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place till a considerable time after the evidence of the said governor their exportation, though a great and deputy governor, and other di. additional capital has been previo reators of the bank, wheu they atously employed, in providing the tended the committee, either as a dearti« les fo exported. 'The balance putation, or in their individual caof payments, which arises out of pacity, as well as from the minutes the balance of trade, is necessarily of those conferences, and the coposterior to it, and in countries pies of the resolutions delivered by like Great Britain, where long them to the chancellor of the ex. credits are given, it may not pro- chequer :- it will appear also, duce its full effect upon our circu. from the evidence of the chancellation, for a congderable time. lor of the exchequer, and from the
The result of all the various cir. letters written by him to the go. cumstances before itated, does not vernor of the bank; all which are appear, on the whole, to have pro- inserted in this report, and to which duced any permanent disadvanta- the committee think it more proper geous effe&t on the cash of the to refer the house, than to give a bank, till the month of September summary of them. 1795: the cash of the bank had, The accounts before inserted, indeed, been much lower than and the evidence just referred 10, usual in March and June 1793; will also flow, what was the nabut it role in the September of that ture of the advances made by the year nearly to its usual average. bank to government - Upon what From September 1795, however, funds or credit they were madeit continued progresively declin- What was their amount at dif. ing, so as to be, during the whole ferent periods---How far the aof the year 1796, considerably less mount of those advances, during than in the year 1795, but not low- the present war, have exceeder at the end of 1796 than in the ed those made in time of peace middle of that year; and in the - How far they have exceeded commencement of the present year, those made in the last warstill less than in the year 1796 – whether they were greater or less, and in the week preceding the issue immediately previous to the issuing ing of the order of council, it di- the order in council of the 26th of minished rapidly: It was not, how- February, than at any preceding ever, even at that period, in any period. degree fo low as in the year 1783, The committee were desirous of and particularly in the month of throwing farther light on this subOctober of that year.
jeet, by laying before the house The conferences between the fome accurate account of the exchancellor of the exchequer, and the changes between Great Britain and governor and deputy governor of other countries; as these, when the bank, on the apprehensions they can be correctly ascertained, they entertained of the diminution atford a good criterion of the ba. of their cain, and the representa- lance of payments between Great tions made by then, from time to Britain and other countries, and time, on the effect which foreign thereby now, whether there is realoans and remittances had on the lon to conclude, that any coin or state of their call, will appear by bulliou have been exported or im.
perted. At present, the only places ver has been for many years only a with which there subfifts any regie commodity, which has no fixed lar course of exchange with Great price, and is very rarely carried to Britain, are Lisbon and Ham- the Mint to be coined, but varies burgh. Ai this last place, a great 'according to the demand for it at proportion of the accounts between the market. The market price of Great Britain and the northern these precious metals appears also; parts of Europe, is now settled and to have an influence on the Banco paid. The par of exchange with money of Hamburgh, in which the Lisbon can be accurately stated; it exchanges are reckoned It is prois 674. It has already been down bable that to these circumstances is, from the evidence of fir John Hort to be imputed the difficulty of deand Mr. Whitmore, how far the terming the par of exchange beexchange between London and tween London and Hamburgh. Oni Lisbon has been of late to the dif- the present subject, therefore, all: advantage of this country; and that the committee can say with their account of it is fully confirm- certainty is, that according to the ed hy a fiatement of the course of evidence of the governor of the exchange taken from Caltaing's pa- bank of England (which is conpers, inserted in this report. firmed by a paper annexed), the
With respect to the exchange be- exchange with Hamburgh ceased to tween Great Britain and Ham- be unfavourable to this country, in: burgh, the committee have not March, 1796, became more fabeen able to decide, to their fatis- vourable in the month of O&tober faction, what is the actual par of laft; and that it continued favour) exchange between London and able till the 26th of February, when Hainburgh. The witnesses they the order of council was issued; and have examined have widely differs that it continues fo ftill. ed, with respect to the par of ex The committee have hitherto! change between whose places. The stated the several points relating to committee, however, have inserted the more remote causes, by which in the minutes of the eviderice, the the circulation of the kingdom, answers of Mr. Boyd to two quef- and the general state of the bank, tions put to him, and a paper pre may have been affected. They proc' sented to this committee by one of ceed now, to those which immethe members of it, which throw diately preceded the 26th of Fe.' considerable light on this intricate bruary last, and more directly con: subject, and will account, in some tributed to the necessity of the ordegree, for the difficulty the com- der of council, which was issued mittee had experienced in deter on that day. mining, with sufficient accuracy, It appears from the evidence of the par of this exchange.
