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Bank of England—“The principal Bank of Deposit and Circulation, not in this country only, but in Europe,"—is an isolated building bounded by Threadneedle Street on the south, Lothbury on the north, Princes Street on the west, and Bartholomew Lane on the east, and covers an area of nearly four acres. The public entrances are in Threadneedle Street, Lothbury, Bartholomew Lane, and Princes Street. The Bank was founded in 1694, its principal projector being Mr. William Paterson, an enterprising Scotch gentleman, who submitted his scheme for a National Bank to the Government in 1691. Nothing was done in the matter for nearly three years, when funds being necessary to carry on the war in which the country was then engaged, Charles Montague, then one of the Lords of the Treasury, and the leading financial authority in the Ministry, took up Paterson's scheme, and with the assistance of Michael Godfrey, one of the wealthiest and most influential merchants in the City, soon brought it into a practical shape. A Bill was brought by Montague before the House of Commons, by which subscribers to a loan of £1,200,000 to the Government were to be paid interest at the rate of eight per cent, and to be incorporated by the denomination of the Governor and Company of the Bank of England—the name it is still known by. The project was received with avidity in the City. The entire amount required was subscribed within ten days; the Bill passed quickly through both Houses of Parliament and received the royal assent, and on July 27, 1694, the Great Seal was affixed to the Charter of Incor poration. The entire sum which the Company was to lend to the Government was paid into the Exchequer before the first instalment was due.
The Bank commenced business in Grocers' Hall, which it rented for the purpose (See Grocers' Hall], and there it continued till June 5, 1734, when it removed into premises of its own, part of the present edifice. The first Governor was Sir John Houblon, whose house and garden occupied the site of the present Bank, and the first DeputyGovernor was Michael Godfrey, author of "A short Account of the intended Bank of England. The number of persons employed was at first only fifty-four; there are now above nine hundred. During the great recoinage in 1696 a crisis occurred, and the Directors were compelled to suspend the payment of their notes. This, however, they got over, and, in order to prevent the like occurrence, the capital was increased from £1,200,000 to £2,201,171. Further increase of capital was made from time to time, the last being in 1816, when the total was raised to £14,553,000, at which it now stands. The Charter was renewed in 1695 until 1711; and subsequently at intervals, usually from 20 to 30 years apart. The great events in the history of the Bank were the run on the “Black Friday” of 1746, when so great was the pressure for cash payments for the notes that the Directors are said to have averted suspension by the device of gaining time by paying each note separately in shillings and sixpences; and one still more serious which occurred in 1797, when cash payments were suspended. On Saturday, February 26, 1797, a Gazette Extraordinary was published,
announcing the landing of some troops in Wales from a French frigate. The alarm on the subject of invasion was deep and universal, and the Bank, though possessing property, after all claims upon her had been deducted, to the amount of £15,513,690, had only £1,272,000 of cash and bullion in her coffers. There was every prospect of a violent run, and on the next day (Sunday) an Order of Council was issued, prohibiting the Directors from paying notes in cash until the sense of Parliament had been taken on the subject. The Parliament concurred with the Privy Council, and the Restriction Act, prohibiting the Bank from paying cash except for sums under twenty shillings, was passed at this time. Payments in specie were not fully resumed till 1821. Bank of England notes are now a legal tender in England, except at the Bank and its branches. The tendency of all recent legislation, in connection particularly with the renewals of the Bank Charter, has been to place the convertibility of the Bank of England note into gold on a perfectly secure basis; and this as regards all but those extraordinary circumstances against which provision can hardly be made, has probably been accomplished. In the panics of 1847 and 1857 it was deemed necessary by the Government to authorise the Directors to issue notes in excess of their Parliamentary powers, but this was mainly with a view to the restoration of credit and confidence in a great monetary crisis ; the stability of the Bank was in neither instance in peril.
