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The History of England in Three Volumes, Vol.III. / From the Accession of George III. to the Twenty-Third Year of the Reign of Queen Victoria cover

The History of England in Three Volumes, Vol.III. / From the Accession of George III. to the Twenty-Third Year of the Reign of Queen Victoria

Chapter 761: EXTENSION OF THE BANK RESTRICTION.
By Edward Farr
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The volume traces British political, parliamentary, and military developments from the accession of George III through the early nineteenth century, chronicling changes of ministry and cabinet, debates over colonial taxation and the American conflict, parliamentary controversies involving figures such as Wilkes and Warren Hastings, questions of Catholic relief and slave-trade abolition, and responses to the French Revolution and Napoleonic wars, including major naval and continental campaigns, the union with Ireland, and domestic legislation on finance, civil liberties, and parliamentary reform.

EXTENSION OF THE BANK RESTRICTION.

At an early period of the session, Mr. Grenfell inquired of the chancellor of the exchequer whether any event had occurred, or was likely to occur, which would prevent the resumption of cash-payments by the Bank in July. He observed that the public stood in the situation of debtor to the bank for £3,000,000 advanced without interest, and for £6,000,000 at an interest of four per cent; but as the Bank had secured possession of public money deposited in their hands, which for the last twelve years had amounted on an average to £11,000,000 for the repayment of these sums, he asked whether any arrangement was made for discharging, or placing them on a better footing. In reply, the chancellor of the exchequer stated, that the Bank had made ample preparation for resuming cash-payments at the time fixed by parliament, but that pecuniary transactions were going on with foreign powers which might probably require an extension of the restriction: as regards the loan of £6,000,000, he said, he should shortly submit a proposal for its repayment, allowing the country still to enjoy the benefit of that on which no interest was paid. Later in the session, in submitting some propositions to a committee of the house, he observed that in January, 1817, the Bank had given notice of its readiness to pay in specie outstanding notes of a particular description, for which cash to the amount of about £1,000,000 might have been demanded, but a very considerable sum was called for. At that time, gold bullion was £3. 18s, 6d., and silver 4s. 10d. the ounce: in October notice was given that the Bank was ready to pay in cash all the notes dated prior to January, 1817; but the result was very different, for upwards of £2,500,000 were drawn out, of which scarcely any portion remained in circulation. This arose from the large remittances to foreign countries, consequent on the importation of corn; the residence of Englishmen on the continent; and the negociation of a loan in this country by France. It now therefore became inexpedient for the Bank to resume cash-payments, and the restriction was continued till the 5th of July, 1839.