Considering the world-wide reputation of the Bank of England, it is
remarkable how little is generally known as to its internal working.
Standing in the very heart of the largest city in the world—a central
landmark of the great metropolis—even the busy Londoners around it
have, as a rule, only the vaguest possible knowledge of what goes on
within its walls. In truth, its functions are so many, its staff so
enormous, and their duties so varied, that many even of those who have
spent their lives in its service will tell you that, beyond their own
immediate departments, they know but little of its inner life. Its mere
history, as recorded by Mr. Francis, fills two octavo volumes. It will
be readily understood, therefore, that it would be idle to attempt
anything like a complete description of it within the compass of a
magazine article. There are, however, many points about the Bank and
it’s working which are extremely curious and interesting, and some of
these we propose briefly to describe.
The Bank of England originated in the brain of William Paterson, a
Scotchman—better known, perhaps, as the organiser and leader of
the ill-fated Darien expedition. It commenced business in 1694, its
charter—which was in the first instance granted for eleven years
only—bearing date the 27th July of that year. This charter has been
from time to time renewed, the last renewal having taken place in
1844. The original capital of the Bank was but one million two hundred
thousand pounds, and it carried on its business in a single room in
Mercer’s Hall, with a staff of fifty-four clerks. From so small a
beginning has grown the present gigantic establishment, which covers
nearly three acres, and employs in town and country nearly nine hundred
officials. Upon the latest renewal of its charter, the Bank was divided
into two distinct departments, the Issue and the Banking. In addition
to these, the Bank has the management of the national debt. The books
of the various government funds are here kept; here all transfers are
made, and here all dividends are paid.
In the Banking department is transacted the ordinary business of
bankers. Here other banks keep their “reserve,” and hence draw their
supplies as they require them. The Issue department is intrusted
with the circulation of the notes of the Bank, which is regulated as
follows. The Bank in 1844 was a creditor of the government to the
extent of rather over eleven million pounds, and to this amount and
four million pounds beyond, for which there is in other ways sufficient
security, the Bank is allowed to issue notes without having gold in
reserve to meet them. Beyond these fifteen million pounds, every note
issued represents gold actually in the coffers of the Bank. The total
value of the notes in the hands of the public at one time averages
about twenty-five million pounds. To these must be added other notes
to a very large amount in the hands of the Banking department, which
deposits the bulk of its reserve of gold in the Issue department,
accepting notes in exchange.
All Bank of England notes are printed in the Bank itself. Six
printing-presses are in constant operation, the same machine printing
first the particulars of value, signature, &c., and then the number
of the note in consecutive order. The paper used is of very peculiar
texture, being at once thin, tough, and crisp; and the combination of
these qualities, together with the peculiarities of the watermark,
which is distributed over the whole surface of the paper, forms one
of the principal guarantees against imitation. The paper, which is
manufactured exclusively at one particular mill, is made in oblong
slips, allowing just enough space for the printing of two notes side by
side. The edges of the paper are left untrimmed, but, after printing,
the two notes are divided by a straight cut between them. This accounts
for the fact, which many of our readers will doubtless have noticed,
that only one edge of a Bank-note is smooth, the other three being
comparatively ragged. The printing-presses are so constructed as to
register each note printed, so that the machine itself indicates
automatically how many notes have passed through it. The average
production of notes is fifty thousand a day, and about the same number
are presented in the same time for payment.
No note is ever issued a second time. When once it finds its way back
to the Bank to be exchanged for coin, it is immediately cancelled; and
the reader will probably be surprised to hear that the average life
of a Bank-note, or the time during which it is in actual circulation,
is not more than five or six days. The returned notes, averaging, as
we have stated, about fifty thousand a day, and representing, one day
with another, about one million pounds in value, are brought into what
is known as the Accountant’s Sorting Office. Here they are examined by
inspectors, who reject any which may be found to be counterfeit. In
such a case, the paying-in bank is debited with the amount. The notes
come in from various banks in parcels, each parcel accompanied by a
memorandum stating the number and amount of the notes contained in it.
This memorandum is marked with a certain number, and then each note in
the parcel is stamped to correspond, the stamping-machine automatically
registering how many are stamped, and consequently drawing immediate
attention to any deficiency in the number of notes as compared with
that stated in the memorandum. This done, the notes are sorted
according to number and date, and after being defaced by punching out
the letters indicating value, and tearing off the corner bearing the
signature, are passed on to the “Bank note Library,” where they are
packed in boxes, and preserved for possible future reference during
a period of five years. There are one hundred and twenty clerks
employed in this one department; and so perfect is the system of
registration, that if the number of a returned note be known, the head
of this department, by referring to his books, can ascertain in a few
minutes the date when and the banker through whom it was presented;
and if within the period of five years, can produce the note itself
for inspection. As to the “number” of a Bank-note, by the way, there
is sometimes a little misconception, many people imagining that by
quoting the bare figures on the face of a note they have done all that
is requisite for its identification. This is not the case. Bank-notes
are not numbered consecutively _ad infinitum_, but in series of one
to one hundred thousand, the different series being distinguished as
between themselves by the date, which appears in full in the body of
the note, and is further indicated, to the initiated, by the letter and
numerals prefixed to the actual number. Thus 25/0 90758 on the face of
a note indicates that the note in question is No. 90758 of the series
printed on May 21, 1883, which date appears in full in the body of
the note, 69/N in like manner indicates that the note forms part of a
series printed on February 19, 1883. In “taking the number” of a note,
therefore, either this prefix or the full date, as stated in the body
of the note, should always be included.
