appears to have come to the hands of lord Melville, previous to the paymastership of Mr. Trotter ; but how it was applied, the evidence to which we have had the opportunity of resorting, does not enable us to determine. Various sums appear also to have been advanced by Mr. Trotter, during a period of between fourteen and fifteen years, whilst he was paymaster of the navy under lord Melville, to the order of lord Melville, amounting in all to 22 or 23,0001. which we shall distinguish by the name of the aggregate sum of 22 or 23,000l. about one half of which, Mr. Trotter states to have been advanced exclusively from public money; the rest from a fund, which is called in Mr. Trotter's evidence, his mixed fund at Messrs. Coutts, consisting partly of public and partly of private money; for which aggregate sum of 22 or 23,000l. no interest was paid. In order to avoid confusion, it may be proper here to state, that Mr. Trotter was desired by lord Melville to borrow for him, and did advance to him for his private use, a further sum of between 22 and 23,000l. of which he was himself the lender, and for which he charged him with interest at 51. per cent.; but from what fund the same was drawn by Mr. Trotter, we did not think it proper to enquire. He was also occasionally in advance in his account current to lord Melville, in sums to the amount of from 10 to 20,0001, as mentioned in the tenth report, which came entirely from the mixed fund at Messrs. Coutts and company (the balance upon that account being also occasionally in favour of lord Melville to the amount of 2 or 3,0001.) and for the last mentioned sum of 22 or 23,0001. so lent on int erest, as well well as

for such balance when it was in favour of Mr. Trotter, he states, that he considered lord Melville as his pri vate debtor; but on such balances in the account current, no interest on either side was paid. Of the speci fic sum therefore of 22 or 23,0001. solent on interest, and those occasional advances in the account current from the mixed fund at Messrs. Coutts and company, mentioned in the appendix to the tenth report, we shall abstain altogether from taking further notice; confining our remarks to the several sums of 40,000!. 10.0001. and the aggregate sum of 22 or 23,0001. upon none of which any interest was paid. As to the 40,0001. the diversion of it from naval services to which it was appropriated, contrary to the provisions and meaning of the 25th of Geo. III. c. 31. attracted our earliest attention, and called for a full and minute enquiry into the causes and circumstances of that transaction. For this purpose, several witnesses have been called before us, from whose evidence it appears, that in December 1795, a contract was made by government with the houses of Messrs. Boyd and company, Robarts and company, and Goldsmid and company, for a loan of 18,000,000; of which, in the beginning of the month of September 1796, three instalments of 15 per cent. each were still due; and that about the month of April 1796 a loan of seven millions and an half was negociated by the chancellor of the exchequer, in order to fund a sum to that amount of exchequer bills and navy bills held by the bank, principally for the purpose of relieving the company from their advances to government, which then pressed heavily upon them. That

2

loan

loan was contracted for conjointly by the same parties who were concerned in the preceding loan; all houses at that time of unsuspected credit; each house being generally considered, subsequent to the payment of the deposit for which they were all jointly liable, responsible only for the amount of the shares then held by them respectively. Of the latter loan, in the beginning of September 1796, two instalments, of 15 per cent. were due. In the beginning of the year 1796, from the embarrassment of public credit, and the decreasing state of the specie at the bank, the governor and directors thought it prudent to restrain their engagements, and upon that account had refused advancing the progressive payments upon the loan of December 1795; but in consideration of the purposes for which the loan of April 1796 had been made, as well as of its being comparatively small, they consented to advance to the contractors, and did advance, the third, fourth, fifth, and sixth payments; requiring them to make the seventh, being the last payment, which was to become due on the 26th of October in that year. It is stated, in the evidence given to your committee, that the autumn of 1796 was a period of peculiar embarrassment, both of public and private credit, which led to the restrictions of payments in specie at the bank, that took place in February 1797; that there was a very great run on private commercial houses, a great scarcity of money, and a very heavy pressure on the bank for discounts, which they had been obliged materially to narrow, and had thought it necessary to contract their accommodations both to government and the commercial world,

not however making any distinction between the house of Boyd and co. and houses of the first mercantile credit in the city of London.-Under these circumstances, at some time before the 9th of September 1796, Mr. Boyd appears to have re presented to lord Melville and Mr. Pitt the great pecuniary difficulty and embarrassment of his house; that the bank had refused to discount their bills, and that, with ample securities in their hands, they were not enabled to raise money to pay the next instalment on the loan, which was nearly due, and request. ed immediate pecuniary assistance, for the purpose of completing their engagements to government. It ap pears to your committee, that in addition to these engagements to government, Messrs. Boyd and co. had large payments to make on account of the emperor of Germany; that they paid, on the 31st of October 1796, a sum of 186,340). 13s. 1d. on account of the director of the emperor's finances at Vienna; and that, in the whole of the same year, they remitted, on the same account, sums amounting to 4,609,5061, 9%. It appears also in evidence, that it would have been difficult, and perhaps impossible, for Messrs. Boyd and co. to have procured advances upon the securities in their posses. sion (which we shall hereafter mention), or to have converted them into cash; that a payment of 15 per cent. on the loan of 18,000,0001. was due on the 9th of September; and that, had they brought to mar ket such a proportion of their script as was necessary to raise the said sum of 40,0001. in order to make good their engagement, the probable consequence would have been, to increase the discount on script, which

