402 



BANK. 



1604, the original capital, 1,200,000 



1(J97, 2,201,171 



1708, 4,402,313 



1709 5,058,547 



1710, 5,559,990 



1722, 8,959,996 



1742, 9,800,000 



17J6, 10,780,000 



1781, 11,(>-12,;00 



The rates of dividends liave been as follows : 



From 1694 



to 1696, 3 yrs., 8 per cent. 



1707,11 9 



1729,22 . estimated, 9 to 5 

 1746, 17 . actual, 6 & 5 



1752, 6 5 



1753, lyr. 5&4 



1763 10 yrs., 4$ 



1766, 3 5 



1780,14 5 



1787, 7 6 



1806, 19 7 



1823,17 10 



1826, 3 .. 8 



The bank lias, besides, at different times, made 

 dividends under the name of bonuses, viz.: 



June, 1799, 10 percent. 



May, 1801, 5 



Nov., 1802, 2 



Oct., 1804, 5 



1805, 5 



1806 5 



The amount of loans to the government has increas- 

 ed with the capital of the bank. In 1787, the per- 

 manent loan to government was 8,688,570; in 

 1797, 10,672,490 an amount approaching very 

 near to that of the whole capital. In 1817, the loan 

 to government arose to 28,300,209, and, in 1825, 

 it was 18,261,100. Ever since its establishment, 

 the bank has been closely allied with the govern- 

 ment, the fate of the institution having always been 

 directly involved in that of the government ; and, 

 for twenty six years, from 1797 to 1823, as we shall 

 see, the existence of the government, and fate of the 

 kingdom, seemed to depend upon maintaining the 

 credit of the bank, and the circulation of its paper. 

 Besides being a creditor of the government to the 

 immense amount already mentioned, the institution 

 is an important agent in the management of the pub- 

 lic debt, and the collection of the revenue, the whole, 

 of which, amounting to about 50,000,000 per an- 

 num, passes through the bank. 



Besides its importance to the government as a 

 public creditor, and as an agent in managing the 

 finances and public debt, collecting taxes, and pay- 

 ing interest and annuities, this institution is, in its 

 character of a bank of deposit, discount, and circula- 

 tion, a powerful auxiliary to commerce and industry. 

 As a bank of deposit, it offers the advantages of 

 those of Hamburg and Amsterdam. Transfers or 

 assignments of deposits, being made by means of 

 checks, are attended with less trouble than the writ- 

 ing off and transferring of credits at Amsterdam and 

 Hamburg. Besides permanent loans to the govern- 

 ment, the bank makes extensive discounts of paper, or, 

 iu other words, loans to a great amount on promissory 

 notes and bills of exchange. It is apparent, from 

 the statement already made, that, if the actual capital 

 is not greater than its estimated nominal amount, 

 namely, 11,642,400 it had, in 1787, but a com- 



paratively small amount of capital to loan to iiulivi. 

 duals ; for, 10,672,490 of its capital being loaned 

 permanently to the public, only the sum of i'969,910 

 of the capital remained for private loans. This 

 amount might then have been loaned, if the institu- 

 tion were merely a loaning or discounting one, and 

 received no deposits, ana circulated no bills. But 

 all the means of additional loans must have been 

 derived from deposits and circulation ; and the means 

 derived from these sources, for this purpose, must 

 obviously be very ample; for the payment of th<> 

 revenue of the kingdom through the bank, it \vc 

 suppose the money to remain in the bank, on an 

 average, one day, will give a fund of l(J(i,(>i>ii. 

 The deposits by individuals and companies will add 

 immensely to this fund. It is true, that the bank is 

 liable to be called upon at any moment for tli< si- 

 deposits, and, where no interest is allowed ujion 

 them by the bank, the depositors will generally 

 withdraw them as soon as they can make an invest, 

 ment; but, still, experienced bankers will estimate, 

 with some precision, the average of deposits on which 

 they may venture to discount. Besides this fund for 

 discount or loan, the bank has the additional one of 

 the amount of the excess of the circulation over that 

 of the specie necessary to be kept in the vaults of 

 the bank, to redeem the bills presented for payment. 

 To a bank with the resources and advantages of that 

 of England for collecting specie, it is quite an ample 

 provision for its circulating notes and bills, to keep 

 on hand 20 or 25 per cent, of the amount of such 

 circulation, where its discounts are for short periods 

 of two or three months. The circulation of this 

 bank has varied at different times, but, on the whole, 

 gradually increased. From 1792 to 1800, it arose 

 from about 11,000,000 to about 12,000,000; from 

 1800 to 1810, it increased to above 18,000,000; 

 from 1810 to 1820, it was at the maximum, being, in 

 Aug., 1817, as high as 30,099,908, and, generally, 

 during this period, ranging from 25,000,000 to 

 28,000,000; from 1820 to 1826, it ranged from 

 18,000,000 to 23,000,000, and, on the 26th of 

 February, 1826, was 23,673,737. It thus appears 

 that the circulation of notes gives the bank an 

 effective loaning capital of from 15,000,000 to 

 20,000,000. It appears, further, that the actual 

 capital of the institution is greater than its nominal 

 stock, or the amount on which dividends are made. 

 In March, 1819, the actual capital exceeded the 

 nominal by 4,261,280; but this excess must vary 

 with the periods of making dividends, and also with 

 the good or ill success of the business of the institu- 

 tion. From all these sources the bank has an avail- 

 able loaning capital of over 20,000,000, besides 

 the loan of 10,672,490 to the government. Thus, 

 on a capital stock of 11 millions, the bank receives 

 interest on between 30 and 40 millions, including 

 the interest on the government loan, besides the 

 bonus annually paid to the bank, for its agency in 

 the financial concerns. This accounts for the high 

 rate of dividends made on the capita) stock, as above 

 stated, being between two and three times the cur- 

 rent rate of interest in Great Britain. Since 1800, 

 the circulation of the notes of this bank under 5 

 lias varied exceedingly, being, in 1800, 1,406,708; 

 in 1816, 9,036,374 ; in 1824, as low as 491,370 ; 

 and, in 1826, when the law was enacted prohibiting 

 the circulation of notes under 5 after the 5th of Feb. 

 1829, standing at 1,559,756. 



The most important event in the history of this 

 institution we have reserved for a distinct considera- 

 tion, viz., the stopping of specie payment, in 17 ( '7. 

 On the 26th of February of that year, being Sunday, 

 an order of the privy council was transmitted to the 

 bank towards evening, prohibiting the further pay- 



