666 



BRITAIN. 



Britain 



1797. 



State of the 

 Bank on 

 the 25th 

 February 

 1797. ' 



assumed a high tone. Lord Hawkesbury spoke ex- 

 ultingly of paper. It is not only, said his lordship, 

 a cleaner, neater, and more portable medium to re- 

 present property, but it is the essence of wealth it- 

 self. The flourishing state of our commerce, is the 

 cause of this inability to produce specie to answer 

 the demands upon the Bank of England. Mr She- 

 ridan called upon gentlemen, if this was the case, to 

 explain how it happened, that the public were of 

 this opinion, and yet rejected it. The public like 

 bank notes as well as guineas ; and yet, while mini- 

 sters asserted this, they passed a law to protect the 

 Bank against the demands of that public. They 

 passed a law to compel that public to take the pa- 

 per, which it was pretended was as popular as gold. 

 The statement of the Bank clearly ascertained 

 their solvency in paper : but with regard to their 

 power, or the prospect of power, of renewing their 

 payments in money, it was far from satisfactory. 

 According to the state of their finances, they stood 

 thus on the 25th of February : 



Amount of bank notes in circulation, j8,(vlO,250 



Bills and notes discounted, cash and! A ,01 xnn 



bullion, petty cash in the house, J *' IKI ' W 



Difference, 4y&58,850 



In this statement, the comparative amount of the 

 discounted bills, and of the coin and bullion, were 

 not given. This was not satisfactory to the public ; 

 for the main point on which the public alarm had 

 been grounded, was the inability of the Bank as to 

 ' real, not nominal money. * A table was indeed 

 drawn up by a Mr Allardyce, from which the coin 

 And bullion of the Bank, at their stoppage, was said 

 to be A' 1,272,000. This was said to be ascertained, 

 from a statement of proportionate increase or dimi- 

 nution of the cash and bullion in the Bank for dis- 

 tinct periods in several years. But the direct sum 

 of their cash and bullion was not given in by the 

 bankers. Allowing, however, that this sum did ex- 

 ist in cash and bullion at the period of stoppage, it 

 gave but a scanty prospect of their speedy resump- 

 tion of solid payments. 



Mr Pitt was charged with having drained the mo- 

 ney from the Bank, and sent it abroad in subsidies. 

 He replied, that the whole of the transactions of the 

 Bank, or nearly so, were transactions in paper. This 

 answer certainly repelled the direct censure, that he 

 had drained the Bank of gold ; but it still did not 



disprove, that the advances of the Bank to govern- 

 ment, the consequences of an expensive war, had oc- 

 casioned an issue of paper too much disproportioned 

 to the solid money of the country ; that the whole 

 system of our finances was a paper system, and that 

 it had been stretched to a dangerous length. 



In estimating the finances of the year, Mr Pitt 

 stated, that the loan which he should require would 

 amount to eighteen millions, besides five millions and 

 a half of exchequer bills, and thirteen millions and a 

 half of navy bills, which he proposed to fund. 

 Three millions were raised for the assistance of our 

 allies. A levy of 15,000 seamen was ordered to be 

 raised upon the different parishes ; a supplementary 

 militia, to the number of 60,,XX), and a force of 20,000 

 irregular volunteer cavalry, was expected to be raised 

 by an act, which obliged the owners of pleasure 

 horses to furnish a certain proportion of horsemen 

 for the militia. The general fear had hardly been 

 quieted upon the subject of public credit, when it 

 was awakened by a still more alarming danger. This 

 was a mutiny on board the channel fleet, which broke 

 out in the month of April. 



The fleet being entirely in possession of the sea- 

 men, delegates met from all the ships in Lord 

 Howe's cabin. Two petitions were presented, in 

 respectful but firm language, one to the House 

 of Commons, the other to the Board of Admiral- 

 ty, demanding a small increase of pay, and of 

 the Greenwich pensions, and a redress ot some grie- 

 vances ; in all very reasonable demands. These were 

 readily granted by government, and order was re- 

 stored without a drop of blood being shed. A re- 

 volt of a more licentious nature broke out soon after 

 in the fleet at the Nore, where the seamen, on the 

 refusal of their demands, seized some vessels laden 

 with provisions, and, mooring their ships across the 

 Thames, threatened to cut off all communication be- 

 tween the mouth of the river and the metropolis. 

 Government, to guard against the worst extremes to 

 which the mutineers threatened to proceed, ordered 

 all the buoys to be removed from the mouth of the 

 Thames, whilst furnaces, and red-hot shot, were kept 

 in readiness at Sheerness, and at Tilbury, in case of 

 the forts being attacked. The firmness of govern- 

 ment in persisting to refuse their demands, finally 

 prevailed over these improvident and misguided in- 

 surgents, who at length struck the red flag of muti- 

 ny, and, after struggles on board several of the ships, 

 the ringleaders (of whom the chief was Richard 



Britai 



' - .'" 



GEORGI 



179' 



Supplii 

 for the 

 year. 



Mutin 

 the No 



which 



checke< 

 the firr 

 tics- or 

 vernmt 



without loss of time, to state those total amounts, and to report the total result thereof. Your committee find, upon such 

 examination, that the total amount of outstanding demands on the Bank, on the 25th of February last, (to which day the ac- 

 counts could be completely made up,) was 13,770,390; and that the total amount of the funds for discharging those de- 

 mands, (not including the permanent debt due from government of 11,686,800, which bears the interest ot 3 per cent.) 

 was, on the same 25th day of February last, 17,597,280 : and that the result is, that there was, on the 25th day of Februa- 

 ry last, a surplus of effects belonging to the Bank, beyond the amount of their debts, amounting to the sum of 3, 826,890, 

 exclusive of the above-mentioned permanent debt of 11,686,800, due from government. And your committee farther repre- 

 sent, that, since the 25th of February last, considerable issues have been made by the Bank in bank notes, both upon 

 government securities, and in discounting bills, the particulars of which could not immediately be made up ; but as those is- 

 sues appear to your committee to have been made upon corresponding securities, taken with the usual care and attention, the 

 actual balance in favour, of the Bank did not appear to your committee to have been thereby diminished. The second report, 

 Tuesday, 7th March, thus concludes : That, in their opinion, it is necessary to provide for the confirmation and continuance, 

 for a time to be limited, of the measures taken in pursuance of the orders of council on the 26th of February last, submitting 

 to the wisdom of parliament to determine for what limited time it may be necessary that those measures should be conti- 

 nued. 



" The nation, that is, the part of the nation who had bank notes, were the creditors of the Bank ; they were now compelled 

 to take paper currency in discharge of a debt. Let us hear what Mr Burke says," As soon as a nation compels a credit* 

 to take paper currency in discharge of his debt, thence is a bankruptcy." 



