The original capital subscribed by the proprietors was £1,200,000 sterling, which was lodged in the exchequer at the rate of 8 per cent. interest ; and government allowed 44000 additional in name of house expenses, so that the bank received 4100,000 annually. lu 1697 the bank was allowed to ingraft £1,001,171 : 10 : 0 sterling on its capital stock. This enlargement was intended as a support to pub lic credit, for tallies had been at from forty to sixty per cent. discount, and bank notes at twenty per cent. which was occasioned by the bank discontinuing to pay its notes during the great recoinage of the silver at that time going on. In terms of the act of the 7th Anne, cap. 7. the bank advanced 4-100,000 on the original annuity of 4100,000, and there had been paid into the exchequer, in all, 41,600,000. In pursuance of the same act, the bank cancelled Ex chequer bills to the amount of £1,775,027 : 17 : 101 at 6 per cent. interest, and was allowed to double its capital. In 1708 the advances to government amount ed to 4'3,375,027 : 17 : 10i, and the capital of the bank was now 41,102,313. By a call of 15 per cent. in 1709, there was paid in and Made stock the sum of 4'656,20.1 : 1 : 9d ; and by another of 10 per cent. in 1710, £501,448 : 12 : 11. In conse quence of these two calls, the bank capital amounted to 4'5,559,995 : 11 : 8. By the 3d of George I. c. 8. the bank cancelled £2,000,000 of exchequer bills, which made the advance to government 4'5,375,027 17 : 10i. By the 8th of George I. c. 21. the bank purchased South Sea Company stock to the amount of £4,000,000. To enable the bank to effectuate this purchase,it increased the capital stock £3,400,000 by subscription, in the year 1722 ; and at this time, the bank had advanced to the state £9,375,027 : 17 10,1- ; but its capital stock was no more than .4'8,959,995 14 : 8. It appears, from this statement, that the bank advanced a larger sum to goverinnent than the whole amount of its capital, on which it paid a dividend to the proprietors. And this circumstance shews, that the bank possessed an undivided capital, which had accumulated from its establishment, which is the fact, and it has continued to have an undivided capital ever since. For in the year 174.6 the bank had advanced to the public, on different occasions, 411,686,800 ; and the capital on which it divided, had been raised, by several calls and subscriptions, to no more than d R10,780,000.
In pursuance of the 4th George III. c. 25. the bank paid to government X110,000 for the renewal of its charter, without stipulating for repayment of principal or allowance of interest. Af the same time, (1764,) it advanced 41,000,000 towards the sup plies on exchequer bills, to be repaid in the year 1766. The charter was accordingly extended to the 1st August 1786, and the dividend on the com pany's stock was raised from to 5 per cent. ; and at Michaelmas 1767, it was farther raised to 5i per cent.
Soon after the establishment of the bank, it assisted government with money in anticipation of the land and malt taxes ; and also by advances on exchequer bills, and other securities. In 1781 the advances in this way amounted to £8,000,000, in addition to the permanent debt of £11,686,800. On the condition
of advancing £2,000,000 on exchequer bills, at 3 per cent. interest, to be paid off from the sinking fund within three years, the bank again obtained an exten sion of its charter to August 1812. To enable it to make good this advance, it was thought necessary to make a call of 8 per cent. on the capital stock, which was now increased to and the dividend was raised to 6 per cent. In February 1782, the to tal advances to government on the land and malt taxes, and exchequer and treasury bills, amounted to R9,991,678 ; but in 1786 this sum was reduced to £6,634,872; and from that period to the commence ment of the late war in 1793, the amount of advances on these funds has fluctuated from seven to nine mil lions sterling. In February 1788, the dividend was raised to 7 per cent., which continued to be the rate of division until April 1807.
In the year 1800 the charter was renewed by the 40th George III. c. 28, and continued to 1st August 1835, on condition of £3,000,000 being advanced for the public service, without interest, for six years, ending on the 5th April 1806. In that year, how ever, it was stipulated, and accordingly enacted by the 46th George III. c. 4, that these three millions should remain with the public till six months after the ratification of a definitive treaty of peace, at 3 per cent. interest per annum, which is a present to the na tion of X60,000 a year, during the continuance of the war ; and which shews the resources and profit able trade of the Bank of England.
The circulation of the notes of the bank has not been so extensive as was generally supposed ; • and has seldom eitceeded the amount of the capital until of late years. In February 1787, no more than £8,688,570 were in circulation ; in 1790, .C10,217,360 ; in 1795, .03,53 9,160 ; and in 1796, £11,030,110. But by issuing small notes, the circulation was greatly increased; and in 1805 amounted to .C18,397,880; in 1806, to .C17,093,570 ; in 1807, to £ 16,621,390; and at present (1810) to about A: 2 1 , 000,000 sterling.
In the year 1797, the amount of the public debt to the hank, and the vast drainage of coin and bullion for the payment of loans, exchequer bills, &c. con joined to the apprehension of invasion, produced a run upon the bank, and it was found necessary to stop payments in cash. The privy council issued an order for that purpose on the 26th of February ; and an act was passed by parliament, suspending payments for bank notes for a limited period, which suspension was renewed annually ; but by subsequent acts it was continued until six months after the ratification of a definitive treaty of peace.
From the reports of the committee of secrecy ap pointed in 1797, to inquire into the state of the bank, it appeared, that on the 5th February of that year, the total credits of the bank were c17,597,293 ; and the debt owing by government was x13,770,390, thus leaving a balance in favour of the bank of £ 3,826,903. Since that time, the profits of the bank have been considerably augmented, and the pro prietors have occasionally received bonus's in addi tion to the usual dividend of 7 per cent.; but in April 1807, the permanent dividend was fixed at 10 per cent. per annum.