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HISTORY
BANK OF ENGLAND
HISTORY
BANK OF ENGLAND,
ITS TIMES AND TRADITIONS.
BY JOHN FRANCIS
VOL. II.
THIRD EDITION.
LONDON:
LOXGMAN. BROWN, GREEN, a^d LONGMANS.
Gross Collection
Bus. Adm. Lib.
CONTENTS TO VOL. 11.
Page
CHAP. I.— BtlSBtE GOAlPAJJIES— INCREASE OF PBOSPERIIY
-^iGdMiiENCfilftENl OF THE PANIC^FAIXUBES OF COUN-
TRY AND EONDON bankers— SCENE AT THE DISCOUNT
Office — - great Distress — general discredit —
assistance ot the bank — issue of one pound
jfotes-^-ajfecdotes of the panic^— opinions of the
CAUSE. ..... i i 1
CHAP. II. — EFFECTS OF THE PANIC ALTERATION IN THE
CHARTER PARLIAMENTARY DEBATES OPINIONS ON
THE CURRENCY ASSISTANCE TO THE MERCANTILE
INTEREST— TABLE OF ADVANCES — LEGAL DECISION
EXTENSION OF THE BRANCHES-^ JEALOUSY OF THE
COUNTRY EANKERS-^-NEW 3^ PER CENTS. USES OF
BANK NOTES— DANGER OF THE BANK ITS ORIGIN-
RUN UPON THE BANK — POLITICAL CAUSES. . . 29
1519046
VI CONTENTS.
Pa«e.
CHAP. III. FOKGERY — ENDEAVOUR TO PKEVENT IX —
COMMITTEE APPOINTED — INCREASE OF THE CRIME —
SIR SAMUEL ROMILLY AND SIR JAMES MACKINTOSH
PROGRESS OF OPINION — PETITION OF THE BANKERS —
INEFFICACY OF THE PUNISHMENT — INSTANCE OF IT —
FORGERIES OF BUONAPARTE . . . .69
CHAP. IV. — THE NEW CHARTER ITS CONDITIONS EXTRA-
ORDINARY DISCOVERY — HOLIDAYS ABOLISHED — FAIL-
URE OF THE GOVERNOR — LONDON AND WESTMINSTER
BANK — SPECULATIONS IN 1836 PANIC — DEMAND FOR
BULLION ITS CAUSE. . . . . .81
CHAP. V. LOSS OF THE NORTHERN AND CENTRAL BANK
— APPLICATION FOR ASSISTANCE STIPULATIONS DE-
MANDED DIRECTORS AT MANCHESTER PRIVATE LED-
GER — APPLICATION OF MR. FRESHFIELD — ITS SUCCESS
CURIOUS DISCOVERIES — FAILURE OF ESDAILE AND
CO. ALARM AND ASSISTANCE OF THE BANKERS
DIFFICULTIES OF AMERICAN HOUSES SUSPENSION
FOREIGN CREDIT DRAIN OF GOLD RESTORATION OF
CONFIDENCE — NEW MODE OF MANIFOLDING BANK
NOTES. ....... 101
CHAP. VI. EXCHEQUER BILL FORGERIES NEW DIS-
COVERY LEGAL DECISION INTERNAL ALTERATION IN
THE CIRCULATION AND NATIONAL DEBT DEPARTMENT
GREAT CONTINENTAL CONSPIRACY ITS DEVELOP-
MENT AND DISCOVERY — FATE OF THE PERPETRATORS
TRIBUTE TO THE "TIMES."' .... 126
CONTENTS. VU
< Page.
CHAP. VII. THE INCOME TAX ITS PAYMENT ON ANNTJI-
XIES — THE BANK CHARTER ACT ITS PROVISIONS THE
COUNTRY BANKERS PETITION OF THE LONDON
BANKERS ITS RESULT NEW ARRANGEMENTS — WILL
FORGERIES. ...... 159
CHAP. VIII. FORTUNATE DISCOVERY — FORGERY OF BUR-
GESS ESCAPE TO AMERICA THE PURSUIT ROMANTIC
EVENTS RAILWAY MANIA ITS PROGRESS AND DE-
VELOPMENT. . . . . . .190
CHAP. IX. TRADITIONS CONCERNING THE BANK STOLEN
NOTES — STRATAGEM OF THE DUC DE CHOISEUL LOST
NOTE — DESCRIPTION OF THE BANK WEIGHING MA-
CHINE INTERNAL ARRANGEMENTS. . . . 218
APPENDIX.
A SHORT ACCOUNT OF THE BANK OF ENGLAND, RE-
PRINTED FROM A RARE PAMPHLET PUBLISHED IN
1695, BY MICHAEL GODFREY. .... 243
A LIST OF THE SERVANTS OF THE BANK OF ENGLAND AT
THE FIRST ESTABLISHMENT, AND THEIR SALARIES, TO
BE ACCOUNTED FROM MICHAELMAS 1695, ESTABLISHED
BY THE COURT OF DIRECTORS THE 13tH NOV. 1695. . 258
The HIGHEST AND LOWEST PRICE OF BANK STOCK IN
EACH YEAR FROM 1732 TO 1846. . . . 260
List of directors from 1694 to 1847. . . . 262
Vlll CONTENTS.
Page,
Bank stock dividends from 169,4 to 1847, with the
bate of discount. ..... 267
Bonuses on bank stock from 1799 to 1847. . . 276
Progress of the bank of England, shewing the
A^O^■S■f OF ITS liabilities, ASSETS, CIBGULATION,
DEfiOSITS, SEPUBITIES, BULLION, AND REST EACH
YEAR FROM 1787 TO 1844. . . . .277
A COPT OF THE CORRESPONDENCE BETAVEEN THE CHAN-
CELLOR OF THE EXCHEQUER AND THE BANK OF
ENGLAND RELATIVE TO THE RENEWAL OF THE CHAR-
TER OF 1844. . . . . . . 281
Index. . . . . . . .294
HISTORY
BANK OF ENGLAND.
CHAPTER I.
BUBBLE COMPANIES — INCREASE OF PROSPERITY — COMMENCEMENT
OF THE PANIC — FAILURES OF COUNTRY AND LONDON BANKERS —
SCENE AT THE DISCOUNT OFFICE — GREAT DISTRESS — GENERAL
DISCREDIT — ASSISTANCE OF THE BANK — ISSUE OF ONE POUND
NOTES — ANECDOTES OF THE PANIC — OPINIONS OF THE CAUSE,
The quantity of gold expected from the South
American mines was so great that many well-informed
persons, according to Mr. Tooke, " believed, and acted
on the belief, of a diminished value in gold and silver
in consequence. A journalist of the day, writing on
what was evidently a feeling, if not a belief, founded
on it an essay, of which the following is an extract.
"The Chancellor of the Exchequer was obliged to
give up his customary budget, and introduced a new
system of duties in kind. I had an opportunity of
hearing a Right Hon. Gentleman, who filled that
situation, very pathetically lament that the * over-
production of gold then, was as great an evil as the
over-production of grain had been formerly.' 'Once,'
he added, ' the difficalty was how to get gold ; then
VOL, II. B
2 HISTORY OF THE
the question to be put was how to spend it ; for the
nation already resounded with the lamentations of
sufferers, forming creditors of the state, but who had
been paid off w-ith gold.' "
It is in such things as these, which satirize popular
opinion, in the pursuit of public applause, that the
real feeling of a people may often be discovered. The
pages of the satirist are a vivid picture of society.
As a confirmation of this phrenzied desire, another
writer of the period says, " The earth was to yield in
such quantities of the precious metals, that fears began
to be entertained of their becoming almost valueless."
The credulity of the British public was only sur-
passed by the impudence of the inventor. Men,
without any capital but presumption, proposed and
carried out companies ; and when, by the aid of an
important name or two, obtained, perhaps, under
fraudulent pretences, and a prospectus full of specious
phraseology and definite promises, they had arrived at
a premium, the shares were sold, and the association
abandoned. In a satirical novel of the day, a bubble,
to be called " The Gold, Wine, and Olive Joint Stock
Company," is supposed to be projected. From the
wTiter's position, it is veiy probable that much of his
presumed fiction was fact. " Why, you talk," says
one of the characters, " as if we had any real business
to transact. All w^e have to do is to puff our shares up
to a premium, humbug the public into buying them,
and then let the whole concern go to ruui." The
BANK OF ENGLAND. d
history of the difficulty ^dth which the first instal-
ment of rent was met, amounting to £8 6s. 8d., is un-
questionably a picture of the pauperism and poverty
which often min2:led with the shamelessness of the
pretenders. The writer remembers to have seen, some
time afterw^ards, the prospectus of a company to drain
the Red Sea, in search of the gold and jewels left by
the Egyptians, in their passage after the Israelites.
Many similar jocularities were in circulation, some of
which emanated from the members of the Stock Ex-
change, always alive to a sense of the ridiculous. But
it is impossible, and the experience of every specula-
tive era has proved it, to open the eyes of men who
are making large profits. We are all prone to believe
what is agreeable, and the movers in the mania of
1825 were no exception to the rule.
Eveiy one appeared to get rich without trouble-
The prices of all articles increased in value. Tenfold
higher terms were paid for land, with the view of
building on it, than it was worth.
" The wildness of speculation," says " Knight's
History of London," " was not, however, confined to
joint-stock projects ; but at length reached to com-
mercial produce generalh\ Money was abundant, and
circulated with rapidity. Prices and profits rose
higher and higher, and, in short,
All went merry as a marriage bell."
The newspapers could scarcely contain the an-
nouncements which day after day poured from the
4 HISTORY OF THE
proline pens of the schemers. Shares were issued at
high premiums; loan after loan was taken at high rates ;
but high as they were contraeted, the extravagant feel-
ing of the period sent them all higher. The Real del
Monte Mining shares, the value of whieh may be known
fi'om being quoted shortly after at 377 discount,
reached 1400 premium, makingadifference of £1777 per
share. The Bolanos, and other foreign Mining compa-
nies, mounted to 525 premium. The less the place was
known where the mine was to be sunk, the higher the
premium reached, the bolder and the more exorbitant
were the demands made on the public credulity. The
Tlalpuxahua was done at £299. Rumours and re-
ports of veins of gold discovered, had only]to be fastly
propagated, to be freely credited.
The following table will give an idea of the height to
which the madness of the period had raised the prices
of shares in one month :
Dec. 10.
Jan. 11.
Anglo-Mexican
. . £10
paid .
. £33 pm.
. . £158 pm.
Brazilian ....
10
.
10 dis. .
70 pm.
Columbian . .
. . 10
.
. 19 pm.
. . 82 pm.
Real del Monte . .
70
.
. 550 pm. . ,
. . 1350 pm,
United Mexican . .
10
. . 35 pm.
. . 155 pm,
The shopkeeper ceased to toil, that he might be-
come suddenly rich. The merchant embarked his
capital and his credit ; the clerk risked his reputation
and his place, to obtain a share of the broad golden
stream, which waited to be drunk. The broker could
scarcely find time to execute his commissions. The
BANK OF ENGLAND. 5
ordinary business of the funds was disregarded. The
regions of the Stock Exchange wore an appearance of
perpetual bustle. But a great change was at hand.
This desire of adventure, and the rising aspect of all
markets, created an unfavourable foreign exchange,
which, together with the specie, sent to fulfil the loans
made to foreign States, occasioned seven millions and
a half of gold to be subtracted from the Bank coffers
by November, 1825.
In that month the alarm began. The directors of
some of the companies consented to their being dis-
solved, on condition of retaining one-fourth of the
deposits to meet contingent and past expenses. The
banks where the deposits of others had been placed
were besieged to procure a return. The Lord Mayor
was applied to by many who, rejoicing at first in the
prospect of profit, shrank from the chance of loss.
From this period the tide turned. The eyes of the peo-
ple were opened to their marvellous absurdity. The
sellers became more numerous than the purchasers; and
by December had arisen a voice of alarm so loud that it
reached to the remotest provinces of the empire, and so
deep, that it penetrated to the heart of the metropolis.
By the 23rd of November greater difficulty existed
in obtaining commercial discounts than had been
experienced for some years. The extreme caution of
the directors of the Bank, who, witnessing a decline
in the exchanges, feared a fresh exportation of their
gold, was the immediate cause. The applications of
6 HISTORY OF THE
the highest houses, equal m stability to the Bank, were
only partially complied with. It may be supposed
that the coming storm was little anticipated, when
the following remark was made by a high authority :
" They contract the issue of their bank notes with
more timidity than perhaps the real urgency of the
case demands." " The distress occasioned by the
limitation exceeds belief." These comments occurring
immediately preceding the panic, prove that it was
but little expected. But if the directors were com-
pelled to limit their accommodation great care was
evinced that credit should not be injured by it. The
most eminent firms, the character and wealth of whom
placed them beyond suspicion, were selected for reduc-
tion, so that no reproach could be attached to them.
In an interview with the Bank authorities held
with the Chancellorof the Exchequer, towards the end
of November, some high words appear to have passed,
in which the Chancellor said the Bank had brought
themselves into a situation too serious to be treated with
disregard, though the evil must work its own cure. The
Governor reminded him that they had undertaken the
dead weight, when no one else would do so ; but as past
services are generally forgotten, the Chancellor repHed
that it was only a private contract, and had no con-
nexion with their corporate privileges. The following*
condensed from the " Times," will give some idea of
the intense anxiety to obtain money. " Yesterday was
the day for effecting discounts at the Bank on Lon-
BANK OF ENGLAND. 7
don bills. It is customary to leave them the day
before, and the answer is returned on Thursday, The
decision is usually given before one, at the latest-
Long before that hour had struck, the place was
besieged, and when at last the expected ^time came»
notice was given that the answers could not be an-
nounced till two. Two o'clock arrived, and the
anxiety of those who waited was at the highest pitch ;
and then another notice was given, stating that a
further delay must take place till half- past two.
During the whole of the period the directors were in
close deliberation in the Bank parlour. By this time
the assembly was immense ; and when intimation was
made that the arrangements were complete, a rush,
similar to that at a theatre, ensued, to gain access to
the window at which answers were to be given. The
confusion was so great, that when four o'clock arrived
the crowd had not dispersed, and it could not be
ascertained whether the bills were discounted, or part
discounted, or rejected. During the ministration of
the clerk at the window he was frequently called away
to receive fresh instructions. The directors did all
in their power, but that power was limited."
So great was the emergency, that the principals of
some of the first mercantile firms waited in person,
in anxious expectation, to hear their fate.
The country banking houses were the first to fall.
The important York house of Wentworth and Co. ad-
vertised that they were " under the most painfu
8 HISTORY OF THE
circumstances, compelled to suspend payments."
£200,000 in notes of their issue were said to be circu-
lated ; and the effect of this failure was severe. It was
confidently beheved at the time, that if the London
agent had honoured Wentworth's bills, all would have
been well. Some curious statements were made con-
cerning these transactions ; but the probability is, that
the London bankers were justified in their proceedings,
and the fact that Wentworths were unable to resume
payment is some proof of their discretion. It was a
time for caution, but it was a time also for kindness
and smypathy.
The evil of an unlimited currency being permitted to
firms not sufficiently responsible, was fearfully felt. By
an extraordinary anomaly, the Bank was without the
issue of a single one-pound note; while country bankers,
many of whom were mere retail shopkeepers, deluged
the provinces with millions. Terrible suffering was
spread among the poorest families, with whom these
notes circulated. The distress was as hopeless as exten-
sive. Since the act of 1827, paper had almost supplied
the place of gold throughout the provinces. If notes
of that kind are to be circulated, wrote the " Times,"
the Bank ought to do it ; not hovels in the country,
dignified by the title of "Bank" being written over a
dairy, or a cheesemonger's shop. The notes of one
house were openly sold at 15s. in the pound. To
support credit, associations were formed by the most
opulent, pledging themselves to take the paper ot
BANK OF ENGLAND. \)
various firms. The stoppage of the bank of Sir W.
Elford, at Plymouth, while it added to the alarm in
London, created a melancholy scene on the spot. The
people were almost frantic. The holders of notes
crossed and jostled each other in all directions.
There was literally a whole population, with food in
abundance staring them in the face, unable to pro-
cure it, as nothing but gold would be taken. Day-
break witnessed the Bank surrounded by tumultuous
mobs, and the civil power mustered in front. A
night of fearful omen succeeded to many an unfor-
tunate family. The run on the Norwich Bank was
stopped by the notes of the Bank of England being
given in exchange.
On the 1 2th of December, the crash which struck
terror and alarm throughout London commenced with
the partners in the banking-house of Sir Peter Pole
and Co., which was said to have yielded £40,000 a
year for the previous seven years, announcing their
incapacity to meet the claims of their creditors. At
nine o'clock this stoppage was known, and the Ex-
change was resorted to, to ask the cause, and enquire
if other houses were in danger. Forty -four country
banks were connected with the firm, and the ruin
of many was anticipated. The agitation of the city
exceeded ever}" thing that had been witnessed for
a century. The funds fluctuated violently. Rumours
of the failures of other firms spread rapidly. On the
13th an important house, possessed of half a miUion
10 HISTORY OF THE
of undeniable securities, declared, after a most severe
pressure, an inability to meet its creditors. On the
14th, a west-end banker advertized that, though com-
pelled to pause for the present in his payments, he
hoped to resume on the following Saturday ; and in
this he was successful. On the same day the distress
was increased by the stoppage of two firms, known as
Sikes, Snaith and Co., and Everett, Walker and Co.
The confusion spread ; men ran in alarm and dread
to draw the balances from the hands of their bankers.
Lombard-street was crowded with persons waiting in
anxious fear or idle curiosity. A few gazers around a
door was sufficient to create the destructive rumour
that a run was made upon the establishment. But
there was no occasion for rumour. The people seemed
to anticipate that the bankers kept all their deposits to
answer unreasonable demands, and that the expence
of a banking-house was maintained for the sole pur-
pose of benefiting the public. Many a firm, of un-
impeachable honour and unquestionable solvency, was
compelled to bend before the storm. The merchant
looked to his banker for support ; but all the eflforts
of the latter were directed to save himself from de-
struction. The usual channels of credit were stopped,
and the circulation of the country completely de-
ranged. Cheques came pouring in fi'om all quarters;
and it was remarked that, " the question would soon
be, not who goes, but who stands?" On the Ex-
change the names of other firms were openly men-
BANK OF ENGLAND. 11
oned ; and no report, however absurd, failed to obtain
implicit belief.
The " Times," in commenting upon the assistance
granted by the Bank to the house of Pole, Thornton
and Co., remarked, " It is not probable that gold to a
great amount has been in the first instance transmitted
to this house. An additional quantity of paper, con-
vertible no doubt into cash on application to the Bank
to the amount of the sum advanced, has been sent
into the market. We suppose that the funds possessed
by this and other houses, not immediately convertible
in the case of a run upon their credit, may consist of
mortgages, and if so, it is a public evil that bankers,
the dealers in paper, should have seized so much of
the real property of the kingdom, and not left them-
selves sufficient to meet an emergency. They resemble
pike and other rapacious fish, who pursue and seize
a gudgeon, which, when they are on the point of
swallowing, a larger pike supervenes and appropriates
the victim."
The members of the press generally performed
their great duty. " It ought to be impressed on all
who possess any influence at the present moment,"
said the " Morning Chronicle," " that a blind selfish-
ness will soon bring its own punishment along with
it ; that if all persons rush to the Banks to draw out
their balances, which the bankers must pay instantly,
while they cannot compel their debtors to pay the
balances due to them, the consequences must be very
12 HISTORY OF THE
serious indeed. We can hardly conceive any amount
of capital equal to this conflict."
The rumour was spread that a firm in Mansion
House Street had stopped, and an immediate rush
took ph\ce from the Royal Exchange and Stock
Exchange to discover the truth. So great was the
crowd that it was necessary to remove them by force.
The clerks grew alarmed at the tumult outside, and
rushed simultaneously to the outer desk, in apprehen-
sion of a more violent demand than their duty would
allow them to meet. "Nefarious attacks," says one,
" continue to be made on the credit of other banking
houses, by collecting crowds of idle people round their
doors, and reporting a run." The distresses of the
country people, as day by day, and almost hour by
hour, circulars were issued announcing fresh stop-
pages, baffle belief. Bills might be seen in many of
the shops of the different localities, announcing that
the banker's notes would be received for goods. One
house took £2,000 in this manner. Another was so
crowded that the sufferers could only be admited one
at a time. The doors were besieged, and men might
be seen issuing burdened with drapery or grocery
which they had bought, in preference to retaining the
dishonoured paper. A Cambridge bank advertised
that " they would keep open an hour or two later,
and open the next morning an hour earlier, that the
holders of their notes, if there be any then in circula-
tion, may hav^e them exchanged for gold or Bank
BANK OP ENGLAND. 13
paper." The Messrs. Gurney, at Norwich, by bold-
ness in going beyond their usual line, saved many
from ruin, and lost nothing worthy of notice through
it. But it is to be feared that these are few, though
honourable exceptions. An Oxford bank ostenta-
tiously exhibited such a profusion of gold that every
one was satisfied, and no person thought of demand-
ing it.
Country bankers from all parts of England were in
town, trying to secure cash. The heads of all the
London houses were as regular in their attendance as
their clerks. It was common to hear of men, worth
£100,000, begging the loan of £1,000 as a personal
favour, on unexceptionable security. The gloom
spread to the Exchange. Exchequer bills fell to
sixty-five shillings discount, and the brokers closed
their books, and refused to engage in any transactions
whatever. The bankers from the provinces demanded
gold, not to the extent of their circulation, but to the
extent of all their engagements of every description,
in anticipation of a run. Many packages of gold
forwarded to these gentlemen came back unopened.
Hundreds of thousands of sovereigns, said Mr. Poulett
Thomson, were sent which were returned unpacked
and untouched, having been provided only to meet
the chance of a run. The Bank of England were
called on to supply gold for all the notes of these
banks, and post-chaises and four were regularly sta-
tioned in Lombard Street all the day. The principal
14 HISTORY OF THE
Stocks were closed at the Bank, but transfers were
allowed on this occasion up to the last possible period
before making out the dividend. One hundred, an
unprecedented number, were effected in one day.
The partners of London banking-houses were called
out of church to answer the expresses of their corres-
pondents ; and the latter often carried off a reserve of
gold of fifty per cent, more than they were likely to
require. The governor and deputy-governor, with
many of the directors, were constantly at their post.
They came early and they left late. The guard
also remained all day in the building, in case their
exertions should be required.
On the 14th December a meeting of the merchants
and traders, only of London, was convened at the
Mansion House, to devise mitigating measures for this
calamity. It was stated that the distress arose from
want of confidence in men able to pay 40s., 50s., and
60s. in the pound. That those who had any confi-
dence in their bankers ought to continue to pay in
their money as usual ; and were this done, the whole
difficulty would be met. The governor and deputy-
governor of the Bank officially communicated to the
Lord Mayor that they would do everything in their
power to alleviate the city and country bankers. Mr.
Alexander Baring, now Lord Ashburton, in a speech,
which, from its energy and insight into business, was
calculated to produce a great effect, demanded, after
an elaborate picture of the panic, "confidence; and
BANK OF ENGLAND. 15
SO great was the impression that the assembly, almost
simultaneously, re-echoed the word. After a series
of resolutions, in which they determined to support
the banking interest to the utmost extent of their
capacity, the meeting separated. " One establish-
ment," wrote the " Courier," " falls after another.
The fabric of our credit is in flames around us. Five
great houses have already been sacrificed to panic ;
three or four others have suffered immense losses.
To withstand a pressure, aid must be given largely and
liberally. In the words of Mr. Baring, let us follow
general principles in ordinary cases, but in an extra-
ordinary emergency, like the present, let us resort to
an adequate, though extraordinary, remedy."
The distress continued to increase. Trade was at a
stand. Doubt brooded everywhere. No one knew
who was trustworthy. The millionaire of yesterday
might be the bankrupt of to-day. It was almost im-
possible for any man, engaged in business, to know
his own position. An order was issued to the officers
of the mint to expedite, with all possible dispatch, a
coinage of sovereigns ; and one hundred and fifty
thousand a day were made for the space of a week.
Gold coin was sent to every town in the kingdom.
Then was the mischief felt of the country bankers
having been allowed to continue and increase the
circulation of their notes of one and two pounds.
There was a constant demand for their gold ; and this
demand affected the Bank, which was, indeed, the only
16 HISTORY OF THE
resource ; and every house in London found itself
under the necessity of meeting the damands made by
its depositors, through the medium of the former.
Nor were they backward in affording assistance. In
a few weeks their discounts arose from five to fifteen
milhons. Advances were made upon the simple de-
posits of title deeds, often without even an examina-
tion. Exchequer bills, to an enormous amount, were
sold to meet the demand from the mercantile interests.
Gold, from abroad, and coin fi'om the mint, were con-
stantly arriving at the Bank.
Mr. Harman said, in his examination before the
Parliamentary Committee, " we took stock in as secu-
rity ; we purchased Exchequer bills ; we not only dis-
counted outright, but we made advances on deposits
of bills of Exchange to an immense amount ; and we
were not, on some occasions, over nice, seeing the
dreadful state in which the public were."
The course which the directors adopted, though op-
posite to that of 1797, appears to have been correct.
Within three weeks they doubled their discounts.
From the 11th to the 1 7th December, the demand for
gold was urgent, incessant, and msatiable. A sug-
gestion was made to Government for an order in
Council to restrain the payments in specie, under the
apprehension that it might be exhausted. ]\Ir.
Canning is reported to have replied, in one of his
emphatic sentences, that " he would never consent to
a thing of that sort." But the most extraordinary
BANK OF ENGLAND. 17
features of the application was the advice of J\lr.
Huskisson to place a paper against their doors, stating
they had not gold to pay with, but expected it shortly.
It is, perhaps, more extraordinary that the Bank de-
Uberated upon it ; but allowances must be made for
the agitation and anxiety of the time. That which,
ordinarily, is looked upon as unreasonable, assumes a
new form under an almost insupportable pressure. For
two or tliree days the most unquestionable security
would not procure money ; nor could the public funds
be said to have a price. There was no market for
Bank, there w^ere no buyers of East India Stock. It
was the opinion of Mr. Huskisson that in forty-eight
hours all deaUngs would have been stopped, between
man and man, except by way of barter. Owing to
the difference in the money and account prices of con-
sols, those bankers, wdio were compelled to sell stock
to raise cash, paid at the rate of 72 per cent, for the
necessity. On the 13th the Bank raised the discount
to 5 per cent.
A morning journal remarked, " that to inspire
confidence in houses which can at last only repay
it by insolvency, is to increase a direct WTong, and
dreadfully to enhance a gi'eat commercial evil. If a
house fails and pays 15s. in the pound, a foolish cry
is raised that a little reasonable help w^ould have
saved it. Saved what ? A house that w^as in relation
to its debts one quarter w^orse than nothing, Ought
such a house to be left standing in a condition wdiere
VOL. II. c
18 HISTORY OF THE
it was every hour made the depository of other
people's money ? Even if a banker pays 20s. in
the pound, and has no surplus afterwards, he is not a
legitimate banker, he is trading without a capital, and
the least mishap, or the least fall in the public funds,
if he buy into them with other men's money, may
in one day make him an insolvent."
The energy of the direction was great in adminis-
tering relief to worthy applicants. An eminent
country banker was some days in town imploring
a loan of £50,000, for which he offered double
the security. During his stay a neighbouring bank
stopped payment ; the alarm of the townspeople
grew so strong lest his own should follow the
example, that they assembled to force, if possible,
the payment of their notes, nor could they be dis-
persed without the aid of the military. On this
intelligence reaching London, the 50,000 sovereigns
were suppUed, with which the banker immediately
departed to the scene of confusion. " The town was
swept of cash," says one writer; " and such a dearth
of this necessary commodity ensued, that few persons
had five pounds to spare for any purpose whatever."
Pawnbrokers and money-lenders were resorted to, till
their capitals were exhausted. Scarcely a sovereign
was to be seen throughout London which was not
new ; so active had the authorities been at the Mint,
and so eagerly had the old coinage been carried from
the metropolis. The deficiency in sovereigns was
BANK OF ENGLAND. 19
said at one time to be so great at the Bank, that
apphcants were compelled to receive half sovereigns
in payment.
The gloom wnich pervaded the metropolis was
universal. A vague feeling of uncertainty as to the
issue ripened into an indefinite dread of consequences,
almost as harassing as the worst reality. A
general bankruptcy seemed impending. The im-
pression — for it scarcely amounted to a conviction —
that the Bank itself, hitherto regarded as almost
sacred, was sharing the danger of the time, added
to the general anxiety. Up to this period, with the
single exception of 1797, the term Bank had been
synonimous with safety. When, therefore, it was
believed that, amid the general wrack and ruin, even
the Bank of England was in danger, the great hall
of the establishment witnessed an eager proffer of
notes in exchange for gold, which, however, was
met as promptly as it was made. No attempt was
offered to withhold, as in 1797 ; no attempt to delay,
as in 174.5. It was probably partly owing to the
unhesitating readiness with which the gold was paid
as fast as it could be demanded, that the confidence
of the public was so quickly restored. Had the
holders of the notes felt that there was anything like
hesitation, the alarm would have spread indefinitely,
and the Bank must have suffered in proportion.
The energy displayed in the Bank parlour led
to the same activity in the executive department.
20 HISTORY OF THE
The labour of the clerks was trebled in the discount
office ; and in others many were kept working long
after the ordinary hours. The counters were be-
sieged ; and the attendants were wearied with the
constant demand for sovereigns. The drain of notes
and specie for the countiy continued to be prodigious.
One provincial banker carried with him £300,000 ;
and there was scarcely an establishment throughout
the empire which did not apply for help. As it has
been in most panics, the country bankers took more
than they required, and assisted in bringing on many
of the town failures. Counterfeit sovereigns, wdiich
rivalled in brightness the new issue, were numerous,
as anything which looked like gold was taken without
hesitation. The manufacturers rivalled the Mint in
activity.
The danger of a run upon any bank cannot be
measured. The beginning of a demand for gold ma}
be very trifling ; but no sooner is it known that a run
is occurring on any establishment, however unques-
tionable its solidity, than it is indefinitely increased,
each man only anxious that the supply should hold
out until his claim be satisfied. So great was the
demand for one week, that a doubt was seriously
entertained by all parties that the Bank w^ould
scarcely be able to stem the torrent. They had,
however, determined to pay to their last guinea.
" Another such week," said Mr. Richards emphati-
cally, " and the Bank could not have stood it. Gold
BANK OF ENGLAND. 21
was expected ; but we were subject to the winds and
the waves."
Fortunately, on the last day of the week, the tide
turned. It must have done so decidedly, for Mr.
Richards to have been able to call out that all was
well, when, reeling with fatigue, he sought Lord
Liverpool, with the other members of his Majesty's
government, on the afternoon of Saturday, the 17th
of December.
The following description of the position of the
governor and directors of the Bank at this period is
from the mouth of its deputy-governor :
" In Autumn the Bank very seriously began to
contemplate what would be the result of the specula-
tions. Not only the Bank, but every man's mind
comiected with the city, was in an extreme state of
excitement and alarm. I think I can recollect on the
first Saturday in December having come home, after
a very weary and anxious day, from the Bank, receiv-
ing a visit from two members of the committee, and
one of our bankers of that class, at my own house,
stating the difficulty in which a banker's house near
the Bank was placed. The object was to ascertain
my views. I was called .upon in consequence of the
governor being connected with the house of Pole and
Co. by marriage, and other circumstances. I ventured
to encourage these gentlemen that upon any thing
like a fair statement the Bank would not let this
concern fall through. It was agreed that on the
22 HISTORY OF THE
following morning (Sunday) we should meet as many
directors as I could get together, wath the three gen-
tlemen who had called upon me, and that some emi-
nent merchants, friends of the house, should be called
to the meeting, to assist with their opinion. The
result was that the directors authorised their chairs
to say that assistance should not be wanting. It was
agreed that £300,000 should be placed at the disposal
of Pole and Co. the next morning, on the security of
a number of bills of exchange and notes of hand, and
over and above, a mortgage on Sir Peter Pole's pro-
perty, which was to ride over the wdiole. During that
week, I believe, the attention of every man was
directed much more to the state of that house than
to any thing else. They fought through it till Thurs-
day or Friday pretty manfully, and about that time,,
from a conversation I had with a partner in the house,
I was led to fear that it might fail : however, it fought
on till Saturday evening. Sunday passed, and on
Monday the storm began, and till Saturday night it
raged with an intensity it is impossible for me to
describe. On the Saturday night it had somew^hat
abated. The Bank had taken a firm and deliberate
resolution to make common cause wdth the country,
as far as their humble efforts w^ouldgo. On Saturday
night it was my happiness, w^hen I went up to the
cabinet reeling with fatigue, to be able just to call
out to my Lord Liverpool, and to the members of his
Majesty's government then present, that all was well.
BANK OF ENGLAND. 23
Then, in the following week, things began to get a
little more steady ; and by the 24th, what with the
one pound notes that had gone out, and other things,
people began to get satisfied. Then it was, for the first
time in a fortnight, that those who had been busied in
that terrible scene could recollect that they had fami-
lies who had some claim upon their attention. It
happened to me not to see my children for that week."
The incidental mention to one of the directors that
there was a box of one pound notes ready for issue,
turned the attention of the authorities to the propriety
of attempting to circulate them ; and the declaration
of Mr. Henry Thornton, in 1797, probably occurred,
that it was the want of small change, not a necessity
for gold, that was felt ; and as the pressure on the
country banks arose from the holders of the small
notes, it was suggested to the government that the
public might, perhaps, receive one pound notes in
place of sovereigns. The ministry approved of the
idea, and the panic was at its height, when, on Satur-
day, the 17th of December, the Bank closed its doors
with only £1,027,000 in its cellars.*
* In the pamphlet, lately published by Lord Ashburton, is the follow-
ing remarkable paragraph. After saying, " I was called in to counsel with
the late Lord Liverpool, Mr. Huskisson, and the Governor of the Bank,"
his lordship proceeds : " The gold of the Bank was drained to within a
very few thousand pounds ; for although the published returns showed a
result rather less scandalous, a certain Saturday night closed with nothing
worth mentioning remaining." It has been stated that the directors
were unable to cash notes to the amount of £16,000, which were
presented by a city banker.
24 HISTORY OF THE
It has been frequently stated, that by a mere acci-
dent the box of one pound notes was discovered. But
such was not the case. Mr. Richards said " he did
not recollect that there were any one pound notes ;
they w^ere put by ; it was the casual observation that
there were such things in the house, which suggested
to the directors that it would be possible to use them."
Application w^as made to government for permission
to issue them ; and this was granted, subject to the
following stipulations : —
" If, for the purpose of meeting the temporary
exigency, occasioned by the sudden withdrawal of the
country banks' small notes, the Bank are disposed to
avail themselves of the powder which they have by
law, to issue one pound notes, the government will not
object to it, provided it is understood to be strictly
temporary ; and provided that the Bank shall take the
opportunity of the present state of the Exchange to
procure a gi'eater fund of treasure, and to promote a
more extensive circulation of gold in the country."
The delight with which these notes were received in
the country, proved that the want of a secure small cur-
rency alone was felt. The knowledge that the provin-
cial banks were constantly breaking, that the parent
banks in London were stopping almost as frequently,
the fear that universally prevailed with regard to those
that were really solvent, brought in the country notes
wnth that rapidity which produced the fearful failures
of so many of the body. But, that the holders only
BANK OF ENGLAND. 25
required to be safe, and that thej'^ considered the notes
of the Corporation eminently so, is proved from the
fact of the run suddenly stopping after their intro-
duction.
In Norwich, the Messrs. Gurney are said to have
staid the plague by merely placing a thick pile of one
pound notes of the Bank of England on the counter.
"They worked wonders," said Mr. Harman, "as
far as my judgment goes, they saved the country."
In most of the provinces they were received with ac-
clamation. Within a week from their issue^ the peril
and the panic had passed away, and the monied inter-
est had time to look around and count the terrible cost
of the yet more terrible dangers to which they had
been exposed. Seventy-three town and country bank-
ers had failed in one mouth ; of these, ten resumed
payment, their difficulties arising solely from the
extraordinary alarm of the time.
It is gratifying to add the opinions of such men as
the late Mr. Rothschild, Mr, George Grote, and Mr.
George Carr Glyn, upon the conduct of the Bank
during emergency. Mr. Rothschild, said " At the
time of the last panic I think there was a great deal
of credit due to the Governor of the Bank." On
another occasion he remarked, " I think the Bank dis-
counted all the bills sent in as liberally as possible.
They discounted everything." Mr. George Grote
described their conduct " as liberal and daring ; but as
judicious as proper." Mr. George Carr Glyn asserted
2G HISTORY OF THE
that *' the commercial public were exceedingly indebted
to them at that time ; they rendered every assistance
in their power." Mr. Attwood " gave great praise to
the Bank for a remarkable degree of moral firmness
during this panic, in throwing its notes out into circu-
lation, which prevented a catastrophe, so distressing,
that he would not attempt to describe it."
As a proof of the justice of these opinions, it may
be mentioned, that on the 8th December, the discounts
amounted to £7,500,000, on the 15th they were
£11,500,000, and on the 29th, £15,000,000.
In looking over a list of the joint stock companies
formed during this eventful period, the names which
appear in the [lists of directors are remarkable. The
greatest, richest, and the most honourable in the
city, in some, in others persons who w^ere borne by
the bubbles to the surface, but have now sunk to
their original nothingness. Mines were proposed in
all parts of the world. One was issued at a premium
avowedly for the benefit of the projector. Another
was celebrated " for having a vein of tin ore in its
bottom, as pure and solid as a tin flagon." A third
was pronounced by the directors as " no speculative
undertaking — no problematic or visionary scheme — it
was founded on a sure and permanent basis, adopted
after months of mature consideration, after enquiry,
survej^s, investigations, and reports ;" and this was
dissolved almost immediately. Another declared that
*' lumps of pure gold, weighing from two to fifty
BANK OF ENGLAND. 27
pounds, were totally neglected," and that its mines
alone would yield " considerably more than the quan-
tity necessary for the supply of the whole world."
The romantic aspect of the land was described in a
fifth ; while a sixth, proposing to supply England with
granite, lamented in plausible and poetic strain the
" soft and perishable materials" of the buildings of
" the mighty head of a mighty empire." Innumerable
labourers and artizans were to be employed, " and,"
continued the prospectus, " perhaps to the efforts of
this company, the dingy brick fronts, the disgrace of
the metropoHs, may give way to more durable and
magnificent elevations, worthy of the throne of the
queen of isles."
An utter ignorance was shown of the capability
of the countries in which many of the mines were to
be worked. Expensive machinery was exported
Liberal salaries were given to every individual con-
nected with the speculations ; and Cornish miners,
tempted by high wages and higher promises, wan-
dered across the Andes, or tried a fall with the
gigantic conder on the " wide desert plain of Villa
Vicencia," as Captain Head, sent out on some such
expedition, amusingly relates.
But other companies, besides mining ones, found
support. When the bubble burst it was made manifest
that an extensive plan of gambUng and fraud had
been carried on. The old system — for even in de-
fi-auding there is nothing new — was adopted. News-
28 HISTORY OF THE
paper puffs, reports, and prospectuses, raised many of
the companies to a high premium. AA'hen the shares
were sold, the company dissolved, and the projectors
sought new schemes and new dupes. One member
of Parliament was stated to have been the director
of nine companies. "The press," says the editor of
the "Morning Chronicle," "for the most part by
taking shares in these schemes when at a premium
(and we blush to say few editors of newspapers in the
metropolis are not to be found in the hst of those who
benefitted by them), had at all events no particular
interest in opening the eyes of the public." In one
company the two principal charges were the payments
of newspaper puffs and legal expences.
To read many of the prospectuses it appeared only
necessary to cut a canal, and it would be laden with
barges, bearing the industrial produce of the country ;
and only necessary to send miners to some place with
an unpronounceable name, and gold would attend
every touch of the labourer's implements. " The
Mississippi scheme," says a writer of the day, "was
a rational project compared with the extravagance of
the expectations held by whole armies of speculators.
The sea was to contribute its proportion ; and trea-
sures which had been buried for ages were called
from ' the vasty deep,' by the magic and resistless
power of steam. In this universal mania men
hazarded the savings of a long life of industry ; they
gazed only on the bright side of the future ; they shut
BANK OF EiMGLAND. 29
their eyes to the reverse. In their region the sun
never set."
Mr. Hughes, in his " History of England," says
that the joint stock companies which, in the plenitude
of their imaginary power, would have contracted to
throw a bridge across the channel, or make a tunnel
to the antipodes, were for the most part in the
Gazette, without a single subscriber, or an available
shilling. "They fixed the public gaze," said Mr.
Canning, in one of his brilliant orations, " and excited
the public avidity so as to cover us, in the eyes of
foreign nations, if not wdth disgrace, at least with
ridicule. They sprung up after the daw^n of the
morning, and had passed away before the dews of
the evening descended. They came over the land
like a cloud, they rose like bubbles of vapour tow^ards
the heavens, and, destroyed by the puncture of a pin,
they sunk to the earth and were seen no more."
It was openly declared that a member of Parliament
received £500 a-year from each of two companies, for
the protection of their rights. Some senators, for
supporting gas companies, had their houses lighted
for nothing, while shares which bore a good premium
were allotted to others, for their assistance in the
commons.
From the pamphlets of Mr. English, published in
1827, the following list of companies are copied, that
the reader may form some idea of the enormous
nature of the nroposed speculations.
30
HISTORY OF THE
EXISTING.
Capital.
44 Min. Co. 26,776,000
20 Gas ditto 9,061,000
14 Ins. do, 28,120,000
49 Miscell. 38,824,600
AiBOunt paid.
5,455.100
2,162,000
2,247,000
5,321,850
Present val. ■^"""t"*';le Amount
to be called. bliares.
2,927,350
1,504,625
1,606,000
3,265,975
21,320,900
6,899,000
25,873,000
33,502,750
358,700
152,140
545,000
562,500
127
102,781,600 15,185,950 9,303,950 87,595,650 1,618,340
16 Mining Companies
9 Investment ditto
20 Canal Rail Road, &c.
30 Steam . ,
43 Miscellaneous
118 Companies
ABANDONED.
Capital.
5,585,000
8,550,000
19,135,000
2,927,500
. 20,409,000
Amount paid.
400,900
746,000
293,375
79,900
799,500
14 Mining Companies
9 Gas ditto
19 Investment ditto
6 Insurance ditto .
11 Trading ditto
26 Building ditto
18 Dock, Canal. &c. ditto
16 Rail Road ditto
37 Steam ditto
23 Provision ditto
57 Miscellaneous ditto
236
£56,606,500 £2,419,675
PROJECTED.
Capital.
6,009,000
3,016,000
. 44,050,000
7,700,000
. 10,450,000
13,781,000
13,851,000
11,065,000
5,628,000
8,360,000
. 19,700,000
£143,610,000
No.of Shrs.
98,200
78,500
246,000
35 650
390,250
848,600
No of Shares.
80,300
48,800
608,000
106,000
85,000
164,900
164,410
131,800
89,570
674,000
382,600
2,535,380
GENERAL SUMMARY.
127 Companies now existing
118 Ditto abandoned
236 Ditto projected
143 Ditto projected (No. 2,)
not particulai'ized
624
Capital required.
102,781,600
56,606,500
143,610,000
69,175,000
Amount actually
advanced.
15,180,950
2,419,675
Number of
Shares.
1,618,340
848,600
2,535,380
959,000
£372,173,100 £17,605,625 5,961,320
BANK OF ENGLAND.
31
Nor will the accompanying list of foreign loans
contracted for in 1824 and 1825, be less interesting
to the reader.
FOREIGN LOANS.
CONTRACTED FOR IN 1824.
Austria, 5 per cent.
Brazil, ditto
Portugal, ditto .
Greece, ditto
Columbia, 6 per cent.
Buenos Ayres, ditto .
Mexico, 5 per cent.
Peru, 6 per cent.
Naples, 5 per cent.
Brazil, 5 per cent.
Mexico, 6 per cent. .
Greece, 5 per cent.
Denmark, 3 per cent.
PeiTJ, 6 per cent.
Guatimala, 6 per cent.
Foreign Loans of 1824 .
Ditto . . 1825
Total .
Cont. Price.
82^
75
87
59
88-1
85
58
77
924
Nom. Capital.
3,500,000
. 1,200,000
1,500,000
800,000
4,750,000
. 1,000,000
3,200,000
750,000
2,500,000
£19,200,000
IN 1825.
Nom. Capital. Cont. Price.
2,000,000 85
. 3,200,000 89t
2,000,000 56i
. 3,625,000 75i
616,000 78
. 1,428,571 73
£12,869,571
SUMMARY.
Capital.
19,200,000
. 12,869,571
Mny. advncd.
2,887,500
900,000
1,305,000
472,000
4,203,750
850,000
1,856 000
577,500
2,312,500
£15,364,250
Mny. advncd.
1,700,000
2,872,000
1,130,000
2,718,750
480,480
1,042,988
£9,944,218
£32,069,571
Amount advncd.
15,364,250
9,944,218
£25,308,468
At the time, the panic was generally traced to the
issues of the country bankers. The fact is unques-
tionable that their circulation was enormously in-
creased ; and it is equally so that the misery of the
32 HISTORY OF THE
provincial population was painful in the extreme, from
the failure of so many of the body. It is impossible
to imagine the aggregate wretchedness which this
must have occasioned. Domestic distress, ties bro-
ken, families disunited, these were the individual
fruits which resulted from houses being permitted to
circulate to any extent notes which in many instances
proved only valuable as waste paper. The cause
w hich had operated to increase the country circulation
was the first departure from the principles of Mr.
Peel's Currency Bill, and whether it occasioned or not,
it at least aggravated the evil to an enormous degree.
It was a further proof that the currency of the
country should have been in the hands of a Bank,
the solidity of which, says Adam Smith, is equal to
that of government. To preserve our social system
we levied taxes, declared war, chose senators, held
courts of justice, and yet, up to 1825, anj'- person
calling himself a country banker, though in some
instances not rising above the level of a small trader,
was allowed to issue, to an illimitable extent, the very
notes which penetrated through and influenced every
grade of social life. The great Bank of the empire
was constantly called on for returns, lest its governors
should be too liberal with their paper, while the
pettiest banker in the provinces was only self con-
trolled. The result is evident. Seventy country
banks failed ; and the poor man, whose time is money,
was told in the House of Commons, with a refinement
BANK OF ENGLAND. 33
of cruelty, that he ought to have deposited his earn-
ings in a savings' bank, "when," said Mr. Peel, in a
few indignant words which spoke volumes for the
inefficiency of the present system, "the savings' bank
was perhaps twenty miles from his home."
The following opinions, as to the cause of the panic,
are important in proving the difficulty of aniving at a
just conclusion, or interesting as they evince the bias
of each speaker, springing, either from his pre-deter-
mined notions, or from the natural prejudices of his
position. Three, out of the four unfavourable to the
corporation, were country bankers, or directors of
joint stock banks. To Mr. Wilkins, a provincial
banker, and an issuer of paper, great praise is due for
the honesty which produced an avowal contrary to his
own advantage, and so much at variance with the
general opinions of the interest he represented.
Mr. Gurney considered it impossible to define the
whole of the causes of that very remarkable crisis ;
but it certainly was not the over-issue of the countiy
bankers. He believed that everything which caused
great facility in money transactions tended that way ;
and that the great reduction in the duties on many
foreign articles of production contributed to it. Mr.
Stuckey thought that it arose, mainly, from an over
issue of the Bank of England paper, while Mr.
Wilkins gave it as his opinion that the distress and
failures of the period were owing to the excessive
issue of the country bankers.
VOL. II. D
34 HISTORY OF THE
Mr. Rothschild thought it might be assisted by the
great speculation in different articles ; an immense
amount of bills had been drawn upon this country from
almost every quarter, of which he received, in two
months, from a million to a million and a half sterling.
An immense deal of specie had been sent to the con-
tinent to take up those bills. When the Bank found
that gold was going away, they would not discount.
There was an immense deal of speculation in corn,
and the Bank refused to discount the corn and other
bills. Mr. Dyer believed that the Bank had been the
cause of the panic, and of a constant succession of
little panics, continually annoying the commerce of
the country. Mr. Burt was of opinion that the crisis
was first caused by the Bank of England ; and after-
wards the Bank remedied it the best way it could.
