Page images
PDF
EPUB

The charter declares

"That the management and government of the corporation be committed to the governor, deputy-governor, and twenty-four directors, who shall be elected between the 25th day of March and the 25th day of April each year, from among the members of the company duly qualified. "That no dividend shall at any time be made by the said governor and company, save only out of the interest, profit, or produce arising out of the said capital, stock, or fund, or by such dealing as is allowed by Act of Parliament.

"They must be natural born subjects of England, or naturalized subjects; they shall have in their own name and for their own use, severally, viz., the governor at least 4,000l., the deputy-governor 3,000l., and each director 2,000l., of the capital stock of the said corporation.

"That thirteen or more of the said governors or directors (of which the governor or deputy-governor shall be always one), shall constitute a court of directors for the management of the affairs of the company, and for the appointment of all agents and servants which may be necessary, paying them such salaries as they may consider reasonable.

"Every elector must have, in his own name and for his own use, 5007. or more, capital stock, and can only give one vote; he must, if required by any member present, take the oath of stock, or the declaration of stock if it be one of those people called Quakers.

"Four general courts to be held in very year, in the months of September, December, April, and July. A general court may be summoned at any time, upon the requisition of nine proprietors duly qualified as electors.

“The majority of electors in general courts have the power to make and constitute by-laws and ordinances for the government of the corporation, provided that such by-laws and ordinances be not repugnant to the laws of the kingdom, and be conformed and approved, according to the statutes in such case made and provided.”

1694. Aug. 8. The rate of discount charged on foreign bills was six per cent., which was the highest legal interest. Aug. 30. The bank discounted foreign bills at four and a half per cent.; and Oct. 24, the discount on inland bills was six per cent.

:

1695. Jan. 16. The following rates of interest were charged at the bank foreign bills, having three months to run, six per cent.; but to those who keep accounts at the bank, foreign bills were discounted at three per cent., and inland bills at four and a half per cent. May 19. Running notes and bills were discounted at three per cent. May 6. The following advertisement appeared in the London Gazette:'-" The Court of Directors of the Bank of England give notice, that they will lend money on plate, lead tin, copper, steel, and iron, at four per cent. per annum."

1697. Bank notes were from fifteen to twenty per cent.

discount. During the recoinage in 1696, the bank had issued their notes in exchange for the clipped and deficient coin previously in circulation, and they were not able to procure from the mint a sufficient quantity of the new coins to discharge the notes presented to them for payment. This compelled them to make two calls of twenty per cent. each upon their stockholders. They paid some of their notes by bills, bearing interest at six per cent. They also advertised, that while the silver was recoining, "such as think it fit, for their convenience, to keep an account in a book with the bank, may transfer any sum under five pounds from his own to another man's account."

Exchequer tallies and orders for payment having, in 1696, been at a discount of forty, fifty, and sixty per cent., and bank notes at a discount of twenty per cent., the bank was empowered to receive subscriptions for the enlargement of their stock; four-fifths in tallies and orders, and the remaining one-fifth in bank notes. The sum subscribed was 1,001,1717. 10s., which, with the original capital of 1,200,0007., raised the capital to the sum of 2,201,1717. 108.

The bank charter was extended or renewed until the expiration of twelve months, notice to be given after the first day of August, 1710, and until payment by the public to the bank of the demands therein specified; being an extension or renewal for five years (8 and 9 William III. c. 20). It was also enacted, "that the common capital and principal stock, and also the real fund of the governor and company, or any profit or produce to be made thereof, should be exempted from any rates, taxes, assessments, or impositions whatever, during the continuance of the bank ;" and that the forgery of the company's seal, or of any of their notes or bills, should be felony without benefit of clergy. The dividend on bank stock this year was nine per

cent.

1704. Feb. 28. Foreign bills made payable at the bank were charged discount at the rate of four per cent., but if not payable at the bank they were charged five per cent.

1707. The subscription of 1,001,1717. 10s., raised in the year 1697, was restored. This reduced the bank capital to the original sum of 1,200,0007.

1708. The bank charter was extended or renewed until the expiration of twelve months' notice, to be given after the first day of August, 1732, and until payment by the public to the

bank of the demands therein specified; being an extension or renewal of the said charter for twenty years (7 Anne, c. 7). By this Act it is provided, "That during the continuance of the said corporation of the Governor and Company of the Bank of England, it shall not be lawful for any body politic or corporate whatsoever, created or to be created (other than the said Governor and Company of the Bank of England), or for any other persons whatsoever, united or to be united in covenants or partnership, exceeding the number of six persons, in that part of Great Britain called England, to borrow, owe, or take up any sum or sums of money on their bills or notes, payable at demand, or at a less time than six months from the borrowing thereof."

From this year until the year 1729, the annual dividends varied from nine to five and a half per cent.

1709. In this year there was a new subscription of 1,001,1717. 10s., another of 2,201,1717. 10s., and a call upon the proprietors of fifteen per cent., 656,2047. 1s. 9d.; altogether making the total capital of the bank, 5,058,5477. 18. 9d. This increase of capital became necessary, from the bank having in the preceding year lent the government 400,000l. without interest, and agreed to cancel one million and a half exchequer bills in their possession, amounting, with interest, to 1,775,0277. 17s. 10дd.