Mr. Ellison, that a few weeks preThe mercantile accounts in Ham- vious to the 26th of February, two burgh and London have a refer- great mercantile banks at Newence to different metals. Silver ap- castle stopped payment in cash, owpears to be the common coin of ing to the effect of a local aları, Hamburgh, and gold is, in that similar, as stated by this gentleman, place, rather to be confdered as a to that in 1793, which occasioned coinmodity. . Gold is the mercan- most of the country bankers to tile coin of Great Britain, and lilo draw large sums of money from the
metropolis, and induced them to throws a confiderable light on one keep in store larger quantities of at least of the causes which prospecie, than before the year 1793, duced this great demand for calla in order to make their payments, on the bank. It appears by the acit such fhould be required of them. count of the state of the call at the Mr. Thornton confirms in general bank, at different periods, as laid this account given by Mr. Éllifon. before the committee, that the He agrees also with Mr. Ellison with greatest drain of cash which the refpect to the demand for caflı bank has experienced, fubsequent made on the nietropolis by the to the year 1783, was in March country bankers, for the purpose and June 1793, that is, a fhort of being sent to different parts of time after the failure of the counthe kingdom, where it is partly try banks in that year; and in the kept by the country bankers, for commencement of the month of the uses before mentioned, and February of this year, that is, * partly drawn out of their hands by short time after the Newcastle individuals, to be hoarded. bauks stopped payment in cash,
It appears by the evidence of and when the alarins before stated Mr. Thornton, that there was, at produced great demands for cash, this time, also a demand of cash to from different parts of the country: be sent from the metropolis to So that, in both thofe periods, the Scotland.
fame cause appears to have proBut those demands for cash, duced an effe&t nearly similar, that from the distant parts of the king, is, a very unusual drain of cash from dom, were pot the only causes of the bank. the embarassments of the bank of The increased demand for call England, at this period. It is must bear a proportion to the deftated in an account delivered by crease of any other sort of circulaMr. Puget, one of the directors of tion that is a fubftitute for it. The the bank of England, and agent committee will prefeutly fhow, to for the bank of Irelanch
, that in the what degree the circulation of the commencement of the year 1797, notes of the bank of England had there was an unufual demand of been diminiftred, immediately pre. call made on the bank of England, vions to the 26th of February laft, to be sent to Ireland; and that with respect to the decrease of abere was an expectation of a loan country bank bills in circulation, being intended to be raised in Great Mr. Thornton, who appears to Britain for the fervice of Ireland, have collected his evidence from which would have necessarily oc feveral parts of the kingdom with casioned the exportation of a con- great accuracy, was delired by the fiderable quantity of coin from the committee to deliver in an account metropolis to the latter kingdom. of the proportion in which, acIt is proper to add, that the king. cording to his information, coun dom of Ireland appears, for some try bank bills circulated in difweeks previous to the issuing the ferent parts of the kingdom, before order of council of the 26th of Fe- the failures in 1793; at a period bruary, to have experienced a great fubfequent to that year; and at the want of cath, fimilar to that which present tiire. This account may was experienced in Great Britain. be seen at large in the evidence; There is a circumstance, that but the result is, that at the pre
fent time, the circulation of these accounts presented to the commit. bills is in one part of the king, tee, of the amount of bank notes dom not more than about a third; in circulation, at different periods, in another, not more than half; that the average amount of these and in a third, but a fixth, of what notes in circulation, for several years was in circulation before the year previous to the end of the year 1793 : and the committee have al- 1796, may be stated at between ready endeavoured to thow, in a 10,000,000l, and 11,000,000l. hardformer part of this summary, to ly ever falling below 9,000,000h what degree the means of coining, and not often exceeding, to any ' and, in consequence thereof, the great amount, 11,000,000l. It will regular supply of new coin (which appear by one of the afore-mentialone could fill up the void occa oned accounts, that in the latter fioned by this decrease of circulat- end of the year 1796, and in the ing paper) had diminished of late beginning of 1797, the amount of years.
