The Sun.
London, England, 1861-02-07 00:00:00

tics would make it probable that tb tey would be
managed at an inferior cost in rela lion to their
value. Under these circumstances, it is the opinion
of her Majesty's Government that all terminable
annuities ilenceforward granted by Parliament
should, for the purposes of Bank management, be
valued as follows :
If originally granted for more than 50 years,
at 15 years' purchase,.
for any loner term, at 10 years' purchase.
IV. Before I come to the rate of allowance to
be made to the Bank for the management of
the debt, I have to propose a somew.hat different
adjustment of the present graduated plan, with a
view to giving greater fixity to the arrangements
now contemplated during the time for which they
are to last.
The Bank now ree, elves the greater part of its
remuneration, namely, that on 600 millions of debt,
at £3lO per million; and only 136 millions at. the
lower rate of £3OO per million. Now the outlay
of the Bank in connection with this branch of its
business does not appear to vary greatly with the
minor variations in th?, amount of the debt, whether•
upwards or downward's. For the bulk of the debt
it must keep its premi,tes,and the bulk of the esta-
blishment.
We therefore propose, and we confidently antici-
pate the concurrence of the Bank in proposing that
the great bulk of the remuneration also should be
P•
lae-d at the first 600 millions of the debt ; or,
more specifically, that the rate per million, not ex-
ceeding 600 millions, instead of as now being but
slightly greater than the ,rate above it, should be
double that rah"-
Thus, the effect of any changes that might be
adopted by Parliaim'et in fhe form of the public
debt would become coniparati rely of small impor-
tance to the Bank as a trading'ost`ablishment.
V. With respect to the rate or remuneration—
we propose to introduce- a bill in,to -Parliament
which shall fix prospectively, as the ra,4e of remune-
ration, the sum of £3OO for the first 600' millions of
the debt, and of £l5O for the excess be vond 600
millions. The payment of £4,000 per annum,
termed house-money,- and the payment of £1,579
on account of South Sea debt to cease and deter-
mine.
The effect of this proposal will be to plac,t the
annual remuneration to the Bank on the present
amount, in round numbers, at about £200,000 a
year. The dormant provision of the present law
under which the bank would be entitled to a pay-
ment of £450 per million, if the debt under their
management were reduced below 400. millions, is
one which,her Majesty's Government see no reason.
to disturb.
To a proposal of this nature, her Majesty's
Government are in hopes that' Parliament would.
be induced to give the sanction of its authority; and,
on the other hand, they trust that'the authorities of
•the Bank will deem it one affording to them the
just and adequate remuneration for the important
services which they have performed, we believe to.
the entire satisfaction of the public, under such re-
gulations as are now in force regarding them.
In conclusion, I lart.Te to add that it will be emi-
nently satisfactory to her Majesty's Government,
and will also be agreeable to the spirit in which
the Bank of Englaod adjusts itself to the demands
of commerce and of monetary transactions, if you
should be able to assure.' me of the intention of the
Bank to afford increased facilities for business, such
as would be supplied by a' material contraction of
the periods of shutting, if thelr cannot be, dispensed
with altogether • and also respect' to the pay-
ment of the dividends to such holders wherever this
Bank may have branch establishments.
I have the honour to be, gentlemen,
Your very obedient and faithful servant,
(Signed) W. E. GLADSTONE.
To the Governor and Deputy Governor
of the Bank of England.
The GOVERNOR said the secretary would now
read the reply of the directors. •
The SECRETARY read the communication, which
was as follows :
Bank of England, 6th Feb., 1861.
Sir,—We have the honour to acknowledge the
receipt of your letter of the 31st ultimo, which
we have submitted to the consideration of the
Court; of Directors, and they have resolved (to
recommend to the Court of Proprietors to accept
the proposals of her Majesty's Gove'rnment, con-
tained in the letter of the Chancellor of the
Exchequer, dated the 31st of January', 1861, for
regulating the remuneration to the Bank of
England for the management of the national debt,
for the period of 25 years.
As these proposals involve a very considerable
reduction in what has always been regarded as
only an adequate remuneration for the services per-
formed and the risks incurred, the Court of Direc-
tors desire to express to her Majesty's Government,
that they are induced to accede to this reduction,
mainly because the combined management of the
National Debt, and of 'the collateral Departments
of Issue and Banking, enable them to exercise a
very important economy in the labour charge, and
in the other expenses of Bank administration.
The directors will also be -prepared to make
arrangements for facilitating transfers in the
public funds, by limiting the closing of the books
to the shortest period possible ; but for this purpose
the authority of Parliament w;11 be necessary ; and
in regard to the payment of dividends to the fund
holder at places where the Bank has branches, the
views of her Majesty's Government shall be carried
out to the utmost practicable extent.---We have the
honour to be, Sir, your most obedient and humble
servants, (Signed)
BONAMY DOBREE, Governor;
ALFRED LATHAM, Deputy-Governor.
To the Right Hon. the Chancellor of -
the Exchequer, Downing-street. •
The CHAIRMAN said—Before proceeding further
he would state that the directors had had the matter
under their consideration, and the result was the

