From the commencement of the year 1797, great apprehensions were entertained of a French invasion: the people were alarmed for the stability of the government, consequently for the stability of the Bank, which depended upon the government: a run upon the Bank ensued: the credit of the establishment was endangered; and suspicion, which PAINE justly denominates credit asleep, was now awakened. The run on the Bank continued hourly to increase, till Saturday, the 25th of February, 1797. This was the last day the Bank was compelled to pay their notes on demand, agreeably to the tenor of their notes, and the conditions on which they had been issued. The alarm not being likely to subside, and the run continuing to increase till the latest hour the Bank was open, on the next day, Sunday, an order was issued from the Privy Council, requiring the Bank to forbear issuing any more cash, till the sense of parliament could be taken on the subject. This order, as might be expected, was instantly obeyed. A few days more would have drawn out of the Bank coffers the last farthing of cash and bullion. The Company wished anxiously to conceal the amount of specie in their possession at the time of the stoppage; but, by an ingenious calculation of Mr. Allardyce, this point was subsequently ascertained almost to a certainty. It appears, that, on the 25th of February, the last day of payment, the notes in circulation amounted to £8,640,250, and the total amount of cash and bullion in the Bank, to only one million two hundred and seventy two thousand pounds.

The Bank, like true traders, has always manifested great anxiety about the credit of the house, and endeavoured to make it appear that the stoppage did not originate in the necessities of the Bank, but the necessities of the government. In the resolutions of a court of directors, on the 25th March, 1797, affixed to the second report of the Bank committee of 1819, it is said, "That the restriction on cash payments was altogether a measure of state necessity." Whether it originated in the necessities of the Bank, or of the boroughmongers, or both-the latter appears most probable—it is not very material to inquire: but it appears, that on the last day of payment, the Bank had little more than a million of cash and bullion to pay more than eight millions of their notes; and how, under such circumstances, the Bank could have met their creditors, or what could have protected them from arrest for debt, but the interference of government, it is not easy to conceive.

But the fact is, the stoppage was concerted betwixt Mr. Pitt and the directors. Sometime before the order in council was issued, Mr. Bosanquet and other directors had had repeated interviews with that minister, to consult how the run could be stayed, and the Company saved from impending bankruptcy. The last interview was on the 22d of February; the directors were then in a terrible fright; they told the minister they were "alarmed for the safety of the house;" and asked him, when he would think it necessary to interfere." Pitt interfered on the following Sunday: a singular day for the consummation of this extraordinary transaction. Immediately after, the Bank had recourse to a great deal of dissimulation to disguise their bankruptcy from

the public. On the 2d of March, six days after the stoppage, a court of proprietors was called. Mr. Bosanquet, who waited on Pitt to express his fears for the "safety of the house," and to know when ministers would interfere, was present. After expatiating on the THEN prosperous state of Bank affairs, this gentleman told the proprietors that he earnestly hoped they would soon be permitted to pay their notes, as usual, in cash. Thanks were then voted to the directors for complying with the order in council, which empowered them to violate their engagements to the public with impunity, and refuse payment for their notes. All this was excellent. Mr. Bosanquet earnestly hoped" that they would be permitted to do that which he had earnestly petitioned Pitt they might be protected from doing; and the proprietors gravely thanked the directors for complying with their own earnest request!

66

The Order in Council, requiring the Bank to issue no more cash, was issued on the 26th of February. The Restriction-Act received the royal assent on the 3d of May, and was to continue in force till the 24th of June, that is, only for fifty-two days. On the 22d of June, two days before the expiration of the original act, it was renewed till one month after the next session of Parliament. This was the first renewal; the second renewal was in 1798, to continue till one month after the signing of a definitive treaty of peace. Peace came in 1801; but, before the expiration of the month, the third renewal was passed, to continue till the 1st of March, 1803; before that time, notwithstanding peace continued, a fourth renewal passed to continue till six weeks after the next session of Parliament. In the interim war broke out; the fifth renewal followed as a matter of course, and to continue till the signing of a definitive treaty of peace. In 1814, plaguy peace came again to put these deluders to the test; but before the expiration of the six months, the sixth renewal passed, to continue only one year. In 1816, the country being at peace, every one expected the law would expire; when, lo! it was renewed the seventh time, for two years! In 1818, it was again renewed, for the eighth time, for one year; and in 1819, it was renewed for the ninth time, and the Bank protected from payment of its notes in statutable coin for four years.

