BANK of England, was projected by Mr. W. Paterson, a merchant, who, in conjunction with others, arranged the establishment, for which, with some diffi culty, they obtained the sanction of par liament. The charter was executed July 27, 1694, and was granted for the term of twelve years, the corporation being then determinable on a year's notice. The ori ginal capital subscribed was 1,200,0001. which they lent to government at 8 per cent. interest, with an allowance of 4000/. perann.fortheir expenses of management.
In less than two years from its esta blishment the company was involved in much difficulty,from the bad state of the silver coin, and the great discount to which all public securities had fallen ; the impossibility of getting a sufficient supply of cash during the re-coinage re duced them to the necessity of paying their notes by small instalments, and of issuing bonds bearing interest, in ex change for their cash notes. These dif ficulties, however, were overcome by pru dent management, and the responsibility and reputation of the bank became fully established. The term of the charter was, in 1706, extended to five years be yond the original period, in consideration of the company having undertaken to cir. culate for government exchequer bills to the amount of 1,500,060/. and it has since been further extended at different times, viz.
In 1709 to 1st of August 1732 1713 • 1742 1742 1764 1763 1786 1781 1812 1800 1833 On all these occasions the company have either paid a considerable sum, or advanced a greater amount by way of loan to government, as a consideration for the renewal of their exclusive privi leges, and for the advantages they derive form acting as the agents for government in all money transactions of any impor tance. Their chief privilege consists in the prohibition of all other companies or partnerships of more than six persons, from issuing bills or notes payable on demand, or for any time less than six months.
The total permanent debt due from go vernment to the bank is11,686,800/. bear ing 3 per cent. interest ; but the capital stock of the company is 11,642,4001. on which they pay a dividend of 10 per cent. per ann. to the proprietors.
The notes of the bank of England are the representative of money in all the commercial transactions of London audits vicinity, and from the vast magnitude of the payments in which they are employed, the total amount in circulation, which, till within a few years was never made pub lic, was generally thought to be much greater that it has since appeared to have been. The total amount of bank notes in circulation on the 25th of February, 1787, was 8,688,5701. which, on the 25th of Fe
bruary, 1793,badincreased to 11,451,1801. Soon after this period the temporary an nual advances which the bank had long been accustomed to make to government were increased; while an advance in the price of gold, in consequence of the great exportation of coin and bullion to Germany and Ireland, greatly reduced the quantity in the hands of the bank, and consequent ly rendered it impracticable to maintain the same amount of notes in circulation. An alarm of invasion, in the beginning of the year 1797, greatly increased the de mands on the bank for cash, and it was deemed necessary for the government to interfere and authorise a suspension of pay. ment in cash for bank notes, for a limited period : the continuance of the suspension was at first renewed annually, and after wards till the return of peace. In order to supply a substitute for coin for making small payments, the bank issued notes of 21. and 11. each, and as the demand for notes of this description has increased, the total amount of bank notes in circu lation has become considerably greater than previous to the suspension of issuing cash, viz.
On the 1st of Feb. 1805, 1.18,397,880 1806, 17,293,570. t . . 1808, 16,621,390 From the reports of the secret commit tee appointed in 1797 to investigate the affairs ofthe bank, it appeared, that on the 25th of February, in that year, there was a balance of 3,826,9031. and/on the 11th of November a balance of 3,837,5501. in favour of the company; their profits since must have been greater than while they were obliged to maintain a large stock of cash to answer their notes, which has enabled them to make several occasional dividends to their proprietors, and at La dy-day,1807, to raise their usual dividend from 7 per cent. which it had been for the last 19 years, to 10 per cent.
The profits of the company arise from the interestreceived from government on the permanent debt, and on their annual advances on exchequer bills and treasury bills of exchange ; from their allowance for receiving the contributions to loans, and for paying the dividends on the pub lic funds ; from dealing in bullion, and discounting mercantile bills of exchange, and other sources of less importance.
The concern is under the management of a governor, deputy governor, and twen ty-four directors, who are elected annually. 5001. bank stock entitles the proprietor to a vote at the general courts, and no pro prietor is entitled to more than one vote for any sum whatever.