CHAPTER XL.

THE BANK OF ENGLAND.

The Jews and the Lombards--The Goldsmiths the first London

Bankers--William Paterson, Founder of the Bank of England--Difficult

Parturition of the Bank Bill--Whig Principles of the Bank of

England--The Great Company described by Addison--A Crisis at the

Bank--Effects of a Silver Re-coinage--Paterson quits the Bank of

England--The Ministry resolves that it shall be enlarged--The Credit

of the Bank shaken--The Whigs to the Rescue--Effects of the

Sacheverell Riots--The South Sea Company--The Cost of a New

Charter--Forged Bank Notes--The Foundation of the "Three per Cent.

Consols"--Anecdotes relating to the Bank of England and Bank

Notes--Description of the Building--Statue of William III.--Bank

Clearing House--Dividend Day at the Bank.

The English Jews, that eminently commercial race, were, as we have shown

in our chapter on Old Jewry, our first bankers and usurers. To them, in

immediate succession, followed the enterprising Lombards, a term

including the merchants and goldsmiths of Genoa, Florence, and Venice.

Utterly blind to all sense of true liberty and justice, the

strong-handed king seems to have resolved to squeeze and crush them, as

he had squeezed and crushed their unfortunate predecessors. They were

rich and they were strangers--that was enough for a king who wanted

money badly. At one fell swoop Edward seized the Lombards' property and

estates. Their debtors naturally approved of the king's summary measure.

But the Lombards grew and flourished, like the trampled camomile, and in

the fifteenth century advanced a loan to the state on the security of

the Customs. The Steelyard merchants also advanced loans to our kings,

and were always found to be available for national emergencies, and so

were the Merchants of the Staple, the Mercers' Company, the Merchant

Adventurers, and the traders of Flanders.

Up to a late period in the reign of Charles I. the London merchants seem

to have deposited their surplus cash in the Mint, the business of which

was carried on in the Tower. But when Charles I., in an agony of

impecuniosity, seized like a robber the L200,000 there deposited,

calling it a loan, the London goldsmiths, who ever since 1386 had been

always more or less bankers, now monopolised the whole banking business.

Some merchants, distrustful of the goldsmiths in these stormy times,

entrusted their money to their clerks and apprentices, who too often

cried, "Boot, saddle and horse, and away!" and at once started with

their spoil to join Rupert and his pillaging Cavaliers. About 1645 the

citizens returned almost entirely to the goldsmiths, who now gave

interest for money placed in their care, bought coins, and sold plate.

The Company was not particular. The Parliament, out of plate and old

coin, had coined gold, and seven millions of half-crowns. The goldsmiths

culled out the heavier pieces, melted them down, and exported them. The

merchants' clerks, to whom their masters' ready cash was still sometimes

entrusted, actually had frequently the brazen impudence to lend money to

the goldsmiths, at fourpence per cent. per diem; so that the merchants

were often actually lent their own money, and had to pay for the use of

it. The goldsmiths also began now to receive rent and allow interest for

it. They gave receipts for the sums they received, and these receipts

were to all intents and purposes marketable as bank-notes.

Grown rich by these means, the goldsmiths were often able to help

Cromwell with money in advance on the revenues, a patriotic act for

which we may be sure they took good care not to suffer. When the great

national disgrace occurred--the Dutch sailed up the Medway and burned

some of our ships--there was a run upon the goldsmiths, but they stood

firm, and met all demands. The infamous seizure by Charles II. of

L1,300,000, deposited by the London goldsmiths in the Exchequer, all but

ruined these too confiding men, but clamour and pressure compelled the

royal embezzler to at last pay six per cent. on the sum appropriated. In

the last year of William's reign, interest was granted on the whole sum

at three per cent., and the debt still remains undischarged. At last a

Bank of England, which had been talked about and wished for by

commercial men ever since the year 1678, was actually started, and came

into operation.

That great financial genius, William Paterson, the founder of the Bank

of England, was born in 1658, of a good family, at Lochnaber, in

Dumfriesshire. He is supposed, in early life, to have preached among the

persecuted Covenanters. He lived a good deal in Holland, and is believed

to have been a wealthy merchant in New Providence (the Bahamas), and

seems to have shared in Sir William Phipps' successful undertaking of

raising a Spanish galleon with L300,000 worth of sunken treasure. It is

absurdly stated that he was at one time a buccaneer, and so gained a

knowledge of Darien and the ports of the Spanish main. That he knew and

obtained information from Captains Sharpe, Dampier, Wafer, and Sir

Henry Morgan (the taker of Panama), is probable. He worked zealously for

the Restoration of 1688, and he was the founder of the Darien scheme. He

advocated the union of Scotland, and the establishment of a Board of

Trade.

The project of a Bank of England seems to have been often discussed

during the Commonwealth, and was seriously proposed at the meeting of

the First Council of Trade at Mercers' Hall after the Restoration.

Paterson has himself described the first starting of the Bank, in his

"Proceedings at the Imaginary Wednesday's Club," 1717. The first

proposition of a Bank of England was made in July, 1691, when the

Government had contracted L3,000,000 of debt in three years, and the

Ministers even stooped, hat in hand, to borrow L100,000 or L200,000 at a

time of the Common Council of London, on the first payment of the

land-tax, and all payable with the year, the common councillors going

round and soliciting from house to house. The first project was badly

received, as people expected an immediate peace, and disliked a scheme

which had come from Holland--"they had too many Dutch things already."

They also doubted the stability of William's Government. The money, at

this time, was terribly debased, and the national debt increasing

yearly. The ministers preferred ready money by annuities for ninety-nine

years, and by a lottery. At last they ventured to try the Bank, on the

express condition that if a moiety, L1,200,000, was not collected by

August, 1699, there should be no Bank, and the whole L1,200,000 should

be struck in halves for the managers to dispose of at their pleasure. So

great was the opposition, that the very night before, some City men

wagered deeply that one-third of the L1,200,000 would never be

subscribed. Nevertheless, the next day L346,000, with a fourth paid in

at once, was subscribed, and the remainder in a few days after. The

whole subscription was completed in ten days, and paid into the

Exchequer in rather more than ten weeks. Paterson expressly tells us

that the Bank Act would have been quashed in the Privy Council but for

Queen Mary, who, following the wish of her husband, expressed firmly in

a letter from Flanders, pressed the commission forward, after a six

hours' sitting.

The Bank Bill, timidly brought forward, purported only to impose a new

duty on tonnage, for the benefit of such loyal persons as should advance

money towards carrying on the war. The plan was for the Government to

borrow L1,200,000, at the modest interest of eight per cent. To

encourage capitalists, the subscribers were to be incorporated by the

name of the Governor and Company of the Bank of England. Both Tories and

Whigs broke into a fury at the scheme. The goldsmiths and pawnbrokers,

says Macaulay, set up a howl of rage. The Tories declared that banks

were republican institutions; the Whigs predicted ruin and despotism.

The whole wealth of the nation would be in the hands of the "Tonnage

Bank," and the Bank would be in the hands of the Sovereign. It was worse

than the Star Chamber, worse than Oliver's 50,000 soldiers. The power of

the purse would be transferred from the House of Commons to the Governor

and Directors of the new Company. Bending to this last objection, a

clause was inserted, inhibiting the Bank from advancing money to the

House without authority from Parliament. Every infraction of this rule

was to be punished by a forfeiture of three times the sum advanced,

without the king having power to remit the penalty. Charles Montague, an

able man, afterwards First Lord of the Treasury, carried the bill

through the House; and Michael Godfrey (the brother of the celebrated

Sir Edmondbury Godfrey, supposed to have been murdered by the Papists),

an upright merchant and a zealous Whig, propitiated the City. In the

Lords (always the more prejudiced and conservative body than the

Commons) the bill met with great opposition. Some noblemen imagined that

the Bank was intended to exalt the moneyed interest and debase the

landed interest; and others imagined the bill was intended to enrich

usurers, who would prefer banking their money to lending it on mortgage.

"Something was said," says Macaulay, "about the danger of setting up a

gigantic corporation, which might soon give laws to the King and the

three estates of the realm." Eventually the Lords, afraid to leave the

King without money, passed the bill. During several generations the Bank

of England was emphatically a Whig body. The Stuarts would at once have

repudiated the debt, and the Bank of England, knowing that their return

implied ruin, remained loyal to William, Anne, and George. "It is hardly

too much to say," writes Macaulay, "that during many years the weight of

the Bank, which was constantly in the scale of the Whigs, almost

counterbalanced the weight of the Church, which was as constantly in the

scale of the Tories." "Seventeen years after the passing of the Tonnage

Bill," says the same eminent writer, to show the reliance of the Whigs

on the Bank of England, "Addison, in one of his most ingenious and

graceful little allegories, described the situation of the great company

through which the immense wealth of London was constantly circulating.