The opinion of Mr. Palmer is presented at length,
because it enters more calmly into the question, and
because from his position he could best afford to regard
it in a dispassionate light.
"I have always considered that reduction of in-
terest, one-fifth in one case and one eighth in the other,
to have created that feverish feeling in the minds of
the public at large, which prompted almost every body
to entertain any proposition for investment, however
absurd, which was tendered. The excitement of that
period was further promoted by the acknowledgment
of the South American republics by this country, and
the inducements held out for engaging in mining
BANK OF ENGLAND. 35
operations, and loans to those governments in which
all classes of the community in England seem to have
partaken. Almost simultaneously with those spe-
culations, arose general speculation in commercial
produce, which had an effect of distiu-bing the relative
values between this and other countries, and creating
an unfavourable foreign exchange, which continued
from October 1824, to November 1825, causing a
very considerable export of bullion from the Bank ;
about seven millions and a half. The Bank were,
even at the latter period, sufficiently provided with
bullion for their own purposes ; and had it not been
for the internal demands to which I have alluded in
the former part of my evidence, would have weathered
the storm."
Mr. Richards thought that the reduction of interest
by the government, and that the statements made in
the royal speech of the unbounded prosperity of the
country, had buoyed up the public mind, and that
"the Bank had continued then, as it always invariably
did, as steady a course as it was possible for a body
of that magnitude, moving at best but slowly, as,
from necessity, it must move, to have done."
To the judgment of the reader must be left the
task of reconciling these conflicting views. They
have been presented at some length, because the
importance of the period demands an extensive en-
quiiy.
From the failure of so many private bankers, a great
36 HISTORY OF THE
number of accounts were transferred to the Bank of
England. Up to 1826, £10 had been the lowest sum
allowed to be drawn; but this was reduced to £5 to
facilitate business. On the 17th December govern-
ment raised the interest on Exchequer bills to 2d. per
cent per diem. A message was forwarded to the India
House requesting a postponement of the Indigo sale
for three or four months, and at the desire of some
influential gentlemen, one public sale was actually de-
layed on the plea, that however responsible the buyers
might imagine themselves, it was impossible to know
whether they would be able to pay for the goods they
bouglit. While all the other banking houses were in
a state of trepidation, the "Courier" remarks that
Messrs. Coutts and Co. had not a single cheque drawn
upon them more than was warranted by the ordinary
demand of business.
The manufacturing and trading interests felt the de-
pression long after the cause had ceased. Money was
so scarce with the former, that large orders, which
arrived from Germany, were unable to be executed.
One house, carrjdng on an extensive business, sent an
agent to collect debts in the north to the amount of
£80,000. After an absence of six weeks he returned
from his tour with no more than £500. An application
for assistance, founded on this distress, was made to
government. Mr. Wilson, member for the City, said
that the difficulties demanded attention. The relief
he asked for might be granted with safety. Cotton
' BANK OF ENGLAND. 37
had fallen from 12d. to 6d. per pound, and no sales
could be effected. What risk would there be in ad-
vancing 3d. per pound. Yet such an advance would
save many a merchant from ruin, and prevent
hundreds of operatives from being thrown out of
employment, and would be, therefore, of the utmost
importance.
The reply of Mr. Robinson, Chancellor of the
Exchequer, was, that a compliance with this pro-
position would be attended with consequences more
prejudicial than the relief would be serviceable.
"But," he added, " if government, by administering
any relief in the money market, could tender any
effectual assistance, it would be found most ready and
willing to do so. If, for instance, in the absorption
of the Exchequer bills, by the purchase of them
by the Bank, any pressure of that kind could be
removed, government would be most happy in
forwarding such a measure." After some negociation
between the Bank of England and the ministry,
the following was addressed to the governor and
deputy-governor.
" Gentlemen, — Under all the circumstances of the
present distress in the city and country, it appears to
us that it would be advantageous, with a view to
public and private credit, if the Bank were to give
directions for the purchase of Exchequer bills to the
amount £2,000,000. If the Bank shall agree to
this proposal, we engage to submit to Parliament the
38 HISTORY OF THE
necessary measures for the repayment of the same
between this period and the 14th June next.
We have the honour to be, Gentlemen,
Your most obedient servants,
Liverpool,
Frederick John Robinson.
It was therefore resolved, "That the governor be
authorised to purchase Exchequer bills to an amount
not exceeding £2,000,000, on condition that the
repayment be made within four months."
As a conclusion to this chapter, and as, perhaps,
the .true origin of the crisis is here stated, the
following, from the pen of one, who, if he had not
been " born to riches," would, in all probabihty,
have been a great man, instead of being simply
a great banker, is well worthy an attentive perusal.
There is the finest of all philosophies, the philosophy
of nature, in the remark. "The history of what we
are in the habit of calling the ' state of trade' is an
instructive lesson. We find it subject to various con-
ditions which are periodically returning ; it revolves
apparently in an established cycle. First we find it
in a state of quiesence — next improvement — growing
confidence — prosperity — excitement — overtrading —
convulsion — pressure — stagnation — distress — ending
again in quiescence."
BANK OF ENGLAND. 39
CHAPTER II.
EFFECTS OF THE PANIC — ALTERATION IN THE CHARTER — PAR-
LIAMENTARY DEBATES — OPINIONS ON THE CURRENCY — ASSIS-
TANCE TO THE MERCANTILE INTEREST — TABLE OF ADVANCES —
LEGAL DECISION — EXTENSION OF THE BRANCHES — JEALOUSY
OF THE COUNTRY BANKERS — NEW 85 PER CENTS. — USES OF
BANK NOTES — DANGER OF THE BANK — ITS ORIGIN — RUN UPON
THE BANK — POLITICAL CAUSES^.
The crisis of 1825, which it has been seen produced
an effect so extraordinar}^ as to be paralleled by no
personal recollection, induced a searching inquiry into
the cause. Many opinions were published, and
almost eveiy man had his tlieory. The Bank of
England was denounced by a few ; and the over-issue
of the country bankers by many. By some the Com-
pany was considered the shield, by others as the
destroyer of national credit ; and a most important
effect was produced to the Corporation through the
panic, as a negociation was opened by the govern-
ment, in which they expressed their desire of estab-
lishing the banking system on a firmer foundation.
In January a correspondence, of which the following
is an analysis, passed between the governor and
40 HISTORY OF THE
deputy-governor witli the First Lord of the Treasury
and the Chancellor of the Exchequer. After stating
that the principal cause of the recent distress was to
be traced to the rash spirit of speculation, supported,
fostered, and encouraged by the private banks, the
paper proceeds : —
' ' The remedy for this evil must be found in an
improvement of the circulation of the countiy paper ;
and the first measure that has suggested itself to
most of those who have considered the subject, is a
recurrence to gold circulation throughout the country,
by a repeal of the act which permits country banks to
issue one and two pound notes until the year 1 833,
and by the immediate prohibition of any such issues
at the expiration of two or three years from the
present period." After saying, " we believe that
much of the prosperity of the country for the last
century is to be attributed to the general wisdom,
justice, and fairness of the deahngs of the Bank,"
they proceeded to state, " There appear to be two
modes of obtaining a sound system of banking
throughout the country. 1st. That the Bank of
England should establish branches of its own in
different parts of the country. 2nd. That the Bank
should give up its exclusive privilege as to the
number of partners engaged in banking except within
a certain distance of the metropolis. With regard
to the first it would be quite impossible, under
present circumstances, for the Bank to cany into
BANK OF ENGLAND. 41
execution such a system to the extent necessary for
providing for the wants of the country. There
remains, therefore, the other plan — the suri'ender by
the Bank of their exclusive privilege, as to the
number of partners beyond a certain distance from
the metropolis."
It was indicated that if the Bank should] demand a
renewal of their charter from 1833 as the price of this
concession, it would not be allowed. " Such privi-
leges," was the ominous remark, " are out of fashion."
" It is to be hoped that the Bank will make no diffi-
culty in giving up their exclusive rights, in respect to
the number of partners engaged in banking, as to any
district miles from the metropoHs."
The reply of the directors was to the point ; and
the last paragraph, containing the result, was as follows :
" Under the uncertainty in which the Court of
Directors find themselves with respect to the details
of the plans of government, and the eflfect which they
may have on the interests of the Bank, this court
cannot feel justified in recommending to their pro-
prietors to give up the privilege which they now
enjoy, sanctioned and confirmed as it is by the
solemn act of the legislature."
In return to this, the government said " that they
were quite willing to remove this uncertainty, but
against any proposition for compensation they for-
mally protested. If the Bank, however, should be of
opinion that this ought to be accompanied with other
42 HISTORY OF THE
concessions, and that it should not be made without
them, it was for the Bank to bring forward such
conditions."
On this point the Bank committee came to a
resolution of which the following is an abstract : —
"That the Committee of Treasury of the Bank of
England had taken into consideration the paper of the
23rd instant, from the earl of Liverpool and the
Chancellor of the Exchequer, and finding that
ministers persevered in the restriction of their exclu-
sive privileges, and also that it did not seem hkely
they would call upon Parliament to renew these
privileges after the present term of their charter, as
well as that the application was founded upon a
generally received notion of its public benefit ; finding
all these matters, the Committee of Treasury declared
their readiness to recommend to the Court of Di-
rectors a negociation for the proposed surrender of
their privileges, founded upon the basis of the act of
Parliament, which stipulated that the Bank of
Ireland should have an extension of its charter
after the time at present assigned by law ; relin-
quishing the claim, however, to a prolongation,
upon the condition that the new partnership pri-
vilege for private banks should not be available
w^ithin sixty-five miles (fifty miles was the Irish act,) of
the metropolis, and should make proper arrangements
for individual responsibility of the partners." The
proposition contained in the above resolution was
BANK OF ENGLAND 43
accepted, and the government concluded by recom-
mending the establishment of branch banks, being
decidedly of opinion that, under proper regulations,
they would be highly advantageous to the Bank and
the community.
A general meeting of the proprietors was called to
confirm or reject the proposed arrangement. Opinions
were very much divided. One party strongly main-
tained that the proposition had nothing equal- — that
all the benefit would accrue to the country at the
expense of the Bank, and that it was unjust to call
upon them to lay open their charter for the public
good without an adequate recompense. By others it
was urged, that it would not hurt the real interests
of the Bank ; and that all the exertions of the
directors to obtain compensation would be unavailing.
The agreement was confirmed almost unanimously ;
and the following tribute paid to the management of
the Corporation during the panic. *' That this Court
desire to express the grateful sense they entertain of
the decision, liberality, and judgment with which the
directors came forward in support of public credit in
a late crisis of unexampled pressure and commercial
difficulty."
On the 10th February, 1826, the Chancellor of the
Exchequer moved, "That all promissory notes, payable
to the bearer on demand, issued by the Bank of Eng-
land or by any English bankers, and stamped on 5th
February, 1826, or previously, should not be allowed
44 HISTORY OF THE
to circulate beyond the 5th February, 1829." This
motion was carried in the lower House, the members
of which entered warmly into the question ; but the
government was determined to prevent, or, at least,
lessen the chance of panics for the future. A varied
and ea2;er debate ensued. It was asserted that in all
great commercial countries, commercial crises, like
that of 1825, had occuiTed. That where there were
great enterprises there must be great occasional re-
verses. " It would be impolitic and unsafe to await
returning prosperity," said Mr. Peel, " w^hich would
make the country banks more reluctant to agree to it
and more able to oppose it. It appears to me that
the time has arrived when we can carry the measure
into effect ; that we are upon the brink of the river,
that the ford is passable, and that if we permit the
opportunity of taking our passage to pass by, we shall
imitate the folly of the rustic who waited on the bank
expecting the stream would pass away."
During one of the debates, Mr. Baring argued that
the result of the measure would be ''an immediate,
sudden, and precipitate withdrawal from circulation of
the one-pound notes of the country banks." It was
undoubtedly the interest of these gentlemen and of the
country to spread the diminution over as great a space
of time as was practicable." " But," said Mr. Can-
ning, " reports have reached his majesty's ministers
from various parts of the country, that many of the
country bankers, in violation of the good faith which
BANK OF ENGLAND. 45
persons in their situation ought to keep Avith tlie
public, have begun to act upon the principles of a sud-
den contraction of their circulation." This gentleman
contended that if such a practice should become
general, and the Bank of England be deprived of the
power of issuing one-pound notes, the same species of
crisis would ensue as occurred in December. To
meet this evil it was arranged that " during the three
years, when the notes of country bankers should not
be issued unless stamped prior to the 5th February, the
notes of the Bank of England should continue to be
circulated, though stamped up to the 10th October."
The question of a mixed currency was mooted and
denounced with great force by many of the members.
It was said that " all experience proved the restor-
ation of a metallic issue could not be effected so
long as small notes were permitted ; that wherever
there was a paper circulation of the same denomina-
tion as the metallic currency the coin was sure to be
expelled by the paper ; and it was argued, again, by
others that a mixed issue would be more beneficial in
many respects than a purely metallic one. In a pam-
phlet, published some years afterwards, entitled "The
Cun'ency, its laws, evils, and remedies," which at-
tracted considerable attention at the period, it was
said that, by the system then in operation, " whilst
money was becoming scarce, the Bank of England sold
securities to make it scarcer ; and when money was
decreasing in value and becoming plentiful, the Bank
46 HISTORY OF THE
of England bought securities to make it more so."
" Now, however much that is to be regretted," con-
tinued the writer, " yet the Bank directors are abso-
lutely obliged to entail upon the commercial commu-
nity all the evils resulting from this course, so long as
the legislation compel them to pay their notes, always
on demand, for gold.
*' For should they not sell securities when the ex-
changes are adverse, they would not be able sufficiently
to lower the price of goods, nor would they be able
to turn the exchanges before the stock of gold was
exhausted. But if the Bank directors are obliged to
sell securities on an adverse exchange, they must be
compelled to purchase the securities back again when
the exchanges are favourable. Because, if they did
not, on the next adverse exchange they would have
less power, for they would have less securities to sell,
and there must ultimately come a time when the
Bank shall have got rid of all its marketable securi-
ties, and then, as a manager of the circulation, it
would exist no longer. As a remedy for this, at once
simple and effectual, it is proposed that the legislature
allow the Bank, at its discretion, to issue one and two
pound notes.
" This will enable the Bank to act as buUion mer-
chants. When the stock of bullion has decreased by
five millions, for example, the Bank directors can say
to the merchant, as they do now when he comes for
discount, ' Bullion is much in demand. We are pur-
BANK OF ENGLAND. 47
chasers rather than sellers, but you can have it if
necessary to you at £3 18s. per ounce.' Or, in other
words, they can ask such a price for gold that it
cannot be exported for profit, whilst no impediment
is offered by the price charged to the legitimate trans-
actions of trade."
Such are the varying opinions of clever men upon
the subject of the circulation. But the difference of
creeds on the topic of the currency cannot be more
explicitly expressed than in the following commence-
ment of Mr. Warde Norman's pamphlet : "Of
all the great questions that have for many years
occupied public attention, there is not one on which
opinions have prevailed more discordant, or less re-
concilable for the most part to sound principles, than
the important subject of currency and banking. The
discussions in the periodical press, which, on other
matters, have so greatly tended to enlighten and
instruct, upon these seem calculated almost univer-
sally to darken and mislead."
Mr. Robinson left to Lord Liverpool, in the Upper
House, the task of proposing the clauses by which the
Bank of England were to establish branches in various
parts of the empire, and submit to the throwing open
their charter by the establishment of joint-stock banks
with more than six partners, and the following para-
gi'aph expressed the feeling which was so general at
the period. Those only who had witnessed the failures
of the country banks could appreciate the distress
48 HISTORY OF THE
occasioned by them. " I must enter my protest,"
said his lordship, " against the present system, where
you allow liberty to all that is rotten and bad, while
your restrictions apply only to what is solid and good.
Where you permit any shoemaker, grocer, or cheese-
monger to establish a bank, but w^here more than six
respectable persons are joined they may form no
establishment, if the crown cannot grant them a
charter." " There is one consolation," he added,
" that if we are to be liable to crises of great diffi-
culty, it will not fall exclusively upon those least able
to support them, the poorer classes of society. I am
drawing no imaginary picture, for I have witnessed
many such scenes, when I say, conceive these poor
creatures who, in return for their labour, have received
these worthless bits of paper, obliged to hawk them
about, and part with them for whatever they can get,
to purchase the necessaries of life for them and their
starving families."
The following is a summary of the bill for the better
regulation of copartnerships of certain bankers in
England :
" Bodies politic, corporate, or partnerships consist-
ing of any number of partners, may carry on business
as bankers, any where not within sixty-five miles of
London, provided none of them have banking estab-
lishments in London ; that they are all individually
liable for the issues and debts of the copartnerships ;
they must neither issue nor pay any bill within the
BANK OF ENGLAND. 49
prescribed limits, at a shorter date than six months,
nor for a less sum than £50.
" The names of the firm, and the names of the
partners, are to be duly registered, of which registra-
tion they are to receive a certificate from the Stamp
Office. The names of those who cease to be partners
and enter as partners, during the course of each year,
must also be registered."
That a check on country bankers was necessary
may be gathered from the fact that, previous to the
act of 1775, notes for sums as small as ten and five
shillings were issued by some, w^iile others circulated
them to the value of sixpence.
An unanimous feeling pervaded all parties that it
was necessary to provide some refief for the mer-
cantile interest. The force of pubHc opinion, the
increasing agitation of the commercial world, peti-
tions from the most important persons in the city,
and deputations from all the great trading and
manufacturing interests, convinced the government
that the period had anived when something must
be done to mitigate the prevailing agitation. After
some consultation with the directors, the follow-
ing memorandum w^as forwarded by the first Lord
of the Treasury and the Chancellor of the Ex-
chequer ;
"1. In the event of the Bank consenting to advance
money upon the security of goods, under the present
circumstances of the country, it is understood that
VOL. II. E
50 HISTORY OF THE
these advances should not exceed the sum of three
milhons in the whole.
•' 2. That assimilating the principle of these ad-
vances to advances made in the ordinary course of
discount upon bills of exchange, they shall be subject
to repayment in three months.
" 3. The government to propose to Parliament that
the provisions of the act respecting merchant and
factor, which will be in force in October next, shall be
brought into immediate operation in respect to any
goods which may be pledged to the Bank under the
proposed arrangement.
"4. If the Bank should think proper to make
advances in conformity with these suggestions, the
government engage to submit to Parliament the ne-
cessary measures for enabhng them to reduce the
present amount of the advances of the Bank to the
government, by a repayment of six millions ; such
repayment to be made as soon as may be practicable,
and at all events before the close of the present ses-
sion of Parliament."
The directors of the Bank of England, therefore,
feeling that this distress was harrassing to the pubHc
interest, determined to do all in their powder to relieve
it, and agreed to make advances to private individuals
on the deposit of goods, merchandize, and other
securities, to the amount of three millions ; and in
the principal commercial districts commissioners w^ere
appointed to cany the arrangements into execution.
BANK OF ENGLAND. 51
But the very fact that such an intervention had
taken place, was almost sufficient to prevent the want
of it. When the capitahst who had hitherto held
timidly aloof, saw a proverbially cautious company
advancing its funds, his fears were dissipated, his own
coffers became unlocked, and with a renewed confi-
dence he followed in the same path, and returned to
his ordinar}^ sources of gain.
The Bank found that the sums required fell far
short of the three millions set apart to this object,
and in some of the provincial towns the commission-
ers were in the enjoyment of sinecures. The most
honourable moderation was used in asking for ad-
vances, and those parties who were compelled to
apply are stated to have shown an earnest desire to
receive only the smallest sum which would suffice to
meet their immediate wants.
The following is a list of the places, with the total
advance to the manufacturers in each :
Manchester £115,490
Glasgow 81,700
Sheffield 59,500
Liverpool 41,450
Huddersfield 30,300
Birmingham 19.600
Dundee 16,500
Norwich 2,400
To carry out the various measures resulting from
the panic, different acts of parliament were passed,
one of which was to facilitate the loan of money on
deposits and pledges, by which all persons in posses-
52 HISTORY OF THE
sion of bills of lading were to be regarded as owners
of the property represented, to secure to the Bank
a legal claim on the deposits. By the act also which
prohibited the circulation of small notes after 1829,
a weekly return was to be made to the Treasury by
the Bank of England, of the notes in circulation under
£5 ; and after 1829 all notes below £20, w^re to be
made payable at the place from which they w^ere
issued.
In February, 1826, a stock broker was robbed of
two notes, one of £500 and another of £50. The
necessary information was given at the police office,
and the notes stopped at the Bank. In May one
of these was presented for payment by Messrs.
Jones Loyd and Co., and the directors refused to
give credit for it on the ground that it was stolen, and
that they had been directed to retain it until the right
owner could be discovered. Messrs. Jones, Loyd,
and Co. next requested that it might be returned, but
this was also declined, on the ground that it
had not been received in the regular transactions of
business. The character of the gentleman who had
sent it, a M. de la Chaumette, W'as indisputable,
but beyond this the question seemed doubtful. The
law had long since decided that if a proper considera-
tion wTre given for a note, the holder w^as entitled to
recover its value, although it might have been stolen
before it came into his possession. But if it should
have been lost by felony, fraud, or accident, no pro-
BANK OF ENGLAND. 53
perty in it passed to the thief, or finder, or to any-
other person having a knowledge of the circumstances,
or who did not receive it in the customary way of
business. In summing up the evidence, Lord Tenter-
den said, the only question to decide was whether the
note had been obtained according to the usual mode
of dealing, in the place where it had been purchased.
The jury immediately decided against the Bank, and
from this period they have ceased to detain stopped
notes.
The extension of the branches of the Bank of Eng-
land was not viewed with favour by the country
bankers, whose influence, importance, and profits,
were in many instances depreciated by them. The
great trust with which these branches were viewed,
attracted many of the customers of the private es-
tablishments, although a further advantage was to be
procured by remaining with the latter, in an allow-
ance of interest on deposits. The country bankers
had previously charged five per cent, discount, and
in some places an extra per centage as commission :
the branch banks, by performing the same business at
four per cent., had reduced these profits, and com-
pelled them to lower their terms. The country
bankers, therefore, in 1827, alarmed at what they re-
garded as a dangerous increase of their rivals, endea-
voured to organise a system of opposition to that
which they termed an undue extension of influence.
Nor is this to be wondered at. Men rarely argue
54 HISTORY OF THE
calmly when their interests are at stake, and are often
most partial when they plume themselves upon their
impartiality. Meetings were held in London by the
leading provincial bankers, and a natural regard for
their private interests made them believe their own
welfare an inseparable part of the prosperity of the
nation, which was, in their opinion, endangered by the
establishment of the branch banks. A deputation was
appointed to wait on the First Lord of the Treasury
(Lord Goderich), and Mr, Herries, then Chancellor of
the Exchequer. The following are the most important
points urged by the deputation, and principally affect
the Corporation of the Bank of England :
" That the late measures of the Bank of England,
in the establishment of branch banks, have the evident
tendency to subvert the general banking system, that
has long existed throughout the country, and which
has grown up with, and been adapted to the wants
and conveniences of the public.
"That it can be distinctly proved that the pros-
perity of trade, the support of agriculture, the increase
of the national revenue, are intimately connected with
the existing system of banking.
" That the country bankers would not complain of
rival establishments founded upon equal terms ; but
they do complain of being required to compete with
a great company, possessing a monopoly and exclusive
privileges.
" That should this great corporation, conducted by
BANK OF ENGLAND. 53*
directors who are not personally responsible, succeed
by means of these exclusive advantages, in their
apparent object of supplanting the existing banking
establishments, they will thereby be rendered masters
of the circulation of the country, which they will be
enabled to contract or expand according to their own
will ; and thus be armed with a tremendous power
and influence, dangerous to the stabiUty of the pro-
perty and the independence of the country."
The reply made by Lord Goderich, as first minister
of the crown, and by Mr. Herries, as Chancellor of
the Exchequer, was polite and diplomatic ; but un-
satisfactory. "They were fully sensible of the great
importance of the subjects which were brought before
them by the deputation, and although it was obviously
impossible they could undertake, on the part of the
government, to express upon that occasion any opinion
upon the matters under consideration, they could
assure the deputation that all that had been communi-
cated should receive the most deliberate and serious
attention." Other topics of complaint arose from
time to time, one of which was, that the branch banks
refused to take the notes of the country bankers, un-
less an account had been previously opened with them.
Twenty years have passed, and the above resolutions
are all answered by the simple fact, that the number
of branches of the Bank of England, throughout the
entire kingdom, amounts to thirteen. To prove that
objections which are really tenable, are met by govern-
^)(j HISTORY OF THE
ment, it may be stated that another very fair subject
of complaint was, that the issue of the branch banks
was subject to a less amount of stamp duty than that
of the country bankers ; and the latter claimed to be
included in the composition of the Bank of England
of £3,500 for every million circulated. The bankers
of Birmingham and its environs proved that, for a
twenty-one days' bill on London, they paid three shil-
lings and sixpence, while the branches paid but five
pence ; and that for a yearly circulation of £10,000 in
bills of exchange of £20 each, the former would pay
£650, while to the latter the cost would be but £35.
The claim made by the country bankers was equitable,
and they were, by 9 Geo. iv. c. 23, allowed to com-
pound for their notes on the same terms as the Bank.
The composition also included bills drawn on London
at twenty-one days' date.
The objections of the provincial bankers to the
branches of the Bank of England are interesting,
proving, as they do, the jealousy which springs fi'om
small causes, and the difficulty which generally exists
in the establishment of a new principle.
In this year the directors commenced a system
which has been found of great benefit to the monetary
interest. The period during which the stocks were
closed to prepare for the payment of dividends, pre-
vented many persons from availing themselves of
those funds to which they looked for support ; and
occasioned a pressure on the money market. For the
BANK OF ENGLAND. 57
relief of this, a notice was issued to the effect, thai
the directors would be ready to receive applications
for loans, on the security of bills of exchange, exche-
quer bills, and East India bonds, at three per cent-
These loans, which were proposed to commence on the
5th December, 1829, were to be for sums of not less
than £2000, for a period of not less than ten days,
and were to be repaid on or before the succeeding
15th of January. On the same day, also, the 3rd
December, 1829, notice was given that, from and after
that day the Bank would be ready to receive apphca-
tions for loans on the deposit of gold bullion, to be
valued at 77s.|9d. per ounce, at £2 per cent, per annum*
In 1830, the interest on the new four per cent,
stocks, which had already been reduced from five per
cent., was again reduced to three-and-a-half, from
which operation they derived their name of the " New
3i per Cents."
The uses of Bank notes are manifold ; but the
following is a novel mode of rendering them service-
able. One of these for £5 came in the course of
business to a mercantile house in Liverpool. On
the back" of it was written : "If this note gets
into the hands of John Dean, of Longhill, near
Carlisle, his brother Andrew is a prisoner in Al
giers." The circumstance was interesting, and ap_
peared in a newspaper, in which the paragraph was
perused by a person in Carlisle, who had known in
past years one Andrew Dean, and was still acquainted
58 HISTORY OF THE
with his Lrother John Dean of tlie place named in
the note. The son of the latter happened to be in
Carlisle, and hearing the intelligence, gave such a
report of his uncle that there was every reason to
believe he was the Andrew Dean whose captivity-
became thus singularly known to his friends in
England. Of these things are formed the romance
of life ; and the impossibility of assisting the Algerine
slave must often have been a painful remembrance to
the prisoner's brother.
The danger which has always threatened the Bank,
when large bodies of disaffected men are drawn
together, was renewed in November, 1830. The
period was one of doubt and dread. An impulse had
been given to all Europe ; and France had again
taken the initiative in spreading a desire for change
The tenth Charles proved a true Bourbon ; the spirit
of the people burst forth in opposition to the tyranny
of the monarch and his ministers, and Great Britain
once more sheltered the royalty of France. The
spirit spread over Europe. Belgium was separated
from Holland. Saxony taught her indolent monarch
that there was a limit to human endurance. The
free city of Hamburgh felt the influence ; and Swit-
zerland, in her beautiful canton of Berne, responded
to the cry. Poland once more re-asserted her ancient
rights, expelled the garrison of her despotic monarch
from Warsaw, and proclaimed herself free. England
felt that mighty and revolutionary spirit. The
BANK OF ENGLAND. 59
demands for reform grew earnest and incessant.
Ireland was told by the liberator *' to look at France
and Belgium." Kent, the garden of England, wit-
nessed the first disturbances. Night after night,
conflagrations were lighted up by bands of incen-
diaries. Mills were attacked : machinery was de-
mohshed : and all protection for property seemed at
an end. Rioters spread terror and alarm throughout
the day ; and night was the signal for blazing fires
which excited a fearful shudder in those who beheld
them. London felt the desire of change, and cla-
moured for an improved representation. The duke
of Wellington indicated his intention of resisting any
measure of reform which might be produced, and he
grew as unpopular as a statesman as he had been
popular as a soldier.
On Tuesday, the 9th of November, the sovereign
was expected to dine with the civic authorities, but
the prevalent feeling of discontent rendered this visit
not advisable in the eyes of the Lord Mayor elect,
who had received various letters, stating that it was
the intention of a set of desperate men to attack the
duke ; and, believing himself justified by the various
symptoms of disaffection which were visible, he
addressed a communication to his grace, which, from
its alarming character, prevented the projected visit.
There was cause for apprehension and even alarm.
Private information had been received by the ministry
of a proposed attack upon the residence of the duke
60 HISTORY OF THE
of Wellington. Inflammatory hand-bills were circu-
lated ; " not written papers," said Sir Robert Peel
" drawn up by illiterate persons and casually dropped
in the streets, but printed hand-bills, not ill-adapted
for the mischievous purpose they were intended to
answer." Under these, and various other circum-
stances, the government advised his majesty to defer
the visit.
" As soon as this determination became known,"
says Mr. Hughes, " consternation pervaded all ranks.
Men believed that some atrocious conspiracy against
the royal person had been discovered, or even that a
revolution was at hand. The public funds fell, and
mercantile confidence was generally interrupted. The
entertainment at Guildhall was deferred ; and instead
of civic festivities, the city was disturbed by the
rumbling of artillery, and the passage of troops.
The Tower ditch was filled with water, and other
precautions taken to put that fortress into a state of
security. Extra guards were placed at the Bank, and
at the Magazine in Hyde park ; while large bodies of
troops were billeted in the neighbourhood of the
metropolis."
The effect of this upon the minds of the citizens
was instantaneous. Arms were purchased and doors
were fastened as if the banner of rebellion had been
displayed in the streets. In an hour and a-half con-
sols fell three per cent. The Bank directors felt the
danger of their position. The pubhc thoroughfares
BANK OF ENGLAND. 61
were crowded with earnest and anxious countenances.
Questions were asked concerning the approaching
danger, which no one could answer. Every one
seemed to expect some strange and mysterious cala-
mity. Small bodies of men, pouring from their
suburban localities, passed the depository of the wealth
of the country, and no one knew with what intention.
The rumour spread that Temple bar and the bridges
were to be barricaded, the gas cut off, and the plunder
of the city to follow. It was felt that the populace
would have discriminated sufficiently for their own
interests to have pillaged the Bank. A tri-coloured
flag was borne by the mob. By six o'clock in the
evening all shops were closed and every appearance of
business at an end. All the assistants were required
to remain at the Bank of England, as the possibility
of attack was feared. Some casks of biscuits were
ordered in to provide against the wants of a siege, in
case the mob should be sufficiently desperate, or suffi-
ciently strong to attack it. But the civil authorities
were able to meet the rioters. A few broken heads
cooled their courage ; and after venting their disappro-
bation in groans and hisses for the unpopular ministry,
and destroying the windows of a police station, for
which their occupation gave them an especial dishke,
they dispersed without committing any of the dreaded
enormities. The Bank directors were relieved from
fear, and the clerks released from the civic ^garrison.
" Scarcely were twenty-four hours passed over," said
62 HISTORY OF THE
a writer of the day, " when men were laughing at the
foohsh trepidation into which they had been betrayed,
and wondering where any feehng of alarm could have
arisen." If their rejoicings were in proportion to their
fears, they were, doubtless, very hearty. It is the na-
ture of mankind to laugh at past, and to magnify future
fears.
From the pamphlet of Mr. Palmer, the following is
given, as a clear, succinct account of the financial
position of the Bank from 1830 to 1832. Nor can a
better or sounder authority be taken. " It was show^n
in evidence," says this gentleman in his " Causes and
consequences of the pressure on the money market,"
" that the policy pursued by the Bank subsequent to
the withdrawal of the £1 and £2 notes in England
and Wales, had been to maintain their securities as
nearly as possible at a fixed amount, and to allow the
contraction of the currency, eff'ected by the return of
bank notes for bullion, gradually to proceed until the
value of the paper money, remaining in circulation,
was so far increased as to occasion the return of that
specie to the Bank which might have been exported,
and thus to replace the cmTency upon a level with
that of other countries. That system had appeared
to w^ork satisfactorily, and wdthout any forced action
on the part of the Bank in contracting its circulation.
It was tried upon the change of government in France,
in July, 1830, when credit throughout that kingdom
was shaken to its foundation. At that period tlie
BANK OF ENGLAND. 63
Bank of England was possessed of twelve millions of
bullion. Immediately on the events referred to taking
place, the currency of England exhibited an excess,
compared with France and other parts of Europe.
The consequence of that derangement between the
currencies of this and other countries was a continued
diminution of the bullion held by the Bank, from
July, 1830, to February or March, 1832; when the
increased value of money in England, and the gradual
restoration of credit on the continent, gave a favour-
able turn to the foreign exchanges which continued in
our favour till the autumn of 1833, at which time,
the buUion, in deposits, amounted to nearly eleven
millions. At this period an exportation of the pre-
cious metals again commenced, from causes that will
hereafter be explained, as well as the reason why that
system, which appeared to adjust itself so satisfactorily
from 1830 to 1832, failed from 1833 to 1836; for
although during the former period the bullion in the
Bank was diminished from twelve to five millions,
yet, in the progress of this reduction, as there was
no excitement and no undue credit given by the
Bank in the interior of the country, the interest
of money gi'adually rose from 2i to 4 per cent,
per annum for first-rate commercial paper, and
then, without discredit or distrust of any kind, the
bullion returned into the coffers of the Bank, and
money nearly resumed its former value, ha\dng gra-
dually fallen from 4 to 2f per cent, in July, 1833."
64 HISTORY OF THE
The causes alluded to by Mr. Palmer were the over-
issues of the joint-stock banks, of which forty-two
were established in eleven months. The principal
number of these were banks of issue, and whether
they caused the difficulties hereafter to be related, or
not, they must have had a direct influence on the
circulation.
By a revision and melting of the silver coin in 1 83 1 ,
the Bank lost on the sixpenny pieces £4,601 Is. 3d.,
and on other denominations £62,982 19s. 2d., making
a total loss of £67,584 Os. 5d.
In 1832 occurred the last run upon the bullion
of the Bank occasioned by poUtical causes. The
Reform Bill, introduced by Lord John Russell,
had stiiTed party feehng to its very depths. The
powerful owners of what were termed pocket
boroughs, saw their property attacked, and their
influence depreciated. The measure was nega-
tived by a majority of eight. The king went
down to the House of Lords, and, in the midst of
a most extraordinary scene, prorogued ParUament
till the 10th of May. The excitement was increased
by a general election, and popular feeling triumphed ;
but the license exceeded any tiling ever witnessed
under similar circumstances. Life and property
w^ere no longer secure to those candidates who
opposed the measure. An opponent of the bill
was stoned before the altar. Conscientiousness was
regarded as obstinacy, and the only hope for op-
BANK OF ENGLAND.
ei
posing candidates was to be found in flight or con-
cealment.
In the Lower House the bill was again intro-
duced, and passed by a large majority. The
speech made by Lord Brougham in the Upper,
was so extraordinary in its effect, that one of the
public came down to the Bank of England, and
transferred £200 into his lordship's name, as a
testimony of his appreciation. The measure was
rejected in the House of Lords. A strange feel-
ing of excitement spread throughout the country.
Meetings were held all over England, by all classes,
pledging themselves to the support of government.
The Lord Mayor and Corporation, attended by 50,000
followers, presented an address to the throne. The
piincipal opponents of the bill were marked with the
disapprobation of the populace. The residence of the
Duke of Wellington was attacked. A shower of
stones bore the Marquis of Londondeny fi'om liis
horse, as the most unanswerable of all arguments.
The Duke of Cumberland was dragged to the gi'ound,
and would probably have been killed, but for the
interference of the police. The mansion of the Duke
of Newcastle, the head of the borough proprietors,
was tired. The Archbishop of Canterbury was in-
sulted ; and Bristol emulated the London riots of
1780. In the following December the same scenes,
but mth increased violence, recurred, and the ministiy
resigned.
VOL. II. F
66 HISTORY OF THE
Lord Lyndhurst was sent for ; and on communi-
cating with the Duke of Wellington, " I should be
ashamed to crawl about this metropohs if, under such
circumstances, I did not go the King," were the
first words of the " Iron Duke."
The knowledge that the great opponent of the bill
was likely to be recalled, spread throughout the
metropolis. Staves, with the tri-coloured device
painted on them, and sticks with concealed swords,
were sold in great quantities, while the demand for
bludgeons could scarcely be supplied. A speaker at
the Birmingham Political Union, amidst the shouts
of assembled multitudes, called on his hearers to
pay no taxes until the bill should be passed, while a
forest of hands sprung up in answer to his solemn but
most misguided appeal. The small speakers of their
neighbourhoods — men who electrified their families
with the force of their lungs, and called themselves
orators — ^were in great requisition ; and the burden of
their song was the favourite one of " pay no taxes —
pay no taxes."
A terrible excitement was exhibited throughout
England. " Preparations," says one writer, " were
made for a great public tragedy." Warrants were
prepared ; the leaders of political unions were to
be apprehended ; troops began to march on disaf-
fected places ; and the monetaiy interest felt the
shock. On every wall throughout the metropolis
the significant words of — " Stop the Duke ! Go for
BANK OF ENGLAND. Q7
gold!" were boldly placarded. For a week the
Corporation sustained a run upon its specie, \vhich
was reduced to £4,919,000. In one day £307,000
were paid. It soon became very questionable
whether the run for gold would not drain every
banker in the kingdom, and the writing on the wall
spake to those having authority with a power far
exceeding the most brilliant oratory. Lord Lyndhurst
found it impossible to form a ministry ; and Earl Grey
was recalled.
That the demand was political was proved from the
trifling nature of the applications from the country
bankers. " I never saw the hall of the Bank," said
Mr. Richards, in his evidence in 1832, " except in
1825, so crowded with applicants tendering their
notes. They had not in general the appearance of
being people from the country." One person who
had money with Jones, Loyd and Co. to the amount of
£20,000, drew it out from them in the form of notes,
and then went to the Bank and demanded gold. The
London bankers found that the claims extended to
their establishments. Several refused to pay in gold,
but, on giving notes, said, " You may go and get gold
for them at the Bank." The stock-holders took the
alarm, sold their government securities, and demanded
specie in return. The funds were low ; and when the
panic had subsided and confidence re-appeared, the
same persons brought back their sovereigns and re-
purchased their stock at a heavy loss. It is impossible
68 IIlbTOllY OF THE
to say how far the panic would have spread, had the
one pound notes been in existence. But it is far from
improbable that out of the extensive organisation
which then existed, some deeply rooted scheme for a
simultaneous demand might have arisen, and pro-
duced consequences as unforeseen as terrible. As it
was, £1,500,000 were paid in a few days, but no
further evil occurred to the Bank of England.
BANK OF ENGLAND. 69
CHAPTER III.
FORGERY — ENDEAVOUR TO PREVENT IT — COMMITTEE APPOINTED
— INCREASE OF THE CRIME — SIR SAMUEL. ROMILLY AND SIR
JAMES MACKINTOSH — PROGRESS OF OPINION — PETITION OF THE
BANKERS — INEFFICACY OF THE PUNISHMENT — INSTANCE OF IT
FORGERIES OF BUONAPARTE.
Previous to the year 1819, the severity of that part
of our penal code which awarded the punishment of
death for forging or uttering forged notes, together
with the defective nature of the paper, and the facility
with which it was imitated, attracted the attention of
scientific and benevolent men, who endeavoured, by
writing and by declamation, to procure either an alter-
ation of the law or an improvement in the note. The
reluctance of juries to convict was evident so early as
1819 ; and from that period it continued to increase.
The exactitude with which the Bank circulation was
copied, and the ease with which, therefore, it would
deceive the intelligent as well as the illiterate, through
the hands of the latter of whom the small notes prin-
cipally circulated, was proved, to use the words of the
70 HISTORY OF THE
Committee of the Society of Arts, by " the notorious
fact, corroborated by evidence produced at several
recent trials, that forged notes have passed undetected
through the scrutiny of the Bank inspectors."
The above committee entered into an investigation
to ascertain whether there existed any means within
the compass of the fine or the mechanical arts of in-
creasing the difficulty of imitation, and thus of check-
ing the prevalence of crime.
The conviction that some check was necessary
grew more and more peremptoiy as the evils of the
system were exposed. In fourteen years from the first
issue of small notes, the number of convictions had
been centupled. In the ten first years of the present
century £101,061 were refused payment on the plea of
forgeiy. In the two years preceding the appointment
of the commission directed by government to en-
quire into the facts connected with forging notes,
nearly £60,000 were presented, being an increase of
300 per cent. In 1797, the entire cost of prosecutions
for forgeries was £1500, and in the last three months
of 1818 it was near £20,000. Sir Samuel Romilly
said that " pardons were sometimes found necessary ;
but few were granted except under circumstances of
peculiar qualification and mitigation. He beheved the
sense and feeling of the people of England were
against the punishment of death for forgery. It was
clear the severity of the punishment had not prevented
the Climes."
BANK OF ENGLAND. 71
The Bank directors were blamed on all sides for
their presumed apathy. Every person who had pro-
posed a plan, and had it dechned, joined the cry.
Every disappointed adventurer, w^ho had asked for
Bank capital to carry out his operations, asserted that
they had not enquired into the particulars, but had
dismissed an excellent proposal without due consi-
deration.
The publication of the truth in the report of
the committee exonerated the estabHshment from
charges, w^hich, if true, demanded attention. It has
been already stated that one hundred and eight pro-
jects, regularly classified and an'anged, w^ith specimens
of the proposed originals, and successful imitations
executed by the Bank engTaver, were placed before the
commissioners, who concurred in the opinion that
neither of them could have been advantageously
carried into effect. Seventy varieties of paper were
shown, in which ever}'' alteration recommended had
been tried ; while in some instances the directors had
furnished to the proposers the pecuniary means of
carrpng their ideas into eflfect. It has been seen that
the result of the enquiry was,- that in July, 1820, an
act of parliament received the royal assent, for the
further prevention of forging and counterfeiting Bank
paper. In it the note was described, and the exclu-
sive privilege of using this plan w^as granted to the
Bank. By the same act, the governor and Company
WTre authorized to engrave the signatures on the
72 HISTORY OF THE
notes instead of signing them, as heretofore ; a privi-
lege, however, of which they have not found it con-
venient to avail themselves.
Wliat one man can engrave another can imitate,
and the evil continued ; although from the return to
cash payments, and the diminution of small notes,
the forgeries also diminished. The greatest minds in
England had been employed in attempting to alter the
mischievous nature of the criminal law. The names
of Sir Samuel Romilly and Sir James Mackintosh —
men who lived before their time, and who can only be
fully honoured by posterity — stand proudly and pro-
minently in the van of improvement. They died
without witnessing the accomplishment of the object
to which much of their energy and intellect had been
devoted. But since that period the world has moved
onward in the great march of civilization. Much has
been realized that our forefathers beHeved to be
impracticable. It has been discovered that many
things which were looked upon with an almost reli-
gious veneration as unalterable facts, were unalterable
fallacies. We are beginning to discover that cleanli-
ness is a vast assistance to morality ; that education
is the right of the poor as well as the privilege of the
rich. We have found out that to prevent a crime
is better than to punish it ; we have discovered too,
and it has penetrated to our commercial hearts, that
it will cost less to teach a man to be good than to
punish him for being bad.
BANK OF ENGLAND. 73
But tliis was not the case even a quarter of a
century ago. Men were hung in strings. Monday
mornings witnessed a waste of human Ufe aUke horri-
fying and disgraceful. Prosecutions increased ; enor-
mous expenses were incurred; "examples were
made," to use the phrase of the period ; and what was
the result ? The crime continued. From one or two
manufactories issued most, if not all, the forged notes
wdiich w^ere in circulation ; and the manufacturer of
thousands remained unscathed while the issuer of one
was hung. They were sold to ignorant, uneducated,
and almost irresponsible men, for a few^ shillings m
the pound ; and there were always a sufficient number,
urged by want, desire, or vice, to run the risk which
accompanied their circulation. While only such as
these were punished, the great mass of the public
looked upon their deaths as virtuous atonements ;
and thought that an occasional blood-letting was as
good for a nation as for an individual. But when a
gentleman, an educated man, or a banker, was found
in danger of the same punishment, the morbid sym-
pathy of the people was excited ; the Perreaus, the
Dodds, the Rylands, and the Fauntleroys, were looked
upon as the porcelain compared with the common
clay, and every exertion made to save them from their
doom. Thank God, that since then we have dis-
covered a man in fustian feels as much as a gentleman
in broadcloth — that death is as difficult to the hard-
faring as to the luxurious man — and that the vicious
74 HISTORY OF THE
poor has as deep tics, as warm affections, as strong
sympathies, wherewith to make death dreadful, as
the vicious rich man. It has been found that the
punishment of the crime does not fall solely upon
the criminal, but that the agony of parting, and the
despair of the fatal moment, is shared by parent,
wife, and child, and falls wdth an equal, and cer-
tainly with a more enduring force, upon the head of
the survivor, who bears the agony, the ignominy, and
the shame, without having participated in the guilt.
And who shall say how many have been unjustly
deprived of life, and how many have left families
behind them unprotected, untaught, and compelled
either to follow the fatal footsteps of their parents or
to starve !
The press generally, throughout the period, bore
manful testimony to the evil. The "Edinburgh
Review" devoted its pages to the topic with an energy
and a zeal worthy success. " No subject," says this
organ of public opinion, " so deeply or so constantly
engrossed Sir Samuel Romilly's regards as the severity
of our criminal code. He was the first person who
broached the question fairly and systematically in
Parliament, and he shared the fate of all propounders
of change in any institution ; he was derided by some,
pitied by others, by not a few execrated, by almost all
regarded as the advocate of a desperate cause." " Upon
Sir Samnel Romilly's lamented death, the reform of
the criminal law was taken up by Sir James Mackin-
BANK OF ENGLAND. 75
tosh, with congenial feehngs and great resources of
learning, philosophy, and eloquence, and a large
experience derived from his political station. All the
friends of enlightened and humane legislation cheer-
fully rallied round so able a leader ; and he was of
course vehemently opposed by the government of the
country."
"The Bank hangings still continue," says one
authority, with a contemptuous tone, that can only
be palliated by the honesty of its opinions and the
importance of its cause. " The Bank prosecutions,"
says another, " are increasing to a frightful extent.
At the April sessions (1820) there were more than
forty persons under capital charges ; and though only
a fortnight has elapsed, the number at the present
session is twenty."
The circumstances of many of the cases "were
strongly represented. All that could interest the
feelings w^as brought forward, until men who were
sentenced to be hung began to regard themselves
as victims were carried by main force to the scaffold,
yelUng vain cries of murder from its fearful height,
and denouncins; all connected wdth their doom. And
yet the evil continued. Jurors again and again
refused to convict upon the clearest proof. Men
were every day seen submitting to be plundered by
forgers rather than prosecute ; others were observed
to favour in all ways the escape of the worst crimi-
nals, by suppressing evidence, and even by giving in
76 HISTORY OF THE
verdicts of acquittal, when evidence was adduced that
sufficed to prove guiltiness.
Merchants and bankers announced that they would
rather lose their entire fortunes than pour forth the
life which it was not theirs to give. A general feeling
pervaded the whole interest, that it would be better
to peril a great wrong than to suffer an unavailing
remorse. One petition against the penalty of death
was presented which bore three names only ; but those
were an honourable proof of the prevalent feeling.
