B A 
may not improperly be called a trading Jlock, fince with 
this they deal very largely in foreign gold and (ilver, in 
difcoimting bills of exchange, See.' Betides which, they 
are allowed by the government very confiderable funis an¬ 
nually for the management of the annuities paid at their 
office'. All which advantages render a thare in their flock 
very valuable ; though it is not equal in value to the Eafl- 
India tlock. The company make dividends of the profits 
half-yearly, of which notice is publicly given: when thofe 
who have occafion for their money, may readily receive 
it ; but private perfons, if they judge convenient, are per¬ 
mitted to continue their funds, and to have their filtered 
added to the principal. This company is under the direc¬ 
tion of a governor, deputy governor, and twenty-four di¬ 
rectors, who are annually elected by the general court, in 
the fame manner as in the Eaft-India company. Thirteen, 
or more, compote a court of directors for managing the 
affairs of the company. 
The bank of England arts not only as the great engine 
of (late and of commerce, but t ran farts bufinefs with in¬ 
dividuals the fame as an ordinary bank. It polfelfes the 
reputation of having, upon feveral arduous occafions, flip- 
ported the credit of the principal houfes, not only in 
England, but of Hamburgh and Holland. Upon one oc¬ 
cafion it is laid to have advanced for this purpofe, in one 
week, no lefs a fum than i,6oo,oool. nearly all in bullion. 
Private Banks are of an earlier origin than the public. 
The royal mint in the tower of London had for fome years 
prior to 1640 been made life of as a kind of bank, or de- 
{ iofit, for merchants to lodge their caffi in. But Charles I. 
laving in that year made free with their money, the mint 
loll its credit. We may date the commencement of pri¬ 
vate banking from the year 1645, which feems to have 
originated with the goldfmith’s company. The proper 
bulinefs of the London goldfmiths had always been to buy 
and fell plate, bullion, and foreign coins of gold and fil- 
ver ; to melt and cull them ; to coin fome at the mint; 
and with the reft to fupply the refiners, plate-makers, and 
merchants, as they found convenient to the advantages of 
trade. But, in confequence of the civil broils which broke 
out about this period of king Charles’s reign, the mer¬ 
chants and principal traders began to lodge their money in 
the goldfmiths’ hands for its greater fafety. This became 
fo much the fafhion, that in a very ffiort time the banking 
fcheme conftituted a very confiderable branch of bulinefs. 
The goldfmiths began to difeount merchants bonds and 
bills, both in town and from the country ; and alfo, began 
to receive the rents of gentlemen’s eltates remitted to town, 
and to allow them, and others, who put caffi into their 
hands, fome intereft for it, if it remained only for a fingle 
month. This was a great allurement to people to put out 
their money, and an invention that brought an immenfe 
quantity of ca(h into their hands; fo that they were enabled 
to fupply government as the bankof England now does,with 
temporary fums, for which thefe bankers took ten per cent, 
and on bills, tallies, orders, and debts due to the king, 
they fometimes got from twenty to thirty per cent, to the 
great diffionour of government. This great gain induced 
the goldfmiths more and more to become lenders to govern¬ 
ment ; to anticipate all the revenue ; to take every grant 
of parliament into pawn, as foon as it was given ; fo that 
in fart all the revenue paffed through their hands. Thus 
they went on till the year 1672, when they had jointly and 
feveral.ly amaffed of the public’s money 1,328,526!. which 
was depolited, for fafety, in the king’s treafury, and from 
whence they were wont to receive weekly whatever fum 
or funis were wanted for their cuftomers. 