He saw Public Credit on her throne in Grocers' Hall, the Great Charter

over her head, the Act of Settlement full in her view. Her touch turned

everything to gold. Behind her seat bags filled with coin were piled up

to the ceiling. On her right and on her left the floor was hidden by

pyramids of guineas. On a sudden the door flies open, the Pretender

rushes in, a sponge in one hand, in the other a sword, which he shakes

at the Act of Settlement. The beautiful Queen sinks down fainting; the

spell by which she has turned all things around her into treasure is

broken; the money-bags shrink like pricked bladders; the piles of gold

pieces are turned into bundles of rags, or fagots of wooden tallies."

In 1696 (very soon after its birth) the Bank experienced a crisis. There

was a want of money in England. The clipped silver had been called in,

and the new money was not ready. Even rich people were living on credit,

and issued promissory notes. The stock of the Bank of England had gone

rapidly down from 110 to 83. The goldsmiths, who detested the

corporation that had broken in on their system of private banking, now

tried to destroy the new company. They plotted, and on the same day they

crowded to Grocers' Hall, where the Bank was located from 1694 to 1734,

and insisted on immediate payment--one goldsmith alone demanding

L30,000. The directors paid all their honest creditors, but refused to

cash the goldsmiths' notes, and left them their remedy in Westminster

Hall. The goldsmiths triumphed in scurrilous pasquinades entitled, "The

Last Will and Testament," "The Epitaph," "The Inquest on the Bank of

England." The directors, finding it impossible to procure silver enough

to pay every claim, had recourse to an expedient. They made a call of 20

per cent. on the proprietors, and thus raised a sum enabling them to pay

every applicant 15 per cent. in milled money on what was due to him, and

they returned him his note, after making a minute upon it that part had

been paid. A few notes thus marked, says Macaulay, are still preserved

among the archives of the Bank, as memorials of that terrible year. The

alternations were frightful. The discount, at one time 6 per cent., was

presently 24. A L10 note, taken for more than L9 in the morning, was

before night worth less than L8.

Paterson attributes this danger of the Bank to bad and partial payments,

the giving and allowing exorbitant interest, high premiums and

discounts, contracting dear and bad bargains; the general debasing and

corrupting of coin, and such like, by which means things were brought to

such a pass that even 8 per cent. interest on the land-tax, although

payable within the year, would not answer. Guineas, he says, on a sudden

rose to 30s. per piece, or more; all currency of other money was

stopped, hardly any had wherewith to pay; public securities sank to

about a moiety of their original values, and buyers were hard to be

found even at those prices. No man knew what he was worth; the course of

trade and correspondence almost universally stopped; the poorer sort of

people were plunged into irrepressible distress, and as it were left

perishing, whilst even the richer had hardly wherewith to go to market

for obtaining the common conveniences of life.

The King, in Flanders, was in great want of money. The Land Bank could

not do much. The Bank, at last, generously offered to advance L200,000

in gold and silver to meet the King's necessities. Sir Isaac Newton, the

new Master of the Mint, hastened on the re-coinage. Several of the

ministers, immediately after the Bank meeting (over which Sir John

Houblon presided), purchased stock, as a proof of their gratitude to the

body which had rendered so great a service to the State.

The diminution of the old hammered money continued to increase, and

public credit began to be put to a stand. The opposers of Paterson

wished to alter the denomination of the money, so that 9d. of silver

should pass for 1s., but at last agreed to let sterling silver pass at

5s. 2d. an ounce, being the equivalent of the milled money. The loss of

the re-coinage to the nation was about L3,000,000. Paterson, who was one

of the first Directors of the Bank of England, upon a qualification of

L2,000 stock, disagreed with his colleagues on the question of the

Bank's legitimate operations, and sold out in 1695. In 1701, Paterson

says, after the peace of Ryswick, he had an audience of King William,

and drew his attention to the importance of three great measures--the

union with Scotland, the seizing the principal Spanish ports in the West

Indies, and the holding a commission of inquiry into the conduct of

those who had mismanaged the King's affairs during his absence in

Flanders. Paterson died in 1719, on the eve of the fatal South Sea

Bubble.

When the notes of the Bank were at 20 per cent. discount, the Government

(says Francis) empowered the corporation to add L1,001,171 10s. to their

original stock, and public faith was restored by four-fifths of the

subscriptions being received in tallies and orders, and one-fifth in

bank-notes at their full value, although both were at a heavy discount

in the market.

[Illustration: THE OLD BANK, LOOKING FROM THE MANSION HOUSE. (_From a

Print of 1730._)]

The past services of the Bank were not forgotten. The Ministry resolved

that it should be enlarged by new subscriptions; that provision should

be made for paying the principal of the tallies subscribed in the Bank;

that 8 per cent. should be allowed on all such tallies, to meet which a

duty on salt was imposed; that the charter should be prolonged to

August, 1710; that before the beginning of the new subscriptions the old

capital should be made up to each member 100 per cent.; and what might

exceed that value should be divided among the new members; that the Bank

might circulate additional notes to the amount subscribed, provided they

were payable on demand, and in default they were to be paid by the

Exchequer out of the first money due to the Bank; that no other bank

should be allowed by Act of Parliament during the continuance of the

Bank of England; that it should be exempt from all tax or imposition;

and that no contract made for any Bank stock to be bought or sold should

be valid unless registered in the Bank books, and transferred within

fourteen days. It was also enacted that not above two-thirds of the

directors should be re-elected in the succeeding year. These vigorous

measures were thoroughly successful.

The charter was at the same time extended to 1710, and not even then to

be withdrawn, unless Government paid the full debt. Forgery of the

Company's seal, notes, or bills was made felony without benefit of

clergy. Sir Gilbert Heathcote, one of the Bank Directors, gained L60,000

by this scheme. The Bank is said to have offered the King at this time

the loan of a million without interest for twenty-one years, if the

Government would extend the charter for that time. Bank stock, given to

the proprietors in exchange for tallies at 50 per cent. discount, rose

to 112. The Bank had lowered the interest of money. As early as 1697 it

had proposed to have branch Banks in every city and market town of

England.

[Illustration: OLD PATCH. (_See page 459._)]

In 1700-1704, the conquests of Louis XIV. alarmed England, and shook the

credit of the Bank. In the latter year the Bank Directors were once more

obliged to issue sealed bills bearing interest for a large sum, in order

to keep up their credit. In 1707 the fears of an invasion threatened by

the Pretender brought down stocks 14 or 15 per cent. The goldsmiths then

gathered up Bank bills, and tried to press the Directors. Hoare and

Child both joined in the attack, and the latter pretended to refuse the

bills of the Bank. The loyal Whigs, however, instead of withdrawing

their deposits, helped it with all their available cash. The Dukes of

Marlborough, Newcastle, and Somerset, with others of the nobility,

hurried to the Bank with their coaches brimming with heavy bags of long

hoarded guineas. A private individual, who had but L500, carried it to

the Bank; and on the story being told to the Queen, she sent him L100,

with an obligation on the Treasury to repay the whole L500. Lord

Godolphin, seeing the crisis, astutely persuaded Queen Anne to allow the

Bank for six months an interest of 6 per cent. on their sealed bills.

This, and a call of 20 per cent. on the proprietors, saved the credit of

the Bank.

In 1708 the charter was extended to 1732. This concession was again

vehemently opposed by the enemies of the Bank. Nathaniel Tench, who

wrote a reply for the directors, proved that the Bank had never bought

land, or monopolised any other commodity, and had, on the contrary,

increased and encouraged trade. He asserted that they had never

influenced an elector, and had been the chief cause of lowering the

interest of money, even in war time. The Government wishing to circulate

Exchequer bills, the Bank raised their capital by new subscriptions to

L5,000,000. The new subscriptions were raised in a few hours, and nearly

one million more could have been obtained on the same day.

