The following view of the state of its circulation at different periods, from 1718 to the present year (1816), is extracted from accounts laid before Par liament.
Notwithstanding the embarrassments to which the Bank of England has been occasionally exposed from the fluctuations of commerce, and from the effects of political alarms, the amount of its capital, and the ex tent of its transactions, have been gradually increas ing, and the wealth which it has now accumulated is greater, perhaps, than was ever before engrossed by any other trading corporation. Previous to the year 1797, the state of its affairs was not generally known to the public. But at that period its drain having been submitted, in consequence of the sus pension of its cash payments, to the investigation of a Parliamentary Committee, it appeared that, besides paying a dividend generally of from 5i to 7 per cent., it had accumulated a fund of undivided profits amounting to L. 3,800,000. Since the year 1797, its affairs have been even in a more flourishing con dition than at any former period. Its circulation has been increased from L. 11,000,000 to L.27,000,000 ; its transactions have been extended, and its profits have been augmented in proportion ; while the law releasing it from the obligation of paying in specie, by rendering it unnecessary to keep in reserve so large a stock of cash, has tended greatly to increase its command of active and productive capital. It has been already stated that the Bank, besides trans acting the ordinary business of discounting mer cantile bills, is also employed as a great engine of State,—receiving and paying the interest due to the public creditors,—circulating exchequer bills,— accommodating Government with immediate advances on the credit of distant funds, and assisting generally in all the great operations of finance. In its capa city of public banker to the State, the Bank has an allowance for the management of the national debt ; it has an allowance of L. 800 per million on the whole amount of every loan of which it receives the payment ; upon every lottery contract, it is allowed L.1000 ; and, lastly, it has the use of all the public money committed to its charge, besides several other allowances of less importance. The sum paid for the management of the public debt has varied ac cording to circumstances. In the year 1726, under the economical administration of Sir Robert Wal pole, L. 360 per million was paid to the Bank on this account ; the allowance was afterwards increased to L. 562, 10s. per million. But, in the year 1786, when the public debt amounted to L.224,000,000, it was reduced to L. 450 per million, at which rate it continued till the year 1807, when, in consequence of the vast increase of the public debts, it was still farther reduced to L.340 per million, on the first L.600,000,000 of debt, and to L.200 per million on the excess beyond L. 600,000,000; at which rate it still continues.
In the course of the two last wars, the busi ness transacted by the Government at the Bank has increased far beyond its former extent. The debts of the country, on the management of which the Bank receives a commission, have risen from L. 224,000,000 to about L.830,000,000. In the year
1792, the sum paid to the Bank for the management of the public debt, and for receiving the contributions on loans and lotteries, amounted to L. 99,803; while, for the year ending 5th April 1815, the sum paid for the same service amounted to L.281,568, being an increase of L.181,765. During the same period, the public deposits of cash at the Bank, in conse quence of the increased pecuniary transactions of Government, have been accumulating in a similar proportion. In the year 1792, these deposits could' not have amounted to L.4,000,000. Since that time they have been rapidly increasing ; and from the year 1806, the average amount may be stated at be tween L.11,000,000 and L.12,000,000, on which the Bank have beat receiving interest at the rate of S per cent. As a compensation for the use of this money, the Bank, as has been already stated, lent to Govern ment L. 3,000,000, at an interest of S per cent., and afterwards an additional L.3,000,000 without interest. The gain of the public on these transactions being deducted from the annual interest on L. 11,000,000 of the public money, the profit of the Bank on this branch of its business will be found to have amount ed, since the year 1806, to nearly L. 382,000 per an num. From all these different causes, therefore, from the increased circulation of its notes, and from the vast accumulation of public business, the pro fits of the Bank appear to have been prodigiously augmented in the course of the late war, so that its average dividend, including the bonus from time to time added to it, will be found to amount, froth the year 1797, to nearly 10 per cent.; and it is calculated be sides, on data which admit of no considerable er ror, that the sum of undivided profit must, in the meantime, have increased to the enormous amount of L.13,000,000. • Out of this fund the Bank has ad vanced to Government, for the year 1816, a loan of L. 6,000,000 ; and at a court of proprietors, held in May 1816, it was resolved to make an addition to the capital of the Bank of L. 2,910,600, the effect of which is to raise the capital of each proprietor of L.100 of stock„producing at present L.10 per an num, to L.125, and to increase his income propor tionally, i. e. to L.12, 10s. per annum. The great profit realized by the Bank since the suspension of its cash payments, has produced a corresponding rise in the value of its stock. Throughout the year 1797, the average price of Bank stock was about L.125. per cent. Since this period it has been gradually improving in value, and its market price now amounts to about L.262 per cent. The original capital of the Bank has thus acquired, since the year 1797, when the act passed releasing it from its obligation of pay ing in specie, an additional value equal to nearly L.16,000,000; which, added to the estimated increase in the sum of its undivided profit, amounting, ac cording to Mr Ricardo's calculation, to L. 9,599,359, makes a sum of L.25,599,359, the actual improved value of the Bank capital during the last nineteen years.