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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 distress con it is immaterial whether these notes fequently ensued, which distrefs are issued for advances made to gemay 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 case, those whose bills are difmore than sl. per cent intereft' for counted to a greater extent, may money lent or advanced by hin ; suppose that more relief is granted and this restriction is understood to them. He allows, ho rever, 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 disposition to borrow than gl. per cent. can be made of of the bank at sl. per cent, than it money, upon government securi. may be prudent always for the ies, the discounts which merchants bank to comply with. obtain from bankers and other in Another of those gentlemen iş dividuals, are neceffarily much di. óf opinion, that the resolution of minished, and they are forced, on the bank to restriết their discounts, that account, to resort directly to excited an alarm and distruit that the bank.

led to an increase of the drain of Some of the persons whom thë their cash; that it has contributed committee examined on this part also to the forced fale and depreciaof the subject, have expresfed à tion of public securities, and in ftrong opinion of the inconveni. other em barrallinents occasioned by ende produced by the conduct of an insufficient fupply of bank the bank, in diminishing their notes, notes and çalh ; 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 capital, partinion, that an increased quantity of cularly for the last fifieen montis; bank notes, proportioned to the in- and be also is of opinion, that it would creafed oci asion for then, nuust not signify materially in the public

, tend to prevent à 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 so ga the occasions of the inercantile

vernment. world require, a run upon the bank, The committee have judged it will be the confequence. He is of right to ftate the causes alligried by opinion also, that the directors of these gerilemen, of the distrels that the bank do not avail themselves has lately prevailed froin the want of the full extent of their credit; of suficient means of circulation and that the caution necessary to be in conimercial transactions : the observed by private bankers in the committee, however, do not mean, amount of tlieit bills, does not ap. to decide whether the bank direc. ply to the case of the bank of Eng. tors miglit not have folid reasons land, for several reasons whichi te for their conduct in this refecto affigns. A great quantity of bank er to convey any opinion on this notes; in his opinion, is absolutely doubtful and delicate question; but


conceive it their duty to call the The committee think it fufficient attention of the house to a point of merely to enumerate considerations so great importance, and refer the of fuch general notoriety, and to house to the arguments stated more submit them, without farther obat large in the evidence.

servation, to the wisdom of the The committee have thus gone honse. through the chief points which have occurred in their inquiry respecting the causes which produced copy of Resolutions moved by the the order in council of the 26th of Duke of Bedfordd, May 15, 1797,' February laft, as resulting from the in Consequence of the above Reporiam evidence taken by them, and the

The previous question was carried accounts laid before them. They on the wkole Series. fubmit the same to the confideration of the house; but as the mi 6 THAT it appears to this nutes of their proceedings are in. house, that subsequent to the month serted in the former part of this re of June, 1795, and during the year port, and as the house is thereby 1796, a great diminution

was expoffefTed of the evidence on the perienced in the fpecie of the bank whole of this subject, in great de- of England. tail, the members of it will be 2. That the governor and deenabled to fupply any omiffions, puty governor of the bank did, at ånd to correct" any defects which various times, represent to the chanmay be found in this summary.

cellor of the exchequer the danger The committee being desirous of to the bank, from the diminution confining themselves to those mat- of its specie, particularly at the folters on which they have thought lowing periods: proper to call evidence, and fenti

IIth December, 1794, ble of the difficulty (even at all 10th October, 1795, times) of appreciating the extent 23d Otober, 1795, and influence of alarm, forbear

18th November, 1795, from adverting to the effects pro 3d December, 1795, duced upon the state of pecuniary i5th and 16th January, 1796, transactions and circulation, by the 28th January, 1796, apprehenfions of invasion generally 5th and 8th February, 1796, prevalent towards the close of the 11th February, 1796, last year, and in the beginning of 8th, ioth, and 21st February the present, but of which the opera