1710. A further call of 501,4487. 128. 11d., which increased the bank capital to 5,559,9957. 14s. 8d.

The interest on foreign bills raised from four to five per cent., the same as the inland bills.

1713. The bank charter was extended or renewed until the expiration of twelve months' notice, to be given after the first day of August, 1742, and until payment by the public to the bank of the demands therein specified; being an extension or renewal of the said charter for ten years (12 Anne, Stat. I. c. ii.). In consideration of receiving this privilege, the bank undertook to circulate 1,200,0007. in exchequer bills. In this year the legal rate of interest was reduced from six to five per cent. 1716. July 26. The bank rate of discount on foreign and inland bills reduced to four per cent.

1717. The bank cancelled 2,000,0007. exchequer bills, and received interest from the government at five per cent. on the amount.

1718. Subscriptions for government loans were first received at the bank. From this period the government have found it

more convenient to employ the bank as their agents in all operations of this nature, than to transact them at the treasury or the exchequer. The bank, becoming by degrees more closely connected with the government, began to make advances of money in anticipation of the land and malt taxes, and upon exchequer bills and other securities.

1719. April 30. The rate of discount at the bank upon bills and notes was raised from four to five per cent.

1720. THE SOUTH SEA BUBBLE commenced April 7.

"The directors opened their books for a subscription of one million, at the rate of 3007. for every 1007. capital. Persons of all ranks crowded to the house in such a manner, that the first subscriptions exceeded two millions of original stock. In a few days this stock advanced to 3407., and the subscriptions were sold for double the price of the first payment. The infatuation prevailed till the 8th day of September, when the stock began to fall. Then did some of the adventurers awake from their delirium. The number of the sellers daily increased. On the 29th day of the month, the stock had sunk to one hundred and fifty. Several eminent goldsmiths and bankers, who had lent great sums upon it, were obliged to stop payment, and abscond. The ebb of this portentous tide was so violent, that it bore down everything in its way, and an infinite number of families were overwhelmed with ruin; public credit sustained a terrible shock; the nation was thrown into a dangerous ferment; and nothing was heard but the ravings of grief and despair. Some principal members of the ministry were deeply concerned in these fraudulent transactions. When they saw the price of stock sinking daily, they employed all their influence with the bank to support the credit of the South Sea Company. That corporation agreed, though with reluctance, to subscribe into the stock of the South Sea Company, valued at 4007. per cent., 3,500,000?., which the company was to repay to the bank on Lady-day and Michaelmas of the ensuing year. This transaction was managed by Mr. Robert Walpole, who with his own hand wrote the minute of agreement, afterwards known by the name of the Bank Contract. Books were opened at the bank to take in a subscription for the support of public credit, and considerable sums of money were brought in. By this expedient the stock was raised at first, and those who contrived it, seized the opportunity to realise. But the bankruptcy of goldsmiths and the sword-blade company, from the fall of South Sea stock, occasioned such a run upon the bank, that the money was paid away faster than it could be received from the subscription. Then the South Sea stock sunk again, and the directors of the bank, finding themselves in danger of being involved in the company's ruin, renounced the agreement; which, indeed, they were under no obligation to perform, for it was drawn up in such a manner as to be no more than the rough draft of a subsequent agreement, without due form, penalty, or clause of obligation."*

* Smollett

The directors of the South Sea Company took legal advice, with a view to compel the bank to perform their contract; but the matter was arranged through the intervention of the government, who remitted to the South Sea Company two millions sterling as a compensation for the non-performance of the bank

contract.

1721. By the 8th Geo. I. c. 21, the South Sea Company were authorized to sell 200,0007. per annum, government annuities; and corporations purchasing the same at twenty-six years' purchase were allowed to add the amount to their capital stock. The bank purchased the whole of this 200,000l. per annum, at twenty years' purchase, making 4,000,000.

1722. The bank capital increased 3,400,0007. by a new subscription. This made the amount of capital 8,959,9957. 14s. 8d.. April 23. The rate of discount on bills, reduced from five to four per cent.

1726. The stock called three per cents. 1726, was created this year by the means of a lottery.

1727. The bank advanced to government, 1,750,000%. upon the coal and culm duties, at four per cent. interest (1 Geo. II. c. 8).

1728. The bank advanced to government, 1,250,0007. upon the lottery, at four per cent. (2 Geo. II. c. 3).

1730. The half-yearly dividend at Lady-day was at the rate of six per cent. per annum, and that at Michaelmas at the rate of five and a half per cent. per annum.

1731. The dividends were the same as in the preceding year. 1732. The dividends were the same as in the preceding year. From this year until the year 1747, the dividends were at the rate of five and a half per cent. per annum.

Thursday, 3rd of August, about one o'clock, the governor, sub-governor, and several of the directors of the bank, came to see the first stone laid of their new building, in Threadneedle Street; and after they had viewed the stone, on which his Majesty's and their several names were engraved, the same was covered with a plate of lead, and that, with the base of a pillar. They then gave twenty guineas to be distributed among the workmen. The following are the names of the directors in this year :

« PreviousContinue »