at

at that time amounted, on the loan of April, from 13 to 15 per cent. to affect injuriously the credit of Boyd's house, especially if it had transpired that their necessities compelled them to make such disadvantageous sales, and must thereby have had a general tendency to augment the embarrassment of public credit. It has also been stated in evidence to your committee, that if a failure in the loans then in progress of payment had been occasioned, either on the whole or in part, by the circumstances above stated, the deficiency could not have been supplied by a fresh loan (had it been necessary to resort to such a mea. sure), except upon terms of very considerable loss and disadvantage to the public. Under these difficulties, lord viscount Melville, then treasurer of the navy, appears to have suggested to Mr. Pitt, that the sum wanted by Messrs. Boyd and co. might be spared, without a probability that the naval service would suffer any inconvenience from the advance, provided there was a sufficient security for the re-payment; and no other method having occurred, by which much serious mischief to the public could be prevented, it was thought advisable, by the concurrent opinions of lord Melville and Mr. Pitt, that the application of Messrs. Boyd and co. should be complied with, and that the sum of 40,0001. should be advanced, upon a sufficient security being given.And it appears in evidence, that, under the orders of lord Melville, the sum of 40,000l. was drawn from the bank, and on the same day paid over to Mr. Boyd, by Mr. Long, then secretary of the treasury, upon Mr. Boyd's depositing with Mr. Long securities amounting to about

40,7001. consisting, in part, of bills drawn on and accepted by the East India company from their presidencies abroad, the rest in government securities, which Mr. Long transmitted to lord Melville, indors ing upon the cover the purpose for which the securities had been so deposited; that the said sum of 40,0001, had been all repaid; and that, with the exception of two bills on the East India company, one for 40001. payable in October 1797, the other for 70001. or thereabouts, payable in January 1798, all the rest of the securities were payable within three months from the time of the deposit. We do not find that any regular entry or memorandum, either of a public or secret nature, was made of this transaction at the time; the issue of 40,0001. appearing on the books of the bank not discharged by any correspondent payment on the books of the pay-office, this advance must at all times have been evident upon an inspection of the balances as a debt against the treasurer of the navy; but no entry seems to have been preserved, which would in itself have explained the application of this advance (independent of the evidence of the parties), more particularly after the securities were discharged, and the funds replaced. In the course of our examination into this subject, we thought it proper to enquire whether, in fact, any inconvenience had been sustained by the naval service, in consequence of the diversion of this portion of naval money, and were more particularly led to this enquiry, by the information, that an accepted bill for 10001. drawn upon the victualling.office, from Martinique, had been presented for payment, and that on the 18th of Fe

bruary

bruary 1797, the day it became due, the holder of it was told at the victualling-office, there was no effects, or something to that purpose; that there were many other bills in the same situation, and he must call again; and that the bill was not paid till the first of March, though he had sent it two or three times for payment in that interval. Upon further enquiry at the victualling-office, it appears, that on the 9th of February 1797, the victualling-office applied for a sum of 70,0001. at the exchequer, for the payment of several bills, in which the bill in question was included; that on the 25th of the same month, 47,000l. was received in part of the 70,0001. for that purpose; and that on the same day the said bill, with many others, was assigned for payment, and would have been discharged on that day, or as soon after as payment had been called for. In this instance, the delay of the assignment, and consequently of payment, appears to have arisen from a delay in the issues from the exchequer, and not from a refusal of payment on the part of the treasurer of the navy; nor has it appeared in evidence, that any delay of payment has been actually occasioned in other branches of the naval service by the advance in question, however such a practice might in possible cases have been productive of a different result. No interest was demanded from Messrs. Boyd and co. for the money so advanced, and so repaid; but it is to be observed, that no interest would have accrued to the public had the above sum remained in the bank, in conformity to the provision of the act. As to the sum of 10,0001. it appears in evidence, that upon Mr. Trot

ter's appointment to the office of paymaster in the year 1786, he was informed by lord Melville, that he, lord Melville, was indebted to the office in the sum of 10,000l. At what time, under what circumstances, and for what purpose, this sum of 10,000l. originally came into the possession of lord Melville, the death of the preceding paymaster, the absence of all public documents relating to it, and the want of any other evidence, prevents us from ascertaining; and we can therefore only state, that this sum was replaced, but without interest, some time subsequent to the year 1786; but the particular time and manner of the re-payment we have not been able to discover. It appears also in evidence, that upon Mr. Trotter succeeding to the of fice of paymaster, he was appointed private agent to lord Melville; and was, during his continuance in that office, in the habit of receiving his salary as treasurer, and other branches of his income arising in England, as well as frequent remittances from Scotland; and that the sums received by him on lord Melville's account were paid into the mixed fund at Messrs. Coutts : that during the fourteen or fifteen years of his being paymaster, he at various times advanced various sums of money on account of lord Melville to Mr. Tweedy, and to other persons, amounting to another sum of about 22 or 23,000l. being the said aggregate sum before-mentioned; that the sums paid to Mr. Tweedy amounted once or twice to 3 or 40001. that of the said aggregate sum of 22 or 23,000l. about one half was advanced exclusively from the public money; the rest from the mixed fund at Messrs. Coutts, where

all