fent time, the circulation of these bills is in one part of the kingdom not more than about a third; in another, not more than half; and in a third, but a fixth, of what was in circulation before the year 1793 and the committee have already endeavoured to show, in a former part of this fummary, to what degree the means of coining, and, in confequence thereof, the regular fupply of new coin (which alone could fill up the void occafioned by this decrease of circulating paper) had diminished of late years. . From the evidence of the governor of the bank, and from the report of the last fecret committee, which has been laid before this committee, it appears, that it was not fingly the diminished state of their cafh, which gave the directors any great alarm; the governor and Mr. Bofanquet rather impute this alarm to the progreffively increafing demands for cafu upon them, particularly in the week preceding the 26th of February, and to the reafons they had to apprehend that thefe demands, and the confequent progreffive reduction of call, would continue, and even increase; and they add, that this drain was in great part owing to demands for cath from the country, fuch demands being made upon the bank indirectly from the country, but directly from the bankers of Landon, who were to supply the coun try. The directors of the bank, under the impreffion which thefe alarms and embarraffients had occafioned, appear to have judged it prudent to diminish their notes in circulation, and the confequent demands that might come upon them, fo as to make the demands more nearly correfpond with the state of their cah. It will be feen, in the accounts prefented to the committee, of the amount of bank notes in circulation, at different periods, that the average amount of these notes in circulation, for several years previous to the end of the year 1796, may be stated at between 10,000,000l. and 11,000,000l. hardly ever falling below 9,000,000k and not often exceeding, to any great amount, 11,000,000l. It will appear by one of the afore-mentioned accounts, that in the latter end of the year 1796, and in the beginning of 1797, the amount of the bank notes in circulation was lefs than the average before stated; and on the 25th of February laft, it was reduced to 8,640,250l. It is true, that in an account prefented to the committee, of the amount of bank notes in circulation in the years 1782, 1783, and 1784, the quantity was then gene. rally even lefs than the fum last mentioned; but at that time the foreign commerce of the kingdom was not even one half of what it is at prefent, as will be seen in the account of imports and exports inferted in this report. It is not probable that the reduc tion of bank notes to 8,640,250l. immediately previous to the iffuing the order in council of the 26th February, was owing to any diminu tion of the demands for them; for at that time the merchants of London were fubject to difficulties, from not being able to get their bills difcounted. The directors of the bank had, on the 31st December, 1795, come to a refolution to diminish their difcounts; but notwithstanding that refolution, they did not diminish the amount of their discounts in the courie of the year 1796, compared with what they were in 1795, but had rather increased them, not however to fuch an extent, as to (P 3) make make them correfpond with the wants of the commercial world. A confiderable degree of diftrefs confequently enfued, which diftrefs may alfo be imputed to another cause, in evidence before the committee. By law, no man is to take more than 51. per cent. intereft for money lent or advanced by him; and this reftriction is understood to apply to bankers in the bufinefs of difcounting; fo that in time of war, when a much greater intereft than 51. per cent. can be made of money, upon government fecurities, the discounts which merchants obtain from bankers and other individuals, are neceffarily much diminished, and they are forced, on that account, to refort directly to the bank. Some of the perfons whom the committee examined on this part of the fubject, have expreffed a ftrong opinion of the inconvent ence produced by the conduct of the bank, in diminishing their notes, in circulation, and in restricting their difcounts. neceffary for the circulation of the metropolis; and that in this refpect, it is immaterial whether thefe notes are iffued for advances made to go. vernment, or in difcounts to pri vate perfons, except that in the laft cafe, thofe whofe bills are difcounted to a greater extent, may fuppofe that more relief is granted to them. He allows, hoever, that as the bank difcounts, even in timė of war, at 51. per cent. there may be a greater difpofition to borrow of the bank at 51. per cent. than it may be prudent always for the bank to comply with. Another of thofe gentlemen is of opinion, that the refolution of the bank to reftrict their discounts, excited an alarm and diftruft that led to an increase of the drain of their cafh; that it has contributed alfo to the forced fale and deprecia. tion of public fecurities, and to other embarraffments occafioned by an infufficient fupply of bank notes and cath; which fupply has not kept