The Sun.
London, England, 1832-09-06 00:00:00

COMMITTEE ON BANK OF ENGLAND

CHARTER.

Examination of Jouti Housr.ur PALMER, Esq., the Go-
vernor of the Bank of England.
(Continued from our Paper of yesterday.)

You stated in your evidence on the last day what
;s the present management of the Bank of England ;
under whose control is that management ?—The
Court of Directors.
Do the whole Court of Directors interfere in the
management of the general concerns of the Bank ?
The ‘A hole.

Are they all of them aware of the state of the
accounts of the Bank ?—They are : there is a weekly
statement read to the Court of Directors, of the
actual position of the Bank in every department,
of its securities, of its bullion, and of its liabilities.

.
Are there no portion of the Directors who have
a greater control than the others ?—None.
Is there no Committee of Secrecy among the Di-
rectors ?—None; there is a Committee of Treasury,
who may originate or suggest any measure they
think fit to the Court; but such measure is per-
fec ly free and open for the determination on the
part of the Court afterwards.
Any thing that emanates from them must be de-
termined upon by the Court ?—Completely so.
Supposing the majotity of the Directors disap-
prove of the system of management of the Bank,
they might re-erse the whole of it ?—They might.
Are the Committee to understand that the whole
of the Court confer in the management of the daily
transactions of the Bank ?—The Court do not sit
daily—they sit weekly. The daily transactions are
conducted by a Committee of three, but the Gover-
nor or Deputy Governor are ale ays supposed to
be in the house, and no responsible action is taken
by the Committee without reference to the Governor.
Do this Committee, or the Governor and De-
puty Governor, take steps of considerable impor-
tance, such as the sale and purchase of Exchequer
Bills, and the making of discounts, without the in-
terference of the rest of the body ?—All bills pre-
sented by the public for discount are presented be-
fore that daily Committee, and they determine upon
the bills so to be discounted ; but if there were any
considerable demand, unusual in its character, made
upon the Bank, a communication- would pass be-
tween that Committee and the Governor, who
would take such steps as he thought necessary for
the purpose of bringing that extra demand before
the whole Court, if required.

Are the Committee to understand that the Com-
mittee to which you have alluded, with the Gover-
nor and Deputy Governor, do not transact any ex-
traordwary business out of the ordinary routine,
without first consulting the rest of the Court ?
Certainly.
Is the Committee of three that sit daily exclusive
of the Governor and Deputy Governor F—Yes.
Is it not the case that certain bills or notes are
not accepted by that Committee, but referred to the
Court when they sit ?—There is a Wednesday's
Committee for London notes, which consists, I
think, of nine or ten Directors. All London notes
pass before that Committee on Wednesday, and on
Thursday all notes above 2,0001. come before the
Court of D:rectors.

In the business so transacted by the Committee,
do you include the purchase of bullion ?—No, the
bullion is always bought by the Governor, who con-
siders that he has no power to refuse the issue of
notes for gold bullion tendered to him at the Bank.
Does he regulate the price from time to time ?
The price of gold has been fixed at 31. 17s. 91
for the last three years. It formerly was 31. 17s. 6d.;
that was deemed by the late Government to be too
low, and they suggested to the Bank the propriety
of 31. 17s. 9d. being the buying price. The price
of silver, the Committee will be aware, is regulated
by the course of the foreign exchanges.
Do you occasionally send specie abroad ?—Wry
few occasions have occurred when the Bank ha,
sent specie abroad, and • those cccasions have only
been in times of an unfavourable exchange, and
chiefly for the purpose of operating upon the Paris
exchange direct.
Are such transactions as those directed by the
Court?—With the full concurrence of the Court.

Are those remittances in gold or in silver, or
both ?—ln silver; I do not recollect any instance of
old having been so sent.
When you say that you send silver abroad, do
you mean bullion or coin ?—Bullion, different
foreign coin, and bar silver; but it has not been
acted upon to an amount exceeding, in the course of
the last three years, a million. If the Committee
wish for information upon that point, I can give
them correctly what has been sent abroad by the
Bank, and at what periods.
Has that measure been effectual for its purpose?
—lt appears so.
Has the sending of the silver bullion abroad had
a greater effect, in your opinion, in rectifying the
exchanges, than if you had not followed that course,
and the bullion had been exported from this country
by being drawn out of your hands by private indi-
viduals ?-1 believe that a greater effect has been
produced upon the occasions when the exports were
made by the Bank. The Committee will under-
stand that it may not always be in the power of in-
dividuals w act to the extent to which it may be
desirable in times when the foreign markets may be
extremely full of bills upon England.
In what manner do you obtain a return for silver
sent abroad ?—ln bills of exchange; the agent em-
ployed by the Bank purcha,es bills in the foreign
market, and transmits them to the Bank.