During the absurd Tory riots of 1709 the Bank was in considerable

danger. A vain, mischievous High Church clergyman named Sacheverell had

been foolishly prosecuted for attacking the Whig Government, and calling

the Lord Treasurer Godolphin "Volpone" (a character in a celebrated play

written by Ben Jonson). A guard of butchers escorted the firebrand to

his trial at Westminster Hall, at which Queen Anne was present. Riots

then broke out, and the High Church mob sacked several Dissenting

chapels, burning the pews and pulpits in Lincoln's Inn Fields, Holborn,

and elsewhere, and even threatened to use a Dissenting preacher as a

holocaust. The rioters at last threatened the Bank. The Queen at once

sent her guards, horse and foot, to the City, and left herself

unprotected. "Am I to preach or fight?" was the first question of

Captain Horsey, who led the cavalry. But the question needed no answer,

for the rioters at once dispersed.

In 1713 the Bank charter was renewed until 1742. The great catastrophe

of the South Sea Bubble in 1720, which we shall sketch fully in another

chapter, did not injure the Bank. The directors generously tried to save

the fallen company, but (as might have been expected) utterly failed.

With prudence, perhaps, gained from this national cataclysm, the Bank,

in 1722, commenced keeping a reserve--the "rest"--that rock on which

unshakable credit has ever since been proudly built. In 1728 no notes

were issued by the Bank for less than L20, and as part of the note only

was printed the clerk's pen supplied the remainder.

In 1742, when the charter was renewed till 1762, the loan of L1,600,000,

without interest, was required by the Government for the favour. By the

act of renewal forging bank-notes, &c., was declared punishable with

death.

The Bank was at this time a small and modest building, surrounded by

houses, and almost invisible to passers by. There was a church called

Christopher le Stocks, afterwards pulled down for fear it should ever be

occupied by rioters, and three taverns, too, on the south side, in

Bartholomew Lane, just where the chief entrance now is, and about

fifteen or twenty private buildings. A few years later visitors used to

be shown in the bullion office the original bank chest, no larger than a

seamen's, and the original shelves and cases for the books of business,

to show the extraordinary rapidity with which the institution had struck

root and borne fruit.

In 1746, the capital on which the Bank stock proprietors divided

amounted to L10,780,000. It had been more than octupled in little more

than half a century. The year 1752 is remarkable as that in which the

foundation of the present "Three per Cent. Consols" was laid. "The

stock," says Francis, "was thus termed from the balance of some

annuities granted by George I. being consolidated into one fund with a

Three per Cent. stock formed in 1731."

In 1759 bank-notes of a smaller value than L20 were first circulated. In

1764 the Bank charter was renewed on a gift of L110,000, and an advance

of one million for Exchequer bills for two years, at 3 per cent.

interest. It was at the same time made felony without benefit of clergy

to forge powers of attorney for receiving dividends, transferring or

selling stock. The Government, which had won twelve millions before the

Seven Years' War, annihilated the navy of France, and wrested India from

the French sway, was glad to recruit its treasury by so profitable a

bargain with the Bank. In 1773 an Act was passed making it punishable

with death to copy the water-mark of the bank-note paper. By an Act of

1775 notes of a less amount than twenty shillings were prohibited, and

two years afterwards the amount was limited to L5.

During the formidable riots of 1780 the Bank was in considerable danger.

In one night there rose the flames of six-and-thirty fires. The Catholic

chapels and the tallow-chandlers' shops were universally destroyed;

Newgate was sacked and burned. The mob, half thieves, at last decided to

march upon the Bank, but precautions had been taken there. The courts

and roof of the building were defended by armed clerks and volunteers,

and there were soldiers ready outside. The old pewter inkstands had been

melted into bullets. The rioters made two rushes; the first was checked

by a volley from the soldiers; at the second, which was less violent,

Wilkes rushed out, and with his own hand dragged in some of the

ringleaders. Leaving several killed and many wounded, the discomfited

mob at last retired.

In 1781, the Bank charter having nearly expired, Lord North proposed a

renewal for twenty-five years, the terms being a loan of two millions

for three years, at 3 per cent., to pay off the navy debt. In 1783 the

notes and bills of the Bank were exempted from the operation of the

Stamp Act, on consideration of an annual payment of L12,000. The

Government allowance of L562 10s. per million for managing the National

Debt was reduced at this time to L450. Five years later our debt was

calculated at 242 millions, which, taken in L10 notes, would weigh, it

was curiously calculated, 47,265 lbs.

It was about 1784 that the first attempts at forgery on a tremendous

scale were discovered by the Bank. A rogue of genius, generally known,

from his favourite disguise, as "Old Patch," by a long series of

forgeries secured a sum of more than L200,000. He was the son of an old

clothes' man in Monmouth Street; and had been a lottery-office keeper,

stockbroker, and gambler. At one time he was a partner with Foote, the

celebrated comedian, in a brewery. He made his own ink, manufactured his

own paper, and with a private press worked off his own notes. His

mistress was his only confidante. His disguises were numerous and

perfect. His servants or boys, hired from the street, always presented

the forged notes. When seized and thrown into prison, Old Patch hung

himself in his cell.

During the wars with France Pitt was always soliciting the help of the

Bank. In 1796, great alarm was felt at the diminution of gold, and Tom

Paine wrote a pamphlet to prove that the Bank cellars could not hold

more than a million of specie, while there were sixty millions of

bank-notes in circulation. It was, however, proved that the specie

amounted to about three millions, and the circulation to only nine or

ten. Early in 1796, when the specie sank to L1,272,000, the Bank

suspended cash payments, and notes under L5 were issued, and dollars

prepared for circulation. The Bank Restriction Act was soon after

passed, discontinuing cash payments till the conclusion of the war. For

the renewal of the charter in 1800, the Bank proposed to lend three

millions for six years, without interest, a right being reserved to them

of claiming repayment at any time before the expiration of six years, if

Consols should be at or above 80 per cent. In 1802, Mr. Addington said

in the House of Commons that since 1797 the forgeries of bank-notes had

so alarmingly increased as to require seventy additional clerks merely

to detect them, and that every year no less than thirty or forty persons

had been executed for forgery.

In 1807, the celebrated chief cashier of the Bank, Abraham Newland, the

hero of Dibdin's well-known song--

"Sham Abraham you may,

But you mustn't sham Abraham Newland,"

retired from his duties, obtained a pension, and the same year died. His

property amounted to L200,000, besides L1,000 a year landed estate. He

had made large sums by loans during the war, a certain amount of which

were always reserved for the cashier's office. It is supposed the

faithful old Bank servant had lent large sums to the Goldsmiths, the

great stockbrokers, the contractors for many of these loans, as he left

them L500 each to buy mourning-rings.

The Bullion Committee of 1809 was moved for by Mr. Horner to ascertain

if the rise in the price of gold did not arise from the over-issue of

notes. There was a growing feeling that bank-notes did not represent the

specified amount of gold, and the committee recommended a speedy return

to cash payments. In Parliament Mr. Fuller, that butt of the House,

proposed if the guinea was really worth 24s., to raise it at once to

that price. Guineas at this time were exported to France in large

numbers by smugglers in boats made especially for the purpose. The Bank,

which had before issued dollars, now circulated silver tokens for 5s.

6d., 3s., and 1s. 6d.

Peel's currency bill of 1819 secured a gradual return of cash payments,

and the old metallic standard was restored. It was Peel's great

principle that a national bank should always be prepared to pay specie

for its notes on demand, a principle he afterwards worked out in the

Bank Charter. The same year a new plan was devised to prevent bank-notes

being forged. The Committee's report says:--"A number of squares will

appear in chequer-work upon the note, filled with hair lines in elliptic

curves of various degrees of eccentricity, the squares to be alternately

of red and black lines; the perfect mathematical coincidence of the

extremity of the lines of different colours on the sides of the squares

will be effected by machinery of singular fidelity. But even with the

use of this machinery a person who has not the key to the proper

disposition would make millions of experiments to no purpose. Other

obstacles to imitation will also be presented in the structure of the

note; but this is the one principally relied upon. It is plain that any

failure in the imitation will be made manifest to the observation of the

most careless, and the most skilful merchants who have seen the

operation declare that the note cannot be imitated. The remarkable

machine works with three cylinders, and the impression is made by small

convex cylindrical plates."

In 1821 the real re-commencement of specie payments took place. In 1822

Turner, a Bank clerk, stole L10,000 by altering the transfer book. The

rascal, however, was too clever for the Bank, and escaped. In 1822 Mr.

Pascoe Grenfell put the profits of the Bank at twenty-five millions, in

twenty-five years, after seven per cent. was divided.

