The Great Events by Famous Historians [Volumes 1-14]

This is a strange picture; beating even Mr. Paterson's account of the "processions in the city," and adds another convincing proof of the necessity which then existed for some establishment, capable of advancing money at a reasonable rate, on the security of Parliamentary grants.

The scheme proposed by William Paterson was too important not to meet with many enemies, and it appears from a pamphlet by Mr. Godfrey, the first deputy-governor, that "some pretended to dislike the bank only for fear it should disappoint their majesties of the supplies proposed to be raised." That "all the several companies of oppressors are strangely alarmed, and exclaim at the bank, and seemed to have joined in a confederacy against it." That "extortion, usury, and oppression were never so attacked as they are likely to be by the bank." That "others pretend the bank will join with the prince to make him absolute. That the concern have too good a bargain and that it would be prejudicial to trade." In Bishop Burners History of His Own Times we read an additional evidence of its necessity:

"It was visible that all the enemies of the Government set themselves against it with such a vehemence of zeal that this alone convinced all people that they saw the strength that our affairs would receive from it. I heard the Dutch often reckon the great advantage they had had from their banks, and they concluded that as long as England remained jealous of her Government, a bank could never be settled among us, nor gain credit among us to support itself, and upon that they judged that the superiority in trade must still be on their side."

All these varied interests were vainly exerted to prevent the bill from receiving the royal sanction; and the Bank of England, founded on the same principles which guarded the banks of Venice and Genoa, was incorporated by royal charter, dated July 27, 1694. From Mr. Gilbart's History and Principles of Banking we present the following brief analysis of this important act:

"The Act of Parliament by which the Bank was established is entitled 'An Act for granting to their majesties several duties upon tonnage of ships and vessels, and upon beer, ale, and other liquors, for securing certain recompenses and advantages in the said Act mentioned to such persons as shall voluntarily advance the sum of fifteen hundred thousand pounds toward carrying on the war with France.' After a variety of enactments relative to the duties upon tonnage of ships and vessels, and upon beer, ale, and other liquors, the Act authorizes the raising of 1,200,000 pounds by voluntary subscription, the subscribers to be formed into a corporation and be styled 'The Governor and Company of the Bank of England.'

"The sum of 300,000 pounds was also to be raised by subscription, and the contributors to receive instead annuities for one, two, or three lives. Toward the 1,200,000 pounds no one person was to subscribe more than 10,000 pounds before the first day of July, next ensuing, nor at any time more than 20,000 pounds. The Corporation were to lend their whole capital to the Government, for which they were to receive interest at the rate of 8 per cent. per annum, and 4000 pounds per annum for management; being 100,000 pounds per annum on the whole. The Corporation were not allowed to borrow or owe more than the amount of their capital, and if they did so the individual members became liable to the creditors in proportion to the amount of their stock. The Corporation were not to trade in any 'goods, wares, or merchandise whatever, but they were allowed to deal in bills of Exchange, gold or silver bullion, and to sell any goods, wares, or merchandise upon which they had advanced money, and which had not been redeemed within three months after the time agreed upon.' The whole of the subscription was filled in a few days; 25 per cent. paid down; and, as we have seen, a charter was issued on July 27, 1694, of which the following are the most important points:

"That the management and government of the corporation be admitted to the governor, deputy-governor, and twenty-four directors, who shall be elected between March 25th and April 25th of each year, from among the members of the company, duly qualified.

"That no dividend shall at any time be made by the said governor and company save only out of the interest, profit, or produce arising out of the said capital, stock, or fund, or by such dealing as is allowed by act of Parliament.

"They must be natural-born subjects of England, or naturalized subjects; they shall have in their own name and for their own use, severally, viz., the governor at least 4000 pounds, the deputy-governor 3000 pounds, and each director 2000 pounds of the capital stock of the said corporation.