letter which they had heard. It had been the object
of every government to obtain a greater profit out
of the administration of the affairs of the Bank.
They had not hitherto considered that the Bank
was overpaid for the immense services it performed.
It travelled an immense deal for the purpose of col-
lecting the revenue, and brought them to their seve-

ral accounts; and again, the Issue Department cost
uch money, and for this they received nothing ;
and again much of these costlypremises-were rendered

- -
necessary for the public business. The directors had

had several interviews with the treasurer, and
argued the matter, but he regretted they had failed
to produce the desired effect on the Cabinet. After
many interviews and much anxiety we have brought
the negotiation to the point explained in those let-
ters, and the Court now asked the directors to agree
to the plan proposed which was stated in the fol-

[owing resolution, " That the proposal of her Ma-
jesty's Government, as contained in the letter of the

Chancellor of the Exchequer, dated the 31st Jan.,
1861, addressed to the Governor and Deputy-
Governor of the Bank of England, be recommended

to the Court of Proprietors for adoption.
In reply to a question,
The CHAIRMAN said the sum to be received of
Government for the management of the national
debt for the years 1860-61, will be:—
On 600 millions at £340 per million .. £204,000 0 0
On £136,278,369 at £3OO per million • 40,883 10 2

Total .. £244,883 10 2
The sum to be hereafter received will be.=
On 600 mils., at 300 per mil... £lBO,OOO
On £136,278,362 at 150 per mil. .. '20,441

£200,441

£44,442

Management of South Sea Stock
Add house money

.• £1,579
.. .4,000

£5,579

Total sum to be given up £50,021
Mr. W. J. PRESCOTT complimented the directors
on the efficient manner in which they had con-
ducted their negotiations with the Government.
He explained at some length the position of the
Bank as regards the Government, and pointed out
that although the Bank lost some money by the
new arrangement, it was a gainer in having its
position in connexion with the Government settled
for 25 years; and the loss was, he thought, more-
over compensated for by the decrease in the cost of
management. He moved that the Court concurs
in the recommendation of the Court of Directors
to accede to the proposal of the Government con-
tained in the letter of the Chancellor of the Exche-
quer, of Jan. 31, to the Governor and Deputy
Governor of the Bank of England for regulating
remuneration of the Bank of England for the
management of the National Debt for 25 years.
Mr, Alderman SALOMONS seconded the resolu-
tion, concurring entirely in the view of the last
speaker.

Mr, M. CLARK protested against the course put..
sued by the Government. Considering the amount
of capital it had belonging to the Bank of Three
per Cents., the Government ought not to seek to
make such a hard bargain.
Mr. TITE, M.P., thought the last speaker had
mixed up two questions, namely, the money lent to
the Qevernment, and the wet of the management