By Fauntleroy's (the banker) forgeries in 1824, the Bank lost L360,000,

and the interest alone, which was regularly paid, had amounted to L9,000

or L10,000 a year. Fauntleroy's bank was in Berners Street. He had

forged powers of attorney to enable him to sell out stock. An epicure

and a voluptuary, he had lived in extraordinary luxury. In a private

desk was found a list of his forgeries, ending with these words: "The

Bank first began to refuse our acceptances, thereby destroying the

credit of our house. The Bank shall smart for it." After Fauntleroy was

hung at Newgate there were obscure rumours in the City that he had been

saved by a silver tube being placed in his throat, and that he had

escaped to Paris.

Having given a summary of the history of the Bank of England, we now

propose to select a series of anecdotes, arranged by dates, which will

convey a fuller and more detailed notion of the romance and the

vicissitudes of banking life.

The Bank was first established (says Francis) in Mercers' Hall, and

afterwards in Grocers' Hall, since razed for the erection of a more

stately structure. Here, in one room, with almost primitive simplicity,

were gathered all who performed the duties of the establishment. "I

looked into the great hall where the Bank is kept," says the graceful

essayist of the day, "and was not a little pleased to see the directors,

secretaries, and clerks, with all the other members of that wealthy

corporation, ranged in their several stations according to the parts

they hold in that just and regular economy."

Mr. Michael Godfrey, to whose exertions, with those of William Paterson,

may be traced the successful establishment of the Bank, met with a

somewhat singular fate, on the 17th of July, 1695. At that time the

transmission of specie was difficult and full of hazard, and Mr. Godfrey

left his peaceful avocations to visit Namur, then vigorously besieged by

the English monarch. The deputy-governor, willing to flatter the King,

anxious to forward his mission, or possibly imagining the vicinity of

the Sovereign to be the safest place he could choose, ventured into the

trenches. "As you are no adventurer in the trade of war, Mr. Godfrey,"

said William, "I think you should not expose yourself to the hazard of

it." "Not being more exposed than your Majesty," was the courtly reply,

"should I be excusable if I showed more concern?" "Yes," returned

William; "I am in my duty, and therefore have a more reasonable claim to

preservation." A cannon-ball at this moment answered the "reasonable

claim to preservation" by killing Mr. Godfrey; and it requires no great

stretch of imagination to fancy a saturnine smile passing over the

countenance of the monarch, as he beheld the fate of the citizen who

paid so heavy a penalty for playing the courtier in the trenches of

Namur.

On the 31st of August, 1731, a scene was presented which strongly marks

the infatuation and ignorance of lottery adventurers. The tickets for

the State lottery were delivered out to the subscribers at the Bank of

England; when the crowd becoming so great as to obstruct the clerks,

they told them, "We deliver blanks to-day, but to-morrow we shall

deliver the prizes;" upon which many, who were by no means for blanks,

retired, and by this bold stratagem the clerks obtained room to proceed

in their business. In this lottery, we read, "Her Majesty presented his

Royal Highness the Duke with ten tickets."

In 1738 the roads were so infested by highwaymen, and mails were so

frequently stopped by the gentlemen in the black masks, that the

post-master made a representation to the Bank upon the subject, and the

directors in consequence advertised an issue of bills payable at "seven

days' sight," that, in case of the mail being robbed, the proprietor of

stolen bills might have time to give notice.

The effect of the arrival, in 1745, of Charles Edward at Derby, upon the

National Bank, was alarming indeed. Its interests were involved in those

of the State, and the creditors flocked in crowds to obtain payment for

their notes. The directors, unprepared for such a casualty, had recourse

to a justifiable stratagem; and it was only by this that they escaped

bankruptcy. Payment was not refused, but the corporation retained its

specie, by employing agents to enter with notes, who, to gain time, were

paid in sixpences; and as those who came first were entitled to priority

of payment, the agents went out at one door with the specie they had

received, and brought it back by another, so that the _bona-fide_

holders of notes could never get near enough to present them. "By this

artifice," says our authority, somewhat quaintly, "the Bank preserved

its credit, and literally faced its creditors."

An extraordinary affair happened about the year 1740. One of the

directors, a very rich man, had occasion for L30,000, which he was to

pay as the price of an estate he had just bought. To facilitate the

matter, he carried the sum with him to the Bank, and obtained for it a

bank-note. On his return home he was suddenly called out upon particular

business; he threw the note carelessly on the chimney, but when he came

back a few minutes afterwards to lock it up, it was not to be found. No

one had entered the room; he could not, therefore, suspect any person.

At last, after much ineffectual search, he was persuaded that it had

fallen from the chimney into the fire. The director went to acquaint his

colleagues with the misfortune that had happened to him; and as he was

known to be a perfectly honourable man, he was readily believed. It was

only about twenty-four hours from the time that he had deposited the

money; they thought, therefore, that it would be hard to refuse his

request for a second bill. He received it upon giving an obligation to

restore the first bill, if it should ever be found, or to pay the money

himself, if it should be presented by any stranger. About thirty years

afterwards (the director having been long dead, and his heirs in

possession of his fortune) an unknown person presented the lost bill at

the Bank, and demanded payment. It was in vain that they mentioned to

this person the transaction by which that bill was annulled; he would

not listen to it. He maintained that it came to him from abroad, and

insisted upon immediate payment. The note was payable to bearer, and the

L30,000 were paid him. The heirs of the director would not listen to any

demands of restitution, and the Bank was obliged to sustain the loss. It

was discovered afterwards that an architect having purchased the

director's house, and taken it down, in order to build another upon the

same spot, had found the note in a crevice of the chimney, and made his

discovery an engine for robbing the Bank.

In the early part of last century, the practice of bankers was to

deliver in exchange for money deposited a receipt, which might be

circulated like a modern cheque. Bank-notes were then at a discount; and

the Bank of England, jealous of Childs' reputation, secretly collected

the receipts of their rivals, determined, when they had procured a very

large number, suddenly to demand money for them, hoping that Childs'

would not be able to meet their liabilities. Fortunately for the latter,

they got scent of this plot; and in great alarm applied to the

celebrated Duchess of Marlborough, who gave them a single cheque of

L700,000 on their opponents. Thus armed, Childs' waited the arrival of

the enemy. It was arranged that this business should be transacted by

one of the partners, and that a confidential clerk, on a given signal,

should proceed with all speed to the Bank to get the cheque cashed. At

last a clerk from the Bank of England appeared, with a full bag, and

demanded money for a large number of receipts. The partner was called,

who desired him to present them singly. The signal was given; the

confidential clerk hurried on his mission; the partner was very

deliberate in his movements, and long before he had taken an account of

all the receipts, his emissary returned with L700,000; and the whole

amount of L500,000 or L600,000 was paid by Childs' in Bank of England

notes. In addition to the triumph of this manoeuvre, Childs' must have

made a large sum, from Bank paper being at a considerable discount.

The day on which a forged note was first presented at the Bank of

England forms a remarkable era in its history; and to Richard William

Vaughan, a Stafford linendraper, belongs the melancholy celebrity of

having led the van in this new phase of crime, in the year 1758. The

records of his life do not show want, beggary, or starvation urging him,

but a simple desire to seem greater than he was. By one of the artists

employed--and there were several engaged on different parts of the

notes--the discovery was made. The criminal had filled up to the number

of twenty, and deposited them in the hands of a young lady, to whom he

was attached, as a proof of his wealth. There is no calculating how much

longer Bank notes might have been free from imitation, had this man not

shown with what ease they might be counterfeited. (Francis.)

The circulation of L1 notes led to much forgery, and to a melancholy

waste of human life. Considering the advances made in the mechanical

arts, small notes were rough, and even rude in their execution. Easily

imitated, they were also easily circulated, and from 1797 the executions

for forgery augmented to an extent which bore no proportion to any other

class of crime. During six years prior to their issue there was but one

capital conviction; during the four following years eighty-five

occurred. The great increase produced inquiry, which resulted in an Act

"For the better prevention of the forgery of the notes and bills of

exchange of persons carrying on the business of banker."

In the year 1758 a judgment was given by the Lord Chief Justice in

connection with some notes which were stolen from one of the mails. The

robber, after stopping the coach and taking out all the money contained

in the letters, went boldly to a Mr. Miller, at the Hatfield

post-office, who unhesitatingly exchanged one of them. Here he ordered a

post-chaise, with four horses, and at several stages passed off the

remainder. They were, however, stopped at the Bank, and an action was

brought by the possessor to recover the money. The question was an

important one, and it was decided by the law authorities, "that any

person paying a valuable consideration for a Bank note, payable to

bearer, in a fair course of business, has an undoubted right to recover

the money of the Bank." The action was maintained upon the plea that the

figure 11, denoting the date, had been converted by the robber to a 4.

