Bank of England. lions, 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 stamp duty, 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 £3500 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 estimates 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, an ingenious calculator, 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, the cash and bullion of the Bank on the 26th February, 1797, was reduced as low as one million two hundred and seventy-two thousand pounds. Since that time the Bank has increased its stock of cash and bullion; and on the average of the eighteen years, from 1797 to 1815, Mr. Ricardo conjectures it has amounted to about three millions. We have now mentioned all the circumstances necessary to form an estimate of the net profits of the Bank. We have mentioned all the sources whence the gross profits are derived, and also the different items of their disbursements. Proceeding on these principles, Mr. Ricardo has calculated the clear gains of the Bank from the time of the suspension of Cash Payments, in 1797, to the year 1816. The whole of the calculation for each Bank of England. year is inserted at length in the appendix to his " Proposals for a Secure and Economical Currency." We shall only insert his table of the results of his estimate; containing a statement of the surplus capital of the Bank, the yearly gains, and the amount of dividends and bonuses paid to the proprietors of Bank stock. Statement of the net Profits of the Bank, and the amount of Dividends and Bonuses paid to the Proprietors, from the time of the Stoppage in 1797 to 1816: COLQUHOUN had some reason when he said the Bank was the richest establishment in the world. We here see the amount of its plunder during twenty years of blood, rapine, and injustice. The ability of the Bank to expend nearly a quarter of a million in hanging and transporting their fellow-creatures, can no longer excite surprise. We see that the whole of their savings amount to thirteen millions. This enormous surplus is exclusive of the regular dividend of 10, 12, and as high as 17 per cent. to the proprietors. It is the Bank prize-money, the spoil of war, the clear gains from the *There was this year a loss of £509,155. Bank of England. Joans, lotteries, and taxation of the Pitt system. They may well love that system. They may well oppose its reform. They pretend to fear the progress of sedition a and blasphemy; but their real fears, and they well become their Christian zeal, are, at the probable continuance of peace, and the reduction of the public burdens. Mr. Ricardo, in calculating the above table, has not included all the sources of Bank profit. He has not included the profit the Bank derives from the destruction of its notes; nor from the private deposits; nor from exchequer bills. These would have swelled their savings still higher. Omitting, however, these items, we see what an enormous fund has been accumulated. This fund, it must be remembered, is clear gain, after the payment of all salaries and expenses. It forms an unappropriated sum, not yet divided among the proprietors. The Bank could now divide more than one hundred per cent. without encroaching on their permanent capital: in other words, they might grant £100 to every holder of bank-stock to the amount of £100, and yet not encroach on the original capital of the company. If they made a division of one hundred per cent. bonus, they would still have an unappropriated income of £542,000, which would enable them to increase their permanent dividend from ten to fourteen and a half per cent. If they divided only a bonus of seventy-five per cent. they would retain a surplus capital exceeding that of 1797, and an unappro priated income of £673,000, which would enable them to raise their dividend from ten to fifteen and a half per cent. If the profits of the Bank were to continue, and no addition were to be made to the present dividend of ten per cent. the accumulation of the surplus profit in forty years, would give to the Bank a disposable fund of more than one hundred and twenty millions.* According to law, all profits and advantages arising out of the management of the Bank ought to be divided, from time to time, among the pro prietors, in proportion to each person's share and interest in the stock of the company. This law has never been observed by the directors; the concern has been carried on, and no statement of its affairs, nor the surplus savings, have ever been submitted to the proprietors. Mr. Allardyce, in 1801, and other proprietors, have attempted at different times to compel the governor and directors to make a declaration of the affairs of the Bank; but these gentlemen appear to have considered it more prudent policy to conceal, as far as possible, their immense gains from the public. As an enormous surplus Secure and Economical Currency, p. 84. Bank of England. capital remains undivided, we would suggest to the Bank, that it be employed as some atonement for the blood and injustice of which they are