pace with the demand arifing from the employment and One of thefe perfons is of opi- circulation of active capital, parti nion, that an increafed quantity of cularly for the last fifteen montus; bank notes, proportioned to the inad he alfo is of opinion, that it would creafed occafion for them, muft tend to prevent a demand for guineas rather than to promote it; and that if the quantity of notes iffued is very confiderably lefs than the occafions of the mercantile world require, a run upon the bank, will be the confequence. He is of opinion alfo, that the directors of the bank do not avail themfelves of the full extent of their credit; and that the caution neceffary to be obferved by private bankers in the amount of their bills, does not apply to the cafe of the bank of England, for feveral reafons which he affigns. A great quantity of bank notes, in his opinion, is abfolutely not fignify materially to the public, whether the quantum of bank notes introduced into circulation, was created by difcounting bills for the merchants, or by advances to government. The committee have judged it right to state the caufes aligned by thefe gentlemen, of the diftrefs that has lately prevailed from the want of fufficient means of circulation in commercial tranfactions: the committee, however, do not mean, to decide whether the bank direc tors might not have folid reafons, for their conduct in this refect, or to convey any opinion on this. doubtful and delicate queftion; but, conceive ་ conceive it their duty to call the attention of the house to a point of fo great importance, and refer the houfe to the arguments ftated more at large in the evidence. The committee have thus gone through the chief points which have occurred in their inquiry refpecting the caufes which produced the order in council of the 26th of February laft, as refulting from the evidence taken by them, and the accounts laid before them. They fubmit the fame to the confideration of the houfe; but as the minutes of their proceedings are inferted in the former part of this report, and as the houfe is thereby poffeffed of the evidence on the whole of this fubject, in great detail, the members of it will be enabled to fupply any omiffions, and to correct any defects which may be found in this fummary. The committee being defirous of confining themselves to thofe matters on which they have thought proper to call evidence, and fentible of the difficulty (even at all times) of appreciating the extent and influence of alarm, forbear from adverting to the effects produced upon the ftate of pecuniary tranfactions and circulation, by the apprehenfions of invafion generally prevalent towards the clofe of the laft year, and in the beginning of the prefent, but of which the operation muft doubtlefs have been confiderable. Nor will they attempt to eftimate how far the interruption given to the banking operations of many great commercial cities, by the troubles and calamities which have agitated Europe, and the entire ruin of many commercial houfes and establishments, may have tended to derange the accuftomed courfe and confidence of general circulation. The committee think it fufficient merely to enumerate confiderations of fuch general notoriety, and to fubmit them, without farther obfervation, to the wifdom of the house. Copy of Refolutions moved by the Duke of Bedford, May 15, 1797,' in Confequence of the above ReportThe previous question was carried on the whole Series. 1. "THAT it appears to this houfe, that fubfequent to the month of June, 1795, and during the year 1796, a great diminution was experienced in the fpecie of the bank. of England. 2. That the governor and deputy governor of the bank did, at various times, reprefent to the chancellor of the exchequer the danger to the bank, from the diminution of its fpecie, particularly at the following periods: 11th December, 1794, 5th and 8th February, 1796, 8th, 10th, and 21st February, tence of the neceffity of the public fervice, renewed his demands for farther aid; and that under the exigency of the cafe, as flated to them by the chancellor of the exchequer, the directors of the bank were, from time to time, induced to confent to farther accommodation. 4. That it appears that the chancellor of the exchequer frequently folicited fuch farther accommodation in the most anxious and preffing terms; declaring, that it was impoffible to avoid the most serious embarrassments to the public fervice, unless the bank directors afforded the affittance he required. 5. That it appears, that although by thefe means the directors of the bank were induced to comply with his demands, they generally expreffed their reluctance in ftrong language; and that they at last, that is to fay, on the 28th of July, 1796, thought it neceffary for their own juftification, to request the chancellor of the exchequer to lay before his majefty's cabinet, their moft ferious and folema remon ftrance; in which they declare, that," fenfible of the alarming and dangerous ftate of public credit, nothing could induce them to comply with the demand then made upon them, but the dread that this refufal might be productive of a greater evil," 6. That it appears, that during the above period, a confiderable portion of the bank advances was occafioned by payments of bills of exchange drawn on the treasury from abroad. 