"Proper Trust of Liberty": economical reform, the English constitution and the protections of accounting during the American War of Independence, The

Accounting History,  Feb 2008  by Funnell, Warwick

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Despite the doubts expressed initially about the likely value of their work, it was widely agreed that the Commissioners for Examining the Public Accounts took their responsibilities very seriously, producing reports which,19 according to Binney (1958, p.56), determined the direction and course of subsequent comprehensive financial reform undertaken by Pitt (for similar comments see Cannon, 1973, p.86; Tonance, 1978, p.56). To some extent pre-empting the later findings of the Commissioners, in March 1780 the North Government had little choice but to legislate to remedy the problems that the Commissioners had very quickly confirmed and reported (see 22 Geo.III, c.48; 22 Geo.III, c.81; Keir, 1934, pp.382-3). Accordingly, on the 13 March 1780 Lord North introduced a Bill to compel payment of outstanding balances in the hands of government bankers and agents and, significantly, to inform the House and the pubhc as to "the real state of the accounts of the kingdom, that the nation might be informed how and in what manner the enormous sums which had been granted by parhament have been disposed of..." (Parliamentary History, VoLXXI, 13 March 1780, col. 278). Less than a month earlier Burke similarly had called upon the government to legislate so as to deny government agents the ability to act as bankers or treasurers and to make them instead "mere offices of administration" and account (Burke cited in Elofson and Woods, 19%, p.521, emphasis in the original; for similar sentiments see also the "Fifth Report of the Commissioners for Examining the Pubhc Accounts", Journals of the House of Commons, 28 November 1781, col. 577). North's subsequent 1781 Act (22 Geo.HI, c.48)20 precluded the worst excesses of the system of delayed acquittances by finally requiring any civilian or military official in possession of unspent balances of pubhc monies to surrender these to the Exchequer at the time they left office. In future, paymasters and others responsible for paying government monies would act as accountants on behalf of the Exchequer and not as bankers with private accounts with the Exchequer into which money appropriated by parhament had been paid.

The provisions noted earlier were later extended and strengthened in 1782, once Burke was in government, with 22 Geo.III, c.81,21 and the Civil Establishments Act (22 Geo.III, c.82),22 which Reitan (1966, p.335) describes as the Act that finally ended the struggle between parliament and the executive for control of finance. These initial reform Acts were replaced in 1783 by the more effective legislative requirements of 23 Geo.III, c.50,23 which required that all monies would be firstly paid into accounts at the Bank of England from which the paymasters would draw funds and which would be controlled by the Exchequer. Meanwhile, the reforms to the civil list allowed by Burke's 1782 Act saw the influence of the Crown appreciably weakened and that of parliament strengthened (Reitan, 1966, p.318). Burke's Civil Establishments Act,24 which saw the abolition of 134 offices in the royal household, was later followed in 1783 by Lord Shelburne's abolition of a further 144 sinecures (23 Geo.III, c.82). This process was greatly accelerated by Pitt's administrative reforms in 1789 and 1798, while sinecures were further progressively reduced throughout the nineteenth century by legislation such as 47 Geo.III. sessi, c.12,48 Geo.III. c.9 and 51 Geo.III. c.71.25