At this time, Charles II. happening to be much ftraight- 
ened for cadi, he {hut up the exchequer, and feized upon 
all the money, to carry on his war with Holland. This 
violent meafure (a fpecies of open robbery never before 
nor fince experienced) bankrupted the goldfmiths, and is 
faid to have brought near ten thoufand families to po¬ 
verty. A general murmur ran through the nation ; and 
the public became fo clamorous, that the king, for Iris 
Von. II. No. 96* 
N K. 673 
perfonal fafety, was obliged to bind himfelf to pay the 
principal out of his revenue, and, till that could be effieft- 
ed, to allow an intereft of fix per cent, per annum ; but 
the principal was never paid. However, the parliament, 
12 William III. c. 12, provided for a large arrear of in¬ 
tereft then due, and fettled the intereft at three per cent, 
for the future. The debt was hereby made redeemable, 
on paying one moiety of the principal fum, viz, 664,263!. 
farther confirmed by an aft of queen Anne, which moiety 
now became the proper debt of the public, and was finally 
fubferibed into the South-fea capital ftock, in the year 
1720. Upon this fubjeft, Sir William Temple, in his 
Mifcellanies, makes the following remark : “ The credit 
of our Exchequer is irrecoverably loft, by the laft breach 
with the bankers ; for credit is gained by cuftom, and fei- 
dom recovers a (tain.” Several bitter inveftives again!! 
the trade of banking were now publiftied ; and many 
years after, when the prefent cuftom of receiving and .pay¬ 
ing money from morning till night in an open (hop came 
fil'd to be introduced, it was thought to be a (trange fort 
of thing ; and Sir Joffiua Child, and feveral other au¬ 
thors of credit, wrote vehemently againft it. The bank¬ 
ers were accufed of being a pack of ufurers ; of keeping- 
the intereft of money at lead two per cent, higher than 
otherwife it would be, which was productive of many 
evils ; and alfo, that they made money fcarce amongft in¬ 
dividuals, by furreptitioufly coilefting all they coujd into 
their own pofteffion, whereby the country was drained in 
every part, and the fubjeft injured. But, upon the whole,' 
whatever might have been the praftice of bankers then, 
the cafe is now quite otherwife. The difpatch given by 
our modern bankers to merchants and dealers in general, 
is found fo convenient to trade, that people are greatly ac¬ 
commodated by lodging cadi with them, to be drawn our 
from time to time as they want it, without receiving or 
expefting any intereft whatever ; and the facility with 
which bills, notes, drafts, bonds, and real perfonal fecu- 
i ities, are and may be converted into immediate money- 
through the medium of private banks, both in London 
and in the country, nuift be acknowledged a very great 
public conveniency, and one of the moft important aids 
to trade and commerce that cuftom or invention ever in¬ 
troduced. The great national utility of the bank of Eng¬ 
land, its particular interefts, tranfartions with the govern¬ 
ment, quantum of its circulating notes, and caufes of the- 
late temporary inability to retrieve them, are fubjefts that 
have been lately very ably difeuffedby Sir Francis Baring; 
and, as they are no lefs interefting than important to the 
commercial world, we (hall here fubjoin the moft material 
part of the worthy baronet’s obfervations ; and alfo his 
remarks upon the economy and management of private 
banks both in town and country. 
Tile operations of the bank of England may be confi- 
dered under three diftinft heads. The firft relates to the 
general circulation, or circulating medium, of the country. 
The fecond, its tranfartions with the government, by loans, 
payment of dividends, &c. The third, its commercial 
difeounts. Circulation, as the word implies, muft have a 
pivot or centre on which the whole can turn; and that 
centre, as far as relates to the ifland of Great Britain, is 
the bank of England ; whofe paper or notes reprefent that 
medium, for every ufeful and convenient purpofe. In¬ 
deed any thing may become a circulating medium ; but 
paper is as good a reprefentative fign as gold, and in many 
inftances it is better, becaufe it is more eafy to manage 
and to transfer ; but then it muft be underftood, that, with 
a correct knowledge of the bafts on which fuch paper is 
founded, it enjoys the moft perfect confidence: in which 
cafe, the only difference confifts in fuch paper being the 
circulating medium for the country where it fifties; while 
gold or filver are the circulating mediums in every part of 
the world,—for both are no more than reprefentative (igns. 
If there were more gold than was wanted, confidence in 
it, as a reprefentative fign, would llacken, and it would, 
no longer become a circulating medium. If bank notes 
8 I were 
