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

DENMARK.

A telegram, dated Copenhagen, 4th Feb., says:—
" The Dagbladet gives a formal contradiction to
the report published by some of the Hamburg
papers, to the effect that the European Powers had
strongly urged Denmark to make concessions, and
that the Powers had declared they should not re-
cognise a blockade by Denmark if attacked by the
Federal troops. The whole story is declared to be
a' pure fabrication.' "

BANK OF ENGLAND.

SPECIAL MEETING THIS DAY.

A special meeting of the Governor, Directors, and
proprietors of the Bank of England was held
this day, in the Bank Parlour, for the purpose of
considering a letter from the Chancellor of the
Exchequer containing proposals to the Governor
of the Bank of England for the revising the allow-
ance to the Bank of England, under the 49th Geo.
IV., for the reduction of the national debt. There
was a very large attendance.
Bonamy Dobree, Esq., the Governor, presided.
The mimutes of the last court having been read,
The CHAIRMAN said the secretary would read
the letter referred to, which was as follows :
DOWNING-STREET, Jan. 31, 1861.
Gentlemen,—Her Majesty's Government having
had under their consideration the following report
of Sir Alexander Spearman, Mr. Arbuthnot, and
Mr. Anderson, dated November, 1860, on the
expenses incurred by the Bank of England in
conducting certain duties on behalf of the public
in connection with the issue of notes, the care of
the public balances, and the management of the
national debt, the Government considers that this
report should be submitted to Parliament, and it is
to be desired that on producing it, they should be
prepared at once to state and to act upon the view
which they take of its contents.
I accordingly proceed to lay that view before
you, following herein the precedent furnished by
the conduct of my predecessors in office at former
periods, and the course most agreeable to the inti-
mate relations which have ever prevailed between
the Government and the Bank, and to the charac-
ter of the weighty duties performed by the Bank
on behalf of the State.
I commence by adverting to the two former of
the three important subjects opened in this report
—namely, the expenses and profits connected with
the issue of notes, and with the custody and use of
the public balances.
On neither of these subjects do her Majesty's
Government deem it their duty to submit any pro-
posal to Parliament.
The profits connected with issue they do not
regard as upon the whole a desirable subject for
legislation, otherwise than in connection with issue
itself. They were so treated in 1844, and they were
left upon a footing with respect to any renewal of
the question, which her Majesty's Government see
no reason to disturb.
In like manner with regard to the advantages
connected with the use of the balances. This point
was fully considered in the correspondence of 1844,
between the Government and the Bank.
Mr. Goulburn stated the views of the advisers
of the Crown, and reserved the discretion of the
State as to a participation in the profits of the
public deposits, should they, from any circum-
stances undergo material increase or reach an
extraordinary amount; while the Bank reserves
its freedom to consider what its own rights might
be in the event of their reduction. The subject
was, we think, judiciously handled on both sides;
the case contemplated by Mr. Goulburn has not
arisen, and we propose to leave it in this point also,
as it was left by the correspondence presented to
Parliament in 1844.
I have, however, to subjoin to what I have now
stated, a qualification of limited extent. The Com-
mittee of the House of Commons on Public Monies,
which reported in 1858, recommended the abolition
of deficiency bils, and the substitution, in cases of
deficiency, of advances in a different and simpler
form, together with a change in the basis on which
such deficiency was to be calculated.
It is the intention of her Majesty's Govern-
ment to propose, in the coming session, legislation
in general conformity with the tenor of these re-
commendations ; but I have mentioned the subject
in this place rather with a view to strict accuracy,
than because it is of any great moment in the
adjustment of the pecuniary relations between the
Government and the Bank.
With respect to the third and remaining sub-
ject, the management of the National Debt, the
Government conceive that the time has come
when they may justly call upon Parliament to
reconsider the rates of charge fixed by the Act
of 1808, and still substantially in force, although
as matter of account, reduced by the payments
which the Bank makes to the State to the extent
of £188,078 per annum in respect of composition
for Stamp Duties and of profit on the issue of
notes.
The Act of 1808 assigned to the Bank, as a remu-
neration for its charges and its responsibilities in
the management of the National Debt, an annual
sum of £340 per million up to the limit of 600 mil-
lions, and an annual sum of £3OO per million
beyond that limit, with a proviso for a rate of pay-
ment of £450 per million, in case the debt should at
any time stand at less than 400 millions. It is also
provided that Terminable Annuities shall be
reckoned at 25 years' purchase.
Referring to the several communications which I
have had the honour of holding with you, I shall
waive all argument upon this subject and shall
simply proceed to state the particulars of the
changes which the Government think may reason-
ably and advantageously be introduced into the
subsisting arrangements.
I. We propose to ask Parliament to enact that
a new plan shall take effect from the commence-
ment of the next financial year, and shall remain
in force for twenty-five years certain.
11. The method of set-off by which the Bank
gives credit on account of profits of Issue and of
Stamp Duty composition to the State, and deducts
the amount so credited from its charge for the
Debt, was in conformity with the system under
which the public revenue was managed and ac-
counted for at the date of the subsisting arrange-
ments. But in 1854, an Act was passed which
provided for the payment into the Exchequer of
the gross revenue of the State. Agreeably to the

spirit of that Act, her Majesty's Government are of
opinion that the sum of £188,078 allowed by the
Bank should no longer stand as a deduction from
its charge against the public, but that the sum of
£60,000, being the composition for stamp duties,
should be paid to the department of Inland Revenue,
and the sum of £128,078 being the allowance
out of profits of issue should be paid to the Exchequer
as part of the miscellaneous revenues of the country.
The charge for the management of the debt would
then stand as a separate and distinct charge, and
would be defrayed under an Act for the purpose out
of the Consolidated Fund.

111. It seems evident that the valuation of
Terminable Annuities is, by much, too high. A
public annuity; granted for 99 years, would be
worth something more than 25 years' purchase
at its inception : but its value would descend
in a vanishing series to zero, and the mean
value of it would probably lie between 12 and 15
years. Annuities granted for shorter tarms would
represent subjects for commercial dealing of pro-1
portionably narrower scope. And the compara-
tively limited nature of the market fex those annul-