The “Library” of cancelled notes—not to be confounded with the Bank
Library proper—is situated in the Bank vaults, and we are indebted to
the courtesy of the Bank-note Librarian for the following curious and
interesting statistics respecting his stock. The stock of paid notes
for five years—the period during which, as before stated, the notes
are preserved for reference—is about seventy-seven million seven
hundred and forty-five thousand in number. They fill thirteen thousand
four hundred boxes, about eighteen inches long, ten wide, and nine
deep. If the notes could be placed in a pile one upon another, they
would reach to a height of five and two-third miles. Joined end to end
they would form a ribbon twelve thousand four hundred and fifty-five
miles long, or half way round the globe; if laid so as to form a
carpet, they would very nearly cover Hyde Park. Their original value is
somewhat over seventeen hundred and fifty millions, and their weight
is about ninety-one tons. The immense extent of space necessary to
accommodate such a mass in the Bank vaults may be imagined. The place,
with its piles on piles of boxes reaching far away into dim distance,
looks like some gigantic wine-cellar or bonded warehouse.
As each day adds, as we have seen, about fifty thousand notes to the
number, it is necessary to find some means of destroying those which
have passed their allotted term of preservation. This is done by fire,
about four hundred thousand notes being burnt at one time, in a furnace
specially constructed for that purpose. Formerly, from some peculiarity
in the ink with which the notes were printed, the cremated notes burnt
into a solid blue clinker; but the composition of the ink has been
altered, and the paper now burns to a fine gray ash. The fumes of the
burning paper are extremely dense and pungent; and to prevent any
nuisance arising from this cause, the process of cremation is carried
out at dead of night, when the city is comparatively deserted. Further,
in order to mitigate the density of the fumes, they are made to ascend
through a shower of falling water, the chimney shaft being fitted with
a special shower-bath arrangement for this purpose.
Passing away from the necropolis of dead and buried notes, we visit the
Treasury, whence they originally issued. This is a quiet-looking room,
scarcely more imposing in appearance than the butler’s pantry in a
West-end mansion, but the modest-looking cupboards with which its walls
are lined, are gorged with hidden treasure. The possible value of the
contents of this room may be imagined from the fact that a million
of money, in notes of one thousand pounds, forms a packet only three
inches thick. The writer has had the privilege of holding such a
parcel in his hand, and for a quarter of a minute imagining himself a
millionaire—with an income of over thirty thousand per annum for life!
The same amount might occupy even less space than the above, for Mr.
Francis tells a story of a lost note for thirty thousand pounds, which,
turning up after the lapse of many years, was paid by the Bank _twice
over_! We are informed that notes of even a higher value than this have
on occasion been printed, but the highest denomination now issued is
one thousand pounds.
In this department is kept a portion of the Bank’s stock of golden
coin, in bags of one thousand pounds each. This amount does not require
a very large bag for its accommodation, but its weight is considerable,
amounting to two hundred and fifty-eight ounces twenty pennyweights, so
that a million in gold would weigh some tons. In another room of this
department—the Weighing Office—are seen the machines for detecting
light coin. These machines are marvels of ingenious mechanism. Three or
four hundred sovereigns are laid in a long brass scoop or semi-tube, of
such a diameter as to admit them comfortably, and self-regulating to
such an incline that the coins gradually slide down by their own weight
on to one plate of a little balance placed at its lower extremity.
Across the face of this plate two little bolts make alternate thrusts,
one to the right, one to the left, but at slightly different levels.
If the coin be of full weight, the balance is held in equipoise, and
the right-hand bolt making its thrust, pushes it off the plate and down
an adjacent tube into the receptacle for full-weight coin. If, on the
other hand, the coin is ever so little “light,” the balance naturally
rises with it. The right-hand bolt makes its thrust as before, but this
time passes harmlessly _beneath_ the coin. Then comes the thrust of
the left-hand bolt, which, as we have said, is fixed at a fractionally
higher level, and pushes the coin down a tube on the opposite side,
through which it falls into the light-coin receptacle. The coins thus
condemned are afterwards dropped into another machine, which defaces
them by a cut half-way across their diameter, at the rate of two
hundred a minute. The weighing machines, of which there are sixteen,
are actuated by a small atmospheric engine in one corner of the room,
the only manual assistance required being to keep them supplied with
coins. It is said that sixty thousand sovereigns and half-sovereigns
can be weighed here in a single day. The weighing-machine in question
is the invention of Mr. Cotton, a former governor of the Bank,
and among scientific men is regarded as one of the most striking
achievements of practical mechanics.