The name of Nathan Meyer Rothschild was the first,
" through wdiose hands," said Mr. Smith, on pre-
senting the petition, " more bills pass than through
those of any twenty firms in London." The second
was that of Overend, Gurney, and Co., through whom
thirty millions passed the preceding year ; and the
third was that of Mr. Sanderson, ranking among the
first in the same profession, and a member of the
legislature.
At last the labours of the press, the public feeHng,
and an increased regard for human life, produced the
introduction of a bill, by Sir Robert Peel, in 1830, to
discontinue the punishment of death in certain
cases.
It is worthy of notice that the class which was
most interested in the subject, which suffered princi-
pally from the crime, and whose prejudices, therefore,
were likely to be strong, by the memorable petition
of the country bankers against capital punishment,
BANK OF ENGLAND. 77
proclaimed that they had no faith in the severity of
the law to protect them. With nine hundred signa-
tures to the petition, signatures of men who had an
interest in the question, signatures which were not
rashly and inconsiderately given, there was no reason
for proceeding with the penalty on the ground of
protection to these classes. Another remarkable fact
was that there was no application in favour of the
punishment, and the one against it told the plain
tale that the banking community considered the
punishment of death increased forgery instead of
diminishing it.
When the bill was introduced it was found to be
less merciful than was anticipated ; and after a
solemn and careful revision, clauses were introduced
in the lower house, by which the capital penalty was
abolished in all cases of importance, including notes.
Sir Robert Peel left his opponents to carry on the
remainder of the bill, and the result was that the
good cause was delayed by the house of peers re-
jecting it. But the question now in all men's minds
was not whether capital punishment for forgery would
be abandoned, but when! In 1832, it was settled;
and all cases were excluded excepting only forgeries
of wills and powers of attorney. But though the
clause was maintained in the bill, no one supposed
that the punishment would ever be inflicted ; and, in
1836, when the forgery of a power of attorney was
discovered, the Bank Immanely and judiciously de-
78 HISTORY OF THE
dared an absence of all wish to see the criminal capi-
tally punished ; and the cause of justice, humanity,
and sound principles prevailed.
A remarkable evidence of the inefficiency of these
punishments arose from the execution of one William
Weller for uttering forged Bank notes. " From the
very room," says the " New Annual Register," "in
which was placed the coffin with his corpse, and
during its continuance in that room, some forged
Bank notes have been uttered by his confederates.
The conclusions are as obvious as irresistible. These
facts demonstrate the total inefficacy of the punish-
ment of death for the suppression of such crimes.
In all future and approaching discussions they should
not be forgotten."
Such and so strong was the feeling against the
punishment that, by the Edinburgh reviewer's testi-
money, "men suffered losses to a large amount,
and repeatedly, without complaining, because they
knew that their complaint was the death-warrant,
and might be such, of a fellow-creature. Others
who could give evidence kept their lips sealed, for
fear of being called upon as witnesses, should it
be known that they possessed any criminal infor-
mation."
But it was not only with the English fabricator
that the Bank had to deal. Alluding to the question
under consideration, Mr. Nicholls said, in the House
of Commons, " forgeries of the small notes had made
BANK OF ElSf GLAND. 79
alarming progress, and the practices of our own
government, against France and America, showed
the impossibility of resisting the effects of forgery.*"
They had been encouraged by government ; and even
our courts of justice had said that to depreciate the
credit of an enemy by forging its paper money was a
moral act." In 1820 a very extraordinary appeal was
made to the French tribunals by a man named J.
Castel, who was a merchant in Hamburgh, while the
free city was in the hands of the French. He accused
the general commanding there of employing him to
get five thousand pounds worth of English Bank notes
changed, which proved to be forged, and he was com-
pelled, in consequence, to fly from Hamburgh. He
also asserted that Savarj^, Duke of Rovigo, and Des-
nouettes, were the fabricators, and that they employed
persons to pass them in England, one of whom was
seized by the London police, and hanged.
If these things be true, and if our own government
practised thus against America and France, and our
courts of law called them " moral acts," if thus a
regular system of forgeiy w^as conducted upon a great
scale, and justified because it had great ends to gain,
it is difficult to imagine with what degree of assurance
that government could be gifted which hung a man
for doing in a small what they did themselves in an
enlarged degree. But w^hether this was the truth
* Mr. Doubleday asserts that Mr. Pitt caused a large quantity of
French assignats to be forged at Birmingham, with the view of depre-
ciating the credit of the French republic.
80 HISTORY OF TFIE
or not, there is sufficient collateral evidence to arrive
at the conclusion that the appeal made by J. Castel
was founded on fact. During the last wild attempts
of Napoleon, when the armed league of the monarchies
of Europe were crushing him with fatal effect, Eugene
Beauharnais, with his army, was compelled to retreat
from his Italian vice-royalty. Part of that retreat was
through the Austrian Tyrol. As they passed this
mountainous region, forged notes of the Austrian Bank
were sold by them for any sum that was offered. The
small baskets of the country were filled and sold for a
few crowns, or for anything that the peasantry would
offer ; and there yet reside in the Tyrol men who
profited by the opportunity ; who, taking advantage
of the disturbed state of Europe, passed with their
counterfeit notes to Hungary, where they purchased
large droves of cattle, and other articles valuable in
their native country, to which they successfully
brought the result of their deliberate frauds. The men
are yet living ; they are still pointed out by their con-
temporaries ; and whatever shame may attach to
them, a far deeper infamy, and a more enduring de-
gradation, must rest upon that Imperial head which
contrived, abetted, and sanctioned the crime.
BANK OF ENGLAND. 81
CHAPTER IV.
THE NEW CHARTER — ITS CONDITIONS — EXTRAORDINARY DISCOVERY
— HOLIDAYS ABOLISHED — FAILURE OF THE GOVERNOR — LONDON
AND WESTMINSTER BANK — SPECULATIONS IN 1836. — PANIC —
DEMAND FOR BULLION — ITS CAUSE.
The charter of the Bank of England again occupied
the attention of the House of Commons in 1832.
From the circumstances which had arisen out of the
panic, from the general feeling that a great alteration
must take place in its construction, and from the
ominous remark of Lord Liverpool, that "such pri-
vileges were out of fashion," great anxiety was expe-
rienced by the friends of the Corporation, and the
price of the stock declined from 202 to 185. On the
22nd of May the question was opened by Lord Althorp
moving for a committee of secrecy to report upon the
expediency of renewing the Bank privileges, which,
after some desultory remarks, was agreed to ; and, on
the 11th of August, 1832, a brief report was delivered,
accompanied by some very valuable documents, and
VOL, II. G
82 HISTORY OF THE
examination of witnessess. The committee arrived at
no conclusion, in consequence of the limited time
allowed for their deliberations ; but the report was
satisfactory to the proprietors of Bank stock, and the
public generally. The following is the conclusion.
" Of the ample means of the Bank of England to
meet all its engagements, and of the high credit which
it has always possessed, and which it continues to
deserve, no man who reads the evidence taken before
this committee can for a moment doubt ; for it
appears that, in addition to the surplus rest in the
hands of the Bank itself, amounting to £2,880,000,
the capital on which interest is paid to the proprietors,
and for which the state is debtor to the Bank,
amounts to 14,553,000, making no less a sum than
£17,433,000 over and above all its liabilities."
The publication of the report was believed to have
produced a beneficial result. Many who had pre-
viously doubted the wisdom of the management,
found their doubts removed, and were disposed to
regard it with more favour than they had evinced
before the enquiry. On the 31st of May a letter was
placed before the proprietors, containing the proposals
of the government ; in which Lord Althorp stated
that the only relaxation in their privileges was that
which allowed joint stock banks, more than sixty- five
miles from the metropolis, to draw bills and issue
notes payable in London.
The following clauses, in addition to the declaratory
BANK OF ENGLAND. 83
one hereafter to be mentioned, were the distinguishing
features of the charter of 1833.
"That while the Bank of England is liable to pay
gold on demand, all the notes of the Corporation
shall be made legal tender for all sums above £5,
excepting at the Bank itself and its branches.
" That one-fourth of the debt due from the public
to the Bank be repaid, and that the Company be at
liberty to reduce its capital stock in the same por-
portion.
" That the laws restricting the interest of money
to £5 per cent., shall be repealed, so far as they affect
bills of exchange not having three months to run
before they become due.
" That the charter shall be extended for twenty-one
years, from the 1st of August, 1834, with power to
the existing government to suspend its privileges on
giving one year's notice, after the expiration of ten
years.
" That no banking company of more than six part-
ners, within sixty-five miles of London, shall issue
notes payable on demand.
" That all notes of the Bank of England issued out
of London shall be payable at the place where they
are issued.
" That a weekly account of the bullion and securi-
ties, the circulation and the deposits, shall be for-
warded to the treasury, an average of which shall be
published quarterly.
84 HISTORY OF THE
"That, in consideration of its exclusive privileges,
the Bank shall pay £120,000 per annum, to be
deducted from the sum allowed for managing the
national debt."
On the same day also the public were made aware
of the terms proposed by Lord Althorp, who stated
that the principle on which the Bank had acted, of
keeping one- third of the amount of its liabilities in
bullion, and of expanding or diminishing the circula-
tion in proportion as the bullion was increased or
diminisbed, had reason and experience in its favour.
The question of permitting one bank only to issue
paper had been maturely deliberated, and the result
was that a single body was considered better than
rival banks, provided a sufficient check could be ob-
tained. The check proposed was a weekly return to
the treasury of the circulation and deposits, with the
bullion and securities of the Corporation, the average
to be published quarterly. Hitherto the Bank had
only been able to repress the circulation by reducing
the discounts ; and this operated disadvantageously
upon the commercial interests. By a change in the
usury laws, all bills with more than three months to
run would be exempted from their operations. For
these privileges the Bank were to allow £120,000 a
year.
Many opinions were expressed during the debates
on this important bill. Mr. Poulet Scrope attributed
all the fluctuations in our system to the monopoly of
BANK OF ENGLAND. 85
the Bank, and expressed great surprise that govern-
ment should wish to bend down the country to those
task masters, whose stripes were yet fresh on their
shoulders. He dreaded this increase of power to the
Corporation, for it w^ould establish a more complete
tyranny than that of Napoleon Buonaparte. Sir
Robert Peel thought the contract an improvident one
for the public, and^ this was clearly indicated by the
fact that Bank stock had risen from 193 to 208.
He objected strongly to making bank notes a legal
tender.
Mr. Fryer believed this bill would render the gold
circulation of the country unproductive. If they
were to return the gold of Potosi to the bowels of the
earth, they could not render it less serviceable than it
would be by this bill. A man who had now £30,000
in gold could scarcely get any interest for it. The
Bank stepped in with its cheap rags and prevented
him from using it to advantage. This was a ruinous
sort of competition ; it was like that of the Rob Roy
and Quicksilver Brighton coaches. The Rob Roy
offered to carry passengers cheaply ; but the Quick-
silver offered to take them for nothing and find them
a bottle of wine on the road. The Rob Roy was
beaten out of the field, and the Quicksilver was run
away w4th and smashed ; and that would be the result
with the Bank. Mr. Attwood remarked that the old
banks, both in London and the country, had one
fault, — a sordid and servile devotion to men in power ;
86 HISTORY OF THE
that was bad enough ; but the joint-stock banks,
which it was proposed to establish, would be seven-
fold more the tools of the government of the day,
because they would all be under the Bank of England,
and that establishment was under the immediate
controul of government; so that the government
would instruct the Bank of England ; the Bank would
instruct the branch banks ; the branch banks would
instruct the joint-stock banks ; the joint-stock banks
would instruct every one of their partners ; the part-
ners would instruct their debtors, and the people of
England would rue the day in which such a system
was commenced. He was more than ever convinced
that government should be the sole issuer of notes.
Some resolutions, with regard to joint-stock banks,
which Lord Althorp proposed to introduce into the
bill, were abandoned in consequence of the opposition
of the country bankers ; and one of the most remark-
able evidences occurred, during the progress of this
charter, of the implicit faith of men in that which
every one declares to be true, in the strange discovery
that, as the law stood, there was nothing to prevent
joint-stock banks of deposit from being estabHshed in
London, nor had there been at any time an enactment
to that effect. A clause was therefore introduced decla-
ring such to be and to have been the law, thus saving
the government a tedious opposition on a point already
within their power. The opinion of the legal author-
ities was, that banks with more than six partners
BANK OF ENGLAND. 87
might exist within the magic circle, but not as banks
of issue.
The government were not in this matter so straight-
forward as the government of a great country should
have been. The basis of the contract was distinctly
understood to be, that all the exclusive privileges of
the Bank should remain. Among them was that
which made the existence of joint-stock banks in the
metropolis a violation of the charter. This was the
full conviction of all who considered the subject. That
it was the firm persuasion of the directors of the Bank
there can be no doubt. That the public thought so
is equally unquestionable ; or banks of deposit, with
more than six partners, would have sprung up
throughout the city. When therefore it was proposed
by the ministry to allow these banks in London and
its immediate vicinity, the proprietary came to a
spirited resolution, " That the court feels itself bound,
in justice to its own character, to protest against the
treatment it has experienced at the hands of the
Chancellor of the Exchequer, who has, in the opinion
of this court, most improperly and unjustly departed
from the terms of his own proposition ; and after
having engaged to continue certain privileges to the
Bank, on consideration of stipulated pecuniary con-
cessions, has since determined to withhold from the
Bank some of the most important of those privileges
without making a corresponding abatement in the
pecuniary concessions. That, although this course of
88 HISTORY OF THE
procedure and the violation of the contract, fully
justified the Bank in rejecting the arrangement in
toto, this court, considering the extensive injury to the
puhlic interest that might be the result, and consider-
ing that a new range of prices had been made, in the
conviction that the question was settled, is unwilling
to assert its undoubted rights at such hazard, and
authorizes the court of directors to submit to the
arrangement."
The Solicitor- General maintained that the establish-
ment of such banks was not an encroachment on the
privileges of the Bank of England, He had looked
into the various acts, and they clearly proved that
monopoly was confined to the issue of paper money
within sixty-five miles of the metropolis. That mono-
poly should be preserved. He was prepared to prove
that the act referred to banks of issue only.
The reply of Mr. Alderman Thompson was what a
direct view of the question must necessarily produce.
" He had a right to contend that the interpretation he
had put upon the law was the right one, because it
had never been questioned in a court of justice, and
had been universally acted upon by mercantile men.
Lord Althorp had stated that he had no intention of
defrauding the Bank of any privileges which it at
present enjoyed. The introduction, however, of this
clause would have that effect." The governor ad-
dressed a letter to the Chancellor of the Exchequer,
stating that the stipulation proposed did not, either
BANK OF ENGLAND. 89
literally or substantially, carry out the agreement of
the Bank with the government, that it took away their
exclusive privileges ; but that, to avoid the incon-
venience of further delay, they would submit to it.
A clause to the following effect was inserted : " That
any body, consisting of more than six persons, may
carry on the business of banking in London, or within
sixty-five miles of it, provided such body do not bor-
row, owe, or take up, in England, any sum or sums of
money on their bills or notes, payable on demand, or
at any less time than six months from the borrowing
thereof." Under this declaration, any bank of de-
posit only might be established.
There can be no question that government availed
itself of an unexpected discovery to the injury of
the Company. It is lamentable, but true, that a
collective body will sometimes condescend to acts
from which each member would shrink in his indivi-
dual capacity. Lord Althorp — a most upright and
honourable man — admitted that he had "in an off-
hand way," said " that he did not intend to propose
the establishment of joint-stock banks in London,
because he thought such was the law." Such was
the law fully befieved to be by all mercantile men ;
the privileges of the Bank had been supported by that
belief; they were in actual existence, and had been
long enjoyed by the Corporation. They may be
argued away by special pleading ; but no special
pleading can prevent the fact from being most dis-
90 HISTORY OF THE
tinct, that for more than a centuiy, the Bank ot
England, by virtue of one act of Parliament, possessed
certain prerogatives, which were the foundation of the
new arrangement with government, and contemplated
in the amount of payment; and that the latter, finding,
by a novel construction of the deed, they might be
abolished, did, without hesitation, that which they
had no moral claim to do, by putting in force this
new interpretation of an old act of Parliament. No
wonder such conduct was impeached, or that the
Court of Proprietors, justly indignant at that which
in a private person would have been deemed a breach
of faith, entered the important protest just recorded.
That the writer is justified in the view he has
taken is confirmed by the following extract from a
pamphlet by Mr. Palmer, who says, " A declaratory
clause was inserted in the Bank Charter Act, autho-
rising the establishment of those bodies in the metro-
polis. It is conceived that the Bank had the more
reason to complain of the ministers' proceedings upon
that occasion, it having been distinctly understood
during the negociation, that the law affecting the
formation of banks within 60 miles of London should
remain untouched ; and upon the faith of that under-
standing Earl Spencer undertook to bring the bill
into the House of Commons for the renewal of the
charter of the Bank."
This charter was important from many causes.
The weekly account to be transmitted to the Lords of
BANK OF ENGLAND. 91
the Treasury was a wise provision, as it was no
inconsiderable check upon the transactions of the
Bank, while the publication of the averages every
quarter could produce no further effect than to
present that information to the monetary world which
had hitherto been wanting. But a yet greater object
was achieved in the alteration of the usury laws, as
the first relaxation of a principle which had weighed
heavily upon the claims of commerce. The payment
of one-fourth of the debt due to the Bank was in
consideration of the loss sustained by the latter of
one per cent, on the amount lent to government.
On the 31st July, 1834, a special court of pro-
prietors was held to agree to the terms proposed of
paying off one-fourth of the Bank capital. The fol-
lowing resolutions were passed : —
" That a proposal from the Chancellor of the Ex-
chequer to transfer to the Bank the sum of £4,080,000
three per cent. Reduced Annuities, in liquidation
of a fourth part of the permanent debt due to the
Bank, which will become due on the 1st of August
next, be recommended to the proprietors for adop-
tion ; provided the transfer be made so soon as the
act of Parliament shall have passed authorising the
same, and the interest on the returned capital be
paid up to the day of the said transfer.
" That the court also concur in opinion with the
Court of Directors, that it will be of advantage to
the future management of the affairs of the Bank to
92 HISTORY OF THE
retain the proportion of debt when repaid by govern-
ment ; this court do, therefore, in pursuance of the
authority for that purpose, contained in the act of
3rd and 4th William IV. cap 98, determine not to
divide or appropriate the sum of £3,638,250, or
any part thereof, amongst the several persons,
bodies politic or corporate, who may be proprietors
of the capital stock of the Governor and Com-
pany of the Bank of England on the 5th of October
next."
By an act passed, to provide for the repayment of
the sum, it was arranged that £4,080,000 Reduced
Three per cents, should be placed to the credit of the
Bank of England, and form part of the public debt ;
the Bank to receive interest from the 1st of August,
1834, until the £4,080,000 should be written in their
books, and continue a corporation till redeemed.
In the same year, the Bank allowed an interest of
two per cent, on the balances of the East India Com-
pany, as an inducement to the latter to allow them
to remain in their possession. In this year, also, the
new four per cents, were reduced ; and by the pro-
posed terms, the holders might either receive £100
stock at 3| per cent, not redeemable until 1840, or
£70 at £5 per cent., not redeemable until 1873. The
principal number chose the former, and the remainder
form the holders of the new five per cents., amount-
ing only to £430,000.
In 1834, the holidays of the Bank of England,
BANK OF ENGLAND. 93
which had been previously reduced to a considerable
extent, were entirely abolished. The question is one
of great interest. That an occasional relaxation of
the fi'ame is desirable to the toil-worn and the weary,
is unquestionable, and when it does not interfere with
public duty, is justice, and not generosity. Men were
not born to labour in pent up cities, breathing an impure
atmosphere from morning to evening, to the exclusion
of all that is natural and healthful. Our forefathers
were wiser than their descendants. They knew that
to grant their servants a recreation was to benefit
themselves. That to mingle with them in their
sports, and to encourage them in invigorating
pastimes, w^as politic as well as pleasant ; and this
great fact will once more be comprehended, because
it is a question of self-interest. It will yet be under-
stood that a day passed in the green fields, in the
fresh air, or on the gay river, produces a desire no
less than a capacity to serve, and that to make a man
beUeve his interests are cared for, will induce him to
regard the interests of his employer in a ten-fold
degree. These things are not written of the Bank
of England. The writer rejoices in bearing testi-
mony to their great and honourable liberality ; and it
is a curious incident in the history of the holidays, that
the members of the Stock Exchange at whose soUcitation
they are stated to have been abolished, made, at a subse-
quent period, an application to have them restored.
In 1834, a great sensation was created throughout
94 HISTORY OF THE
England, by a circumstance which was only important
from its connection with the Corporation. Mr. Rich-
ard Mee Raikes, governor of the Bank, a gentleman
universally respected, was compelled, from various
unforeseen events, to announce a suspension of pay-
ments, which was followed by the appearance of his
name in the list of bankrupts. The rumour spread
among the less-informed class, among the dwellers
in the suburbs, and the inhabitants of the country,
that the governor of the Bank had failed. The
annuitants and small class of fund-holders, who look
upon the head of the estabhshment as an integral
part of the Corporation, regarded their fortunes
gone, and their property forfeited. The autumn
dividends were just due ; and it was remarkable to
witness the earnestness with which they were applied
for. The offices were crowded with applicants ; and
if the shghtest delay occurred, though occasioned by
their own ignorance, they regarded it as an invidious
delay of their rights, and a confirmation of their
fears. Time, however, in this as in other things,
brought " healing on its wings," and confidence to
the breasts of the public creditors.
The commencement of banks in the metropolis
with more than six partners, demands a brief remark.
" The London and Westminster" and " London joint-
stock" banks, were the first establishments of the kind,
and from a combination of causes have commanded
complete success. Mr. Gilbart has, in liis " History
BANK OF ENGLAND. 95
and Principles of Banking," discussed, in a very able*
manner, the comparative merits of joint-stock banks,
and private banking houses ; and though he may be
regarded as liable to be partial, yet there is an
equitable statement of truths in his essay, which
demands respect, at whatever opinion the reader may
arrive. The formation of the Bank to w^hich this
gentleman is attached, is memorable from the dislike
evinced to it by the private bankers refusing to allow
a clerk from the new estabUshment to attend at the
clearing house. The directors of the " London and
Westminster " also considered themselves aggrieved
because the Bank of England declined to allow them
a drawing account, and alluded to both these circum-
stances in their yearly report. Such occurrences are
incidental to all new^ concerns, and the rights of the
Bank stock proprietors are the bounden charge of
those whom the latter choose to manage their affairs.
In 1834 the new bank applied to the House of
Commons for the privilege of sueing and being sued
by its chairman. Considerable opposition was shown ;
and Lord Althorp, who thought that parliament would
not be justified in granting the application, moved "that
the bill be read that day six months." It was stated,
however, that this bank had been established on the faith
of the declaratory clause, introduced by Lord Althorp,
and that out of seventy private banks, twenty-two
had failed in twelve years to the amount of seven
millions, of which four millions had never been paid.
on HISTORY OF THE
The bill went through the lower, was introduced to
the upper house, and there, after the expression of
Earl Grey, that it would be inconsistent with the ex-
clusive privileges of the Bank, it was resolved that
certain questions should be framed for the consider-
ation of the judges. These learned gentlemen declined
answering, and as the session was near its close, the
bill was withdrawn.
In 1834 symptoms of a dormant spirit of speculation
might have been discovered in various propositions for
foreign loans ; joint-stock banks ; and one, — the Lon-
don and Southampton- Railway. The year 1835 wit-
nessed a continuance of the same spirit; and in
May of that year, the speculation in Spanish funds,
which had been extensively carried on, suddenly ex-
ploded. The bullion began to flow out of the Bank,
and by the 2nd of June it was reduced to £6,150,000.
In the following August a notice was issued by the
Bank, tbat advances would be made on Exchequer
bills, India bonds, Stock, and other approved securi-
ties at 3i per cent.; the previous rate for similar
advances being 4 per cent. In August, 1835, the
proposition for the West India loan was made ; and
in the opinion of those opposed to the Bank, the
above reduction of interest added a stimulus to the
excitement then prevalent. The bullion in the cof-
fers of the Bank, which on the average of the three
months before October, 1833, had been £10,900,000,
had fallen by the June average of 1835 to £6,150,000.
BANK OF ENGLAND. 97
This reduction was considered by Mr. Palmer, in his
" Causes and consequences of the pressure upon the
money market," to arise from the loans to Portugal
and Spain. " These loans were going forward from
July, 1833, until towards the end of 1834, when the
profits realized upon the daily extending engagements
in the foreign stock market engendered a further spi-
rit of speculation in almost every kind of previously
neglected South American, Spanish, and Portuguese
bonds, causing an enormous advance in all, and in
some nearly 100 per cent. In short, until the spring
of 1835, hardly a packet anived from the continent,
which did not come loaded with every sort of foreign
securities for realization upon our foreign stock mar-
ket." But other causes were in operation, one of
which is to be found in the measures taken by Presi-
dent Jackson to establish a metallic currency in the
United States, which partially assisted to drain the
vaults of the Bank of England. The demand ceased
in May, 1835 ; and the directors increased their cir-
culation to the extent of five millions, from August
to the close of the year.
The late Lord Sydenham, (then Mr. Poulett Thom-
son,) caused a register of the various companies to be
kept, the number of which amounted to between two
and three hundred in 1836, with an aggregate capital
of about two millions. Joint-stock banks were a
favourite investment, and the shares of nearly all these
companies bore a premium. Railways also, from the
VOL, II. H
98 HISTORY OF THE
ucccss of the Liverpool nd Manchester, were fi'eely
entered into. Mr. Tooke, in his History of Prices,
says, " new lines were proposed to intersect almost
every part of the kingdom, and there was actually
a swarm of Railway projects starting up in every
direction. The rage for undertakings of this kind
was at its height in the spring of 1836, and numerous
other projects for public companies were at the same
time brought into notice. The most considerable of
these were for mining purposes. And several of the
projects proceeded on substantial grounds with fair
prospects of success, along with many others that
were absolutely worthless, and served only for the
individual benefit of the projectors. But the good,
bad, and indifferent, contributed to a general activity
of the share markets."
In July, 1836, the rate of interest was raised by
the Bank to four-and-a-half, and in August to five
per cent. Those opposed to the establishment again
blamed this policy, as too sudden a contraction of the
currency. It was about this period also that the
Bank reduced their loans by refusing to discount all
bills drawn or endorsed by joint stock banks of issue,
together with an immense amount of bills drawn from
America on, and accepted by several first-rate establish-
ments in this country, although the acceptors were
considered to be of the most unquestionable solidity.
The Chamber of Commerce at Manchester estimated
the loss on cotton, wool, silk, linen, and hard-ware,
BANK OF ENGLAND. 99
at forty millions, in addition to the moral and social
evils which follow the deprivation of employment to
the working classes.
The customary result of the wild love of speculation
of 1836, to which allusion has been made, was wit-
nessed in panic, prostrate credit, languid commercial
operations, and a drain upon the Bank of England.
The joint stock banks felt the pressure. The Agii-
cultural and Commercial Bank of Ireland suspended
payments ; and a fearful panic, from the stoppage of
the Northern and Central Bank of Manchester, with
numerous branches, was only prevented by the assist-
ance of the Bank of England. During this period the
bullion had been again diminishing, and on the 17th
of November it had fallen to £4,933,000; and a
fortnight after the determination had been taken to
support the Northern and Central Bank, an account
of w^hich is given at a later period, it fell to
£4,545,000. The great importance of the Corpora-
tion was experienced in its resolution to support
commercial credit ; but the panic was, as usual, pro-
ductive of many opinions as to the cause.
A pamphlet, published by Mr. Horsley Palmer,
attracted great attention ; answers poured from the
press in attempts to disprove one of the positions
assumed by him, that it was owdng to the mismanage-
ment and over-issue of the joint stock banks. Mr.
David Salomons replied, and among other causes,
attributed the derangement of the currency to the
100 HISTORY OF THE
" transaction between government, the public, and
the Bank of England, connected with the West India
loan." "The joint stock banks," says Mr. Salomons,
" do not hesitate to repel the charge, and to accuse the
Bank of England of having caused the mischief which
they attempt to lay to the account of the joint stock
banks." Mr. Samuel Jones Loyd, Mr. Sampson
Ricardo, with others, entered the lists, either in
defence of the joint stock banks, or in attack upon
the Bank of England. And the question closed,
doubtless, with the conviction of each, that his own
theory was demonstrated
BANK OF ENGLAND. 101
CHAPTER V.
LOSS OF THE NORTHERN AND CENTRAL BANK — APPLICATION FOR
ASSISTANCE — STIPULATIONS DEMANDED — DIRECTORS AT MAN-
CHESTER — PRIVATE LEDGER — APPLICATION OF MR. FRESHFIELD
— ITS SUCCESS — CURIOUS DICOVERIES — FAILURE OF ESDAILE
AND CO. ALARM AND ASSISTANCE OF THE BANKERS — DIFFI-
CULTIES OF AMERICAN HOUSES — SUSPENSION — FOREIGN CREDIT
DRAIN OF GOLD — RESTORATION OF CONFIDENCE — NEW MODE
OF MANIFOLDING BANK NOTES.
The committee appointed on joint stock banks of
issue in 1836, produced some curious disclosures.
The Northern and Central Bank of Manchester oc-
cupied a great part of its time, and the following are
the most important results, in connexion with a trans-
action which occasioned considerable comment. In
1834 this bank was established, with a paid-up capital
of £710,000 , and 1200 shareholders, the united pro-
perty of whom was considered equal to ten millions.
Not one of the directors had previously been engaged
in banking, and, unfortunately, they were prosperous
to a great extent, at the commencement of their
business, as it induced them to extend their branches
in thirty -nine towns, w^ithout an adequate capital, and
probably gave them an idea of the ease with which a
102 HISTORY OF THE
banking connection might be formed, while it deprived
them of the caution necessary to conduct it to a
successful issue. The rule which the Bank of Eng-
land had constituted, not to discount any bill endorsed
by a joint stock bank of issue, was, however, felt
severely by the managers of the Northern and Cen-
tral, who found their paper refused by the discount
houses of London, not because it was doubtful, but
because it was impossible to re-discount it ; as paper
possessing the endorsements alluded to, although it
had the signatures of the first bankers in the city,
was sure to be rejected.
Mr. Gilbart stated it as his belief that "this arose
from the hostiUty of the Bank of England to joint
stock banks of issue, and that they regarded them as
rivals." But the idea of rivalry between the great
Bank of the Empire and a provincial joint stock bank,
is scarcely probable. It is more likely to have had its
rise in the hope of restraining these banks from that
over-trading, in which, at a future period, many were
found to have indulged.
The mode of allotting shares w^as a remarkable
feature in the history of these establishments. By
some questions of Sir Robert Peel it was ascer-
tained that shares in some of these banks were
awarded to others at par, not for the establishment,
but for the directors ; that, "if shares were allotted
to ABC, and ABC could not take them, the
directors made the profit," and that " part of the
BANK OF ENGLAND. 103
profits of the Northern and Central Bank were made
by allotting shares at a premium." " It was usual,"
said one of the witnesses, " if you take an account to
any bank, to have shares granted you if you apply for
them." Thus the Northern and Central Bank re-
ceived shares from the London and Westminster, the
Yorkshire District Bank, and the Royal Bank of
Ireland. These shares were not only divided among
the directors for their private advantage, but the
deposits were paid out of the funds of the Northern
and Central Bank, to the amount of more than
£50,000 ; and as this narrative proceeds it will be
found that the most unbusiness-like transactions were
carried on. It must however be remembered, in ex-
tenuation, that banking is a science, and that the
directors of the Northern and Central Bank were
utterly ignorant of its principles.
The pressure experienced throughout England in
1836, and the general difficulty in obtaining discounts,
was first felt by the managers in August. "The
cause of our distress," said Mr. Moult, the chairman,
*' was, that the Bank of England had set their face
against discounting our paper, or the paper of any
joint stock bank of issue." The difficulties, however,
had their origin in overdrawn accounts. Up to June,
1836, no distress had been experienced, and the
managers believed themselves so strong in a paid-up
capital of more than half a million, that nothing could
injure them. Great losses were, however, sustained
104 HISTORY OF THE
in the brandies, and these, with the scarcity of money
already alluded to, contributed to add to their trou-
bles. Mr. Cassels, agent in London, wrote to the
head bank that money was very scarce, and advised
the directors to obtain discounts in the country, and
send up all the cash they could gather, as a large
amount would.be required. On this urgent appli-
cation for assistance £108,000 were procured, and
entrusted to Mr. Evans, manager at Manchester, who
arrived in town on the 28th of November, 1836. In
St. Martin's-le-Grand he called a conveyance, which
took him to his hotel. " My mind was very much
engaged upon the state of things generally," said this
gentleman, in his examination before the committee
of the House of Commons, " and the matters I should
have to discuss, and at the moment of leaving the
cab, I lost sight of the bag which contained the
money, and left it behind me." This alarming dis-
covery was almost immediately made; and in no very
enviable state of mind he ran w^ith all possible speed
to overtake the conveyance. The attempt was vain ;
and Mr. Evans instantly sought the authorities at the
Mansion House, communicated with Forrester, and,
assisted by Mr. Bush, solicitor to the bankers, took
the best measures which they could devise together
to recover the property.
The loss w^as of the utmost importance. It was
felt that the rumour of such an occurrence would
affect the Northern and Central very seriously. Mr.
BANK OF ENGLAND. 105
Evans, therefore, accompanied by Mr. Braidley, deter-
mined to seek the assistance of the Bank of England ;
and at five o'clock on the same day they procured an
interview with the governor. Mr. Braidley remarked,
before the committee, "the loss of the parcel having
become known, it occurred to him that, if pubhshed
in the newspapers, a run might be created on the
branches of the country, and that it might extend
even to the injury of the Bank of England." When
it was said to Mr. Evans, " then the committee are to
understand that the loss of the parcel was not the
cause of your going to the Bank of England?" he
replied, unhesitatingly, "certainly not."
At this meeting Messrs. Braidley and Evans re-
quested the Bank to advance £100 to £200,000, on
bills, promissory notes, and other securities, and as
an inducement offered to close two of their largest
branches. During this interview no conclusion was
arrived at, although the governor intimated his opinion
that a larger amount of cash would be necessary to
render them any essential service. By eight o'clock
the same evening the parcel was recovered ; and if the
loss had been the sole cause of the application, it
seems reasonable to suppose that the negociation
w^ould have ceased.
On the following morning, however, it was renewed
by Mr. Braidley, on the grounds that the Northern
and Central Bank could not meet its engagements
without the assistance of the Bank. The first thing
106 HISTORY OF THE
they were informed was that the Bank would make
no advances, unless it were an absolute necessity, and
that, as the help of the Bank must become known, it
would be advisable for them to go on vdthout it, or
proceed elsewhere. The applicants immediately with-
drew to consult, and on their return declared it to be
a case of urgent necessity ; and the following state-
ment of the habihties of the Northern and Central
Bank was handed in :
Deposits ..... £260,000
Circiilation , . . . . 300,000
£560,000
Cash in liand ..... 180,000
£380,000
The assets consisted in bills, notes, and overdrawn
accounts. £300,000 of marketable paper could be
immediately given ; and the overdrawn accounts were
stated to amount to £900,000. On this statement
the Bank agreed to advance £500,000. £100,000
immediately, and £400,000 at a future period, upon
the condition that all the branches, sub-branches, and
agencies should be closed, excepting only Liverpool
and London. The Bank also insisted that the Lon-
don agents should have no repayment made to them
until the debt of the Bank of England should be
liquidated. Mr. Evans considered his apphcation to
the Bank of England as something similar to going to
a broker for it, without being expected to give any
statement of the affairs of the Bank. " We were
BANK OF ENGLAND. 107
not," he said, somewhat energetically, " called upon
to pay off our deposits, we were not called upon to
pay our circulation, they were both as high as they
ever were, and the credit of the Bank was very high
throughout the country." The governor, however,
took a very opposite view, and pointed out the de-
crease in their deposits to £260,000 from the large
sum of £900,000, at which they had previously stood.
It is both curious and instructive to compare the
earnestness with which they thus applied for assist-
ance, and the greatness of its necessity, with the
remarks in which they indulged before a committee
of the House of Commons, when their purpose was
gained and the danger passed. Thus Mr. Braidley
calmly asserted that he beUeved it was only the
anxiety of the Bank of England for their own credit
which induced them to gi'ant the help, as, "if the
information of the lost parcel got into the papers, and
there should be a run on forty banks in different
parts of the country, the consequences would be so
serious that the evil would extend eventually to the
Bank of England," and a national calamity occasioned,
which he was patriotically desirous to avert, even at
some sacrifice. Mr. Moult also "knew no other
reason than that it would save a run upon themselves,
as the Bank had no love for them." It was added,
" the assistance given by the Bank was certain to
injure us. If it had been refused, the directors were
to proceed home as rapidly as possible to close
108 HISTORY OF THE
the bank." The assertion " that the Northern and
Central Bank was in a good healthy state," was
scarcely compatible with " proceeding home as rapidly
as possible to close the bank." After an important
discussion, which lasted from ten in the morning
until six in the evening, the following letter was
signed, and arrangements made for the receipt of the
money,
London, 29th of November, 1836.
'^ Sir, — ^In consequence of the urgent necessities of
the Northern and Central Bank, and under the severe
pressure they now experience, we beg, on behalf of
that establishment, to apply to the governor and
Company of the Bank of England for an advance to
sustain the current engagements of the Northern and
Central Bank. We are desirous of receiving imme-
diately the loan of £100,000, upon the discount of
paper now submitted ; and we request the aid of the
Bank for a further sum, not exceeding £400,000
beyond the above £100,000, to be advanced to us as
may be found necessary.
We are, Sir,
Your very obedient servants,
Benjamin Braidley, Director
Thomas Evans, Manager.
To the governor of the Bank of England.
One of the stipulations of the Bank of England
had been for a full account of the affairs of the appli-
cants ; and by the 12th of December a specification
BANK OF ENGLAND. 109
was delivered which materially differed from the first
statement, the deposits being £860,000 instead of
£260,000. The attendance of some of the managers
was instantly desired at the Bank of England, and
the discrepancy was attempted to be explained ; but
an examination of the books at a later period utterly
destroyed the excuse. It also appeared that, after
the advance of £600,000, a very large amount would
be required to bring the business to a successful issue.
The affair assumed so serious a complexion, that the
governor informed the representatives of the Northern
and Central, that further relief could only be granted
on condition of their books being instantly closed,
as the Bank would not continue assistance while they
made fresh engagements, and that, in consideration
of this, and of the consequences likely to occur to the
whole country if they stopped payment, they should
receive the requisite aid.
In both these arrangements the Bank had stipulated
that the London agents of the establishment for which
assistance was required should postpone their claims
until those of the Bank of England were fully satisfied,
and a letter to this effect was required before carrying
out the agreement. To this the directors of the
London and Westminster Bank demurred very de-
cidedly, and it is said that the arrangement nearly
fell to the ground. The interests of this bank,
however, were involved to a considerable extent ; and
it is probable that their refusal was rather an evidence
110 HISTORY OF TIJE
of disapprobtiaon than of positive opposition. How-
ever this may be, they found it advisable to con-
sent to the terms proposed. The directors of the
Northern and Central Bank held a meeting, at
which, after entering into a review of the transaction,
and declaring " that the Bank of England had more
than fulfilled their part of the agreement ;" they were
compelled, however unwillingly, to consent to close their
business. The affair was so important that two of the
Bank directors, Mr. Dobree and Mr. Prescott, accom-
panied by Mr. J. W. Freshfield, jun., solicitor to the
Bank, immediately proceeded to Manchester, to take
possession of the securities, and examine the affairs of
the company. The investigation was most unsatis-
factory. By an account rendered on the 17th of
December, there appeared securities to the amount of
£373,136, while, by the books, the almost incredible
discovery w^as made that of these so called securities
£104,740 consisted of dishonoured, or as they were
delicately termed, "overdue" bills, and that very
many were nearly worthless. Their advances had
been on the most profuse scale. The directors
owed the enormous sum of £290,000 ; while, with a
liberality not usually awarded to these functionaries,
the clerks were in debt nearly £14,000. The pro-
prietors formed a large proportion of debtors ; and
of fifty-two principal ones at Manchester, thirty-five
were shareholders ; and of twenty-nine at Liverpool,
twenty-one proved to be the proportion interested.
BANK OF ENGLAND. Ill
These things would have been startling to any one ;
but to the directors of the Bank of England, accustomed
to a precision little less than marvellous, they must
have appeared most extraordinary. But this was not
all. It was accidentally discovered that secret ac-
counts were kept ; and on application to examine
them, some difficulty occurred. The private ledger
w^as not forthcoming ; and a letter, of which the fol-
lowing is an extract, was written by Mr. Freshfield,
demanding, as an unquestionable right, the possession
of so important a document. It will also place in a
clear and forcible hght some more transactions of the
managers of the Northern and Central Bank before
the reader : — '* In the course of the inquiries under-
taken by Mr. Dobree and Mr. Prescott into the assets
of the Northern and Central Bank, it appeared that
large debts were due to the company by the directors ;
and on prosecuting this, it was found that, partly in
their own names and partly in the names of con-
nexions or friends, put forward avowedly to represent
them, there were debts owing by directors to the
company exceeding the enormous sum of £200,000,
The principal security for these advances consisted
of shares in the Northern and Central Bank ;
and Mr. Dobree and Mr. Prescott, therefore, felt it
their duty to ascertain the existence of these shares ;
first, as a material part of the assets of the Bank ;
and secondly, as the fact represented to them, that
the directors had agreed to hold their shares, tended
1 12 HISTORY OF THE
to show their own confidence in the undertaking, and
therefore to afford some excuse to the directors, in
intention, at least, in the course they had pursued.
On opening this inquiry, however, Mr. Dobree and
Mr. Prescott discovered, that, while some of the
directoi's were large shareholders, others had sold
the greater portion of their shares ; and that others
had been buying and selling upon a scale which ap-
peared too nearly to approach jobbing in the shares
of the company. The worst feature of the case
was, that while the directoi's had bought in their
own names, and added, by the credit of their
station, to the value of shares in the market, sales
had been made in the names of third parties, and
shares had been transferred to purchasers in the names
of persons who were for that purpose merely ficti-
tious, not having the shares in their names ; and these
shares, purporting to be transferred by strangers, were
written from the accounts of directors ; thus falsify-
ing the transfer book, falsifying the titles of pur-
chasers, and deceiving the public. In following this
inquiry, it appeared that 1,120 shares, placed in the
names of the directors, were carried to the private
ledger, the same book in which part of the enormous
advances to the directors had been entered and kept
from view. Mr. Dobree and Mr. Prescott, therefore,
required to see that book ; and not only has that been
reftised, but you have closed the investigation into
the share account of the directors. It appears to
BANK OF ENGLAND. 113
Mr. Dobree and Mr. Prescott, that the exisience of
the shares of the dh'ectors is most material, as part of
the assets of the companj^ ; that the accounts in the
private ledger are necessary for the elucidation of this
and other matters of this enquiry, and they consider
the withholding them a breach of the engagement
with the Bank of England. In this opinion I entirely
concur. Upon the mere verbal construction, I am of
opinion that the inquiry must be permitted, and that
the particulars called for are strictly within the terms
of tlie agreement ; but this transaction cannot be
allowed to stand upon so narrow a basis. The Bank
of England have come forward upon public grounds
to support an institution of such magnitude, that its
failure, otherwise inevitable, must have been a public
mischief; and they were compelled to do this upon
such an emergency as not to allow of a previous
investigation ; but I insist on their right to every
such information as a person in embarassment must
give to the person applied to for assistance, a full
statement of the present situation and prospects of
the company ; and these can only be ascertained by
an unrestricted enquiry into the past transactions of
the company. And to avoid any misunderstanding, I
think it right to state that I consider the production
of the private ledger as now indispensable. It is a mere
misapprehension of terms to treat such books as con-
fidential; the private books of a trader or trading
company are private from clerks ; but it is to such
VOL. II. I
114 HISTORY OF THE
books that reference must be made for the real state
of the assets and profits of the company ; and in this
particular case the book is now known to contain the
accounts of very large debts due to the company,
which it is necessary and proper to investigate."
The following is an exact copy of the reply from
the Chairman of the Northern and Central Bank.
" Mr. Moult has received your letter, dated 31st
December, and sent for Mr. Braidley last night, but
found him confined to bed. I am most anxious
to have every circumstance fully set forth for the
satisfaction of Mr. Prescott and Mr. Dobree, and
shall convene an early meeting to-morrow, (Monday)
for to take into consideration your communication,
and will forward without loss of time an answer.
" Broughton, 4 o'clock, 1st Januaiy, 1837."
The private ledger was at last placed in the hands
of the representatives of the Bank of England, and a
discrepancy was discovered between the account
tendered on the 17th of December, and that in the
priyate ledger, by which the directors were indebted
£90,000 more than had been represented.
Various circumstances were found out which prove
the responsibility of a company unless great care be
taken to choose a direction well disciplined to their
task. One director alone owed £70,000. In two
months the board of managers had distributed among
themselves 4465 shares at £1 premium, when they
were selling in the market at £3 premium. Besides
BANK OF ENGLAND. 115
these £3465 were divided at a lower rate, also for their
own benefit. " Some may be more deeply impli-
cated," says the confidential report to the House of
Commons, " but justice requires that the case of Mr.
Stell should be especially noticed. That gentleman
had a large banking account with the company, and
the directors invited him at the latter end of the year
1835 to take a seat in the direction, to which he as-
sented. Mr. Stell was already a proprietor of 1400
shares, for which he had paid, but the directors pro-
posed to give him an additional thousand shares at the
premium of £3 per share, and consented, on his paying
the premium, to allow the £10,000 to remain at his
debit for two years certain, and a third year, if he
required it, charging interest thereon at the rate of £4
per cent, per annum. Mr. Stell, in fact, paid £3000
for premium ; and these shares were allotted to him
on the day, and no doubt at the same board, when the
directors apportioned to themselves 1000 shares at £1
per share premiums." A further instance was that of
Mr. John Ferneley of Manchester, who declined
receiving an appropriation of shares, although they
were selling at £5 and £6 premium in the market,
and when it was pressed upon him, he, to avoid a
collision, sold them, and sent the proceeds to the
chairman of the Bank.
Another circumstance was brought to light, evincing
the necessity of care in accepting dividends, unless it
can be clearly proved that they arise from the legiti-
116 HISTORY OF Tllli
mate profits of the compaiiy. For the year ending
December, 1835, an interest of 7 per cent, was de-
clared. The actual business profits of the company
being insufficient to sanction this division, the directors
provided for the deficiency by assuming a profit on
unsold shares. The company was originally to con-
sist of £100,000 shares; of these 29,104 remained
unappropriated, and the expedient, which certainly
merits praise for its ingenuity, was resorted to, of
imagining them to be sold at £1 premium, thus pro-
ducing a fictitious sum of £29,104 to assist in pay-
ing the dividend of 7 per cent. These circumstances,
combined, induced Mr. Dobree and Mr. Prescott to
request that a committee of inspection, unconnected
with the recent administration of the company, should
be associated for the investigation of the affairs of the
bank.
So liberally, however, had the shareholders been
used, that a doubt was expressed whether it would be
possible to find four of them who were not indebted
to the company. The difficulty was overcome ; and
the Bank of England having secured its interests by
entering judgment for one million, which would
enable them, in thiC event of necessity, to come upon
the proprietors of the Northern and Central Bank,
left the immediate management of the affairs to this
newly-formed committee. At the meeting which took
place on this occasion, Mr. Freshfield explained the
accounts as he had found them ; Mr, Moult remarked
BANK OF ENGLAND. 117
it was " an excedingly fair statement;" Mr. Braidley
also added " the statement is a fair one ;" and both
these gentlemen expressed their obligations to the
directors of the Bank of England for the pains they
had taken ; Mr. ]\ioult adding, he was surprised at
the temper and forbearance they had manifested
through the investigation.
Among the joint stock banks which had been es-
tablished through the declarator)'^ clause, in the act of
1833, the London and Westminster occupies a con-
spicuous place; and on the 5th of April, 1837, an
important opinion w^as given by Lord Langdale, in the
Rolls' court. The question which was left for his
lordship to decide, w^as the right of this establishment
legally to accept bills of exchange, payable at a less
date than six months. It appeared that the St.