7. That it appears, that it had feldom been the custom of the bank of England to advance, on the account of fuch bilis, more than from 20,0col. to 30,000l.; and that even during the American war, fuch bills never exceeded at any one time the fum of 150,000l. the wifdom of our ancestors having foreseen and provided against the mischief of fimilar advances, by a clause in an act paffed in the 5th year of Widiam and Mary, by which the governor and company of the bank of England were reftrained from advancing any furs of money, other than on fuch funds on which a credit is granted by parliament. 8. That it appears, that from and after the year 1793, at which time an act of parliament paffed, containing a claufe, by which the directors of the bank are indemnified for the advances they had made on bills drawn from abroad, and exempted in future from the penalties of the faid act of William and Mary refpecting fuch advances to government, the amount of trea fury bills paid at the bank continued progreffively to increafe; and that between the 1ft of January 1795, and the 25h of February 1797, fums to the amount of upwards of 15,000,000l. were at dif. ferent periods advanced to govern ment upon this head. 9. That it appears, that the directos of the bank did, at various times during the years 1795, 1796, and 1797. apply to the chancellor of the exchequer for re-payment of fuch advances, and reprefent to him the ruinous confequences to them felves and to the public, of continuing the fyftem of making treafury bilis payable at the bank: and that they even declared they conceived it to be "an unconftiutional mode of raising money, and what they were not warranted by their charter to confent to." 10. That it appears, that the chancellor of the exchequer did, at various times in that period, undertake to reduce the advances on that that head within the fum of 500,000l. and likewife fo to arrange his payments as to put an end to the account; but that nevertheless the faid promifes never were kept by him, and that the advances on treasury bills, on the 28th of February, 1797, aniounted to 1,619,0491. II. That it appears to this houfe, that foreign remittances to a much larger amount than ever were known in the most expenfive wars in which this country has been involved, have taken place fince the year 1793. 12. That the extent of fuch remittances occafioned, at fo early a period as the end of the year 1794, and the beginning of the year 795, great alarm in the minds of the directors, which they at various periods communicated to the chancellor of the exchequer ; and that on the 3d of December, 1795, the court of directors, under the apprehenfion that it was intended to grant a farther loan to the emperor, came to a refolution, by which they declared their unanimous opinion, that fhould fuch a loan take place it would be moft fatal in its confequences to the bank of Englani. 66 out previously communicating to them his intention. 14. That on the 11th of Fe-. bruary, 1796, the directors of the bank paffed unanimously the following refolution : "Refolved, That it is the opinion of this court, founded upon the experience of the effects of the late imperial loan, that if any farther loan, or advance of money, to the emperor, or to any other foreign ftate, fhould, in the prefent ftate of affairs, take place, it will in all probability prove fatal to the bank of England. The court of directors, therefore, do moft earnestly deprecate the adoption of any fuch measure, and they folemnly proteft against any refponfibility for the calamitous confequences that may follow thereupon." To which refolution, when com municated to him, the chancellor of the exchequer returned for anfwer, "That after the repeated intimations which he had given to the governor, &c. of the bank, that no farther loan to the emperor. would be refolved on without previous communication with bank, he did not fee any reafon for these resolutions; that he did fuppofe they were adopted in a moment of alarm, and that he should confider them in that light." the That they communicated fuch refolution to the chancellor of the exchequer, who affured them he fhould lay afide all thoughts of it, unless the fituation of things rela- 15. That both from the genetive to the bank should fo alter as ral tenor of the faid anfwer, and to render fuch a loan of no im- from its particular reference to the portance or inconvenience to fubftance and matter of the refolu them." tion then communicated to him, he gave the governor, &c, of the bank to understand, that he was bound by promife to them, to negotiate no loan for the service of his imperial majefty, nor to make any remittance either to his faid imperial majefty, or any foreign prince, under any pretences whatever, with 13. That on the 5th of February, 1796, the chancellor of the exchequer, after ftating, in converfation with the governor and deputations from the bank of England, his opinion of the neceflity of farther af fifting the emperor, promifed to take no step in that business with out |