BAN 



to'tl-ic ancients, and wliich is the pride of tlie modern com- 

 TTicrcial iyfteni. 



Bank rif England, was firft cllablifhtd in the year 1694, 

 pirtly for the convenience of commerce, and partly alfo for 

 the emoUiment of the proprietors; and it is the greateft 

 bank of circulation in Europe. The fcheme was projected 

 by Mr. W. Paterfon, a merchant, and debated for a long 

 while in the privy council, till at length, by an a^t of J & 6 

 William & Mary, cap. 20. it was enacted, that their majef- 

 ties might grant a commifllon to take particular lubfcrip- 

 tions for i,2co,oool. of any ptrfons, natives or foreigners, 

 whom their maiedies were hereby empowered to incorporate 

 with a yearly alloivance of ico,oool. viz. 96,000!. or 8 per 

 cent, for intercll till redeemed, and4CQol. to be allowed the 

 intended bank for charges of management. The corpora- 

 tion was to have the name of " The governor and company 

 of the bank of England;" their faid fnnd to be redeemable 

 upon a year's notice, after the ill of Auguft 1 705, and 

 payment of the principal, and then the corporation to ceafe. 

 The company was enabled by this act to purchafe lands, &c. 

 unlimitedlv, and to enjoy the other ufual powers of corpo- 

 rations; their llock was to be tranjferrable. They were re- 

 llrifted from borrowing more than i,200,oool. except on 

 parhament funds, and from trading ii any merchandife, ex- 

 cept in bills of exchange, and in bullion, and in the fale of 

 fuch goods as were the produce of lands purchafed by the 

 corporation: and all bills obligatory under the feal of the 

 faid corpoi-ation, were made alhgnable by indorfement. The 

 charter of incorporation was executed July 27, 1694; 

 which direfts, that there be a governor, deputy-governor, 

 and tvventy-fonr directors; and fpecifies the qualihcations 

 of voters and of direftors, together with other regulations, 

 which have been farther amended and enlarged by fubfe- 

 ifucnt ftatutes. 



In 1697, the hank was allowed to enlarge its capital flock, 

 by an engraftment of 1,001,171!. los. Its whole capital 

 flock, therefore, amounted at this time to 2,201,17!!. IDs. 

 This engraftment is faid to have been for the fupport of pub- 

 lic credit. In 1696, tallies had been at 40, and 50, and 60 

 per c-.:;t. dif"count, and bank notes at 20 per cent. During 

 the great rccoinage of hlver, which was going on at this 

 time, the bank had thouglu proper to difcontinue the pay- 

 ment of its notes, which necefFarily occafioncd their difcrcdit. 

 By this engrafting ad, as it was called, the capital (lock of 

 the bank was to be exempted from any tax ; no aft of the 

 corporation, nor of its court of direftors, nor lub-committees, 

 flioiild fubjeft tiic .particular fhare of any number to for- 

 feiture; but thcfe shares were fubject to the payment of all 

 yyk debts contrafted by the corporation ; and it was made 

 ■felony to counterfeit the common fcal of the bank, afTlxtd 

 to their fealed bills, or to alter or craft any fum in, or any 

 indorfement on their feaied notes, figned by order of tlie faid 

 governor and company, or to forge or counterfeit the faid 

 Ijills or notes. Tiiis act was judicioufly framed for the re- 

 floration of public credit ; and it ferved to tfl'eft two points ; 

 Tiz. the reicue of the exchequer tallies and orders from the 

 ilock-jobbing harpies by engrafting them into this company, 

 and alfo by cancelling the bank notes, alfo engrafted, which 

 had been at 20 per cent, difcount; becaufe the government 

 had been greatly deficient in their payments to the bank ; 