Alban's bank had drawn a bill on the London and
Westminster for £25, at twenty one days date, which
bill w^as duly accepted by order of the directors
of the latter. The Bank of England considered
that the acceptance of a bill of less date than
six months, by any banking establishment containing
more than six partners, and within sixty-five miles of
London, was a violation of the principles of their
charter. Lord Langdale was of the same opinion,
and decreed that an injunction should be issued re-
straining the London and Westminster bank from
accepting at a less date than six months.
The commercial discredit at the end of 183G and
118 HISTORY OF THE
beginning of 1837, arising from the panic which
followed the excitement of the former year, was
productive of renewed assistance on the part of the
Bank of England. Some private banking houses
claimed and received gold to a large amount, on the
representation that if aid should not be afforded, the
most disastrous consequences must ensue. One
banking house, that of Esdaile and Co., stopped
payment. Great anxiety was evinced throughout the
city. Fears were entertained lest a run should com-
mence on others. It was agreed, therefore, that each
of the London bankers should pay £5000, in order
to prevent a catastrophe which might have become
generally ruinous. By this pohcy the city was pre-
served from distrust, and the creditors of Messrs.
Esdaile received all their demands in full.
From the beginning of 1837 doubts had been en-
tertained that " the resources of the principal houses
in the American trade, vast as those resources were
known to be, would not be sufficiently adequate to
meet the enormous extent of their engagements." By
February and March their difficulties had excited
great attention ; and it became doubtful to what
extent their necessities would require assistance, and,
until this doubt was expelled, great concern was felt
in all monetary circles. The bullion left the Bank
coffers ; and by the 7th of February it had fallen to
£4,032,000. In this month the emergencies of the
great American houses were notorious ; and it after-
BANK OF ENGLAND. 119
wards became known that they had applied for and
received assistance from the Bank of England. It
was soon ascertained that a sufficient amount had
not been granted to save them from falHng ; and in
May, 1837, they again applied for help. On an in-
vestigation of the offered securities which were found
inadequate, after a long and anxious deliberation,
the directors came to the conclusion of refusing the
request. The ramifications of these houses were so
extensive, that it w^as evident great mischief must en-
sue from their destruction. On the first of June, 1837,
the day on which the appeal was finally rejected, three
great American firms announced a suspension of
payments. For a week there was a great distrust, if
not an absolute panic, as the houses alluded to were
under acceptances, at the time of their failure, to
more than five millions. By the absence, however,
of much doubtful paper, the circulation became
sounder ; and, assisted by advances from the Bank,
to the amount of £6,000,000, the trade of the coun-
try revived. The years 1838 and 1839 witnessed
a repetition of similar scenes. In nine months
3,300,000 quarters of grain were entered for home
consumption. The large payments for foreign corn
had depressed the exchanges, and the country was
embarrassed still further by its financial relations
with the United States. American securities had been
over-imported, and there was a continued drain upon
the bulhon of the Bank of England, which was re-
120 HISTORY OF THE
duced from £7,073,000 in April, 1839, to £2,522,000,
at which it stood in the following October. On the
16th of May an effort was made to stop this progres-
sive drain by raising the discount to five per cent.
On the 20th of June it was again increased to five-
and-a-half, with the further announcement that money
would only be advanced on bills of Exchange. Still
the drain went on ; and on the 13th of July, a notice
was issued that the Bank would receive proposals for
the purchase of the dead weight, either in money or
stock. The attempt failed, as the price offered did
not reach its estimated value. " They then," said
Mr. Norman, " pledged a portion, and obtained credits
in foreign countries upon it ; which they made use
of to the amount of about two milhons and a- half.
They also borrowed £750,000 in Exchequer bills from
the East India Company, on the same security, a
portion of which they made use of." The drain for
bullion ceased about October. " I have no doubt,"
says the same authority, and it must be received with
the respect due to a thorough comprehension of the
subject, " that the foreign credit operated materially :
it tended to restrict the circulation here, and it also
furnished means of foreign payment."
The operation to which allusion is made, of " credits
in foreign countries," w^as not unprecedented in the
history of the Bank, having previously been resorted to
in 1832 and 1836. An idea generally prevailed that
the English Corporation had been compelled to bor-
BANK OF ENGLAND. 121
row bullion from its less opulent neighbour, but this
was a misconception. The following, from " The
Times," is a correct account :
" In July, 1839, the bullion in the Bank of England
had fallen below^ three millions sterling, while its rate
of discount was as high as 5i per cent. It was evi-
dent that the causes for the existing drain consisted
more in distrust abroad, founded on the belief that
the Bank of England could not long continue specie
payments, than in an unfavourable balance of trade,
or a run for sovereigns to hoard at home. Parties on
the continent drew out all their balances here, and as
much more as their correspondents would give them
credit for, discounted the acceptances in London, and,
in the absence of foreign bills, took gold from the
Bank of England. Under these circumstances it was
impossible that exports of produce and manufactures
from England could take place immediately to a suffi-
cient extent to counteract the evil ; but it w^as seen
that the difficulty would be met, if a temporary crea-
tion of bills on the Continent could be effected. With
this view the Bank of England engaged to transfer
English securities, as a guarantee, to Messrs. Baring,
Brothers and Co., or those whom they should name,
and this house engaged to draw three months' bills
for forty millions of francs, on various houses in Paris.
These bills, which Baring, Brothers, and Co. negociated
on 'change, paying the proceeds into the Bank, so as
gradually to act upon the circulation, fully supplied
122 11 1 STORY OF THE
the trade demand for remittances hence, and equally
served to meet all paper in England remitted here for
returns, as they proved a better return than gold.
At the end of three months, when the acceptances
fell due, the same amount was re- drawn, so as to
cover each acceptor by bills on his neighbour, thus
prolonging the operation to six months ; but before
the expiration of this period, the supply of the regular
remittances of commerce had been such as to enable
Messrs. Baring to liquidate all the engagements in
Paris, and to restore the pledged securities to the
Bank of England. From this statement the Bank of
France will appear to have had nothing to do with the
operation ; but a mode by which they facilitated its.
progress, and which doubtless gave rise to the erro-
neous suppositions which have since been entertained
on the subject, remains to be mentioned. The
draughts drawn by Baring on the various French
houses were, of course, liable to be presented for
discount to the Bank of France ; and as these firms
respectively only had credit to a certain limit with that
institution, there was a possibility that their rejection
might become necessary, owing to such limits being
exceeded. This difficulty was calculated to produce
an injurious effect ; and application w^as therefore made
to the Bank of France, in order that it might be over-
come. An understanding was accordingly entered
into by the Bank of France, that the draughts, in
case they should make their appearance, should be
BANK OF ENGLAND. 123
discounted, without regard to the limits in question.
This precautionary arrangement, however, proved to
have been scarcely essential, for the draughts being
of the first character, and the rate of discount at the
Bank of France being somewhat higher than the
market rate, they were readily discounted out of
doors ; and hence it is believed that but a very small
proportion found their way into that establishment."
The lowest sum to which the bullion was reduced
was £2,300,000 ; but from this amount the re-action
took place, and the monetary affairs of the Bank were
restored to their ordinary footing ; and when, in 1839,
the Bank of the United States of America applied for
that assistance which was required through pressure
and difficulty, they were enabled to offer £300,000,
which, however, being deemed insufficient, was re-
jected by the latter.
Mr. Palmer attributed the drain of bullion to three
causes. " The first I take to have been the very large
amount of American securities that was sold, or for
which credit had been given in 1838, and to February,
1839, which increased considerably the amount of
bills upon London, in the continental markets ; the
second cause I attribute to the unprecedented extent
of the purchase of foreign corn, in almost every
continental port, towards the close of 1838, and
almost through the whole of 1 839 ; and the third
cause, from the doubt existing on the continent, after
May and June, 1839, of the ability of the Bank to
124 HISTORY OF THE
maintain specie payment, the consequence of such
apprehension having been the transmission of all long
clcited bills upon this country for immediate discount,
and return of their values, and the withdrawal of
monies to a considerable amount, deposited in this
country for foreign account."
The difficulties environing the market of America
affected the Bank, which had claims on the United
States to a considerable amount. Bills drawn on
tirms there had been discounted by the Bank for
the houses in England ; and on the inability of the
latter to meet them, the Bank fell back upon the
American firms. Representations were made by well
informed persons that an exportation of gold to the
United States would hasten the restoration of credit ;
that great benefits would arise, and that the ordinary
commercial intercourse between the two countries
would be restored. To these representations the
Bank yielded; and at the commencement of 1838 the
directors forwarded one million sovereigns to America.
The importance of their transactions with this country
may be gathered from the fact that two gentlemen
were confidentially employed by them to visit Ame-
rica, on the important question of representing their
interests, and assisting them in procuring an adjust-
ment of their accounts.
The use of Bank notes, independently of their
legitimate value, appears to be incalculable. It has.
been seen that they may be pasted on a village case-
BANK OF ENGLAND. 125
ment in compan)^ with a ballad, to keep out the wind;
and that an Algerine slave may make them the me-
dium of communication with his friends in the north.
But the most extraordinary powder to wdiich they have
been placed is to be found in wdiat our authority calls
" manifolding." A person carrying on a somewhat
extensive business in the provinces, being in want of
cash, and in possession of a £50 note, came to the
resolution of cutting it in two. With one part he
w^ent to a monied acquaintance, told him he had just
received it by post, and that the other W'Ould follow in
a day or two, and it would be a great convenience if
his friend could advance him cash to the amount on
its security. The person to whom he applied con-
sented to the request. Having been thus successful
with one half he determined to try the other ; with it
he proved equally fortunate, and thus his £50 note
procured him £100. The game was too profitable to
be given up at once, so he w ent to a banker and de-
manded a £100 note with the cash he had received.
Again he had recourse to the process of cutting, again
he victimized tw'O acquaintances, and thus procured
£200 for his £50. With the money thus acquired he de-
parted, satisfied wdth having gained £150 thus easily.
In 1836, in consequence of the failure of several
East India houses, and the discredit which was gene-
rally felt, a resolution was passed authorizing the
issue of bills of the Bank of England, payable at sixty
days' sight, for circulation in India.
126 HISTORY OF THE
CHAPTER VI.
EXCHEaUER BILL FORGERIES — NEW DISCOVERY — LEGAL DECISION
— INTERNAL ALTERATION IN THE CIRCULATION AND NATIONAL
DEBT DEPARTMENT — GREAT CONTINENTAL CONSPIRACY — ITS
DEVELOPEMENT AND DISCOVERY — FATE OF THE PERPETRATORS
— TRIBUTE TO THE "TIMES."
In the month of October 1841, the members of the
Stock Exchange were startled with the rumour of a
series of forgeries, the ramifications of which were
said to be so wide that no person could tell to what
extent they had penetrated. It was stated that a large
proportion of the Exchequer bills then in the market
were forged. Great alarm spread throughout the
holders of these securities. No one knew how far he
might be involved, and there was no mode of testing
their authenticity. The report continued to increase ;
and the public were made aware of a fraud, so great, that
it jeopardized the prosperity of many first-rate houses,
and so dishonourable, that it is difficult to find an
excuse for one who had possessed the confidence of
his superiors for twenty-eight years, and who, by his ne-
BANK OF ENGLAND. 127
farious transactions, disgraced alike himself and his con-
nexions. The Bank of England was deeply inte-
rested in the question, as Exchequer bills formed a
deposit on which they frequently advanced money.
The species of bill chosen was the supply bill, issued
under the authority of various acts of parliament, and
either paid off or exchanged, according to the option
of the holder, after the expiration of a year. They
pass with as much facility as bank notes, and are,
from many circumstances, a favourite investment. In
1841, Mr. David Haes, a member of the Stock Ex-
change, was requested to lend money on Exchequer
bills ; but the interest offered of six per cent, seemed
so strange to this gentleman, who had lent £20,000 at
four per cent., that his suspicions were aroused, and
he immediately entered into a communication with the
Chancellor of the Exchequer. To those who are un-
initiated in the mode of transacting business at the
Stock Exchange, the following evidence of Mr. Haes
will prove both novel and interesting : — " I had been,'*
said this gentleman, " in the habit of lending money
on foreign stock, but thought it imprudent to conti-
nue ; and that I would take it out of the foreign
market and lend it on English security. I lent £20,000
on Exchequer bills at four per cent. I was walking
up Broad Street about ten or eleven o'clock on
Tuesday morning, with a friend, when a person
crossed over the way to me, and said, * You are the
man I want ; will you lend me more money on Ex-
128 HISTORY OF THE
chequer bills ?' I said, ' Yes, I will ; it depends upon
the amount, the interest, and the time/ He says,
* The interest is six per cent, for three months ; you
many have £10,000 worth.' I thought that ver}' good
interest, certainly. But he parted with a man on the
opposite side of the way. I, at that time, did not
consider him a man likely to have the bills in any way
at all. He said, ' You can have ten or you can have
twenty.' I am not sure whether it was not more.
He said, ' We will take the money from to-morrow,
but begin the interest from to-day.' The amount of
interest I do not care for at all, but we are not in the
habit in the city of giving up a day's interest ; and I
said to the person with me, ' Here is something smoky ;'
and said to the man who offered me the bills. ' Do not
consider anything binding in what I have done with
you.' I went to the Stock Exchange, and said to the
man to whom I had been lending on Exchequer bills,
' This is a pretty joke ; I lend you money at four per
cent, on Exchequer bills, and go out and get an offer
at six !' 'Oh!' said he, 'you may let me have mine
back ; but I will refer you to another man.' I com-
municated with that other man, and he told me I had
better go over to a banker's in Lombard Street and
ascertain the fact. I went there, and combining all
the circumstances in my mind, it struck me there was
some robbery, and I made up my mind and sat down,
and wrote to the Chancellor of the Exchequer. The
whole did not occupy me twenty minutes." This
BANK OF ENGLAND. 129
important letter, through which the transactions to be
related were brought to light, requested a few minutes
conversation, on the plea that the importance of the
writer's communication as to what was going on in the
Exchequer bill market, was such, that he was led to
consider the Chancellor would not think his time lost
if he devoted it to this communication." On the fol-
lowing morning an interview was granted, and Mr.
Haes detailed the transaction, mentioning that the
doubts of Mr. John Francis Maubert had been awa-
kened on a previous occasion. This gentleman also
had a meeting with Mr. Goulburn, who was informed
by him that in November, 1839, he had been paid
seven per cent, on Exchequer bills, when the market
rate of interest was only six and a half per cent. ; that
as he considered the circumstance remarkable, he had
declined any further transactions with the same party,
and the event was only recalled to his mind when the
decision and promptitude of Mr. Haes had brought
the affair to light. So searching was the enquiry im-
mediately instituted, and so easy of detection was the
fraud, when suspicion was aroused, that by the 25th
of the month, Edward Beaumont Smith, chief clerk
in the issuing office of the Exchequer, was taken into
custody. "Availing himself of his official capacity,"
said the Chancellor, " the offender has taken the bills
from the office in w^hich he served, in order to forge
the name, whose signature, they were bound by law
to bear." In every other particular they were genuine
VOL. II. K
130 HISTORY OF TIJE
Exchequer bills, and there was therefore no difficulty
in procuring money on them. But a confederate was
necessary ; and confederates in crime are rarely want-
ing when wealth is to be attained. Ernest Rapallo
and Angelo Solari, foreigners long resident in Eng-
land, were the agents employed. It was only advisable
to raise money on these bills in the way of loans, as if
they should obtain a general circulation, it was possi-
ble that duplicates might pass into the hands of the
same party, whose doubts would be aroused ; and it
was certain, were this danger even avoided, that at
the regular periods of paying off or exchanging them,
a discovery must inevitably be made.
For five years did Edward Beaumont Smith, Ernest
Rapallo, and Angelo Solari, confederate to employ the
vast power lodged in the hands of the first in defraud-
ing the public. By introductions to brokers and
bankers, by plausible assertions that there were friends,
great capitalists who were advancing money, and
last, not least, by the offer of the higher rate of interest
than that of the market, did these men succeed in
their designs. Upwards of £800,000 were thus pro-
cured ; and as another proof that money wrongfully
gained is easily lost, they paid upon the stock and
share markets large differences with their dishonest
gains ; in all probability flattering themselves that,
by some fortunate hit, their liabilities would be paid
and their fortunes secured.
It was invariably stipulated that the very bills
BANK OF ENGLAND. 131
which were pledged should be returned when the
money was repaid, or on other Exchequer bills being
given. But this was not unusual ; it being a recog-
nised principle on the Stock Exchange that the
borrower had a right to demand a restoration of
the same documents which he had advanced. On
one occasion some of them got into the market, and
when the time expired, the same bills were not of
course forthcoming. As soon as the discovery was
made that eleven of the papers returned were not
those which had been lent, gi-eat anxiety was evinced,
and after much trouble they were procured, at an
expense of £50. It appears strange that these com-
bined facts did not lead to detection. The fears of the
money-lenders were, perhaps, allayed, by a high rate
of interest, and probably many shut their eyes, if not
wilfully, yet with that obstinate resistance to truth,
so frequently shown under circumstances which pro-
mise large profits. It has been seen that Mr. Mau-
bert had some doubts about the fairness of the trans-
action in which he had been engaged, and the small
difference of i per cent, justified him in remaining
quiet ; but immediately the crime became public, a hun-
dred incidents could be remembered by others ; and a
hundred communications made to the Chancellor of
the Exchequer, either one of which, sent at the proper
time, would, in all probability, have led to the imme-
diate discovery of the fraud. The Duke of Wellington
positively asserted, that though there were many
132 HISTORY OF THE
innocent sufferers, yet a great number of the holders
of the fraudulent Exchequer bills were believed to
have a knowledge that they had been issued under
fraudulent circumstances.
The great alarm of the possessors of these securities
may be conceived ; and it was doubtful in what light
government would regard many of them, as it was
understood that the caution used, with the amount
of the interest received, W' ould be taken into considera-
tion, lest those who had wilfully closed their eyes to
the deception should be rewarded. A committee of
the House of Commons was appointed, who delivered
their report, and the result was a commission to en-
quire into the whole transaction. During this period,
the owners were utterly ignorant as to the treatment
they would receive. Their claims were strongly
supported by the press ; and the report of the com-
mittee was important, as it proved that an enormous
power had been vested in the hands of the defaulter.
" The sole direction of the quantity of paper to be
manufactured," said this document, " of the plates
to be engraved, and the custody of the moulds, plates,
and of the paper unprinted and printed, of the press,
seal, and counterfoils, as well as the entire prepara-
tion of the Exchequer bills, were entrusted to the
uncontrolled discretion and integrity of the senior
clerk of the department in which the bills were
prepared, and, during the absence of his assistant
clerk, unchecked by any regular examination of the
BANK OF ENGLAND, 133
Stores or of the tradesmen's bills." This extraor-
dinary power was commented on by the press. " If
government had secured the Exchequer seal by
placing it in proper custody, and providing for its use
only in the case of certain authorized persons, it
would have been impossible for any single Exchequer
clerk, year after year, to issue hundreds of forged
bills properly stamped."
The Bank of England were deeply interested. On
the 21st. of September, they had advanced to Mr.
Tomkins £11,000, for one month, on the security of
certain documents, purporting to be Exchequer bills.
The money had been lent upon condition that if they
were not redeemed at the expiration of the time, the
Bank should be at liberty to dispose of them and pay
themselves, with interest. At the proper period,
Mr. Tomkins redeemed three, but being unable to
take up the remainder, they ^vere sent into the
market, and pronounced spurious. An action was
brought against Mr. Tomkins by the Bank of Eng-
land to recover the amount, and a verdict given in
their favour-
The arrangement by which government met the
views of the holders of the Exchequer bills was
considered fair and equitable. In February, 1842 it
was announced that of the £377,000 in circulation
at the time of the discovery, £262,000 would be
paid. The cases were divided into four classes,
distinguishing the various degrees of care which had
134 HISTORY OF THE
been evinced by each. Great endeavours were made
to procure a remission of Smith's sentence, but the
efforts were vain, and the punishment of transporta-
tion was awarded to the offender, who, with his ac-
complices, had received altogether to the amount
of £885,000.
The long period during which these forgeries
remained undiscovered speaks loudly for the ineffi-
ciency of government arrangements. Against a com-
bination of treacherous men it is almost impossible to
guard, but the public have a right to demand that
at least there shall be some mode of quickly detecting,
even if it be impracticable utterly to prevent fraud.
The internal alterations of the Bank, which com-
menced in 1839 and lasted until 1845, claim a calm»
unbiassed statement. While in the secretary's office,
where he had been since 1837. Mr. WiUiam Ray
Smee was employed to draw up some important
documents for the governor, a task that was per-
formed greatly to the satisfaction of the latter. It
occurred to Mr. Smee that a proposal to simphfy the
working of the Dividend Warrant, and the Cheque
offices, the latter of which was so termed, from its
operating as a check on the payment of the
national debt, might be favourably received, and,
that he might compromise no one save himself in
the event of failure, he handed his proposition to the
governor without acquainting the chief accountant.
By the proposed alteration he stated that the work of
BANK OF ENGLAND. 135
the Cheque office, employing three principals and twen-
ty-one clerks, would be accomplished more effectually
with two principals and seven clerks. The project
was approved, a Committee of Directors appointed
to enquire into its merits, and after an anxious in-
vestigation, the more so as it emanated from a
young man whose financial abilities were not then
generally known, the proposition was adopted, and
the scheme carried out. This important check
on the payment of the national debt, with all
the intricacies involved in 600,000 warrants, being
successful, Mr. Smee immediately presented to the
governor another plan for remodelling the whole cir-
culation department of the Bank. The importance
and perfection of the project may be understood
from the fact that after it had been approved by
the committee although it was re-considered, then
sent to another committee, then altered, and again
re-altered, the original plan, after several months'
close and careful enquiry, was ordered to be carried
into execution.
The scheme was simple. It was, however, interest-
ing to the public, as, on the day of its adoption, the
Bank ceased to re-issue its notes. By the old system,
the numbers, amounts, and dates of the latter were
copied into books, in the order in which they were
received. The amounts were then added, and the
notes posted in a ledger, that they might be referred
to for the courts of law and the public, in cases on
136 HISTORY OF THE
fraud or litigation. These postings were afterwards
examined from a copy of the cash books, in which the
notes were entered, giving the balance of each ledger.
The new system abolishes the entry in the cash
hooks, and stamps every note on its entrance, with
a number which gives the full particulars of the
parties who send it in. The notes are then arranged
numerically, thereby saving the copying of the date
and number, except the last tw^o or three figures, and
altogether saving the entry of the amount ; while the
posting, which before took fifty, now employs eight
clerks. As the circulation is nearly numerically
doubled, it is impossible to say what amount is saved
to the public, but, judging from the number stated
to be employed by the report of the committee of the
House of Commons, it is probable that the old plan
could not be reverted to under eighty extra assistants.
On the day of its commencement one hundred and
twenty clerks were employed. From the novelty of
the various operations, the balance, the great proof
of success, was not arrived at till near eight o'clock.
On the second day of its trial, the same result was
arrived at by five o'clock. On the third it was tried
by three o'clock, but without the same success, being
5£ deficient. Every plan that could be imagined was
tried to discover the supposed error. For seven
hours were the clerks of the department employed
in examining and re-examining the books. For seven
hours were they detained investigating and re-investi-
BANK OF ENGLAND. 137
gating the notes, of which the books were a copv ;
and it was curious to witness a young man of three-
and-twenty, with unchangeable confidence in the
soundness of his system, directing or attempting all
those experiments which a perfect knowledge of the ac-
counts suggested as most likely to discover the presum-
ed error. At ten o'clock the search was given up ;
and the ruin of the new system seemed complete. The
information spread rapidly that the office had sepa-
rated without a balance ; and it could have been no
pleasant task to Mr. Smee to meet the governor on
the following morning with the news. The confidence
of the latter was, however, complete ; the plan
w^ent on ; a mode of detection was adopted ; and it is
to be presumed that the dread of discovery produced
the note, as the balance, a few days afterwards, was
£5 over, and the very note which had been proved to
be missing was found to have been returned.
A change in the working of the circulation depart-
ment had long been considered desirable. Mr. Mel-
lish, one of the directors, and member for Middlesex,
took considerable interest in the accomplishment of
an alteration ; and on one occasion there is a tradition
that, being desirous to ascertain the real nature of the
duty, he announced his determination to the principal
of the accountant's office, to come and attempt a day's
work. The morning arrived, and with it Mr. Mellish.
The day was a heavy one ; the business was new ;
and the books were brought him with all the gravity
138 HISTORY OF THE
suitable to the occasion, and perhaps more frequently
than was absolutely necessary. They came too fast
for him. In vain he exerted himself with all the
energy of which he was capable ; there was to him
a difficulty in finding the proper folios ; that which
clerks, accustomed to the operation, performed almost
intuitively, was a great exertion to a novice, and, long
before the day had passed, Mr. Mellish beheld such an
accumulation of ponderous tomes, both before and
behind him, that he gave up the attempt in despair,
and from this period an alteration w^as made in the
amount of labour, which was perhaps more in propor-
tion to the clerks' views of propriety than before The
same gentleman — and these things, trifling in them-
selves, are an evidence of the desire of the direction
to improve the economy of the establishment — saw
the principal of the office in which he had worked in
the area of the Royal Exchange. Immediately ac-
costing that gentleman, he earnestly addressed him on
the subject of the proposed alteration, and seizing the
button of his coat, pulled at it w^ith the same
energy with which he was talking, nor was it until
the button was divorced from the coat that the indi-
vidual whom the director held captive was enabled to
make his escape.*"
* Mr. Mellish may almost be said to have died in the sennce of the
Corporation. On the night of the fire of the Royal Exchage, although
but recently recovered from an attack of gout, he came down to the
Bank, the thermometer standing about ten degrees below freezing
point, saw everything done to secure its safety, and died from his
BANK OF ENGLAND. 139
From the above period various alterations occupied
the attention of Mr. Smee, till the spring of 1842,
when a committee was appointed. They reported the
triumphant success of the plan, and it has been in
working ever since. In the following week, the same
gentleman proposed another alteration in the circula-
tion department, by which the whole of the post -bill
office was successfully remodelled. Mr. William
Ray Smee's influence was now doubled ; and the next
step which he took was the first movement in the altera-
tion of the national debt department, by which the post-
ing in the dividend office was abolished. Success pro-
duced confidence ; and the proposition which followed
for an entire alteration in the management of the
national debt, almost involved in its failure or success
the payment of the dividends at the appointed time
to the public creditor. Looking calmly back on the
magnitude of this transaction, it appears singular to
reflect on the confidence reposed in Mr. Smee. It is
impossible to magnify the greatness of the operation,
for the balance of 600,000 accounts was to be pro-
cured by it, and it is impossible to deal with anything
more extensive than the national debt of England.
The confidence was, however, absolute ; and success
justified the confidence.
exertions. Perhaps no man would have been more pleased with these
alterations than Mr. Mellish had he lived to have witnessed them. But
singular enough, it was stated at the time, that the greatest difficulty-
Mr. Smee had to surmount was, that Mr. Mellish had proposed several
years before an alteration with a similar object, and had abandoned it.
140 HISTORY OF THE
The Bank — like other large establishments — is an
epitome ol" the world. Men are contented to abide
by their old institutions, and deprecate change as
evil. It was very natural that those who had followed
one particular plan for thirty or forty years should be
prejudiced in its favour. This plan, by a high and
competent authority,* had been pronounced perfect in
all its detail ; and a proposal to alter perfection must
have sounded to those gentlemen something like
presumption. It was natural enough for those who
knew the working of the old system, to think that a
new plan must fail ; to be slow in recognizing its
advantages, and to apprehend a want of safety in
various departments which had hitherto been regarded
as perfect. It is hardly too much to say that the
proposer was deemed arrogant by some, and that it
was firmly believed by others, that he would not
succeed in procuring the requisite balances. To enter
into a description of the new, would be useless without
doing the same with the old arrangements ; but their
importance may be gathered from the fact that the
dividend books, from which the public creditor re-
ceives his interest, are now commenced a week earlier
than before, while, during the remainder of the time
that the books are closed for transfer, certain
operations are rendered less laborious, and the
officers have less to do than heretofore. The task
was difficult. Involving as it did the most important
* Mr. Higham, Controller of the National Debt Office.
BANK OF ENGLAND. 141
operations of the Bank, with consequences to the
Corporation no less than to the projector in the event
of failure, it is probable that both the governor and
chief accountant experienced great anxiety during
its progress. Mr. Smee himself, with a most re-
markable confidence, never shaken by any apparent
difficulty, went through it with unswei*ving decision.
But the labour was not trifling. To initiate those in
a new, who had grown grey in the practice of an old
system — to explain the intricacies of a fresh plan to
those who would have preferred proceeding in the
good old path, and who, at first, unavoidably con-
fused the one with the other — to find out errors
which had occurred through" ignorance of the detail,
and which required a complete knowledge of it to
detect — appeared to require an older head than his
who now" attempted it, and who pursued his task
with a most unalterable faith in the excellence of his
scheme. The plan was successful ; the balance was
obtained ; and a most important result, far greater
than any pecuniary consideration, was arrived at.
The directors were enabled so far to consult the
accommodation of the public, as to enable the trans-
fers in the various offices to be made eight or nine
days later than usual, the business which formerly
occupied about thirty-two days being accomplished in
about twenty-three. That this is a most important
result, and that it would be found highly beneficial
during monetary crises, may be gathered fi'om the fact
142 HISTORY OF THE
already given, that during the panic of 1825, when
the demand for money was so extensive, upwards of
one hundi-ed transfers were daily made, as a favour
and after much trouble, by those whose necessities
compelled them to sell stock.
The importance to the banker and the merchant
can scarcely be overrated, as there must ever arise
periods of pecuniary difficulty when the advantage of
having a command over money in the funds is almost
incalculable.*
It is possible that these pages may be perused by
parties engaged in similar attempts in other establish-
ments. Let them not imagine that these alterations in
the economy of the Bank of England were effected with
the ease with which they have been related. Let them
remember that great operations are liable to great
difficulties ; that they may have to contend with the
power of the strong, and the jealousy of the weak ;
that in some there may be the pretension which
promises much, but produces nothing ; while the ca-
pacity of others may be only employed in condemning
that which they cannot improve. To alter the system
of a century is no trivial task ; to cany those altera-
tions into effect requires no ordinary mind ; and with
all the appurtenances of power, resolution of no com-
mon nature is demanded. The abuses with which
* There is no cause, under the new arrangements of Mr. Smee, to
prevent the stocks from remaining open throughout the year. An aboli-
tion of the shuttings would be received with acclamations by the monied
world. The Bank could not effect a more popular or more beneficial change.
BANK OF ENGLAND. 143
we are familiar are sanctioned by time, or appear so
woven into the fabric, that in destroying the one
we seem to tear down the other ; and whatever the
change, there are always so many antagonistic interests,
and so many important considerations, that, to adopt
the words which an Edinbm'gh reviewer applied to
Sir Samuel Romilly, he who would alter must in all
probability " share the fate of all propounders of
change in any institution : be derided by some, and
by others be regarded as the advocate of a desperate
cause."
Various efforts were made in 1843 to procure a
salutary relaxation of the labours of clerks in banking
establishments, although without success, as the at-
tempts made by benevolent persons to procure an
additional hour have hitherto failed. The argument
w^as adduced that other classes worked longer than
clerks ; and this obtained favour with those who were
against the movement. In May, 1843, the Bank of
England, in compliance with a request of the mem-
bers of the Stock Exchange, gave notice that no
transfers would be allowed after one o'clock on Satur-
days, and that the future public days would be Tues-
day, Wednesday, Thursday, and Friday, for all the
stocks. In the same year the hght sovereigns were
called in, and much uneasiness occasioned to the
poorer classes. The Bank received only large quan-
tities ; the poor man, therefore, was left to the mercy
of the small tradesman. Sixpence, and occasionally
144 HISTORY OF THE
a shilling was demanded, and the holder could only
complain and comply.
Every arrangement was made by the directors to
forward the business ; but in this, as in other instances,
much dissatisfaction was evinced. Those who were
compelled to apply were sometimes obhged to wait,
and their detention generally gave birth to a letter in
the daily papers, about loss of time, bad arrangements,
with unfair complaints against the clerks. There is
no public establishment in which so much accommo-
dation is afforded to the public, or where such atten-
tion is shewn ; and there is no place against which so
many unjust charges are brought. They generally
emanate fi^om the small holders of stock, who fancy
that the privilege of receiving their dividends twice a
year is to be accompanied by a deference, an obse-
quiousness, and a promptitude, which the monied man
or the banker never think of claiming.
The total amount of light coin received from the
11th of June to the 28th of July was £4,285,837,
and 2fd. was the loss on each, taking an average of
35,000. The large sum of £1400, in one pound
notes, was paid into the Bank this year. They had
probably been the hoard of some eccentric person
who evinced his attachment to the obsolete paper at
the expense of his interest. A few years afterwards a
£20 note came in which had been outstanding for
about a century and a quarter, and the loss of interest
on which amounted to some thousands.
BANK OF ENGLAND. 145
It is now the province of the writer to relate one of
those occurrences which occasionally interest the some-
what uneventful hours of a commercial community.
The union of rank, talent, and accomplishment, with
fraud, dishonour, and dishonesty, forms, in the present
instance, a relation sufficiently interesting to pass an
hour by the winter fire-side, and sufficiently striking
to demand the attention of the monetary man, and
the notice of the observer of human nature.
Florence, the beautiful capital of the grand duchy of
Tuscany, is, both from its natural advantages, and its
acquisitions in art, the chosen residence of many
members belonging to the most aristocratic families
from every country in Europe. Some reside from
choice, others from necessity. Some are of unim-
peachable honour, others are of broken fortunes and
questionable reputation. None were more remark-
able, from a combination of the latter, than the
Marquis de Bourbel, whose family was, according to
his own showing, as old as the "rocks of Provence,"
and Cunningham Graham of Gartmore, whose name
is a sufficient description of his country. Although
there might be a little gasconade in M. de Bourbel's
description of his race, there is little doubt that he
was of an ancient stock, which could be traced back
to the gentillard, or small gentlemen of Normandy,
a rank somewhat analagous to the better class of
English yeomanry. The Marquis, whose immediate
ancestor is said to have filled some subordinate
VOL. II. L
146 HISTORY OF THE
situation under the Governor-general of India, entered
life with no ordinary advantages. While young he
became attached to the French embassy in Portugal,
and afterwards at Copenhagen. From such situations
many men of less capacity have risen to wealth and
honour. This was not the fortune of the Marquis de
Bourbel, who, from some cause or another, sank to the
unenviable reputation of a gambler, duellist, and roue.
His accomplishments were varied. A great linguist,
a good draughtsman, a fine equestrian, and a skilful
fencer; he rode, fought, and fenced, until he became
a member of the secret French police, a degradation
sufficiently accounted for when it is added that he
was universally regarded as a thoroughly mauvais
sujet. He appears, indeed, to have been one of those
specious agreeable persons whom good men pity, and
with whom bad men associate. His wife, an English-
woman, who, with her fortune, had been caught
by the showy exterior of the Marquis, died broken
hearted, shortly after his elopement fi'om her with her
maid, or with an opera dancer, history is uncertain as
to which. But even the laxity of the Italian morals
found the Frenchman too bad for it, and he was com-
pelled in some measure to submit to public opinion,
by retiring to a country-house near Leghorn, on the
road to Florence.
The seclusion of the Villa Micali, the name of the
place to which De Bourbel retreated, was often en-
livened by the visits of the remarkable man who
BANK OF ENGLAND. 147
has been already named, Cunningham Graham, of
Gartmore, in Scotland. The bad pre-eminence of the
Norman was rivalled by the cool craft and unprincipled
design of the Scot. A large estate which had de-
volved to him he had squandered ; the fair fame of
his ancestors he had disgraced ; the honourable name
which had descended with his estates he had tarnished ;
and, in 1828, he was compelled to leave Scotland to
avoid his creditors, in an exile which ultimately
brought him to Florence, and made these two dan-
gerous men acquainted. Graham, like his friend, was
a person of considerable accomplishments. There
was, moreover, a refinement and taste in him which
was absent in his companion. Although he possessed
a love for the fine arts, it was in the more imitative
and mechanical ones that he excelled. With a turning
lathe he formed tools ; and possessed sufficient skill to
work on rare engravings of Rafael Morghen, and the
chef d'ceuvres of Domenichino and Guido Reni, which
he traced with singular success.
Such were the two men who sought each other's
society at the Villa MicaU, and who first brooded over
the artful and daring fraud that sought for its victims
al] the great European bankers, and which, in its
unparalleled boldness and cupidity, looked to the
gain of a million sterling as its reward. The idea
was worthy the crafty brains from which it emanated ;
and in order to carry the gigantic crime into execu-
tion it was proposed to forge those *'lettres circu-
148 HISTORY OF THE
laircs" (better known in England as letters of credit,)
which arc obtained from the principal bankers, for
payment by their foreign correspondents.
These letters, which are issued for sums var)ung
from £100 to £10,000, are very much alike, and are all
engraved in black with blank spaces for the amount,
the name of the bearer, and the banker's signature.
The great credit and immense business of the house
of Glyn and Co. made them fixed upon as unwilling
assistants in this bad transaction. On the letters
used by this firm their initials are stamped. Below
them is the blank space for the various sums to be
entered which are paid until the amount of credit is
exhausted. As an assistance to the holder, the names
of the principal places of Europe are annexed, with
the bankers to whom the credit is addressed ; thus to
the first, of Abbeville, is given that of Messrs. Daver-
ton and Tholome, and to Zante, Lawrence Hayes
and Co.
The difficulties were many ; but such men as De
Bourbel and Graham delight in surmounting difficul-
ties where wealth is to be achieved. One necessity
was a continental banker to aid them with his ex-
perience ; another and less difficult one was the want
of a circular letter of credit, on which the imitative
capacity of Cunningham Graham might exercise it-
self. Allan George Bogle, a native of Glasgow, son
of a West India merchant. Lieutenant in the Royal
Navy, and Graham's son-in-law, was stated to be
BANK OF ENGLAND. 149
chosen by the consph'ators to aid them in their bad
design. He first obtained a situation as clerk to a
banker at Florence, through his father-in-law's interest,
and then contrived to enter into partnership w ith Mr.
Kerrich and Mc Carthy, one of whom had commercial
connexions of the very highest credit, which pro-
duced a profitable business to the new firm of Bogle,
Kemch and Co.
The intimacy of De Bourbel and Graham increased,
and the turning room of the latter was chosen by
them for their many conferences. Here, by means of a
machine ostensibly employed in tracing pictures, they
employed themselves in imitating signatures, until
they arrived at the most unerring accuracy and veri-
similitude.
The commercial connexions of Bogle, Kerrich and
Co., were in the meantime rising fast into the highest
credit. In March, 1839, a great move was made in
the plot by the introdution of the Marquis de Bour-
bel as a constitutent to Bogle, Kemch and Co. ; and
the next step was a visit of De Bourbel to London, to
accelerate those branches of the scheme which could
not be forwarded out of the great English capital. No
sooner had the Marquis found himself in England
than he discovered a valuable assistant in the person
of an old friend, the Baron D'Arjuzon, son of a peer
of France, who was president of the College of
the electoral department of the Eure, and had been
first chamberlain of Hortense, wife of Louis Buona-
150 HISTORY OF THE
parte. The vicissitudes of a gambler's life were a
fitting introduction to the risks of the forger ; and
D'Arjuzon readily joined the designs of his comrade.
The first object was to procure the kind of paper used
by Glyn and Co. in their circulars ; an operation neces-
sarily of great difficulty, but one in which they were
successful. The next was to get the letter of credit
engraved, previous to which it was requisite to pro-
cure one from the banker whose paper was to be
imitated, and whose signature was to be forged. In
the month of January, 1840, an application was made
to them for a letter of credit. The transaction was
regular, the money was paid, the document handed
over, and the work of iniquity proceeded with expe-
dition. The master mind of De Bourbel was in a
congenial element. An engraver was employed for
the copper-plates ; the seal of the instrument was
engraven, and copies struck off at the apartments of
De Bourbel, which were then forwarded to Florence,
to Cunningham Graham, who added, by mean s of his
tracing machine, the names of Glyn, Hallifax, Mills,
and Co. All was now ready for the perpetration of
that plot, the discovery of which interested every
great commercial house in Europe. Other assistants
were procured to the number of six, amongst whom
were the son of Cunningham Graham, and Marie
Rosalie D'Arjuzon, who was to travel under the title
of the Countess of Vandec, with one who called him-
self the Count De Paindrv, but whose title is no
BANK OF ENGLAND. 15l
where to be found among those of the aristocratic
families of France.
The 19th of April was the day chosen for a simul-
taneous presentation of the forged letters. The
bankers of Italy, Belgium, and the towns on the
Rhine, were chosen as the chief victims. America,
India, Algiers, or Egypt, was to be the rendezvous
when the robberies were effected. The chief conspi-
rators were in high spirits. The elder Graham
declared, in some intercepted correspondence, ** that
the letters were perfectiom, and that it would be
impossible to refuse them." De Bourbel wrote to
Graham, the younger, to be of good courage, to act
vigorously, that all was right ; " and a proof that all
is right is, that Bogle lets him come and embark in
the affair. Bogle and your papa are convinced that
all will turn out well, and that the letters of credit
must be paid."
After an interview of De Bourbel with Bogle on the
21st of April, in a private room, which lasted upwards
of two hours, the Count de Paindry commenced his
operations by presenting a letter of credit to Messrs.
Bogle, Kerrich and Co. ; and receiving upon it the
sum of £200. The confederation by this time had
opened the campaign in various parts of Europe. At
Genoa, Messrs. Gibbs and Co. paid £1500 on the faith
of the letter. At Turin, £600 were obtained from
Nigra and Son. At Milan, £800 were procured from
Pasteur Girod and Co. ; and on the following day
152 HISTORY OF THE
the same amount was procured from Louis Laurent
and Co. Rome next witnessed the pollution of their
presence. £200 were procured from M. Le Mesurier,
and the next day £1300 more were demanded. So
large a sum made the cautious Italian hesitate. It
was the first time he had honoured any letter of Glyn
and Co. Pipe, one of the subordinate agents, affected
great indignation. He asserted that his father had sent
him out to purchase pictures on commission, and
should the money not be immediately paid, he would
forthwith replace what he had received, return to
England, and cause his father to enter an action
against Messrs. Glyn for damages. The high tone of
this man, a consultation with the English Consul and
another gentleman, together with a full consideration
of the circumstances, unfortunately procured the
payment of the money.
Florence witnessed a curious scene in this romantic
drama. It has been related that the Count de
Paindry had procured £200 from Bogle, Kerrich & Co.
On the following day, on the arrival of Mr. Kerrich,
he found the Count in earnest conversation with his
other partners. A shop-keeper of the name of Phil-
lipson had doubted the authenticity of the letter, and
the high-minded Count could not think of retaining
the money, lest it might possibly injure a reputation
so unsullied as his own. "At first," he said, "I
determined to pass this over ; but, on reflection, it
is a matter which touches mv honour ; and rather
BANK OF ENGLAND. 153
than have my name brought in question, I have
resolved to return your money, and request you will
write to your correspondents and re-assure yourselves
in the matter."
It may be easily imagined that however Messrs.
Kerrich and Macarthy, the partners of Bogle, might
applaud so honest an action, it was not without its
reward to the accomplished Count. An entry was
made in the letter as follows, " The above payment
cancelled by desire of the bearer. Bogle, Kerrich
and Co.," and this would tend to convince other houses
of the correctness of any transactians he might have
with them. From Florence he sought Bologna,
w^here he procured £347 from Messrs. Landi and
Roncadelli ; and at Venice a further sum of £40.,
from Dubois, Brothers. At Trieste, Messrs. Routh
paid him £1612 6s. ; and one of the partners was so
struck with the Count's pleasing manner, that he
invited him to his opera box in the evening, and
allowed him to accompany him home to his private
residence.
Affairs were progressing equally favourably on the
Rhine. The Countess Vandec, in order to support
her rank, travelled in her private carriage attended by a
courier. At Coblentz she obtained £500 from Dein-
hard and Jordan, and from Gogel, Kock and Co. £520.
At Mentz she procured £500 from Human and
Mappes Fils, and, satisfied with her success, pro-
ceeded to Paris. At Liege, D'Arjuzon and a con-
154 HISTORY OF THE
federate obtained £100 ; and at Brussels £750 from
Engler and Co. Ghent was assailed by them on the
23rd ; but Messrs. Meulemeester and Son refused to
honour the letter, on the ground of not having re-
ceived advice from Glyn and Co. On the same day,
the letter of credit presented to Engler and Co. was
presented to M. Agie, at Antwerp. This gentleman,
surprised at a further advance being so soon required,
refused to honour the letter on the ground of want
of advice. The tinith was that M. Agie supected a
fraud. He intimated these suspicions to M. Engler,
who immediately communicated with the police ; and
Ireland (one of the subordinate agents) was appre-
hended on the 25th of April, on board the Ostend
steamer, bound to London.
The news passed into the Brussels journals ; fi*om
thence to Galignani's Paris papers ; and before the
ramifications of the conspiracy could be discovered,
different parts of the world received the actors in the
plot. The names of De Bourbel and Graham were
implicated. Mr. Kemch was startled by the receipt
of some documents fi-om Her Majesty's envoy at
Florence, in wliich the name of Bogle w^as seriously
compromised. The distress of mind of the latter
appears to have been great ; and after some agitated
interview's with his partners, he declared his determi-
nation of retiring from the firm, a letter to this effect
being drawn up by Mr. Macarthy.
The first intelligence in England of this fraud was
BANK OF ENGLAND. 155.
received bv the " Times" newspaper, in which a letter
was pubUshed wherein Mr. Bogle's name was intro-
duced as one of the fraudulent parties. The letter
stated " that a great forgery company, established on
the continent, had lately been detected and blown up ,
and that the object of the company was to plunder
the continental bankers by means of forged letters of
credit, purporting to be of the banking firm of Glyn,
Mills and Co., of London." The letter then gave the
names of the conspirators, and among others included
that of Bogle, who immediately commenced an action
against the proprietors of the " Times" newspaper, as
he was unable to support the idea of his name and
character being questioned. The beha\dour of the
conductors of the "Times" was worthy their high
reputation. Disregarding expence, they sent Mr.
Dobie, their solicitor, and Mr. Kirwan, a barrister, to
the continent ; there, after an anxious search and
harassing difficulties, a body of evidence was obtained
from wliich the above circumstances have been col-
lected, and which perhaps, have never been surpassed
in the annals of jurisprudence.
The character of the plaintiff was estimated at one
farthing by the jury, w^hich was the amount of
damages granted by them. The judge refused to
certify ; and the expenses of Mr. Bogle, therefore,
were paid out of his own purse. The testimony paid
to the proprietors of the "Times" was worthy the
vigorous and honourable course of that paper ; nor is
156 HISTORY OF THE
it possible to praise too highly the promptitude which
published the account, the boldness which printed
names at a risk so great, or the skill that collected
the evidence which justified its conduct in the eyes of
all Europe. The following will give some idea of
the fate of the various conspirators.
De Bourbel retreated to Spain ; but is sup-
posed to have been in London at the time of the
trial, and to have supplied Bogle with cash, and what
would be more valuable, with the counsel of his
crafty brain.
The Count de Paindry was overtaken in Moldavia,
and compelled to disgorge some of his plunder ; was
delivered ov^er by the police of Constantinople, and
sent to Genoa, and thence to Aix, where the court
declared its incompetency to take cognizance of the
affair, and he was dismissed.
Alexander Graham died at a maison de Sante, in
great want and misery.
Graham the elder, D'Arjuzon, his mistress, and
Pipe, do not appear to have suffered any molesta-
tion on account of their share in the transaction, other
than that they were compelled to decamp very sud-
denly ; so that the only parties punished in connexion
with a fraud of unexampled magnitude, laid with
consummate skill, and put into execution with boldness
that ensured its success, was the journal which put the
commercial men of all Europe on their guard, broke
up the confederacy, and prevented the loss of thou-
BANK OF ENGLAND.