[Illustration: THE BANK PARLOUR, EXTERIOR VIEW.]

A new crime was discovered in 1767. The notice of the clerks at the Bank

had been attracted by the habit of William Guest, a teller, of picking

new from old guineas without assigning any reason. An indefinite

suspicion--increased by the knowledge that an ingot of gold had been

seen in Guest's possession--arose, and although he asserted that it came

from Holland, it was very unlike the regular bars of gold, and had a

large quantity of copper at the back. Attention being thus drawn to the

behaviour of Guest, he was observed to hand one Richard Still some

guineas, which he took from a private drawer, and placed with the others

on the table. Still was immediately followed, and on the examination of

his money three of the guineas in his possession were deficient in

weight. An inquiry was immediately instituted. Forty of the guineas in

the charge of Guest looked fresher than the others upon the edges, and

weighed much less than the legitimate amount. On searching his house

some gold filings were found, with instruments calculated to produce

artificial edges. Proofs soon multiplied, and the prisoner was found

guilty. The instrument with which he had effected his fraud, of which

one of the witnesses asserted it was the greatest improvement he had

ever seen, is said to be yet in the Mint.

In 1772 an action interesting to the public was brought against the

Bank. It appeared from the evidence that some stock stood in the joint

names of a man and his wife; and by the rules of the corporation the

signatures of both were required before it could be transferred. To this

the husband objected, and claimed the right of selling without his

wife's signature or consent. The Court of King's Bench decided in favour

of the plaintiff, with full costs of suit, Lord Mansfield believing that

"it was highly _cruel and oppressive_ to withhold from the husband his

right of transferring."

On the 10th of June, 1772, Neale and Co., bankers, in Threadneedle

Street, stopped payment; other failures resulted in consequence, and

throughout the City there was a general consternation. The timely

interposition of the Bank, and the generous assistance of the merchants,

prevented many of the expected stoppages, and trade appeared restored to

its former security. It was, however, only an appearance; for on Monday,

the 22nd of the same month, may be read, in a contemporary authority, a

description of the prevailing agitation, which forcibly reminds us of

a few years ago. "It is beyond the power of words to describe the

general consternation of the metropolis at this instant. No event for

fifty years has been remembered to give so fatal a blow to trade and

public credit. A universal bankruptcy was expected; the stoppage of

almost every banker's house in London was looked for; the whole city was

in an uproar; many of the first families were in tears. This melancholy

scene began with a rumour that one of the greatest bankers in London had

stopped, which afterwards proved true. A report at the same time was

propagated that an immediate stoppage of the greatest Bank of all must

take place. Happily this proved groundless; the principal merchants

assembled, and means were concocted to revive trade and preserve the

national credit."

[Illustration: DIVIDEND DAY AT THE BANK.]

The desire of the directors to discover the makers of forged notes

produced a considerable amount of anxiety to one whose name is indelibly

associated with British art. George Morland--a name rarely mentioned but

with feelings of pity and regret--had, in his eagerness to avoid

incarceration for debt, retired to an obscure hiding-place in the

suburbs of London. "On one occasion," says Allan Cunningham, "he hid

himself in Hackney, where his anxious looks and secluded manner of life

induced some of his charitable neighbours to believe him a maker of

forged notes. The directors of the Bank dispatched two of their most

dexterous emissaries to inquire, reconnoitre, search and seize. The men

arrived, and began to draw lines of circumvallation round the painter's

retreat. He was not, however, to be surprised: mistaking those agents of

evil mien for bailiffs, he escaped from behind as they approached in

front, fled into Hoxton, and never halted till he had hid himself in

London. Nothing was found to justify suspicion; and when Mrs. Morland,

who was his companion in this retreat, told them who her husband was,

and showed them some unfinished pictures, they made such a report at the

Bank, that the directors presented him with a couple of Bank notes of

L20 each, by way of compensation for the alarm they had given him."

The proclamation of peace in 1783, says Francis, was indirectly an

expense to the Bank, although hailed with enthusiasm by the populace.

The war with America had assumed an aspect which, with all thinking men,

crushed every hope of conquest. It was therefore amid a general shout of

joy that on Monday, the 1st of October, 1783, the ceremonial took place.

A vast multitude attended, and the people were delighted with the

suspension of war. The concourse was so great that Temple Bar was

opened with difficulty, and the Lord Mayor's coachman was kept one hour

before he was able to turn his vehicle. The Bank only had reason to

regret, or at least not to sympathise so freely with the public joy.

During the hurry attendant on the proclamation at the Royal Exchange,

when it may be supposed the sound of the music and the noise of the

trumpet occupied the attention of the clerk more than was beneficial for

the interests of his employers, fourteen notes of L50 each were

presented at the office and cash paid for them. The next day they were

found to be forged.

In 1783 Mathison's celebrated forgeries were committed. John Mathison

was a man of great mechanical capacity, who, becoming acquainted with an

engraver, unhappily acquired that art which ultimately proved his ruin.

A yet more dangerous qualification was his of imitating signatures with

remarkable accuracy. Tempted by the hope of sudden wealth, his first

forgeries were the notes of the Darlington Bank. This fraud was soon

discovered, and a reward being offered, with a description of his

person, he escaped to Scotland. There, scorning to let his talents lie

idle, he counterfeited the notes of the Royal Bank of Edinburgh, amused

himself by negotiating them during a pleasure excursion through the

country, and reached London, supported by his imitative talent. Here a

fine sphere opened for his genius, which was so active, that in twelve

days he had bought the copper, engraved it, fabricated notes, forged the

water-mark, printed and negotiated several. When he had a sufficient

number, he travelled from one end of the kingdom to the other, disposing

of them. Having been in the habit of procuring notes from the Bank (the

more accurately to copy them), he chanced to be there when a clerk from

the Excise Office paid in 7,000 guineas, one of which was scrupled.

Mathison, from a distance, said it was a good one; "then," said the Bank

clerk, on the trial, "I recollected him." The frequent visits of

Mathison, who was very incautious, together with other circumstances,

created some suspicion that he might be connected with those notes,

which, since his first appearance, had been presented at the Bank. On

another occasion, when Mathison was there, a forged note of his own was

presented, and the teller, half in jest and half in earnest, charged

Maxwell, the name by which he was known, with some knowledge of the

forgeries. Further suspicion was excited, and directions were given to

detain him at some future period. The following day the teller was

informed that "his friend Maxwell," as he was styled ironically, was in

Cornhill. The clerk instantly went, and under pretence of having paid

Mathison a guinea too much on a previous occasion, and of losing his

situation if the mistake were not rectified in the books, induced him to

return with him to the hall; from which place he was taken before the

directors, and afterwards to Sir John Fielding. To all the inquiries he

replied, "He had a reason for declining to answer. He was a citizen of

the world, and knew not how he had come into it, or how he should go out

of it." Being detained during a consultation with the Bank solicitor, he

suddenly lifted up the sash and jumped out of the window. On being taken

and asked his motive, if innocent, he said, "It was his humour."

In the progress of the inquiry, the Darlington paper, containing his

description, was read to him, when he turned pale, burst into tears, and

saying he was a dead man, added, "Now I will confess all." He was,

indeed, found guilty only on his own acknowledgment, which stated he

could accomplish the whole of a note in one day. It was asserted at the

time, that, had it not been for his confession, he could not have been

convicted. He offered to explain the secret of his discovery of the

method of imitating the water-mark, on the condition that the

corporation would spare his life; but his proposal was rejected, and he

subsequently paid the full penalty of his crime.

The conviction that some check was necessary grew more and more

peremptory as the evils of the system were exposed. In fourteen years

from the first issue of small notes, the number of convictions had been

centupled. In the first ten years of the present century, L101,061 were

refused payment, on the plea of forgery. In the two years preceding the

appointment of the commission directed by Government to inquire into the

facts connected with forging notes, nearly L60,000 were presented, being

an increase of 300 per cent. In 1797, the entire cost of prosecutions

for forgeries was L1,500, and in the last three months of 1818 it was

near L20,000. Sir Samuel Romilly said that "pardons were sometimes found

necessary; but few were granted except under circumstances of peculiar

qualification and mitigation. He believed the sense and feeling of the

people of England were against the punishment of death for forgery. It

was clear the severity of the punishment had not prevented the crimes."

The first instance of fraud, to a great amount, was perpetrated by one

of the confidential servants of the corporation. In the year 1803, Mr.

