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now worth in the market only 100 per cent.the 11 millions of such stock belonging to the 2500 individuals composing the corporation of the bank, is worth 200 per cent.
That difference of 100 per cent. in the values of £100 of the 11 millions of the 3 per cent. stock belonging to the corporation of the bank,-and of £100 of the 489 millions of 3 per cent. stock, belonging to other individuals of the public,-shows the present value on the Stock-exchange of the monopoly, exclusive privileges, &c. proposed by the Bill to be sold to the corporation.
Moreover, if the rate of interest in the market shall fall below three per cent.—the bank during the continuance of such lower rate of interest and of the charter, will be receiving the difference from the public, for having accepted the charter, instead of paying any thing for it; in like manner as the public, in fact, paid for many years to the bank of Ireland, on its capital of 2 millions – interest on one million at five per cent., and on a million and a half at four per cent. ; which money could have been raised by creation of stock at three and a half, or on exchequer-bills at less than three per cent !!
That is a practical illustration of the improvidence of now making a bargain with the Bank of England to pay a rate of interest on 11 millions, fixed for 12 years to come, at three per cent. per ann.; for it is clear to demonstration if the rate of interest in the market shall in that time fall under three per cent.—that the corporation will for such time be receiving a bonus for the acceptance of its charter (as the bank of Ireland, in point of fact, did); and even if the rate of interest in the market shall range on the average at three per cent., it is equally clear, that the bank will not be paying, nor the public receiving, any consideration whatsoever for the monopoly, exclusive privileges, &c. proposed by the Bill to be sold to the corporation,—for 11 millions, at three per cent. interest, can be borrowed by the public on any day, and without guarantee of repayment at the end of 12 years, or any guarantee of repayment.
It may, perhaps, be truly said, that on each successive renewal of the charter of the bank, the minister of the day made a worse bargain for the public, and the corporation a better bargain for itself, from the time of its first institution in the year 1694 ; and by the present Bill, accordingly, going on in the same train, a worse bargain for the public is proposed to be made, than has been made on occasion of any former renewal of the charter of the bank, except the memorable renewal in the year 1800.
As to the payment by the bank of 180 thousand pounds per ann. out of the £300 per million for the management of the public debt, with exemption of the corporation from stamp duty on its notes—upon a view of the profits of the bank-ultrá the like payment to the public in times past--such payment is the merest trifle, undeserving of a moment's consideration.
In the statements and arguments in support of the Bill, much stress is laid on Foreign-exchanges,by the state of which it is alleged, that the issues of paper-money in the United Kingdom ought to be regulated. But no reason is, because no reason can be, assigned for such allegation, which is, in truth, founded on assumptions which are mere delusions and fallacies.
Exchange, in the language of commerce, means -the quantity of money of any given country which must be paid at a given time and place in that country—for a given quantity of money of some other country, to be received at a given time and place in that other country.
In calculating exchange, gold is used as the touchstone.
Exchange between two given countries is said to be at par-when the quantity of money to be paid in the one country, and the quantity to be received for it in the other country, will each buy the same quantity of gold in those countries respectively. And Exchange is said to be against that one, of two given countries, in which gold is cheapest,--and in favor of that country in which gold is dearest.
When the difference in the price of gold in any two given countries is so great, that it can be sold in one of the countries at such a price as will pay for the first cost of it in the other country- plus the expense and risk of the transportation of it to that other country, and a profit ultra-gold begins to be sent, or to flow, from the one country to the other—from that country where gold is comparatively cheap, to that country where it is comparatively dear.
In the argument in support of the Bill, it is assumed—that it is for the interest of a nation or country that gold should always be so dear in it, as that the gold of all other countries should be continually flowing into, but never out of it !!! And it is further assumed in that argument, that the moment gold begins to flow out of the United Kingdom to any other country, the Bank of England and all country banks should contract their issues of paper-money, by which contraction it is assumed that the efflux of gold would be prevented, and its imprisonment within the United Kingdom be secured.
But why the trade in gold should be confined to importation of gold into any country,-and when it has once found its way into that country, never be exported or sent out of it,-is not, because it cannot be explained-being contrary to reason.
In the argument in support of the Bill-founded upon Foreign-exchanges-it is further assumed, that when Exchange becomes what is called against the United Kingdom,—that that must be owing, not to a demand in foreign countries for gold, but solely to an excessive issue of paper-money in the United Kingdom ; and banks of issue in the counties and provinces are upbraided with ignorant, selfish, and unpatriotic disregard of the state of the Foreign-exchanges in the issues of their paper-money.
But now let the real effects of the state of Foreign-exchanges on the circulating medium of the United Kingdom be considered.
According to the return required by law to be made and published in the London Gazette,—the average aggregate amount of promissory notes, payable to bearer on demand, which were in circulation in the United Kingdom during the four weeks, ending on the 6th January 1844, was less than 36 millions. *
Assuming the quantity of coin in circulation to be of value equal in amount to the sum total of all the paper-money in circulation within the United Kingdom—which is probably very near the truthbut certainly near enough to the truth for the present purpose,—the value of the coin would amount to another sum of 36 millions, and the circulating medium of coin and paper-money together, would be of the value or amount of 72 millions.
( The Bank
£18,964,000 * England Private Banks . £4,822,675)
( Joint Stock Banks 3.234 999 ? 8,057,674
5,850,839 Scotland .