157
sands. The expenses of the " Times " are known to
have amounted to many thousand pounds. A con.
temporary says :
" The bold and manly conduct of the " Times " in
publishing the original account of the confederacy,
the resolution with which they stood the attack, as
well by pleading justification instead of an evasive
plea, as the enormous expense they went to to support
the plea, and the important consequences resulting
from the whole proceeding, did not escape the obser-
vation of the merchants and bankers, and was greatly
appreciated by them. A committee was formed ; sub-
scriptions poured in from every quarter ; the Corpo-
ration of the city, the companies, the incorporated
bodies of every kind, merchants, bankers, and trades-
men, and even private parties, hastened to forward
very handsome contributions. Nor were the leading
merchants and bankers of the continent at all back-
w^ard ; they, indeed, were the parties chiefly aimed at,
and they came forward very handsomely, so that in
the course of a few months the subscription amounted
to £2700.
"The proprietors of the 'Times' now added another
honour to those they had already gained, for, declining
any of the customary forms in which tributes of this
nature are usually embodied, they requested that some
mode should be chosen by which, at once, the memory
of the occasion might be perpetuated, and the com-
munity benefitted ; and it was finally decided, that, with
158 HISTORY OF THE
the exception of the expenditure of a trifling sum in
tablets, with suitable inscriptions, one to be placed in
the Royal Exchange, and the other in a conspicuous
part of the " Times " printing establishment, the
whole of this sum should be appropriated to the
foundation of two scholarships, to be given to youths
elected from Christ's hospital and the City of London
school, to the Universities of Cambridge or Oxford."
BANK OF ENGLAND. 159
CHAPTER Vll.
THE INCOME TAX — ITS PAYMENT ON ANNUITIES — THE BANK CHAR-
TER ACT — ITS PROVISIONS — THE COUNTRY BANKERS — PETITION
OF THE LONDON BANKERS — ITS RESULT — NEW ARRANGEMENTS
WILL FORGERIES.
The advent of Sir Robert Peel to power, in 1842,
was a circumstance of some importance to the Bank
of England. The powerful majority by which he was
supported rendered it almost undoubted that he would
maintain the position in which he had been placed by
the country, when the expiration of the first ten years
allowed by the charter for the continuance of the pri-
vileges of the corporation should arrive ; and it was
almost equally certain that he would modify the prin-
ciples on which it had hitherto been founded, accord-
ing to his own views of the necessities of the monetary
world. The position of the country at this period
was very critical. A feeling of discontent was preva-
lent among the agi^arian and manufacturing popula-
tion. An empty treasury, a failing revenue, and a
169 HISTORY OF THE
dissatisfied people, were sufficient to render the go-
vernment of the nation a difficult task. But the
prospect of our foreign relations also was by no means
cheering. The Chinese question was unsettled. We
w^ere waging an expensive but ineffective war with
an empire which reckoned its people by myriads. In
the east we saw the power which had been won by a
Clive, supported by a Hastings, and consolidated by
a Wellesley, jeopardized in a manner which roused
the sympathy of the whole nation. The integrity of
the Turkish empire had been supported against the
capacity of one of the great men of the day, and
against the inclination of France, the government of
which maintained an armed and haughty neutrality,
while her people were prepared to spring w^ith the
fierceness of their nature on the enemy they denounced.
America advanced claims which the dignity of Great
Britain rejected.
These things were ominous, and required a prac-
tised skill to gi-apple with them. The danger, how-
ever, passed away. India was preserved, and China
yielded up her undignified isolation. From the Chinese
expedition came a treasure, which, for the first time
in the history of the Bank of England, placed within
its keeping a metal, w^hich, under the name of
Sycee silver, had never before been within her vaults ;
and which was an object of almost universal interest.
The pride of France w^as soothed by time. The
breach with America was healed through the agency
BANK OF ENGLAND. 161
of an Ashburton ; and by the imposition of an income
tax the finances were restored to a healthy condition.
The labour of the officers of the Bank was greatly
increased by the deduction of the property tax from
more than half a million of dividends belonging to the
public creditor, and the interests of the Corporation
were yet more deeply involved in this tax, as it
opened the question with regard to the justice of
paying the charge upon terminable annuities. In
many instances these annuities would expire in a very
few years ; and in the case of the Bank, which pos-
sessed the Dead Weight and other annuities, entered
into without any idea of such a tax, it appeared to
the proprietors a very objectionable impost. It was
argued by these gentlemen, at a meeting of the
court, that it would not be equitable to compel
them to pay the income tax on annuities, as it
would be in reality paying on the capital. A motion
was carried requesting the governors and directors
to memorialize the government on the question ;
but the attempt was vain, as it was determined
that no difference should be made between the divi-
dend of the fundholder and the payment of the
annuitant.
In 1844, a reduction was made in the whole of the
funds which bore an interest of 83 per cent. Money
had been abundant ; the three per cent, consols were
above 100 ; and there could not be a more favourable
period for the operation. The idea had long been
VOL. II. M
162 HISTORY OF THE
prevalent that the dividends upon this Stock would be
reduced ; and those proprietors who lived upon their
interest evinced great anxiety when it was known that
the alteration was decided on. The proposition, how-
ever, was one which met with much favour. Instead
of an immediate reduction to three per cent., it was
announced that for the first ten years the 3^ per
cents, would be lowered to 3i ; and after that, to
three per cent. ; at the same time they were guaranteed
against any further alteration for the succeeding
twenty years. The dividends of the greatest por-
tion of the Stock had hitherto been paid in January
and July, but they were from this period receivable
in April and October. Three months dividend was
paid to all the holders of the new 3| per cents.,
and this arrangement possessed the advantage of
equalizing the half yearly amount of interest paid
to the national creditor. The operation was altogether
very successful, and met with great approval from
those who were considered most capable of judging of
its merits.
The history of the last Bank charter act has now
to be detailed. It is a history fraught with interest,
no less from its importance than from the strange
misunderstanding which arose during its progress.
For some time previous great speculation existed as
to the character of the act ; and the future policy of
Sir Robert Peel was looked forward to with conside
rable earnestness. The question of the circulation
BANK OF ENGLAND. 163
was widely discussed ; but a perusal of the numerous
pamphlets appeared to render it impossible to recon-
cile the contending opinions which obtained. It was
a fortunate circumstance for the Corporation that
those upon whom the management of the detail
devolved were successful in obtaining the confidence
and esteem of Sir Robert Peel. They had a most
difficult task to perform. They had to reconcile the
rights of the proprietors with the public interest. They
had firmly to resist a strong pressure from without ;
and they had to accommodate their views to those
principles by which it was resolved to frame the
charter. Their correspondence proves that they did
not, by servilely yielding at once, sacrifice the rights
of the proprietors, but where they were compelled to
give way, they did so from the conviction that resist-
ance was useless. The few words of Sir Robert Peel
are sufficient evidence ; he said, " I must, in justice
to the gentlemen who conducted the negociation on
the part of the Bank, declare that I never saw men
influenced by more disinterested or more public
spirited motives than they have evinced throughout
our communications with them. They have recon-
ciled their duties as managers of a great institution,
bound to consult the interests of the proprietors, with
enlightened and comprehensive views of the pubhc
interests." On a subsequent occasion. Sir Charles
Wood remarked, and the opinion is valuable as the ex-
pression of an opposite political faith, " I will only say
164 HISTORY OF THE
that the more wc enquired into tlie conduct of the
directors in the management of the Bank affairs, the
more I was convinced of the injustice of the greater
part of the charges which had been made against
them ; I was convinced that whatever they did, they
did in the behef that it was for the best, for the pubhc
interest ; and above all, I believe that they have not
been swayed by any considerations of their mere
private interests."
The question of the renewal w^as opened by a
letter addressed to the governor and deputy-governor
by the Right Hon. Henry Goulburn, then Chancellor
of the Exchequer, proposing certain alterations in the
act, and entering very minutely into the question.
To the suggestion since carried into effect, that a
publication of the affairs of the Corporation should
be made weekly, although the reply of the Bank
authorities offered no objection, they intimated a
doubt whether the publication of the banking ac-
counts could be considered essential ; and to the
proposal to remove the prohibition then in force, as
to drawing, accepting, or paying bills within the
sixty-five mile circle round London, they alluded in
the remark that the Bank might incur some loss in
its banking department ; and in the more serious
objection, that if such power should be exercised for
the purpose of circulation, it might interfere with the
great object of the projected measures. It will be
seen that Sir Robert Peel made an emphatic declara-
BANK OF ENGLAND. 1 G5
tioii concerning this remonstrance. The fear thus
expressed was fuL^lled by the result. Many such
attempts w ere made to estabHsh a spurious and illegal
circulation. They were, however, quickly exposed ;
exposure produced failure ; and they are only worth
mentioning as a short-sighted policy which met with
the fate it merited.
The reply of the Bank was considered satisfactory
by the ministry, who refused to hold out any pros-
pect of an abatement of the terms which the Bank
were to pay for their advantages, and the correspon-
dence concluded with the acceptance of the conditions
of Mr. Goulburn. These letters afford an additional
proof that the government had no intention of
allowing the Bank to increase its circulation above
fourteen millions. The following is a copy of the
" Resolutions to be proposed in committee on the
Bank of England Charter Acts, on Monday, the
20th of May," which w^ere appended to the letters
of the contracting parties.
1. " That it is expedient to continue to the Bank
of England certain privileges, subject to certain
conditions.
2. That the Bank of England should henceforth
be divided into two separate departments ; one con-
fined to the issue and circulation of notes, the other
to the banking business.
3. That it is expedient to limit the amount of secu-
rities upon which it shall be lawful for the Bank to
166 HISTORY OF THE
issue notes, payable on demand, and that such amount
shall only be increased under certain conditions to be
prescribed by law.
4. That a weekly publication shall be made of the
circulation and the banking departments of the Bank
of England,
5. That it is expedient to repeal the law, which
subjects the notes of the Bank to Stamp duty.
6. That the rate of payment by the Bank shall
be £180,000 per annum.
7. That, in the event of any increase of securities,
as aforesaid, a further annual payment shall be made
by the Bank equal in amount to the net profit derived
from such additional securities.
8. That it is expedient to prohibit the issue of
notes, payable on demand, by any bank not now
issuing notes, or by any bank hereafter to be estab-
lished.
9. That it is expedient to provide that such banks,
in England and Wales, as now issue notes, payable on
demand, shall continue to issue them, subject to such
conditions as may be provided for.
10. That it is expedient to provide, by law, for the
weekly publication of the amount of notes payable on
demand.
1 1 . That it is expedient to make provision, by law,
with regard to joint stock banking companies."
The principles of the bill did not meet with much
admiration among the country bankers, who, naturally
BANK OF ENGLAND. 1G7
enough, looked upon the system which yielded them
large profits, as a very excellent system, and thought
all interference not only unpleasant but unnecesary.
The memorials which they presented to government
met with attention ; and where it was shown that an
alteration would be an improvement, it was readily
adopted.
The speech of Sir Robert Peel, on the evening of
the 6th of May, 1844, will well repay perusal. The
subject w^as one to w^hich his mind had long been de-
voted. From the year 1819, when that bill, which is
indelibly associated with his name, received the assent
of the legislature, up to the period when the renewal
of the Bank charter act occupied the attention of the
house, the name of this gentleman is to be found in
all those debates which affected the w'elfare of the
Bank of England. The opening of his oration evinced
his sense of the importance of the movement. *' There
is no contract, public or private ; no engagement,
national or individual, wdiich is unaffected by it. The
enterprises of commerce, the profits of trade, the ar-
rangements made in all the domestic relations of soci-
ety, the wages of labour, pecuniary transactions
of the highest amount and the low^est, the pajmient
of the national debt, the provision for the na-
tional expenditure, the command which the coin
of the lowest denomination has over the necessaries
of life, are all affected by the decision to which we may
come."
168 HISTORY OF THE
On tlie 17th of April, 1844, the committee of
country bankers held a meeting, and passed several
resolutions indicative of their alarm that Sir Robert
Peel would propose certain alterations in the local cir-
culation ; and calling on all their brethren to co-operate
with them in a strenuous opposition. Their reasons
for this mode of action were, that government had
refused to declare its views prior to mooting the ques-
tion in parliament ; and as the weakest fortress makes
the greatest show of resistance, so they endeavoured to
guard themselves in that part where attack was most
to be expected, and most dangerous.
Their resolutions were alluded to in the speech of
the right honourable gentleman, who expressed his
conviction, that their own assertions were sufficient to
condemn their cause, with his hope, that no member
of the senate would respond to an appeal which de-
manded him to come into that house pledged to a
specific course of action, as though no statement and
no argument could add to his knowledge or throw
any light upon the intricate subject.
- The following is a digest of the clauses of the new bill.
1. That from and after the 31st of August, 1844,
the issue of notes payable on demand shall be kept
distinct fi'om the banking business, and that it shall
be conducted in a separate department, to be called
"The issue department of the Bank of England."
2. That on the 31st of August, 1844, the Bank
shall t) ansfer to the issue department securities to the
BANK OF ENGLAND. 1G9
value of fourteen millions, the debt due by the public
to be deemed part ; that the banking shall transfer to
the issue department, all the gold coin and gold and
silver bullion not required ; that the issue department
shall deliver to the banking department such an
amount of notes, as, with those in circulation, shall
equal the securities, coin, and bullion, transferred
to the issue department. That the Bank may
not increase but may diminish the amount, and
again increase it to any sum not exceeding fourteen
milHons.
3. That the Bank may not retain in their issue de-
partment at one time more silver than one-fourth of
the gold coin and bullion held at the time.
4. That the notes of the Bank shall always be
payable in gold on demand, at the rate of £3 17s. 9d.
per oz.
5. That if any country banker shall cease to issue
his own paper, the Bank of England may issue addi-
tional notes to the amount of two-thirds of the autho-
rized issue of the said banker.
6. That a weekly report of the accounts of the issue
and banking departments be published in the " Lon-
don Gazette."
7. That the notes of the Bank shall be freed from
the payment of stamp duties.
8. That £180,000 per annum shall be deducted
from the charge made for the management of the
national debt.
170 HISTORY OF THE
9. That if (under provision 5.) the circulation of
the Bank shall be increased, the net profit of such
circulation shall also be deducted from the above
charge.
10. That no other banks of issue be allowed than
those in existence on the 6th of May, 1844.
1 1 . That after the passing of this act no banker
may issue, in England and Wales, any bill of Ex-
change or promissory note on demand, excepting such
bankers as were in existence on the 6th of May, 1844,
who shall only continue to issue them under the
conditions hereinafter mentioned. That the right to
issue notes shall not be compromised by the admission
or retirement of any partners. That no company
now consisting of six or less than six partners, shall,
if they exceed that number, be allowed to issue notes.
12. That if any banker shall become bankrupt, or
shall cease to issue notes, he shall not resume the
issue.
13. That the average amount of the twelve weeks'
circulation prior to the 27th of April, 1844, shall be
taken of those bankers who issue notes, and they may
continue to issue them, provided they shall not, on
four weeks' average, circulate more than the average
previously taken.
14. That if two or more banks become united, the
same principles shall apply to their issue.
15. That the average circulation of the country
bankers, the twelve weeks prior to the 27th of April,
BANK OF ENGLAND. 171
1844, shall be published in the "London Gazette,"
and this " Gazette" shall be received as evidence of
the circulation allowed to such banker.
16. That if two or more banks unite, the same
principle shall be applicable to them ; but it shall not
be lawful for them to issue notes when the partners
exceed six.
17. That if any country banker exceed his author-
ised amount, he shall forfeit a sum equal to the sum
issued in excess.
18. That a weekly account shall be sent by every
banker issuing notes, on and after the 19th of Octo-
ber, 1844, to the Commissioners of Stamps and
Taxes, of the amount in circulation each day of the
week ; and also an average amount of the said weekly
circulation ; and on the expiration of every four
weeks, the average amount of the said notes, with
the amount authorized, shall accompany the weekly
account. The weekly average to be published in the
" London Gazette." Any banker rendering a false
account to forfeit for each offence £100.
19. That the average amount of the issue of each
banker is not to exceed that certified by the Com-
missioners of Stamps and Taxes.
20. That the said commissioners shall have full
power to examine all books, at all seasonable times,
of such bankers as issue notes, and to take copies or
extracts from any such book or accounts.
21. Each banker to return his name, residence,
172 HISTORY OF THE
and occupation, or in the case of a partnership or
company, the name, residence, and occupation of
every person ; a copy of such return to he puhHshed.
22. Each banker to take out a separate license • for
every place at which he may issue notes or hills.
Any banker having such licence in force on the Gtli of
May, 1844, for issuing notes at more than four separate
places, shall not be called on to exceed his licenses
for continuing such issue in the places specified.
23. That on and after the 31st December, 1844,
the Bank shall pay to certain bankers, agreeing to
issue their notes, one per cent, on the account
circulated.
24. That similar arrangements may be formed
with other banks of issue, provided the composition
be deducted from the amount payable by the governor
and company to the public.
25. That all the compositions payable to the
several banks w^hich have ceased to issue their own
notes under the usual agreement with the governor
and company, shall cease on the 1st of August,
1856.
26. That any company of bankers, though exceed-
ing six in number,carrying on the business of banking
in London or within sixty-five miles, may draw,
accept or endorse bills of exchange, not payable on
demand.
27. That all previous privileges, except such as
are abolished by the act, shall remain in force, subject
BANK OF ENGLAND. 173
to redemption at any time, upon twelve montiis, notice
being given, after the 1st of August, 1855, and on
repayment of all debts due from the public."
The last was an unusal feature ; as, if the existing
government in 1855 omitted to give notice of an alter-
ation in the charter, it was at their option to do so in
the following year, or at any succeeding period which
might appear to render it adxasable to suspend or alter
the privileges of the corporation.
It was considered by some that the privileges granted
to^ the countiy banks, by which they might draw bills
within the sixty-five mile limit at less than six months
date, might give rise to a paper currency, differing in
form, but not in principle, from promissory notes^
" But," said the framer of the charter, very emphati-
cally, " I give pubhc notice that if the power should
be abused, if it should be attempted to circulate small
bills so accepted, within the limits reserved to the
Bank, I shall not hesitate to appeal to parliament on
the instant, for the purpose of correcting the evil."
A court of proprietors met to discuss the alterations,
and the letters which had passed between the Chan-
cellor and the governor and deputy-governor were
read. The court was adjourned for a few days and
the proposals agreed to at the ensuing meeting with
only three dissentients.
The two great elements of this act were that the
Bank might issue £11,000,000 on the security of
the debt due from the public, with £3,000,000 on
174 HISTORY OF THE
exchequer bills and other securities ; and that every
note issued beyond that sum must have its repre-
sentative in an equal amount of bulHon. The mea-
sure as at first proposed met with a few modifications;
but the great principles of the bill, which not only
restricted the issues of the Bank of England, but
those of the country banks, also, remained unaltered.
The objections of the representatives of this class
were strong ; but no objections that they could
make were equal to the facts which were developed in
one of the speeches of the right honourable baronet,
A simple announcement of the failures of bankers
destroyed all their assumptions ; and every argument
grew weak in comparison with the statement that from
1839 to 1843, there had been eighty-three bankrupt-
cies, of which twenty-nine were banks of issue ; that
of these, forty-six had paid no dividend, twelve had
paid less than 5s. in the pound, twelve had been
under 10s., three less than 15s., two under 20s. ; the
results not yet being known of seven ; that some,
though insolvent when they died, had left large
amounts to their relatives ; that others had embarked
in wild speculations, to the ruin of themselves and
their clients, and that the only assets of another were
race horses.
Allusion has been made to an incident of great in-
terest which arose during the proceedings. AVhen the
bill was first introduced, a general impression was pre-
valent that the government had reserved a right to
BANK OF ENGLAND, 175
itself to increase the amount of circulation on secu-
rities, above the fourteen millions to which it was
ordinarily limited. When, therefore, the act was
printed, and it was seen that none of the enactments
were to this purpose, those members of the monetary
classes who were in favour of large issues, took the
alarm, and at a meeting of the banking interest, a let-
ter was framed, calling on Sir Robert Peel to abide by
his word ; and, after some difficulties and dissensions
which are not worth detail, a letter was sent on
the 13th of June, to the right honourable baronet,
stating that on the first announcement of the new bill,
it was proposed, that in the event of any particular
crisis, a power should be reserved, with the consent
of the government, of extending the issues of the Bank
of England beyond fourteen millions, and submitting
that the absolute limitation of the issue to this amount
would create a feeling of uneasiness throughout the
country. This letter was signed by the following
firms : —
RoBARTs, Curtis & Co. Currie & Co.
Hanbury, Taylor & Lloyd Glyn, Halifax & Co.
BosAxauET, Franks & Co. Williams & Co.
Brown, Janson & Co. Fullers & Co.
Barclay, Bevan & Co. Barnard, Dimsdale & Co.
Hankey & Co. Barnett, Hoares & Co.
Smith, Payne & Smiths Lubbock, Forster & Co.
Willis, Percival & Co. Stevenson, Salt & Sons
Masterman, Peters & Co. Price, Marryat & Co.
Rogers, Olding & Co. Sapte, Banbury & Co.
Spooner, Attwood & Co. Weston & Co.
176 HISTORY OF TJFE
TwiNiNGs & Co. Ransom & Co.
Dixon & Co. Stuahan & Co.
CouTTS & Co. Scott & Co.
HeRRIES & Co. COCKBUUN & Co.
The reply fiotii the minister was to the effect that
he would refuse any further extension than that already
provided for by the fifth clause, and denied that his
speech on the first introduction of the matter justified
the opinion entertained by the applicants.
It seems difficult to account for the view taken by
these and other gentlemen that Sir Robert Peel origi-
nally intended to allow the Bank to increase its issues
in the event of any great monetary crises. The
whole tenor of the bill proved that this would have
been incompatible with its principles. That the idea
was very prevalent there can be no doubt. Mr. David
Sidomons asked the governor of the Bank, at the
meeting of the court, " Has the Bank the power, with
the consent of government, to increase its issue?"
The answer was " Yes ; with the consent of the First
Lord of the Treasury, the Chancellor of the Ex-
chequer, and the Master of the Mint." This, at first
sight, may appear to support the opinion of the
bankers ; but it is strictly trae, and it is most probable
that the governor referred in his reply to the increased
issue liable to a change in the circulation of the
country banks. Sir Charles Wood, in a speech
remarkable for its elegance and depth, stated that it
was one of his most important objections to the
BANK OF ENGLAND. 177
charter ; and a gi-eat portion of the monetary world
begin, through the mere force of reiteration, to believe
that the premier made a wilful alteration in his bill,
while, during a late financial crisis, in the memorable
petition of the bankers, that interest again acted on
this impression.
The English language could scarcely be more ex-
plicit than the passage by which the great architect of
the Bank charter has been judged. It is now given
that the evidence may be fairly weighed.
" I have said that the Bank shall be restricted from
issuing notes upon securities to any greater extent
than fourteen millions. The restriction apphes, how-
ever, to ordinaiy circumstances, and the present state
of the affairs of the Bank. The case may occur in
wliich it would be reasonable, and, indeed, might be
necessaiy, that there should be an increase of the issues
of the Bank upon securities. Supposing the country
circulation to amount to eight millions, and of this
amount two milUons to be withdraw^n, either in con-
sequence of the failure of banks, or in consequence of
agreements with the Bank of England to issue Bank
of England paper ; in that case, in order to supply
the void, it may be necessary that the Bank should
make an increased issue. A part of this issue may
fairly be made upon securities. Our proposal is, that
the profit to be derived from such an issue shall be
placed to the account of the government, and that
no increased issue upon securities shall take place
VOL. II. N
178 HISTORY OF THE
without a communication from the Bank to govern-
ment, and without the express sanction of three
members of government, the First Lord of the Trea-
sury, the Chancellor of the Exchequer, and the Presi-
dent of the Board of Trade. We do not contemplate,
and do not intend to provide for, an increased issue
upon securities in any other case than that to which I
have referred, namely, the supply of a void caused by
the withdrawal of some considerable portion of the ex-
isting country circulation." There is scarcely any neces-
sity for comment on this. The mistake must have arisen
fi'om some one taking the lead in the assertion ; and
it must have been continued from the indolence which
prevented others from re -perusing the debates. The
principle is laid down, the exceptions are named, and
then, that there may be no error or misunderstanding
on so important a point, those exceptions are reiterated
in language which cannot be more definite. " We do
not contemplate, and do not intend to pro\'ide for an
increased issue upon securities in any other case than
that to which I have referred, namely, the supply of a
void caused by the withdrawal of some considerable
portion of the existing circulation." There is no cir-
cumlocution in this, and there can be no doubt to a
disinterested party ; but " the wish is often father to
the thought," and words are often looked at through
coloured spectacles, which only require the clear light
of day to interpret correctly.
The nature of this charter was approved by Mr.
BANK OF ENGLAND. 179
Jones Loyd. His evidence before the committee of the
House of Commons indicated that which he afterwards
\sTote ; that the contraction of the circulation in
correspondence with the decrease of the bullion was
the only measure which could afford effectual security
for stopping the drain of bullion. The " Times" re-
marked, "the sincerity of Mr. Loyd's opinions cau
admit of no doubt, since they are at variance with his
own interest as a banker, as persons are not wanting
who accuse him of having betrayed his craft, and of
having assisted in handing over the entire banking
interest to the government, for the purpose of creating
ultimately one great banking monopoly."
It was the opinion of Mr. Loyd that to accede to
the petition would be virtually to destroy the effect
of the measure ; others believed that it would have
given a dangerous power to government, which might
have been turned to all sorts of abuses ; and there
can be little doubt that it would have been the first
step towards a government issue. But whatever the
effect, a clear statement of the facts must exonerate
Sir Robert Peel from the opinion of the bankers
that he ever contemplated any other increase of
issue than that which might be necessaiy from the
failures or withdrawals of the country banks ; and
his own language alike proves their error, and is
his justification.
On the 3rd of September, 1844, the new arrange-
ments, by which the issue was separated from the
180 HISTORY OF THE
banking department, came into operation ; and on the
6th, an announcement was issued that bills would be
discounted at 2| per cent., and notes at 3 per
cent., such bills and notes not having more than
ninety-five days to run. This, which seemed like a
declaration that the directors of the Bank, as the
circulation was no longer under their control, were
disposed to enter into competition with the general
discount market, caused many comments. It was at
the time a prevalent feeling that the accountability
of the directors as managers of the circulation was
greatly reduced, if not destroyed ; but events which
have since occurred prove that the public are still
disposed to burthen them with the responsibility, dis-
regarding the fact that, to a great extent, they are
deprived of both power and profit. In November of
the same year, the Bank commenced charging a com-
mission on sums remitted to various parts of the
country through the agency of the branch banks.
The year 1 844 gave additional evidence that there
is no security against fraud. A man named Joshua
Fletcher, induced WilUam Christmas, a clerk in the
Bank, to giv^e him information fi'om the private books
of the Corporation. There is no possibility of ascer-
taining the precise amount of guilt of Cluistmas, but
it is beUeved, having once been induced to pass the
strict Une of duty, that Fletcher wrought upon his
fears of discovery, and extracted from him sufficient
information to compass his designs. Forgeries of
BANK OF ENGLAND. 181
wills to a large amount were carried on ; great sums
of money were frequently obtained ; and, though the
clerk received gi'atuities in return, it does not appear
that he was guilty of a partnership in the fraud.
The Attorney-general distinctly stated his belief that
Christmas had not a criminal knowledge, but was
chargeable only with having given information against
the rules of the Bank.
About the year 1815, a Mr. Slack died, and by his
will appointed Mr. Hulme, partner in the banking
house of Jones Loyd and Co., as his executor.
Among other duties which arose from this executor-
ship, Mr. Hulme transferred £6600 three per cent,
consols and £3500 three per cent, reduced, into the
name of Ann Slack, of Smith Street, Chelsea,
daughter of the deceased Mr. Slack. This lady, justly
reposing the most unbounded confidence in the gen-
tleman chosen, by her father as executor, drew
upon him for the money she required, without being
aware that the £3500, three per cent, reduced, had
been transferred into her name, or that there was any
other property due to her than the £6600 in the three
per cent, consols. Mr. Hulme acted as her friend
and as her banker ; and Miss Slack, happy in his
integrity, was at no trouble to enquire into the
particulars of her property.
On the death of Mr. Hulme, in 1832, this lady
resolved to receive her own dividends ; and knowing
only of the £6600, demanded the interest on it, still
182 HISTORY OF THE
leaving the £3500 in the possession of the Bank of
England, from 1832 to 1842, when the Stock, with
ten years' dividend, were both transferred, by the
Accountant-general, under the act 56 Geo. III., to
the commissioners for the reduction of the national
debt. Had it not been for the signal and successful
fraud to be related, this money would, in all prob-
ability, have been lost to its rightful owner.
The department of the unclaimed stock at the
Bank was under the management of William Christ-
mas, a clerk in the establishment, who, either weak-
ly or wickedly, gave information of the transfer of
this sum by the Accountant-general to his friend,
Joshua Fletcher, originally in the medical profession,
but a man of exceedingly dark and more than
doubtful reputation. It immediately became the
object of Fletcher fraudulently to secure this sum,
by the surest means and the smallest amount of risk ;
and after tracing Miss Slack, with all the craft of
crime, from Smith Street, Chelsea, to the house of
her brother-in-law, Captain Foskett, at Abbott's Lang-
ley, he lost no time in applying to Mr. Barber, of the
reputable firm of Barber and Bircham, attorneys of
Bridge Street, Blackfriars, and a correspondence
commenced with Captain Foskett, in which, in Oc-
tober, 1842, Barber boasted of private information
from the Bank, and artfully procured the signature of
Ann Slack, which was handed by Fletcher to Christ-
mas, by whom a comparison was made with that lady's
BANK OF ENGLAND. 183
signature in the books of the Corporation : and on the
4th of June, 1843, Barber wrote, saying, " As the sig-
natures do not correspond, we have arrived at the
conclusion that the identity cannot be supported."
It is noticeable that this was in direct opposition to
the opinion given by Christmas, who had stated the
writings to be similar, and was, therefore, an
evidence that some deception was about to be
practised.
The next step of the attorney was to insert a
notice in the " Times," advertising for the repre-
sentative of Ann Slack, formerly of Chelsea ; but
this of course was ineffectual. It is necessary to
follow this affair closely, because it was either
a regular business transaction on the part of Mr.
Barber, or these things prove that, under the
colour of great candour, a most artful fraud was
being perpetrated.
The next movement of Fletcher was to register
the name of Ann Slack, as deceased ; and on the
25th of Februaiy, 1843, he went to the office and
reported her death as having occurred at No. 8,
South Terrace, Pimlico. The following step, in this
consummate deception, was to execute a false will,
to pass it through Doctors' Commons, and to
lodge it at the Bank. This was successfully done ;
but this was the immediate cause of discovery.
When the probate of a will is lodged at the Bank,
the stock specified only is placed at the command
184 HISTORY OF THE
of the executors. But should there be any other
funds in the name of the deceased party, the word
*' deceased " is placed against the name ; and this pre-
vents any unauthorised person from receiving the in-
terest. By the rules of the Bank, also, no
more stock can be added to that which is tech-
nically termed "a dead account." When the pro-
bate of the will, therefore, was lodged, the word
" deceased " was placed against the account on which
Miss Slack personally received the interest, as well
as against that which was claimed by the forgers, and
thus the fraud was eventually discovered.
Prior to the proceedings enumerated above, it
was necessary to provide a fictitious Emma Slack to
pass as the niece and executrix of Ann Slack, and
this was was done in the person of Lydia Sanders, who
occupied apartments for the occasion in Oxford Street.
The will being forged, the probate lodged, and
a representative provided, the great difficulties in the
way of procuring the £3500, with the additional ten
years' interest, were surmounted, and the path became
comparatively easy. Barber introduced Lydia San-
ders to a stock-broker, who, on the faith of the
attorney's supposed respectability, and as an everj^-
day occurrence, identified her as Emma Slack, and
thus the money being secured, the villany appeared
successful ; while from the nature of the transaction
similar oflences might have been frequently per-
petrated.
BANK OF ENGLAND. 185
It has been seen that both the accounts of Miss
Slack had the word " deceased " placed against them
in the ledgers of the Bank. When, therefore, her
broker received instructions to purchase a certain
amount of stock for her, he was informed while
making the necessary enquiries, that Miss Slack was
dead, and that no more stock could be placed to the
account.
The surprise of the broker was great, and he imme-
diately wrote, informing his client of her reported
death. The astonishment of this lady was such
that she instantly came to town and presented
herself at the Bank, where the matter was fully
investigated. On searching the books, it was dis-
covered that a will had been lodged, purporting to
be signed by Ann Slack, of Smith Street, and that
£3,500, with the accruing dividends of £1 100, had been
paid.
The first thing to ascertain was the name of the
solicitor employed, and the house of Barber and
Bircham was brought to notice. When Mr. Barber's
name was discovered, Mr. Freshfield called at his
office, and told him that the will was a forgery, and
that the fact must be reported to the treasury. Bar-
ber replied that the affair was quite regular, and that
Emma Slack was a most respectable woman. But
the Bank Solicitor drew his attention to the point,
that in 1842 he had enquired for the representatives
of Ann Slack, and that he had proved the will of
186 HISTORY OF THE
that person as dying in February, 1843; to this re-
mark Barber gave some hesitating answer, and professed
to forget who had introduced Emma Slack to him.
From that period Barber was closely and carefully
watched ; and little did he suppose that, to whatever
part he directed his steps, the acute eye of Forrester,
the officer, was on him. For three wrecks his path
was tracked ; and yet it is remarkable, that although
the visit of Mr. Freshfield must have aroused his
alarm, and that a communication with Fletcher was
most natural, he attempted no interview, but went to
and from his office as customary ; and when it was
deemed advisable to apprehend him, and his papers
were seized, all the documents connected with this
transaction were found among the office papers, en-
dorsed "Re-Slack," with no attempt at concealment,
as if it had been a perfectly legitimate business. The
apprehension of Barber made the name of Joshua
Fletcher known to the Bank Solicitor, as being deeply
implicated in this infamous transaction.
When Barber was first examined he called Fletcher
to prove that he had only acted as his attorney.
From the witness box Fletcher passed to the officer,
and thenceforward took his place as an accomplice.
The next person to find was the party who had
represented Emma Slack ; and after great sagacity on
the part of the officers, she was discovered in one
Lydia Sanders, of Bristol.
Of the money so fraudulently obtained, £1000 was
BANK OF ENGLAND. 187
received in a note to that amount by Lydia Sanders,
who publicly displayed it as a curiosity in the shop of
her sister, Georgina Dorey, also tried as an accom-
plice. Another note was changed by Barber and
Fletcher, the former of whom had advanced all the
requisite funds, in the shape of probate, legacy duty,
stamps, &c., a custom quite common among the pro-
fession.
The trial excited peculiar attention. The escape
of Barber in a former case had renewed his confi-
dence, and he appeared certain of acquittal. Of the
guilt of those parties who stood with him at the
same bar, no doubt has ever been entertained. Nor,
indeed, when the apposite remark of Mr. Freshfield
concerning the date of the forged will, and the date
of Mr. Barber's letters to Captain Foskett, is remem-
bered, can a dispassionate mind come to any other
conclusion than that William Henry Barber was a
knowing and fraudulent accomplice of Joshua Fletcher,
and that the verdict which pronounced him guilty
was justified by evidence, both direct and collateral.
That there were extraordinary symptoms of an appa-
rent innocence, or that great carelessness was shown,
hardly compatible with so important a transaction,
there can be no doubt ; but the overwhelming fact is
recorded against this plausible man, that in 1842 he
wrote to Captain Foskett of Ann Slack as then dead,
and that he was a party to the passing of the will of
the same Ann Slack, as having died in 1843.
188 HISTORY OF THE
When their sentence was announced he earnestly
called on Fletcher to exonerate him. The latter,
however, refused ; and Barber entered into a defence,
the greatest part of which was meant to prove that he
had been deceived by Fletcher, and that he was en-
tirely innocent. The following formed the conclusion '
" If I have been negligent, I have already suffered
deeply. I solemnly declare that throughout this
business I have acted merely as a solicitor ; and, as I
expect to answer for this declaration in a future world,
again declare that I am innocent, and that I have been
deceived by Fletcher, who had obtained my confi-
dence." There was a considerable difference [ of
opinion at the time in the public mind ; the facts
connected with the case were closely investigated,
the conclusion arrived at by the legal authorities being
that Barber was guilty, and that it would not be
proper to commute the punishment awarded in ordi-
nary and less flagrant cases.
In order to obviate any future fraud, various pre-
cautionary measures have been used, which render
similar instances of deception almost impracticable.
It is worthy of remark that the whole of the loss
occasioned by the will forgeries was sustained by
government.
Prior to 1846, two arrangements, which demand
great praise, were entered into. By one, the clerks
commenced a mutual guarantee against fraud ; and the
securities, which had hitherto been necessary, were
BANK OF ENGLAND. 181)
abolished. By the other, the governor and Court of
Directors allowed to each clerk in the establishment
a period of leave every year proportioned to his
service. This plan was warmly appreciated by those
for whom it was thoughtfully established, and will
tend to benefit the health of the clerks, at the same
time that it nourishes a desire to return the kindness.
This year the further relaxation in the usury laws,
by which bills not having twelve months to run had
been exempted from the operation, was continued
until 1850.
On the 20th January, 1846, the mint received from
the Bank £5000 in worn sixpences, which, converted
into new coin, produced £4,310 6s. 2d., the loss being at
the rate of £13 I5s. lOid. per cent. In the same year
the Bank sent £1000 in old shillings, which only caused
a loss of £8 Os. 2|d. per cent., as they produced £919
18s. Old. In November, 1846, £12,000 in worn six-
pences occasioned a loss of £14 Is. 7ld. per cent, as
they procured only £10,310 5s. 5|d.
190 HISTORY OF THE
CHAPTER VIII.
FORTUNATE DISCOVERY — FORGERY OF BURGESS — ESCAPE TO AME-
RICA — THE PURSUIT — ROMANTIC EVENTS — RAILWAY MANIA ITS
PROGRESS AND DEVELOPMENT.
An ingenious fi'aud was perpetrated in 1845. Payment
for two stolen notes, of £500 each, had been stopped ;
but, notwithstanding this precaution, both were paid
on presentation, one coming in a few days after
the other. When the error was discovered, the care-
lessness which produced it was severely blamed by the
authorities ; an enquiry was instituted ; the clerk was
examined ; and he could not deny the initials, on the
authority of which the notes were paid. Although
the directors of the Bank are not responsible for these
notes, they decided that the carelessness which could
overlook the stoppage of them for such large sums
amounted to culpability, and that the payer must be
responsible for the amount. The excellent character
of this gentleman, however, together with his general
conduct, raised a doubt in the minds of the directors,
BANK OF ENGLAND. 191
and they requested Mr. Alfred Smee tu analyse the
ink, and see if it were that generally used in the es-
tablishment. This gentleman was fortunately able to
prove that the initials on every note passed on the
day of payment were written in Bank ink, and that
the initials of the stolen notes only were in ink of
different ingredients. The signatures were in truth
forged, and so excellently imitated, that it w^as impos-
sible to distinguish between the true and the false.
Another daring forgery was committed on the Cor-
poration in 1844. It was, however, so cleverly
aiTanged, that had not peculiar thought been evinced
by a member of the estabhshment, discovery might
have been long eluded, and detection ten-fold more
difficult. In September of that year, William Bur-
gess, a clerk employed in assisting the power- of
attorney office, obtained a brief leave of absence.
On the day of its commencement a broker called, at
the office, requested to see the absentee, and expressed
surprise at his being aw^ay, as Burgess had desired
him to sell £8200 from the account of William Oxen-
ford. This enquiry occurred on the Tuesday, and on
the following Saturday Burgess should have returned
to his duties, or have sent a sufficient excuse for not
doing so. He did neither, and under such circum-
stances an enquiry is always instituted. Before any
information could be obtained, however, Mr. James
Smith — of whom the broker had enquired — fancying
that the absence of Burgess might be in connection
192 HISTORY OF THE
with the transaction alluded to, investigated the ledger,
by which he found that £8200 had been sold from
William Oxenford's account ; looked to the transfer,
and discovered that the absentee had identified the
seller ; examined the signature of the present sale with
an authentic one of William Oxenford's, and saw that
one bore no resemblance to the other. His suspicions
were justified; he informed the proper authorities';
Mr. Oxenford denied having sold ; and to Mr. James
Smith the credit may be fairly assigned of this early
discovery of a forgery which was alike remarkable for
a breach of faith and a consummate contempt for the
chances of detection, many of which had been ven-
tured. Mr. Oxenford was known to several clerks of
the corporation ; the character of Burgess was not
quite unsullied ; and the man who personated the
fundholder bore no likeness to him. When one of
the gentlemen to whom Burgess appHed concerning
the sale casually mentioned that he had once known
Mr. Oxenford, the remark that " he was an old
friend," was the only reply; and in a short time an
accomplice, afterwards ascertained to be Joseph Elder,
a horse dealer, was brought to personate Mr. Oxen-
ford, without any apparent regard for consequences.
The receipt was witnessed, the transfer effected, and a
cheque received from the broker, with which they
proceeded to the banker, and demanded gold. On
being informed that, if they wished this, they must
apply to the Bank, Elder coolly returned, requested
BANK OF ENGLAND. 193
and procured gold to the amount of £8,000 ; and
finding that he was not able to lift it, was assisted
by two porters in carrying the proceeds of the robbery
to his accomplice, who waited with a cab outside the
building. They then proceeded to a public house in
St. Martin's Lane, in which they hired a room, and
transferred the gold to a portmanteau.
As there was little doubt that the confederates had
gone to America, it was deemed necessary to send
FoiTester, accompanied by some one who could iden-
tify Burgess ; and Mr. Bord, a member of the depart-
ment in which the forgery had been committed, was
chosen for the important task. After great difficulty
the defrauders were tracked to Liverpool ; from Liver-
pool they w^ere traced to Boston, in America, where
Forrester and his companion became satisfied that
they were on the right path, but that the culprits had
proceeded westward. It appears probable that Elder
and Burgess were ignorant of the international league
known as the Ashburton treaty, as, directly they were
on the American soil, they began to enjoy them-
selves ; and, after investing their money in the Mer-
chants' Bank, they proceeded to Buffalo, made a
tour to the falls of Niagara, paid a flying visit
to Canada, returning ,by a new route to Boston,
where Burgess commenced building a residence, and
became noted " for a peculiar partiaUty for raisins
soaked in burning champagne, and other high notions'
a taste for which he probably acquired," said the
VOL. II, o
194 HISTORY OF THE
Boston paper very innocently, " while he held the
honourable post of clerk in the Bank of England."
From Boston the seekers went to Niagara, ima-
gining but little that at the time of their arrival in
Boston the fugitives were both there, and probably
in one of the very hotels at which inquiry was made.
Their visit westward, therefore, only produced a
view of the fine cataracts of Niagara. They then
returned to Boston, where, by this time, Burgess and
Elder, who called themselves Uncle and Nephew, and
passed by the name of Ellis, had attracted a certain
degree of notoriety, and had obtained introduction to
certain Americans of distinction, who w'ere probably
pleased by Burgess's aristocratic taste for raisins and
champagne. Under these circumstances it was soon
ascertained that Elder was residing at a boarding
house, to which Mr. Bord went, accompanied by the
police. On being informed that the culprit w^as out,
they requested permission to wait, and in a short time
Joseph Elder entered the house, came unsuspectingly
up stairs, and was at once pointed out to the officers
as the personator of William Oxenford. He was
immediately conveyed to prison ; and the next morn-
ing it was discovered that he had added to his pre-
vious crimes that of suicide.
The apprehension of Burgess w^as not quite so easy.
From the hotel at Nahant, where he w^as residing, he
must have seen the police approach, as he made
his escape through the lower part of the house,
BANK OF ENGLAND. 195
without a hat ; he then went to a Mr. Tarbox, in the
neighbourhood, made some excuse for his unexpected
and hatless appearance, requested him to procure his
money and portmanteau fi'om the hotel, and to bring
them to him in a neighbouring field. The commission
was only partially successful, as the officers, while
searching every nook and corner of the neighbouring
rocks, came across IMr. Tarbox with his booty, and
compelled him to yield it to the authorities.
Not finding Mr. Tarbox at the place appointed. Bur-
gess immediately went away, as he probably guessed
to use the characteristic phrase of an American paper,
that " the hounds of the law were after him." Every
arrangement was made to secure his detection in the
morning, and the events which marked his temporary
escape were remarkable almost to romance. The
officers were frequently near him ; he fell into a pig
pen ; tumbled into the water ; sunk into the sand on
the beach ; was on one side of a large rock, and heard
the conversation of the officers, as they passed on the
other ; was at last successful in detaching a boat from
the steam wharf, and after being tossed about on the
waves for six hours, throwing away the oars in despair,
and yielding up all hope of escape, succeeded in
landing on Light House Island, where he took refuge
in the cottage of an Irishman, who, for 300 dollars,
informed the police of his " whereabout." His in-
ten^iew with Forrester, when he gave himself up, was
characteristic of the same contempt for consequences
196 HISTORY OF THE
which marked the beginning and end of the transac-
tion ; and when, a short time afterwards, he was
brought to England, and tried for his unprincipled
breach of trust, his self-possession could scarcely be
said to have forsaken him.
The greater part of the money — upwards of £7,000
— was obtained, from various sources. IMr. Bord, and
his companion, had evinced gi'eat tact ; and the only
result which occurred was in an order which prevented
all clerks, excepting only principals and deputy prin-
cipals, from identifying in the disgrace which stigma-
tised the culprit, in the misery he caused his friends,
and in the general distrust which such transactions
ever entail on the class to which the offender belongs.
Whether it be a Bank clerk, or whether it be a
banker — whether it be a Rowland Stephenson, or
whether it be a William Burgess — the effect upon
the great and unthinking mass of society is evil and
mischievous.
The history of the railway mania of 1845 is not the
least remarkable among those delusions which from
time to time arise to tlirow aside legitimate trade, and
paralyse national commerce. From 1842, discounts
had been easy, and money plentiful. The funds
maintained a high rate ; and low interest only could be
obtained. In 1844 it was remarked that there had
been a longer continuance of a plentiful supply of
money than had occurred in the memory of the oldest
capitalist. A desire to speculate gi'ew out of these
BANK OF ENGLAND. 197
circumstances. Unlike most periods, when this desire
has been spread ov^er many objects, it was concen-
trated on railways and railway schemes ; and England
was seized with her ancient phrenzy. For some time
it was legitimate, and confined within its proper
boundary ; but the desire spread ; the contagion
passed to all ; and, from the clerk to the capitalist,
the fever reigned, uncontrollable and uncontrolled.
Some portion of the press aided the mania. The
subject was a capable one, and leading articles trum-
peted the growing greatness of the train.
" Railways are the triumph of a period of peace.
They are the emblems of internal confidence and pros-
perity. They are the prophetic announcements of an
open-eyed people to their neighbours, that they will
not again waste their dearest action on the tented
field, but exhibit and exert it in the mightier works
of commerce." The power of steam; the humaniz-
ing influence of a close connexion between the re-
finements of the city and the requirements of the
hamlet, were all eloquently announced. London was
to receive the superfluities of the village ; the village
was to be gladdened with the civilization of London.
Railways were to cover the length and breadth of the
land, and their complete development was only a
question of time ; they were the advent of all that
was desirable. " Do the people want present employ?
Railways give it to hundreds of thousands at this
moment. Is it desirable that the artizan or mere
198 HISTORY OF THE
labourer should at all times be able to transfer his
skill or his strength to the place where he can most
profitably employ either ? Railways give the power
to do so., Is it desirable that prices should be
equalised generally through the country ? Railways
are the great levellers in this respect, bringing, as it
were, the producer and the consumer into immediate
contact. Are wastes to be reclaimed by labour and
manure in places where neither can be found ? Rail-
ways will carry both to the spot. By Railways
the whole country may be, and under the bles-
sing of Divine Providence will be, cultivated as a
garden."
Invasion was no more to be feared, for every village
would have its line, and the bold yeomanry of England
would be carried to any place, and in scarcely any
tmie, long before their aid could be required. The
money would be spent in England, and, unlike the
mining speculations, which carried it into distant
parts, it would nourish the English population. La-
bour would be abundant. Wages would be plentiful.
