The Sun.
London, England, 1833-07-02 00:00:00

the Bill. A 57 note, and nn other, would be ionverdhle
into gold on demand.—(An Hon. Member asked whether
a five guinea note would be a legal tender ?) A five
coin.% note, if such were issu,d by the Bank, would cer•
tainly he legal tender —( Hear.)
The House then divided, when there appeared--

Ayes
Noes
Majority -58
On our re-entrance to the gallery, we found the House
. _

discussing the third resolution, of which
Lord ALTHORP appeared to he giving come expla-
nation, but his Lordship was totally inaudible, from
his low tone of voice and the noise which prevailed in
the House.

Mr. HERRIES made some objections, as far as we

could understand, for the Hon. Member was equally n-
audible with his Lordship.
Lord ALTHORP, to the heat of our bearing, said that

the reduction in capital proposed to be made would not
at all diminish the security to the public. 14,500,0001.,
it appeared to him, was far more than was at all necessary
!Or that object. The less the amount in the hands of the
Bank, the cheaper they could afford to do the business,
and this would be a manifest saving to the public.

Mr. Gtswawa, Mr. F. LEWIS, and Mr. CAYLEY
respectively addressed the House, but from the- extreme
confusion which prevailed, we were quite unable to catch

the tenor of their remarks.
Mr. BA RING did not at all understand the object of
Government in reducing the capital of the Bank. The
only advantag,, it could have produced would have been
enabling Government to make a better bargain, and with
th it view the reduction would have been perfectly legiti-
mate. By the next resolution, however, it appeared that
no such advantage was taken, and he was therefore greatly
at a loss 'o understand it.

Lord ALTHORP, as far as we could understand, said
that it was the object of the Government, ou the part of
the public, to get rid of a portion of the debt at a time
like the present, when the funds were so high and interest
so low, instead of delaying such reduction to a period
when such an advantageous opportunity might not occur.
Mr. M. ATTWOOD also thought that no adequate
reason had been given for the reduction. The Bank were
ready, he believed, to transact the whole business at as
cheap a rate as they would the reduced capital, and he did
not therefore see why the public security should be dimi-
nished.

Mr. P. THOMSON was perfectly astonished how the
Hon. Gentleman could venture to make such a statement
as this, so totally at variance with every statement and
account laid betere the House. As to the }milk security,
he thought it would be fully guaranteed by half the capital.
It was most important to get rid of some of the debt at so
auspicious a moment, when funds were so high and inte-
rest so low ; for who could say what the 3 per cents. would
be at the end of the ten years? they might, as likely as not,
be at 50 or 60, instead of at 96. It was urged by some
that they might also be at 100, instead of 96 ; but he be-
lieved that though there might he a small margin for the
rise, there was a very great margin for the fall.