This was the last renewal, the Bank in 1823 resuming payments in specie, after a suspension of twenty-six years. It was thought by many, and confidently predicted by some, such an event could not possibly happen. These views were fallacious, originating in misconception; all that was requisite to enable the Bank to fulfil its engagements were a general peace, public confidence, and such a favourable state of the exchange as would enable it to obtain a supply of the precious metals adequate to meet the probable demand for gold in lieu of paper. These circumstances concurring at the period fixed for the resumption of cash-payments, the Bank resumed its ancient course of business, and an event to which such undue importance had been previously attached, was actually consummated without exciting the least interest or attention.

One of the greatest calamities resulting from the suspension of cashpayments by the Bank, and consequent inundation of the country with small notes, was the vast increase in the number of prosecutions for forgery. It appears, from returns to parliament, that, in the interval from 1797 to 1818, the Bank instituted 998 prosecutions either for forging, uttering, or having forged notes in possession. The results of these prosecutions were a dreadful sacrifice of human life; and it has been calculated that four hundred victims were offered up in the space of twenty-one years to the MOLOCH of paper money.

Another evil may be justly charged to the vast amount of paper issued by the Bank of England; the great extent of their circulation gave them a complete control over the national currency, which enabled them, at their own arbitrary discretion, merely by contracting or enlarging their issues, to determine the prices of all articles of consumption and merchandize. Thus was a company of traders, without responsibility or peculiar fitness for so grave a function, and who e conduct experience proved not to be always influenced either by absolute wisdom or disinterestedness, empowered to entail on the body of the people a plenty or scarcity of the necessaries of life, and on the commercial public the most sudden and disastrous vicissitudes.

Our next object will be to give an account of the Bank profits, and the enormous wealth it has acquired since the suspension of cashpayments.

The profits of the Bank arise from various sources. First, from the interest of their notes in circulation, which, in some years, as in 1817, amounted to more than twenty-nine millions. Secondly, from balances of public money. These balances arise from the produce of different taxes paid into the Bank, and which have not been drawn out for the service of government. On an average of ten years, from 1806 to 1816, the balances amounted to £11,000,000, on which the Bank gained an interest of five per cent. per annum.

The third source of profit is the interest on their capital and savings. The Bank's permanent capital amounts to £11,686,000, lent to government at an interest of 3 per cent. The fourth source of profit is from the management of the borough debt. From a late act for the management of the debt, the Bank is paid £340 per million per annum, when its amount shall be 400 millions, and not exceed 600 millions: and £300 per million on such part of the debt as exceeds 600 millions.

Besides these sources of profit, the Bank derives a profit from its trade in bullion, the destruction of its notes, and the private deposits of individuals. It also has a profit, at the rate of £805:15:10 per million, for receiving subscriptions on loans contracted for by government.* All these form the gross profits of the Bank; from which, in

During the continuance of the income-tax, the Bank had an allowance of £1250 per million, or one-eighth per cent. for receiving the produce of that impost. It had also another source of profit from lotteries; for issuing the tickets and paying the prizes it received £1000 for each lottery.

order to form an estimate of their annual gain, it is only necessary to deduct the amount of their expenses, the stamp-duty on their notes, and the interest of their cash and bullion, which constitute their unproductive capital.

