, Feb. 13, IS 16, on Transactions sub- 
 sisting betwixt the Public and the Bank of England, with an Appen- 
 dix of'bfficial Documents. 8vo. 3s. 6d. 
 
 T. Davison, Lombard-street, Wliitefriars, London.
 
 
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