BANK OF ENGLAND. In the year 1691, William Paterson, a native of Dumfriesshire, submitted to the Government a plan for the establishment of a national bank, and in the year 1694 the Bank of England, which has since become the greatest banking institution in the world, was incorporated by Act 5 & 6 William Mary. The Act is entitled " An Act for granting to their Majesties several duties upon tonnage of ships and vessels, and upon beer, ale, and other liquors, for securing certain recompenses and advan tages in the said Act mentioned, to such persons as shall voluntarily advance the sum of fifteen hundred thousand pounds towards carrying on the ‘var with France." The Act authorised the raising of /1,200,000 by voluntary subscription, the subscribers to be incorporated under the style of " The Governor and Company of the Bank of England." The sum of /300,000 was also authorised to be raised by subscription and annuities granted to the subscribers. All the money was quickly subscribed. and a charter was granted on July 27, 1694, for eleven years, and it has since then been renewed from time to time.
Within three years the Bank was com pelled to suspend payment.
In 1708, when the Bank Charter was renewed, a clause was inserted constituting the Bank of England the only joint stock bank in England. In 1718 subscriptions for Government loans were for the first time received at the Bank, and the Bank has been employed by the Government in similar transactions up to the present time.
In 1720 the Bank found itself in danger of being involved in the South Sea Com pany's ruin. In 1734 its business was trans ferred from the Grocers' Hall to a newly erected building in Threadneedle Street.
The Bank commenced to issue Bank Post Bills in 173S (see BANK POST BILL.. A run upon the Bank took place in 1745, and in order to check it and to obtain time, it is related that the Directors arranged that employees of the Bank should present notes for payment and that the cashiers should pay those notes in sixpences. The employees who received the sixpences went out of the Bank, but slipped in by another door and paid in the money again. The Bank began to issue notes for /10 and /15 in 1759 pre vious to that year it would appear that the lowest amount of note issued was £20. In
1780 the Gordon Riots occurred, and for protection a company of Foot Guards did duty in the Bank, and ever since a company of Grenadier or Coldstream Guards have remained in the Bank during each night. In 1793, or practically one hundred years after the Bank was founded, notes for /5 were first issued. The capital of the Bank had by that time increased to i11,642,400. In 1797, owing to the effects of the unusual demand for specie, an Order in Council was issued " that it is indispensably necessary for the public service, that the Directors of the Bank of England should forbear issuing any cash in payment, until the sense of Parliament can be taken on the subject." . . .
Notes for /1 and /2 appeared for the first time in 1797. In the same year Peel's " Restriction Act " was passed. It is entitled " An Act for continuing for a limited time the restriction contained in the minute of Council of the 26th of February. 1797, of payment of cash by the Bank." In 1810, the Bullion Committee reported to the House of Commons upon the high_ price of bullion and the state of the circu lating medium. In 1S16, the Bank was authorised to increase its capital to /14,553,000, at which amount it still stands. In 1S19 the Bank Restriction Act was further continued till 1820. On May 1, 1821, the Bank began to pay their notes in gold. In December. 1825, the Bank passed through a very severe time. and it appears that the credit of the Bank was saved by the finding of a box containing a quantity of one-pound notes. In 1826, notes under 15 were abolished ; and the monopoly which the Bank had hitherto enjoyed was done away with except in London and within a radius of sixty-live miles thereof. In 1844, the Bank Charter Act was passed. It separated the Bank into two departments. the Issue Department and the Banking Department. The Bank's note issue was limited to D4,000,000 against securities, part of which was the debt due from the public ; for any notes issued in excess of that amount gold coins or gold or silver bullion must be deposited in the issue department. The net profit on any issue of notes against securities exceeding is paid to the State. The Bank Act has been sus pended on three occasions—in 1847, 1857 and 1866.