In your opinion has not the greatest public be-
nefit arisen from those operations of the Bank upon
certain occasions ?—I believe so, in times of an un-
favourable exchange.
Would the Bank always apply to this resource in
all times of unfavourable exchange ?—Not if there
was a demand in the London market for silver to
the extent required.
Has not this been done with that kind of manage-
ment and secrecy, that it has not been known that the
Bank were operating that way ?-1 do not think
that it was known that the Bank were operating in
that way to any extent.
But you think it a very fit mode to relieve the
pressure for gold, by disposing of silver in that man-
ner ?—Yes ; the sole operation of the Bank in using
silver is to protect the gold,
Can any individual of the Court of Directors
originate any new measure ?—He has the power to
du so.

Does it occur to you that, in the event of the
foreign exchange being unfavourable for any great
length of time, there would be any objection to the
Ban resorting to the measure of exporting silver,
with a view of correcting that exchange as a com-
mon practice P—lf there is a regular demand at
the maker price to the extent to which the Bank
think it expedient to sell there is no occasion for
the Bank export; but when there is a deficient ca-
pital for the purchase of silver, then it is that the
Batik may, with advantage to the country, preserve
the gold by the exportation of silver, and purchasing
the excess of bills in the foreign market.
Is it your opinion that, by the operations of any
individual, or any combination of individuals, the
reign exchanges can be controlled for any length
of time should say certainly not.
You have stated that the whole engagement of
the concerns of the Bank depends upon the Court
of Directors; if, then, any change should take place
among the persons elected to be Directors of the
Bank of England, might not that produce a com•
plete change in the systeto of management of the

Could you lay before the Committee an account
of the number of shares held by each proprietor,
without naming the proprietors ?—The number of
stockholders can be laid before the Committee.

Distinguishing the amount of stock held by each
proprietor ?—lf the Committee will lay down any
scale of return that can be furnished, it shall be
complied with ; we can give the number of stock-
holders, and classify them in any way the Commit-
tee may desire •
You stated that the accounts of the Bank have
never been laid before the Court of Proprietors ;
ire the Court of Proprietors aware oft he system of
management of the concerns of the Bank ? I pre-
sume that they must be aware G f it.
• At all events they are satisfied with it, as they
do not demand the accounts ?—I suppose so.
Have not demands occasionally been made ?
Demands have occasionally been made, but they
have been rrjected by such immense majorities,
.hat there has been no possibility of entertaining the
question.
By what means do the Proprietors Of Bank Stock
know the system upon which the Batik conducts its
iffairs ?—I cannot answer that question but by their
,upposrd general knowledge.
Do you believe that ti.ey generally do know the
system upon which the Bank is conducted ?—I be-
lieve so.

You believe that the proprietors know the system
If the management of the Ba,:k, bCCittli, you be-
lieve it to be generally known by the public ?___l7o,.
Are you not awarethat the management of heß mk•
has frequently been very _ unjustly complained of, us
to the mode in which they have transacted their
business ?—I do not know to what such objection
may have applied ; some may have objected to the
action of the Bank under the Restriction Act,' and
'he amount of Government securities they hold.
Have not you heard complaints made that •the
Bank has been acting capriciously in withholding
accommodation, when you yourself were aware that
'hey were acting upon principle and upon a regu-
lar system ?—No, I have not; I have seen reports
'n the newspapers, but I never heard it stated by
my body, within my own sphere, that the Bank had
acted capriciously.
Can you recollect how long it is since there was
any contested election of Directors for the Bank of
England ?—No, I cannot.
Has there been any within your memory ?
There was one vote given at the last election for
in individual not included in the list of candidates.
do not recollect any regular canvass.
What is the amount of stock that a proprietor
'oust hold to qualify him to vote ?—Five hundred
pounds.
What is the amount of stock that qualities fer
a seat in the Court of Directors ?—Two thousand
pounds. _ _ _

Does not the «•hole list of candidates conp to
the Court of Proprietors recommended by the Court
Hof Directors themselves ?—Yes.