Bish, a member of the Stock Exchange, was applied to by Mr. Robert

Astlett, cashier of the Bank of England, to dispose of some Exchequer

bills. When they were delivered into Mr. Bish's hands, he was greatly

astonished to find not only that these bills had been previously in his

possession, but that they had been also delivered to the Bank. Surprised

at this, he immediately opened a communication with the directors, which

led to the discovery of the fraud and the apprehension of Robert

Astlett. By the evidence produced on the trial, it appeared that the

prisoner had been placed in charge of all the Exchequer bills brought

into the Bank, and when a certain number were collected, it was his duty

to arrange them in bundles, and deliver them to the directors in the

parlour, where they were counted and a receipt given to the cashier.

This practice had been strictly adhered to; but the prisoner, from his

acquaintance with business, had induced the directors to believe that he

had handed them bills to the amount of L700,000, when they were only in

possession of L500,000. So completely had he deceived these gentlemen,

that two of the body vouched by their signatures for the delivery of the

larger amount.

He was tried for the felonious embezzlement of three bills of exchange

of L1,000 each. He escaped hanging, but remained a miserable prisoner in

Newgate for many years.

In 1808 Vincent Alessi, a native of one of the Italian States, went to

Birmingham, to choose some manufactures likely to return a sufficient

profit in Spain. Amongst others he sought a brass-founder, who showed

him that which he required, and then drew his attention to "another

article," which he said he could sell cheaper than any other person in

the trade. Mr. Alessi declined purchasing this, as it appeared to be a

forged bank-note; upon which he was shown some dollars, as fitter for

the Spanish market. These also were declined, though it is not much to

the credit of the Italian that he did not at once denounce the

dishonesty of the Birmingham brass-founder. It would seem, however, from

what followed, that Mr. Alessi was not quite unprepared, as, in the

evening, he was called on by one John Nicholls, and after some

conversation, he agreed to take a certain quantity of notes, of

different values, which were to be paid for at the rate of six shillings

in the pound.

Alessi thought this a very profitable business, while it lasted, as he

could always procure as many as he liked, by writing for so many dozen

candlesticks, calling them Nos. 5, 2, or 1, according to the amount of

the note required. The vigilance of the English police, however, was too

much even for the subtlety of an Italian; he was taken by them, and

allowed to turn king's evidence, it being thought very desirable to

discover the manufactory whence the notes emanated.

In December John Nicholls received a letter from Alessi, stating that he

was going to America; that he wanted to see Nicholls in London; that he

required twenty dozen candlesticks, No. 5; twenty-four dozen, No. 1; and

four dozen, No. 2. Mr. Nicholls, unsuspicious of his correspondent's

captivity, and consequent frailty, came forthwith to town, to fulfil so

important an order. Here an interview was planned, within hearing of the

police officers. Nicholls came with the forged notes. Alessi counted up

the whole sum he was to pay, at six shillings in the pound, saying,

"Well, Mr. Nicholls, you will take all my money from me." "Never mind,

sir," was the reply; "it will all be returned in the way of business."

Alessi then remarked that it was cold, and put on his hat. This was the

signal for the officers. To the dealer's surprise and indignation, he

found himself entrapped with the counterfeit notes in his possession, to

the precise amount in number and value that had been ordered in the

letter.

A curious scene took place in May, 1818, at the Bank. On the 26th of

that month, a notice had been posted, stating that books would be opened

on the 31st of May, and two following days, for receiving subscriptions

to the amount of L7,000,000 from persons desirous of funding Exchequer

bills. It was generally thought that the whole of the sum would be

immediately subscribed, and great anxiety was shown to obtain an early

admission to the office of the chief cashier. Ten o'clock is the usual

time for public business; but at two in the morning many persons were

assembled outside the building, where they remained for several hours,

their numbers gradually augmenting. The opening of the outer door was

the signal for a general rush, and the crowd, for it now deserved that

name, next established themselves in the passage leading to the chief

cashier's office, where they had to wait another hour or two, to cool

their collective impatience. When the time arrived, a further contest

arose, and they strove lustily for an entrance. The struggle for

preference was tremendous; and the door separating them from the chief

cashier's room, and which is of a most substantial size, was forced off

its hinges. By far the greater part of those who made this effort

failed, the whole L7,000,000 being subscribed by the first ten persons

who gained admission.

In 1820 a very extraordinary appeal was made to the French tribunals by

a man named J. Costel, who was a merchant of Hamburg, while the free

city was in the hands of the French. He accused the general commanding

there of employing him to get L5,000 worth of English bank-notes

changed, which proved to be forged, and he was, in consequence of this

discovery, obliged to fly from Hamburg. He also said that Savary, Duke

of Rovigo, and Desnouettes, were the fabricators, and that they employed

persons to pass them into England, one of whom was seized by the London

police, and hanged. Mr. Doubleday asserts that some one had caused a

large quantity of French assignats to be forged at Birmingham, with the

view of depreciating the credit of the French Republic.

Merchants and bankers now began to declare that they would rather lose

their entire fortunes than pour forth the life which it was not theirs

to give. A general feeling pervaded the whole interest, that it would be

better to peril a great wrong than to suffer an unavailing remorse. One

petition against the penalty of death was presented, which bore three

names only; but those were an honourable proof of the prevalent feeling.

The name of Nathan Meyer Rothschild was the first, "through whose

hands," said Mr. Smith, on presenting the petition, "more bills pass

than through those of any twenty firms in London." The second was that

of Overend, Gurney, and Co., through whom thirty millions passed the

preceding year; and the third was that of Mr. Sanderson, ranking among

the first in the same profession, and a member of the Legislature.

A principal clerk of one of our bankers having robbed his employer of

Bank of England notes to the amount of L20,000, made his escape to

Holland. Unable to present them himself, he sold them to a Jew. The

price which he received does not appear; but there is no doubt that,

under the circumstances, a good bargain was made by the purchaser. In

the meantime every plan was exhausted to give publicity to the loss. The

numbers of the notes were advertised in the newspapers, with a request

that they might be refused, and for about six months no information was

received of the lost property. At the end of that period the Jew

appeared with the whole of his spoil, and demanded payment, which was at

once refused on the plea that the bills had been stolen, and that

payment had been stopped.

The owner insisted upon gold, and the Bank persisted in refusing. But

the Jew was an energetic man, and was aware of the credit of the

corporation. He was known to be possessed of immense wealth, and he went

deliberately to the Exchange, where, to the assembled merchants of

London, in the presence of her citizens, he related publicly that the

Bank had refused to honour their own bills for L20,000; that their

credit was gone, their affairs in confusion; and that they had stopped

payment. The Exchange wore every appearance of alarm; the Hebrew showed

the notes to corroborate his assertion. He declared that they had been

remitted to him from Holland, and as his transactions were known to be

extensive, there appeared every reason to credit his statement. He then

avowed his intention of advertising this refusal of the Bank, and the

citizens thought there must be some truth in his bold announcement.

Information reached the directors, who grew anxious, and a messenger was

sent to inform the holder that he might receive cash in exchange for his

notes.

In 1843 the light sovereigns were called in. The total amount of light

coin received from the 11th of June to the 28th of July was L4,285,837,

and 2-3/4d. was the loss on each, taking an average of 35,000. The large

sum of L1,400, in L1 notes, was paid into the Bank this year. They had

probably been the hoard of some eccentric person, who evinced his

attachment to the obsolete paper at the expense of his interest. A few

years afterwards a L20 note came in which had been outstanding for about

a century and a quarter, and the loss of interest on which amounted to

some thousands.

And now a few anecdotes about bank-notes. An eccentric gentleman in

Portland Street, says Mr. Grant, in his "Great Metropolis," framed and

exhibited for five years in one of his sitting-rooms a Bank post bill

for L30,000. The fifth year he died, and down came the picture double

quick, and was cashed by his heirs. Some years ago, at a nobleman's

house near the Park, a dispute arose about a certain text, and a dean

present denying there was any such text at all, a Bible was called for.

A dusty old Bible was produced, which had never been removed from its

shelf since the nobleman's mother had died some years before. When it

was opened a mark was found in it, which, on examination, turned out to

be a Bank post bill for L40,000. It might, it strikes us, have been

placed there as a reproof to the son, who perhaps did not consult his

Bible as often as his mother could have wished. The author of "The

American in England" describes, in 1835, one of the servants of the Bank

putting into his hand Bank post bills, which, before being cancelled by

having the signatures torn off, had represented the sum of five millions

sterling. The whole made a parcel that could with ease be put into the

waistcoat pocket.