Trade would flourish by the circulation of capital, and
the prosperity of the country be carried to an unima-
ginable extent. The railways were like " the bridge
of gold which the generous Greek would have built
to aid the escape of a flying enemy ; they were the
links which bring and bind friends together." They
were to remain safe in the midst of panic, and though
"times of pressure — severe, hazardous, ruinous pres-
BANK OF ENGLAND. 199
sure — have been felt in this country, and unfortu-
nately must be expected to be felt again ; yet, when
such a time of apprehension shall arrive, it will only
prove them to be part and parcel of the genuine
sources of w^ealth and avenues for labour, in
which this country lives, and moves, and has its
being,"
The directors of the railways were formed of all
classes, and of all conditions. Long lists of provisional
committee men, with their residences and professions,
were paraded in papers. The journals were increased
in size to contain the numerous advertisements. The
heat of India was no objection. The cold of Canada
no preventive. Men who had mingled in the bubbles
of 1825; men who were known and recognised as
adventurous swindlers, but who had disappeared when
no money was to be obtained, reappeared, to exercise
their customary vocation. The environs of the Stock
Exchange were crowded. The countess came down
in her carriage, and hovered in a state of excitement
round the doors of her broker. Grave and sober
men dabbled in scrip. The literary man and the
artist risked their well-earned money to procure a
share of the profits. The youth of the empire sought
to gratify expensive habits. The old man sought to
indulge his average. The clergyman traded in " un-
deniable securities." The physician murmured of the
broad and narrow guage. The lawyer forsook his
fee ; the lady jeopardized her soft and gentle influ-
200 HISTORY OF THE
ences ; the matron forgot her children, and the maiden
her embroidery ; in one universal pursuit. The rail-
ways formed the current theme of the time. Pre-
miums and discounts were the topics of the day, and
everything wore the same smiling appearance which,
in 1823, had lured the people to destruction, and,
as then, almost every thing came out at a profit.
If they went to a discount, the company was aban-
doned, the whole of the expenses deducted from the
deposits which were paid, the directors liberally re-
warded, and the small remaining dividend returned.
The names of the clergy on the lists of directors
produced an opinion from the Bishop of Exeter, that
for a clergymen to speculate in railways came under
the denomination of " dealing for gain or profit," and
this was against the statute. " As the statute only
mentions dealing," remarked a contemporary, "and
railway speculation involves shuttling, some of the
reverend gentlemen maintain that they do not violate
the act of Parliament."
The following is undoubtedly a faithful picture of
the way in which many railways were established :
" A young gentleman need only look to a half-
crown railway map, and search for a district tolerably
clear of the rail. Taking two of the towns that form
that open space, he draws a diagonal with his pencil,
and thus creates a direct line. He then writes down
the name of the company, his own name as " pro-
moter," either alone, or with the names of as many
BANK OF ENGLAND. 201
friends as he can venture to take that hberty with, or
with any names, real or fictitious ; his own occupa-
tion, whether gentleman or esquire, engineer, artist,
or sohcitor, or clerk, or perfumer, or tailor, or M.A.,
or M.D., dissenting minister, his place of business,
if he has one ; his place of residence, whether it
be castle or hall, or in Berkeley Square, or rooms
in Gray's Inn, or lodgings in the borough. In the
course of his walk to the office in Serjeant's Inn, he
may, if he pleases, remodel his company, changing
every name in it, whether of place, or person, inclu-
ding himself Arrived at the office, he invests a few
sovereigns, begged, borrowed, or stolen, in fees, and
enters his company. Advertisements and letters of
allotment do the rest. It may, for any thing thing the
registrar knows or cares, be straight across a moun-
tain, a mile high, or straight across the arm of a
sea, ten miles broad. It would be his duty to register
a tunnel under the Atlantic ; and we are not
quite sure that he would have the option of re-
fusing a railroad to Jupiter, with extension to
the other planets, and a short branch to the
moon."
The prospectus was sure to promise all the advan-
tages of all the world, perhaps to some small village
which had hitherto been unable to support a coach
once a week. The name of a local person of influ-
ence was obtained ; a meeting was called at the village
inn ; speeches were uttered, which discoursed most
202 HISTORY OF THE
eloquent music in the ears of the villagers, for their
property was to be improved, and their importance
doubled. Propositions were carried that a railway
was necessaiy ; the speeches appeared in the local
journals ; were advertised m the London papers ; ten
times the number of shares were applied for which
were issued ; and when they arrived at a premium,
the promoters, secretaries, and directors seized the
golden opportunity, and the public came off second
best. The socializing influences of the railway were
descanted on. Directors dreamed of premiums, pa-
tronage, and pay. Men who were known to have
been penniless a year before, suddenly kept their
broughams or started barouches. Valuable diamonds
gleamed from fingers which had hitherto been guilt-
less of the bright adornment. Railway papers and
railway pantaloons, railway ties and railway tricks,
abounded. It was a railway madness. London was
to be tunnelled that the train might run beneath her
mighty heart ; colonnades were to be formed in the
air that the engine might pass over the path of the
pedestrian ; and the Surrey Zoological garden was to
have a direct line. The time for other vehicles had
gone ; a new epoch had arrived ; and iron roads were
to intersect the great city, to pass through the
fruitful orchard, and to destroy the fertile field. The
sanctities of the poet of the lakes were to be invaded,
and the haunts of nature were to resound with the
hiss of steam and the rush of carriages. The weekly
BANK OF ENGLAND. 203
exponent of the follies of the times, which, beneath an
exuberant fancy, veils a deep philosophy, suggested
that there should be one great terminus for all the
companies, and that that terminus should be a lunatic
asylum. The system was fruitful ; and every one
said there w^as no risk. When shares were demanded
of a company, and they only came out at par, the
letter of allotment was put into the fire ; if they
arrived at a premium they were sold. Men without
a shining wa'ote for hundreds of shares. Journeymen
mechanics styled themselves gentlemen, and signed
deeds for thousands. The names of men w^ell known
in the city as swindlers, whose notorious character
had banished them fi'om the society of all good men,
suddenly re-appeared on the lists of the proprietors
and directors, their names graced by the cheap esquire,
and their residences given in some far distant
county.
Many of the prospectuses rivalled those of previous
periods in grandiloquence. The lines w^ere often
recommended, not so much on account of their
financial prospects, as they were for historical asso-
ciations. One was " connected with the remarkable
fact that, in the reign of Alfred the Great, the vicinity
was the seat of an actual invasion by the Danes under
Hubba ;" while another gave a history of the battle of
Hastings, and invited the public to subscribe for a
reason which was only interesting from its connection
with a period when railways were unknown.
204 HISTORY OF THE
The following is a further illustration of the
schemes. " A flattering prospectus is issued, promis-
ing ten per cent., and perfect prosperity. Some
secret agent of the directors is on the Stock Ex-
change, pufling up the shares. A price is named ;
it is eagerly accepted by him ; the bargain is made ;
and the price of the scrip established. The agents
continue to buy ; the jobbers, calculating on plenty
of scrip being in the market, are willing to sell on
the liberal terms which the agent pays ; and they enter
into engagements to deliver a large quantity of scrip.
When a sufficient number of shares are sold to satisfy
the grasping avarice of the directors, they profess to
consider the applications ; and it is announced that
no more letters will be received, and that letters of
allotment have been forwarded to the fortunate appli-
cants, taking care, how^ever, not to issue a tenth part
of the number previously sold in the market. The
letters applying for shares are burnt by bushels,
without even the trouble of opening them ; and those
who have sold at £5 a share cannot even buy at £10
or £15, if the consciences of the directors are suffi-
ciently elastic to allow of so enormous a robbery."
This madness seized upon the peerage, both at home
and abroad. " Prince de Joinville mounted a tender ;
Lord F. Egerton sought to make a railway all by
himself; Earl Lonsdale bought one ; Lord Belhaven
condescended to speak at meetings ; Lord Worsley
even took the chair ; the Marquis of Ormonde trun-
BANK OF ENGLAND. 205
died a wheelbarrow in the presence of his admiring
peasantry ; and Lord Wharncliffe, ' high in the coun-
cils of Her ^Majesty,' cut turf on correct geometrical
principles."
Every one talked of making large fortunes, and
very few realised them. Each day witnessed the
advent of some new companies ; and ten times the
quantity of shares were applied for than were to be
issued. During the greater part of 1845, it is almost
impossible to imagine the constant and exciting fever
which was around. The absorption of scrip was
astonishing. It w-as understood that a certain amount
of responsibility rested on the signer of the deeds,
and some, therefore, prefeiTed to purchase in the
market at a small premium. The desire of gambling
was thus spread ; and those who at one time only
thought of paying a small premium, and buying a
small number, were led on by this terrible spirit to
gamble far beyond their means. In many instances
shares were purchased as investments, which would,
in all probability, pay less than the interest receivable
in the ftinds.
The tricks of the speculators were as frequent as
ever. The daring genius wdiich in 1825 had pro-
jected a Mining Company in the far west, which, in
1836, would skim the Dead Sea, or bore the Swiss
mountains for asphalte, was equally ready, in 1 845,
to project railways for the prevailing fancy. There
was no possibility of providing for the responsibility
206 HISTORY OF THE
of applicants for allotments. In vain the directors
announced that no applications would be received
without a respectable reference. Respectable refer-
ences were easy, and the first nobility of the nation
were appealed to by men without a shilling.. They
were also so numerous that it was impossible to
ascertain their authenticity. Private property was
invaded, and private gardens were measured with
all the impudence of the craft. Gentlemen who had
lived the best part of the century in their ancestral
mansions, were threatened with the destruction of
buildings, eveiy nook of which was endeared by some
old reminiscence. Fancies and feelings were alike dis-
regarded ; it was the age of iron.
Grave divines uttered after-dinner speeches which
were applauded to the echo, and reported in news-
papers, until people began to think they were only
doing their duty in subscribing. " From London
to Edinburgh," said one, " from St. Petersbugh to
Moscow, fi'om Brussels to Cologne, the railway is
spreading, carrying civilization and Christianity in its
train, and making all the people of the world as one
united family." The newspapers realised fortunes by
the advertisements. Half-a-dozen competing railroads
were announced to go over the same ground ; and
though only one could obtain success, they were all
at a premium. The same person was director of
thirty different railways, under various descriptions.
The rumour of the amalgamation of a projected with
BANK OF ENGLAND. 207
an established line sent the former up to an increased
premium ; while the report that the " Railway King"
was negociating with an embryo company, added
enormously to the value of its shares. In one, called
the Great Western of Canada, which was issued at
£3 10s. premium, it was stated that out of this only
£1 15s. could be returned, as ten thousand shares
had been divdded among the Stock Exchange, for the
purpose of interesting the members. " In schemes,"
said the " Chronicle," " where as many as 30,000
shares have been advertised, not more than 15,000
have been allotted to the public, the remainder being
reserved, part of them for property on the line, part
for the provisional committee and officers. In this
way a scarcity of scrip was created, and the shares
rose to a premium. When the price was thus forced
up to a point supposed to be worth reahzing, the
reserved shares were sold, and the proceeds divided
among the committee." In one case three millions
of shares were applied for, where not one hundred
thousand could be allotted.
Until the middle of October, 1845, the excitement
continued, and the city article of the " Times" re-
ported that the share market was good, with a large
extent of business. The course of that paper during
the fear and fright which followed will be faithfully
pursued, because there can be little doubt that the
panic was greatly hastened, if not absolutely caused,
by its earnestness of purpose. Its leading articles
208 IlIbTORY OF THE
were like a succession of hand grenades thrown into a
camp during a triumphal feast. The nation was still
in its delirium ; they projected without counting the
cost; they laughed at warning, and defied opposition.
On Tuesday, the 14tli of October, a leading article
appeared, which, after calculating the income and the
accumulations of the country, entered calmly but
closely into the investigation of railway schemes, and
concluded by demanding. " Whence, then, are the
hands to come for the railroads already authorized,
staked out, and contracted for? As for the nine or
ten thousands of miles of new projects, the three or
four hundreds of millions they demand, and the whole
population of skilled and unskilled Englishmen they
would require, they are at present no more than a
dream, the greater part of which must vanish into
thin air long before they can become the sport of
counsel and the victims of committees. In vain their
long lists of directors, in vain the mutual support
which men of straw in every age have been so ready
to afford. Could we find in the pompous catalogues
which adorn the columns of the public press any
good show of substantial names, we might at least
distrust our own anticipations. It is the simpler
part of the public which is deceived ; and, at the risk
of offence, we think it our duty to take what steps we
can to warn them of the day when the bubbles must
burst and collapse." On the following day the direc-
tors and provisional committee-men were warned of
BANK OF ENGLAND. 209.
their responsibility, and the bold assertion made that
" many of the schemes were based on fraud." The
public began to wonder, and men looked anxiously
about them. Money grew scarce, and thirty and
forty per cent, was offered on the security of scrip,
but refused. The appearance was ominous. On
Thursday, the 17th of October, a notice was issued
by the Bank that the minimum rate of interest would
be three per cent., and this advance caused general
satisfaction among the disinterested. The " Times "
continued its progressive warnings. On the 17th of
October, a correspondent wrote that among the di-
rectors of the new railways " there were some most
notorious scamps, alias swindlers, who never possessed
a penny in the world, and never could or would have
possessed one, save what might arise from their infa-
mous designs." Another added, " nothing seems to
come amiss to them ; north, south, east, and west,
the Mauritius, West Indies, French, Spanish, Italian,
their enormous appetite hath stomach for them all."
By Friday, the 18th, these masterly exposures, and
the advance in the rate of interest, checked the pro-
gress, and produced a general gloom.
The alarm had now^ fairly seized the speculators,
who vented their spleen in decrying the " Times,"
and in abusing the Bank. The prices of all shares
fell in value. In vain the holders agreed that an
advance in the Bank rate of one-half per cent, ought
not to affect those who were wiUing to pay twenty or
VOL. II. p
210 HISTORY OF THE
thirty per cent, for accommodation ; that railroads
were as good as they ever were ; and that there was
no just cause for their falling. In vain they asserted
that the journal which had so evidently stopped their
career was not free from pecuniary views ; the voice
of the " Times" spoke the voice of the disinterested,
and a " voice potential double as the Times," the
voice of truth, asserted to all intelligent listeners that
the '* madness which had method in it" had passed
away, and that panic and peril awaited the dealers.
In vain meetings were held, and promoters and pro-
visional committee-men pledged themselves to punish
the " Times," by sending no more advertisements to
it: the danger of their position was evident; and many
holders of scrip were prepared to escape, at almost
any sacrifice.
The higher the premiums, the more eager were the
purchasers before the bubble burst, and then, the
lower the price fell, the more anxious were they to
dispose of their property, thus rendering the value ten
times less than it might otherwise have been. So
great a fright had seized upon the unhappy specula-
tors, that the very men who boasted of realising
thousands, were urgent in offering large premiums to
any person who would relieve them of the responsi-
bility. The warning which had been given at an
earlier period was fulfilled. " When the crash comes,
as come it soon inevitably will, it may not be the
scrip holder alone that will be involved in ruin, but
BANK OF ENGLAND. 211
provisional committee-men, who had congratulated
themselves on their skilful execution of the manoeu-
vre of * getting out,' may find themselves still 'in,' to
an extent which they never expected." The earnest-
ness of the railway papers to prove that there could
be no difficulty in paying the deposits was almost
amusing. It was placed with the utmost ingenuity
in all forms and phases ; and it was remarked that the
effort reminded of the Indian fable of the creation of
the w^orld, that the globe rests first on an elephant, and
the elephant on a tortoise ; but when the Brahmins are
asked w^hat the last rests on, there is no reply. An
open swindling had been adopted ; and one of the
most significant signs of the times was in constant
advertisements offering for sale the instruments of
engineers. The following clever but infamous scheme
was successfully pursued.
Twelve " leading men " in the city brought out a
project for a railway. The deposit was trifling, but
their standing enabled them to demand a heavy pre-
mium. They cleared by this £2.5,000 a piece, and
shortly afterwards sent round a circular, stating that
unforeseen engineering difficulties rendered the aban-
donment of the scheme necessary, and, wdth a trifling
per centage deducted for expenses, the deposits, not the
premiums, were returned. An endeavour at the time
to estabhsh the truth of this produced the reply, "It
is likely to be true of so many that it will be useless
to fix it upon any particular company."
212
HISTORY OF THE
The panic continued, and tlie "Times" continued
its startling warnings with a tone that must have
penetrated the hearts of those who had unliappily con-
sented to become directors or provisional committee
men. "It is quite impossible that men who have
been notoriously little better than swindlers all their
lives, should have become suddenly honest by being
chosen members of a provisional committee. Doubt-
ful characters do occasionally get smuggled into tl>e
direction of reputable companies, but it is utterly im-
possible that those schemes can be soundly constituted
which allow the almost indiscriminate admission of
men of straw, of uncertificated bankrupts, and re-
cently discharged insolvents," " Can twenty millions
of money," wrote the "Banker's Magazine," "be
withdrawn annually from circulation without inter-
fering with the necessary business of the country?"
These things produced their natural results. The
evil commenced to abate ; and it was announced on
the 24th of October, a little more than a week after
the first alarm had been sounded, that " should the
depression continue, the alleys in the neighbourhood
of the Stock Exchange will be speedily cleared of the
horde of petty gamblers and letter dealers that at pre-
sent infest those localities. It will be some satisfaction
to the public to know that there is every prospect of
the clearance of this nuisance being shorty accom-
plished." The fluctuations in the periodical returns
of the Bank were eagerly watched ; and each week the
BANK OF ENGLAND. 213
apparent impossibility of paying up the deposits was
confirmed. It was what has since been finely termed
" the rushing mania of a nation."
But the evil spread to the innocent. Those who had
pursued their legitimate calling found some difficulty
in collecting their money from those who had been en-
gaged in railways ; and wholesale houses directed
their travellers "to enquire how their customers stood
in the share market, and to press them accordingly,"
Of this prevailing madness, however, the evil effects
remained long after the hope had departed. Many men of
character, who had worked hard for the independence
they had gained, had consented in an evil hour to join
the committees of projected companies ; in the height of
their delusion they talked of large profits, made ex-
tensive purchases, and lived in a costly style ; but they
soon found out that they were liable for their indi-
vidual risk, and many were compelled to sell their pro-
perty at a sacrifice, and fly to a foreign soil from their
relentless creditors. As an evidence of the thought-
lessness of the period, a line, known as the Oxford and
Wolverhampton, on which 3 J per cent, was guaranteed
by the trunk line, reached a high premium ; the same
line has now 4 per cent, guaranteed, but is at 10 dis-
count. In one instance, a person who had stepped
out of his legitimate path to speculate in these secu-
rities, was paying 200 per cent, in the Stock Exchange
at the very time that his bills were being taken at 3i
per cent, in the discount market.
214 HISTORY OF THE
By the arrangements of the Board of Trade, the
plans, sections, and documents of thos ecompanies whicli
were anxious to forward their appearance before the
Railway committee, were to be lodged by the 30th of
November. There was no time to be lost, and artists
and artizans alike reaped a golden harvest. It is
almost impossible to imagine the hurry and eagerness
displayed by the promoters of the various lines.
Draughtsmen were enticed from the continent by the
hope of high wages and continued occupation.
Youths not out of their servitude were employed on
important works. The Sabbath was desecrated ; en-
gravers worked without resting until exhausted nature
demanded her tribute, and they snatched a hasty re-
pose. The most extravagant pay was granted to sur-
veyors and engineers ; the merest novices received
employment, and all regular business was abandoned.
Tricks of all sorts were played ; and in one instance
the whole of the type and stock-in-trade of a printer
was purchased by one company to prevent its rival
from publishing an important document, by a parti-
cular period. The ruse was successful, and the
document behind its time.
On the last day allotted for the reception of the
plans, a scene was witnessed which must have as-
tonished the officials at the Board of Trade. As the
time approached an anxiety which passes belief was
evinced. Higher wages were paid to those who could
or would work in preparing the plans. Some con-
BANK OF ENGLAND. 215
tracts were abandoned from the impossibility of
fulfilling them. Night after night witnessed the
earnest workman still snatching a brief repose for an
hour or two that he might resume his labours with
greater energy. Post horses were in demand. Special
trains brought plans from all parts of England. Rail-
way companies refused trains which would assist
opposition projects ; and the exertion made to lodge
those which were ready, is almost imcalculable. The
clerks were overwhelmed with them ; and though
an additional number of those gentlemen were em-
ployed, it was impossible to keep pace with the
incessant arrivals. The place became crowded. The
last hour was approaching. An alarm seized on all
that the necessary forms would not be gone through
in time. The clock struck, and the doors were
closing, when a gentleman, with the plans of a pro-
posed railway for Surrey, rushed in and succeeded in
lodging his charge. The doors were then closed, and
in a short time, a post chaise, with foaming steeds,
galloped up to the entrance. Down the passage, and
towards the office rushed the three occupants, with
their cherished papers. The door was shut ; but
railway persons deemed themselves privileged, and
the bell was loudly rung. The unsuspicious inspector
of police answered the ring ; and the huge documents
were thrown in at a venture, but were again thrown
into the street. Many w^ere too late for the appointed
hour. The labour of anxious days and weary nights,
216
HISTORY OF THE
the results of plotting beads and crafty brains, were
rejected.
Thus ended the wild excitement of a period wuthin
the memory of all. It is another evidence of the
truth of Mr. Jones Loyd's assertion that these events
occur in cycles ; it is another proof that no w^arning
can save a people determined to grow suddenly rich.
The delusion passed ; but the effects remained.
Business was long paralysed. The small trader who
had neglected his calling w^as ruined. The merchant
who had embarked in the adventurous speculations
found to his cost that the reckoning was yet to come.
The deposits w^ere to be met, and many possessed no
money wherewith to pay them. They had embarked
in engagements which they could not fulfil, and a
fearful prospect awaited them. Notwithstanding the
wholesale manner in which the new lines were re-
jected, contracts for a certain amount of work, in-
volving the outlay of a proportionate capital, were
entered into by the conductors of various railroads.
The deposits have yet to be paid. The question has
yet to be decided whether the surplus resources of the
country will be sufficient to meet them, and on that
doubtful question rests the welfare of the nation until
the last call of the last railw^ay has been fulfilled.
It is to be feared, to use the homely illustration of
Benjamin Franklin, that Great Britain must yet " pay
for her whistle."
It was a somewhat curious circumstance that the
BANK OF ENGLAND. 217
first half year the Bank were able to shorten the
shuttings was at a period when the monetary interest
required it most urgently. The following, from the
"Times," is a satisfactory proof that the service was
pubhcly appreciated : " Much credit is due to the
directors of the Bank for the arrangements made to
shorten the period during which the books are to be
closed against transfers of stock. Last year the
shutting day was the 3rd of September, but the ap-
proaching shutting day is not till the 10th of Decem-
ber, At all times an additional week for public
transfers is valuable, but is most particularly so at
present. There has not occurred for many years a
period for closing the Bank books against transfers
which has been regarded with so much anxiety."
The events which have transpired since the con-
clusion of the above history, the extraordinary insol-
vencies of 1847, the periodical panic, and periodical
vituperation of the Bank, the permission to relax the
stringency of the charter, the senatorial discussions
and senatorial opinions, are reserved for a future edition
or a future volume. The history of the Bank of
England fi'om 1846 promises to equal, if not surpass,
in interest and importance, anything which has hitherto
been related.
218 HISTORY OF THE
CHAPTER IX.
TRADITIONS CONCERNING THE BANK — STOLEN NOTES — STRATAGEM
OF THE DUC DK CHOISEUL — LOST NOTE — DESCRIPTION OF THE
BANK — WEIGHING MACHINE — INTERNAL ARRANGEMENTS.
In the history of an estabUshment which for more
than a century has veiled its transactions with an
ahnost jealous secresy, many occurrences have taken
place, which are now only known by the dim light of
tradition. The periodicals of the time are replete
with remarkable events, some of which are often
related with a circumstance and a verisimilitude
arising either from being founded on fact, or
from a deliberate deception for which there is no
adequate cause. Great trouble has been taken to
verify those which ai'e now presented to the reader's
notice, and though the effort has been futile, yet
where it has been found practicable to test, upon other
subjects, the source from which they have been de-
rived, it has always proved correct ; and this is strong
BANK OF ENGLAND. 219
though indirect evidence ot their truth. The follow-
ing are most worthy relation :
The principal clerk of one of the bankers having
robbed his employer of Bank of England notes to the
amount of twenty thousand pounds, made his escape
to Holland. Unable to present them himself, he
sold them to a Jew. The price which he received does
not appear; but there is no doubt that, under the
circumstances, a good bargain was made by the pur-
chaser. In the mean time every plan was exhausted
to give publicity to the loss. The numbers of the
notes were advertised in the papers, with a request
that they might be refused ; and for about six months
no information was received of the lost property. At
the end of that period, the Jew appeared wdth the
whole of his spoil, and demanded payment, which
was at once refused, on the plea that the bills had
been stolen, and that payment had been stopped.
The owner insisted upon gold, and the Bank per-
sisted in refusing. But the Jew was an energetic
man, and w^as aware of the credit of the Corporation ;
he was known to be possessed of immense wealth ;
and he went deliberately to the Exchange, where, to
the assembled merchants of London, in the presence
of her citizens, he related publicly that the Bank
had refused to honour their own bills for twenty
thousand pounds ; that their credit was gone ; their
affairs in confusion ; and that they had stopped pay-
ment. The Exchange wore every appearance of
220 HISTORY OF THE
alarm ; tlie Hebrew showed the notes to corroborate
his assertion. He declared that they had been re-
mitted to him from Holland ; and as his transactions
were known to be extensive, there appeared every
reason to credit his statement. He then avowed his
intention of advertising this refusal of the Bank ;
and the citizens thought there must be some truth
in his bold announcement.
Information reached the directors, who grew
anxious, and a messenger was sent to inform the
holder that he might receive cash in exchange for
the notes. " In any other country," says the person
who relates this tradition, " the Jew would have been
tried as a calumniator ; but in England, the Bank,
the soul of the state, would have lost the cause. The
law could not hinder the holder of the notes from
interpreting the refusal that was made of payment
according to his fancy ; nothing could prevent him
from saying that he believed the excuse was only a
pretext to gain time ; and though intelligent people
would not credit the story, the majority would have
been alarmed, and would not have taken their notes
for cash. In short, the Jew was acquainted with
the nation and its laws, and he gained his point."
It must also be remembered that at so early a period
the reputation of the company was not so firmly
established as at the present time.
Among the many runs upon the Bank wdiich have
been recorded, the following is not the least remark-
BANK OF ENGLAND. 221
able. The Due De Choiseul, during the American
war, hazarded a project, which, had it been successful,
would have injured the credit of the establishment,
and, for a period, destroyed the energies of the nation.
Aware of the importance of this corporation to the
state, and that Great Britain owed her success in war
partially to the Bank, he conceived the idea of using
all the efforts of France to destroy the power of the
company, trusting that a triumphal close to the con-
test between the two countries might be produced.
Some millions of livres added to the zeal of the
French emissaries, who discovered a period when the
bullion was somewhat low, and spread reports calculated
to injure the reputation of the Corporation. Collect-
ing all the notes which they could possibly procure,
they poured them into the Bank, and carried away the
gold with a parade which attracted the attention it
sought. The old cry arose of a run upon the Bank,
and in a few hours the whole city was in motion.
Volumes of paper were presented, and gold received in
exchange. The consternation of the directors, was in
proportion to the suddenness of the attack. The
alarm, far from being quieted, became every day more
general. Post chaises poured in from the provinces.
The application for specie became more urgent. There
was no mode of judging to what extent an attempt so
unprecedented and so unexpected might be carried.
The efforts of the national enemy seemed prospering,
and for some days England appeared to be upon the brink
222 HISTORY OF THE
of the greatest evil which could happen. Time was
necessary to collect specie, and people were employed
day and night to coin money. All the gold w^hich
by any stratagem could be gathered was brought into
the Bank. The method of paying by weight was discon-
tinued. The sums claimed were delivered with greater
deliberation ; and the money placed guinea by guinea
upon the table. For nine days this fever continued ;
but the method adopted by the directors, with con-
current circumstances, gave time for the production
of a large supply of gold. All the demands were
met ; the claimants finding there w^as no cause for
doubt resumed their confidence in the Bank, and the
scheme of the Due de Choiseul proved ineff'ectual.
An extraordinary affair happened about the year
1740. One of the directors, a very rich man, had
occasion for £30,000, which he was to pay as the
price of an estate he had just bought; to facilitate
the matter, he carried the sum with him to the
Bank, and obtained for it a Bank note. On his
return home, he was suddenly called out upon
particular business ; he threw the note carelessly
on the chimney, but when he came back a few minutes
afterwards to lock it up, it was not to be found. No
one had entered the room ; he could not therefore
suspect any person. At last, after much ineffectual
search, he was persuaded that it had fallen from the
chimney into the fire. The director went to acquaint
his colleagues with the misfortune that had happened
BANK OF ENGLAxXD. 223
to him ; and as he was known to be a perfectl}^
honourable man he was readily believed. It was
only about four-and-twenty hours from the time
that he had deposited his money; they thought,
therefore, that it would be hard to refuse his request
for a second bill. He received it upon giving an
obligation to restore the first bill, if it should ever be
found, or to pay the money himself, if it should be
presented by any stranger. About thirty years after-
wards (the director having been long dead, and his
heirs in possession of his fortune), an unknown person
presented the lost bill at the Bank, and demanded
payment. It was in vain that they mentioned to this
person the transaction by which that bill was an-
nulled ; he would not listen to it ; he maintained that
it had come to him fi'om abroad, and insisted upon
immediate payment. The note was payable to bearer;
and the thirty thousand pounds were paid him. The
heirs of the director would not listen to any demands
of restitution; and the Bank was obliged to sustain the
loss. It w^as discovered afterwards that an architect
having purchased the director's house, had taken it
down, in order to build another upon the same
spot, had found the note in a cre\dce of the chimney,
and made his discovery an engine for robbing the
Bank.
The interior arrangements of the Bank of England
are not the least remarkable part of its economy. The
citizen who passes it on his way to his counting-house;
224 HISTORY OF THE
the merchant who considers it as an edifice where
he gets his bills discounted or lodges his bullion for
securit}^; and the banker who regards it in his daily
visits only as a place to issue the various notices that
interest him, look on it with an indifferent eye. Even
to the stranger its external appearance is almost lost,
in contemplating the nobler structure which looks
down upon it. But to visit its various offices, to enter
into the mode in which its affairs are conducted, and
to witness the almost unerring regularity of its tran-
sactions, cannot fail to excite admiration. Within
that building, occupying a few feet less than three
acres, is the remarkable regularity and precision which
has procurred from statesmen and political economists,
from merchants and from bankers, the highest and
most complimentary eulogiums. In its management
all that capital can command, or intellect devise, is
introduced. The machinery of Manchester, on a
small scale, may here be witnessed. The steam engine
performs its work with an intelligence almost human,
as by it the notes are printed, and the numbers regis-
tered, to guard against fraud. When the spectator
posses from building to building, and mai-ks each
place devoted to its separate uses, yet all of them
links in one chain, he cannot fail to be affected with
the grandeur of that body w^hich can command so
extensive a service.
The most interesting place connected with the
machinery of the Bank is the weighing office, which
BANK OF ENGLAND. 225
was established a few years ago. In consequence of
a late proclamation concerning the gold circulation,
it became veiy desirable to obtain the most minute
accuracy, as coins of doubtful weight were plenti-
fully offered. Many complaints were made that
sovereigns which had been issued from one office
were refused at another ; and though these assertions
were not, perhaps, always founded on truth, yet it is
indisputable that the evil occasionally occurred.
Every effort was made by the directors to remedy
this, some millions of sovereigns being weighed sepa-
rately, and the hght coins divided from those which
were full weight. Fortunately the Governor for the
time being, before whom the complaints principally
came, had devoted his thoughts to scientific pursuits
and he at once turned his attention to discover the
causes which operated to prevent the attainment of a
just weight. In this he was successful ; and the
result of his enquiry was a machine remarkable for
an almost elegant simplicity. About eighty or one
hundred light and heavy sovereigns are placed indis-
criminately in a round tube ; as they descend on the
machinery beneath, those which are light receive a
slight touch, and this moves them into their proper
receptacle, while those which are the legitimate weight
pass into their appointed place. The light coins are
then defaced by the sovereign-cutting machine, ob-
servable alike for its accuracy and rapidity. By
this 200 may be defaced in one minute, and by the
VOL. II. Q
226 HISTORY OF THE
weighing machineiy 35,000 may be weighed in one
day.*
It has been stated in a previous part of these
volumes that the first stone of the original building
was laid in 1732, that the edifice was finished in 1734,
and that this comprised the centre of the present
building, which is of the Ionic order, and occupied the
space previously employed by the house and gardens
of Sir John Houblon, the first governor. The design
was by Mr. George Sampson ; the fabric was raised
under his superintendence ; the front was of stone,
and the principal offices were formed of wood. As
the importance of the Corporation increased, the
building became enlarged, and between 1770 and
1786, the wings w^re erected, under the direction of
Sir Robert Taylor, the design being taken by him
from a small building in the Belvidere Gardens, at
Rome. The columns are of the Corinthian style,
arranged in pairs along the front, supporting at each
end a pediment and a balustraded entablature between,
with arched recesses in the place of windows. The
remainder of the building was erected principally by
one who has left the evidences of a cultivated mind
and a pure taste in many public buildings. On the
death of Sir Robert Taylor, in 1788, the office of
* An eminent member of the Royal Society mentioned to the writer
that amongst scientific men it is a question whether the weighing machine
of Mr. Cotton is not the finest thing in Mechanics, and that there is
only one other invention, the envelope folding machine of De la Rue,
to be named vvith it.
BANK OF ENGLAND. 227
the architect of the Bank became vacant, and Mr.
Soane was appointed to the post of honour. " It
opened," says the wi'iter of the Illustrations of the
Public Buildings of the Metropolis, " a wide field for
his fancy and talents ; for the buildings of the Bank
were at that time limited in extent, inconvenient in
many essential parts, and were also ungracious in
architectural character. Unhke liis predecessors,
Mr. Sampson and Sir Robert Taylor, Mr. Soane com-
menced his operations by making an elaborate ground
plan of the whole range of ofiices, and another plan
showing a design for erecting a new edifice, to be
progi'essively executed, without interrupting the ne-
cessaiy and extensive business of this gi'eat national
establishment." In 1780 the directors, alarmed at
the dangerous facility which the adjacent church of
St. Christopher le Stocks gave to any mob possessed
of the slightest mifitary skill, entered into a negocia-
tion with the rector. Two acts of Parliament had
been passed to enable them to purchase ground ad-
joining their establishment, and by another act the
glebe land, the parsonages, &c., belonging to the
rector of St. Christopher le Stocks, were vested in
the governor and company. The rotunda was built
in 1795 by Sir John Soane, and shortly afterwards
apphcation was made to Parliament for extending the
Lothbury front westward, and connecting the whole
of the offices then built, with those proposed to be
erected, to give the exterior an uniform appearance.
228 HISTORY OF THE
The notice which the designs by Sir John Soane
attracted, must be in the memory of many, as, from
the novelty of the arrangement and the style of archi-
tecture, they were altogether new to the critics and
conoscenti of the day.
The principal entrance to the Bank is from Tliread-
needle Street, opening by a large arched gateway into
a quadrangular paved court, with which all the leading
communications are connected. Prior to the im-
provements by Sir John Soane, many of the offices
between which a close connection was desirable were
far apart, and inconveniently situated for business.
The governor and directors being anxious to remedy
this evil, consulted their architect, who arranged the
offices into one uniform plan, to which he proposed
that all future additions or alterations should be made
subservient. Under his direction a line of communi-
cation was opened through the interior from north
to south.
The pay hall, which fronts the main entrance, is a
part of the original building by Sampson, measuring
seventy-nine feet in length and forty in breadth ;
and at the eastern end is the statue of the founder of
the Bank. In allusion to this place, the Baron Dupin
says, in his " Commercial power of Great Britain,"
"The administration of a French bureau, with all its
inaccessibilities, would be startled at the view of this
hall."
The bullion office is only remarkable for the vast
BANK OF ENGLAND. 229
store of treasure which it occasionally contains. " I
understand the buUion office," said a witness before
the buUion committee, in 1810, "to have been insti-
tuted merely for the purpose of accommodation and
safety between merchant and merchant, as a place of
deposit; it used formerly to be called the warehouse."
It is exclusively devoted to the receipt and deposit of
bullion ; any person may send gold to this office as a
place of safety, without incurring any charge unless
it be weighed, when a small per centage is demanded.
It formed part of the structure by Mr. Sampson, was
altered by Sir Robert Taylor, and still further im-
proved by Sir John Soane, on his accession to the
office of architect.
The court room is a noble apartment, by Sir
Robert Taylor, of the composite order, about sixty feet
long and thirty-one feet six inches wide, with large
Venetian windows on the south, overlooking that
which was formerly the church yard of St. Chris-
topher. The north side is remarkable for three
exquisite chimney pieces of statuary marble, the
centre being the most magnificent. The east and
west are distinguished by columns detached from the
walls, supporting beautiful arches, which again sup-
port a ceihng rich with ornament. The west leads
by folding doors to an elegant octagonal committee
room, with a fine marble chimney piece. The gover-
nor's room is square, with various paintings, one of
which is a portrait of William III. in armour, an inter-
230 HISTORY OF THE
sected ceiling, and semi-circular windows. This chim-
ney piece is also of statuary marble ; and on the wall
is a fine painting by Marlow of the Bank, Bank
Buildings Cornhill, and Royal Exchange. An ante-
room contains portraits of Mr. Abraham Newland and
Mr. Daniel Race, cashiers, taken as a testimony of the
approbation of the directors. In the waiting room
ai-e two busts, by Nollekens, of Charles James Fox and
William Pitt. The original rotunda, by Sir Robert
Taylor, was roofed in with timber ; but when a
sui'vey was made, in 1794, it was found ad\'isable to
take it down ; and, in the ensuing year, the present
rotunda was built, under the superintendance of
Mr. Soane. It measures fifty-seven feet in diameter,
and about the same in height to the lower part of the
lantern. It is formed of incombustible materials, as
are all the offices erected under the care of Sir John
Soane. For many years this place w^as a scene of
constant confusion, caused by the presence of stock-
brokers and jobbers. In 1838, this annoyance was
aboHshed, the occupants were ejected, and the space
employed in cashing the dividend waiTants of the
fundholders. The offices appropriated to the man-
agement of the various stocks, 'are all close to or
branch out from the rotunda. The dividends are paid
in two rooms devoted to that purpose, and the trans-
fers are kept separate ; they are arranged in books
under the various letters of the alphabet, containing the
names of the proprietors, and the particulars of their
BANK OF ENGLAND. 231
property. Some of the stock offices were originally
constructed by Sir Robert Taylor, but it has been
found necessary to make great alterations, and most
of them are designed from some classical model ; thus
the three per cent, consol office, which, however,
was built by Mr. Soane, is taken from the ancient
Roman baths, and is eighty-nine feet nine inches iq
length and fifty feet in breadth. The chief cashier's
office, an elegant and spacious apartment, is built
after the style of the Temple of the Sun and Moon,
at Rome, and measures forty-five feet by tliirty.
The fine court, which leads into Lothbury, presents
a magnificent display of Roman and Grecian archi-
tecture. The buildings on the east and west sides
are nearly hidden by open screens of stone, consisting
of a lofty entablature, surmounted by vases, and
resting on columns of the Corinthian order, the bases
of which are on a double flight of steps. This part of
the edifice was copied fi'om the beautiful temple of
the Sybils, near Tivoli. A noble arch, after the
model of the triumphal arch of Constantine, at Rome,
forms the entrance into the bullion yard. The entab-
lature rests on fluted Corinthian columns, sup-
porting statues, wliich indicate the four quarters of
the globe. The intercolumniations are ornamented
by allegories representing the Thames and the Ganges,
executed by Thomas Banks, academician, the roses
on the vaulting of the arch being copied from the
Temple of Mars the Avenger at Rome. On the
232 HISTORY OF THE
deaiii of Sir John Soane, Mr. Cockcrell was chosen
to succeed him in his important position. The style
of this gentleman in the office he designed for the
payment of the dividend warrants, now employed as
the private drawing office, is very different to the
erections of his predecessor. The taste which pro-
duced the elaborate and exquisite ornaments in this
room is in strong contrast to the severe simplicity of
the works of Sir John Soane.
The new machinery for printing the notes, which
was introduced by Mr. Oldham — the invention of
whom has been employed by the Austrian and Irish,
no less than by the English Bank — is well worthy
of a visit, but w^ould be uninteresting to delineate.
Its effect may be described in the assertion that
the power formerly employed by the mechanic in
pulling a note is now exerted by the steam engine.
The machines by which the Bank notes are num-
bered on the dexter and the sinister halves, each
bearing the same figures, have been used in the
establishment for nearly fifty years, and are the
patents of Bramah and Co. The principle, like every
other intricacy when it is explained, is very simple,
and may be summed up in the words that, as soon as
a note is printed, and the handle reversed to take
it out and put another in its place, a steel spring,
which is attached to the handle, alters the number
to that which should follow. The whole of the
printing of the Bank is executed within its walls ;
BANK OF ENGLAND. 233
the ruling machines are the simple ones generally in
use ; the presses are those invented by Cowper, and
are so well known that no description is required.
By the appendix it may be seen that the Bank
commenced business with fifty-four assistants, the
salaries of whom amounted to £4350. The total
number employed at present is upwards of nine
hundred, and their salaries exceed £210,000.
The curiosities of the Bank are few. It possesses,
however, a collection of ancient coins, which, with the
exceptions of those of the British Museum and of
Paris, is perhaps the finest in Europe. Visitors are
occasionally shown some notes for large amounts, which
have passed between the Bank and government ; but
to the antiquary there are not many attractive objects.
In the early history of the establishment any
person in possession of a Bank note might demand
only part of its amount, and the same plan might be
resorted to with the same note until the whole of the
sum due upon it was absorbed. Some of these are
still shown ; on the last which came in there was
only sixpence to receive.
The following is principally derived fi'om the report
of the Committee of the House of Commons, and is
given almost verbatim.
The supreme management of the Bank is vested in
the whole Court of Directors, which meets weekly,
when a statement is read of the position of the Bank
in its securities, bullion, and liabilities. The directors
234 HISTORY OF THE
have equal power, and should a majority disapprove
of the arrangement, they might re-construct it.
Eight of them go out and eight come in annually,
elected by the court of proprietors ; and the system
on which the affairs of the Bank are conducted
is of course liable to change, as new directors may
exert their individual influence on it. A list of
candidates is transmitted to the court of proprietors,
and the eight so recommended uniformly come in.
Quakers and Hebrews are not eligible ; although many
are so well versed in monetary matters. When an
individual is proposed as a new director, enquiry is
always instituted concerning his private character.
The qualification is the possession of Bank Stock
to the amount of £2000, of the deputy-governor
£3000, and of the governor £4000. For many years
the directors have adhered to the practice of pos-
sessing only the amount of qualification; and when
the twenty-five per cent, bonus on stock was given to
the proprietors, they merely retained their previous
amount. They are responsible for the management
of the affairs of the Bank, and penalties attach to
their conduct, individually or collectively, upon certain
occasions. But by the charter they are not responsi-
ble for the management of the monetary department
to government ; and the whole security which the
public have for that management depends on their
discretion, subject to the new charter.
If the mode of choosing and electing directors be
BANK OF ENGLAND. 235
wrong, it is in the power of the proprietors to change
it ; but in Mr. George Grote's opinion, it would be
most difficult to devise a better method. *' House
lists" are common in many institutions ; and it has
long been thought that the present method is better
for the public than any other. Although, strictly
speaking, the directors are the sworn servants of their
constituents, their duty to the Bank is always regu-
lated, to a certain degree, by the demands of the
country. " It has happened to us," said Mr. Rich-
ards, "to feel it our duty to our proprietors to
postpone their interests, in order to effect some
important good to the public at large, in which their
interest might be mixed up ; it has not been the
practice of the Bank to sacrifice the wishes and
expectations of the public merely to a dry considera-
tion of the interests of the proprietors, because they
are so blended that it is hardly possible to keep them
distinct." Mr. Loyd thinks the limitation of the
right of election exclusively to proprietors of stock,
is open to objection, but not sufficiently so to justify
any alterations.
Many persons consider that if the present system
with reference to the private deposits in the Bank
were extended, it would prove beneficial to the traders
of London. This consideration has induced the Bank
to offer the usual facilities for obtaining advances
which are afforded by private bankers to their cus-
tomers. There is every reason for its employment
236 HISTORY OF THE
as a bank of deposit, and most especially in the
feeling of additional security. The want of confidence
in the private bankers, produced by their failures, has
caused a great increase of deposits in the Bank of
England since 1825. The directors have not had the
power *of acting upon any fixed system till a late
period, in consequence of a variety of circumstances
that existed prior to that time. For instance, from
1819 to 1822, the Bank had to prepare for cash
payments, and to contend with the conflicting
character of the circulation of the country and
London, governed as the country then was by a
small note circulation. While that circulation existed
the Bank was liable to a great sudden demand.
In the two last months of the year 1825, the de-
mand upon the Bank was nearly two millions and a
half sterling for the support of the country circulation,
when the exchanges were nearly at par, which placed
the Bank in a peculiar state of difficulty. The whole
embarrassment of that period, with regard to bullion,
arose from the magnitude of the demand, which was
made almost entirely for the purpose of upholding the
small note circulation. The holders of that paper were
the lower orders of the people, whose fears are exten-
sively acted upon in times of distrust; and there having
been no exchange for one-pound notes but the sove-
reign, the demand upon the Bank became inevitable.
At that period the London bankers also pressed very
much for gold, but they served merely as the channel
BANK OF ENGLAND. 237
•hrough which the supply was sent to the country.
Since the circulation of the one-pound notes has ceased,
the occasional excessive demand has been obviated.
Whenever there is a deficient capital at home, for
the purchase of silver, the Bank may, with advantage
to the country, preserve the gold by the exportation
of silver, and by purchasing with it the excess of bills
upon England in the foreign market. The operation
^s conducted with secresy, but with the full concur-
rence of the whole court of directors ; and in making
such a use of their silver, their sole object is to
protect the gold, which, in times of an unfavourable
exchange, has a tendency to leave the country.
The governor or deputy-governor, one of whom is
always supposed to be in the house, assisted by a
select committee of three directors, conducts the daily
business, in the intervals between the sittings of the
court. The treasury committee consist of the gover-
nor and deputy-governor, the directors who^ have
passed the chair, and the gentleman next in rotation
for the deputy-governorship. The bullion is pur-
chased by the governor, who considers he has no
power to refuse the issue of notes in return for gold
bullion, as a paper currency, founded upon gold, is
the main object of the institution. He does not
regulate the price of bullion, which is bought at
£3 17s. 9d., and sold at £3 17s. lOJd. It was for-
merly at £3 17s. 6d. ; but government considered this
too low, and suggested the existing price.
238 HISTORY OF THE
When gold coin is demanded in large quantities, it
may be delivered in bags to almost any amount in the
course of a day. But the largest amount that can
be paid in one day by about twenty-five clerks, if
counted by hand to the pubHc, would be about
£50,000. When large sums are applied for by
bankers or others, the practice of the tellers is to
count twenty-five sovereigns, and put them into one
scale, then to count twenty-five more, and put them
into the other scale ; and if the accuracy of tlie scales
be proved by their balancing, the sum is increased in
each scale by counting to two hundred. The balance
is again tested, and, if found exact, one of the scales is
emptied, and the two hundred sovereigns in the other
serve as a weight the whole day for the delivery, with-
out further counting, of sums divisible into two
hundred. In this way, a thousand sovereigns can be de-
livered ina few minutes ; and upwards of £300,000 were
paid to bankers and others on the 14th of May, 1832.
The amount of £500, which entitles to a vote,
must have been in the name of the proprietor for
more than six calendai* months.
The chapter with which these volumes conclude
might have been increased to an almost indefinite
extent. A brief sketch, however, of the building,
machinery, and action of the Corporation, is all that
the writer deems necessaiy to accompany the present
history of the origin and progress of the Bank of
England.