Is there not an annual change ?—Eight go out
and eight come in every year.
And those eight that come in are generally re-
commended by the Court of Directors ? They are.
There is not, in general, any application made
individuals to be placed in the Court of Direc-
tors?—Not publicly.
What is your opinion of the effect of eight Direc-
tors retiring each year ?—I am not aware of any
particular effect being produced.
Are you aware of any prejudicial effect ?—No.
13 it not the fact that the Directors of the B ink
England for many years past have thought it
right not themselves to be very large holders of Bank
stock ?-1 do not believe that any D rector of the
Bank of England holds more than his qualification.
Is it not true that, in the month of May, 1816,
when the Bank made a most magnificent donation►
o the proprietors, the Bank Directors remai red just
as they did before, small proprietors of stock P—l
believe so.

Has there been any change made in the dura,ion
time for which any officers of the Bank of England
have been elected, within the last year or two?-10.
The Governor and Deputy-Governor have each
been elected for a year ?—Except upon the last oc-
casion, when I have been allowed to continue, under
the particular circumstances of this inquiry.
In the choice of new Directors, is it not the prac-
tice of the Court to look with attention at the private
character of the new Director in all points of view?—
As far as I have been concerned that has been the
nvariable practice.

If an individual was to be offered as a member of
the Directors, would not the Court of Directors
consider it their duty to inquire into the whole cha-
racter of that individual, and would they not give
him that influence which, as a body, the Court of
Directors have, according to the opinion they form
after their inquiries were made ?-1 believe no.
Do the Bank endeavour to equaliz,, as far as
they can, the circulation of the country, during the
,whole course of the year P—They endeavour to
equal ee the circulation of London at the termina-
tion of every quarter, within about a month of the ex-
piration of the quarter, when they offer to the pub-
ic at large the issue of any notes that may be re-
quired, at what may be deemed to be the market
rate of interest, upon the deposit of approved secu-
rities; and that is done for the purpose of relieving
he scarcity that mey be supposed to arise from the
payments into the Exchequer.
How long is it since that regulation has been
adoped ?—About three years.
Has it not been attended with the most benefi-
cial consequences ?—lt has been stated so.
And you believe so ?—Yes.
By good secnrity, do you mean all Government
securities, including Stock ?—The Bank have of
'ate, upon one occasion, advanced about 300,0004
upon Stock ; but only upon one occasion, and that
vas under particular circumsta,:c?s.
When measures of importance are about to be
taken with respect to the enlargement or contrac-
ion of the issues, are the 1 tirectors at large con-
sulted, or are steps of that sort taken on the re-
sponsibility of a select portion of the Directors ?
The Court of Directors are apprised of every trans-
tion of that sort as it occurs.

Before it occurs, or afterwards ?—I can hardly
,ay before it occurs, because there may, at times,
be a day or two intervening. The Governor is
,opposed to have the responsibility, for a few days
between the intervening Courts, ofrAingany measure
af that nature that may be deemed desirable.
Practically, he and the Select Committee conduct
he business of the Bank in the intervals between
he sittings of the Court ?—Ye;; but nothing of
my consequence can be acted upon without the full
knowledge and concurrence of the Court of Direc-
tors; no action of any extent, that ever I was
aware of, has taken place, without the Court being
apprised of the principle that governed that action.
Now is the Select Committee formed; is it by
etnergenPY'fr!'llt
extraordinary
►ily Not vita" -77:\---"'s
iotation, or by agreement amongst the Directors ro
attend ?—lt consists of the senior Directors of the
Batik, who have passed the chair.
Then no person is on the Select Committee who
has not passed the chair ?—No, with the exception
of the Director immediately succeeding in rotation
to the deputy chair.
eececi,idisrliYriialynilor to 40.-yesa 1025, \'fl:
Does the Governor himself extend or contract the
currency without communicating with the Directors?
—I never knew a Governor take upon himself the
responsibility of acting to any extent without the
concurrence of the Court of Directors.
sum orv'ed, and HI f ~, .-'..) \--,'7\. r_;,,
~.luienilscniioot
emergency:
ilursttub :e%w.loceLuiploedoutrrbo)teaasitsii,)yipes
were so during that period. •: - - '....L.: )
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With rtfertficse to some of the, g iii ';pc of .:..z ..,.:'

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