The largest amount of a bank-note in current circulation in 1827 was

L1,000. It is said that two notes for L100,000 each, and two for

L50,000, were once engraved and issued. A butcher who had amassed an

immense fortune in the war time, went one day with one of these L50,000

notes to a private bank, asking the loan of L5,000, and wishing to

deposit the big note as security in the banker's hands, saying that he

had kept it for years. The L5,000 were at once handed over, but the

banker hinted at the same time to the butcher the folly of hoarding such

a sum and losing the interest. "Werry true, sir," replied the butcher,

"but I likes the look on't so wery well that I keeps t'other one of the

same kind at home."

As the Bank of England pays an annual average sum of L70,000 to the

Stamp Office for their notes, while other banks pay a certain sum on

every note as stamped, the Bank of England never re-issues its notes,

but destroys them on return. A visitor to the Bank was one day shown a

heap of cinders, which was the ashes of L40,000,000 of notes recently

burned. The letters could here and there be seen. It looked like a piece

of laminated larva, and was about three inches long and two inches

broad, weighing probably from ten to twelve ounces.

The losses of the Bank are considerable. In 1820 no fewer than 352

persons were convicted, at a great expense, of forging small notes. In

1832 the yearly losses of the Bank from forgeries on the public funds

were upwards of L40,000.

It is said that in the large room of the Bank a quarter of a million

sovereigns will sometimes change hands in the course of the day. The

entire amount of money turned over on an average in the day has been

estimated as low as L2,000,000, and as high as L2,500,000. At a rough

guess, the number of persons who receive dividends on the first day of

every half year exceeds 100,000, and the sum paid away has been

estimated at L500,000.

The number of clerks in the Bank of England was computed, in 1837, at

900; the engravers and bank-note printers at thirty-eight. The salaries

vary from L700 per annum to L75, and the amount paid to the servants of

the entire establishment, about 1,000, upwards of L200,000. Some years

ago the proprietors met four times a year. Three directors sat daily in

the Bank parlour. On Wednesday a Court of Directors sat to decide on

London applications for discount, and on Thursdays the whole court met

to consider all notes exceeding L2,000. The directors, twenty-four,

exclusive of the Governor and Deputy-Governor, decide by majority all

matters of importance.

[Illustration: THE CHURCH OF ST. BENET FINK.]

The Bank of England (says Dodsley's excellent and well-written "Guide

to London," 1761) is a noble edifice situated at the east of St.

Christopher's Church, near the west end of Threadneedle Street. The

front next the street is about 80 feet in length, and is of the Ionic

order, raised on a rustic basement, and is of a good style. Through this

you pass into the courtyard, in which is the hall. This is one of the

Corinthian order, and in the middle is a pediment. The top of the

building is adorned with a balustrade and handsome vases, and in the

face of the above pediment is engraved in relievo the Company's seal,

Britannia sitting with her shield and spear, and at her feet a

cornucopia pouring out fruit. The hall, which is in this last building,

is 79 feet in length and 40 in breadth; it is wainscoted about 8 feet

high, has a fine fretwork ceiling, and is adorned with a statue of King

William III., which stands in a niche at the upper end, on the pedestal

of which is the following inscription in Latin--in English, thus:--

"For restoring efficiency to the Laws,

Authority to the Courts of Justice,

Dignity to the Parliament,

To all his subjects their Religion and Liberties,

And confirming them to Posterity,

By the succession of the Illustrious House of Hanover

To the British Throne:

To the best of Princes, William the Third.

Founder of the Bank,

This Corporation, from a sense of Gratitude,

Has erected this Statue,

And dedicated it to his memory,

In the Year of our Lord MDCCXXXIV.,

And the first year of this Building."

Further backward is another quadrangle, with an arcade on the east and

west sides of it; and on the north side is the accountant's office,

which is 60 feet long and 28 feet broad. Over this, and the other sides

of the quadrangle, are handsome apartments, with a fine staircase

adorned with fretwork; and under are large vaults, that have strong

walls and iron gates, for the preservation of the cash. The back

entrance from Bartholomew Lane is by a grand gateway, which opens into a

commodious and spacious courtyard for coaches or wagons, that frequently

come loaded with gold and silver bullion; and in the room fronting the

gate the transfer-office is kept.

[Illustration: COURT OF THE BANK OF ENGLAND (_see page 470_).]

The entablature rests on fluted Corinthian columns, supporting statues,

which indicate the four quarters of the globe. The intercolumniations

are ornamented by allegories representing the Thames and the Ganges,

executed by Thomas Banks, Academician, the roses on the vaulting of the

arch being copied from the Temple of Mars the Avenger, at Rome.

On the death of Sir John Soane, in 1837, Mr. Cockerell was chosen to

succeed him in his important position. The style of this gentleman, in

the office he designed for the payment of dividend warrants, now

employed as the private drawing-office, is very different to the

erections of his predecessor. The taste which produced the elaborate and

exquisite ornaments in this room is in strong contrast to the severe

simplicity of the works of Sir John Soane.

Stow, speaking of St. Christopher's, the old church removed when the

Bank was built, says, "Towards the Stokes Market is the parish church of

St. Christopher, but re-edified of new; for Richard Shore, one of the

sheriffes, 1506, gave money towards the building of the steeple."

Richard at Lane was collated to this living in the year 1368. "Having

seen and observed the said parish church of St. Christopher, with all

the gravestones and monuments therein, and finding a faire tombe of

touch, wherein lyeth the body of Robert Thorne, Merchant Taylor and a

batchelor, buried, having given by his testament in charity 4,445 pounds

to pious uses; then looking for some such memory, as might adorne and

beautifie the name of another famous batchelor, Mr. John Kendricke; and

found none, but only his hatchments and banners." Many of the Houblons

were buried in this church.

"The court-room of the Bank," says Francis, "is a noble apartment, by

Sir Robert Taylor, of the Composite order, about 60 feet long and 31

feet 6 inches wide, with large Venetian windows on the south,

overlooking that which was formerly the churchyard of St. Christopher.

The north side is remarkable for three exquisite chimney-pieces of

statuary marble, the centre being the most magnificent. The east and

west are distinguished by columns detached from the walls, supporting

beautiful arches, which again support a ceiling rich with ornament. The

west leads by folding doors to an elegant octagonal committee-room, with

a fine marble chimney-piece. The Governor's room is square, with various

paintings, one of which is a portrait of William III. in armour, an

intersected ceiling, and semi-circular windows. This chimney-piece is

also of statuary marble; and on the wall is a fine painting, by Marlow,

of the Bank, Bank Buildings, Cornhill, and Royal Exchange. An ante-room

contains portraits of Mr. Abraham Newland and another of the old

cashiers, taken as a testimony of the appreciation of the directors. In

the waiting-room are two busts, by Nollekens, of Charles James Fox and

William Pitt. The original Rotunda, by Sir Robert Taylor, was roofed in

with timber; but when a survey was made, in 1794, it was found advisable

to take it down; and in the ensuing year the present Rotunda was built,

under the superintendence of Sir John Soane. It measures 57 feet in

diameter and about the same in height to the lower part of the lantern.

It is formed of incombustible materials, as are all the offices erected

under the care of Sir John Soane. For many years this place was a scene

of constant confusion, caused by the presence of the stockbrokers and

jobbers. In 1838 this annoyance was abolished, the occupants were

ejected from the Rotunda, and the space employed in cashing the

dividend-warrants of the fundholders. The offices appropriated to the

management of the various stocks are all close to or branch out from the

Rotunda. The dividends are paid in two rooms devoted to that purpose,

and the transfers are kept separate. They are arranged in books, under

the various letters of the alphabet, containing the names of the

proprietors and the particulars of their property. Some of the

stock-offices were originally constructed by Sir Robert Taylor, but it

has been found necessary to make great alterations, and most of them are

designed from some classical model; thus the Three per Cent. Consol

office, which, however, was built by Sir John Soane, is taken from the

ancient Roman baths, and is 89 feet 9 inches in length and 50 feet in

breadth. The chief cashier's office, an elegant and spacious apartment,

is built after the style of the Temple of the Sun and Moon at Rome, and

measures 45 feet by 30.

"The fine court which leads into Lothbury presents a magnificent display

of Greek and Roman architecture. The buildings on the east and west

sides are nearly hidden by open screens of stone, consisting of a lofty

entablature, surmounted by vases, and resting on columns of the

Corinthian order, the bases of which rest on a double flight of steps.