The Bank building on the present site was designed by Mr. George Sampson, architect, and opened in June 1734. On January 1, 1735, the statue of William III. was set up. East and west wings, including the Bank parlour, a room 60 feet 6 inches x 30 feet x 22 feet high, were added by Sir Robert Taylor between the years 1766 and 1786. Sir John Soane, R.A., subsequently receiving the appointment of architect to the Bank, and the business of the Governor and Company increasing, much of Sampson's first building, and of the wings erected by Sir R. Taylor, were either altered or taken down, and the (one-storied) Bank as we now see it completed in 1827 by the same architect, who designed in 1795 the Rotunda, 57 feet diameter. The breastwork behind the balustrade was added in 1848 by Mr. C. R. Cockerell, R.A., who also effected many alterations and improvements in the interior, as the New Dividend Warrant Office, 1835, pulled down for the large Drawing Office, 1849, being 138 feet 6 inches x 42 feet 7 inches x 35 feet 6 inches, and 44 feet to the lantern. The plan has the merit of being well adapted for the purposes and business of the Bank. The corner towards Lothbury, a free adaptation of the Temple of the Sibyl at Tivoli, is much admired, especially by architects; as is also the Lothbury Court. The arch leading into the Bullion Yard is, as Mr. Fergusson points out, imitated from that of Constantine at Rome. The area, planted with trees and shrubs, and ornamented with a fountain, was formerly the churchyard of St. Christopher-le-Stocks.
The government of the Bank is vested in a Governor, Deputy
Governor, and twenty-four Directors, four of whom go out every year. The qualification for Governor is £4000 stock, Deputy-Governor £3000, and Director £2000. The Court-room, in which the Directors meet every Thursday at half-past eleven, is called the Bank Parlour. In the lobby of the parlour is a portrait of Abraham Newland, who rose from a baker's counter to be chief clerk of the Bank of England, and to die enormously rich. The number of clerks employed is over 900, and the salaries range from £ 50 to £1500 a year. An excellent library is provided for their use, and a medical officer looks after their health.
The Bullion Office is situated on the east side of the Bank, along Bartholomew Lane, in the basement story, and formed part of the original structure. It was afterwards enlarged by Sir Robert Taylor, and eventually altered to its present form by Sir John Soane. The office consists of—a public chamber for the transaction of business, a vault for public deposits, and a vault for the private stock of the Bank, The duties are discharged by a principal, a deputy-principal, clerk, assistant clerk, and porters. The public are admitted to a counter, separated from the rest of the apartments, but are not allowed to enter the bullion vaults except in company of a Director. The amount of bullion in the possession of the Bank of England constitutes, along. with their securities, the assets which they place against their liabilities, on account of circulation and deposits; and the difference (which is never allowed to fall below £3,000,000) between the several amounts is called the “Rest,” or guarantee fund, to provide for the contingency of possible losses. Gold is almost exclusively obtained by the Bank in the “bar” form; although no form of the deposit would be refused. A bar of gold is a small brick, weighing 16 lbs. worth about £800.
In the Bullion Office there is a remarkable piece of mechanism for checking the weights of bars as received from the Mint and other quarters. It was invented in 1877 by Mr. James Murdoch Napier, of Glasgow, and is the only one of the kind ever made. Though presenting the appearance of a somewhat ponderous pair of scales, its construction is so delicate that when loaded with a weight of 14 lbs. it nevertheless indicates the weight of a postage stamp.
By the Bank Act of 1844 all persons are entitled to demand from the Bank notes in exchange for gold bullion of standard fineness at the rate of £3:17:9 per ounce, the gold to be melted and assayed, it necessary, at the expense of the party tendering it.
The automatic balance invented by Mr. Cotton, a former Governor of the Bank, with glass weights, weighs at the rate of thirty-three sovereigns a minute. The machine presents the appearance of a square brass box, inside which, secure from currents of air, is the strikingly ingenious machinery which, on receiving the sovereigns, separates those which are of full weight from those which are light, and pushes them into their respective heavy and light receptacles. On
the top of the box is a small cylindrical hopper, which will hold about forty sovereigns, and from which the sovereigns pass one by one on to an exquisitely poised scale-plate. Two bolts are placed at right angles to each other, and on each side of the scale there is a part cut away so as to admit of the bolts striking so far into the area of the scale as to remove anything that would nearly fill it. These bolts are made to strike at different elevations, the lower striking a little before the upper one. If the sovereign be full weight, the scale, which turns to the tenth of a grain, remains down, and then the lower bolt, which strikes a little before the upper, knocks it off into the full weight box. If the sovereign be light, it rises up, and the first bolt strikes under it, and misses it, and the higher bolt then strikes and knocks it off into the light box. Ten of these machines are in operation, weighing and sorting between sixty and seventy thousand pieces daily.