1797 tion must doubtless have been con 3. That it appears, that during liderable. Nor will they attempt these periods the directors of the to estimate how far the interruption bank frequently remonstrated with given to the banking operations of the chancellor of the exchequer on many great commercial cities, by the magnitude of their advances to the troubles and calamities which government, anxiously requiring have agitated Europe, and the en- payment, or a considerable reductire ruin of many commercial tion of the same; but that neverhouses and establishments, may theless the chancellor of the exchehave tended to derange the ac- quer not only neglected to comply cuftomed course and confidence of with the object of those remongeneral circulation,

ftrances, but usually, under pré(P4)


tence of the necessity of the public any one time the sum of 150,000l. service, renewed his demands for the wisdom of our ancestors having farther aid ; and that under the exi- foreseen and provided against the gency of the case, as fated to them mischief of similar advances, by a by the chancellor of the exchequer, clause in an act passed in the sth the directors of the bank were, year of William and Mary, by from time to time, induced to 'con- which the governor and company fent to farther accommodation. of the bank of England were re

4. That it appears that the chan- ftrained from advancing any fums cellor of the exchequer frequently of money, other than on such solicited such farther accommoda- funds on which a credit is granted tion in the most anxious and prest- by parliament. ing terms; declaring, that it was 8. That it appears, thae from and impossible to avoid the most serious after the year 1793, at which time embarrassments to the public ser. an act of parliament paffed, conVice, unless the bank directors af- taining a clause, by which the diforded the affittance he required. rectors of the bank are indemnified

$. That it appears, that although for the advances they had made on by these means the directors of the bills drawn from abroad, and exbank were induced to comply with empted in future from the penal. his demands, they generally exprell- ties of the said act of William and ed their reluctance in strong lan- Mary respecting such advances to guage; and that they at lait, that government, the amount of treais to say, on the 28th of July, 1796, fury bills paid at the bank continuthought it neceffary for their own ed progreffively to increase; and justification, to request the chan, that bei weca the ift of January cellor of the exchequer to lay be. 1795, and the 25th of February fore his rajesty's cabinet, their 1797, fquis to the amount of up most serious and solemu remon. wards of 15,000,000l. were at dif{trance; in which they declare, ferent periods advanced to govern that, “ sensible of the alarming and ment upon this head. dangerous state of public credit, 9. That it appears, that the di. nothing could induce them to como rećtois of the bank did, at various ply with the demand then made times during the years 1795, 1796, upon them, but the dread that this and 1797. apply to the chancellor refusal might be productive of a of the exchequer før re-payment of

such advances, and represent to him 6. That it appears, that during the ruinous consequences to theni: the above period, a considerable felves and to the public, of contie portion of the bank advances was nuing the syftem of making trea. occasioned by payments of bills of fury vilis payable at the bank : and exchange drawn on the treasury that they even declared they confrom abroad,

ceived it to be “ an unconftilu7. 'That it appears, that it had tional mode of raising money, and seldom been the custom of the what they were not warranted by bank of England to advance, on their chaiter to consent to." the account of such bilis, more

10. That it appears, that the than from 20,0col. to 30,000l. ; chancellor of the exchequer did, at and that even during the American various times in that period, underwar, such vills nevir exceeded at take to reduce the advances on


greater evil."

that bead within the sum of out previously communicating to 500,00ol. and likewise fo to arrange them his intention. his payments as to put an end to 14. That on the inth of Fe. , the account; but that nevertheless bruary, 1796, the directors of the the faid promises never were kept bank paffed unanimously the folby him, and that the advances on lowing resolution : treasury bills, on the 28th of "Refolved, That it is the opinion February, 1797 1797, aniounted

to of this court, founded upon the ex1,619,0491.

perience of the effects of the late 11. That it appears to this house, imperial loan, that if any farther that foreign remittances to a much loan, or advance of money, to the larger amount than ever were emperor, or to any other foreign known in the most expensive wars fare, should, in the present state of in which this country has been in- affairs, take place, it will in all provolved, have taken place since the bability prove fatal to the bank of year 1793.