First, as to the expenses of the Bank. The Committee of Public Expenditure stated, in their report in 1827," that the number of "clerks employed in the Bank, exclusively or principally in the public

"business was,

"whose salaries, it is presumed, may be calculated at an average "between £120 and £170, for each clerk, taking them at £135, "which exceeds the average of those employed in the South-Sea "House, the sum is

66 at £150, the sum is "at £170, the sum is

£60,750

67,500

76,500

"either of which two last sums would be sufficient to provide a super"annuation fund."

The total expense for managing the public business, the salaries of the governor, directors, &c. as stated by the same report, are follows:

Salaries to governor, deputy-governor, and directors £8,000
Incidental expenses, about

Additional buildings and repairs

15,000
10,000

Law expenses, and loss by frauds and forgeries, about 10,000
Largest estimate for clerks

..

76,500

Total £119,500

as

Owing to the increase in the debt and other causes, Mr. Ricardo supposed that the number of clerks employed in the public business had increased from four hundred and fifty to between five and six hundred. The expenses estimated by the committee, in 1807, at £119,500, he calculated to have increased, in 1816, to £150,000. He states, on very good authority, the total number of clerks employed by the Bank, in the whole of their establishment, at one thousand. Half of this number is employed in the public business, and the other half in the private business of the Bank. The expenses of the Company may be supposed to bear some proportion to the whole number of of clerks employed. And, according to this rule, Mr. Ricardo says that," as £150,000 has been calculated to be the expense attending the employment of five hundred clerks in the public business, we may estimate a like expense to be incurred by the employment of the other five hundred, and, therefore the whole expenses of the Bank, at

the present time, about £300,000, including all charges whatsoever."Secure and Economical Currency, p. 71, 2.

This estimate includes every charge: the expense of managing the public business, the salaries of the governor, directors, and clerks : incidental expenses, additional buildings, and repairs; together with law-expenses, loss by frauds, forgeries, and every other expense incurred in conducting the business of the establishment.

The next subject forming a part of the outgoings of the Bank is the stamp-duty. The Bank, till lately, has always been particularly favoured in the composition which they paid for stamp-duties. In 1791 they paid a composition of £12,000 per annum, in lieu of all stamps either on bill or notes. In 1799, on an increase of the stamp-duty, this composition was advanced to £20,000, and an addition of £4000 for notes issued under £5, raised the whole to £24,000. In 1804, an addition of not less than 50 per cent. was made to the stamp-duty; but, although the Bank circulation of notes under £5 had increased from one and a half to four and a half millions, the whole composition was only raised from £24,000 to £32,000. In 1808, there was a further increase of 33 per cent. to the stamp-duty, at which time the composition was raised from £32,000 to £42,000. In both these instances, the increase was not in proportion even to the increase of duty; and no allowance whatever was made for the increase in the amount of the Bank circulation.

It was not till the Session of 1815, on a further increase of the stampduty, that the new principle was established, and the Bank compelled to pay a composition in some proportion to the amount of their circulation. The composition is now fixed as follows:-Upon the average circulation of the preceding year, the Bank is to pay at the rate of £3,500 per million, on their aggregate circulation, without reference to the different classes and value of their notes. The establishment of this principle it is calculated caused a saving to the public, in the years 1815 and 1816, of £70,000. By the neglect of this principle, which ought to have been adopted in 1799, Mr. Ricardo estimated the public to have been losers, and the Bank consequently gainers, of no less a sum than half a million.

The last subject for which an allowance is to be deducted from the gross profits of the Bank, is for their unproductive capital, namely, their cash and bullion. At the stoppage in 1797, the Bank stated, in their accounts, laid before parliament, that their cash and bullion, and their bills and notes discounted, together amounted to £4,196,080. They also gave a scale of discounts from 1782, to 1797, and a corresponding scale of the cash and bullion in the Bank for the same period. By comparing these numbers with each other, and some parts of the evidence, Mr. Allardyce discovered the whole secret the Bank wished to conceal-namely, the amount of cash and bullion in their coffers. According to this gentleman's calculation, as before mentioned, the cash and bullion of the Bank, on the 26th February, 1797, was reduced as