 and a good interefl was fecured to the proprietors of the in- 

 crealcd capital. By Hat. 6 Anne c. 22. it was enacted... tor 

 fecnring the credit of the bank of England, that no other 

 banking company in England fliall confill of more than fix 

 perfons, empowered to iflue bills or notes payable on de- 

 mand, or for any time lefs than fix months, which is the 

 only exclufive privilege belonging to the bank. In pur- 



BAN 



fuance of the 7th Anne, c. 7. the bank advanced and paid 

 into the exchequer the fum of 400,:ool. ; making in all the 

 fum of I,f5co,oool. which it had advanced upon its original 

 annuity of 96,000!. interelt, and 4000I. for expence of ma- 

 nagement. In purfuance of the fame aft.the bank cancelled 

 exchequer bills to the amount of 1,775,027!. 17s. lojd. at 

 6 per cent, interell ; it likcwife undertook the circulation of 

 2, 50c, cool, of exchequer bills iffued for the fupply of the 

 year; and it was at the fame time allowed to take in fub- 

 fcriptiops for doubling its capital. In 1709, tlicrefore, the 

 capital of the bank amounted to 4.402,343!. ; and it had ad- 

 vanced to government the fum of 3,375,027!. 17s. lOjd. 

 By a call of 15 per cent, towards the 400,000!. advanced to 

 governm.ent, there was paid in and made flock 656,204!. 

 IS. 9d. ; and by another call of 10 per cent, in 17 10, 

 501,4481. I2S. lid. In con fcqnence of thefe two calls, tlie 

 bank capital amounted to 5,559,995!. 14s. 8d. In con- 

 iideration of tlie fum of 400,000!. advanced to government 

 without interell, tlie exchilive privileges of the bank were 

 prolonged to one year's notice, after the ill of Augult 



1732- 



The convenience wliich government fonml in ifTuing ex- 

 chequer bills by means of tjie bank, produced an agreement 

 in 17 13, when the company undertook to circulate new bills 

 for raifing 1,200,000!. towards tlie fupplies, on liaring an 

 allowance of 3 per cent, per aiuium, payable weekly, and a 

 farther allowance of Soool. per annum, payable quarterly. 

 On this occafiwn, by 12 Anne, c. 1 1, the company obtained 

 an additional term of lo years to the period of their conti- 

 nuance as a corporation; fo tliat tliey were not to be dif- 

 folved but upon twelve- months notice after ifl of Augull 

 1742; and to enable them to fultil their engagements, tliey 

 were empowered to make a call for money upon the pro- 

 prietors. Ill the following year, they firfl received the fub- 

 fcriptions to a loan for the public fervice, wliicli had been 

 hitherto ufually taken at tlie exchequer; but the bank, 

 being found more convenient for monied perfons, has ufually 

 received tliem ever lince. 



In pnrfuance of llat 3 Geo.I. c.7, o, 9. in 17 17, the bank 

 delivered up two millions of exchequer bills to be cancelled ; 

 and it had, therefore, at tins time, advanced to government 

 5,375,027!. 17s. io|d. It was now agreed to reduce the 

 interell from 6 to 5 per cent. In purfuance of the flat. 

 8 Gc<i. I. c. 2 1. in 1722, the bank purchafed of tlie South 

 Sea company flock to tlie amount of 4,000,000!. ; and in 

 this year, in confequcnce of the fublcriptions vvliich it had 

 taken in for enabling it to make this purchafe, its capital 

 flock was increafed by 3,400,000!. At tliis time, therefore, 

 the banic had advanced to the public 9,375,027!. 17s. 

 lold. ; of wliich the fum of 1,600, cool, was entitled to 

 6 per cent, interell, till tlie ill of Auguil 1743; but the 

 rell^ was to be reduced to 4 per cent, from and after Mid- 

 fummer 1727; and the capital Hock of the bank amounted 

 only to 8,959,995!. 14!. 8d. It was upon this occalion, 

 that the fum wliich the banit liad advanced to the public, 

 and for which it received interell, began firll to exceed its 

 capital flock, or the fum for which it paid a dividend to the 

 proprietors of bank flock ; or, in other wordi, that tiie bank 

 began to liave an undivided capital, over and above its 

 divided one; and it lias continued to have an undivided ca- 

 pital of tlie fame kind ever lince. 



In 1728, tlie company of tlie bank advanced to govern- 

 ment 1,750,000!. at 4 per cent, interefl, witliout aMy power 

 of enlarging tlieir capital. In the following year, they ad- 

 vanced the farther fum of 1,250,000!. at 4 per cent. The 

 capital due from goveriimcDt, after fuiidi"y redemptions, was 

 io,ioo,oool. ; of whicji the funl of i,ooo,oool. was re- 

 deemed 