England. 12. That the extent of such re The court of directors, there. mittances occafioned, at fo early a fore, do moft earnestly deprecate period as the end of the year 1794, the adoption of any such measure, and the beginning of the year 795, and they solemnly protest against great alarm in the minds of the di- any responsibility for the calami: rectors, which they at various periods tous consequences that may follow communicated to the chancellor of thereupon.” the exchequer ; and that on the 3d To which resolution, when comof December, 1795, the court of municated to him, the chancellor directors, under the apprehension of the exchequer returned for anthat it was intended to grant a far. [wer, “ That after the repeated in. ther loan to the emperor, carne to a

timations which he had given to resolution, by which they declar- the governor, &c. of the bank, that ed their unanimous opinion, that no farther loan to the emperor. flould such a loan take place it would be relolved on without prewould be most fatal in its confe- vious communication with the quences to the bank of Englani. bank, he did not see any reasou « That they cominunicated such for these resolutions; that he did resolution to the chancellor of the suppose they were adopted in a moexchequer, who assured them he ment of alarm, and that he should should lay aside all thoughts of it, consider them in that light." unless the situation of things rela. 15. That both froin the gene. tive to the bank should fo alter as ral tenor of the said answer, and to render such a loan of no im- from its particular reference to the portance or inconvenience to substance and matter of the resolu, them."

tion then communicated to him, he 13. That on the 5th of February, gave the governor, &c, of the bank 1796, the chancellor of the exche- to understand, that he was bound quer, after stating, in conversation by promise to them, to negotiate with the governor and deputations no loan for the service of his imfrom the bank of England, his opi- perial majesty, nor to make any re. nion of the neceflity of farther af. mittance either to his said imperial fisting the emperor, promised to majesty, or any foreigo prince, vatake no step in that business with- der any pretences whatever, with


out previously communicating such pending the due and ordinary his intention to the bank of Eng- course of the bank payments ia' land: that the directors so under. calls. stood him; and that, impressed 20. That it appears to this with that belief, they abstained houfe, upon an attentive examinafrom making any further remon tion of the evidence reported by strance on this subject.

the secret committee, upon a mi16. That nevertheless, the chan- nute peru fal of the correspondence cellor of the exchequer, for some between the governor and directime prior to February 11, 1796, tors of the bank of England and clandestinely remitted, and did the chancellor of the exchequer, for several months subsequent, during the years 1795, 1796, and clandestinely remit, to his faid im- 1797, and after a thorough review perial majesty, and other foreign of the whole circunstances of the princes, large sums of inoney, in case, that the veglect of the chandefiance of his repeated promises, cellor of the exchequer in discharge and in violation of his folemn en- ing, or fufficiently diminishing, the gagement with the bank of Eng- amount of the fums advanced to land, and consequent upon their government by the bank of Engresolution of the nth of Febrų- land; his perseverance in direct. ary:

ing treasury bills of exchange to 17. That it appears, that if an amount unexampled to be paid the said advances of the bank to at the bank; his frequent promises, government had been paid off and constant breach of those prowhen required, or confiderably re- mises, to reduce their amount duced, the bank would have been within the sum of 500,cool.; and enabled to reduce, if expedient, the enormous amount of his rethe amount of its outstanding mittances to foreign princes in notes; and that such option would loans and fubfidies, were the primhave been of effential service to its cipal and leading causes which interests.

produced the necelity for suspend. 18. That it appears, from the ing the due and ordinary course of evidence of the governor and depu- the bank payments in cash.” ty governor of the bank, that if the said advances had been paid off when required, or considerably Protoff entered on the Journals of ike reduced, the bank would have House of Lords, in Consequence of been enabled to give more the Resolution of the House to rejce tended aid to the mercantile inte the Motion of the Duke of Bedford rest of Great Britain, in the way of for the Dijmijjon of Ninifiers. discount, 19. That it appears, that if the

DISSENTIENT. advances on the treasury bills had ift. Because, acting according to been paid off when required, and the ancient practice of the British as the chancellor of the exchequer constitution, and in conformity had promised, and the foreign re with its true principles, we hold mittances abstained from, as the the advisers of the crown to be rechancellor of the exchequer had fponsible for the condition of the likewise promised, there would state; refponfible for its internal have exifted no ncceflity for suf- peace, and general good govern.



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