APPENDIX.
APPENDIX.
A
SHORT ACCOUNT
OF THE
BANK OF ENGLAND.*
HERETOFOKE PUBLISHED BY MICHAEL GODFKEY, ESQ.,
DECEASED, AND NOW BEPRINTED.
Considering the variety of opinions concerning the Bank, it may
be thought a service to the publick to give the following accoimt of
it, whereby 'twill appear that the Bank, notwithstanding all the
cavils which the wit and malice of its opponents have raised, is one
of the best establishments that ever was made for the good of the
kingdom ; for how plausible soever their objections may seem, 'its
manifest they proceed in some from aversion to the government, in
others from prejudice, false insinuations, or mistaken notions, but in
most from self-interest.
The Bank is a society consisting of about 1300 persons, who
having subscribed £1,200,000 pursuant to an act of parliament, are
incorporated by the name of the governor and company of the
Bank of England, and have a fund of £100,000 per annum granted
them, redeemable after eleven years, upon one year's notice, which
£1,200,000 they have paid into the Exchequer by such payments as
the public occasion required, and most of it long before the money
could have been demanded.
* Reprinted from a rare pamphlet published in 1695, by Michael
Godfrey, whose death at Namur is recorded in the first volume.
VOL. II. R
242 APPENDIX.
The subscriptions to the Bank were made by virtue of a commis-
sion under the great seal of England, grounded upon the said act of
parliament, of which publick notice was given, and the commissioners
were appointed to take all such voluntary subscriptions as should
be made on or before the first day of August last, by any person or
persons, natives or foreigners, bodies politic or corporate, towards
the raising the said £1,200,000 ; and there was a proviso in the
said act, that if £600,000 or more of the said £1,200,000 should not
be subscribed on or before the first day of August then next coming
that the power of making a corporation should cease, and the
money be paid into the Exchequer by the respective subscribers
and contributors. And notwithstanding all the endeavours of its
adversaries, the whole £1,200,000 was subscribed in ten days time,
though if the subscriptions had not amounted to £600,000 the sub-
scribers would have had but a bad bargain, and such as no body
would have taken off their hands for 20 per cent, loss of their prin-
cipal, and yet they would have received £8 per cent, per annum for
their money ; nor would the £1,200,000 have been anything near
subscribed, but upon the prospect of their being incorporated to be
the Bank of England.
It's observable that the promoters of the Bank have proposed no
advantage thereby to themselves above any of the other subscribers,
all the profit being only pro rata, according to their stock ; and
though it cannot be imagined but that they intended to be largely
concerned, yet it is settled, that those who have £500 have one vote,
and those who have never so much can have no more ; and the
directors have no salary fixt for their pains and attendance, but
submit themselves wholly to what a general court will think fit to
allow them ; and any nine members, having each £500 stock, may
call a general court, and turn out the governor, deputy-governor,
and all or any of the directors, and choose others in their places.
Which are provisions so wise and effectual to prevent fraud in some,
to the prejudice of the rest, that it hardly leaves room for any doubt
of that nature.
I shall not attempt to enumerate all the advantages which the
APPENDIX. 243
nalion will receive by the Bank, however I will mention some few,
which alone are sufficient to recommend it, viz :
The Bank, besides the raising £1,200,000 towards the charge of
the war, cheaper than it could otherwise have been done, and (like
the other publick funds, tying the people faster to the government)
will infallibly lower the interest of money, as well on publick as pri-
vate securities, which all other funds have advanced, and which hath
been raised to an exorbitant rate, as to the publick, by those who
have made use of its necessities, and are now angry at the Bank,
because that will reduce it. And the lowering of interests, besides
the encouragement it will be to industry and improvements, will by
a natural consequence, raise the value of land and increase trade,
both which depend upon it ; but it cannot be expected that land
should rise much whilst such high taxes continue upon it, and whilst
there are so great advantages to be made by lending money to the
publick.
The Bank gives money for tallies on funds, having a credit of
loan by act of parliament, and which are payable in two years time,
for the growing interestonly, without any other allowance on which
there was used to be paid for the change, as much or more than the
publick interest : for even on the land tax, which is counted the
best of all the funds, there has been frequently given on tallies
payable inthreeor four monthstimc 1, l|,£ly, and2percent.premio.
over and above the public interest, and tallies on some funds, on
which but twelve or eighteen or twenty months past there was £25
and £30 per cent, given over and above the publick interest, are
now taken by the Bank for nothing, and instead of allowing money
to change them, there is now money given to procure them ; so that
tallies are become better than money, because there is 7 or 8 per
cent, per annum benefit whilst they are kept ; and they are paid by
the Bank upon demand to all those who desire to have money for
them, which is, in effect, so much quick stock which the Bank has
ali'eady increased to the nation, besides what it will farther add
by its own credit.
Thus, by a regular course, and without any violence, the Bank
244 APPENDIX.
lias made tallies current in payment, which is what has been so long
wisht for, but could not have been affected without the Bank, (al-
though there had been a law to compel it,) and this has given such
a reputation to all tallies, even those which are the most remote, that
they are now currently taken by private persons at £6, £8, £10,
£15 and £20 per cent, less allowance than what was given but some
few months before the Bank was establisht, all which losses on
tallies was paid by the public, for it cannot be suppos'd but those
who are to allow 15 or 20 per cent, for discount of their tallies
make provision accordingly in the price they are to have for their
commodities.
The Bank will likewise facilitate the future supplies, by making
the funds, which are to be given, more useful and ready to answer
the publick occasions, and upon easier terms than what has been
done during the war ; for it's said, they will lend money on the land
tax at 6 per cent, per annum ; nay some say at 5 per cent, per
annum ; which will save the nation a great sum of money in interest,
as well as what was usually paid for gratuities and other charges to
procure loans, a method that some of the opposers of the Bank
have been well acquainted with.
But now the Bank is establisht, and tnat all who want money and
have securities, know where to be supplied, and the terms, there
cannot be such advantages made on the public or private men's
necessities for the future.
The more credit the Bank has, and the more money is lodged in
it, the more it will lessen interest, for Avant of occasion to improve
it ; and those who lodge their money in the Bank have it as much
at their disposal as if it were in the hands of the goldsmiths, or in
their cash chest ; and there is a greater value than the money
which is -deposited in the Bank that cu-culates by their credit as
mucli as if it were stirring in specie. And the Bank bills serve
already for returns and exchanges to and from the remotest parts of
the kingdom, and will in a little time do the like in foreign parts,
which will lessen the exporting of bullion for the paying and main-
taining our armies abroad during this war ; and if the bulk of the
APPENDIX. 245
money of the nation, which had been lodged with the goldsmiths,
had been deposited in the Bank four or five years past, it had pre-
vented its being so scandalously dipt, which one day or other must
cost the nation a million and half, or two millions to repair.
Those who are concerned in the Bank cannot fail to lessen the
interest of money, for it's their own interest to do it, else they can-
not employ it ; and their fund being settled at £8 per cent, per an-
num, the lower they bring all other interest, they make the stock of
the Bank the more valuable ; and it must be allowed, that it is the
only fund that ever was settled in England which has lessened the
interest of money. And it 's very observable, that any resolution
that the concerned in the Bank have taken to be more serviceable in
accommodating the publick or private men's occasions, has always
given it a farther reputation, and increased its value ; and the more
they serve the interest of the nation, so much the more they serve
theb o"SATi, they being under this happy circumstance that they
cannot do good to themselves but by doing good to others.
The nation pays for the million on aimuities £14 per cent, per
annum, for ninety-nine years ; and for the million lottery, £14
per cent, per annum, for sixteen years, besides about one-tenth
part which was expended in charges, and reckoning interest upon
interest at 5 per cent, per annum, as some have computed it, the
lottery amounts to above three millions, and the annuities amount
to above two hundi'cd and sixty millions.
The funds of wine, \-inegar, and tobacco, East India goods, joint
stocks, paper and parchment, and neAV impositions, are all at £8 per
cent, per annum, as well as the Bank ; and yet there has been from
£20 to £30 per cent, loss on tallies upon several of these funds, besides
the publick interest ; the like has been on the remote parts of the
^ excise and ^ customs before the Bank was establisht, and thereby
the nation has paid 12, 14, 16, 18, and 20 per cent, per annum in-
terest for money, which, if it had continued, must have ruined the
kingdom ; but now that they who have made these advantages by
the public are prevented of the like for the future, they vnll be
more ready to lend money on private securities, or to purchase
24G APPENDIX,
lands, for want of occasions to improve their money to so much
better advantage.
It 's a matter which is very surprising and without any example,
that after the nation has been six years ingag'd in such a chargeable
war, and has been at near thirty millions expence, and such quan-
tities of bullion have been exported, besides the loss of several
millions, which the enemy has taken ; that after all this, instead of
the interest of money rising, (as has been usual in all wars) there
should now be such a fall of interest, which must be acknowledged
to be wholly owing to the Bank, and that it could not have been
effected without ; for till the Bank exerted itself, the interest of
money was rising apace, and would have continued so, and have
come to a strange exorbitancy e'er this, if the Bank had not been
establisht.
The Bank being thus viseful to the publick, extends itself likewise
to accommodate all private men's occasions ; for they lend money on
mortgages, and real securities at £5 per cent, per annum, and their
very publishing they would do it, has given a check to the raising
the interest on them from £5 to £6 per cent, per annum, as Avas at-
tempted ; and if the titles of land were made more secure, money
would be lent thereon at £4 per cent, per annum, and in time of
peace at 3 per cent, per annum. Foreign bills of exchange are dis-
counted at 4~ per cent, per annum, and inland bills and notes for
debts of 6 per cent, per annum ; and those who keep their cash in
the Bank, have the one discounted at 3 per cent, per annum, and
the other at 4J per cent, per annum, for which most goldsmiths used
to take 9 or 10 per cent, per annum. And money is lent on pawns
of commodities, which are not perishable, at £5 per cent, per annum,
for which, some in their necessities, have paid more than double as
much, to the mine of many great traders.
Money is likewise lent on the fund of the orphans of the city
of London, at 5 per cent, per annum, which will hmder several,
Avho are necessitous, from being forced to sell their interest at
under rates.
And it's said they have agreed to set up aLumbard to lend money
AITEKDIX. 247
on small pawns, for the relief of the poor, at one penny per month
for twenty shillings, for which they now pay sixpence or twelve-
pence every week. And it's probable, if the Bank was not restrained
by act of parliament, they might take into consideration the ex-
changing seamen's tickets for money for a very small allowance, for
which they have often times paid seven or eight shillings in the
pound.
The Bank will reduce the interest of money in England to 3 per
cent, per annum in a few years, without any law to enforce it, in
like manner as it is in all other countries where banks are establisht,
whereby the trade of the nation may be driven upon more equal
terms with the rest of our neighbours, where money is to be had at
so much lower rates than what we in England have hitherto paid.
And as the lessening the interest of money will infallibly raise the
value of land, it had been worth while for the nobility and gentry
who are the proprietors of the real estates in England to have given
a land tax for the Bank, of double the sum which was raised by it,
if they could not otherwise have obtained it ; for the falling the
interest of money to 3 per cent, per annum, to which rates the Bank
will reduce it, will unavoidably advance the price of land to above
thirty years' purchase, which will raise the value of the lands of
England at least 100 millions, and thereby abundantly reimburse
the nation all the charges of the war, and wiU not only enable the
gentry to make better provision for their younger children, but those
who now owe money on their lands, to pay off their debts by the
increase of the value of their estates.
The ease and security of the great receipts and payments of
money which are made by the Bank, (where people's cash is kept
as it is at the goldsmiths',) together with the safe depositing of it,
are such advantages to recommend-it, that they ought not to be past
over without some observation ; especially considering how much
money has been lost in England by the goldsmiths and seriveners
breaking, which, in about thirty years past, cannot amount to so
little as betwixt two and three millions, all which might have been
prevented, had a Bank been sooner establisht ; for none can lose by
248 APPENDIX.
the Bank, they having a fund of £100,000 per annum, and money
or good securities besides, for as much they owe, wherewith to
pay all that trust them.
These are such services to the nation, in general, Avhich have been
(and will be) done by the Bank as could not have been done with-
out it; and such arguments as these, arising from fact, are better
demonstrations and more convincing of the usefulness of it than
mere speculative notions, urged by its opposcrs, can be to prejudice
others against it ; and therefore, it would be an accoimtable sort
of policy, to endeavour to deprive the nation of those vast advan-
tages which it now does and will receive by it.
Having given this short account of the Bank, I shall consider the
objections that have been made agamst it, and who they are that
make them ; in which I shall chiefly take notice of those who would
cloak the opposition they make out of private interest, under some
other specious pretences ; among which they are some who would
be thought the most zealous for the government, who at first pre-
tended to dislike the Bank, only for fear it should disappoint their
majesties of the supplies which were proposed to be raised by it.
But since the whole £1,200,000 has been so readily subscribed,
their opposition has increased, and their being now so zealous against
it, can only proceed from their fear that they shall not have the like
opportunities as they have had to impose on the public, by whose
necessities they have made so great advantages ; and they now
threaten what they will do to destroy the Bank this session of par-
liament, as if what past in the last were to be imdone in this.
There are others who are for forcing a currency of bills or tallies,
and think they may pass as well as bank bills ; but they do not con-
sider that its nothing makes bank bills currant, but only because
that all those who desire it, can -go when they will, and fetch their
money for them ; and to force anything to pass in pajTnent but
money, would soon end in confusion : for it cannot serve the nations'
occasions at home, much less our foreign negotiations with other
countries abroad ; seeing that all those who take bills of exchange
on England, are too wise to except any such sort of payment ; but will
APPENDIX. 249
be sure to have them made payable in sterhng money, in specie, in
like manner as the bills, which are now drawn on Spain, are made
payable in old money, as before the Pragraatica : which, together
with the late essay of copper money in Ireland, might be sufficient
to shew that all such attempts will be ineffectual.
And, besides, the confusion it would make, the danger of their
being counterfeited, is an objection that cannot well be answered ;
and all that it would cost to exchange them for money would be
certainly paid by the government; for it would be considered, by
those who sell their goods, in the prices of them ; and though but
a small sum were paid for the loss of exchanging them for money,
by every one through whose hands they should pass, yet there might
be more than the whole value lost thereby, in less than one year's
time. And the very proposing such an innovation is of dangerous
consequence, and tends to destroy the public credit. For if it
should be attempted to make anything current in payment but
specie money, no body would trust the government on any loans for
the future ; and it would put a stop to the discounting tallies or bills
of exchange, lending money on pawns or mortgages, or, indeed, to
the giving any credit, but upon the undoubted assurance of receiv-
ing the payment in specie ; for on all other sorts of payment there
will be a loss to exchange them for money ; and it would discou-
rage our friends, and encourage our enemies, by proclaiming to the
world that we are not able to continue the war, and this would put
an end to it ; for we should be forced to submit to such terms as
the French King would think fit to grant us.
It's very observable that all the several companies of oppressors
are strangely alarm'd, and exclaim at the Bank, and seem to have
joined themselves in a confederacy against it, out of pure zeal (as
they pretend) for the good of the publick : whereas 'tis nothing but
their private interest, that has so nettled them, to see their crafts
and trade of oppression endangered ; for extortion, usury, and op-
pression were never so attacqued as they are like to be by the Bank ;
and 'tis that which has engaged them to use all the arts and tricks
they could invent, to blemish it; and amongst the rest, to make those
VOL. II. S
250 APPENDIX.
that owe money uneasie at it, great sums have been called in, spe-
cially if any have happened to be due from those whose public
stations might make their anger the more significant ; pretending
that the Bank has made such a scarcity of money, that none is left
to be lent on land or other securities ; though if it really did what
they pretend, they would be far from being angry at it. Scarcity
of money naturally producing a high interest, and a difficulty for
those that want to be supplied with it; which are the best argu-
ments that can be used, to extort double the price for procuration
and continuation, crimes that would easily be forgiven by those men.
But the Bank, on the contrary, makes a plenty of money, and ren-
ders it easie, for those that want to be supplied with it, at a mode-
rate interest, as well on public as private securities, without paying
anything either to procure or continue it.
There are others who pretend to be against the Bank lest it
should hereafter joyn with the prince to make him absolute, and so
render parliaments useless. But tho' that may at first seem fright-
ful, yet, when it's considered, there will not appear any cause for
such fear as is pretended ; and it's morally impossible to be attempted,
the concerned in the Bank being restrained by act of parliament,
from advancing any money to the crown but upon such funds only
on which there is a credit of loan by parliament, under the penalty
of each person's forfeiting treble the value of all the money lent ;
the one-fifth to the informer, and the other four-fifth cannot be par-
doned by the King, but are to be disposed of by parliament. Nor
can it be the interest of the Bank to make any King absolute, see-
ing they have no security for their fund, nor for the money that is
lodged in the Bank, but the protection of the laws. For if they
should contribute to make any King absolute, they can have no as-
surance that he would not (nay, they may be confident that he
would) seize on their fund and their money by violence, lest that
they who contributed to make him absolute, should afterwards en-
deavour to reduce him to a conformity with the laws of the land.
And certainly there is more danger of such a design from twelve
or fourteen goldsmiths, who were used to have most of the running
APPENDIX. 251
cash of the kingdom ; or from other corporations, who depend
wholly on prerogatives, and are under no manner of restraint. Nor
could such a design ever be attempted by the Bank ; for the whole
court of directors, which consists of twenty-six persons, must be
made privy to it ; and some of them, to be sure, would be against
it; and it could not be kept secret, but would soon be divulged.
And any nine members of the Corporation may call a general court
who would infallibly turn out those that should incline to favour
such a design ; for 'tis not to be supposed, that such a body of
men should agree to ruin themselves and their posterity, by losing
their estates and their liberties, when 'tis in their power to preserve
them. And seeing the triennial bill is past, a new parliament must
be chosen, and sit once in three years ; and during the war, there
is no danger but they will meet oftener.
There are others who are against the Bank, pretending the fund
from which its revenue arises is prejudicial to the nation ; but if
that were an objection, it might as well be urged against the an-
nuity for lives, payable out of the same fund, and settled by the
same act of parliament. But as this is not made an objection
against the one, no more ought it to be against the other ; for the
Bank would be the same out of whatsoever fund the £100,000 per
annum were payable ; and if it were ill for the kingdom, the good-
ness of the fund would not make it the better, nor if the fund were
a bad one, would that make the Bank the worse.
There are others who are against the Bank, because they pretend
the concerned have too good a bargain ; though if it were really so,
the nation pays but £100,000 per annum for £1,200,000, which is
no more than their agreement ; and 'tis much less than must have
been paid for that money, if it had been to be raised in any other
manner ; but if there were any weight in this objection, it might be
proper to be considered eleven years hence, when their term ex-
pires, in case they should endeavour a longer continuance. It never
was thought to be an objection against those who have the fee-farm
rents, that they have had too good a peniworth, though they now
sell at twenty-one, twenty-two, and twenty-three years' purchase.
252 APPENDIX.
And though great part of tliem were paid for by debentures, and
old debts due from the crown, which were bouglit for httle or
nothing; nor is it objected that it was a thin liouse wlien tliat bill
past, though upon the division there were but forty- two members
present.
Some find fault with the Bank because they have not taken
in the whole £1,200,000 which was subscribed, for they have called
in but £72,000, which is more than they have now occasion for.
But, however, they have paid into the Exchequer the whole
£1,200,000 before the time appointed by the act of parliament;
and the less money they have taken in to do it with, so much the
more they have served the public ; for the rest is left to circulate in
trade, to be lent on land, or otherwise to be disposed of for the
nation's service. And it's better for the Bank, as well as the pub-
lic, to have £480,000 in the subscribers' hands, ready to be called
for as they want it, than to have had it lie useless by them. And
it's very observable, that few of those, who make this objection,
either do or would trust the Bank, though the whole £1,200,000
were actually paid in by the subscribers, as they would pretend to
have it. And though they are so careful lest the Bank should not
have credit ; yet, at the same time, they pretend to fear its credit will
so far prevail, that it will engross all the money in the nation ; so that
it seems as if they who would have £480,000 called in, wanted a
pretence to find fault with the Bank for having made money scarce,
by calling in the remainder of the whole subscriptions, when they
did not want it ; unless they would shew by some new discovered
rules in arithmetic, that the calling in £480,000 more would make
the Bank have the less money lodged in it.
'Tis pretended by others that the Bank is prejudicial to trade
because there are some under such unhappy circumstances, that the
Bank cannot relieve them in their broken fortunes, and who have
been sinking before the Bank was thought of. Indeed they who
have not credit to borrow money at interest, nor to draw by ex-
change, and who have neither tallies, bills of exchange, nor good
bills for debt to discount, goods to pawn, or land or houses to
APPENDIX. 253
mortgage, must be allowed to be in no very good condition, and
must continue to pay as exorbitant allowances for money, to supply
their necessities, as they used to do before the Bank was established.
What has been observed of discounting foreign bills of exchange
at 3 per cent, per annum, inland bills, and notes for debts at 4^ per
cent, per annum, lending money on pawns at 5 per cent, per annum,
exchanging tallies, and lowering interest of money, it's supposed,
is sufficient to answer this objection.
'Tis alleged by some that the Bank will ingross all manner of
trades. But this is an objection like many others which are made
against it by those who do not understand its constitution ; for if
any person trades on account of the Bank in any other thing than
taking pawns, or in bills of exchange, or bullion, or consents that
any other should trade ; every such person so trading, or consent-
ing to such trade, incurs, by the act of parliament, a forfeiture of
treble the value of all that is traded for.
The goldsmiths have been guilty of engrossing most commodities
themselves, and they have also been great merchants and traders.
And since the nation has suffered so much by their monopolizing
goods and trading with other men's stocks, it may seem highly
reasonable, that, as the Bank is restrained from trade, for fear of
those mischiefs which the goldsmiths have practised, so the gold-
smiths, in like manner, should be limited to the selling plate and
jewels, which was their antient and proper trade. And if there be
an advantage to be made by the running cash of the kingdom, it's
fitter for the Bank to have it; which consists of thirteen hundred
persons, and who employ it to serve the nation in general, by lower-
ing the interest of money ; than that it should be given to a few
private men, who have already made use of it, so much to the
nation's prejudice.
And, whereas they pretend that the Bank has bought up all the
silver, upon enquiry it appears, that there hath not been £12,000
worth bought by the Bank, and the greatest part of that was pieces
of eight, and the rest bars and piny silver, which came from Spain ;
though some particular refiners and goldsmiths have since that
254 APPENDIX.
shipp'd off more than double that value in bars of English melting,
and have likewise sold much greater parcels to others, which have
been exported. And it may be a matter well worth enquiry, where
those mines are which have produced that silver ?
And though it be made such a crime for the Bank to be con-
cerned in the public remittances, it is no more than was done by
a goldsmith before the Bank undertook it ; nor is it looked on as
a fault in the goldsmiths to deal by exchange, seeing some of them
do now draw or remit money almost every post.
As to the pretence of the Bank setting a price upon guineas, and
having engrossed the greatest part of all that are in the nation ; 'tis
answered, the Bank has always received and paid guineas, at two-
pence or threepence a piece, at least, under the price which the
goldsmiths have put upon them ; and has been so far from buying
up any, that they have only received such as have been brought
them in payment ; and have constantly paid them away every week
at the same price as they have received them ; so that if they make
any benefit by the advance of the price of guineas, 'tis chiefly on
those which were received at the taking the subscriptions ; which
cannot come to any such quantity as is pretended ; and 'tis a matter
wholly owing to some or all of these causes.
To the goldsmiths and refiners, who have raised the price of
them : or, to the trade which is driven by the clippers, who sell their
clippings for guineas, and with them to procure heavy money ; or
to the badness of our silver coin, which is diminished every day.
There are others, who make a mighty complaint against the Bank
because twopence per day is allowed on all bank bills ; and the money
which was used to be lodged in their hands for nothing, and made
use of by themselves, is now paid into the Bank by the owners ;
but they, it's supposed, will not find fault with receiving twopence
per day for that money, for which before they had nothing ; and so
one may be set against t'other.
'Tis pretended, the allowing twopence per day, hinders some
from purchasing or lending money on mortgages, and makes others,
who are traders, and owe money, bad paymasters.
APPENDIX. 255
Bat it may well be supposed, there are none who intend to pur-
chase or lend money on mortgages, who will leave their money in
the Bank at 3 per cent, per annum, when they can have a purchase
to their minds, or a good security at 5 per cent, per annum ; and
there are few who would not leave their money lying dead, rather
than lay it out on the purchase of an estate they do not like, or
lend it on a bad security.
And as for its making bad paymasters ; they must consider their
credit or interest but little, who will delay paying their debts for the
getting the twopence per day per £100, which is allowed on bank
bills ; for in their future dealings they would pay a much dearer
interest. The money which is lodged in the Bank, is only the
money which can be spar'd, and was wont to be left with the gold-
smiths ; and it's strange that 3 per cent, per annum, which is allow-
ed on bank bills, should do all this mischief, and that the great
advantages which have been made by the public funds should never
be made an objection.
But the plain trutli of the matter is, that the goldsmiths are angry
at the Bank's allowing twopence a day per cent., because that by
this means the money is drawn out of their hands the faster, and
p^d into the Bank for bank bills.
And if the allowing twopence per day on bank bills be lookt on
to be such a crime, it's very probable the concerned in the Bank will
be willing in time to remove the objection, seeing it will ease them
of the charge of £36,000 per annum, which the interest amounts
to and which they have given the nation out of their fund for that
money for which the owners used to have nothing.
Notwithstanding all these objections, which are made against the
Bank, and that the allowing twopence a day per £100 on bank bills,
is pretended to be so prejudicial, yet there are some now, who in op-
position to it, talk of nothing less than settling a new one, witli four-
pence a day per cent, interest, which is double as much as is now
paid by the Bank; nay, others are for setting up a bank in every city, or
in every market town ; which shews, after all, the cavils against the
Bank, that a bank is good for the nation in general, and that the
25G APPENDIX.
greatest objection against llie Bank of England, is, that tliey who
find fault with it, are not concerned in it ; for many of those wlio
clamour against it, do it only in hopes of coming in the cheaper.
But the honour and justice of the whole nation, (on whose credit
and authority the subscribers are establisht to be the Bank of Eng-
land for eleven years,) is too much concerned, to admit a supposal
that any such designs should receive countenance or encouragement.
For what past in the last session of parliament, and their refusing to
admit any other lives to be added to the annuities, lest it should be
thought to lessen the security on which the money was contributed ;
(though they were not intended to take place 'till after the lives in
being were extinct) shews the great care of the honourable House of
Commons, to preserve the public credit, and to avoid any the least
occasion which might make it suspected ; and gives the whole nation
a sufficient assurance, that they who are the preservers of the
people's rights and properties, will never suffer anything to be at-
tempted in that august assembly, that must seem but to weaken the
security, or lessen the encouragements which they have given the
subscribers to the Bank, and which they themselves have established
by so solemn and inviolable a sanction ; and all insinuations to the
contrary (though under never such specious pretences) are of dan-
gerous consequence to the government, tending to raise doubts and
scruples in the minds of the people, 'and to lessen the public credit;
for if the parliamentary securities, on which all men, both natives
and foreigners, firmly relying, have hitherto so freely contributed
their fortunes for carrying on the war, were now made precarious
and uncertain, no body could trust them for the future ; and during
the war, the government cannot possibly subsist without credit.
And besides, the seeming injustice which it would be to those who
have subscribed, and contributed their money upon the encourage-
ment given by the act, of their being the Bank of England for eleven
years, to have another establisht before those eleven years are ex-
pired for which this Bank is settled ; it would be so far from being
like the having of several shops to go to, to be better used, (as is by
some pretended) that it would be a means to hinder either from being
APPENDIX. 257
serviceable in the supplying the public or private men's occasions.
And the nation must pay the dearer for money, for one being in
opposition to the other ; there would be a sort of civil war be-
tween them ; and the Bank being a Bank of credit, neither of
them, by their jealousy of each other, would venture to extend its
credit ; but would bury the money of the nation instead of increas-
ing and quickening its circulation, as the Bank of England does
and will do.
To conclude, the instances which have been given in the fore-
going account, of the usefulness of the Bank, may, it's supposed,
suffice to convince such as were prejudiced against it ; upon the
misrepresentations which have been so industriously made by those
who appeared the most barefaced and violent in opposing it. But
it may perhaps be objected, that the Bank is so far from being an
advantage to all trades that 'tis prejudicial to some ; for it seems
to be admitted that the Bank will be injurious to a dozen or four-
teen goldsmiths, and to some scriveners, usurers, and pawnbrokers ;
because it will hinder them from exacting such oppressive extor-
tion as some of them have done formerly ; and it will quite ruin
the trade of tally jobbers.
Now, if the clamour of a few, (whose trade has been to make
merchandise of the nation and to enrich themselves by the neces-
sities of others,) shall not only prevail against the benefit of a com-
munity, legally establisht, but even of the kingdom in general, and
the credit of a parliament, then the enemies of the Bank ma}' hope
to subvert it. But, until the public good be postponed to private
interest, and a small namber of oppressors be too hard for the no-
bility, gentry, and traders of England in general ; it will and must
be preserved and maintained, because of its great use to the whole
realm ; and the benefits which already accrue by it in its infancy
are a good earnest of those greater advantages which the nation
must receive from its future iirogress.
VOL. II.
258
A LIST OF THE SERVANTS OF THE BANK OF EN^GLAND AT THE
FIRST ESTABLISHMENT, AND THEIR SALARIES, TO BE ACCOUNTED
FROM MICHAELMAS, 1695, ESTABLISHED BY THE COURT OF
DIRECTORS THE 13th NOV., 1695.
SECRETJ^
.RY S
OFFI
CE.
DISCOUNT OFFICE.
John Ince
. £250
A. Wright .
. £110
T. Walder .
. 100
E. Miller
. 100
T. Barnes (a writer)
. 40
J. Delage
. 40
390
250
ACCOUNTANTS.
EXCHEQUER.
T. Mercer
. 250
J. Malbon
. 100
J. Monteage
. 150
J. Miller
. 60
T. Delact
. 150
M. FoUett
. 150
160
B. Parker
. 100
TELLERS.
J. Downes
80
J. Hodgkin .
80
C. Conyers
60
J. Wase
. 60
T. Jones
60
J. Newell
. 60
J. Seaward
. 60
R. Meverell .
. 60
W. West
60
T. Morris
. 60
S. Montague (gratis)
R. Martin
. 60
1120
A. Debucy
. 50
J. Watkins
. 50
CASH BOOK,
T. Speed
250
T. Jones
. 50
R. Hedges
150
J. Debret
. 50
T. Maddox
150
J. Nicholls .
. 50
J. Adams
80
P. Kidd
50
R. Haskey
70
T. Burnard .
. 50
W. Stubbs
60
R. Strickland
. 50
J. Carpenter .
50
R. Weeley .
. 50
G. Flint
50
J. Buller
. 50
N. Lovell
50
J. Collier
50
B. Hassell .
50
910
P. Duffield
. 50
APPENDIX.
'Z^y
TELLERS CONTINUED.
E. Brinkworth
. £50
R.
Vaughan .
. £50
J. Taylor
. 50
S.
Berry
. 50
1330
M.
Jones
. 50
FOR SILVER,
&c.
R.
Colman
. 50
M. Bowles
. 180
Clerks.
Salary.
Secretary's office
3 . . .
£390
Accountants .
11 . . .
1120
Cash Book
9 . . .
910
Discount office
3 . . .
250
Exchequer
2 . . .
160
TeUers
(
25 . . .
1330
For Silver, &c.
1 . : .
180
54
£4340
260
THE HIGHEST
AND LOWEST PR
YEAR FROM
CE OF
1732 TO
Highest. Lowest. i
1732 . . . .152—109 1
1764
1733 .
. 151 — 130
1765
1734 .
. 140 — 132
1766
1735 .
. 146 — 138
1767
1736 .
. 151 — 148
1768
1737 .
. 151 — 142
1769
1738 .
. 145 — 140
1770
1739 .
. 144 — 115
1771
1740 .
. 144 — 138
1772
1741 .
. 143 — 135
1773
1742
. 143 — 136
1774
1743 .
. 148 — 145
1775
1744
. 148 — 116
1776
1745
. 147 — 133
1777
1746
. 136 — 125
1778
1747
. 129 — 119
1779
1748
. 129 — 117
1780
1749
. 140 — 128
1781
1750 .
. 136 — 131
1782
1751 .
. 142 — 135
1783
1752
. 149 — 141
1784
1753
. 144 — 135
1785
1754
. 135 — 130
1786
1755
. . 162 — 119
1787
1756
. 121 — 114
1788
1757
. . 120 — 115
1789
1758
. 123 — 116
1790
1759
, . 123 — 109
1 1791
1760
. . 114 — 101
1792
1761
. . 116 — 98
1793
1762
. . 119 — 91
1794
1763
. . 131 — in
1795
STOCK IN' EACH
Highest.
Lowesf.
. 127
—
112
. 136
—
126
. 139
—
135
. 159
—
142
. 170
—
158
. 175
—
149
. 153
—
105
. 155
—
134
. 153
—
144
. 143
—
139
. 140
—
139
. 146
—
141
. 143
—
134
. 138
—
128
. 120
—
107
. 118
—
106
. 116
—
109
. 119
—
105
. 124
—
109
. 135
—
112
. 118
—
110
. 142
—
111
. 158
—
138
. 160
—
145
. 178
—
158
. 191
—
169
. 188
—
164
. 204
—
178
. 219
—
171
. 180
—
161
. 169
—
153
. 180
152
APPENDIX.
2t)l
Highest. Lowest.
Highest. Lowest.
1796 . . . . 180 — 142
1822 . . . . 252 — 235
1797
. 146 _ 115
1823
. 246 — 204
1798
. 138 — 118
1824
. 245 — 227
1799
. 176 — 134
1825
. 299 — 196
1800
. , 175 — 154
1826
. 223 — 193
1801
. 190 — 148
1827
. . 217 — 200
1802
. 207 — 178
1828
. 215 — 203
1803
. 193 — 136
1829
. 218 — 208
1804
. 169 — 146
1830
. 203 — 194
1805
. . 197 — 167
1831
. 204 — 189
1806
. 223 — 191
1832
. 208 — 185
1807
. 235 — 208
1833
. 213 — 190
1808
. 240 — 224
1834
. , 225 — 211
1809
. 288 — 235
1835
. 225 — 208
1810
. 276 — 273
1836
. 219 — 199
1811
. 251 — 229
1837 .
. 212 — 203
1812
. 232 — 212
1838
. , 208 — 201
1813
. 242 — 211
1839
. 206 — 177
1814
. 266 — 234
1840
. 179 — 156
1815
. 260 — 219
1841
. . 173 — 157
1816
. 262 — 215
1842 .
. 173 — 165
1817
. 294 — 220
1843
. 185 — 172
1818
. 292 — 207
1844
. . 211 — 185
1819
. 267 — 210
1845 .
. 215 — 199
1820 .
.
. 226 — 215
1846
. 211 — 199
1821 .
. 240 — 221
262
LIST OF DIRECTORS
FROM 1694 TO 1847.
Sir John Houblon
Michael Godfrey ,
Sir Thomas Abney
Sir James Bateman
Brook Bridges
George Bodington .
James Denew
Sir Henry Furnese
Sir William Gore
Thomas Goddard .
Sir Gilbert Heathcote
Sir William Hedges
Sir James Houblon .
Sir John Huband .
Abraham Houblon .
Sir Theodore Janssen
John Knight , .
Samuel Lethieullier
John Lordell . . .
William Paterson .
Robert Raworth . .
Sir WiUiam Sea wan
Obediah Sedgwick .
John Smith .
Nathaniel Tench . .
Sir John Ward
Henry Cornish . .
Edward Clarke . .
1694
1695
Sir John Cope, Sen. .
. 1695
Peter Godfrey ....
)»
Anthony Stevens . .
• »»
Sir William Ashhurst .
1697
Charles Chambrelan . .
>>
Robert Bristow . . .
5)
Samuel Bultell . . .
>»
John Page ....
• 5»
Sir Francis Eyles . . .
ii
John Shipman . . .
>»
Sir Nathaniel Gould . .
J>
Samuel Lock. . . .
»»
Sir Peter Delme . . .
1698
William Dawsonne. .
• j>
Francis Stratford . . .
>»
Peter Gott ....
)»
Sir Richard Levett . .
,,
Sir Charles Thorald .
. 1699
John Devinck ....
?>
John Rudge ....
5>
Richard Perry ....
?»
Jacob Reynardson . .
. 1700
William DesBouverie .
5»
Josiah Diston . . .
. 1701
John Gould ....
)»
John Hangen . . .
5»
Humphrey South . .
H
Sir Robert Clayton . .
. 1702
APPENDIX.
263
Sir Gerard Conyers
Abraham Hill . .
Samuel Heathcote
Sir William Hodges
Sir Charles Peers .
Sir Thomas Scawen
Sir John Cope, Jun.
James DolliflFe
John Emilie . .
William Gore
George Dodington
Sir Justus Beck .
William Henry Cornelisen
John Dolben . . .
Jeremiah Powell
Sir Denis Dutry .
Heneage Fetherstone
Sir Philip Jackson
John Ward, Jun.
Sir George Thorald
Mr. Robert Atwood
Richard Cary .
Sir Joseph Hodges .
Sir Randolph Knipe
Christopher Lethieullier
Matthew Raper
John Edmonds
Sir Richard Houblon
Robert Bristow . .
Richard Chiswell
Sir William Joliff . .
Henry Lyell . .
William Thompson .
Sir John Eyles .
Mr. Barrington Eaton
. 1702
John Francis Fauquier
1716
Humphrey Morice . .
Moses Raper . . .
55
n
Sir Joseph Eyles . .
1717
. 1705
Sir William Humfreys
1719
11
Richard Du Cane . .
1720
. 1706
Samuel Holden . . .
,,
1708
Bryan Benson ....
1421
n
Thomas Cooke . . .
,,
1709
Delillers Carbonnel .
1722
1?
Nathaniel Gould . .
55
1710
Henry Herring . . .
55
en „
Hon. Horatio Townshend
„
,,
Sir Edward Bellamy . .
1723
,,
Matthew Howard . .
,,
. 1711
John Olmius ...
55
55
Sir Francis Forbes . .
1724
55
William Fawkener . .
55
55
Sir John Heathcote . .
1725
• 55
John NicoU ....
1726
1712
Sir Francis Porten . .
55
55
Stamp Brooksbank . .
1728
55
James Gaultier . .
55
55
William Hunt . . .
55
r ,,
William Snelling . .
. 5,
55
Clement Boehm . . .
1729
. 1713
Joseph Paice, Jun.
1730
55
Matthew Raper . . .
5J
55
James Spilman . . .
55
. 1714
Robert Alsop ....
1731
55
John Bance ....
55
55
55
Henry Neale ....
Robert Thornton .
1732
1715
Charles Savage. . . .
1733
. 1716
Benjamin Lethieullier .
1734
264
Benjamin Longuet .
Sir John Thompson.
Christopher Tower .
John Eaton Dodsworth
Frederick Frankland
Samuel Trench . . .
Alexander Sheafe
Richard Chiswell, Jun.
Sir John Lequesne .
Benjamin Mee .
Mark Weyland . .
Claude. Fonnereau . .
Charles Palmer . .
John South ....
Matthew Beachcroft .
Robert Nettleton . .
Thomas ^\liately .
Merrik Burrell .
James Lever .
Theophilus Sahvey .
Robert Marsh . .
James Theobald . .
Robert Salusbury
Peter Thomas . . .
Bartholomew Burton
Godfrey Thornton . .
John Weyland . .
Thomas Winterbottom
Charles Boehm . . .
Matthew Clairmont .
Samuel Handley . .
Richard Stratton
Harry Thompson . .
Sir Samuel Fludyer .
John Sargent . .
APPENDIX.
. 1734
William Cooper . . .
1754
)>
Philip De la Haize . .
,,
>?
Sir Thomas Chitty . .
1755
5>
Peter Du Cane
55
. 1736
Edward Payne ....
1756
,,
Thomas Plumer .
55
. 1737
Peter Theobald . . .
.,
1738
Robert Dingley . . .
James Sperling
1757
9?
Henry Plant ....
1759
?»
Samuel Beachcroft .
1760
1739
Gustavus Brander .
Daniel Booth ....
1761
,,
John Cornwall ....
„
. 1741
7»
Peter Gaussen ....
James Houghton Langstou
Edmund Wilcox . . .
55
1742
William Bowden . . .
William Ewer . . .
1763
»)
Richard Neave ....
*i
. 1743
John Fisher ....
Christopher Hake, Jun. .
1764
. 1744
Thomas Thomas . . .
Benjamin Hopkins . . .
1765
55
. 1746
Lionel Lyde
.,
1748
George Peters ....
1766
,,
Edward Darell ....
1767
. 1749
William Halhed . . .
-
1750
Lyde Browne
1768
i?
George Drake ....
. "■
51
George Hayter . ...
Benjamin Hopkins
George Peters . .
"
17-53
Mark Weyland ....
,,
55
Roger Boehm ....
1769
APPENDIX.
2i5b
Matthew Howard
1769
William Mellish • . .
1792
Benjamin Branfill
. 1770
Edward Simeon . , .
.,
WQliam Snell .
„
Alexander Champion, Jun
1794
Samuel Bosanquet .
. 1771
George Dorrien . . .
??
Martyn Fonnereau
»»
Jeremiah Harman . .
55
Godfrey Thornton . .
1772
Nathaniel Bogle French
1796
Daniel Giles, Jun.
1774
Charles Pole ....
,,
Christopher Puller . .
51
Thomas Amyand . .
1798
Thomas Dea , . .
1775
Thomas Langley . . .
5»
Richard Clay ....
1776
Ebenezer Maitland . .
,,
Thomas Raikes . .
?5
Peter Free ....
1800
Benjamin Mee, Jun.
1777
Jeremiah Olive
,,
John Sargent, Jun.
1778
Henry Smith ....
1802
William Cooke . . .
1780
Stephen Thornton . .
,,
Samuel Thornton . .
55
John Bowden ....
1803
Thomas Scott Jackson .
,,
Cornelius Buller . .
i»
Job Mathew . . .
1781
Alexander Baring . .
1805
Joseph Nutt ....
,,
John Josiah HoKord
,,
Thomas Boddington .
1782
John Baker Richards
•>
Benjamin "Winthrop . .
»'
Samuel Drew . . .
1806
Beeston Long, Jim. .
1784
Samuel Turner, Jun.
„
James Maude ....
,,
Henry Da\'idson . .
1807
Isaac Osborne . . .
?5
John Staniforth . .
Sir Brook Watson . .
,,
Sir Robert Wigram
??
John Harrison . . .
1785
James Campbell . . .
1808
Bicknell Coney . . .
1786
William Haldimand
1809
John "WTiitmore, Jun.
,,
George Blackman . ,
1810
Peter Isaac Thellusson .
1787
William Tierney Robarts
,,
Moses Yeldham . . .
1788
John Horsley Palmer
1811
William Manning, Jun.
1790
Andrew Henry Thomson
•5
John Pearse . . .
If
Sir Thomas Neave . .
1812
John Puget ....
5?
Richard Mee Raikes
,,
James Reed
?»
James Pattison, Jun.
1813
Thomas Lewis . . .
. 1791
WiUiamWard . . .
1817
Peter Cazalet ....
1792
Samuel Hibbert . . .
1819
VOL. II.
U
266
APPENDIX.
Timothy Abraham Curtis
Sir John Rae Reid .
Sir John Henry Pelly. .
David Barclay ....
John Cockerell
Henry Porcher ....
George Warde Norman .
Thomas Warre, Jun.
William Cotton
John Benjamin Heath
Money Wigram
"William R. Robinson
William Mitchell
James Morris
Simon Taylor
William Thompson
Humphrey St. Jno.Mildmay
John Oliver Hanson
Stephen Edward Thornton
Melvil Wilson
Charles Pascoe Grenfell
Abel Lewes Gower
Sheffield Neave
1820 William Unwin Sims . 1830
Rowland MitcheU . .1833
1821 Christopher Pearse . .1834
„ Henry Davidson . . 1835
„ Bonamy Dobree . , „
„ Thomson Hankey, Jun. „
„ Henry James Prescott . „
1822 Robert Barclay . . 1837
„ James Malcolmson . . „
1823 John Gellibrand Hubbard 1838
„ Charles Frederick Huth „
1825 Alfred Latham . . „
„ Thomas Charles Smith . „
1827 Thomas Matthias Weguelin „
„ Edward Henry Chapman 1840
„ Kirkman Daniel Hodgson „
1828 William Little . .1842
1829 David PoweU . . „
„ Francis Wilson . , „
Arthur Edward Campbell 1843
1830 Thomas Tooke, Jun. . „
„ Henry Lancelot Holland 1844
„ Thomas Newman Hunt „
267
BANK STOCK DIVIDENDS FROM 1694 TO 1847, WITH THE RATE OF
, DISCOUNT,
DIVIDENDS.
DISCOUNT.
PER CBNl
From 1694 to 1697 £8
8th August .
PER CBNT
1694, on
per cent, per annum,
payable quarterly.
10th September . 1698
9th March . .1699
. £7
4|
Foreign bills
30th August .
Foreign bills
24th October .
... £6
1694, on
... 41
1694, on
20th September
1699
5
Inland bills .
... 6
25th March °.
29th September
25th March. .
29th September
25th March .
1700
1700
. 1701
. 1701
1702
4!
16 th January .
Foreign bills
16 th Jannary .
Inland bills .
16th January .
1695, on
... 6
1695, on
... 41
1695, on
29th September
25th March ,
. 1702
1703
Foreign bills, to those
who keep cash at the
29th September
25th March .
1703
1704
9
Bank . . .
19th May . .
. . . 3
1695, . 3
29th September .
25th March ,.
1704 .
1705
8i
28th February, on Foreign
bills, payable at the
29th September
25th March . .
29th September .
25th March . .
1705
1706
1706 .
1707 .
7
101
n
Bank 4
28 February, on Foreign
bills, not payable at the
Bank 5
29th September
25th March .
1707
1708 .
4
4i
29th September
25th March . .
1708
1709 .
29th September
25th March .
1709
1710
4
4
29th September .
25th March .
1710 .
1711 .
22nd June, on Foreign bills d
29th September
25 th March . .
1711
1712 .
H
4
29th September
1712 .
4
268
APPENDIX.
DIVIDENDS.
DISCOUNT.
PER CENT.
fBR CK.VT.
25th March . . 1713 .
29th September . 1713 .
25th March . . 1714 .
29th September . 1714 .
25th March . . 1715 .
29th September . 1715 ,
25th March . . 1716 .
29th September . 1716 ,
25th March . . 1717
29th September . 1717
25th March . . 1718
29th September . 1718 ,
25th March . . 1719 ,
29th September . 1719 .
25th March . . 1720 ,
29th September . 1720
25th March . .1721
29th September . 1721
25th March . .1722
29th September . 1722
25th March . .1723
29th September . 1723
25th March . .1724
29th September . 1724
25th March . .1725
29th September 1725
25th March . .1726
29th September . 1726
25th March . .1727
29th September . 1727
25th March . . 1728
29th September . 1728
25th March . . 1729
£4
4
4
4
3f
4
4
4
4
4
4
4
4
H
H
4
3
3
3
3
3
3
3
3
3
3
3
3
3
3
2f
2f
2f
26th July, on Foreign and
Inland bills . . . .
£4
30th April, on bills and
notes 5
27th October . bills . 5
23rd August
bills
APPENDIX. 2by
DIVIDENDS.
DISCOUNT.
PJSR CENT
PBR rrVT
29th September
. 1729
. £2|
22nd August . bills . . £4
25th March .
. 1730
. 3
29th September
. 1730
• 2|
25th March .
1731
. 3
29th September
. 1731
• 2f
25th March .
. 1732
. 3
29th September
. 1732
• 21
25th March .
. 1733
• 2|
29th September
. 1733
• 2f
25th March
. 1734
• 2f
29th September
. 1734
• 2f
25th March. .
. 1735
• 2|
29th September
. 1735
■ 2f
25th March . .
. 1736
. 2f
29th September
1736
• 2|
25th March .
1637
. 2f
29th September
. 1737
. 2f
25th March .
