6jz v B A 
tempts of robbers, and lofs from truding it with unfaith¬ 
ful fervants : for the prevention of all which, cities of 
large commerce very naturally introduced the life ol banks. 
A bank therefore may properly be denned a common re- 
pofitory, where many perlons agree to keep their cadi, to 
he always ready at their calLor direction. And banks are 
of two - kinds ; either public , confiding of a company of 
monied men, who being duly edablidied, and incorporated 
by the laws of their country, agree to depofif a conlider- 
able fund, or joint dock, to be employed for the ufeof. 
the fociety, in lending.money upon fecurity, buying and 
felling bullion, difcounting bills of exchange, &c. or pri¬ 
vate, i. e. let up by private perfons, or partnerfhips, who 
(feal in the fame wav as the former upon their own (ingle 
hock and credit. Of thcfe banks we (hall now give the 
hidory borh public and private ; and fird, of the 
BANK of ENGLAND. 
The bank of England is the greatelf public bank in the 
world. It was firft introduced in the year 1694, upon a 
plan fuggeded by Mr. Patterfon, a merchant of great 
eminence, occalionally to fupply the exigencies of govern¬ 
ment, and, as he termed it, “ to lave the miniderial peo¬ 
ple the difgrace of (looping fo frequently to folicitations to 
the London common-council, for the borrowing of only 
one or two hundred thoul'and pounds, upon the credit of 
the land-tax ; as the common-councilnten did to the pri¬ 
vate inhabitants of their wards, going from hottfe to hou-fe, 
for the loan of the money.” After the fchenie had been 
debated for a long while in the privy-council, the plan 
was at length adopted, and the company was incorporated 
by parliament, in the 5th and 6th years of William and 
Mary, by the name of the Governors and Company of the 
Bank of England ; in conlideration of the loanof 1,200,000k 
to tiie government ; for which the fubfcribers received al- 
moft eight per cent. By this charter, the company are 
not to borrow under their common feal, unlefs by act of 
parliament: they are not to trade, or Aider any perfon in 
trull for them to trade, in any goods or merchandife ; but 
they may deal in bills of exchange, in buying or felling 
bullion, and foreign gold and lilver coin, See. By an ait 
of parliament palled in the 8th and 9th year of William 1 , 11 . 
they were impovvered to enlarge their capital (lock to 
2,201,171k 10s. It was then alfo enacted, that bank (lock 
diould be a perfcmal and not a real ellate ; that no contrail 
either in word or w riting, for buying or felling bank flock, 
ihould be good in law, unlefs regidered in the books of the 
bank within (even days, and the (lock transferred in four¬ 
teen days;' and that it diould be felony, without the bene¬ 
fit of clergy, to counterfeit the common feal of the bank, 
or any fealed bank bill, or any bank note, or to alter or 
erafe finch bills or notes. By another ail, palled in the 
7th of queen Anne, the company were impovvered to aug¬ 
ment their capital to 4,402,343k and they then advanced 
400,0001. mote'to the government; and in 1714 they ad¬ 
vanced another loan of 1,500,000. 
In the third year of the reign of George I. the intered 
of their capital dock was reduced to five percent, when 
live bank agreed to deliver up as many exchequer-bills as 
amounted to 2,000,000!.and to accept ao annuity of ioo,oool. 
and it was declared lawful for the bank to call from their 
members, in proportion to their intereds in their capital 
dock, fuch (urns of money as in a general court (hould be 
found necelfary. If any member diould negleit to pay 
his (hare of the monies fo called for, at the time appointed, 
by notice in the London Gazette, and fixed upon the Royal 
Exchange, it diould be lawful for the bank, not only to 
(lop the dividend of (licit a member, and to apply it to¬ 
ward payment of the money in quedion ; and alfo to dop 
the transfer of the (hare of fuch defaulter, and to charge 
him with the intered of live per cent, per annum, for the 
money fo omitted to be paid: and, if the principal and in¬ 
tered (hould be three months unpaid, the bank diould 
then.have power to fell fo much of the dock .belonging to 
tht d faultcr as would fatisfy the fame.. After this, the 
N IC. 
