382 Tradesman and Merchant — Commercial Population 



The Bank at once became "the very heart of the economic Ufe of 

 the country," and performed invaluable functions with respect to 

 commerce. Not least of these was the separation of the finances of 

 the government from the trading companies.^ Heretofore trading 

 companies like the East India Company were forced to become 

 financial supports of the government. These sudden and irregular 

 diversions of capital from trade interrupted commerce and caused 

 wide fluctuations in the rate of interest. Hereafter government 

 financing was handled independent of trade. 



The Bank added to the available capital of the country and gave 

 wider opportunity for trading on borrowed capital.^ In conjunction 

 with the reform of the currency in 1696 it corrected the disadvan- 

 tageous rate of foreign exchange.^ But it did not perform as many 

 functions as commercial banks might and many extensions of ser\dce 

 were suggested,^ such as advances to importers to pay duties, loans 

 on landed security, etc. By the middle of the eighteenth century, 

 however, it was agreed that the methods of business employed by the 

 Bank of England were more satisfactory to the commercial world 

 than those of any foreign country.-' 



Banking institutions extended themselves very little in the first 

 half of the eighteenth century. The following numbers of banks 

 existed:^ in 1677, 44; 1738, 21; 1754, 18; 1763, 23; 1736, 21; 1740, 28; 

 1759, 24; the fluctuations were caused by failures, amalgamations, 

 and foundations*. 



Country banks were \^ery slow to arise. The first was founded at 

 Gloucester in 1716. It was the only one of its kind as late as 1737. 

 By 1750 there were twelve, and 1772 twenty-four country banks.^ 

 Their development coincided with the improvement in the means of 

 communication and the development of the North after 1750. The 

 Bank of England made no extension of its business after 1742 except 

 in the immediate vicinity of London, and country banks took the 

 initiative in country financial operations. Some London private 

 banking firms estabUshed country connections by delegating a junior 



1 See treatment by Scott, III, 199-200. 



' Cunningham, Growth, II, 442. For contrary opinions by contemporaries, see 

 Defoe, Projects, 46-7, and "Against the continuance," 11-12. 



3 Scott, III, 200-1. 



''See, for instance, Defoe, Projects, 48-5,i; and a quotation from London 

 ]\Iagazine in Gilbart, II, 35-7. 



■'' Beawes, Lex Mer. Red., 365. 



^ See lists in Price, Handbook, 158-161. 



' Bisschop, Rise, 150. 