accused; that they endeavour to alleviate the calamities entailed upon the country by their avarice; and administer some compensation to the widows and orphans, created by their savage and relentless prosecutions. In the Bank Report to the Committee of the House of Lords, there is also an estimate of the total profits of the Bank since the Restriction act. This estimate exhibits at one view the amount of bonuses and increase of dividends to the proprietors; the new stock created, and the increased value of the original capital. This statement we will insert. It is Mr. Ricardo who is interrogated. "Do you believe the following account to be an accurate account of the profits of the Bank since the Restriction? namely, £7,451,136 In bonuses and increase of dividends... 14,553,000 Making in all, on a capital of £11,642,000, a gain in 19 years of £29,280,626 ” "I have no reason to doubt it; I believe it is accurate as far I recollect."— Minutes of Evidence, p. 191. This statement we conceive needs no explanation. In bonuses and an increase of dividends, the Bank has gained £7,451,136. The new bankstock created, at its present value of £250 per cent. is worth £7,276,500. The original capital of £11,642,000, has increased in value £14,553,000. The total gain of the Bank on a capital of cleven millions, is more than twenty-nine millions. The brief history of the Bank, for nineteen years after the stoppage in 1797, is this: they have hanged and transported about EIGHT HUNDRED PERSONS, and in addition to their old dividend have made a profit of near THREE HUNDRED PER CENT! We have little more to add relative to this establishment. The subject of of Bank hangings and Bank profits, we conceive must be quite clear. The great influence of the Bank, and the great stake it has in the present system, must also be obvious. What has been said on the Restriction act, we think cannot be misapprehended. Betwixt the two questions of the ability of the Bank to resume payments in specie, and its ability to convert the present amount of paper in circulation into a metallic currency, there is a wide difference. Supposing a confidence in the stability of the government, on which the Bank depends, there is nothing but the paper being depreciated, Bank of England. in other words, the market price of gold being above the mint price, which could cause paper to be presented for payment. But the Bank, by the contraction of its issues, has always the power to maintain its paper on a par with gold, and preserve it from depreciation. According to Mr. Ricardo, (Min. of Evidence, p. 196-202) it would not be necessary for the Bank to diminish its issues more than £3,000,000, in order to maintain its paper on a par with gold; and this diminution of currency would not cause the prices of commodities to fall more than four per cent. ; a variation in price which frequently occurs, and which would hardly be felt. This, however, is all on the supposition that there would be no run upon the Bank, from a want of confidence, but merely from Bank paper being below par. So far, the proposition is true, and we believe on this principle the Bank might resume cash-payments to-morrow; but we contend that, in the present state of alarm and incertitude as to the permanency of the present corrupt system, the Bank might expect every day, provided the restriction was removed, to be called upon for the payment of the whole amount of paper in circulation; and this is a catastrophe for which they could only be prepared by being provided with specie equal to that amount, and which supply of specie, we conceive, it is wholly impossible to obtain; therefore the restriction act cannot be removed. Besides the impossibility of the Bank being provided with specie to take up the whole of their notes, there are other reasons which must render the restriction co-existent with the present system. The profits of the Bank, as well as its ability to make advances to government, are in proportion to the amount of paper in circulation; it is clear, therefore, that both the government and the Bank, have a direct interest in the continuance of the restriction act. In addition to all the evils we have mentioned as resulting from our present paper system, we shall mention one or two more, and then conclude. The power of the Bank to vary the price of commodities, is equal to the power of creating famine and plenty. By enlarging or contracting its issues, the Bank has an absolute power over the value of property, and the incomes of individuals; they may raise one part of the community into affluence, and reduce another to beggary; they may enrich the fundholder and the servants of government, while they reduce to distress and embarrassment all the tax-payers in the country; they may cause the quartern loaf to sell for 6d. or 12d. and feed or starve the working classes. This enormous power is vested in the Directors of the Bank; and it forms one of the greatest absurdities in the history of nations, that twenty-four individuals, traders, |