The value of bank-notes in circulation, December 29, 1887, was £24,138,160. All notes issued are cancelled when paid in, even if returned to the Bank on the same day, or carried straight from the issue counter to the receiver's desk. On an average above 30,000 notes are thus cancelled daily. The cancelled notes are, however, preserved for a certain time, and a lady visitor is sometimes permitted to hold in her hand a million of money. According to an official memorandum :
The stock of paid notes for 5 years is about 68,000,000 in number, and they fill 13,000 boxes, which, if placed side by side, would reach 24 miles; if the notes were placed in a pile, they would reach to a height of 5 miles; or, if joined end to end, would form a ribbon 11,000 miles long : their superficial extent is rather less than that of Hyde Park : their original value was over £2,200,000,000 ; and their weight over 80 tons.
Previous to 1759 the Bank did not issue any notes for less than £20; £10 notes were then first issued. £5 notes were first issued in 1794, and £i and £2 notes (since discontinued) in 1797. The first forgery of a Bank-note occurred in 1758, when the person who forged it was convicted and executed. The total loss to the Bank from Fauntleroy's forgeries amounted to £360,000.
The whole of the printing for the Bank is done within the walls of the establishment, where also the postal orders and the notes for the Indian Government banks are produced. Although the operation of printing Bank of England notes is surrounded in the popular imagination with a certain amount of mystery, there is really very little to distinguish it from the ordinary well-known printing processes. Down to the year 1855 or thereabouts the notes were printed from copper plates, and a curious collection of old bank notes of various dates from 1699 downwards is exhibited in the printing department. Since the year above named they have been printed from a raised surface like ordinary type, the consecutive number being impressed whilst the note, or rather pair of notes, for they are printed in twos, is passing through the machine. The presses, which were designed by Mr. M‘Pherson, one
of the officials of the Bank, are admirably adapted for their purpose, and are characterised by great ingenuity. A counting apparatus is attached to each machine, and as an additional precaution each pair of notes as printed is delivered under the eye of an experienced officer, whose duty it is to see that the machine is working properly.
By the Bank Act of 1844 the issue of notes on securities is not permitted to exceed 14,000,000.
The bullion in the Bank in the ten years—1876-1887-ranged from £17,883,000 in February 1882, to £32,190,000 in April 1879. The annual average in 1886 was £21,018,000.
The Bank acts as the agent of the Government in all the business transactions connected with the National Debt, receives and registers transfers of stock, and pays dividends quarterly on the several kinds of stock. The stock or annuities upon which the public dividends are payable amounts to about £774,000,000; the yearly dividends payable thereupon to about £25,000,000; and the yearly payment to the Governor and Company of the Bank for the charges of management, to £136,000. The Bank is also the State Banker. The balances of money belonging to the State are deposited in the Bank; the receivers-general make their payments on account into the Bank, and the Bank makes payments to the order of the Government in the same way as a private banker for a customer. The Bank further acts as agent to the Government in facilitating the supply of gold and silver coins to the public, which it does chiefly through the London and Provincial bankers.
The Bank of England also acts as an ordinary banking-house, and carries on every class of banking business for private customers. It receives deposits and pays cheques, receives, pays, and discounts bills of exchange, takes charge of Exchequer bills, receives dividends and the like. All the London bankers who are members of the Clearing House have accounts at the Bank of England. [See Bankers' Clearing House.]
To view the interior of the Bank, it is necessary to obtain a special order from the Governor or Deputy-Governor; but strangers may walk through the public rooms any week-day (except holidays), between the hours of 9 and 3. Enter by the vestibule, Bartholomew Lane, go through the Rotunda, etc., and pass out by the doorway opposite the portico of the Royal Exchange, noticing as you cross the Paved Court, before leaving, the very pretty Garden Court (on the right of the Private Drawing Office), already mentioned as having been the old burial-ground of St. Christopher-leStocks.
Bank of England, WESTERN BRANCH. This bank occupies the building in Burlington Gardens known as UXBRIDGE HOUSE. On the death of the Marquis of Anglesey in 1854 the Directors of the Bank of England bought the house and opened here a western branch. A