bank reduced the intered e,f the 2,000,000k lent fo the 
government, from five to four per cent, and- purchafed fe- 
veral other annuities, which were afterwards redeemed by 
the government, and the national debt due to the bank 
was reduced to 1,6oo,cool. Butin 1742, the company en¬ 
gaged to fupply the government with i,6oo,oool. at three 
percent, which is now called the three percent, annuities ; 
fo that the government was now'indebted to the company 
3,200,000k the one half carrying four, and the other three, 
per cent. 
In the year 1746, the company agreed that the fum of 
986,8001. due to. them in .the exchequer-bills unfatisfied, 
on the duties for licences to fell ("pirituous liqours by re¬ 
tail, diould be cancelled, and in lieu thereof to accept an 
annuity of 39,442!. the intered of that fum at lour per 
cent. The company alfo agreed to advance the farther 
fum of i,ooo,oooh into the exchequer, upon the credit of 
the duties arifing by the malt and land tax, at four per 
cent, for exchequer-bills to be ilfued for that purpofe ; in 
conlideration of which, the company were enabled to aug¬ 
ment their capital with 986,800k the intered of which, as 
well as that of the other annuities, was reduced to three 
and a half per cent, till the 25th of December, 1757, and 
from that time to carry only three per cent. And, in or¬ 
der to enable them to circulate thefe exchequer-bills, they 
edablilhed what is now called bank circulation ; the nature 
of which is as follows : The company of the bank are ob¬ 
liged to keep cadi fufticient to anfwer not only the common 
but alfo any extraordinary demand that may be made up¬ 
on them ; and whatever money they have by them, over 
and above the fum fuppoled necedary for thefe purpofes, 
they employ in what may be called the trade of the company, 
that is to fay, in difcounting bills of exchange, in buying 
of gold and lilver, and in government fecurities, &c. But 
when the bank entered into the above-mentioned contrail, 
as they did not keep unemployed a larger fum of money 
than what they deemed necelfary to anfwer their ordinary 
and extraordinary demands, they could not conveniently 
take out of their current ca(h fo large a fum as a million, 
with which they were obliged to furnifh the government, 
without either leflening that fum they employed in dif¬ 
counting, buying gold and filver, &c. (which would have 
been very difadvantageous to them,) or inventing fome 
method that diould anfwer all the purpofes of keeping the 
million in cadi. The method which they cliofe, and which 
fully anfwers their end, was as follows : They opened a 
fublcription, which they renew annually, for a million of mo¬ 
ney ; wherein the fubfcribers advance ten per cent, and 
enter into a contrail to pay the remainder, or any part 
thereof, whenever the bank dtall call upon them, under 
the penalty of forfeiting the ten per cent, fo advanced ; in 
condderation of which, the bank pays the fubfcribers four 
per cent, intered for the money paid in, and one fourth 
percent, for the whole fum they agree to furnidi and in 
cafe a call dtall be made for the whole, or any part there¬ 
of, the bank farther agrees to pay them at the rate of 
five per cent, per annum for.,fuch fum till they repay it, 
which they are under an obligation to do at the end of the 
year. By this means the bank obtains all the purpofes of 
keeping a million of money by them ; and though the fub- 
feribers, if no run is made upon them, receive fix and a 
half per cent, for the money they advance, yet the com¬ 
pany gains the fum of 23,500k per annum by the contrail; 
as will appear by the following account : 
The bank receives from the government for the 
advance of a million - - £. 30,000 
The bank pays to the fubfcribers who advance 
100,000k and engage to pay (when called for) 
900,000b more - - - 6,500 
The clear gain to the bank therefore is - 23,500 
This is the date of the cafe, provided the company 
diould make no call on the fubfcribers, which they will be 
very unwilling to do, becaufe it would not only leden their 
profit, but a tie cl the public credit in general. Bank Jlock 
mav 