the bank notes in circulation was . From the evidence of the go- less than the average before stated; vernor of the bank, and from the and on the 25th of February last, report of the last secret committee, it was reduced to 8,640,2 gol. which has been laid before this It is true, that in an account precomınittee, it appears, that it was sented to the committee, of the not Gngly the diminished state of amount of bank notes in circulatheir cath, which gave the directors tion in the years 1782, 1783, and any great alarm; the governor and 1784, the quantity was then gene. Mr. Bofanquet rather impute this rally even less than the sum laft alarm to the progressively increas- mentioned; but at that time the ing demands for casa upon them, foreign cominerce of the kingdom particularly in the week preceding 'was not even one half of what it is ihe 26th of February, and to the at present, as will be seen in the acreasons they had to apprehend that count of imports and exports inthese demands, and the consequent serted in this report. progressive reduction of calli, would It is not probable that the reduce continue, and even increass; and tion of bank notes to 8,610,250l. they add, that this drain was in immediately previous to the issuing great part owing to demands for the order in council of the 20th Fecath from the country, such de. bruary, was owing to any diininu. mands being made upon the bank tion of the demands for them; for indire&tly from the country, but at that time the merchants of Lon. dire&tly from the bankers of Lon- don were subject 10 difficulties, don,'who were to supply the coun- from not being able to get their try,
bills discounte:l. The directors of the bank, under The directors of the bank had, the impression which these alarıns on the 31st December, 1795, come and embarrassinents had occa901. to a resolution to dimild their dired, appear to have judged it pru- counts; but notwithstanding that dent to diminish their notes in cir. refolution, they did not diminish culation, and the consequent de. the amount of their discounts in mands that might come upon them, the courie of the year 1796, comso as to make the demands more pared with what they were in 1795, nearly correspond with the state of but had rather increased them, not their eah. It will be seen, in the however to such air extent, as to
make them correspond with the necessary for the circulation of the wants of the commercial world. A metropolis; and that in this respect, considerable degree of distrefs con it is immaterial whether there notes fequently ensued, which distress are issued for advances made to go. may also be imputed to another vernment, or in discounts to pricause, in evidence before the com. vate persons, except that in the mittee. By law, no man is to take last care, those whose bills are difmore than 31. per cent interest for counted to a greater extent, may money lent or advanced by him ; suppose that more relief is gransed and this reftri&tion is understood to them. He allows, hou ever, that to apply to bankers in the businefs as the bank discounts, even in time of discounting; so that in time of of war, at sl. per cent. there may war, when a much greater interest be a greater difpofition to borrow than gl. per cent, can be made of of the bank at 51. per cent, than it money, upon government securi- máy be prudent always for the ties, the discounts which merchants bank to comply with. obtain from bankers and other in Another of those gentlemen is dividuals, are necessarily much di: óf opinion, that the resolution of minilhed, and they are forced, on the bank to restria their discounts, that account, to resort directly to excited an alrm and distrust that the bank.
led to an increase of the drain of Some of the persons whom the their cash; that it has contributed committee examined on this part also to the forced fale and deprecia. of the subject, have expreifed a tion of public securites, and is Atrong opinion of the inconveni. other embarrassments occasioned by ende produced by the conduct of an insufficient fupply of bank the bank, in diminishing their notes, notes and çalı; which supply baş in circulation, and in restricting not kept pace with the demand their difcounts.
arising from the employment and One of these persons is of opi. circulation of active captal, part: nion, that an increased quantity of cularly for the last afiech monts; bank notes, proportioned to the in- ad he also is of opinioz, that it would creafed ocasion for then, must not fignify materially to the publica tend to prevent a demand for whether the quantum of bank notes guineas rather than to promo:e it; introduced into circulation, was and that if the quantity of notes created by discounting bills for the illued is very confiderably less than merchants, or by advances to gothe occasions of the mercantile vernment. world require, a run upon the bank The committee have judged it will be the confequence. He is of right to state the causes alugued by opinion also, that the directors of these gendemen, of the distrels that the bank do not avail themselves
has lately prevailed from the want of the full extent of their credit; of fufficient means of circulation and that the caution necessary to be in commercial trantactions: the observed by private bankers in the committee, however, do not mean amount of their bills, does not ap. to decide whether the bank direcply to the case of the bank of Eng. tors might not have solid reasons Jand, for several eas whi te for their conduct in this rel, ect, affigns. A great quantity of bank
or to convey any opinion on this notes, in his opinion, is absolutely doubtful and delicate question; bus