. 1738
• 2f
29th September
. 1738
. 2f
25th March. .
. 1739
. 2f
29th September
1739
• 2f
25th March
. 1740
• H
29th September
1740
. H
25 th March .
1741
n
29th September
1741
2f
25th March .
1742
2|
29th September
1742
2f
18th October, 1742, on bills
25th March . .
1743 .
2f
drawn within the kingdom 5
29th September .
1743 .
2|
18th October, 1742, drawn
25th March . .
1744 .
2f
without the kingdom . 4
29th September
1744
2|
12th December, 1744, on
25th March . .
1745 .
2f
Foreign bills .... 5
29th September .
1745 .
2|
2:/u
APPENDIX.
DIVIDENDS.
DISCOUNT.
PER CENT.
PER CEWT
25th March .
. 1746
. £2f
1st May, 1746, on foreign
29th September
. 1746
• 2f
bills not having more
25th March .
. 1747
• n
than fifteen days to run £4
29th September
1747
■ 21
4th May, 1 746, on Inland
25th March .
. 1748
• 21
bills and notes not
29th September
1748
• 21
having more than fifteen
25th March .
1749
21
days to run .... 5
29th September
1749
. 21
25th March . .
1750
• 21
29th September .
1750
• 2|
25th March . .
1751
• 21
29th September .
1751
• 21
25th March . .
1752
• 21
10th October . .
1752
. 2J
5th April . , .
1753
• 21
10th October . .
1753
• 21
5th April . . .
1754
• 21
10th October . .
1754
. 21
5 th April . . .
1755
• 21
10th October . .
1755
H
5 th April . . .
1756
• 21
10th October . .
1756
H
5 th April . . .
1757
. 21
10th October . .
1757
H
5th April . ,
1758
H
10th October . .
1758
H
5th April . . .
1759
H
10th October . .
1759
H
5 th April . .
1760
H
10th October . .
1760
2|
5th AprU . . .
1761
- 21
10th October . .
1761
• 21
5 th April . . .
1762
• 21
APPENDIX. 271
DIVIDENDS.
DISCOUNT.
PER CENT.
PER CBNT.
10th October . .
1762 .
£H
On Inland bUls and notes
5 th April . .
1763
H
not having more than
10th October . .
1763
H
fifteen days to run . . £5
5 th April . .
1764
• H
10th October .
1764
• H
5th April . .
1765
. 21
10th October .
1765
21
5th April . .
1766
. H
10th October .
1766
. 2i
5 th April . .
1767
• H
10th October .
1767
' n
5th April . .
1768
. n
10th October .
1768
■ 2f
5th April . .
. 1769
• 2|
10th October .
1769
• 2f
5th April .
1770
• 2f
10th October .
1770
. 2|
5 th April . .
. 1771
. 2f
10th October .
. 1771
• 2f
5 th April . ,
. 1772
• 2f
10th October .
. 1772
. H
5th April . ,
1773
• 2f
On Foreign bills .... 5
10th October .
1773
• 2|
5th AprU . .
1774
. 2f
10th October .
. 1774
• 2f
5th April . .
. 1775
• 2f
10th October .
1775
• 2|
5 th April . .
1776
. 2|
10th October .
1776
. 2f
5th April .
1777
. 2f
10th October .
1777
. H
5th April . .
. 1778
. 2f
10th October .
1778
• 2f
272
APPENDIX.
DIVIDENDS.
DISCOUNT.
5 th April .
10th October
5th April .
10th October
5th April .
10th October
5 th April .
10th October
5 th April .
10th October
5 th April .
10th October
5th April .
10th October
5th April .
10th October
5 th April .
10th October
5 th April .
10th October
5th April .
10th October
5 th April .
10th October
5th April .
10th October
5th April .
10th October
5th April .
10th October
5 th April .
10th October
5th April .
779 .
1779
1780
1780
1781
1781
1782
1782
1783
1783
1784
1784
1785
1785
1786
1786
1787
1787
1788
1788
1789
1789
1790
1790
1791
1791
1792
1792
1793
1793
1794
1794
1795
PER CBNT.
2|
2|
2f
2f
3
3
3
3
3
3
3
3
3
3
3
3
3
H
H
H
H
H
On Foreign bills
£5
H
H
H
H
H
H
H
H
APPENDIX.
273
DIVl
10th October .
5th April . .
10th October .
DENDS. DISCOUNT.
PER CENT.
. 1795 . £3i On Foreign bills . .
. 1796 . 3i
. 1796 . 3i
PER CENT.
. . £5
5th April . .
10th October .
. 1797
. 1797
• 3i
5th April . .
10th October .
. 1798
. 1798
5th April . .
10th October .
. 1799
. 1799
■ H
■ H
5 th April . .
10th October .
. 1800
. 1800
5th April . .
10th October .
. 1801
. 1801 .
5th April . .
10th October .
. 1802 .
. 1802
5th April . .
10th October .
. 1803 .
. 1803 .
5th April . ,
10th October .
. 1804
. 1804
5 th April . .
10th October .
. 1805 .
. 1805 .
5th April . .
10th October .
. 1806 .
. 1806 .
5th April . .
10th October .
. 1807 .
. 1807 .
5
5
5 th April . .
10th October .
. 1808 .
. 1808 .
5
5
5 th April . .
10th October .
. 1809 .
. 1809 .
5
5
5th April . .
10th October .
. 1810 .
. 1810 .
5
5
5th April . .
10th October .
. 1811 .
. 1811 .
5
5
VOL. II
U
274
APPENDIX.
DIVIDENDS.
DISCOUNT,
5th. April .
10th October
5th April .
10th October
5th April .
10th October
5 th April .
10th October
5 th April .
10th October
5 th April .
10th October
5 th April .
10th October
5tli April .
10th October
5 th April .
10th October
5 th April .
10th October
5 th April .
10th October
5 th April .
10th October
5th April .
10th October
5 th April .
lOtli October
5th April .
10th October
5th April .
loth October
5th April .
1812 .
1812 .
1813 ,
1813
1814
1814
1815
1815
1816
1816
1817
1817
1818
1818
1819
1819
1820
1820
1821
1821
1822
1822
1823
1823
1824
1824
1825
1825
1826
1826
1827
1827
1828
£5
5
5
5
5
5
5
5
5
5
5
, 5
. 5
, 5
. 5
. 5
. 5
5
. 5
. 5
, 5
. 5
. 4
. 4
. 4
. 4
, 4
. 4
. 4
. 4
. 4
. 4
. 4
On Foreign bills
PEtl CBNT.
. £5
20th June, bills and notes
not having more than
ninety-five days to run . 4
13th December, bills and
notes not having more
than ninety-five days to
run
5th July, bills and notes
not having more than
ninety-five days to run .
APPENDIX.
275
DIVIDENDS.
DISCOUNT.
rCR CKNT
PER
;Kxr.
10th October .
. 1828
. 4
5th July, bills and notes
5th April . .
1829
4
not having more than
10th October .
1829
4
ninety-five days to run .
4
5th April . .
1830
4
10th October .
1830
. 4
5 th April . .
1831
. 4
10th October .
. 1831
. 4
5 th April . ,
1832
4
10th October .
1832
. 4
5th April . .
1833
. 4
10th October .
1833
4
5th April . . .
1834
4
10th October .
1834
4
5th April . . .
1835
4
10th October .
1835
. 4
5 th April . . .
1836 .
4
21st July
4*
10th October . .
1836
4
1st September ....
5
5th April . . .
1837
4
10th October .
1837
. 4
5th April . .
1838
4
loth February ....
4
10th October .
. 1838
. 4
5th April . . .
1839 .
o-^
16th May
5
10th October .
1839
3i
20th June £5l . 1st August
6
5th April . . .
1840 .
4
22nd January
5
10th October .
1840
H
5th April . .
1841
H
10th October .
1841
• H
5 th April . .
. 1842
• H
7th April
4
10th October .
, 1842
. 31
5 th April . .
. 1843
• 31
29th August, 1844, bills .
2J
10th October .
. 1843
. 31
29th August, „ notes .
o
5th April . .
. 1844
. 31
13th March, 1845, bills .
10th October .
. 1844
. 31
13th March, 1845, notes .
2i
276
APPENDIX.
DIVIDENDS.
5 th April .
10th October
5 th April .
10th October
5th April .
1845
1845
1846
1846
1847
DISCOUNT.
PBR CSNr. PER CENT.
. 3| 2Qth March, . . notes . 2i
. 3i 16th Oct 3
. 3i 6th Nov. . . . . . . 3i
. 3| 27th August 3
. 3i 14th January 3^
BONUSES ON BANK STOCK FROM 1799 TO 1847.
1799
£10 per cent, on the capital.
, In Na^'y 5 per cents
1801
5 „ „
»» 5>
1802
2i
>? >?
1804
5
In money.
1805
5
»?
1806
5
5?
1816
. 25
In Bank Stock.
1847
1
In money.
APPENDIX.
277
rt
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o
o
o
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o
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281
A COPY OF THE CORRESPONDENCE
BETWEEN THE
CHANCELLOR OF THE EXCHEQUER
AND THE
BANK OF ENGLAND,
RBLATIVE TO THE
RENEWAL OF THE CHARTER OF 1844.
To the Governor and Deputy Governor of the Bank of England.
Downing Stkeet, \&th April, 1844.
Gentlemen,
As under the provisions of the 3 Sc 4 W. IV. c. 98, the 1st of
August is the day after which it will be competent to the House
of Commons to give a Notice to the Bank as to the termination,
within a limited period, of their present exclusive privileges, Her
Majesty's Government judge it advisable to endeavour to come to
an understanding with the Bank as to their future relation to the
Government, rather than to terminate the existing arrangements
by recurring to the Notice required by the Act of Parliament.
In submitting to you the views of the Government, I would
premise that the main object of the Government in any new
arrangement is one in the success of which the Bank can be
scarcely less interested than the GoA^ernment ; namely, to place
the general circulation of the coimtry on a sounder footing, and to
prevent, as much as possible, fluctuations in the currency, of the
nature of those which have at different times occasioned hazard
to the Bank and embarrassment to the country.
It appears highly desirable that any new arrangement should be
VOL. II. Y
282 APPENDIX.
founded on the basis of an entire separation of the business of the
Issue of Notes from that of banking. This measure might be
effected by the establishment of a Public Department for the
Issue of Notes independent altogether of the Bank; but Her
Majesty's Government are willing, in the first instance, to con-
sider whether this can be effected by a division of the Bank into
two distinct and separate departments — |to conduct exclusively,
one the business of Issue, the other that of banking. The first
question for the Bank to consider is, how far they are willing to
undertake this duty. Should they be disposed to administer the
functions of issue, it would be desirable that the following prin-
ciple should be adhered to : — That a certain amount of Notes
shoiJd be issued on Securities, and that all other Notes required
beyond that amount shoiild be issued only in exchange for
Bullion, — that the Securities should be to a certain extent of such
a nature as to admit of ready convertibility, and should not be
increased beyond the amount originally fixed, except under cir-
cumstances to be stated by the Bank to the Government ; and
after the consent of certain Members of the Government, namely,
the First Lord of the Treasury, the Chancellor of the Exchequer,
and the Master of the Mint shall have been signified.
It is proposed from henceforth to prohibit the establishment of
any new Bank of Issue ; to restrict the issue of their own Notes
to those Banks at present exercising that privilege, and to limit
the issue of such Banks to the amount of Notes issued by
them on an average of a given preceding period, and in the
event of their failure or liquidation, to prohibit under any
circumstances the resumption of their own circulation. The
void created by the withdrawal of any existing Private or
Joint Stock Bank circulation, either voluntarily or under the cir-
cumstances adverted to, should be supplied, if necessary, by the
substitution of Notes of the Bank of England ; and, in such a case,
the Bank acting in concert with the Government, as provided for
in a preceding paragraph, might be authorised to make a propor-
tionate increase in the amount of those securities which constitute
APPENDIX. 283
the foundation of the issue of paper : the whole net profit derived
from this additional issue would be carried to the account of the
Government, and would be in addition to the annual payment
which the Bank may agree to make.
It is intended that a weekly publication should take place of the
state both of the Issue and Banking Departments of the Bank, and
it will be required that each Private and Joint Stock Bank, issuing
its own Notes, should make once a week a publication of the
amount of their Notes in circulation.
Under such an arrangement, it is obvious that the Bank will not
merely retain its existing privileges of having no Bank of more than
six partners issuing Notes within sixty-five miles of London, but
will be secured against the competition within that district, of any
new Bank of Issue, even with less than six partners, which might
otherwise be established ; and although, as the profit of any in-
creased issue will be placed henceforth to the account of the Go-
verimient, the Bank will not derive direct pecuniary advantage, yet
the extension of business and of confidence in the Bank (which
must result from the extension of its Notes consequent upon this
further exclusion) must be to the Bank a source of no inconsider-
able benefit.
I must add, that it is not proposed to continue the prohibition
which is now in force as to the drawing, accepting, or paying Bills,
within the sixty-five mile circle round London.
Should an arrangement on these princijDles meet the views of the
•Bank, the points remaining for consideration will be, the period for
which the Bank Charter shall be renewed, and the amount of the
payment which ought to be made by the Bank to the public during
the period of its continuance.
Her Majesty's Government consider it advisable that the Charter
should be granted for ten years from the 1st of August, 1845, and
should, at the expiration of that period, be terminable at any time
upon a notice of twelve months, but until such notice be given
should continue in force. The amount of payment to be made to
the public by the Bank will depend upon a joint consideration of
284 APPENDIX.
the benefits secured by this arrangement to the Banking depart-
ment of the Bank, and of the proportion of the profits of the Issue
or Circulation department, which the public are entitled to claim.
As Bankers, the Bank will retain the management of the Public
Debt, and the advantage of the Government Deposits, and the
Balances of the several Public Accounts at the Bank. It must,
however, be distinctly understood, that the Government retains an
entire discretion as to the amount of such Deposits to be left in the
hands of the Bank, and as to a participation in the profits of such
deposits, if they should, from any circumstances, be materially in-
creased.
With respect to the profits of the Circulation department, sup-
posing the fixed amount of Securities to be £14,000,000, the profit
would, obviously, be the difi'erence between the interest received
on those Securities, and the Expenditure "required for the manufac-
ture and issue of the Notes, the keeping the Accounts connected
with them, and the receipt and custody of the Bullion which might,
from time to time, come into the hands of that department.
Assuming Three per Cent, as the rate of interest, the gross
profit of the Circulation department would be £420,000.
It was stated by the Bank, in a Paper presented to the Commit-
tee on the Bank Charter in 1832, that the expense of the circulation
was at that time £106,000. It would be desirable that the items
constituting this aggregate sum should be separately considered,
with a view of ascertaining whether, without diminishing the ad-
vantages now afi'orded to the public, a reduction might not be
efiected in the amount. I will however assume it, for my present
purpose, as amounting to £100.000.
A sum of £320,000 would then remain as the profit of the Circu.
lation department, from which would be to be further deducted the
amount of stamp duty paid on the notes of the Bank of England,
being about £60,000, and the sum, whatever it may be, which the
Bank now allows to those Banks of Issue which have substituted
Bank of England notes for their own paper, and which I assume,
for the purpose of discussion, as about £20,000. The net profits
APPENDIX. 285
therefore, in which the public would have a right to share, would
be a sum of £240,000, or, if it were thought more advisable to
remove the stamp duty on the Notes of the Bank, £300,000. In
fixing the proportion of this amount which ought to be paid to the
public, I do not on the one hand put out of view the fair claim of
the Bank to compensation, as managers on behalf of the public of
the circulation of the country ; but, on the other hand, the Bank
will not fail to bear in mind that, by the advance of their capital of
£11,000,000 to the public at 3 per cent., they have hitherto virtu-
ally paid to the public a sum little short of 1 per cent, on that
amoimt ; and that now, owing to the present circumstances of the
country, that advance is no longer any sacrifice on the part of the
Bank, nor any compensation to the Public for the benefit derived
to the Bank from its connexion with the Government. It may,
therefore, justly become a question, whether that debt of the Pub-
lic to the Bank should be continued at its present amount, or at its
present rate of interest.
It appears to me, therefore, that in claiming for the Public an
annual pajTnent exceeding that now made by the Bank, while I
reserve also to the public the net profit which may result from any
addition hereafter to be made to the amoimt of fixed securities, I
am not claiming more than the Bank will deem a just compensation
for the advantages secured to them.
It appears to me that the real interests of the Bank, taking a
comprehensive \iew of those interests, will be materially promoted
by the proposed arrangement. It proposes to leave to them the
management of the circulation ; it gives a new and decisive proof
of the public confidence reposed in them, while the measure itself
is calculated, by increasing the controul of the Bank over the
Paper Currency of the coimtry, to secure them from much ex-
pense and danger to which they have hitherto been exposed.
I have the honour to be,
Gentlemen,
Your very faithful and obedient servant,
(Signed) HENRY GOULBURN.
286 APPENDIX.
To the Right Honourable the Chancellor of the Exchequer, MP.
Bank of England, 30</«, April 1844.
Sir,
We have the honour to acknowledge the receipt of your
letter of the 26th instant, which we have submitted to the conside-
ration of the Committee of Treasury and of the Court of Directors
and we are desired to assure you that they, in common with our-
selves, are duly impressed with the importance of an early settle-
ment of the question affecting the circulation of the country, and
are satisfied that the Bank, relinquishing its claim to the notice
prescribed by law, will give its most favourable consideration to
any proposal from Her Majesty's Ministers having for it's object to
place the circulation of the country on a sounder footing.
To the ' entire separation of the business of Issue of Notes from
that of Banking,' we are not disposed to offer any objection, and
are of opinion that a division of the Bank into two distinct and
separate departments for that object can be affected without dif-
ficulty ; neither do we differ respecting the principles of the in-
tended measures detailed in your letter.
It is now proposed to take from the Bank all the future advan-
tages that may arise from the substitution of its notes for the pre-
sent issues of Joint Stock and Private Banks. "We are prepared
to admit the favourable impression, which the public opinion will
receive from the fact of the Bank having no pecuniary interest in
the more general adoption of its Notes. It must however be re-
collected, that under the arrangement of 1833, by which it was
agreed to allow to the public £120,000 per annum, very consider-
able advantages were held out to the Bank from the extension of
its circulation : these were never realized, in consequence of the
declared inability of the Government to carry into effect the mea-
sures on which that expectation was founded.
As the Government consider that ' a weekly publication should
take place of the state both of the issue and banking department of
APPENDIX. 287
the Bank, and that each Joint Stock and Private Bank, issuing its
OAVTi paper, should make, once a week, a pubUcation of the amount
of its notes in circulation,' the Court would raise no objection to
that arrangement ; — but we would suggest for the consideration of
the Government, if the publication of the banking accounts can be
regarded as essential ?
By the removal of ' the prohibition now in force, as to the di-aw-
ing, accepting, or paying bills within the sixty-five mile circle round
London, the Bank may incur some loss in its banking department ;
but more serious inconvenience will residt, if the power to accept
should be exercised for the purpose of Circulation, and thus inter-
fere with the great object of the projected measures : a question
deserving the most serious consideration.
On the subject of the proposed grant of the Bank Charter for
ten years from the 1st August, 1845, subject at the end of that
period to terminate upon a notice of twelve months, but until such
notice be given to continue in force : we would suggest as a pre-
ferable plan, that if notice shall not be given by the Government
at the end of ten years, the Charter should continue until after the
expiration of an additional period of ten years. It seems to us that
sufficient power of controvil would thus be retained by the Govern-
ment, and that the inconvenience arising from repeated, if not
annual discussions on the subject, would thus be avoided.
The possession of the £11,000,000 advanced by the Bank, has
ever been considered as afibrding additional security to the public,
and contributing to that entire confidence at all times placed in the
solidity of the Bank ; and although at an interest of 3 per Cent, the
Loan may not at this moment impose any pecuniary sacrifice on the
Bank, we see no benefit likely to arise to the public from its repay-
ment. We therefore think it for the public good that it should
still be retained ; and we would, at the same time, remark, that any
reduction in the interest on this loan will necessarily diminish, to a
corresponding extent, the profit in the Issue department of the
Bank.
Referring to the estimate of the profit to be derived from the
288 APPENDIX.
Department of Issue, we must remark that we calculate its actual
expense at £113,000 per annum ; a large outlay being incurred for
the sole accommodation of the public, by Bank-notes not being re-
issued in London ; by the complete registration of the issue and
cancelment of each Note ; by the preservation of the cancelled
Notes for ten years for the purpose of legal reference, so that each
Note can, in case of need, be traced, and frauds thus be detected ;
and finally, by the ready supply of Notes for Bullion or Coin, be-
sides various other arrangements adopted solely for the public con-
venience. A re-issue of Notes was commenced, as a measure of
economy, in the year 1838 ; but so much inconvenience was expe-
rienced by the bankers and the public, that it was abandoned ; and
the Bank now issues about 20,000 Notes, averaging in amount
from six to seven hundred thousand pounds, cancelling also the
same number and value, daily.
The allowance at present made to those Joint Stock and Private
Banks under engagement to issue only Bank of England paper,
will, at one per cent., amount to twenty-four thousand pounds, as
appears by the Parliamentary return ; and we submit the following
as the correct calculation ; viz. :
£14,000,000 at 3 per cent. - - - £420,000
Deduct the expenses - - - 113,000
307,000
Present alloAvance to the Banks and Banking
Companies _ . _ _ 24.000
£283,000
before any payment is made to the Government.
In reference to the position of the Bank as having the manage-
ment of the public debt and the benefit of the Government depo-
sits, Ave wish to state that the advantage from the former is
diminished by the great risk of forgery, and from the latter by the
alteration of the Exchequer accounts in 1834, which considerably
reduced the amount of the public balances ; but, in reply to the
APPENDIX. 289
proposed understanding that the Government will retain an entire
discretion as to the amount of such deposits, and as to a participa-
tion in the profits arising from them, if they should, from any cir-
cumstances, be materially increased, we beg to say that we should
not object to this, provided it is conceded by the Government that
an allowance wUl be made to the Bank if the balances are reduced
below their jDresent amount.
The benefits to the Bank wQl also be further reduced by the
expenses which will be incurred in the collection of the ordhiary
Revenue ; and, in reference to these, it should be stated that, in
the year 1843, the Clerks of the Bank travelled, on the Revenue
account, 75,090 miles, with the risk attending the ciistody and
transit of £9,047,000, the money being brought immediately to the
credit of the Government, saving to the public a considerable
amount of interest and risk. Taking these circumstances into con-
sideration, and bearing in mind that, under the proposed arrange-
ment, the Bank will derive no advantage from the extension of its
circulation, with all the responsibility, an abatement from the
£120,000 hitherto allowed to the public, may reasonably be ex-
pected ; for if the Bank continue this payment to the Government,
together -with a liability to the estimated amount of the Stamp
Duty on the Notes issued on the fourteen millions of securities ;
viz. £49,000, making a total of £169,000, and incur, besides, the
whole responsibility of the extended circulation without profit, the
Court is of opinion that it will be called upon to make a larger
sacrifice than in reason and justice can be requu'ed.
We have the honour to be,
Sir,
Your very faithful and obedient Servants,
(Signed) WILLIAM COTTON, Gov.
J. B. HEATH, Dep. Gov.
VOL. II.
290 APPENDIX.
The Governor and Dvputy Governor of the Bank of England.
Dovvning-Street, May -Id, 1844.
Gentlemen,
I HAVE the honour to acknowledge the receipt of your letter of
the 30th ultimo.
It is satisfactory to Her Majesty's Government to learn that
there is on the part of the Bank of England a general concurrence
in the principle of the proposals conveyed in my letter of the 27th
ultimo, and a readiness to co-operate in giAing effect to them.
They observe Avith pleasure that, notwithstanding the doubts
which you suggested as to its utility, you offer no objection to a
weekly publication of the state of the Banking as well as of the
Issue Department,
That measiu-e was recommended to you on behalf of the Govern-
ment, under the conviction that such a publication would be ad-
vantageous to the public, and would carry with it the strongest
evidence of the stability and credit of the institution over which
you preside, and upon the same grounds it still appears to the Go-
vernment to be of essential importance.
I agree with you that if the removal of the existing prohibition
against accepting Bills within the sixty-five nrile circle round
London should lead to the introduction of a new Paper circulation,
it might materially interfere with the object of the proposed ar-
rangement. An attempt might undoubtedly be made now to guard
against such an evil consequence by imposing generally, and in the
case of all Banking establishments, a limit upon the siun for which
Bills to be accepted might be drawn, or by extending the dates at
which they might become payable. But while such a measure
might fail in proving an effective check upon future evasions, it is
calculated to raise impediments in the way of legitimate Banking
business. It appears, therefore, more advisable to trust for a re-
medy for so serious an evil to the power of the Government, a
APPENDIX, 291
power which will not fail to be exercised if the abuse should arise,
of applying by new legislative enactment an adequate corrective.
Her Majesty's Government have well weighed the reasons which
you have urged for preferring a renewal of the Charter upon the
terms granted in 1833, namely, for twenty years, with the power of
terminating it at a notice given at the expiration of ten.
In making the proposal contained in my letter of the 27th
ultimo, the Government were mainly influenced by the considera-
tion, to which you appear also to attach much weight, that it was
not advisable unnecessarily to agitate questions affecting the Bank-
ing Interests and the CuiTency of the country.
We confidently hope that the arrangements now to be made will
be found at the end of ten years to have satisfied public expecta-
tion, and in that case there would probably be a disposition, encou-
raged by the knowledge that the subject was at any time open to
discussion, to forbear from proposing a change in the existing sys-
tem. But, on the other hand, if the opportunity of revision
afibrded at the end of ten years were not again to occur tiU the
expiration of a similar period, the necessity of re\'iewing what was
other-nase to be for so long a time irrevocable, could scarcely be
denied.
On these grounds Her Majesty's Government consider that it
would be more for the public interests that the Charter should be
continued as proposed in my former letter.
The reasons offered by you for the retention by the public of the
£11,000,000 advanced by the Bank, are entitled to considerable
weight ; and in the event of the acquiescence of the Bank in the
terms proposed. Her Majesty's Government are prepared to consent
to that debt remaining during the further continuance of the Charter
on its present footing.
With respect to the public balances in the hands of the Bank, I
deem it unnecessary to make any observation. The Government
must necessarily retain an unfettered discretion as to the amount
which it may be proper to keep in the Bank, and m the event of
any extraordinary accumulation beyond the usual amount, it woidd
292 APPENDIX.
be hereafter, as it has been heretofore, competent to tlicm to make
any arrangement with the Bank which might ai:)pear to them con-
ducive to the public interests.
With reference to the expense of the Department of Issue, I
readily admit the importance of not discontinuing any one of the
facilities which the Bank has hitherto afforded to the Public, al-
though necessarily attended with an increase of charge. Nor, after
a due consideration of the detail of the expenditure of £113,000,
which you have assigned to the Issue Department, am I prepared
to state that it is excessive.
But after making the deductions which you have specified, the
profit of the Issue Department stiU amounts to £983,000.
Under these circumstances, I cannot feel myself authorized to
hold out to the Bank any expectation of an abatement from the
sum of £120,000, which they now allow to the public ; nor can I
admit the j)ajTnent of 49,000 to be an adequate compensation for
the sum which would accrue to the public from leaving the Bank
of England notes still subject to Stamp Duty. The sum latterly
received on this accoimt has been, as I previously stated, £60,000.
I should certainly have preferred the continued payment by the
Bank of duty on the amount of Notes in circulation. By the ar-
rangement, however, which I have proposed, the public will hence-
forth be entitled to receive the whole nett profit of any Issue of
Notes founded on any addition to the fixed amount of Securities.
The Stamp Duty on such notes would necessarily be a deduction
from the profit for which the Bank would have to account ; and I
anticipate considerable difficulty, in the case of such additional
issue, of ascertaining the precise proportion of such issue which
might be in circulation, and on which alone the duty would attach.
I am, therefore, prepared, on behalf of the Government, to accept,
as compensation for the Stamp Duty, a sum of £60,000.
If, therefore, the Bank of England are prepared to make a fixed
annual payment to the public, amounting in the whole to £180,000,
subject to the several conditions which I have in this and in my
former letter submitted to you, her Majesty's Government will be
APPENDIX. 293
prepai'ed to recommend to Parliament the continuance of the
Charter for the period which I have specified.
I have the honour to be,
Gentlemen,
Your most obedient Servant,
(Signed) HENRY GOULBURN.
The Higltt Honourable the Chancellor of the Exchequer.
Bank of England, May 3d, 1844.
Sir,
"We have the honour to acknowledge your letter of the 2d inst.,
which we have submitted to the consideration of the Court of Di-
rectors ; and although they are still of opinion that some abate-
ment from the £120,000 allowed to the pubHc might reasonably
have been expected, they have resolved, in order that no obstacle
may be presented by them to the measures which are considered
desirable by Her Majest)'"s Ministers to place the CuiTency on a
sounder footing, to recommend to the Court of Proprietors to
accede to the proposals of the Government.
We have the honour to be,
Sir,
Your very faithful and obedient Servants,
(Signed) WILLIAM COTTON, Gov.
J. B. HEATH, Dep. Got.
294
INDEX.
Alessi, Vincent, i. 281.
Amiens, peace of, i. 261.
American war, i. 213; firms,
failures of, ii. 119.
America, management of pub-
lic debt in, i. 273.
American, South, speculations,
i. 312.
Astlett, Robert, i. 263.
Ashburton, Lord, ii. 14; treaty,
ii. 193.
Austria, bank of, i. 203 ; go-
vernment situation, i. 334.
Attwood, Mr. ii. 193.
Bank of England, i. 44 ; founder
of the, i. 53 ; establishment
of the, i. 62 ; in grocers'
hall, i. 65 ; trial of the, i. 68 ;
will of the, i. 69 ; epitaph of
the, i. 71 ; difficulties of the,
i. 73 ; suspension of the, i.
76 ; preserve their credit, i.
87; services of the, i. 90;
advance to government, i.
93 ; saved from pillage, i.
96 ; its importance, i. 97 ;
run on the, i. 99, 150; ii.
20 ; ii. 67 ; ii. 221 ; stock,
fall of, i. 100 ; rivalry with
the, i. 122; rest of the, i.
147; disputed, i. 253; as-
sistance to government from
the, i. 151 ; new building
of the, i. 152 ; stratagem
of the, i. 161 ; reduction of
interest, i. 167; dividends of
the, i. 166 ; description of
the bank, i. 168; loan to
government, i. 174; alarm
of the directors of the, i.
181; attacked, i. 183; mili-
tary force in the, i. 185;
losses of the, i. 187; re-
sumption of cash payments
by the, i. 329 ; interest fixed
at 4 per cent, in the, i. 332;
stock, fall in, i. 338 ; cash
and bullion in the, i. 204 ;
court of directors of the, i.
222 ; protest of the, i. 226 ;
memorial of the, i. 227;
crisis in the history of the
corporation of the, i. 230 ;
dismay of the directors of
the, i. 237 ; paper of the, i.
246 ; improved, i. 260 ; re-
striction act, i. 249 ; court
of proprietors of the, i. 250 ;
balances in favour of the, i.
250 ; claims upon the state
by the, i. 258 ; profits of, i.
269; accounts of the, i. 273 ;
increase of the, i. 274 ; re-
ceive from the public, i. 275;
enlarge their dividend, i.
INDEX.
295
276 ; reduction in the rates
of management, i. 278
paper depreciated, i. 285
notes at a discount, i. 299
restriction act of the bank
of, i. 298 ; large advances
to the state, i. 310 ; pay
gold, i. 317; paper value of,
i. 322; tokens, i. 302; re-
sumption of cash payments,
i. 323 ; dividends raised from
7 to 10 per cent., i. 314;
stock, bonus of, 25 per cent.,
i. 315 ; to pay specie for its
notes on demand, i. 326 ; and,
the chancellor, ii. 6 ; supply
gold, ii. 13 ; pay in half sove-
reigns, ii. 19 ; conduct of
the, ii. 25 ; assistance of the
ii. 37; directors of the, ii.
42 ; tribute to, during the
panic, ii. 43 ; make advances
on goods, ii. 49 ; protest of the,
ii. 87; bills of the, ii. 125;
alterations in the, ii. 134;
light sovereigns called in by
the, ii. 143 ; returns of the,
ii. 212; shuttings of the, ii.
217; traditions of the, ii.
218 ; interior arrangements
of the, ii. 223 ; management
of the, ii. 233 ; deposits in
the, ii. 236 ; enlargement of
the ii. 226.
Bank of Venice, i. 9 ; establish-
ment of a national, i. 38 ; of
credit, pamphlet on, i. 39 ; of
credit, i. 41 ; land, i. 42 ; na-
tional, i. 57 ; joint stock, ii.
87 ; royal, i. 104 ; branch, ii.
54.
Banking under the Stuarts, i.
20 ; houses, balances of, 205 ;
country, ii. 7.
Bank, ii. 173.
Bankers, Lombards, dealt as, i.
13 ; first run upon the, i. 32 ;
private i. 86 ; in London, i.
337 ; ii. 237 ; in London, on
first failures,!. 177 ; ii. 174;
country failures of, i. 214 ;
unable to meet their liabili-
ties, ii. 10 ; bills of country,
ii. 12 ; country, issue notes
for five and ten shillings, ii.
49 ; country, ii. 44 ; country,
dislike branch banks, ii. 53 ;
of Birmingham, ii. 56 ; peti-
tion of ii. 175.
Bankruptcies, i. 314.
Berlin decrees, i. 272.
Baring, i. 329 ; ii. 44.
Barber, trial of, ii. 187.
Bodleian library, i. 24.
Britain, position of, i. 199.
Brougham, Lord, i. 299; ii.
65.
Bogle, Allan George, ii. 148.
against the
" '• Times,'' ii. 155.
Bord, Mr., ii. 193.
Bourbel, Marquis de, ii. 146.
Burgess, forgery of, ii. 191.
Board of Trade, ii. 214.
Bonus, i. 161.
Brazils, i. 288.
Buenos Ayres, trade with, i. 313.
BuUion, drain of, i. 2, 30; ii.
119; in the bank, i. 347;
high price of, i. 285; com-
mittee, i. 290 ; report, i. 291 ;
speculators, i. 317; office, ii.
228 ; purchased by the go-
vernor, ii. 234.
Burke, Mr., ii. 211.
Cash payments, historical sketch
of the cessation of, i. 219 ;
suspension of, i. 239 ; restrict-
ed, i. 249,262 ; impracticable.
296
INDEX.
i. 267 ; suspension act, i. 298;
drain of, i. 234 ; for notes, i.
317.
Cashier's office, chief, ii. 231.
Canning, Mr. i. 347; ii. 79.
Cathcart, Lord, i. 307.
Change alley, i. 123, 134.
Charles first, i. 21.
second, i. 30, 33.
Charters, bank, i. 62, 79, 88, 90,
98, 155, 172, 199, 254 ; altera-
tions in the, ii. 40.
Charter, new, ii. 81 ; importance
of the, ii. 90.
Charter act, bank, ii. 162 ;
clauses of the new, ii. 169.
Child, Mr. Francis, i.2 9.
Messrs. attempts to in-
jure, i. 164.
Chamber of Commerce, at Man-
chester, ii. 98.
Chronicle, Morning, opinion
of the, ii. 28, 207.
Circulation, estimated, i. 233 ;
paper, i. 286 ; of small notes
extended, i. 347 ; country, i.
236.
Cobden, Mr. testimony of, i.
153.
Cockerell, Mr. ii. 232.,
Coins of, doubtful weight, ii.
225.
Commons, raised to power, i. 14 ;
house of, i. 139 ; 241.
Company, East India, i. 15, 47,
96 ; of mine adventurers i. 91 ;
Mississippi, i. 102 ; London
assurance, i. 132 ; joint stock,
i. 350.
Companies, list of, ii. 29 ; price
of shares in, ii. 4.
Commerce, Anderson on, i. 43;
state of, i. 28.
Commercial bank of Ireland, ii.
99.
Committee appointed to pre-
vent forged notes, i. 327.
Conti, Prince de, i. 112.
Continental conspiracy, ii. 145;
its discovery, ii. 154; fate of
the conspirators, ii. 154.
Corporation, importance of the,
ii. 226.
Country, disaffection of the, i,
235 ; traders, i. 209.
Court room, ii. 229.
Counterfeit sovereigns, ii. 20.
Coutts k Co., Messrs. ii. 36.
Credit, preservation of, i. 177.
Cotton, Mr. ii. 226.
Cromwell, protectorate of, i. 25,
27, 37.
Croly, Dr., i. 220.
CuiTency, metallic, i. 209 ;
speech upon the, i. 292 ; bill,
i. 323, 337; aggregate, i. 348 ;
want of a secure small, ii. 24;
bill, Mr. PeeVs, ii. 32 ; opin-
ions on the, ii. 45 ; metallic
in the United States, ii. 97.
Cutting machine, ii. 225.
Darien company, i. 44 ; depart-
ure for, i. 49.
Delusion of 1824, i. 354.
Deputy-governor, death of, at
Namm-, i. 72 ; qualification of
a, ii. 234.
Dictionary of Commerce, i.
333.
Discount on foreign bills, i. 66 ;
obtained with difficulty, ii. 5.
of the bank, from 5 to 15
millions, ii. 16 ; bank raise
them to 5 per cent., ii, 17;
bank notes at a, i. 76 ; dimi-
nution of, i. 231, 242 ; exten-
sion of, i. 248.
Directors of the bank, qualifica-
tion, of, ii. 234.
INDEX.
297
Dividends unclaimed, i. 276.
Dividend, reduction of, i. 338.
Disaffection of 1830, ii. 58.
Dobree, Mr., ii. 116.
Dollars, issue of, i. 246 ; rise in
the price of, i. 301.
East India annuities, i. 212 ;
company, balances of the, ii.
92.
Eldon, Lord, speech of, i. 297.
Ewer, Mr., i. 202.
Exchequer bills, i. 92, 98, 167,
216, 290 ; interest raised on,
ii. 36 ; demands on the, i, 32 ;
no payments made by the, i.
33 ; forgeries, ii. 126 ; dis-
count of, ii. 13.
Exchange, bills of, i. 10; foreign,
ii. 5; royal, i. 16, 132, 206.
Exchequer bills, scene on fund-
ing, i. 320.
Exchanger, office of, i. 23.
Epigrams of the period, i. 129.
Finance committee, i. 273, 279.
Flanders, traders of, i. 14.
Foley, Admiral, i. 304.
Forged notes, the first, i. 171,
321 ; ii. 69.
Forgeries, extraordinary of,
Charles Price, i. 188 ; of
Austrian notes, ii. 80.
Forgery of the water mark, i.
197 ; of Barnard Turner, i.
330 ; of Henry Fauntleroy, i.
339 ; of Burgess, ii. I9l ;
attempts to prevent, ii. 71 ;
opinions as to the punish-
ment of death for, ii. 73 ;
petition against hanging for,
ii. 76.
Fraud of Robert Astlett, i. 263 ;
stock exchange, i. 303.
France, Regent, D' Orleans of,
VOL. II. 2
i. 104; national bankruptcy
of, i. 116.
French forgeries, ii. 79 ; strata-
gem, due de Choiseul, ii. 221.
Freshfield, Mr., ii.lll, 185.
Foreign loans, i. 351 ; list of, ii.
31.
Funds, reduction in the, ii. 161.
Godfrey, Mr. Michael, i. 56, 57,
72.
Goldsmiths, i. 23 ; borrowers,
and receivers of money, i. 28 ;
notes, i. 28 ; enormous in-
terest of the, i. 30 ; advantage
taken by the, i. 31 ; ruined, i.
34 ; opposition to the bank, i,
56 ; jealousy of the, i. 73.
Goldsmith's family, i. 281.
Gold, over production of, ii. 2 ;
demand for, ii. 15 ; export of,
ii. 124.
Goulburn, Mr., ii. 129, 164.
Gordon riots, i. 179.
Governor, qualification of the, ii.
234.
Glyn, Mr. George Carr, ii. 25.
Messrs. Hallifax, Mills, &
Co., ii. 150.
Graham, Cunningham, ii. 147.
Grenville, Mr. Pascoe, i. 302.,
335.
Gresham, Thomas, i. 16, 29.
Grote, Mr. George, ii. 25, 235.
Grundy, Nathaniel, i. 319.
Gurney, Messrs., ii. 25.
Haes, Mr. David, ii. 127.
Hamburgh, correspondent at, i.
205.
Harman, Mr,, ii. 16.
Heathcote, Sir Gilbert, i. 94.
Hebrew, first banker, i. 5 ; op-
pression of the, i. 7 ; posses-
sors of wealth, i. 9 ; expulsion
A
298
INDEX.
of the, i. 10; return of the, i.
24.
Hoares, Messrs, i. 38.
Holland, Earl of, i. 24.
Horn, Count Antoine Van, i.
109.
Huskisson, ii. 17.
Income tax, ii. 161.
Interest, first forbidden, i. 3 ; of
money, i. 4 ; rate of, i. 37,
56 ; of money borrowed, i. 81 ;
reduction of, i. 100 ; bank
raise their, ii. 98.
Ireland, government of, i. 212.
Irish loan, i. 229.
Jacobin societies, i. 235.
Joint stock companies, i. 350;
ii. 26, 28 ; banks, ii. 47, 86 ;
shares of, ii. 97 ; over issues
of, ii. 64; committee on, ii. 101.
King, Lord, a letter from, i. 294.
Law, John, i. 102 ; popularity,
i. 106; resigns his office, i.
115.
Legal decision, i. 203.
Liverpool's, Lord, speeches, ii.
48.
Loans from the citizens, i. 17 ;
to government,i. 101, 155, 165,
270.
Loan, loyalty, i. 216 ; West India,
ii. 96.
Lombards, i. 10 ; persecution of
the, i. 1 1 ; robberies of, i. 20.
London assurance, i. 132; and
Westminster bank, ii. 94, 109,
117; and Paris press, i. 267.
Loyd, Mr. Jones, ii. 100, 179,
216.
Lushington, Mr. Alderman, i.
267.
Lothbury front, ii. 227.
Lottery tickets, i. 96.
Machine, weighing, ii. 225.
Machinery for printing the
notes, ii. 232.
Malmesbury, Lord, i. 217.
Mania of 1825. ii. 3.
Mansion-house meeting, ii. 14.
Manning, Mr., i. 335.
Maubert, Mr., ii. 131.
Mellish, Mr., i. 311; ii. 137.
Merchants, steel yard, i. 13;
Elizabeth borrowed of the, i.
17; faUures of the, i. 213;
support to, i. 216 ; meeting
of the, i. 241.
Metallic payments, i. 316.
Mint, robbery of the, i. 22 ; ex-
pedite the coinage at the, ii.
15.
Mississippi scheme, i. 102.
Monetary failures, i. 82.
Morland, the painter, i. 193.
Mutual guarantee, ii. 188.
National debt doubled, i. 221.
Newland, Mr. Abraham, i. 280,
New, 3i per cents., ii. 57 ; 4,
reduced, ii. 92 ; 5, holders
of, 92.
Northern and central bank, ii.
102 ; account of, ii. 106 ;
application for assistance, ii.
108.
Norwich bank, run on the,
ii. 9.
Notes, issue of five pound, i,
213 ; under five pounds, i.
245 ; one pound, ii. 23 ;
country discredited, i. 214 ;
circulation of one pound, i.
259 ; preferred to gold, i.
318 ; stopped, ii. 53; lost, ii.
222; stolen, ii. 219.
INDEX.
299
Oxford and Wolverhampton
line, ii. 213.
Oldham, Mr., ii. 232.
Paine, Thomas, i. 232.
Palmer, Mr. Horsley, i. 336 ; ii.
62 ; ii. 132
Panic, great, i. 175, 213 ; ii.
38; ii. 99.
Parliamentary enquiry, i. 137 ;
speeches, i. 138 ; debates, i.
201 ; ii. 85; reports i. 244.
Panama, isthmus of, i. 45.
Paterson, William, i. 44, 71 ;
discharge of claims by, i. 48 ;
scheme of. i. 60.
Payhall, ii, 228.
Peace of 1815, i, 309.
Peel, Mr.,i. 323, 317, 347.
currency bill, i. 323. 337.
Sir Robert, ii. 44, 60, 159,
163, 177.
Percival, Mr. Spencer, i. 278.
Peru-\-ian loan, i. 352.
Pitt, Mr., i. 211.
communications with, i.
223.
demands of, i. 242.
Pole. Sir Peter, ii. 9.
Police, a century ago, i. 154.
Political causes, i. 251 ; riots,
ii. 59 ; unions, ii. 69.
Pretender, i. 85 ; conspiracy of
the i. 149 ; retreat of the, i.
162.
Price, Charles, forgeries of, i.l88
Provinces, alarm of the, i. 236.
Prescott, Mr., ii. 111.
Property tax, i. 277.
Purchase of the dead weight, i,
333.
Ptansom, M., i, 321.
llaikes, Mr. Richard Mee, ii.
94.
Railway mania, ii. 196 ; direc-
tors, ii. 199 ; picture, ii. 200 ;
prospectus, ii. 201 ; no risk
in the, ii. 209 ; tricks of the
speculators in the, ii. 205 ;
private Property invaded by
the, ii. 206 ; security, thirty
and forty per cent, offered on
ii. 209 ; projects by leading
men, ii. 211 ; deposits, ii. 216.
Riots in the country, ii. 18.
Rothschild, Mr., opinion of, ii.
25.
Romiliy, Sir Samuel, ii. 70,
Rebellion of 1745, 157.
Ricardo, Mr., on the return to a
metallic standard, i. 337.
Roval exchange assurance, i.
335.
Sacheverell, Dr. Henry, i. 94.
Salomons, Mr., ii. 100.
Saville, Sir George, i. 201.
Savings' Bank, ii. 33.
Scarcity of money, ii. 36.
Securities, public, i. 84 ; lower-
ing the interest on, i. 346.
Scarcity of silver, i. 268 ; of
gold, i. 301, 221.
Scotland, Royal Bank of, i. 249.
Scotch banks, i. 289.
South sea fund, i. 35 ; delusion,
i. 119 ; scheme, i. 41.
South sea, i. 121, 136; direc-
tors, i. 123; stock, i. 133;
secret committee, i. 139 ;
stock, i. 144 ; company,
government annuities, i. 146 ;
bubble, i. 349.
South American speculations,
i. 312.
Spanish funds, ii. 96.
Specie payments, a bill limiting,
i. 266.
Speculations of 836, ii. 98.
300
INDEX.
Special trains, ii. 215.
Snows, Messrs. i. 38.
Smee, Mr. W Ray, i. 205 ; ii.
134.
Alfred, ii, 191.
Smith, Edward Beaumont, ii.
129.
Stocks, fall in, i. 85.
Stock Jobbing, i. 78 ; exchange
fraud, i. 303 ; ii. 35 ; holders,
ii. 67.
Stamps, composition for, i. 303 ;
duties, i. 203.
Stanhope's, Lord, resolution, i.
296.
Standard of value, new, i. 336.
Sycee silver, ii. 160.
Tallies, abolition of, i. 196=
Tench, Nathaniel, i. 89.
Thornton, Mr. Henry, .i 243,
255.
Thompson, Mr. Poulett, ii 13,
97
■ Mr. Alderman, ii.
88.
Times, comments of the, ii. 207.
Tokens, issue of bank, i. 302.
Trade, the position of, i. 215 ;
export and import, i. 248 ;
again opened with the penin-
sula, i. 312 ; at a stand, ii. 15
Traffic in one, 'two, and five
pound notes, i. 283.
Treasury, credit of the main-
tained, i. 221 ; bills, i. 228.
Trial respecting a forged note, i.
321 ; of Barber, ii. 187.
Usury laws, alterations of the,
ii. 91, 189.
Vansittart, Mr., on the price of
gold, i. 291.
Voter, qualification of a, ii. 218.
Walpole, Mr. Robert, i. 142.
Wellington, Duke of, ii. 60, 66,
Wniiam III., i. 35, 154; un-
popularity of, i. 58.
Wilkes, Mr. John, i. 184.
Will forgeries, ii. 180.
Weighing machine, ii. 225.
Wood, Sir Charles, ii. 176.
THE END.
Wrr.LOUQHBY AND CO., PRINTERS, 97, ST. JOHN ST. SMITHFIELD. «
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