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CURRENCY. 



in an imperfect form in 1694, and remodelled under a stronger 

 and more satisfactory constitution in 1697, was the creature 

 of the public debt. Some have alleged that its origin was 

 always tainted by the system to which it owed its existence. 

 But the criticism is shallow, and as usual, treats a coincidence 

 as a cause. The principal dangers of the Bank's early ex- 

 istence arose from its securities* being too often public debts, 

 and the fact that the Government of the day, while it affected 

 to be its protector, fastened on it like a leech, and bled it 

 almost to death. 



The experience which the founders of the Bank of England 

 had of the usefulness of goldsmiths' notes enabled them to 

 take a new departure in joint-stock or corporate banking. 

 From the beginning, this great institution in England, which 

 has had not only an illustrious financial career, but has really 

 done more to strengthen and develop the British constitution 

 than parliaments and governments have, was a bank of issue, 

 which conceived itself justified in circulating its notes on its 

 credit, that credit consisting in the judgement with which it 

 limited its issues by the interpretation of its probable liabili- 

 ties, with a large margin kept, as experience taught the 

 direction, over the probability. I have in another work told 

 its early history, that is, of the nine years during which it 

 is a factor in the period which lies before me, and I am glad, 

 in the vast mass of facts which I have collected and must 

 comment on, that I can save space by referring to my work 

 on the first nine years of the Bank of England 1 . 



I must however say something here about the recoinage 

 of 1696, an act of government which was not so fruitful of 

 results as Elizabeth's recoinage was, because it had no effect, 

 as her action had, on prices. But Elizabeth's resources were 

 not considerable enough, even if her counsellors had had the 

 wisdom to advise her, to make good the frauds which her 

 father and the guardians of her brother, bred in the 

 demoralising atmosphere of Henry's court, had committed on 



1 The First Nine Years of the Bank of England ; Oxford, Clarendon Press. 