In the Bullion department we find another weighing-machine of a
different character, but in its way equally remarkable. It is the
first of its kind, having been designed specially for the Bank by Mr.
James Murdoch Napier, by whom it has been patented. It is used for the
purpose of weighing bullion, which is purchased in this department.
Gold is brought in in bars of about eight inches long, three wide, and
one inch thick. A bar of gold of these dimensions will weigh about two
hundred ounces, and is worth, if pure, about eight hundred pounds.
Each bar when brought in is accompanied by a memorandum of its weight.
The question of quality is determined by the process of assaying; the
weight is checked by means of the weighing-machine we have referred to.
This takes the form of an extremely massive pair of scales, working
on a beam of immense strength and solidity, and is based, so as to
be absolutely rigid, on a solid bed of concrete. The whole stands
about six feet high by three wide, and is inclosed in an air-tight
plate-glass case, a sash in which is raised when it is desired to use
the machine. The two sides of the scale are each kept permanently
loaded, the one with a single weight of three hundred and sixty ounces,
the other with a number of weights of various sizes to the same amount.
When it is desired to test the weight of a bar of gold, weights to the
amount stated in the corresponding memorandum, _less half an ounce_,
are removed from the latter scale, and the bar of gold substituted in
their place. Up to this point the beam of the scale is kept perfectly
horizontal, being maintained in that position by a mechanical break;
but now a stud is pressed, and by means of delicate machinery, actuated
by water-power, the beam is released. If the weight of the bar has been
correctly stated in the memorandum, the scale which holds it should be
exactly half an ounce in excess. This or any less excess of weight over
the three hundred and sixty ounces in the opposite scale is instantly
registered by the machine, a pointer travelling round a dial until it
indicates the proper amount. The function of the machine, however, is
limited to weighing half an ounce only. If the discrepancy between the
two scales as loaded is greater than this, or if on the other hand the
bar of gold is more than half an ounce less than the amount stated in
the memorandum, an electric bell rings by way of warning, the pointer
travels right round the dial, and returns to zero. So delicate is the
adjustment, that the weight of half a penny postage stamp—somewhat
less than half a grain—will set the hand in motion and be recorded on
the dial.
The stock of gold in the bullion vault varies from one to three million
pounds stirling. The bars are laid side by side on small flat trucks or
barrows carrying one hundred bars each. In a glass case in this vault
is seen a portion of the war indemnity paid by King Coffee of Ashantee,
consisting of gold ornaments, a little short of standard fineness.
One of the first reflections that strike an outsider permitted to
inspect the repository of so much treasure is, “Can all this wealth
be safe?” These heaps of precious metal, these piles of still more
precious notes, are handled by the officials in such an easy-going,
matter-of-course way, that one would almost fancy a few thousand would
scarcely be missed; and that a dishonest person had only to walk in
and help himself to as many sovereigns or hundred pound notes as his
pockets could accommodate. Such, however, is very far from being the
case. The safeguards against robbery, either by force or fraud, are
many and elaborate. At night the Bank is guarded at all accessible
points by an ample military force, which would no doubt give a good
account of any intruder rash enough to attempt to gain an entrance.
In the event of attack from without, there are sliding galleries which
can be thrust out from the roof, and which would enable a body of
sharpshooters to rake the streets in all directions.
Few people are aware that the Bank of England contains within its walls
a graveyard, but such is nevertheless the fact. The Gordon riots in
1780, during which the Bank was attacked by a mob, called attention to
the necessity for strengthening its defences. Competent authorities
advised that an adjoining church, rejoicing in the appropriate name of
St. Christopher-le-Stocks, was in a military sense a source of danger,
and accordingly an Act of Parliament was passed to enable the directors
to purchase the church and its appurtenances. The old churchyard,
tastefully laid out, now forms what is known as the Bank “garden,” the
handsome “Court Room” or “Bank Parlor” abutting on one of its sides.
There is a magnificent lime-tree, one of the largest in London, in
the centre of the garden, and tradition states that under this tree
a former clerk of the Bank, _eight feet high_, lies buried. With
this last, though not least of the curiosities of the Bank, we must
bring the present article to a close. We had intended briefly to
have referred to sundry eventful pages of its history; but these we
are compelled, by considerations of space, to reserve for a future
paper.—_Chambers’s Journal._