Sir R. PEEL said that an even reduced Government
debt to the Bank, might be a sufficient security to the
public for the solvency of the Bank, if the circulation were
to remain al at present ; but here Government, while they
narrowed the security of the debt, were about to extend a
paper circulation to an indefinite amount.—(Hear, hear.)
Was the Bank to divide this three and a halt millions
among its proprietors?—(" Yes," from the Ministerial
side.) Why then they would, pro facto, diminish the
assets of the Bank.--(Hear, hear.) If this amount was
to be vested in some other way, there might be some rea-
son in the thing, but to divide it among the proprietors
was clearly lessening the security to the public. The Bank,
it was said, was to pay 120,0001. to the public far the
renewal of their Charter, but it was elsewhere in the Bill
contrived that the public should be a loser to the amount
of 20,0001., so that, in point of fact, the Bank would only
pay the public 100,0001. a year. What was this com-
peted to sums paid by the Bank formerly for renewals of
their Charter ?—(Hear, hear.) He apprehended that the
Bank, on farmer renewals of its Charter, made a bargain
with Government for about 280,0001.—et least for a sum
which was much greater than the present price of the
bargain, which he took to lie, in round numbers, 100,000/.,
and yet the profits of the Bank at present were greater than
formerly, consequently it could afford to pay dearer for
the renewal of its Charter. There was one thing he
should like especially to know—namely, the principle up-
on which the Noble Lord proceeded when be made
this bargain. One thing there was be would say, that
his confidence in the Batik Directors was not diminished
by the way in which they had managed that part of the
affair ; on the contrary, that confidence had increased by
the manner they had arranged the transaction. He did
not absolutely mean to say that they had outwitted the
Noble Lord (Althorp) ; till he meant was, that they had
made a capital bargain.—(A laugh.) He did not feel
inclined by his vote that night, to annul the bargain of the
Noble Lord ; but he thought that the Noble Lord should
give an account of former bargains between the Govern-
ment and the Bank with respect to the renewal of its
Charter. If the sums formerly paid were found to be less,
of course the result would be favourable to the present
bargain.
Lord ALTHORP said there was one observation in the
commencement of the Right Hon. Baronet's speech to
which lie would briefly refer. It was, that whilst they
were diminishing the capital of the Bank, they were in
creasing its liabilities. Now such was not the fact ; for
the debt to the Bank in 1797, was 9,000,0001., or about
6,000,0001. less than it was at present. When the Char-
ter was renewed in 1801, the Bank advanced to Govern-
ment an additional sum of 3,000,0001., without any in-
creased charge. The amount of the liability of the Bank
its
circulation then greater
.than it was now ; for the amount of
circulation was limited to nearly 90,0001. In 1816, in
consequence of some privileges granted to the Batik,
it advanced again about 3,000.0001. to Govern-
ment, arj_d_l_ie .....aaael sire that what the Bank gave for
.6e-talc-renewal of its Charter was 150,0001. Before any
correspondence had taken place between the Governor of the
Bank and the Government, be stated what his intentions
were. The c3pital if the Bank was 17,000.0001., and
its profits, divided anmag theProprietors,were 1,164,0001.,
which he did not. consider a very large amount of profit.
He proposed to reduce the funded capital, which was
14,500,0001., to 11,000,0001., and that the dividend
should be eight per cent. on the whole capital of the
Barak. The proposal he then made he did not consider
at all un'ai,, yet the Bank Directors said they could not
accede to it. However, he considered that the amount
the Bank was to pay for the renewal of its Charter was of
far less consequence, than that the system of banking
should he placed on a new priuciple. lie haul then to
consider how a new bank was to be established, with a
capital of somewhat about 10,000,0001., and how much it
could effete' to do the business of Government for. He
found that it could not be managed so cheaply as at present,
and such a bank could not afford to pay more than six per
cent. by way of dividend. In making a change, the question
was, whether a better bargain could not be made with the
Bank Directors, than in establiehinga new bank. Hefound
that it was cheaper to make the b argain he had made. That
was the princip:e upon which the bargain was made, and
it was not on the principle of favouring the present bank.
Mr. BARING asked whether it was the intention of
the Noble Lord to decide that night upon the resolution
that contained the before mentioned bargain ?, The Noble
Lord certainly stated with a great deal of ingenuousness,
the principle of the bargain between him and the Bank.
The Noble Lord seemed to consider only the profits of the
Bank with respect to its transactions with Government.
Wnen lie looked to the correspondence lately published, it
eeeto taiga. Ca. ',Lek last 117,000/. a yid•
capital lent to Government, for the Noble Lord took it
for granted, that they deducted one pir cent. on the in
terest they might otherwise obtain. He should like to
know what were the average profits of the Bank on the
whole of their capital. The Hon. Member then made a
calculation, which, as nearly as we could understand, was
to the following effct :—He would take the capital of the
B ink—say 16,000,0001.—and see how it was employed,
and what was the average rate of interest upon it. About
9,000,0001. were in the shape of Exchequer Bills, at 2}
ver cent.; 800,0001. was lent at 3 per cent. ; 100,0001.
for circulation and other purposes, at 3 per cent. ;
500,0001. in country discounts, at 3 per cent. ; and there
was nearly 5,000,0001. at 44 per cent. So that the
greater portion of the capital was employed at the rate of
:3 per cent. The cons, quence was, that if the Nubia
Lola bad been a little mole alert in making his bargain,
tie would have otatained better terms; and there wool
have been no necessity fur establishing a new bank. Whets
he looked at the result of those figures it was impossibl.
for him nut to say that the Bank had the better tai,thie
nargain. He did not know whether it was the Note
Lord's intimation to take a vote upon that bargain, u ithnu.
giving further explanations upon it, and would conclude
by putting the saute question he hail put when lie first rose.
Sir. HUME thought that if the third and fourth reso
lotions were to be discussed together, it woulat be better is
afefer them ; and he would take that opportunity of at)
tag, chit the bargain with the Bank was a most prafligat
one, and that the Bank had its nicompoly continued to
absolutely for nothing. He hoped that the fourth res..
lotion would be deterred until has Hon. Friend, the Mein.
her for the Tower Hamlets, bad an opportunity of stating
his views ou the bargain. The third resolution might IA