This part of the edifice was copied from the beautiful temple of the

Sybils, near Tivoli. A noble arch, after the model of the triumphal arch

of Constantine, at Rome, forms the entrance into the bullion yard."

The old Clearing House of 1821 is thus described:--"In a large room is a

table, with as numerous drawers as there are City bankers, with the name

of each banker on his drawer, having an aperture to introduce the cheque

upon him, whereof he retains the key.

"A clerk going with a charge of L99,000, perhaps, upon all the other

bankers, puts the cheques through their respective apertures into their

drawers at three o'clock. He returns at four, unlocks his own drawer,

and finds the others have collectively put into his drawer drafts upon

him to the amount, say, of L100,000; consequently he has L1,000, the

difference, to pay. He searches for another, who has a larger balance to

receive, and gives him a memorandum for this L1,000; he, for another; so

that it settles with two, who frequently, with a very few thousands in

bank-notes, settle millions bought and sold daily in London, without the

immense repetition of receipts and payments that would otherwise ensue,

or the immense increase of circulating medium that would be otherwise

necessary."

The illustration on page 475 represents the appearance of the present

Clearing House. The business done at this establishment daily is

enormous, amounting to something like L150,000,000 each day.

"All the sovereigns," says Mr. Wills, "returned from the banking-houses

are consigned to a secluded cellar; and, when you enter it, you will

possibly fancy yourself on the premises of a clockmaker who works by

steam. Your attention is speedily concentrated on a small brass box, not

larger than an eight-day pendule, the works of which are impelled by

steam. This is a self-acting weighing machine, which, with unerring

precision, tells which sovereigns are of standard weight, and which are

light, and of its own accord separates the one from the other. Imagine a

long trough or spout--half a tube that has been split into two

sections--of such a semi-circumference as holds sovereigns edgeways, and

of sufficient length to allow of two hundred of them to rest in that

position one against another. The trough thus charged is fixed slopingly

upon the machine, over a little table, as big as the plate of an

ordinary sovereign-balance. The coin nearest to the Lilliputian platform

drops upon it, being pushed forward by the weight of those behind. Its

own weight presses the table down; but how far down? Upon that hangs the

whole merit and discriminating power of the machine. At the back and on

each side of this small table, two little hammers move by steam

backwards and forwards at different elevations. If the sovereign be full

weight, down sinks the table too low for the higher hammer to hit it,

but the lower one strikes the edge, and off the sovereign tumbles into a

receiver to the left. The table pops up again, receiving, perhaps, a

light sovereign, and the higher hammer, having always first strike,

knocks it into a receiver to the right, time enough to escape its

colleague, which, when it comes forward, has nothing to hit, and

returns, to allow the table to be elevated again. In this way the

reputation of thirty-three sovereigns is established or destroyed every

minute. The light weights are taken to a clipping machine, slit at the

rate of two hundred a minute, weighed in a lump, the balance of

deficiency charged to the banker from whom they were received, and sent

to the Mint to be re-coined. Those which have passed muster are

re-issued to the public. The inventor of this beautiful little detector

was Mr. Cotton, a former Governor. The comparatively few sovereigns

brought in by the general public are weighed in ordinary scales by the

tellers."

The Bank water-mark--or, more properly, the wire-mark--is obtained by

twisting wires to the desired form or design, and sticking them on the

face of the mould; therefore the design is above the level face of the

mould by the thickness of the wires it is composed of. Hence the pulp,

in settling down on the mould, must of necessity be thinner on the wire

design than on the other parts of the sheet. When the water has run off

through the sieve-like face of the mould, the new-born sheet of paper is

"couched," the mould gently but firmly pressed upon a blanket, to which

the spongy sheet clings. Sizing is a subsequent process, and, when dry,

the water-mark is plainly discernible, being, of course, transparent

where the substance is thinnest. The paper is then dried, and made up

into reams of 500 sheets each, ready for press. The water-mark in the

notes of the Bank of England is secured to that establishment by virtue

of a special Act of Parliament. It is scarcely necessary to inform the

reader that imitation of anything whatever connected with a bank-note is

an extremely unsafe experiment.

This curious sort of paper is unique. There is nothing like it in the

world of sheets. Tested by the touch, it gives out a crisp, crackling,

sharp music, which resounds from no other quires. To the eye it shows a

colour belonging neither to blue-wove, nor yellow-wove, nor cream-laid,

but a white, like no other white, either in paper and pulp. The three

rough fringy edges are called the "deckelled" edges, being the natural

boundary of the pulp when first moulded; the fourth is left smooth by

the knife, which eventually cuts the two notes in twain. This paper is

so thin that, when printed, there is much difficulty in making erasures;

yet it is so strong, that "a water-leaf" (a leaf before the application

of size) will support thirty-six pounds, and, with the addition of one

grain of size, will hold half a hundredweight, without tearing. Yet the

quantity of fibre of which it consists is no more than eighteen grains

and a half.

Dividend day at the Bank has been admirably described, in the wittiest

manner, by a modern essayist in _Household Words_:--"Another public

creditor," says the writer, "appears in the shape of a drover, with a

goad, who has run in to present his claim during his short visit from

Essex. Near him are a lime-coloured labourer, from some wharf at

Bankside, and a painter who has left his scaffolding in the

neighbourhood during his dinner hour. Next come several widows--some

florid, stout, and young; some lean, yellow, and careworn, followed by a

gay-looking lady, in a showy dress, who may have obtained her share of

the national debt in another way. An old man, attired in a stained,

rusty, black suit, crawls in, supported by a long staff, like a weary

pilgrim who has at last reached the golden Mecca. Those who are drawing

money from the accumulation of their hard industry, or their patient

self-denial, can be distinguished at a glance from those who are

receiving the proceeds of unexpected and unearned legacies. The first

have a faded, anxious, almost disappointed look, while the second are

sprightly, laughing, and observant of their companions.

[Illustration: "JONATHAN'S." _From an Old Sketch._]

"Towards the hour of noon, on the first day of the quarterly payment,

the crowd of national creditors becomes more dense, and is mixed up with

substantial capitalists in high check neckties, double-breasted

waistcoats, curly-rimmed hats, narrow trousers, and round-toed boots.

Parties of thin, limp, damp-smelling women, come in with mouldy

umbrellas and long, chimney-cowl-shaped bonnets, made of greasy black

silk, or threadbare black velvet--the worn-out fashions of a past

generation. Some go about their business in confidential pairs; some in

company with a trusted maid-servant as fossilised as themselves; some

under the guidance of eager, ancient-looking girl-children; while some

stand alone in corners, suspicious of help or observation. One national

creditor is unwilling, not only that the visitors shall know what amount

her country owes her, but also what particular funds she holds as

security. She stands carelessly in the centre of the Warrant Office,

privately scanning the letters and figures nailed all round the walls,

which direct the applicant at what desk to apply; her long tunnel of a

bonnet, while it conceals her face, moves with the guarded action of her

head, like the tube of a telescope when the astronomer is searching for

a lost planet. Some of these timid female creditors, when their little

claim has been satisfied (for L1,000 in the Consols only produces L7

10s. a quarter), retire to an archway in the Rotunda, where there are

two high-backed leathern chairs, behind the shelter of which, with a

needle and thread, they stitch the money into some secret part of their

antiquated garments. The two private detective officers on duty

generally watch these careful proceedings with amusement and interest,

and are looked upon by the old fundholders and annuitants as highly

dangerous and suspicious characters."

Among the curiosities shown to visitors are the Bank parlour, the

counting-room, and the printing-room; the albums containing original

L1,000 notes, signed by various illustrious persons; and the Bank-note

library, now containing ninety million notes that have been cancelled

during the last seven years. There is one note for a million sterling,

and a note for L25 that had been out 111 years.

In the early part of the century, when "the Green Man," "the Lady in

Black," and other oddities notorious for some peculiarity of dress, were

well known in the City, the "White Lady of Threadneedle Street" was a

daily visitor to the Bank of England. She was, it is said, the sister of

a poor young clerk who had forged the signature to a transfer-warrant,

and who was hung in 1809. She had been a needle-worker for an army

contractor, and lived with her brother and an old aunt in Windmill

Street, Finsbury. Her mind became affected at her brother's disgraceful

death, and every day after, at noon, she used to cross the Rotunda to

the pay-counter. Her one unvarying question was, "Is my brother, Mr.

Frederick, here to-day?" The invariable answer was, "No, miss, not

to-day." She seldom remained above five minutes, and her last words

always were, "Give my love to him when he returns. I will call

to-morrow."